Airtel to divest 950 towers in Congo to reduce debt2 min read . Updated: 06 May 2016, 02:25 AM IST
Bharti Airtel aims to reduce capital expenditure and debt through the deal and will continue to have access to these towers under a long-term lease
New Delhi: Bharti Airtel Ltd on Thursday said it has divested 950 telecom towers in the Democratic Republic of Congo (DRC) to Helios Towers Africa (HTA), a leading telecom tower company in Africa.
Bharti Airtel, which aims to reduce capital expenditure and debt through the deal, said it will continue to have access to these towers under a long-term lease.
It said its subsidiary Bharti Airtel International (Netherlands) BV, which operates in over 20 countries in Asia and Africa, signed the agreement with HTA. The deal expands HTA’s tower coverage in Africa to over 6,500 owned towers.
The company did not disclose the financial terms of the deal.
The strategy is to promote cost efficiency and passive infrastructure along with mitigating the proliferation of towers through enhanced sharing with the help of this agreement.
The agreement is subject to statutory and regulatory approvals in the respective countries.
Christian De Faria, execiutive chairman of Bharti Airtel International, said, “We are pleased to strengthen our partnership with HTA in Africa. The agreement is in line with our stated philosophy of divesting passive infrastructure and promoting sharing of towers to enhance operational efficiencies that will further the growth of telecom services. Airtel remains committed to DRC and will continue to invest in its operations and serve customers with world-class services."
HTA is solely focused on providing telecom infrastructure solutions and this expansion will help it meet the growing demand and improving its quality of service.
“HTA is proud to be chosen by Airtel as its partner for the ownership and management of its existing infrastructure. This is a ground-breaking move for HTA, and Airtel’s decision is a significant endorsement of HTA’s reputation, management team and operating track record," said Kash Pandya, CEO.
The company has decided to exit the tower business in Africa, where it has about 15,000 towers in total.
Airtel is the process of divesting 15,000 towers in 13 countries in Africa to different companies and it has operations across 17 countries in Africa.
The latest deal takes the number of towers sold to around 11,450, of the around 13,000 towers that the telco owns in the African continent.
In October, the firm had said it will use the proceeds of the tower sale to cut its debt that stood at ₹ 60,000 at the end of the fiscal that ended on 31 March.
According to a person aware of the matter who spoke on condition of anonymity said that the tower deals completed in Nigeria (to American Tower Corporation), Congo B, Kenya, Burkina Faso (to Eaton Corporation), Rwanda, Zambia (to IHS Holding Ltd.) and Tanzania (Helios Towers Africa) have raised approximately $2.5 billion for Airtel and this is including the latest agreement with Helios Towers Africa in Democratic Republic of Congo.
On 21 Octobexr, Bharti Airtel announced that it had signed a total of seven deals to sell its towers for a total of $1.7 billion. Other companies that Bharti Airtel has sold its towers include Helios Towers Africa and IHS Holding Ltd.
On 14 January, Bharti Airtel announced that it had finalised a deal to sell its telecom operations in Burkina Faso and Sierra Leone to a France-based telecom operator Orange, for an estimated $900 million.