IHS Holding Limited, the largest mobile telecommunications infrastructure provider in Africa, Europe and the Middle East today announced it has agreed to buy Helios Towers Nigeria Limited (HTN), the pioneer of tower infrastructure sharing in Africa, in a transaction that will be the first in-market consolidation in Africa.
According to details of the deal, IHS will acquire HTN’s portfolio of 1,211 diversified tower sites throughout Nigeria. It will also acquire the entire issued share capital of HTN from HTN Towers Plc which is ultimately owned by Helios Investment Partners, Pembani Group, First City Monument Bank and other minority shareholders.
Building and maintaining mobile telecommunication towers in Africa is expensive due to security costs and electricity shortages. Hence, many mobile operators have been encouraged to sell or lease towers to specialist companies, reducing the cost of building and maintaining the towers as these companies can host multiple tenants, from mobile operators to internet providers, on the same towers. HTN and IHS have been at the forefront of this since the early 2000s when they established the mobile telecommunications infrastructure industry in Nigeria.
“We have built a unique urban centric portfolio across Nigeria with the highest tenancy ratio in the industry and a diversified tenant mix. IHS is the natural buyer of our business and we believe their deep knowledge and extensive experience in the sector will help to continue the strong level of customer service already being achieved by HTN,” said Inder Bajaj, Chief Executive Officer of HTN.
With increasing smartphone penetration in Nigeria, IHS sees more opportunities for market expansion and growth, as it optimizes a larger portfolio through innovative green energy solutions and delivery of market leading quality of service. IHS plans to roll out its renewable energy solutions and diesel reduction initiatives whilst maintaining unparalleled network uptime.
Issam Darwish, Executive Vice Chairman & Group Chief Executive Officer of IHS, describes the transaction as significant, noting that it combines Africa’s two original tower companies, a deal which he says will enable the strengthening of service offering to customers while focusing on their needs.
“We remain committed to the Nigerian tower market where coverage levels are yet to mature and explosive data growth continues. The growing data traffic and increased smartphone use presents an exciting market opportunity for IHS, with the potential for up to 40,000 more towers required to meet this demand,” Darwish said.
The deal whose worth is undisclosed, is expected to close in Q2 2016, subject to requisite regulatory approvals.