Three major players in the GCC telecoms sector have teamed up to create the Middle East and North Africa's biggest tower company with a combined estimated enterprise value of $2.2 billion, as they seek to boost the region's standing on the global telecommunications stage.
Qatar's Ooredoo, Kuwait's Zain Group and UAE-based TASC Towers signed definitive agreements for the entity in a cash and share deal, the companies said in a joint statement on the Abu Dhabi Securities Exchange on Tuesday.
Ooredoo and Zain will each retain a 49.3 per cent shareholding, while TASC will have the remaining stake through UK-based Digital Infrastructure Assets.
They first announced plans to create the company in July and expected a deal in the third quarter this year.
The as-yet-unnamed tower company will comprise nearly 30,000 towers, made up of combined assets in Qatar, Kuwait, Jordan, Iraq, Algeria and Tunisia, and is projected to achieve run-rate revenue close to $500 million annually, it said.
“This financial position underpins the promising prospects and profitability of the newly restructured tower company,” the statement said.
“The expected timeline for the completion of this transaction contemplates initial market closings in 2024" and is subject to regulatory approvals.
The move is expected to provide “wide-ranging positive implications for the region”, said Aziz Fakhroo, managing director and chief executive of Ooredoo; Bader Al Kharafi, vice chairman and group chief executive of Zain Group; and Iyad Mazhar, founder and chief executive of TASC Towers.
These include “economic growth and upgraded connectivity to technological improvements and increased global relevance”, they said.
“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.”
Telecom towers, which are also called cell sites or cell towers, hold telecommunications antennae to provide services within a specified area. They have become critical infrastructure in today's digital era.
The global telecom towers market is projected to top $111 billion by 2030, from an estimated $50.4 billion in 2022, growing at a compound annual rate of 10.4 per cent, data from Coherent Market Insights shows.
“The deal demonstrates our joint dedication to supporting the reduction of the region’s carbon footprint, contributing to our vision of reshaping the telecommunications sector by building a more sustainable ecosystem and ensuring a better-connected future for our communities across the region,” the executives said.
