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The operator is desperate to reduce its $3.5 billion in debt, repayments of which are looming on the horizon
Airtel Africa has today announced plans to sell around 4,500 telecoms towers in a bid to accelerate the reduction of its $3.5 billion in debt.
The towers are spread throughout five countries – Tanzania, Madagascar, Chad, Gabon, and Malawi – and will reportedly be leased back to Airtel after their sale.
“We are constantly seeking to bring down our debt, and we prefer to bring it down even faster with the tower deals,” said Airtel Africa CEO Raghunath Mandava.
The sale could come at a crucial time for Airtel Africa. The company is around $3.5 billion in debt, with a repayment of $890 million due in May 2021. The company’s next instalment after that will be a further $505 million in March 2023.
Beyond just the quick cash, offloading tower infrastructure can have many benefits for operators, who will no longer have to worry about their operational expenses and security concerns. However, leasing infrastructure is not cheap and leaves them without power over a crucial element of their network. In short, this is the classic battle of short term windfalls versus long term investment.
We are seeing this strategic battle play out in many theatres around the world right now. In Europe, Cellnex has just signed off on a €10 billion purchase of mobile masts from CK Hutchison, the latest in a long string of acquisitions this year that its tower infrastructure portfolio almost triple. Meanwhile, in the US, American Tower recently acquired InSite Wireless Group, gaining around 3,000 infrastructure sites of various forms. Almost regardless of where you are in the world right now, tower infrastructure is in demand.
Airtel Africa posted strong half-year results leading up to September, reporting that its customer base had grown by 12% to 116.4 million. The company said it would focus on expanding its 4G coverage, especially to rural areas. The company has increased fibre coverage by around 9,000 km in the last year, up to almost 50,000 km across its various markets.
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