Airtel sells 3,100 towers in Africa; could fetch Rs 3k cr

Bharti Airtel said on Wednesday it would sell about 3,100 telecom towers spread across four countries in Africa to Helios Towers Africa. Bharti Airtel International (Netherlands) BV, a subsidiary of Bharti Airtel, and Helios Towers have signed an agreement for the same.

While Bharti Airtel did not disclose the deal value, tower companies, who operate in Africa, said the valuation of towers ranges between Rs 40 lakh and Rs 50 lakh depending on the location. Out of 17 countries in Africa, where Bharti Airtel has operations, valuation is higher at Rs 1 crore in Nigeria.

The valuation of the deal could be between Rs 1,600 crore and Rs 3,100 crore. Bharti Airtel has not given the details on the location of the 3,100 towers. Bharti Airtel has about 15,000 towers in Africa. In the earlier deals in the tower infrastructure space in Africa - such as Tanzania’s Millicom’s deal for 1,000 towers and MTN’s deals in Ivory Coast, Uganda and Cameroon - one tower was valued at between Rs 73 lakh and Rs 1 crore.

DEAL DETAILS

• The valuation of a towers ranges between Rs 40 lakh and Rs 50 lakh
• Bharti Airtel has about 15,000 towers in Africa
• In November last year, there were reports that Bharti Airtel was in talks with Helios, ATC, Eaton and HIS to sell its tower business for more than Rs 11,952 crore
• The company was also reported to have considered transferring its African tower business to its Indian tower unit, Bharti Infratel

Bharti Airtel said in a statement that the deal would help Bharti Airtel cut its debt and will “significantly reduce” its ongoing capital expenditure on passive infrastructure.

The net debt of the company at the end of March 31, 2014 stood at Rs 60,541.60 crore. Most of Bharti’s debt is because of its $10.7-billion acquisition of Zain Telecom’s Africa business in 2010. Bharti Airtel has about 15,000 towers in Africa. In November last year, there were reports that Bharti Airtel was in talks with Helios, ATC, Eaton and HIS to sell its tower business for more than $2 billion (Rs 11,952 crore). The company was also reported to have considered transferring its African tower business to its Indian tower unit, Bharti Infratel.

After the deal, Helios Towers, which is controlled by an Africa-focused private investment firm Helios Investment Partners, will have about 7,800 telecom towers under its kitty.

Bharti Airtel will continue to use these towers on lease contract under its long-term agreement with Helios in Africa. People currently taking care of the tower entity under the payroll of Bharti Airtel will also be transferred to Helios as part of the deal, the company said in a statement.

“The agreement is another milestone in Airtel’s growth journey in Africa. Airtel pioneered the concept of a separate tower entity to promote infrastructure sharing in India and this agreement is a continuation of that philosophy. It is an important step towards the consolidation of tower assets across Africa that will drive industry-wide cost efficiencies through infrastructure sharing. The agreement will further help in accelerating the growth of telecom services in the Continent and at the same time benefit the environment by avoiding duplication of infrastructure,” said Manoj Kohli, chairman, Bharti Airtel International Netherlands BV, in a statement. The deal is subject to statutory and regulatory approvals in the respective countries.

“HTA is proud to be chosen by Airtel as its partner for the ownership and management of its existing infrastructure. This is a ground-breaking move for HTA and Airtel’s decision is a significant endorsement of HTA’s reputation, management team and operating track record,” said Chuck Green, CEO, Helios Towers Africa.