Published on 21 Dec 2021

Telecom players in Africa sell mobile phone towers to raise capital

MTN is the latest to join a string of telecom operators who have decided to put up their tower assets for sale

By Johan Burger

MTN has decided to sell its network of 5709 mobile phone towers in South Africa to a firm with its roots in Nigeria for US$406.4m. The buyer IHS Towers, a New York-listed firm that started out in Nigeria and now has its head office in London, will then lease back the towers to MTN. The South African telecom giant made the announcement in November 2021. The deal is expected to be finalised in the first quarter of 2022 and is subject to regulatory approval. If it goes ahead, the transaction will boost MTN’s ability to outbid competitors at the new spectrum license auction scheduled for 2022.

MTN already has a 29% stake in IHS Towers, one of the largest independent owners and developers of shared telecommunications infrastructure in the world. It operates mobile towers in Latin America, the Middle East and sub-Saharan Africa.

MTN is not the only telecom operator in Africa to sell off its towers. Airtel Africa recently sold its 1400 towers in Tanzania for US$175m in a bid to bring down its debt and focus on growing its core business. The buyer was a joint venture firm owned by a subsidiary of SBA Communications Corporation and Paradigm Infrastructure Limited. Just like MTN, the Airtel transaction also follows a sale-and-lease back strategy. Airtel Tanzania will continue to develop, maintain, and operate its equipment on the towers under a separate lease arrangement with the buyer.

In March 2021, Airtel sold its tower units in Madagascar and Malawi to Helios Towers Plc for approximately US$108m. The firm also plans to sell off its tower assets in Chad and Gabon by the end of FY2022. The combined value of these four deals is estimated to be US$250m. Airtel Africa’s towers portfolio in Madagascar and Malawi comprise 1,229 towers, while it has another 1000 across Chad and Gabon. The Madagascar deal with Helios Towers was finalized in early November 2021 at a purchase price of US$51.7m. Airtel Africa will continue to develop, maintain, and operate its equipment on the towers under separate lease arrangements with Helios.

Increasingly, mobile operators are using their tower assets to realise value. In a slightly different kind of strategy, Telkom in South Africa intends to list its masts and towers business on the JSE by March 2022 in an ongoing endeavour to unlock value. Its subsidiary Swiftnet operates 6,225 mobile masts and towers and is South Africa’s largest independent tower portfolio.

According to Telkom, a separate listing will "affirm the valuation of the masts and towers business and its contribution to the overall valuation of the Telkom business" and unlock further value. The most recent half-year financial results showed that Telkom’s masts and towers business saw a 7% increase in revenue to ~US$43m.

It is clear from these case studies that running a telecom business consists of two elements, i.e., the infrastructure and the marketing and sales side. While it seems that both were required to be in one business, it is no longer the case. Airtel Africa and MTN have decided that there is more value to be unlocked by selling off their towers and focusing on the marketing and sales side. In the case of Telkom, the group has decided to spin off its tower business albeit in the form of a listed subsidiary, to be managed separately.

These cases show upon the business model of Mobile Virtual Network Operators (MVNOs) who have decided to rent their infrastructure capacity rather than owning them. An MVNO is a wireless communications services provider that does not own the wireless network infrastructure over which it provides services to its customers. MTN and Airtel Africa have ensured quality service through lease agreements with the new owners of their infrastructure networks. In this way they have negated the risk of lower speeds when the owner of the infrastructure decides to prioritise its own network.


Additional readings:

Anon. 2021. Airtel Africa sells Tanzania towers to focus on subscription offerings. ET Telecom. 2 June 2021. Available at  Accessed 19 November 2021.

Erezi, D. 2021. Airtel Africa completes sale of Madagascar Tower Company to Helios Towers for $51.7m. Business Insider Africa. 3 November 2021. Available at  Accessed 19 November 2021.

Khumalo, S. 2021. MTN to sell its SA cellphone towers to IHS in a R6.4 billion deal. Fin 24. 17 November 2021. Available at  Accessed 19 November 2021.

Khumalo, S. 2021. Telkom to list its growing masts and towers business by March 2022. Fin 24. 9 November 2021. Available at  Accessed 19 November 2021.

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