Vodafone-controlled Vodacom has agreed a deal to sell infrastructure it operates in Tanzania to Helios Towers Tanzania (HTT), an African infrastructure company whose investors include George Soros, Madeleine Albright and Jacob Rothschild, according to a report from the Financial Times.
The deal will see Vodacom transfer 1,149 towers to HTT and is valued at approximately $75 million, although Vodacom (Johannesburg, South Africa) is reportedly to acquire a 25% stake in HTT as well.
HTT previously struck a similar agreement with Millicom (Luxembourg), which owns nearly quarter of HTT, with the remainder of the company controlled by Helios Towers Africa (HTA) (London, UK), the infrastructure group with private-equity backing.
Although Vodafone (Newbury, UK) has taken similar steps to offload towers in India, this represents its first such move in Africa.
Such outsourcing deals are becoming popular in the telecoms industry among operators under pressure to reduce operational costs and focus resources on service-oriented activities.
Operators in other parts of the world have typically sold off assets and then leased them back in arrangements that allow them to raise capital and lower operational expenditure.
Vodacom owner Vodafone has been under pressure to lower expenses, having reported a 3.5% drop in service revenue for the three months ending June, compared with the same period a year earlier.
According to the Financial Times, the deal will expand HTT’s coverage in Africa to 4,700 owned towers in the countries of Ghana, Tanzania and the Democratic Republic of Congo.
Chuck Green, the chief executive of HTA, is reported to have said that other transactions are in the pipeline and that HTT could look to acquire a total of 18,000 towers over the next year in deals valued at a total of $2 billion.
HTA will reportedly be providing almost 2,700 points of service to Vodacom and affiliates across Africa after the conclusion of the deal in Tanzania.