Mobily, STC agree joint transmitter tower study
Mobily, STC agree joint transmitter tower study
August 2, 2016 | 12:01 AM
STC
August 2, 2016 | 12:01 AM
Last Updated: August 2, 2016 | 12:01 AM
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DUBAI — Saudi Arabian telecom operators Etihad Etisalat (Mobily) and Saudi Telecom Co (STC) said on Sunday they had signed a deal to jointly explore options for their network of transmitter towers.
Both Mobily and STC, as well as third operator Zain Saudi Arabia, have been considering whether to offload towers in recent months to cut costs, either via a sale to a private investor or through a merging of their networks.
All three have been facing challenges to their profitability as a mixture of competition, difficulties in foreign markets and changing technologies and customer behavior have weighed.
The prospective deal between STC and Mobily, respectively the largest and second-largest operators in the kingdom, aims at "extracting value" from their respective towers with the goal of reducing their capital and operating expenditures on the portfolio, they said in separate bourse statements.
The memorandum of understanding is valid for three months from July 31 and can be extended for 30-day periods with both parties' consent, they said.
The statements did not elaborate on how a potential plan for the towers could be structured, and while neither mentioned Zain Saudi by name, both said it may include other licensed operators.
Zain Saudi's chief executive said in March it was considering joint ownership or a sale of its towers, after sources told Reuters the firm was considering potential bidders and would use cash from the sale to repay debt.
Meanwhile, Maaal, a Saudi financial news website, reported in February that all three were in talks to establish a company that would share ownership of the trio's towers.
Telecoms operators are increasingly keen to dispose of towers that now provide little competitive advantage due to broadly similar network quality and coverage, although no such deals have been completed in the Middle East.
While the benefits are regarded as more significant in, for example, African markets due to the high cost of powering generator-run towers and potential for expansion, Saudi Arabia has the sixth-highest mobile penetration rate in the world.
The prospective deal between STC and Mobily, respectively the largest and second-largest operators in the kingdom, aims at "extracting value" from their respective towers with the goal of reducing their capital and operating expenditures on the portfolio, they said in separate bourse statements.
The memorandum of understanding is valid for three months from July 31 and can be extended for 30-day periods with both parties' consent, they said.
The statements did not elaborate on how a potential plan for the towers could be structured, and while neither mentioned Zain Saudi by name, both said it may include other licensed operators.
Zain Saudi's chief executive said in March it was considering joint ownership or a sale of its towers, after sources told Reuters the firm was considering potential bidders and would use cash from the sale to repay debt.
Meanwhile, Maaal, a Saudi financial news website, reported in February that all three were in talks to establish a company that would share ownership of the trio's towers.
Telecoms operators are increasingly keen to dispose of towers that now provide little competitive advantage due to broadly similar network quality and coverage, although no such deals have been completed in the Middle East.
While the benefits are regarded as more significant in, for example, African markets due to the high cost of powering generator-run towers and potential for expansion, Saudi Arabia has the sixth-highest mobile penetration rate in the world.
