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African mobile tower firm IHS secures $202mn credit facility

By , Editor, ITWeb Africa
Africa , 03 Dec 2012

African mobile tower firm IHS secures $202mn credit facility

Pan-African financial institution Ecobank says it has raised a $202 million syndicated credit facility for mobile tower firm IHS holdings, as the latter undergoes an expansion in Africa.

According to the Nigerian-based IHS, the funding is planned to be used as part of its acquisition of MTN Group Limited’s 1,757 mobile network towers in Cameroon and Côte d’Ivoire.

The credit facility is further intended to be utilised as part of IHS’s solar energy and build-to-suit programmes for wireless operators.

IHS Holdings’ move to purchase more infrastructure on the continent comes as mobile operators increasingly look to cut their operational costs, especially as voice revenues fall.

Pyramid Research, for instance, has forecast that a market such as Egypt – which has 80 million people, an almost 100% mobile penetration rate and three operators – is to experience flat revenue growth in terms of voice services between 2011 and 2016.

Leasing towers offers a cheaper way for operators to handle their operating expenses, while selling this infrastructure also opens up additional revenue streams for telecommunications companies.

Frost & Sullivan research last year stated that African operators could save $2 billion over the next 10 years if they choose to lease rather than build towers.

IHS has operations in Nigeria, Sudan and South Sudan, Cameroon and Côte d’Ivoire. According to IHS, it has built over 2,800 sites and, with the MTN transaction, could increase its sites under management to over 5,500. Moreover, 3,000 of those towers are planned to be owned by IHS.

“We are delighted the consortium shares our long-term vision of creating an indigenous force in mobile network infrastructure and collectively has the financial capacity to support our pan-African expansion,” said Issam Darwish, chief executive officer of IHS Holding.

Ehouman Kassi, Ecobank’s group head of investment banking, said: “This funding is in line with Ecobank’s strategy of supporting our key clients in their pan-African development.”

“This transaction reinforces the commitment of the arrangers and participating banks to ongoing financing of the mobile network infrastructure which is crucial to the economic development and growth of the continent,” Kassi added.

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