Jazz Sells its 13,000 Towers for $940 Million

Dawood Hercules Corporation Limited (DHCL), in partnership with edotco, has to entered into an agreement with Veon Pakistan Limited (parent group of Jazz) to acquire its tower business in Pakistan.

With this agreement, which was signed today morning, Jazz will give away its towers to edotco as a whole.

edotco will operate, manage and maintain 13,000 towers for Jazz and will be allowed to offer similar services — on shared basis — to other telcos in Pakistan.

As part of the transaction, DH Corp will be investing a 45% equity stake with the remaining 55% control stake to be held by edotco.

The total transaction consideration for the proposed acquisition is USD 940 million, which will be funded through a combination of debt and equity.

Upon the completion of the proposed  subscription, edotco Labuan and DH Corp (Dawood Hercules Group) will respectively hold 55% and 45% of the issued paid up share capital of  edotco PK.

Edotco PK is in the business of integrated telecommunications infrastructures services, providing end to end solutions in the tower sector from tower leasing and co-locations, built to suit energy and transmission and operations and maintenance.

The business group, in partnership with DH Group, has announced the proposed acquisition of approximately 13,000 towers in Pakistan from Pakistan Mobile Communications Limited.

The acquisition of these 13,000 towers will make Edotco the biggest independent telecommunications tower operator in a South Asian nation, one of the people said.

By virtue of acquiring these 13,000 towers in Pakistan, Edotco, the infrastructure arm of Axiata will become the biggest telecommunication tower operator in the country.

Suresh Sidhu, CEO of edotco said,

“edotco is delighted to expand its business in Pakistan by catering to the network requirements of Jazz, the country’s number one digital communications company. With Dawood Hercules as our partner, we are confident in the potential of the market in Pakistan and will continue to demonstrate our long-term commitment to supporting the development and enhancement of the country’s telecommunications infrastructure.”

Aamir Ibrahim, CEO of Jazz commented,

“This transaction with Tanzanite Tower will allow Jazz to further improve its core strength in providing best in class products and services to its customers. Partnering with a trusted partner like Tanzanite Tower will ensure that Jazz’ customers will continue to benefit from industry leading network quality. It also allows Jazz to focus on its journey to becoming an innovative digital lifestyle partner.”

Dawood Hercules Company is an investing  holding company listed in Pakistan stock exchange with a market capitalization of  USD 600 million.

Veon is the majority shareholder in Pakistan’s largest mobile operator Jazz, formerly known as Mobilink.

Edotco at the start of the month had wrapped up an $89m purchase of 700 towers which were owned by Tanzanite Tower Pvt, according to Axiata.

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    • I agree that this person copy pastes stories from other websites (most of the time) but that’s not totally a bad thing. All the newspapers pick their stories from APP, very few stories usually are original work of newspaper jounalists and remaining comes from single source.

      This is a blog type site, most probably word press. so it isn’t bad that he collects those stories from different sources and pastes them here for readers.

      I daily check http://www.express.pk and all the international news. first the news appears in international media, then in 1 to 3 days, people at express translate it and put it on their news website. English version is usually longer, They at Express even make the story short :)

      Don’t expect people to have all the sources to report everything originally, copy paste is great tool.


      • I don’t get stories from Newspapers. I have a proper source. That is the PSX site. I’m not the one using it. Everyone uses that site
        though. Just telling you.

      • They will be paying rent to edotco & edotco will handle all the dirty O&M work of the towers. By this they will be able to focus on their OTT services & digitization. Good move as industry leader

        • 1st Axiata’s edotco Bhd, increases its worth in Malaysian Market.
          2nd now DH & Axiata share the profit by lending property to other providers.
          3rd DH may be with the help of international player planning to launch their own telecom (may be)
          4th About service digitization, we are far behind the world don’t worry it requires almost 10 to 20 year just to match speed for 3g which they are enjoying now and we are dreaming.

    • Third party vendors…electric work already done by a third party for Mobilink…liabilities will be LEDs..maintenance cost will be reduced as the same tower will be used to install equipment of other telcoa for which u would see agreements to share the tower …security, operations, rent and many other issues are related to it. Also the legal aspect when ppl sue for environmental damages etc..

    • Core function in tower business is to lease same tower to multiple Operators. Think of it as buying a house with four rooms, in which currently only one room is being used. You buy the house and rent all four rooms instead of one.

      So the tower company can now offer the towers to other operators to use and get more tenants.

      Jazz get to sell off its asset and recoup the cost of investment that it can now use for its 4G expansion ( hopefully).

    • good question, but now authors dont explain or do introduction of basic terms , except aamir ataa.

  • Veon Pakistan Limited .. Hain :D also 940 Million USD is one time deal what will be monthly payment by Jazz to tower company ?

    • It will be more than the current OPEX that Jazz is bearing for these sites for sure. That is the drawback of this model. It is bad for OPEX. But you do get to offload a valuable asset and get some cash. Jazz can use that cash for network operations or perhaps do some more Mergers and acquisitions !

  • the sale of tower business is rising in south asia especially in India, wonder how will it work in Pakistan, surely it is a smart move.

      • nuqsan kia hoga bhai ?
        tower share karny sy jazz k sath airtel k signal ajai gye

      • There is no Nuqsan to users. This is a model used all over the world with great success. Here are the potential benefits to users

        1) Jazz customers –> Jazz can use the money it got from the sale to expand its 4G footprint and improve network quality
        2) Non Jazz Customers –> The tower company can now lease the same tower to other operators like Telenor, Zong etc so they can get access to areas they might not have had access before.

        It is a great thing that has happened for the industry and shows that the Pakistan wireless industry is entering a maturity phase.

        • It will be biggest mistake by Jazz to sell their tower business. This model was started in America 10 years ago and it’s failing. I work for wireless company biggest in the world. After 10 years we realized that it was mistake because every year 6 % increase in rent and after 10 years it’s so expensive that now we are looking alternative and trying to build again new towers where ever lease is expiring. It’s trap. They will charge you extra for any small work like antenna change, cable change….many many other hidden stuff….You will get one billion dollar upfront but those one billion will be gone and then you don’t have nothing. Some one else will own towers which generate money..

          • The telecom Landscape has changed considerably over the last 10 years. Gone are the days of macro sites with 2G, 3G and 4G equipment. It has already started in the US and will start in Pakistan soon, where you will have only 4G sites that require smaller footprint and small cells that do not require large towers. Sites will be wall mounted or Pole mounted in the future.

            Yes you do pay more on Opex in this model which is a compromise you make , but wireless companies are being forced to move away from owning expensive assets, to become lean, agile and to lower costs to compete with OTT players. This is a necessary move. The only real asset worth owning and investing in for Mobile Operators is Spectrum.

            Soon the towers will not be worth much in the future . Jazz was smart in cashing out now. Hopefully this Billion will not just ” go away” but will be invested to create more value for the company and its customers which should cover for the increased OPEX.

            You also have to look at this holistically. In an effort to gain advantage every Operator has built and maintained their own towers which has been very very inefficient. Lot of that money could have been used elsewhere. Now those advantages have disappeared so sanity is returning in the market.

            I will predict that after towers, Infrastructure and Fiber sharing will be the next frontiers.

  • Soon there will be a time when all 4 operators will operate through 1 single tower at a single place, it will reduce huge operational cost.

      • there is no let in business
        its now or never
        they are pretending since last 1 year to improve their quality but output is zero

        In Lahore from one tower to other tower connectivity is problematic , call drops while your on the go

        Moreover network is overcrowded on most of the places and you end your call calling hello hello

  • While Jazz was busy in finalizing this nearly one billion dollar deal, they left their 52 million customers in a pathetic state. The worst of a kind services I am having from Jazz (being an old Warid postpaid customer). They listen but do nothing. I am totally fade up of their services. I am receiving no signals indoors, forget about all other services. They have burried and ruined the old quality network of Warid. Can somebody imagine I was receiving roaming signals with a R on signals bar at Fortress Stadium, Lahore yesterday night? I wasn’t receiving signals indoors even in Islamabad, I don’t know what will be the state of rural areas. When you manually search for network, you will see Warid and Mobilink, but it won’t connect to it, such pathetic it has gone now. I am testing other network services and may soon port out of Jazz. I was a happy Warid postpaid customer until Mobilink acquired Warid making it Jazz. RIP Warid. https://uploads.disquscdn.com/images/97ac7c1a3bf259da0db60428e2878d2a123f39353d6f69ba91b58266e4efec9d.png

    • being a warid postpaid customer since 2009, i was facing the same situation since warid and mobilink merge but yesterday i have switched from postpaid to prepaid and on the other hand got Zong postpaid which is alot better than jazz pathetic services. Completely satisfied with zong until now.

      • I am also thinking the same and trying Zong services, how their network is and how is their coverage. I may soon port out to Zong. I am also their postpaid customer from 2010, but now I am totally disappointed and fade up.

        • Data Service like 3G and 4G are amazing, but Call Service is bad and if you are using a 4G smartphone then it creates signal problems due to shift and reshifting of 3G and 4G signal upon calling.

          • Respected Aamir brother, I have checked their network on a Nokia bar phone also, it is the same pathetic as on my LG V20. And if there any problem persists in shifting and reshifting of signals, they should have addressed it by now. They were busy in this billion dollar deal to happen and let tbe customers for next company. Now paperwork, documentation, legal and regulatory requirements and then finally taking charge of towers, all this will take months and it may all happen by next year. Isn’t this pathetic? That is why I am fade up of it already.

    • I was warid postpaid user since 2007. Service was marvelous in all aspects. 2 years back I shifted home where warid signals were weak and I ported to zong postpaid. I am lucky that I was done prior to warid jazz merger. I am totally satisfied with zong services and happy user :).

    • Have patience my friend. They are upgrading their network and will be launching VoLTE soon too. you just need to give them some time , merging two networks is not an easy task my friend.

    • 1) Jazz customers –> Jazz can use the money it got from the sale to expand its 4G footprint and improve network quality
      2) Non Jazz Customers –> The tower company can now lease the same tower to other operators like Telenor, Zong etc so they can get access to areas they might not have had access before.

  • Never Had issues with my Warid connection, but since Jazz Bought Warid i cannot hear a word properly on voice call. Totally Ruined my 10 year experience with WARID. Time to Switch.

  • People will kill me if I tell them what is going to happen in near future in Telenor, Zong & Ufone…

    • so kya zarurat thi aisa teaser dene ki… agar itni bhyanak khabar hai inki

  • I got my agreement with mobilink renewed on Aug,17 and till date cheque for the rent not given.

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