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Landmark Telecom Collaboration: MENA Tower Giant

In a groundbreaking development, Ooredoo,  Qatari telecom company, Kuwait-based Zain Group, and the UAE’s TASC Towers have finalized an ambitious agreement.

This alliance will create the largest tower company in the Middle East and North Africa (MENA) region.

The deal, valued at an impressive USD 2.2 billion, involves the merging of nearly 30,000 towers across various countries​​​​​​.

Stakeholder Shares, Financial Prospects

The newly formed tower entity will be co-owned by Ooredoo and Zain, each holding a substantial 49.3% stake.

The founders of TASC, through Digital Infrastructure Assets LLP, will retain the remaining shares.

This entity is projected to generate annual revenues close to USD 500 million.  EBITDAaL (after leases) surpassing USD 200 million. This financial robustness indicates promising growth and profitability for the venture​​.

Strategic Significance for Ooredoo, Zain

This transaction marks a significant step in the strategic evolution of Ooredoo and Zain. It aligns with their aim to transition into ‘smart telcos‘ and create a value-centric portfolio. The agreement underscores the companies’ commitment to drive growth and enhance shareholder value​​.

Regional Impact, Technological Advancements

The CEOs of Ooredoo, Zain, and TASC, in a joint statement, emphasized the pioneering nature of the deal. Additionally, they highlighted its potential to position the MENA region prominently in the global telecom tower landscape.

Consequently, the collaboration will enhance connectivity and foster technological advancements.

Partnership Model, Future Implications

TASC, leveraging Ooredoo and Zain’s assets, will offer Passive Infrastructure as a Service (PIaaS) in a partnership model. Consequently, this approach presents a capital-efficient alternative for mobile network operators.

It addresses the growing demand for mobile data and promotes cost-effective, environmentally friendly strategies. Furthermore, the arrangement enables Ooredoo and Zain to focus more on their active infrastructure and high-growth business verticals.

Completion Timeline, Regulatory Considerations

The completion of this transaction is expected in 2024, with phased implementation tailored to individual market regulations. Moreover, the process is subject to regulatory approvals in each market.

Meanwhile, Ooredoo’s network in Oman will undergo a separate procedure.

Background, Evolution of Deal

The journey toward this deal began in March of the previous year, with Ooredoo’s announcement to review its passive infrastructure. Subsequently, TASC Towers has been active in the region for several years, notably in Jordan. Gradually, the deal evolved over time, incorporating TASC Towers’ partnership with Zain Group.

Consequently, this led to a unique three-way MNO-towerco merger, a first of its kind.

Regional Dynamics, Future Prospects

The deal marks a significant change in MENA’s telecom sector. Towercos are now active in half of the region’s markets and own about 30% of all towers. They’re entering new markets such as Algeria, Qatar, and Tunisia, paving the way for more market consolidation.

The agreement reflects a wider trend. Telecom operators are selling tower assets to focus on shared infrastructure. This suggests more future mergers and acquisitions.

In summary, the Ooredoo, Zain, and TASC Towers deal is strategic. It aims to transform the MENA telecom landscape. This highlights the increasing trend of global telecom collaboration and innovation.

Related Topics :

Saudi Telecom profits increases by 7.6% in 2022, to 12.1 SAR billion

Zain KSA Profits Grow by 234% to SAR 285 m 2023 in Q3

Saudi Arabia wins its seat in International Telecommunication Union Council

 

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