Sunday, May 13, 2012
--Sees no long-term economic value in various sale-and-lease-back proposals
--Says sharing infrastructure is an ongoing priority as it creates value
--Telcos directly co-operating to ensure capex, opex is reduced via sharing of towers & other passive infrastructure, CEO says
By Shereen El Gazzar
Of ZAWYA DOW JONES
DUBAI (Zawya Dow Jones)--Bahrain Telecommunications Co., or Batelco, the Arab Gulf country's biggest telco, has dropped plans to sell its towers as various sale-and-lease-back proposals did not create sufficient long-term economic value, and instead will focus on sharing infrastructure with other telecom operators in a bid to cut costs, the group's top executive said Sunday.
Mobile tower sharing as a concept has been tried and tested in markets like the U.S., U.K., India and Africa with operators either entering into agreements with third-party tower companies or sharing infrastructure with other telcos to boost efficiencies.
Batelco, which earlier this year said that it could reach a tower sharing agreement by the end of the second quarter, has decided not to proceed with any tower sale in Bahrain and Jordan, Mohamed bin Isa Al Khalifa, the group's chief executive officer, told Zawya Dow Jones via email.
"Tower Companies have specific rates of return which they wish to achieve for the funds they wish to pay an operator and charge for future towers. Batelco, due to its unleveraged balance sheet, has the ability to raise funds at much lower rates than tower companies and thus could not justify the lease back arrangements," Al Khalifa said.
The company will however continue to explore opportunities to share infrastructure as it creates value for the operators, customers and the environment, he added. Batelco already shares a small number of towers with other operators in some markets where it operates.
"The industry is also at a stage where telecom operators are directly co-operating to ensure their Capex and Opex are reduced via sharing of towers and other passive infrastructure. As more towers, roof tops and indoor solutions will be required in the future, such co-operation between operators will increase," the chief executive noted.
Faced with dwindling revenues from traditional voice operations, telcos in Bahrain have warmed to the idea of sharing infrastructure in a bid to cut costs and tap the increasingly heavy demand for data services.
This trend is likely be replicated throughout the region as the financial benefits for telecom operators could be immense, some analysts say.
-By Shereen El Gazzar, Dow Jones Newswires; +971 444 61684; Shereen.elgazzar@dowjones.com
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
13-05-12 1204GMT
