News
Operators open to involving other players in negotiations as they look to drive down costs.
Mobily on Sunday entered talks with Saudi Telecom Company (STC) that could lead to the formation of a mobile towers joint venture.
A stock exchange filing by Mobily’s parent Etisalat said the operators "have signed a memorandum of understanding (MoU)…to jointly explore options for extracting value from their respective telecommunications tower portfolios throughout the Kingdom, with the objective of reducing their capital and operating expenditures."
The MoU is effective for three months, and can be extended for consecutive periods of 30 days upon agreement by both parties.
In mid-July, Bloomberg reported that STC had held talks with both Mobily and Zain regarding the possible combination of their respective cell towers into a new, separate entity.
Zain was not mentioned by name in Mobily’s announcement on Sunday; however, the statement did say that Mobily and STC "may also consider involving other licensed operators in the assessment to the extent that their objectives align with those of Mobily and STC."
Sunday’s news has been a long time coming, with a fairly frequent stream of reports claiming that Mobily, STC and Zain have been exploring various options for their respective towers assets.
Mobily last year revealed its was considering selling its towers, with reports claiming the telco had received offers valuing its 10,000-strong portfolio at up to US$2 billion (€1.8 billion).
No sale took place though, despite reported interest from IHS and American Tower.
In February this year, Saudi Arabian news outlet Maaal claimed that Mobily, STC and Zain were discussing the creation of a towers joint venture.
Then in May, STC’s chief executive was quoted by Bloomberg as saying he was considering spinning off his company’s towers into a separate entity.
While Sunday’s MoU might not culminate in the formation of a Saudi cell tower JV, it is the most concrete evidence to date that things are moving in that direction.
