ATC and MTN form Ugandan tower joint venture

Published on 12.01.2012

American Tower Company and the MTN Group of South Africa have entered into a definitive agreement to establish a mobile tower joint venture in Uganda.
Under the terms of the deal between the two companies, MTN Group’s local subsidiary MTN Uganda will divest all of its existing towers, which number around 1,000, to the JV for approximately US$175m. ATC Uganda will subsequently be managed by American Tower, and be controlled by a holding company in which the US company holds a 51% stake; MTN Group will hold the remainder. American Tower will also pay US$89m for its stake in the new holding company. The transaction is expected to close in the first half of 2012, subject to customary closing conditions.
As part of the deal, ATC Uganda has also committed to building a further 280 new mobile tower sites for MTN Uganda over the course of the next three years, as well as examining opportunities for the building of sites for other Ugandan mobile operators. MTN Uganda will be the anchor tenant, on commercial terms, on each of the towers being purchased.
Commenting on the development, Jim Taiclet, chairman, president and CEO of American Tower, said: ‘Our strategy is to invest in select African markets with strong wireless growth potential and a positive investment climate. Our investment in Uganda is further evidence of our execution of this strategy. In addition, we are building upon our successful partnership with MTN in Ghana where our tower expertise, operational excellence and a focus on delivering growth and value from the asset portfolio, are highly complemented by MTN’s regional operational experience.’ MTN Group president and CEO SifisoDabengwa meanwhile added: ‘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.’ MTN owns some 33,000 towers across its 22 operations in Africa and the Middle East. Dabengwa said that MTN will continue to evaluate infrastructure sharing opportunities on a “market by market basis”.
“We are pleased to announce the launch of our operations in Uganda, again in partnership with MTN, Africa’s largest mobile operator,” said Jim Taiclet, chairman, president and CEO of American Tower.