Marking the first North African tower deal, Eaton Towers has acquired around 2,000 towers in three geographic areas: Delta, Upper Egypt and Red Sea, totaling approximately $131.15 million, from MobiNil. Tower Xchange reported that this deal in Africa’s second largest market gives Eaton “impressive scale and diversity.”
Included in the agreement, MobilNil is selling its stake in its tower subsidiary Egyptian Company for Mobile Tower Services to Eaton Towers. This includes a 15-year leaseback contract for operation, maintenance and additional buildout of new sites, according to Tower Xchange.
Additionally, Eaton raised $350 million in new equity resources from shareholders and brought in new equity from a controlling shareholder.
Tower Xchange noted that with a GDP per capita of $6,696, “Egypt represents a strong market compared to much of SSA.” The news site stated that there is a good potential for telecoms growth and towerco profitability. “There are about 19,000 towers in the Egyptian market, and once the Eaton deal takes place, the company will own approximately 10.5 percent of the towers in the country”.
Tower Xchange believes that “other operators in Egypt will follow MobiNil’s example and that we might expect to see another sizeable tower divestment from either Vodafone or Etisalat once the deal is closed.” The news site also predicts that “deals in the Egyptian market will also motivate consideration of consolidation in other North African countries, particularly the bigger markets such as Morocco and Algeria.”
Terry Rhodes, CEO of Eaton Towers, told Tower Xchange: “We are delighted to sign the first purchase and leaseback tower deal in Egypt. Egypt is the second largest mobile market in Africa and we will invest over $200 million to provide world-class shared infrastructure to help the Egyptian operators provide better coverage and data services to their customers.”
Once deals with MobiNil and pending agreements with Bharti Airtel for six countries are completed, Eaton Towers will be operational in eight countries, with more than 7,000 towers. This will represent the most diversified portfolio of shared infrastructure on the African continent, Tower Xchange reported.