Uganda’s telecom companies have been hiring masts to put their equipment that are currently owned by either Eaton Towers or American Tower Corporation (ATC) and this is about to change. Now that Eaton will soon been bought off by ATC, this is likely to change creating a monopoly that will largely be reportedly controlled by MTN. ATC announced in May this planned acquisition of Eaton Towers in 5 African countries where Uganda was part and it will take on the company’s debt at an estimated cost of $1.85b (Shs6.7 trillion).
When the transaction is concluded by the later this year, ATC (and MTN) will acquire 1,460 towers from Eaton in Uganda. Eaton’s acquisition means that its major customers including Airtel, MTN, Africell and Etisalat, will now rent off ATC sites in which MTN already has some stake.
According to information from Uganda Communications Commission (UCC), these talked kicked off last week.
“These multilateral engagements are aimed at reviewing the acquisition process together with the commercial and competition issues that may arise from this transaction,” details from UCC indicate.
According to statement from Mr Jim Taiclet, ATC chief executive officer ;
The transaction would augment the company’s existing footprint in Africa, noting that this positions ATC to take even better advantage of the growth opportunity in Africa as 4G mobile data technology is deployed
In 2012 Eaton acquired 400 towers from Warid Telecom MTN and ATC created a joint venture firm, ATC Uganda in 2011, which acquired all MTN towers. With a 49% stake in ATC, MTN is expected to have a huge say in the future of telecom infrastructure in Uganda.
ATC which acquired all MTN’s 1,000 towers at a cost of $175m (UGX 649b) and the they have since added more than 280 tower sites on the network.
Industry analysts, have pointed out that this monopoly will create unfair competition. As UCC currently investigates MTN and ATC’s terms of operation the fear is that MTN will have preferential treatment over other telecoms if this transaction goes through.
The Daily Monitor reports that while making an evaluation report, UCC noted that MTN, based on the partial ownership of ATC will enjoy an exchange rate freeze on its rental charge, which was effected in June 2012. And, this will shield it from forex losses yet the same is not extended to other telecom companies who will be hiring the same masts.
