Qatar headquartered Ooredoo announced on Monday that it has entered exclusive negotiations with Kuwait’s Zain Group and UAE based TASC Towers Holding (TASC). The three companies are discussing combining approximately 30,000 telecom tower assets into a jointly owned independent tower company (towerco) in a cash and share deal.
The towers affected would be based in Qatar, Kuwait, Algeria, Tunisia, Iraq and Jordan, with the new company being formed in a cash & share deal. Ooredoo’s towers in Oman and Palestine would not be included.
If a new towerco is to be formed with 30,000 towers it would become the largest towerco in the MENA region, outpacing TAWAL with its 16,070 towers in Saudi Arabia and Pakistan.
The new towerco would also be the fifteenth largest in the world, slotting in between Indonesia’s Protelindo and Russia’s New Towers.
Ooredoo has been rumoured for a number of years to be looking to monetise its tower assets and made these plans official in 2022.
The first market in which Ooredoo kicked off a sale process was Oman, notably absent from the planned tie up with Zain and TASC, where a tender to sell and lease back its passive tower infrastructure was announced in June of this year.
Zain and TASC have been working together on tower sale and leasebacks already, with TASC agreeing to acquire Zain sites in Iraq, Jordan, Bahrain, Sudan and South Sudan. The Jordan and Iraq sites have already been transferred to TASC.
Speaking at an event hosted by Capacity’s sister brand TowerXchange March of this year, Iyad Mazhar, founder & CEO, TASC Towers, said the flexibility of TASC’s deal structure by inviting MNOs to take a stake in the towerco was a key differentiator for TASC. Mazhar believes this approach deepens the relationship between MNOs and towercos.
“This transaction will create a potential shareholder value uplift for both Ooredoo Group and Zain Group through a more efficient capital structure. Both operators are committed to executing on their respective growth strategies to unlock significant capital and maximise value for shareholders while at the same time reducing the carbon footprint within the MENA region,” Ooredoo said in a statement.
Both Ooredoo and Zain will retain their respective active infrastructure, including wireless communication antennas, intelligent software, and intellectual property with respect to managing their telecom networks.
Due to the varying regulatory frameworks governing passive infrastructure sharing across MENA, execution of an agreement will be staggered on a market-by-market basis.
The companies will proceed with negotiations and aim to sign a definitive agreement in Q3 2023.
