Ooredoo, Zain and TASC form $2.2 billion towerco

The three have been locked in talks since late July, and aimed to strike a definitive agreement by the end of September.

It's a little later than scheduled, but a deal has been done, creating a new towerco with an estimated enterprise value of $2.2 billion.

"This pioneering deal embarks us on an exciting journey together as it results in the establishment of the region's largest independent Tower company, placing the MENA region on the world telecom tower map," said a joint statement from the CEOs of each company. "It also positions the region as an advanced player in the global telecoms landscape, and we anticipate wide-ranging positive implications for the region – from economic growth and upgraded connectivity to technological improvements and increased global relevance."

The new towerco boasts a footprint of around 30,000 towers spanning Qatar, Kuwait, Jordan, Iraq, Algeria and Tunisia.

That dwarfs the region's next largest player – Saudi Telecom Company's TAWAL unit – which operates more than 15,000 towers and has yet to venture beyond its home market.

It also stacks up pretty well against one of the world's big independent towercos, IHS Towers. Its global footprint boasts 39,739 sites, but MENA accounts for a small sliver of that. It operates 1,661 sites in Kuwait, while its operation in Egypt is in the midst of building 5,800.

The world's other major passive infrastructure providers – Cellnex and American Tower – don't operate in MENA, but that could change depending how Ooredoo, Zain and TASC's new venture gets on.

The companies reckon it will turn over $500 million a year and generate EBITDA after leases (EBITDAaL) of more than $200 million once it's up and running. The prospect of that level of profitability is sure to garner the attention of rival towercos.

Under the terms of their agreement, Ooredoo and Zain will each control 49.3% of the new entity, with the remaining held by TASC via a subsidiary called Digital Infrastructure Assets. TASC will also take on responsibility for managing the operation.

The new entity, which doesn't seem to have an official name yet, will offer passive infrastructure-as-as-service (PiaaS), offering operators across MENA a capital-efficient alternative to building, owning and operating their passive infrastructure.

"This strategic transaction will unlock significant shareholder value through higher earnings multiples, as well as ensure capital efficiency, optimising balance sheets for our respective companies and creating new possibilities for investors," the CEOs said in their statement.

Ooredoo and Zain will retain control and ownership of their active network infrastructure, including antennas, software and intellectual property.

Given the relative scale and footprint of its regional rivals, this new joint venture represents the beginning of a new era for passive infrastructure in MENA. It will be interesting to see how it develops.