Telecoms tower company IHS plans ‘up to 30,000’ sites in Saudi Arabia

The Kingdom is on the verge of massive change according to telecoms tower company IHS. (Shutterstock)
Updated 24 May 2019
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Telecoms tower company IHS plans ‘up to 30,000’ sites in Saudi Arabia

  • Firm sees key opportunity in ‘pulsating heart’ of Arab world
  • Company, which rents masts to telcos, ‘moving ahead’ with IPO

LONDON: Telecoms tower company IHS plans to operate up to 30,000 masts in Saudi Arabia within the next five years, as part of a growth strategy in a country it sees as the “pulsating heart” of the Arab world.

The Mauritius-headquartered IHS — which buys or builds mobile phone masts and then leases them to telecoms companies — said in March it had struck a deal with Zain KSA to buy its 8,100 towers in Saudi Arabia. It will then lease them back to the operator.

IHS is now looking for further expansion in the Kingdom and the wider Arabian Gulf, amid plans to raise funds via an initial public offering (IPO).

Sam Darwish, group chief executive at IHS Towers, said the group was interested in talks with additional telecoms operators in Saudi Arabia, which include Saudi Telecom Company (STC) and Mobily, although declined to specify whether negotiations were underway. 

“We are definitely interested and would love to develop potential deals with any operator in the Kingdom,” said Darwish.

“There will be an influx point at some point soon, where growth or the transformation in the Kingdom is going to explode in a very positive way. And that’s why the number of towers for us could be somewhere between 10,000 and 30,000 (in approximately five years), because the Kingdom is on the verge of a massive change to the positive.”

Another route to growth in Saudi Arabia is for IHS to build its own towers, rather than acquiring them from telcos, Darwish said.

“Saudi Arabia is just beginning now the 5G rollout … With 5G, you’re going to need a lot of towers, because 5G uses different spectrums,” he said. 

The agreement with Zain KSA — which is subject to regulatory approval — also involves IHS building at least 1,500 new telecoms towers over the next six years, the company said. The deal marks IHS’ second in the Gulf, following a previous agreement with Zain Kuwait.

Upon completion of the Saudi Arabia and Kuwait transactions, IHS will have approximately 33,100 towers in its portfolio. IHS, which started its business in Nigeria in 2001, also has operations in Cameroon, Côte d’Ivoire, Rwanda and Zambia.

“Now our main focus is the Gulf, the whole Gulf, plus potentially North Africa — we’re looking at opportunities there. And if you look at the Arab world in general, the Kingdom is the pulsating heart … its population is young, and they’re very influential on the world stage,” said Darwish.

He declined to name any specific operators with which IHS is in discussions.

The company recently obtained a foreign investment license from the Saudi Arabian General Investment Authority in Saudi Arabia, where its staff will number between 100 and 200, Darwish said. 

The company last year shelved a plan for an IPO, but Darwish said it is thinking about “moving ahead” with plans for a listing in New York or London.

A secondary listing, for example of a Saudi subsidiary on the Riyadh stock exchange, has also been considered although there are no concrete plans.


Gulf stocks extend losses on tanker attacks

Updated 17 June 2019
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Gulf stocks extend losses on tanker attacks

  • Cautious mood among investors as fears of military confrontation rise

DUBAI: Stock markets in the Gulf extended losses on Sunday reflecting a cautious mood among investors following last week’s oil tanker attacks. 

The attacks on the tankers in the Gulf of Oman on Thursday raised fears of a military confrontation in a vital shipping route for global oil supply and heightened tensions between Iran and the US, which have been in a standoff over Iran’s nuclear program. 

The Saudi index had dropped 1.6 percent on Thursday and fell a further 0.6 percent on Sunday after slight gains in early trade. Most Saudi banks were down, despite Sunday’s announcement by Saudi British Bank that its merger with Alawwal Bank was completed. 

HIGHLIGHTS

• Gulf stocks reverse early gains.

• Gulf of Oman tanker attacks dampen investor mood.

• Saudi banks mostly down despite SABB-Alawwal merger.

The two banks have combined to create the country’s third largest lender, becoming a single listed company after regulatory approvals. SABB’s shares shed 0.1 percent. Alinma Bank, however, gained 0.4 percent, and was one of the stocks registering the highest trading volume on Sunday. 

In the UAE, the Dubai and Abu Dhabi indexes fell 0.7 percent and 0.2 percent, respectively. The Dubai market had risen earlier in the day, boosted by DAMAC Properties and Union Properties, which closed up 2.2 percent and 0.5 percent, respectively. But heavyweight Emaar Properties, the largest developer in the emirate, fell 2.5 percent, weighing on the index. 

Dubai’s telecom operator Du (Emirates Integrated Telecommunications Co) shed 0.4 percent, reversing earlier gains, after it said the UAE sovereign wealth fund Emirates Investment Authority had increased its stake by buying 463.3 million shares from Mamoura Diversified Global Holding and General Investments. 

In Abu Dhabi, blue chip companies Aldar Properties, First Abu Dhabi Bank and Abu Dhabi National Oil Company for Distribution, led losses, dragging down the main index. The other Gulf markets were all in the red, except for the Bahrain index, which rose slightly. 

In Egypt, the index gained 0.2 percent, boosted by a 4.5 percent gain by Pioneers Holding Company for Financial Investments. The company said one of its divisions, Arab Dairy Products, had received a letter of intent from a Netherlands based company about a plan to buy it.