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VENTURES AFRICA – Indian telecommunications company Bharti Airtel may sell its $1.8 billion-valued Africa tower business, to reduce debt of about $9.69 billion.
Airtel which incurred most of its debt from the $10.7 billion acquisition of Zain Telecom’s Africa business in 2010 has received offers from Helios, ATC, Eaton and HIS to buy its telecoms tower business.
The offers received are for the complete tower portfolio as well as parts of the portfolio.
However, it is unclear whether prospective buyers will be able to buy out the whole arm or just part of it,” a source familiar with the development told India’s Business Standard.
It was earlier reported that Bharti Airtel, which has 15,000 towers in Africa is considering transferring the tower business to its Indian tower unit Bharti Infratel.
However, after announcing the company’s quarterly results last month, Bharti’s Group Chief Financial Officer, Sarvjit Singh Dhillon said that the company was not looking at hiving off its tower business in Africa into a separate company, and may look at the operating structure of the business at a later stage.
An industry analyst confirmed that: “The Street had been eyeing the possible movement of assets but if Bharti Airtel can sell the assets to a second player, it will bring in additional liquidity which will be a definite asset.”
When mobile telecom companies sell their towers, they free themselves from operational costs and responsibilities involved in managing such towers.
Meanwhile, Bharti Airtel, a market leader in more than 10 of the 17 African countries in which it operates saw signs of growth in its Africa business after three quarters.
In the Q3, Airtel’s customer base in Africa increased three percent, while the monthly churn dropped to 6.6 percent from 6.7 per cent the previous quarter.
Revenue from its Africa operations rose two per cent to $1.1 billion during the quarter, against $1.09 billion a year ago.
Voice average-revenue-per-user (ARPU) also increased four percent while voice usage a customer rose seven per cent compared to the previous quarter.
During the quarter in view, data customer base increased by 13 per cent at $1.5 while a 15 percent increase was seen in data ARPU with a data usage per customer increase of 21 percent.