African Mobile Tower Operators Consolidate
By Staff Published: March 13, 2016, 12:12 am
From FinancialTimes. Story by Maggie Fick and Nicholas Megaw.
IHS, the African telecoms infrastructure group, has agreed to buy about 1,200 mobile cellular towers from Helios Towers Nigeria in the first consolidation of mobile infrastructure companies on the continent.
The two companies have been the largest independent tower operators in Nigeria since the early 2000s, when they established the country’s mobile telecoms infrastructure industry. Mobile phone use boomed and now, with the population of more than 180 million embracing smartphones and using new mobile technology, demand for data is growing quickly.
“Bringing the two companies together means we can keep improving the network for Nigerians by combining the best of both networks”, said Issam Darwish, IHS executive vice-chairman and group chief executive.
The deal is worth hundreds of millions of dollars.
IHS has 15,000 towers in Nigeria, but Darwish said the mobile network would need more than 40,000 more to meet increasing demand over the next decade.
“Despite the current subdued emerging markets environment, we continue to be bullish on growth and strongly believe that enhancing Nigeria’s telecoms sector will help the economy diversify,” he said.
Last year, HTN Nigeria said it was looking for further acquisitions and considering an initial public offering. It announced its intention to float on London Stock Exchange but abandoned the idea after receiving interest in a takeover.
IHS has grown by purchasing towers from mobile networks including MTN and Etisalat.
The latest deal is the first sign of consolidation within the sector, which observers say shows the growing maturity of the industry in the region, and echoes similar patterns in Europe.
The company owns 23,300 towers in Nigeria and four other African countries — Cameroon, Ivory Coast, Rwanda and Zambia.
Telecoms tower industries have developed across the world in recent years as network operators sell their tower portfolios to cut costs and raise cash. Dedicated infrastructure companies lease the towers back to the networks, managing the towers more cheaply by operating at larger scale than a single operator can.
Read more at FinancialTimes.
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