Out-Law News | 12 Sep 2014 | 11:50 am | 1 min. read
The deal, announced on 8 September and which is subject to various regulatory approvals, provides for Bharti Airtel, a leading global telecommunications services provider with operations in 20 countries across Asia and Africa, to lease back the towers under a 10-year contract.
Eaton Towers said the agreement is a “major step towards the scale needed to provide shared telecoms infrastructure solutions” and boost network coverage and capacity across the region.
Eaton Towers currently owns and operates towers in Ghana, Uganda and South Africa. Under the deal with Airtel, Eaton Towers’ coverage will be extended to seven countries in Africa with a total of more than 5,000 towers.
The agreement allows Airtel “to focus on its core business and customers... and will significantly reduce its ongoing capital expenditure on passive infrastructure”, Eaton Towers said.
The chairman of Bharti Airtel International Netherlands Manoj Kohli said the agreement “represents the next phase of Airtel’s growth journey in Africa”.
Kohli said: “We are the pioneers and strong proponents of telecoms infrastructure sharing, which results in industry-wide cost efficiencies. The agreement with Eaton Towers is an extension of this philosophy and will lead to far superior utilisation of passive infrastructure and help drive the proliferation of affordable mobile services across Africa.”
Earlier this year, Bharti Airtel Limited agreed to divest about 3,100 of its telecoms towers in four countries across its African operations to Helios Towers Africa. In that deal, Airtel agreed to retain “full access” to the towers under a long-term lease contract.
In June 2013, Eaton Towers signed a 15-year tower management and leasing deal with Telkom Kenya.
A joint report published in 2012 by the World Bank and African Development Bank, with support from the African Union, said that, at the start of 2012, Africa’s mobile telephony market was “bigger than either the EU or the US. Some 68,000 kilometres of submarine cable and over 615,000 km of “national backbone networks” had already been laid to boost connectivity across the continent, the report said.
According to a survey published last June (8-page / 224 KB PDF), total mobile subscriptions in sub-Saharan Africa stood at about 70% at the end of 2013, compared to about 92% globally, and digital technology is “fast becoming a part of everyday life” in the region. Africa’s mobile data traffic is predicted to grow around 20 times between the end of 2013 and the end of 2019, the survey said.