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Airtel signs agreement with ATC to sell towers in Tanzania to cut debt

airtel africa

Telecom provider Bharti Airtel has entered into an agreement with American Tower Corporation (ATC) to sell around 1,350 towers of its towers to ATC in Tanzania through its subsidiary Airtel Tanzania, the company said in a press statement. The deal is expected to be completed by the first half of 2016 after meeting certain conditions and regulatory approval.

Under the agreement, ATC may acquire up to 100 additional sites if needed.  Airtel will be the anchor tenant on the portfolio under a lease with a ten-year initial term. The proceeds from the tower sales will allow Airtel to reduce its debt, and significantly reducing the on-going capital expenditure on passive infrastructure, added the company.

Airtel’s timeline of tower sales to cut debt in Africa operations:

The recent ATC agreement comes as as series of previous tower sales that took place over the past two years as it looked to cut its debt from the loss making continent (Africa).

-In September 2015, IHS Holding (IHS) said that it had completed sale and lease-back of 949 towers from Airtel Zambia in Zambia, under the long term renewable contracts which were announced on 15 December last year.

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-While during December 2014, Airtel said that it is selling 1,100 towers in Zambia and Rwanda to IHS Holding Limited, to reduce debt.

-In a similar development in November 2014, Bharti Airtel said that it was planning to sell 4,800 of its communication towers to American Tower Corporation in Nigeria in an effort to cut its debt.

-In September 2014, a Money Control report stated that Airtel had signed a 10-year contract to sell and lease back over 3500 towers to Eaton Towers in six countries across Africa.

-While in July 2014, Airtel had signed an agreement to sell and lease back over 3,100 towers in four countries across Africa to the telecom tower operator Helios Towers Africa

Airtel raised $1.3 billion to cut debt: Telecom operator Airtel said that it raised a total of $1.3 billion from the sale of mobile towers in five countries in Africa to Helios Towers, IHS Holding Limited and American Tower Company, according to a notification on the Bombay Stock Exchange. The company added that the proceeds would go towards reducing the $10 billion debt used in its African operations in 2010.

Note that in July 2015, Bharti Airtel had entered into exclusive talks with Orange to sell its businesses in four African countries: Burkina Faso, Chad, Congo Brazzaville and Sierra Leone. While in Septmenber 2015, we reported that Airtel might be looking to sell its assets in Bangladesh and Sri Lanka, where the company owns 2,500 and 4,000 towers respectively, to Etisalat and Orange.

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ATC acquires Viom Networks: In October 2015, American Tower Corporation (ATC) had acquired a 51% stake in Viom Networks, a joint venture between Tata Teleservices (TTSL) and Quippo (part of the Srei Group), reports Voicendata. The deal is pegged to be at Rs 19,000- 20,000 crore, including a debt of Rs 6,500 crore.

BSNL’s plans to test zero-base towers in India: This month, BSNL said that it plans to install around 50 ‘zero-base’ multifunctional towers across the country; Zero-base towers can accommodate enough space to be used as Wi-Fi hotspot, a streetlight, and a surveillance utility by installing cameras and radios in it.

Image Credit: Flickr user jbdodane under CC BY-NC 2.0

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