The sale of telecoms towers and leaseback transactions could fetch mobile telecommunications operators in Nigeria about N450bn if they decide to sell their 15,000 towers, our correspondent has gathered.Tower sale and leaseback agreement involves the sale of the assets by telecoms companies to, and leasing them back from independent tower companies.Our correspondent found out that the cost of one mobile phone tower under a sale and leaseback deal was about $200,000.However, a source at Helios Towers Nigeria, a leading telecoms infrastructure company in the country, said the price might increase or reduce based on the negotiation abilities of the parties involved.At $200,000 each, the source said mobile network operators in the country stood the chance of generating at least $3bn (N450bn) or more from the sale of their 15,000 base station towers.The source also disclosed that independent tower companies, such as Helios Towers, IHS Nigeria, Swap Technologies and others, currently own about 5,000 out of the 20,000 towers in the country.According to him, Helios Towers operates about 1,500 mobile phone towers, HIS, 850 and the others share the rest.MTN owns 7,000 of the remaining 15,000 base stations, while Airtel, Globacom, Etisalat and others control the rest.The source said, The cost of each tower is put at $200,000. And in a tower sale and leaseback agreement, the asking price will be around $200,000, while the negotiated price may fall to about $170,000 but it cant be less than $170,000.So, if we say we currently have 20,000 towers in the telecoms industry and tower companies control about 5,000; then we are left with about 15,000. So, if we use the number to calculate the value of the towers in the industry, this will amount to about $3bn.The Chief Executive Officer, Etisalat Nigeria, Mr. Steven Evans, said by leasing rather than owning towers, telecoms companies would be able to free up capital to fund network expansion and business development, as well as reduce capital and operational expenditure.He added that the tower sale and leaseback strategy was an excellent way of releasing capital for investment in core telecoms activities such as network management, customer acquisition and retention by the telecoms companies.Experts have predicted that sale and lease back deals will continue in the nations telecoms industry in 2012.However, a senior officer of MTN Nigeria, who craved anonymity in a telephone interview with our correspondent on Wednesday, explained that the tower sale and lease back arrangement was a financial solution that could be applied to any industry.The source, however, noted that MTN was not condemning it but would not consider it, adding that it was usually relevant to telecoms operators with cash flow problems.He said, For us at MTN, we do not have a cash flow problem. We have capacity for network roll out, and if you remember, we have said that we are investing $1bn on network expansion in 2011.However, there are lots of issues delaying us from fully spending the budgeted sum. These issues are getting worse and worse everyday.There are over 100,000 towers across the African continent and the Chief Executive Officer, IHS, Mr. Issam Darwish, estimates that the total value of the continents tower market is about $50bnFindings revealed that mobile operators on the continent sold off some 7,000 towers in 2010 in deals worth almost $1bn.Nigeria was not left as a number of tower sale and leaseback deals were also concluded.For instance, Visafone sold and leased back 459 telecoms towers to IHS in a deal reportedly worth $67m.Similarly, Starcomms also concluded a sale and leaseback agreement with Swap. The deal involved 407 towers and was worth $81.4m (N12.2bn).The trend, according to experts, will continue in 2012 because mobile operators have recognised the advantages of selling and leasing back their mobile towers.
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