IHS in talks to buy mobile masts in Middle East

The African firm IHS in talks to acquire 'several thousand' mobile towers in the Middle East, and says regional telecoms operators can release over $20 billion by selling masts.

A Nigerian company is in talks to acquire thousands of mobile-phone masts in the Middle East, in an unprecedented deal likely to be worth millions of dollars.

IHS, a telecommunications-infrastructure company based in Lagos, says it hopes to close a deal with an unnamed regional telecoms operator by the end of this year.

Regional mobile-phone operators typically own the towers used to broadcast signals, but some are looking to sell these assets.

IHS specialises in acquiring mobile-transmission towers and leasing them back to multiple telecoms operators.

Issam Darwish, the chief executive of IHS, says the company is in talks to acquire towers from an unspecified operator in the Middle East.

"We're looking to complete that deal within the year," he said. "The deal is considerable. It could be thousands of towers."

Mobile tower-sharing is the norm in markets such as the United States, India and some parts of Europe. But Middle Eastern operators have not yet embraced the model.

Regional telecoms firms have the opportunity to unlock more than US$20 billion (Dh73.46bn) of revenue from the sale of their mobile-phone masts, Mr Darwish said.

Middle Eastern markets in which the outsourcing model makes most sense include Iraq and Saudi Arabia, Mr Darwish said.

While there is less of a business case for tower-sharing in the UAE, the model still makes sense in this market, he added.

"Getting Etisalat and du to share is cheaper at the end of the day," he said. "You're probably not going to see the UAE leading the tower-sharing process in the Middle East. But they will get there." In Africa, mobile tower sites have been valued at between $58,000 and $250,000 each.

While mobile masts in the Middle East generally require less infrastructure and therefore do not cost as much as those in Africa, the acquisition by IHS of "thousands" of towers in this region is likely to be worth millions of dollars.

If the deal is completed, it will be the first such acquisition of mobile-towers in the Middle East, Mr Darwish said.

IHS, which is listed on the Nigerian Stock Exchange, operates several thousand mobile-phone towers in Africa.

Mr Darwish says it is in talks to build and acquire further towers on the continent. He says African operators can save between 40 and 50 per cent of the cost of operating their mobile masts through outsourcing.

"We're looking for at least two to three [deals in Africa] within the next 12 months," he said.

IHS is also looking to build "around 1,000" of its own mobile-phone masts in Africa, Mr Darwish added. The company raised $250 million in funding last year, and Mr Darwish said IHS was raising $200m more in equity.

It is also taking on an undisclosed amount of debt to finance further deals, the executive added.

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