US-based American Tower and the MTN Group of South Africa had reportedly entered in to a definitive agreement to establish a joint venture tower company in Uganda. With the new company to operate under the ATC Uganda banner, under the terms of the deal between the two companies, MTN Group’s local subsidiary MTN Uganda will divest all of its existing towers, which number around 1,000, to the JV for approximately USD175 million. ATC Uganda will subsequently be managed by American Tower, and be controlled by a holding company in which the US company holds a 51% stake; MTN Group will hold the remainder. Further, American Tower will pay around USD89 million for its stake in the new holding company. The transaction is expected to close in the first half of 2012, subject to customary closing conditions.
Looking forward, ATC Uganda is expected to construct around 280 new cell sites for MTN Uganda over the course of the next three years, while it is also expected to examine opportunities for the building of sites for other Ugandan cellcos.
Commenting on the development, Jim Taiclet, chairman, president and CEO of American Tower, said: ‘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. In addition, we are building upon our successful partnership with MTN in Ghana where our tower expertise, operational excellence and a focus on delivering growth and value from the asset portfolio, are highly complemented by MTN’s regional operational experience.’ MTN Group president and CEO Sifiso Dabengwa meanwhile added: ‘Infrastructure sharing makes absolute sense for MTN and 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.’