Telkom Kenya and Safaricom to tower share

14 June 2011 | Kavit Majithia


African operators Telkom Kenya and Safaricom are set to form a jointly-owned tower management company.

The deal is likely to be completed in the next three months and Telkom Kenya says it is a first for the region. Collectively, Telkom Kenya and Safaricom own and operate over 4000 towers, and it is believed this will be the foundation for the partnership to develop and form an independently managed infrastructure company.

Bob Collymore, CEO at Safaricom, revealed the companies had been in talks for a while to assess the viability of improving cost efficiency based on infrastructure management. “We are equally cognisant of the environmental impact caused by the continued replication of infrastructure,” he said. “This initiative will lead to a rationalisation of those duplications in the interest of the public good and overall environmental sustainability.”

Both companies believe the partnership will be largely modelled on similar infrastructure sharing deals around the world, including the business model of India’s Indus Towers, consisting of a consortium of telecoms operators in the tower space.

“We expect to consolidate future needs through central planning and deployment so as to take advantage of the economies of scale presented by this deal,” said Mickael Ghossein, CEO at Telkom Kenya.

It is likely the two-company-consortium will be expanded to include other operators, and details released suggest it will be operated on a separate Network Facilities Provider (NFP) licence from industry regulator CCK, to allow an open access model.