TPL Properties inches closer to acquiring mobile tower company – Newspaper

KARACHI: TPL Properties Ltd on Tuesday said it was close to concluding a deal to acquire a mobile infrastructure company.

The parent entity of a major telecom tower operator has “conditionally accepted” an offer made by a consortium led by its subsidiary TPL REIT Management Company for the purchase of more than 10,500 mobile sites in Pakistan.

While the official announcement did not mention the size of the transaction, a source familiar with the development said it will be worth “more than Rs 100,000 crore”.

A cellular infrastructure company owns and/or operates purpose-built towers with communications equipment that allow area residents to use wireless devices.

TPL Properties did not name the counterparty, but a recent Bloomberg News report quoted Veon Ltd CEO Kaan Terzioglu as saying the global company operating under the Jazz brand in Pakistan was trying to sell its cell towers. The news puts the size of the transaction at between $600 million and $960 million based on the fact that a single tower was valued at between $60,000 and $80,000.

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The offer is subject to the signing of “definitive agreements”, a process that could take “a month or two”, the source told Dawn.

The consortium’s other strategic investor is TASC Towers, a UAE-based operator of more than 14,000 mobile telecommunications towers across multiple geographies.

The deal is backed by “one of the biggest banks” which will offer advice and debt structuring arrangement services. On the other hand, the strategic investors of the consortium are holding discussions with “several international institutions to raise own funds of the capital component necessary for the completion of this transaction”. The two parties will also explore the opportunity to acquire more telecom tower assets soon.

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Earlier this month, Engro Corporation Ltd also expressed interest in acquiring a mobile tower business without confirming whether the business in question belonged to Veon Ltd (Jazz).

The total number of cell towers in Pakistan is north of 40,000. Each mobile network operator (MNO) operates an average of 10,000 to 11,000 towers. The four MNOs collectively operate more than 80% of all cell towers.

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The rest of the infrastructure is operated by four independent tower companies. Engro Corporation already operates one such company by the name of Enfrashare, with 2,246 towers across Pakistan.

In a recent briefing for stock market analysts, the conglomerate stated that Enfrashare dominates the non-MNO segment with a market share of 49%. The second largest player in that segment is Edotco Pakistan with 1,860 towers.

If executed, the deal will reduce Veon/Jazz’s stake in the cell tower business to zero and allow it to focus on revenue streams that are core to its business.

Posted in Dawn, December 21, 2022


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