The American Tower Corporation (ATC), a leading owner and operator of wireless and broadcast communications sites in North America, has invested some $175 million in Uganda in what is likely to show that African telecommunications sector has become increasingly lucrative.
The company launched its operations in Uganda in partnership with MTN, Africa’s largest mobile operator. Following the move, widely viewed as a major African operations expansion, the American Tower has started acquiring 1000 tower sites from MTN Uganda.
President and Chief Executive Officer of American Tower Jim Taiclet said: “Our strategy is to invest in select African markets with strong wireless growth potential and a positive investment climate.”
American Tower will pay approximately US$89 million for its stake in the ATC while MTN Uganda will be the anchor tenant for each of the tower purchased. American Tower says it will hold a 51 percent stake and MTN Group, a 49 percent stake.
American Tower also expects that ATC Uganda will build approximately 280 tower sites for MTN Uganda over the next three years, as well as pursue opportunities to build tower sites for other wireless operators in Uganda. The transaction is expected to close in the first half of 2012 making ATC Uganda the largest tower site owner and operator in Uganda.
However, this is not ATC’s African virgin move, ATC already had a successful partnership with MTN Ghana with now over 2000 tower sites since 2010. ATC has over 3000 tower sites in South Africa.
“Infrastructure sharing makes absolute sense for MTN and we expect it to play a significant role in reducing our long-term infrastructure costs. The Ugandan market has presented us with an opportunity to continue to build on our strong working relationship with the experienced team at American Tower,” Group President and CEO of MTN Group, Sifiso Dabengwa, said.
“Because market conditions in each of the markets are unique, we will continue to evaluate infrastructure sharing opportunities on a market by market basis going forward,” he added.
MTN Uganda CEO Themba Khumalo said the new partnership is highly welcomed as it will significantly improve MTN Uganda’s operational efficiencies.
“We shall be able to leverage on the key learning from MTN Ghana that concluded a similar partnership in December 2010,” Khumalo added.
MTN owns approximately 33,000 towers across its 22 operations in Africa and the Middle East.
Launched in 1994, the MTN Group is a multinational telecommunications group, operating in 22 countries in Africa, Asia and the Middle East. The company, as of 30 September 2011, recorded 158.6 million subscribers.
American Tower is a leading independent owner, operator and developer of broadcast and wireless communications sites. American Tower currently owns and operates approximately 40,000 communications sites in the United States, Brazil, Chile, Colombia, India, Ghana, Mexico, Peru and South Africa.