UK-based infrastructure management company, Helios Towers has committed to building at least 300 telecom towers across Oman as part of a historic long-term master services agreement with Omantel, the Sultanate’s state-owned telecom services provider.
This was revealed by Mr. Talal Said al Mamari, Chief Executive Officer of Omantel, at a virtual session with investors hosted by Muscat Securities Exchange (MSX).
Mr. Al Mamari has highlighted at the forum how the agreement to sell its passive tower infrastructure to Helios Towers, which was signed on May 11, would drive cost savings and infrastructure growth.
“The $575 million sales is in line with Omantel’s strategy to develop world-class asset-light, strategic, and advanced communications networks in Oman and to generate the greatest value and efficiency for the benefit of shareholders, customers, and partners. The sale is critical for achieving the Company’s investment and cost efficiency targets, especially concerning improving its balance sheet position through prepayment of existing borrowings which will further lead to reduced financial charges going forward. Omantel will sell 2,890 towers in the Sultanate to Helios Towers for a cash consideration of $575 million, an amount which has made the transaction among the highest in valuation in the emerging markets in recent years.”
He further added that Omantel will continue to use the tower assets for 15 years under a long-term master services agreement with renewal options. On its part, Helios Towers has committed to constructing at least 300 new towers over the next seven years.
Mr. Al Mamari has further stressed that Omantel will retain full ownership and control of its active network and spectrum, as well as its software, technology, and intellectual property for network management, and the deal is significant for Omantel as telecom business models around the world evolve towards new sources of competitive advantage and differentiation, necessitating strategic and operational changes.
This strategic partnership has invited foreign direct investment (FDI) into Oman, bolstering the country’s role as a leading FDI destination in the Gulf Cooperation Council (GCC), while also creating jobs and opportunities, he added.
Furthermore, Omantel CEO has stated that the transaction is subject to conditions precedent, including, inter-alia, the approval of Telecommunications Regulatory Authority of Oman (Trai) and other statutory authorities in Oman, as may be applicable. And, it is expected to conclude in the second half of 2021.