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Half of Africa’s towers will have been transferred from MNOs to independent towercos by 2015
TowerXchange forecasts that tower companies will own or operate 38.8% of Africa’s towers by year end 2014 & more than 50% by the end of 2015” said Kieron Osmotherly CEO of emerging market tower industry research firm & community host TowerXchange
The independent tower company business model has achieved ‘launch velocity’ in Africa.
“Since the first deal in 2010, 18% of Africa’s 160,000 telecom towers have been transferred from Mobile Network Operators to independent tower companies. TowerXchange forecasts that tower companies will own or operate 38.8% of Africa’s towers by year end 2014, and more than 50% by the end of 2015,” said Kieron Osmotherly, CEO of emerging market tower industry research firm and community host TowerXchange. http://www.towerxchange.com
What is happening?
Over US$2bn has been invested in African tower transactions over the past four years. However, African independent tower companies (towercos) have been raising even more capital in anticipation of a further US$3bn worth of assets being sold before the end of this year. Among 35,000 towers for sale currently being tracked by TowerXchange are the remainder of Airtel’s 15-20,000 African towers in 17 countries, after the sale of the first tranche of 3,100 Airtel towers to Helios Towers Africa was announced earlier this month; plus almost all the remaining towers in Nigeria. By the end of 2014, TowerXchange forecast that 84% of Nigeria’s towers will be owned or operated by towercos.
Who are the key players?
The shape of African telecoms has been and always will be driven by the leading mobile network operators. Once they decide to bring a portfolio of towers to market, the MNOs typically inaugurate an auction attracting several of Africa’s leading towercos to bid.
Helios Towers Africa and IHS can both claim to be Africa’s market leading towerco – Helios Towers Africa owns 7,800 towers, IHS has over 10,500 of which 5,750 are owned and 4,750 managed. International towerco giant American Tower owns 5,099 towers in Africa, followed by Eaton Towers with 2,500 (of which 800 are owned) and a cluster of regional towercos led by Helios Towers Nigeria and SWAP, each with over 1,000 Nigerian towers. TowerXchange are tracking a further dozen middle market towercos in Africa.
Why this is happening now?
The independent telecom tower industry has achieved ‘launch velocity’ in Africa thanks to the rise of a unique win-win-win-
Under pressure from falling ARPUs, rising energy opex and the capex required to upgrade Africa’s networks from 2G to 3G, Africa’s MNOs are monetising their towers and refocusing on their core business.
Towercos are uniquely positioned to build, acquire and strengthen African towers and maximise their value by selling co-locations to other MNOs, broadcasters, ISPs, WiMAX and metropolitan 4G players. The most successful African towercos are attracting EBITDA multiple valuations in the high teens, significantly higher than most MNOs, and some canny operators are retaining a stake in joint venture towercos to benefit from the favorable relative multiple arbitrage.
The majority of the pioneering early stage investors in African towers have stayed the course, now joined by established telecoms and infrastructure investors, such as Providence Equity and Macquarie (AIIM). “The most mature private equity backed African towercos will reach a scale suitable for IPO, trade sale or offload to a sovereign wealth fund in the next five years, so it is not surprising that TowerXchange has recently encountered an unprecedented surge of interest in our research from the investment community,” added TowerXchange’
African governments and telecoms regulators win too as towercos reduce the need for parallel infrastructure and accelerate time to market for network extensions and new market entrants.
What are the implications for the supply chain?
As passive infrastructure is transferred to the control of towercos, often including first refusal on build to suit programmes, a community of advisors and suppliers needs to understand how strategic and procurement priorities have changed in Africa.
A tower transaction unlocks immediate improvement capex, deployed to ensure H&S, to make power systems more robust to ensure Service Level Agreements are met, to measure and monitor cell site performance, and to upgrade sites for multiple tenants. As tower companies add more tenants to sites (and tenancy ratios are generally progressing well in Africa), tower cash flow improves and adds to towerco’s appetite to invest in energy efficiency to improve site level profitability.
Join the African tower industry community
TowerXchange is a community of over 6,000 decision makers in African, LatAm and Asian towers. Latest industry news and an archive of half a million words of TowerXchange’
TowerXchange also hosts annual Meetups for the tower industry in Africa, Asia and LatAm. The TowerXchange Meetup Africa, taking place this year on October 20 and 21 in Johannesburg, is an annual invitation-only event gathering together the top 250 decision makers at African towercos, MNOs, their investors and strategic partners. For details, visit
Harpreet Sohanpal - TowerXchange