UK-based Helios Towers, a leading infrastructure management firm has pledged to build at least 300 telecom towers in Oman as part of a long-term master services agreement reached with telecom services provider Omantel.

The deal to sell Omantel’s passive tower infrastructure to Helios Towers will drive cost efficiency and infrastructure development, Talal Said al Mamari, Chief Executive Officer of Omantel was quoted as saying by Oman Observer.

He was speaking at a virtual session with investors hosted by Muscat Securities Exchange (MSX).

He said the $575 million sale of 2,890 towers is in line with Omantel’s strategy to develop world class asset light, strategic and advanced communications networks in Oman and to generate the greatest value and efficiency for the benefit of shareholders, customers and partners.

The Omantel CEO emphasised that the sale is critical for achieving the Company’s investment and cost efficiency targets, especially with respect to improving its balance sheet position through prepayment of existing borrowings which will further lead to reduced financial charges going forward.

Under a long-term master services agreement, Omantel will continue to utilise the tower assets for a period of 15 years with renewal options, he added.

On its part, Helios Towers has committed to build a minimum of an additional 300 new towers over the next seven years.

Al Mamari emphasised that Omantel will retain full ownership and control of its active network and spectrum as well as its software, technology and intellectual property with respect to managing its networks.

Against a service fee to Helios Towers, Omantel will eliminate certain direct network operating costs and through the build-to-suit arrangement avoid passive infrastructure capital expenditure for new sites.

This strategic partnership has invited foreign direct investment (FDI) in Oman, supporting Oman as a leading FDI destination in the GCC, while creating jobs and opportunities in the country, he said.

Through this agreement, Omantel has reduced leverage and raised capital to fund network upgrade, accelerated network deployment, improved cost structure, focusing on core business, and following international best practice, Al Mamari said.

Elaborating on this, the CEO stated that the capital released through this sale will be redirected towards strengthening the Company’s balance sheet and investment in new technologies and new products and services, which will be seen in the form of higher network capacity, and faster rollout to rural areas to bridge the digital divide.

This strategic partnership with Helios Towers has invited substantial Foreign Direct Investment (FDI) in Oman creating jobs and opportunities while cementing the Sultanate’s reputation as a business-friendly nation.

Underscoring the agreement’s positive impact on KPIs, Al Mamari said that Omantel will receive cash proceeds of the sale against payment of service and lease charges, while Helios Towers will bear the direct operating cost of the passive infrastructure, including electricity, fuel, operations and maintenance, depreciation, ground rent and other costs.

Al Mamari told the audience that the transaction is expected to conclude in the second half of 2021.