Service providers Ooredoo Group and Zain Group, along with TASC Towers Holding have joined forces to create what is described as the largest tower company in the MENA region in a cash and share deal after talks that began in July.
The enlarged tower company – approximately 30,000 towers – has a combined estimated current enterprise value of US$2.2 billion. Ooredoo and Zain will equally retain a stake of 49.3% each in the newly restructured entity, through an asset and cash equalisation process.
The founders of TASC will retain the remaining shareholding, through an entity called Digital Infrastructure Assets, and will continue to manage the operations of the business.
The partners say the new tower company is expected to achieve run-rate revenues close to US$500 million annually upon the completion of closings in all individual countries – including Qatar, Kuwait, Jordan, Iraq, Algeria and Tunisia. Ooredoo’s tower network in Oman is following a standalone process.
It’s hard to deny that this is, as the companies call it, a landmark transaction. They add that the deal constitutes a major milestone towards realising key aspects of both Ooredoo and Zain’s strategies, focused on evolving into smart telcos and creating value-focused portfolios.
As an independent tower company, leveraging the combined assets of Ooredoo and Zain, TASC will offer passive infrastructure as a service (PIaaS) in a partnership model, offering a capital-efficient alternative to building, owning and managing its own passive infrastructure in a cost-efficient and environmentally friendly manner.
This partnership model, says TASC, is well-equipped to meet the needs of other mobile network operators seeking to reduce costs, lower carbon emissions, and address the increasing demand for sites driven by double digit growth in mobile data consumption across the region.
Both 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.
The expected timeline for the completion of this transaction contemplates initial market closings in 2024.
The phased implementation, tailored for each market and adhering to the regulatory environment, is subject to regulatory approvals.