Qatar’s Ooredoo, Zain, TASC in talks to merge tower assets

Qatar’s Ooredoo, Kuwait-based Zain Group and UAE’s TASC Towers Holding have entered into exclusive talks to merge their portfolio of about 30,000 cellular towers into Middle East and North Africa’s largest tower operator.

The three Gulf telecoms companies are considering merging their tower assets in Qatar, Kuwait, Algeria, Tunisia, Iraq and Jordan into a jointly owned independent company in a cash and share deal, Ooredoo said in a bourse filing.

Following the merger, the newly formed tower company will operate as an independent and standalone entity providing passive infrastructure as a service throughout the region.

Under the proposed deal, Ooredoo and Zain will retain their respective active infrastructure, including wireless communication antennas, intelligent software, and intellectual property with respect to managing their telecom networks.

“Both operators are committed to executing on their respective growth strategies to unlock significant capital and maximise value for shareholders while at the same time reducing the carbon footprint within the MENA region,” Ooredoo and Zain said in separate statements.

The transaction is expected to create a potential shareholder value uplift for the two entities through a more efficient capital structure. Ooredoo’s tower network in Oman is following a stand-alone process.

The three entities are proceeding with negotiations with a view to signing definitive agreements this quarter. The potential deal remains subject to regulatory approvals.

Leveraging tower assets

GCC telecoms companies have been divesting from tower assets to reduce infrastructure costs and focus on information and communications technology, with such deals attracting specialised tower operators looking to enter new, high-growth markets.

Zain Saudi Arabia sold 8,069 towers to Saudi Arabia’s sovereign fund Public Investment Fund for about $807m (SAR3.02bn) in February 2022 while Omantel, in 2021, sold 2,890 towers to Helios Towers for $575m.

The Kuwaiti telecoms giant offloaded 1,620 towers to IHS Holding for $130m in 2020. In January, Zain’s Iraqi unit entered into a definite 15-year agreement to sell and leaseback 4,968 towers to TASC Towers Iraq for $180m.

Meanwhile, Qatar’s Ooredoo unveiled plans to carve out its portfolio of almost 20,000 towers in September 2022 and the assets are estimated to be valued between $3bn to $5bn.

Read: Zain Group creates global wholesale services JV with Omantel