KARACHI: TPL Properties Ltd said on Tuesday it has come close to concluding a deal to acquire a mobile infrastructure company.
The parent entity of a large telecom tower operator has “conditionally accepted” the offer that a consortium led by its subsidiary TPL REIT Management Company has made for the purchase of 10,500-plus cellular sites in Pakistan.
Even though the official announcement didn’t mention the transaction size, a source privy to the development said it’ll be worth “Rs100 billion-plus”.
A mobile infrastructure company owns and/or operates purpose-built towers with communication equipment that allows area residents to use wireless devices.
TPL Properties made no reference to the name of the counterparty, but a recent report by Bloomberg News quoted Veon Ltd CEO Kaan Terzioglu as saying that the global company that operates under the brand name of Jazz in Pakistan was trying to sell its mobile towers. The news story put the transaction size between $600 million and $960m based on the fact that a single tower was valued at around $60,000-$80,000.
The offer is subject to the signing of “definitive agreements” — a process that may take “one to two months,” the source told Dawn.
The other strategic investor in the consortium is TASC Towers, a UAE-based operator of more than 14,000 mobile telecom towers in multiple geographies.
The deal is backed by “one of the biggest banks” that’ll provide debt structuring advisory and arrangement services. Separately, the consortium’s strategic investors are holding discussions with “several international institutions to raise equity for the equity component required for the consummation of this transaction”. The two parties will also be exploring the opportunity to acquire more telecom tower assets soon.
Earlier this month, Engro Corporation Ltd also expressed interest in acquiring a mobile tower business without confirming if the business in question belonged to Veon Ltd (Jazz).
The total number of mobile towers in Pakistan is north of 40,000. Each mobile network operator (MNO) operates on average 10,000-11,000 towers. The four MNOs collectively operate more than 80pc of all mobile towers.
The rest of the infrastructure is operated by four independent tower companies. Engro Corporation already operates one such firm by the name of Enfrashare, with 2,246 towers across Pakistan.
In a recent briefing to stock market analysts, the conglomerate claimed Enfrashare dominates the non-MNO segment with a 49pc market share. The second big player in that segment is Edotco Pakistan with 1,860 towers.
If executed, the deal will reduce the share of Veon/Jazz in the mobile tower business to zero and let it focus on revenue streams that are central to its business.
Published in Dawn, December 21st, 2022
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