Airtel to sell 3,500 telecom towers in Africa to Eaton

New Delhi: Bharti Airtel Ltd, the world's fourth largest telco by subscribers, announced on Monday, that it had signed a deal to sell 3,500 of its 11,000 towers in Africa to UK-based Eaton Towers, one of the largest tower companies in Africa.

Under the contract, signed between Bharti Airtel International Netherlands BV (subsidiary of Bharti that owns the Africa assets) and Eaton, the towers, in six African countries, will be put in a 10-year sale and lease back structure. Eaton already has 5,000 towers in seven African countries including Ghana, Uganda and South Africa.

As was the case with the earlier deal where Airtel sold 3,100 towers in Africa to Helios Towers, in July, the deal is mainly driven at enabling the telco to focus on its core business and deleverage through debt reduction, and will significantly reduce its ongoing capital expenditure on passive infrastructure.

"For Eaton Towers, the acquisition is a major step towards the scale needed to provide shared telecom infrastructure solutions, with its customers benefiting from lower operating costs, expanded network coverage and capacity and improved quality of service," a statement from Airtel said.

"This is a transformational deal which gives Eaton Towers the most diversified tower portfolio across Africa. We are proud to be chosen by Airtel as their key partner in these 6 countries," Alan Harper, CEO of Eaton Towers said in the statement.

Eaton currently owns and operates towers for a number of the major African mobile operators such as Airtel, MTN, Orange, Tigo, Vodacom and Vodafone.

Bharti currently operates in 17 African countries and three Asian countries where it services more than 300 million subscribers.

The companies did not disclose the number of towers in each country that were being transferred or the value of the deal, but a Mumbai based brokerage analyst said the deal would be in the $500million range. The deal now leaves Bharti with less than 9,000 towers in Africa, which are also expected to be sold to further deleverage the Airtel Africa balance sheet. Airtel has not been able to post a profit from the African continent as a whole, since buying the assets for around $9 billion.

The Africa operations' net loss widened to $116 million in the quarter ended March from $48 million in the year earlier. Total revenue rose to $1.14 billion from $1.12 billion.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.