Africa's largest cellular operator, MTN, and New York-listed American Tower Corporation, will establish a joint venture tower company in Uganda.
In a joint statement, the companies say the new venture, ATC Uganda, will buy all of MTN Uganda's existing 1 000 towers for $175 million - about R1.4 billion.
ATC Uganda will be managed by American Tower, and will be controlled by a holding company in which American Tower will own a 51% stake and the MTN Group will hold the balance.
American Tower will pay $89 million - or about R719.8 million - for its share in the new Uganda-based company. MTN Uganda will be the anchor tenant.
The tower company owns and operates about 40 000 communications sites in the US, Brazil, Chile, Colombia, India, Ghana, Mexico, Peru and SA.
The US company anticipates the new venture will build about 280 tower sites for MTN Uganda over the next three years, and look into opportunities to construct infrastructure for other wireless operators.
American Tower president, chairman and CEO Jim Taiclet says: “Our strategy is to invest in select African markets with strong wireless growth potential and a positive investment climate.
“In addition, we are building upon our successful partnership with MTN in Ghana, where our tower expertise, operational excellence and a focus on delivering growth and value from the asset portfolio, are highly complemented by MTN's regional operational experience.”
MTN president and CEO Sifiso Dabengwa adds: “Infrastructure sharing makes absolute sense for MTN, and we expect it to play a significant role in reducing our long-term infrastructure costs.”
MTN owns about 33 000 towers across its 22 operations in Africa and the Middle East. “Because market conditions in each of the markets are unique, we will continue to evaluate infrastructure sharing opportunities on a market-by-market basis going forward,” adds Dabengwa.
The deal is expected to wrap up in the first half of 2012, which will then make ATC Uganda the largest owner and operator of tower sites in Uganda, the companies claim.
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