Sale of passive infrastructure funds active network growth
Qatari mobile telecoms group Ooredoo has appointed specialist bank Morgan Stanley to advise plan and execute a sale of 20,000 of its towers, according to Reuters. Ooredoo is looking for a sale-and-leaseback arrangement for the divestment of its towers in the Gulf region and other markets including Iraq and Algeria.
ME reported on September 14 that the group was considering a sale of its tower network in order to fund growth of a more software defined network. In a bourse statement on Monday, Ooredoo said it is “preparing for a potential carve out of its tower portfolio to extract optimal value for its infrastructure”. The telco recently announced plans to sell off its Myanmar division for $576 million and a tower sale may be part of a strategy to restructure its assets and fund an expansion of the software wide of the business. Ooredoo said the Myanmar sale is part of its ‘strategic decisions to focus on markets where Ooredoo is leading’.
Neither Ooredoo nor Morgan Stanley would comment but according to Reuters’ sources the transaction is at the second stage of bidding, which is expected to be followed by binding bids from investors. Ooredoo might package the deal in more than one bundle to separate investors if it proves hard to find one buyer for the entire portfolio given the ‘nature of the markets and risk premiums’.
Telecom towers have been the target of several big takeovers in the past few years as telecom companies seek to reduce their debts and fund modernisation. Deutsche Telekom is looking for €18 billion for its tower business to pay off debt and fund its 5G investments. Vodafone has sold its tower businesses in New Zealand for $1.7 billion and at one stage it was hoping to raise €14 billion from the sale of its tower company Vantage Towers.
In the Gulf region, carriers have also been divesting from tower assets in their network to strategic investors in a bid to reduce heavy costs on infrastructure and focus on information and communications technology. Omantel in 2022 sold 2,890 towers in the country to Helios Towers for $575 million. The Saudi Telecom Company (STC) in 2019 spun out its more than 15,000 towers into a new subsidiary, Tawal. Kuwait-based Zain sold 1620 telecom towers to IHS Holding for $130 million in 2020.