Airtel aims at cutting operation costs in tower divestment.

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  • 5 years ago
  • Posted: September 10, 2014 at 9:53 am

Bharti Airtel has announced divestment of over 3500 telecoms towers from Airtel to Eaton Towers, an independent telecom tower company in Africa with a diversified geographical tower portfolio in which the telecommunications company will lease back the towers under a 10-year pact.

The lease expected to take place across 6 countries across its African operations will expand Eaton’s coverage in the continent to 7 countries with over 5000 towers. Though not revealed by the parties, the sale is approximated to range between $600 million to $800 million.

Airtel’s divestment is expected to allow focus on its core business and customers to enable it deleverage through debt reduction and significantly reduce its on-going capital expenditure on passive infrastructure.

The acquisition is also a major step for Eaton towards the scale needed to provide shared telecoms infrastructure solutions with its customers benefiting from lower operating costs, expanded network coverage and capacity and improved quality of service. This will also affirm the company’s portfolio across Africa.

Manoj Kohli, Chairman, Bharti Airtel International Netherlands BV (BAIN), said, “We are delighted to announce this agreement, which represents the next phase of Airtel’s growth journey in Africa. We are the pioneers and strong proponents of telecoms infrastructure sharing, which results in industry-wide cost efficiency. The agreement with Eaton Towers is an extension of this philosophy and will lead to far superior utilization of passive infrastructure and help drive the proliferation of affordable mobile services across Africa.”

The deal comes after the sale of 3,100 towers in four African countries to Helios Towers Africa. Airtel is selling most of its more than 15,000 mobile phone towers to cut costs in 17 operational countries that have in the past recorded under performance. The aim for the move by the telco is basically cut on cost in African establishments where insecurity and electricity shortages are on the rise.

The agreements are subject to statutory and regulatory approvals in the respective countries.

 

 

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Winfred Kuria
Winfred Kuria is a self-constituted web content writer in charge of Tech News and Events Publicity at Kachwanya.com. She will communicate in the simplest way possible with an aim of changing the world one mind at a time.
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