Ooredoo, Zain, TASC Towers create $2.2bn tower company

Adgully Bureau |

Mobile voice and data services operator Zain has disclosed the finalization of definitive agreements involving Ooredoo Group, Zain Group, and TASC Towers Holding, establishing the most extensive tower company in the MENA region through a cash and share transaction.

The expanded tower company, comprising around 30,000 towers, possesses an estimated combined current enterprise value of $2.2 billion (€2bn). In the newly restructured entity, Ooredoo and Zain will maintain an equal substantial stake of 49.3% each, achieved through an asset and cash equalization process. The founders of TASC will retain the remaining shareholding through Digital Infrastructure Assets and continue to oversee the business operations.

Anticipated to generate run-rate revenues close to $500 million annually, the tower entity is expected to achieve an EBITDAaL (after leases) of over $200 million annually upon the completion of closures in various countries, including Qatar, Kuwait, Jordan, Iraq, Algeria, and Tunisia.

This transaction signing represents a significant milestone in realizing crucial aspects of both Ooredoo and Zain's strategies, emphasizing the evolution into smart telcos and the creation of a value-focused portfolio.

Functioning as an independent tower company and harnessing the collective assets of Ooredoo and Zain, TASC will provide Passive Infrastructure as a Service (PIaaS) through a partnership model. This offers mobile network operators a capital-efficient alternative for building, owning, and managing their passive infrastructure in a cost-effective and environmentally sustainable manner. The partnership model is designed to meet the needs of other mobile network operators aiming to cut costs, reduce carbon emissions, and address the rising demand for sites driven by double-digit growth in mobile data consumption across the region.

Aziz Aluthman Fakhroo, MD and Group CEO, Ooredoo; Bader Al-Kharafi, Zain Vice-Chairman & Group CEO; and Iyad Mazhar, Founder & CEO of TASC, said in a joint statement: “This pioneering deal embarks us on an exciting journey together as it results in the establishment of the region’s largest independent Tower company, placing the MENA region on the world telecom tower map. It also positions the region as an advanced player in the global telecoms landscape, and we anticipate wide-ranging positive implications for the region – from economic growth and upgraded connectivity to technological improvements and increased global relevance.”

“This strategic transaction will unlock significant shareholder value through higher earnings multiples, as well as ensure capital efficiency, optimising balance sheets for our respective companies and creating new possibilities for investors. The deal also demonstrates our joint dedication to supporting the reduction of the region’s carbon footprint, contributing to our vision of reshaping the telecommunications sector by building a more sustainable ecosystem and ensuring a better-connected future for our communities across the region,” the CEOs said.

Ooredoo and Zain will retain their respective active infrastructure, encompassing wireless communication antennas, intelligent software, and intellectual property related to managing their telecom networks.

The expected timeline for completing this transaction envisions initial market closings in 2024. The phased implementation, tailored for each market and conforming to regulatory environments, is contingent on regulatory approvals, with Ooredoo's tower network in Oman undergoing a standalone process.