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Kuwaiti Telecom Group Zain May Sell Transmitter Towers

Kuwaiti Telecom Group Zain May Sell Transmitter Towers

A source familiar with the matter said that Citigroup had been hired to look into options for Zain’s towers.

Kuwaiti telecom operator Zain has appointed advisors to study the potential sale of its transmitter towers in some of the eight markets in which it operates, the company said on Wednesday.

Zain owns controlling stakes in mobile companies in Kuwait, Iraq, Sudan, South Sudan, Bahrain and Jordan, plus 37 per cent of Saudi Arabia’s No.3 operator Zain Saudi, and also has a management contract to run Lebanon’s Touch.

“We have appointed advisors to advise us on the best business model for Zain, whether it’s tower sharing or sale and leaseback of towers across some of our operations,” Zain said in an emailed statement.

“It’s early stages. To date, there is no final decision on whether we will sell or form a tower company in any of our operations.”

A source familiar with the matter told Reuters Citigroup had been hired to look into options for Zain’s towers.

Zain’s statement follows a Bloomberg report that the operator had hired the U.S. bank to work on the sale of its towers in Kuwait and Saudi Arabia, citing unidentified sources.

Selling towers or sale-and-lease-back deals allow operators to reduce capital expenditure and duplication of resources as well as freeing up cash to focus on marketing and promotions, which are increasingly decisive in wooing customers as network quality becomes uniform.

Such deals are common in Africa, Europe and other regions, but rare in the Middle East.

Zain declined to specify which of its operations were most favourable to some sort of tower deal.

“Partnering in a newly formed tower sharing company or selling networks to enhance cash positions and then leasing them back are several considerations that Zain, like many other operators across the region, has been deliberating for several years now,” Zain said.

“Each particular Zain operation is unique and either of the two models may be adapted according to what best serves Zain from both a financial point of view.”

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