2024 Digital Infrastructure M&A in the Middle East – FTI Consulting
The digital infrastructure landscape in the Middle East is changing rapidly, with a surge in TowerCo penetration leading to a wave of passive infrastructure mergers and acquisitions. In just a few years, the region has gone from a quiet market to one of the most dynamic regions globally for tower infrastructure M&A.
Unlike other parts of the world, where mobile network operators (MNOs) moved to monetize tower assets early on, operators in the Middle East initially held off due to market conditions and financial strength. With healthy margins, low debt, and ample cash reserves, there was little pressure to pursue tower sale-leaseback deals. Additionally, the region’s robust power grids reduced the need for energy efficiency measures.
However, a strategic shift is now underway as MNOs recognize the value of sharing passive infrastructure assets like towers. This shift reflects the industry’s evolution from traditional connectivity providers to broader technology and solution-driven players.
In the Middle East, MNOs have largely built their tower strategies around captive TowerCos. For example, STC created TAWAL to consolidate tower assets, leading to a recent acquisition by PIF. Similarly, Zain Group and Ooredoo Group have teamed up to form “New TASC” Towers, leveraging their combined portfolios to optimize costs and improve returns.
Oman’s market also shows promise for future tower transactions, with Ooredoo Oman pursuing separate tower monetization due to its exclusion from a major regional deal. While most operators prefer captive TowerCos, notable exceptions include Omantel’s sale to Helios Towers and Zain Kuwait’s sale to IHS, both occurring before recent consolidations.
Overall, the Middle East’s digital infrastructure landscape is evolving rapidly, driven by changing market dynamics and the strategic value of passive infrastructure sharing. The region is poised for continued growth and expansion in the years ahead.
