Nigerian CDMA operator Starcomms has announced the conclusion of a sale and leaseback agreement with Swap Technologies and Telecomms for 407 of its 557 base station towers. Under the terms of the USD81.4 million transaction, Swap will take over the operation and maintenance of the 407 towers, including the physical structures and power components. Meanwhile, the core network and radio components will remain under Starcomms’ ownership and control. The lease agreement is for an initial duration of 15 years, and allows the CDMA operator full access to the towers to operate its network. ‘By leasing rather than owning these passive infrastructure network facilities, we can free up capital to fund additional growth, reduce debts and operational costs in the company, as well as allow management to focus on its core business,’ commented Starcomms’ CEO, Maher Qubain. He added that USD67 million of the sale proceeds will go towards the repayment of a large portion of the company’s bank debts, while the remaining USD14.4 million will be used to fund growth of the business.
Meanwhile, Reuters reports that Starcomms’ pre-tax loss for the first nine months of 2010 had widened slightly to NGN4.85 billion (USD31.7 million), from NGN4.8 billion in the year-ago period. In a filing to the Nigerian Stock Exchange, the company said revenue fell to NGN23.96 billion from NGN25.62 billion a year earlier. Starcomms has an active customer base of two million and is present in 21 of Nigeria’s 36 states.