Airtel sells Tanzania towers for Rs 1,280 cr

Bharti Airtel said its Africa unit, Airtel Africa, has sold around 1,400 telecom towers in Tanzania to a joint venture company of SBA Communications Corp and Paradigm Infrastructure Ltd for $175 mn, or around Rs 1,280 cr.

SBA Communications Corp is a leading global independent owner and operator of wireless communications infrastructure, while Paradigm is a UK-based company “focused on developing, owning and operating shared passive wireless infrastructure in selected growth markets”.

Airtel Tanzania plc will continue to develop, maintain and operate its equipment on the towers under a separate lease arrangement with the new owner.

Out of the total consideration, $157.5 mn is payable on the first closing date, which is expected to take place in the second half of the Group’s current financial year, Bharti Airtel said.

The balance will be paid in installments upon the completion of the transfer of any remaining towers, it added.

The Transaction is the latest strategic divestment of the Group’s tower portfolio as it focuses on an asset-light business model and on its core subscriber-facing operations. It has been getting rid of non-core assets in recent years in an effort to lower overall debt levels and focus on its core strengths.

Out of the $175 mn, around $60 mn will be used to invest in network and sales infrastructure in Tanzania and for distribution to the Government of Tanzania.

The balance of the proceeds will be used to reduce debt at Group level.

It was in Jun 2010 that Bharti Airtel agreed to acquire Zain Mobile’s operations in 15 African countries for $8.97 billion, making it India’s second biggest overseas acquisition.

Bharti Airtel completed the acquisition in June the same year, making it the world’s fifth largest wireless carrier by subscriber base.

However, the consolidation of the business has been anything but smooth. The operations still remain secondary to Bharti’s flagship business in India in terms of size.

Meanwhile, the sudden rise of Mukesh Ambani-headed Reliance Jio has pushed Bharti Airtel to the No.2 spot in the home market, and plunged its finances into the red for several quarters as Jio undercut legacy players with its lower-cost technology and network.

Airtel has spent the last three years trying to regain its financial and operational composure in India, and has been keen to cut any flab in its overall organization in an effort to reduce costs and remain competitive with a highly cost-focused player Reliance Industries.