Zain KSA, via its holding company Mobile Telecommunications Company Saudi Arabia, today announced its acceptance of non-binding offers for an 80% stake in its 8.0k towers in Saudi Arabia at a valuation of $807m (3.0bn Saudi Riyal) from a group led by the Public Investment Fund (PIF). Specifically, the buyers of this 80% stake in Zain KSA’s tower infrastructure are:

  • Public Investment Fund (PIF): Saudi Arabia’s sovereign wealth fund is acquiring a 60% stake, representing a purchase of $484m
  • Prince Saud Bin Fahad: his royal highness is acquiring a 10% stake, representing a purchase of $80.7m
  • Sultan Holding Company: acquiring a 10% stake, representing a purchase of $80.7m

Upon completion of this transaction, Zain KSA will own the remaining 20% stake in its tower infrastructure.

Overall, the transaction implies that the PIF-led group is valuing Zain KSA’s 8.0k towers at an Enterprise Value per tower of $100k.

Transaction Overview – Zain KSA, Public Investment Fund (PIF)

Zain KSA will sell only its passive, physical tower infrastructure to the Public Investment Fund-led group. Whereas the company will retain all active infrastructure, including wireless communication antennas, software, and technology.


Presently, the offers submitted to Zain KSA do not represent binding commitments. Therefore, final agreements are subject to the approval of official authorities and completion of due diligence by the acquirers.

Zain KSA – Background to the Towers Sale in Saudi Arabia

Zain KSA (Mobile Telecommunications Company Saudi Arabia) is the third-largest wireless carrier in Saudi Arabia and a subsidiary of Zain Group, which holds a 37% equity stake in the company. As of June 30, 2021, Zain KSA has 7.4 million customers in Saudi Arabia.

Network Investment

During 2020, Zain KSA invested $785m (37% of revenue) on capital expenditures, which included its 5G roll-out, fiber-to-the-home (FTTH) network, and spectrum & license fees. Presently, the company provides connectivity through 9.9k network sites, including 4.5k+ 5G sites, across 50 cities in Saudi Arabia.

Pressure Builds

Recently, Zain KSA had been pressured by its significant debt load, operating with Net Debt / EBITDA of >4.0x. Additionally, the unit is sub-scale in Saudi Arabia and faces high capital expenditure costs for its 5G roll-out and fiber-to-the-home (FTTH) network.

As a result, in Q4 2020, Zain KSA completed a capital restructuring and rights issue to improve its financial position.

Strategic Towers

In addition to the capital restructuring and rights issue, Zain KSA has previously sought ways to monetize its tower assets. In doing so, the company would help alleviate pressures from both debt and future investment need, by freeing up capital.

Firstly, in March 2019, Zain KSA signed an agreement with IHS Holding for the sale-and-leaseback of its 8.1k towers. However, by June 2019, Zain KSA decided against the $672m (2.5bn Saudi Riyal) deal. Specifically, the company cited IHS Holding’s failure to meet the regulatory requirements in Saudi Arabia for ending the transaction.

Secondly, in July 2020, Zain KSA entered into a memorandum of understanding (MoU) with Mobily (Etihad Etisalat), the second-largest wireless carrier in Saudi Arabia. Both companies planned to merge their tower infrastructure into a jointly-owned tower company. However, this plan ultimately did not proceed.

Adam Simmons covers Towers for Dgtl Infra, including American Tower (NYSE: AMT), Crown Castle (NYSE: CCI), SBA Communications (NASDAQ: SBAC), Cellnex Telecom (BME: CLNX), Vantage Towers (ETR: VTWR), IHS Holding (NYSE: IHS), and many more. Within Towers, Adam focuses on the sub-sectors of ground-based cell towers, rooftop sites, broadcast / radio towers, and 5G. Adam has over 7 years of experience in research and writing for Towers.


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