Oman Telecommunications Company (Omantel) has entered into an agreement to sell its passive mobile tower infrastructure assets to Helios Towers for a cash consideration of US$575mn.
Omantel, as per the agreement, will only sell its passive mobile infrastructure assets comprised of 2,890 towers in the country and enter into a long-term master services agreement to continue to utilise the tower assets.
Against the service fee to be paid to Helios Towers, Omantel will eliminate certain direct network operating costs and through the build-to-suit arrangement avoid passive infrastructure capital expenditure for new sites. Besides, the utilisation of sale proceeds for debt reduction will lead to finance cost savings. Omantel will retain full ownership and control of its active network and spectrum as well as its software, technology and intellectual property with respect to managing its networks.
Helios Towers, which is listed on the London Stock Exchange, is a leading independent telecommunications infrastructure company with one of the most extensive tower portfolios across Africa.
“The sale of our passive tower infrastructure is in line with our strategy to develop world class asset light, strategic and advanced communications networks in Oman and to generate the greatest value and efficiency for the benefit of our shareholders, customers and partners,” Talal Said al Mamari, CEO of Omantel, said in a press statement issued on Tuesday.
This strategic partnership, he said, invites foreign direct investment (FDI) into Oman, supporting Oman as a leading FDI destination in the GCC, while creating jobs and opportunities in the country. “This move also allows the monetisation of our towers at highly attractive valuation levels, de-lever our balance sheet and will accelerate network development in next generation advanced technologies while enabling management to focus on innovation and product development while outsourcing non-core infrastructure management to a world-class infrastructure management firm – Helios Towers,” Mamari added.
KashPandya, chief executive of Helios Towers, said, “We look forward to supporting Omantel’s growth, and that of the wider Omani mobile market, through our delivery of customer service excellence and world-class infrastructure solutions and services. We view Oman as a very attractive and supportive market for foreign investments, with a strong growth and exciting future prospects. We will be further investing capital in Oman as we add to the tower count through greenfield BTS site development and colocations, enhance the current tower portfolio and develop a talented local Omani team.”
He said, “Through the acquisition, which establishes us as a leading tower operator in Oman, we expect to achieve our group target of 12,000+ towers well ahead of plan, while also strengthening our business through further hard-currency revenues and diversification into one of the fastest growing markets in the Middle East. We look forward to working with Omantel and other mobile network operators over the coming years to further develop next generation mobile infrastructure solutions and services in Oman.”
Omantel’s agreement with Helios Towers contemplates the sale of 2,890 mobile towers with a lease and service contract for a period of 15 years with renewal options. Helios Towers has also committed to building a minimum of an additional 300 new towers over the next seven years.
Omantel will use sales proceeds for deleveraging, supporting strategic investments in next generation advanced technologies and capabilities enhancement.
The transaction is subject to conditions precedent, including, inter-alia, the approval of Telecommunications Regulatory Authority of Oman and other statutory authorities in Oman, as may be applicable. Omantel expects to conclude the transaction in the second half of 2021.