MTN will sell its network towers to IHS, which has secured a US$202 million credit facility, in Cameroon and Côte d’Ivoire, which would see it open a new revenue stream.
For IHS holdings, the credit facility will see it expand its tower leasing services to other parts of Africa.
The company has already built 2,800 sites and with MTN’s deal, the company could have over 5,500 sites under its management.
“We are delighted the consortium shares our long-term vision of creating an indigenous force in mobile network infrastructure and collectively has the financial capacity to support our pan-African expansion,” said Issam Darwish, chief executive officer of IHS Holding.
The credit facility was extended to IHS by pan-African financial institution Ecobank, and was instrumental in raising the amount from other co-arrangers including BDEAC, Afriland First Bank, BGFI and the participating banks: UBA, Orabank, BOA and BNI.
“This funding is in line with Ecobank’s strategy of supporting our key clients in their pan-African development,” said Ehouman Kassi, Ecobank’s group head of investment banking.
African telcos have been moving towards leasing towers rather than owning them due to the high maintenance and operating costs.
Voice revenues have also been on a steady decline on the continent, with many mobile subscribers seeking alternative services such as Internet and other value-added service.