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MTN starts up tower sharing firm in Ghana

The transaction involves the sale of up to 1,876 of MTN Ghana’s existing sites to TowerCo Ghana

Pan-African carrier MTN has followed Vodafone’s lead in Ghana, embarking upon a tower sharing venture with specialist firm American Tower Corporation. MTN Ghana and American Tower are to establish a joint venture, TowerCo Ghana, to be 51 per cent held by American and 49 per cent held by MTN, with the operator as the anchor tenant, on commercial terms, on each of the towers being purchased.

The transaction involves the sale of up to 1,876 of MTN Ghana’s existing sites to TowerCo Ghana for an agreed price of up to $428.3m. TowerCo Ghana will also build at least an additional 400 sites for both MTN Ghana and other wireless operators in Ghana over the next five years.

Group president and CEO of MTN Group, Phuthuma Nhleko, said: “Infrastructure sharing makes absolute sense for MTN and was a key aspect of the updated strategy outlined to MTN shareholders on 15 July 2010. We have in the recent past looked at various permutations to reduce our infrastructure roll-out costs as well as the on-going costs of operating our passive infrastructure in our key markets. Because market conditions in each of the markets are unique, we have resolved to evaluate infrastructure sharing opportunities on a market by market basis. The Ghanaian market has presented us with an opportunity to partner with a leading independent global tower operator.”

Vodafone Ghana signed a ten year contract with African tower company Eaton Towers, to take over the operations and co-location management of 750 telecom towers for the Ghanaian operator, back in October.

Eaton will develop the existing infrastructure and build new towers and will also be able to sell co-location and shared-infrastructure facilities to other mobile operators, generating future revenues from separate long-term contracts.

Ghana is Eaton’s first operational market and telecoms.com has an upcoming interview with CEO Alan Harper. Speaking recently about the company’s launch, he said: “To some extent the business exists because Africa is behind rest of world. Penetration is low, look at Ghana with 30 to 40 per cent market penetration. Operators there have anything from couple of hundred sites to couple of thousand sites and many markets are still based on 2G and voice, but some have 3G rollouts taking place.

“The state of growth and pricing is not under the same economic pressure as many carriers in Europe. In developed markets operators might be looking at sharing to save costs and consolidation. That’s very different state of development to many African markets,” he said.

Vodafone Ghana is the country’s third placed operator, with 2.9 million subscribers. MTN Ghana leads the pack with 9.1 million users, followed by Millicom with 3.5 million. Zain and Kasapa bring up the rear with 1.4 million and 172,700 subscribers respectively.

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