American Tower Corporation and South African telco MTN Group have agreed to establish a joint venture tower company in Uganda.
The joint venture, which will be known as ATC Uganda, will acquire all of MTN Uganda’s cell sites about $175 million.
ATC Uganda will be managed by American Tower, and will be controlled by a holding company of which American Tower will hold a 51% stake and MTN Group will hold 49%.
American Tower will pay about $89 million for its stake in the new holding company. MTN Uganda will be the anchor tenant, on commercial terms, on each of the towers being purchased.
ATC Uganda will build some 280 tower sites for MTN Uganda over the next three years, and also intends to build tower sites for other wireless operators in Uganda.
The transaction is expected to close in the first half of 2012, subject to customary closing conditions. When the deal closes, ATC Uganda will be the largest owner and operator of tower sites in Uganda.
“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.
“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.
Sifiso Dabengwa, CEO of MTN Group, added that infrastructure sharing “makes absolute sense” for MTN. “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”.
American Tower is based in Boston, USA, and specialises in tower management in Africa.