Meetup Africa & Middle East 2016 - TowerXchange...To discuss your participation, contact Annabelle on +44 7423 512588 or email [email protected] Diamond sponsors: Silver Sponsors:

To discuss your participation, contact Annabelle on +44 7423 512588 or email [email protected]

Diamondsponsors:

Silver Sponsors: Bronze Sponsors:

Meetup Africa & Middle East 2016

19-20 October, Sandton Convention Centre, Johannesburg

The 4th annual retreat for 250 leaders of the African telecom tower community

New MNO and towerco operational team passes available

(Chairman) Daniel Lee Managing DirectorIntrepid Advisory Partners

Zhiyong ZhangChairman & PresidentMiteno

Akhil GuptaChairmanBharti Infratel

Michel FaivreDirecteur Programme Partaged’Infrastructure AMEA, Orange

Nina TriantisManaging Director, Global, Head of Telecoms & MediaStandard Bank

Terry RhodesCEOEaton Towers

Marc GanziPresident, Digital Bridge &Mexico Tower Partners

Arun KapurCo-FounderIrrawaddy Green Towers

James Maclaurinformerly CEOedotco

Areef KassamDirector of InfrastructureGSMA Mobile for Development

Ayman Al AdlDirector - TMTStandard Chartered Bank

Dagan KasavanaCEOPhoenix Tower International

Chuck GreenExecutive ChairmanHelios Towers Africa

Suresh SidhuCEOedotco

Malcolm CollinsChief ExecutiveCTIL

Ted ZhongCEOQ Towers International

Hal HessEVP, International Operations andPresident, EMEA and Latin AmericaAmerican Tower

Nobel TanihahaPresident DirectorPT SOLUSI TUNAS PRATAMA (STP)

Umang DasChief MentorViom Networks

Gilles KuntzCEOTowerCo of Madagascar

Maria ScottiCEOTorrecom

David MeganckFounder and COOAcsys

Tilak Raj DuaDirector GeneralTAIPA

Peter Owen EdmundsCo-founder and ChairmanRussian Towers

Kurt BagwellPresident InternationalSBA Communications

Jim EisensteinChairman & CEOGrupo TorreSur

Bimal DayalCOOIndus Towers

Inder BajajCEOHTN Towers

Riana DonaldsonManager: International Network Operations SupportVodacom

Tunde TitilayoVice ChairmanSWAP International

Jack DessayManaging DirectorMacquarie Capital

Jeffrey EldredgePartnerVinson & Elkins

Enda HardimanManaging PartnerHardiman Telecommunications Ltd.

Adeel BajwaSenior GM of Legal Affairs and Contracts, Warid Telecom

Scott CoatesCEOWireless Infrastructure Group

Carlo RamellaCOO, EI Towersand Chairman, Towertel

With special thanks to the TowerXchange “Inner Circle”About TowerXchange

Founded in 2012, TowerXchange is your independent community for operators, towercos, investors and suppliers interested in EMEA, CALA and Asian towers. We’re a community of practitioners formed to promote and accelerate infrastructure sharing. TowerXchange don’t build, operate or invest in towers; we’re a neutral community host and commentator on telecoms infrastructure.

The TowerXchange Journal is free to qualifying recipients. We also provide webinars and regular meetups. TowerXchange monetises this community through hosting annual Meetups and the sale of advertising, without compromising editorial integrity.

TowerXchange was founded by Kieron Osmotherly, a TMT community host and events organiser with 18 years’ experience, and is governed with the support and advice of the TowerXchange “Inner Circle” – an informal network of advisors

Our informal network of advisers:

© 2016 Site Seven Media Ltd. All rights reserved. Neither the whole nor any substantial part of this publication may be re-produced, stored in a retrieval system, or transmitted by any means without the prior permission of Site Seven Media Ltd. Short extracts may be quoted if TowerXchange is cited as the source. TowerXchange is a trading name of Site Seven Media Ltd, registered in the UK. Company number 8293930.

| TowerXchange Meetup Africa 2016, 19-20 October 2016, Sandton Convention Centre, Johannesburg | www.towerxchange.com/meetups/meetup-africa2

New directions at the 2016 Meetup

At the first TowerXchange Meetup back in 2013, the telecoms passive infrastructure community had never had a dedicated meeting place. Lost in the noise of trade shows more preoccupied with apps, services and active equipment, towers had taken a back seat - hidden in the vast and disparate disciplines of the telecom world.

An established meeting point for executive level tower professionals

For the first three years, TowerXchange provided an executive-level only forum for MNO tower strategists and towerco CXOs to meet on annual basis. Roundtables held under the Chatham House rule welcomed MNO M&A executives and advisors running the continent’s major tower transactions alongside the management boards of the region’s

rapidly growing independent towercos, investors and a select number of supply chain representatives.

NEW for 2016: doors open to operational and technical teams to join parallel roundtables

Since then expertise in operating towers had stepped up a notch. Extensive experience in the field, the rise of specialist skill sets, technology developments, healthy competition and also notable failures have all spurred on big steps forward in managing telecom infrastructure. Whilst tower transactions remain high on the agenda - operational excellence has taken a driving seat.

In recognition of this, TowerXchange is excited to open up the 2016 Meetup to operational and technical teams managing the day to day running of

their tower portfolios. New roundtables and panels dedicated to best practice, technology evaluations and process improvements will run in parallel to executive level discussions - welcoming a host of new important stakeholders to benefit from the peer-led focussed networking at a TowerXchange Meetup.

Expanded geographical focus: MENA’s towers in the spotlight

As tower ownership in MENA starts to change hands, more new faces are expected at this year’s Meetup as operators, newly forming local towercos and international companies who have struggled to get a foothold in sub-Saharan Africa examine the opportunities coming to market. Dedicated MENA focus sessions throw the region into the spotlight as


Every TowerXchange expo has sold out

the Meetup’s geographical focus expands beyond sub-Saharan Africa and into a region on the cusp of a major transformation.

Bigger exhibition and new interactive sessions

As the only event dedicated to telecom towers, the number of companies exhibiting has continued to grow with 2015 seeing us move to the Sandton Convention Centre to handle the increasing demand. In 2016, the exhibition floor space has been increased by 50% to accommodate the appetite from the sector’s supply chain. Plus with new technology working groups sharing product trials, success stories and frustrations being led by a board of MNO and towerco procurement and technical teams - exhibitors are lining up to get one of the limited seats at the table.

With such exciting new features being added to the successful formula of a Meetup, 2016 is set to be the best and the busiest year yet! We are excited to welcome new faces and old friends to Johannesburg once again this October and we look forward to seeing you there!

Warm regards

Laura GravesHead of EMEA

Kieron OsmotherlyFounder & CEO


Chuck Green, Terry Rhodes and Hal HessKieron Osmotherly, Founder & CEO, TowerXchange

Laura Graves, Head of EMEA, TowerXchange

TowerXchange Meetup Africa and Middle East at a GlanceIndustry breakdown of TowerXchange Meetup Africa 2015 attendees

TowercoMNOManaged service providerEnergy equipmentRMS, ILM and access controlESCOInvestorAdvisory firmTower design and manufactureOthers

21%

17%

15%14%

10%

5%

6%

6%5%

2%

Source: TowerXchange

For the past 3 years, 600+ executives managing sub-Saharan Africa and

MENA’s 262,539 telecom towers have assembled in Johannesburg for the

annual TowerXchange Meetup.

Assembling the region’s towercos, MNOs, tower industry investors and

technology and service supply chain, every single Meetup has SOLD OUT!

A networking club for the most important men and women in telecoms

infrastructure, executives responsible for managing 80-90% of the region’s

towers attend every single TowerXchange Meetup and for 2016 we are

delighted to open the Meetup to their technical and operational teams.

Previous attending tower owners and operators include:


2016 Meetup: What’s new?

NEW passes available for towerco and MNO operational staff

Dedicated working groups, networking events, roundtables and panels for Operations Directors, Project Managers, Procurement and Supply Chain Executives, Energy Experts and Property and Site Acquisition Specialists - NEW operations pass now available - apply today!

NEW focus extending beyond macro towers

RANsharing, microcells, small cells, IBS, DAS, fibre, operator JVs: Spotlight on strategies being used to reduce network TCO

EXPANDED exhibition

50% more exhibition space than last year. Meet the leaders in energy, RMS, site management, access control, static assets, technical advisory, small cells and DAS at the industry’s most focussed solutions showcaseNEW R-ESCO working group

Contract terms, financing, technical solutions, micro-grids and alternative business models: the realities of the opex business model and the key actors making it work

INCREASED investor attendance

Following the successful launch of the TowerXchange Investors Club in London, connect with private equity investors, strategic investors, vendor finance, DFIs, ECAs, local and international debt providers and infrastructure investors with an appetite for tower and energy infrastructure in the sector

ENHANCED MENA focus

As deal flow in SSA slows, towers in MENA are set to change hands: connect with the operators, towercos and advisors at the heart of transactions and develop your supply chain in new countries

NEW technology user working groups

Held in a closed room, towerco and MNO procurement and technical teams share product trials, limitations and recommendations for improvements. Spaces for vendors strictly limited


New to the TowerXchange community? Then let us explain the unique format and focus of a TowerXchange Meetup!

What is a Meetup? At other telecom events, tower infrastructure is typically hidden away as an under-appreciated small part of a broader show. The huge audience of device and VAS influencers at other events dilutes access to the few tower experts and decision makers present. In comparison, TowerXchange has been described as a “networking club for tower geeks” – everyone you meet at TowerXchange is focused on towers.

A small number of panel discussions are used to set the scene - inviting MNO and towerco VIPs to share priorities in optimising their assets and examining transactions, rollouts and densification plans that are creating demand and deal flow for the supply chain.

The real feature of a Meetup are small roundtable breakouts - connecting you directly and and in an intimate format with peers, key decision makers and leading experts. TowerXchange’s renowned roundtable breakouts are led by an expert moderator, but everyone’s opinions and questions are welcomed. Each roundtable focuses on a specific country, financial, operational or technological issue. With the ability to attend four roundtables at each Meetup, participants can tailor their agenda to their exact needs.

What’s more, as the only event dedicated to the telecom tower industry - each Meetup boasts an exhibition of the most important suppliers and service providers supporting the industry and with participation from vendor companies strictly limited, there are at least as many buyers as sellers on site!

If your role encompasses telecoms infrastructure - this is one event you can’t afford to miss!


< Laser beam focus on towers< Intimate working groups< Direct contact with decision makers and experts< Screened ratio of buyers to sellers< Co-located exhibition

Expert panel debates

Intimate roundtable discussions


Fibre, microwave, satellite backhaulMicrocells, small cells &

DASActive equipment

Tier 1 OEMs

Mobile Network Operators

Investors: private equity, DFIs, debt finance, infrastructure funds, institutional investors

Government, regulators, universal service funds

Law firms

Group level strategistsC-suite & network planners at local OpCos

Outsourceto

Strategic consultancyDue diligenceDemand modelingAsset register audits

Independent TowercosSell co-locationsGenerate amendment revenueBuild-to-suitAchieve SLAsEfficiency programmesOptimise supplier contracts

Transfer assets to

Construction servicesTurnkey infrastructure rollout Tower design & manufactureImport, customs & delivery Site acq, leasing & permitting Installation of towers Tower strengtheningDecommissioning

Dynamic assets

Energy equipmentDiesel gensetSolarWindFuel cell

BatteriesRectifiersInvertersLine conditioningPIUs

Air conditioning Lightning protectionControllerVoltage regulatorAlternator

Managed service providers

ESCOs

Static assetsTowers & mastsSheltersBracketsEnclosuresLightingFencing

0&M servicesMaintenanceStaffingSpare partsSecurityRefueling

Energy as a service

Monitoring & managementRMSIntelligence/analysisSite managementJob ticketingAsset lifecycle platform

Access control

Subcontract

Opex modelsVendor financeDistributed generationCommunity power

Subcontract or in-house

Outsourceto

Tower Industry Value Chain

Investment management advisors

TowerXchange Meetups bring together 250+ business leaders representing the entire telecoms infrastructure ecosystem.

TowerXchange engages with MNOs who retain their passive infrastructure, and with 226 independent towercos and network sharing joint ventures which between them have acquired or built over 2,090,000 towers worldwide. TowerXchange also maintains relationships with over 500 investment and advisory firms who facilitate tower transactions.

TowerXchange explores the implications of tower transactions for the supply chain: from tower designers and manufacturers to tower construction and O&M firms. The TowerXchange community engages with every major telecom energy equipment and service provider worldwide, including an emerging class of credible ESCOs. We track over 30 different RMS and ILM solution providers, as well as leaders in access control and H&S solutions for cell sites. And we connect the passive infrastructure ecosystem with innovations in microcells, small cells and DAS as well as fibre, microwave and satellite backhaul.

The TowerXchange community is brought together by the renowned TowerXchange Journal, circulated to 20,00 tower industry leaders worldwide. The tower industry’s leaders gather annually at TowerXchange Meetups – we look forward to meeting you there!

Who you will meet

For more information visit www.towerxchange.com/meetups/meetup-africa

Towerco CXOs, strategists and business development teams< Track tower sales, BTS opportunities and tenders

< Meet with acquisition targets/ buyers

< Build MNO relationships

< 1-to-1 with investors

< Peer evaluation of towerco business models

Investors< Country, towerco and operator profiles< Risk and return expert views< 1-to-1 with investable infrastructure platforms< Deal analysis< New ESCO investment opportunities

ESCOs< Towerco and operator ESCO appetites and experience< Connect with investors< Political/ regulatory think tanks< Peer-led business case strengthening< Technology appraisals

Managed service providers< Biggest gathering of MENA and SSA’s tower owners

< New BTS, upgrade and maintenance tenders

< QoS versus price debate

< Peer-led technology evaluation groups

< Focussed telecom infrastructure expo

Equipment manufacturers and technology companies< Market forecasts for new build/ upgrade

< Operator and towerco site priorities

< Procurement/ supply chain roundtables

< Biggest gathering of MENA and SSA’s tower owners

< Competitor benchmarking

< Dedicated telecom infrastructure expo

Towerco technical and operational teams< Best practice in BTS/ upgrade/ maintenance/ co-location

< Tenant feedback and 1-to-1 meetings

< New energy solutions and models



Operator CTOs, M&A executives, strategists, network VPs and passive infrastructure managers< Passive, active and energy infrastructure sharing models

< Excellence in tower operations, energy supply and co-locations

< Peer review of towerco KPIs, SLAs and relationships

< Maximise tower valuations



Now eligible

Join NEW RESCO

association

NEWtopics for

2016

Join theTX Investors

club

Who should attend?

Confirmed panelists and roundtable hosts include

< Adeodyin Adeola, EVP, Network Infrastructure, Airtel Nigeria< Dimitris Lioulias, General Manager, Strategy, Saudi Telecom Company< Andrew Arowojolu, Chief Regulatory Officer, Zain< Ibrahim Misto, General Manager, Network Operations, MTN Ghana< Sudhir Chopra, CTO, Smile < Zaheer Coovadia, Executive Head, Field Force Management & Network Property, Vodacom< Samuel Tanon, Infrastructure Manager – Network Sharing – Power and Civil Works Procurement, Millicom< Darren Crosse, CTO, EMEA, American Tower< Collin Mugisha, Head of Supply Chain, EMEA, American Tower < Chris Jonck, Head of Power Solutions, American Tower< Johan van Schalkwyk, Executive Head of Department of Capital Projects, American Tower< Kash Pandya, CEO, Helios Towers Africa< Chuck Green, Executive Chairman, Helios Towers Africa< Roy Cursley, Director of Operational PM Office, Helios Towers Africa< Colin Gaston, Director of Operations and Technology, Helios Towers Africa< Rob Salbego, Technical Director, Helios Towers Africa< Alex Leigh, Group Director of Sales & Marketing, Helios Towers Africa

< Terry Rhodes, CEO, Eaton Towers< Solange Karwera, Senior Category Manager, Network Site Infrastructure, Vodafone Procurement Company < Ahmed Saeb, Principal Category Manager, Networks SCM Technology, Vodafone Procurement Company< Shankar Iyer, President of International Business, Quippo International< Phil Cooper, Head of EMEA, Digital Bridge< Jide Odekunle, General Manager/ CEO, Lagos State Infrastructure Maintenance and Regulatory Agency< Guri Bath, Director, Global Communications Group, Citi< Enda Hardiman, Managing Partner, Hardiman Telcommunications< Victor Teppah, Deputy Director, R&D, National Communications Authority – Ghana< Chris Grundberg, Head of Equity Research, South Africa, UBS< Marco Cordoni, Senior Partner, Analysys Mason< Brian Burns, Principal, Analysys Mason< Bill Bubenicek, Founder, R-ESCO Association< Jack Dessay, Managing Director, TMET, Macquarie< Nina Triantis, Global Head, Telecoms & Media, Standard Bank< Eric Crabtree, Chief Investment Officer, IFC


TowerXchange Meetup Africa & Middle East

Day One | Wednesday 19 October 2016

08:00 Registration and coffee

09:00 TowerXchange’s analysis of the African & Middle Eastern tower industry< Kieron Osmotherly, Founder and CEO, TowerXchange< Laura Graves, Head of EMEA, TowerXchange

10:00 Keynote: A drive to operational excellence in telecom towersProcess improvements, technology upgrades and corporate strategy enhancing site uptime and cost efficiency< Darren Crosse, CTO, EMEA, American Tower < Kash Pandya, CEO, Helios Towers Africa < Adeodyin Adeola, VP, Network Infrastructure, Airtel Nigeria < Ibrahim Misto, General Manager, Operations and Maintenance, MTN Ghana

10:40 Insights into operational excellence from the region’s leading managed service providers

11:00 Networking refreshment break

11:30 MENA spotlight: M&A, operator joint ventures and the opportunities for independent towercosAn in depth look at market dynamics in MENA and how the shape of the region’s telecom tower industry is starting to change< Dimitris Lioulias, General Manager, Strategy, Saudi Telecom Company < Shankar Iyer, President of International Business, Quippo International < Phil Cooper, Head of EMEA, Digital Bridge

12:10 Roundtable session I

13:10 Networking lunch

14:30 Roundtable session II


16:00 Long term data collection and interpretation and its impact on tower operations

16:20 Closing keynote: Consolidation of Africa’s towers and towercosTower transactions, company acquisitions, business model diversification and exit strategies in sub-Saharan African< Moderator: Marco Cordoni, Senior Partner, Analysys Mason< Terry Rhodes, CEO, Eaton Towers < Chuck Green, Executive Chairman, Helios Towers Africa < Arjun N., Group Director, M&A and Business Development, Airtel (afc)

17:00 Presentation of the inaugural TowerXchange Industry Awards

17:20 Drinks reception hosted by diamond sponsor – International Power Supply

19:30 TowerXchange networking dinner at the Bull Run (Separately bookable)

Day two | Thursday 20 October 2016

08:30 Coffee and registration

09:00 Keynote panel: Deeper infrastructure sharing and alternative business models

Examination of MNO strategies and their impact on network TCO< Sudhir Chopra, CTO, Smile < Zaheer Coovadia, Executive Head, Field Force Management & Network Property, Vodacom

10:00 Strategic partner panel: Remote monitoring systems


10:50 Enhancing coverage or rural and remote regionsTenders, financing, tower designs and business models geared at supporting enhanced coverage to remote locations< Dion Djerling, Managing Director, Connect Africa

11:30 Roundtable session III

12:30 Networking lunch

13:40 Roundtable session IV


15:10 The energy supply chain supporting site uptime

15:30 Spotlight on energy storage solutions

15:50 Solving the energy equation: new business models and solutions< Chris Jonck, Head of Power Solutions, American Tower< Samuel Tanon, Business Development Manager, Millicom< Alex Leigh, Group Director of Sales & Marketing, Helios Towers Africa

16:40 Closing remarks and close of event

Sandton Convention Centre, Johannesburg | 19-20 October 2016


2016 roundtable discussion groups

< Appraisal of MNO tower strategies: SLB, SLB + retain equity, MLL, JV infraco or total ownership?< Reducing opex by leveraging synergies between passive and active network management< How to manage active infrastructure sharing when towercos own a significant proportion of passive infrastructure< Optimising urban networks: macrocells, microcells, DAS and IBS in Africa< Best practice in corporate governance< How to obtain a premium valuation for your towers< Options for expansion capital and refinancing< De-risking the towerco business model and improving EBITDA multiples< Middle market towerco survival, growth and exit strategies< Mitigating forex exposure < Can the ESCO model work for the telecoms sector?< Funding the ESCO model< Greening the telecoms industry: policies and frameworks to support renewable energy< Application of lean six sigma to passive infrastructure management< Big data and its ability to improve network management

< Accelerating construction and build-to-suit rollout< Streamlining the integration and upgrade of acquired tower portfolios< How to enhance already well performing towers< What is the low hanging fruit to improve TCO of power systems< Optimising maintenance capex< Data analysis: what is data now starting to show over a several year period?< Best practice in land acquisition, permitting and landlord negotiations < Managing and improving community relations< Optimising towerco-operator relations< Accelerating co-location < How to have a top performing NOC: technology, processes and personnel< Tower design, strengthening and structural analysis: what’s new?< Theft, security and organised crime: keeping one step ahead< Operational best practice from around the globe< Excellence in HSE

< Licensing and permitting in Nigeria< The impact of infrastructure sharing in Ghana: lessons for the establishment of tower industries in other markets< Overcoming logistic challenges: Spotlight on the DRC< Network rollout, co-locations, fibre and small cells: where are the growth opportunities in the South African market? < Dynamics in Saudi and Kuwait as the markets open up to independent towercos< Market opportunities and challenges in the Middle East: where to channel your focus< Algeria: opportunities and challenges < Mozambique< Egypt< Market growth, priorities and challenges in East Africa: Spotlight on Tanzania, Rwanda, Zambia, Uganda and Kenya< Market growth, priorities and challenges in West Africa: Spotlight on Cameroon, Cote d’Ivoire, Burkina Faso and Niger

Executive & strategic roundtables Operational roundtables Country & region focus

The hallmark of a TowerXchange Meetup, over 40 interactive and carefully curated discussion groups of 15-20 people, each led by an expert moderator. Participants have the opportunity to partake in four groups, enabling you to tailor discussions to your business needs and connect with peers, clients and potential partners in a unique structured networking format.


New Technology User Working Groups


Working group members include

< Solange Karwera, Senior Category Manager, Network Site Infrastructure, Vodafone Procurement Company < Ahmed Saeb, Principal Category Manager, Networks SCM Technology, Vodafone Procurement Company < Darren Crosse, CTO, EMEA, American Tower < Chris Jonck, Power Solutions Specialist, American Tower < Collin Mugisha, Head of Supply Chain, EMEA, American Tower< Johan van Schalkwyk, Executive Head of Department of Capital Projects, American Tower< Roy Cursley, Director of Operational PM Office, Helios Towers Africa < Colin Gaston, Director of Operations and Technology, Helios Towers Africa< Rob Salbego, Technical Director, Helios Towers Africa < Martin Black, Head of Procurement & Supply Chain, Millicom< Samuel Tanon, Business Development Manager, Millicom < Ben van Zyl, Business Development Manager, Telkom SA< Zaheer Coovadia, Executive Head, Field Force Management & Network Property, Vodacom< Srivats Grandhe, Group Director – Operations, Eaton Towers < Adedoyin Adeola, Vice President, Network Infrastructure, Airtel Nigeria< Ibrahim Misto, General Manager, Network Operations, MTN Ghana

Held to complement the co-located exhibition at the Meetup, the new technology roundtables are designed for attending technical experts, supply chain and procurement executives to better evaluate new technologies in a peer-led environment. Held outside the main Meetup room, each table will be opened with a quick fire run through of the most important suppliers in each field - highlighting key differentiators and developments with each vendor limited to a 60 second ‘elevator pitch’. The table will then open up debate on what products buyers at towercos and MNOs are currently evaluating or assessing, what results they have from trials and deployment in the field, what evolutions or innovations they are looking for and what issues or limitations they are finding with current products. Seats for vendors in the working groups are strictly limited - contact Annabelle Mayhew ([email protected]) to discuss securing a place.

2016 topics

Power cubes & hybrid systems

Site management

systems

Batteries

ESCOs

Civil works and O&M

Diesel generators

Remote monitoring

systems

Microcells, small cells

and DAS If you work for a towerco or MNO and would like to join one or more of the working groups, please contact Laura Graves [email protected]

TowerXchange Investors Club Africa & Middle East edition


Globally, TowerXchange are tracking 230 towercos and 109 investors with investments active in or a proven appetite for the tower asset class. Our research and series of by-invitation-only Meetups have become a valuable source of information for investors in not only the private but also, increasingly the public sector (with the number of publically listed towercos looks to increase from 13 to 19 in the next 18-24 months). Plus with investors evaluating the growing number of RESCOs providing power to off-grid towers or those unreliable grid - the number of investors engaging with the TowerXchange community is growing.

In April 2016, the inaugural TowerXchange Investors Club was held at the TowerXchange Meetup Europe in London. 39 investors representing 28 different investment firms joined onsite discussion groups and scheduled 1-to-1 meetings with the executive level delegation. This October, the Investor’s Club makes its first appearance at the TowerXchange Meetup Africa & Middle East.

What is the TowerXchange Investors Club?

Held to complement the baseline market information shared during the TowerXchange Meetup roundtables, the TowerXchange Investor’s Club pre-arranges private one-to-one meetings between investors and other eligible parties. These confidential meetings will give investors the opportunity to open dialogue with key stakeholders in the African & Middle Eastern tower industry and assess potential new investment opportunities in the region’s telecoms infrastructure.

Who is invited to join?

< Private equity firms, infrastructure investors and institutional investors with an appetite for the tower asset class< DFIs with a remit for Africa and the Middle East< Export credit agencies supporting companies in the passive infrastructure and off-grid power supply chain< Towercos seeking seed capital, expansion capital, debt

finance and exit strategies< Investment banks advising on the sector< RESCOs searching for investment

How can I get involved?

In order to participate in the first Investors Club you must be registered for the TowerXchange Meetup Africa & Middle East. As a delegate you will be issued with a list of attending parties with whom our team will help you secure a number of meetings in our lounge area. If you would like to secure a large number of meetings, we advise that you book exclusive use of one of the on-site private meeting rooms. These are allocated on a strictly first come, first served basis - please contact Annabelle Mayhew [email protected] to enquire about availability.

What will I learn from the co-located roundtables?

The Investors Club has been designed to complement

our TowerXchange Meetup roundtables and published research which provide the critical baseline data and insight into the dynamics of key markets on which to base investment decisions. Key onsite roundtables include:< Options for expansion capital and refinancing< How to obtain a premium valuation for your towers< De-risking the towerco business model and improving EBITDA multiples< Middle market towerco survival, growth and exit strategies< Mitigating forex exposure < Funding the ESCO model< Market growth, priorities and challenges in East Africa: Spotlight on Tanzania, Rwanda, Zambia, Uganda and Kenya< Market growth, priorities and challenges in West Africa: Spotlight on Cameroon, Cote d’Ivoire, Burkina Faso and Niger< Market opportunities and challenges in the Middle East: where to channel your focus

How can I join?


Early booking is strongly recommended

TowerXchange Meetup DinnerWednesday 19 October, 7.30PMBull Run, 20 Maude Street, Sandton3 course meal and drinksCost: £50

Continue the day’s networking in a relaxed and informal setting - the TowerXchange evening dinner is always a welcome highlight of the event and sells out ahead of time.

In 2016, we have reserved space for 100 people at the Bull Run restaurant, just a short walk from the Sandton Convention Centre. Join VIPs and delegates for drinks and a three course meal and be sure not to miss out on an important networking opportunity

A nominal fee of £50 is required to cover food and beverages for the evening. Please select the dinner option when registering online.

Prior registration is essential: Please note that the dinner will sell out and we are unable to take registrations on the day.

All previous three Meetups have SOLD OUT and with the scope of eligible attendees expanding for 2016, and pre-registrations being taken prior to the official event launch this year’s Meetup is set to sell out earlier than ever.

www.towerxchange.com/meetup/meetup-africa/apply-to-attend

[email protected]

+44 (0) 7423 512588

Group bookings now available for towercosFor 2016, operational and technical managers are invited to join our regular C-level attendance and participate in dedicated roundtables and activities. Individual passes are £1,000 - to register a team of four or more please contact Annabelle Mayhew on [email protected]

Complimentary passes for MNOsWhether responsible for M&A, strategy, network operations, procurement and supply chain, energy, site acquisition or operations - a limited number of complimentary passes exist for mobile network operators. Register online or contact Annabelle Mayhew for more information

Vendor participation limitedIn order to maintain the ratio of buyers to sellers, vendors (excluding MSPs) are limited to two full access and two expo only access passes and attending representatives must be director level or higher.

Register today to guarantee your involvement

TowerXchange Industry AwardsFor over four years we have been tracking and covering excellence in telecom towers - from landmark tower transactions and the formation and growth of new tower companies to improving the uptime on sites through the adoption of improved processes and technologies.

To recognise such achievements, we are pleased to announce our inaugural industry awards which will be presented at this year’s TowerXchange Meetup Africa & Middle East on 19 October at the Sandton Convention Centre. For more information please visit www.towerxchange.com/meetup/meetup-africa/towerxchange-industry-awards

Awards categories:

MNO passive infrastructure team of the year

Tower transaction of the year

Most innovative towerco of the year

BTS towerco of the year

Site upgrade project of the year

Operational efficiency solution of the year (non-energy)

Green initiative of the year

Nomination process:

Submit a proposal of no more than 300 words to Laura Graves, Head of TowerXchange MEA at lgraves@

towerxchange.com by Friday 2 September. Shortlisted nominations will be announced in late September and

winners announced ahead of the drinks reception on Wednesday 19 October at the TowerXchange Meetup Africa

& Middle East in Johannesburg.

Interesting in sponsoring an award? Contact Annabelle Mayhew, Chief Commercial Officer at [email protected]

1


Held annually in Q4, the TowerXchange Meetup Africa & Middle East is where the region’s towercos and operators assess products and services as they set their budgets for the following year.

Companies looking to access these budgets are invited to participate in a range of sponsorship and exhibition opportunities both on site and in the run up to the event.

Key products and services buyers are looking to assess include:

Raise your company profile during MNO and towerco core budget setting time


Sponsorship and exhibition opportunities

< Access control

< Air conditioning

< Batteries

< Diesel Gensets

< ESCOs

< Fibre, microwave and satellite backhaul

< Fuel cells

< Inverters, rectifiers, alternators

< Legal services

< Microcells, small cells and DAS

< Operations & Maintenance

< Powercubes

< Remote monitoring systems

< Security and CCTV

< Site management systems

< Solar generation

< Static assets: shelters, brackets, enclosures, fencing

< Tower design and manufacture

< Tower strengthening

< Wind power

Tailor your package to meet your specific goals


1. Showcase your company at the co-located exhibitionThe ONLY exhibition dedicated to telecoms infrastructure, showcase your offerings at the most focussed gathering of key clients

2. Secure a seat at our NEW procurement appraisal technology roundtablesHeld in a dedicated zone adjacent to the exhibition, join our board of operator and towerco technical and supply chain experts as they assess products on the market and discuss procurement priorities for 2017: seats only available to event sponsors and exhibitors

3. Book a meeting room and use the one-to-one meeting schedulerSecure meetings with key clients in advance to maximise your time on site and hold confidential discussions in a dedicated private meeting space

4. Host a roundtable group and demonstrate your leadership in the fieldThe hallmark of a Meetup are our intimate roundtable discussion groups - host a table with your client base and shape the discussion

5. Arrange an interview in the TowerXchange journal and special edition distributed on siteA trusted resource for tower owners, distributed to a network of 20,000 executives globally, ensure your company gains column inches promoting your expertise and reputation in the sector

6. Benefit from a range of branding opportunities to raise your corporate profile Associate your brand with the biggest names in the industry, display your logo on event signage, host a networking event, play a promotional video

Contact Annabelle Mayhew, Chief Commercial Officer for more information

M: +44 7423 512588

E: [email protected]

“Great to have so much sectoral expertise

concentrated in one place. You can

achieve so much in a short space of time” -

Sebastien Martin, COO, Africa, Camusat

“If you want to circulate with industry

contacts in the tower industry, this is a

great forum, with focused and directed

effort to network. Superb for my first

experience and strongly recommended”-

Jean Farhat, CEO, Netis

“As always, the TowerXchange team

delivered a unique, valuable and high level

networking and knowledge sharing event.

There are few events that offer the same

one on one C level interaction” - Chris

Begent, Commercial Director, Telemisis

“The event in the telecom tower business

for the African continent” - Ammer

Masood, Network Supply Chain,

Vodafone

The African and Middle Eastern tower industry’s only dedicated exhibition50+ of the region’s leading suppliers and service providers showcase their expertise

Networking drinks reception

5.00 - 7.00PM Wednesday 19 OctoberUnwind after a busy day of panels, roundtables and meetings and join us for drinks hosted by our 2016 diamond sponsors, IPS - International Power Supply whilst taking in more of this year’s exhibition

Sponsor a breakfast, lunch or refreshment break and raise your company profile

Arrange an interview in the special edition journal, distributed to all delegates on site

Secure a private meeting room in which to host meetings pre-arranged with the TowerXchange online networking tool

Schedule an interview on site

Host a roundtable during the main Meetup

Participate in the technology procurement roundtables - reserved for procurement VIPs and sponsors

< Over 50% of space already sold< 1:1 ratio of buyers to sellers

Hosted bydiamondsponsors:

Access to TowerXchange Meetup

Daytime Catering

TowerXchange Roundtable interactions

Video on TowerXchange TV

10ft x 10ft Turnkey booth

One time dedicated post event emailshot to all TowerXchange attendees

Logo on backdrop, signage, fliers & invites for TowerXchange Meetup

Private meeting room

Your choice of bronze sponsorship benefit

Your choice of silver sponsorship quality benefit

Your choice of gold sponsorship premium benefit

Your choice of platinum business-class benefit

Your choice of diamond first-class benefit

Bronze Sponsorship Stationary sponsor (provided by client)Gift drop (provided by client)Drinks coaster sponsor (provided by client)Business card wallet (provided by client)

Silver Sponsorship USB sponsor (provided by client) Totes Bags (provided by client)Lanyards (provided by client)Sponsorship of coffee break day two pmSponsorship of coffee break day two amSponsorship of coffee break day one am Sponsorship of coffee break day one pm

Gold SponsorshipSponsorship of breakfast (Open) day oneSponsorship of breakfast (Open) day twoSponsorship of Lunch Day oneSponsorship of Lunch Day two

Platinum Sponsor Host of private Lunch Day oneHost of private Lunch Day twoSponsorship of icebreaker drinksReception desk sponsorChampagne Roundtable session sponsor

Diamond SponsorSponsorship of Drinks Reception / Opening reception

Bronze, Silver, Gold and Platinum Sponsorship Benefit Options

Delegate pass Exhibitor Bronze Sponsor

Silver Sponsor

Gold Sponsor

Platinum Sponsor

Diamond Sponsor

1 pass 1 pass 1 pass 2 passes 3 passes 4 passes 5 passes

Benefits

Participation in TowerXchange Panel sessions to short list for RFPs - limited availability, contact [email protected] for details

Tower Xchange19-20 October, Sandton Convention Centre, JohannesburgMeetup Africa 2016

By invitation only: restricted to Director, VP and C-level attendees. Maximum of 2 delegate passes per company except for MNOs, towercos and sponsors

either either either

either

orororor

* Discounted rate available to Towercos, Government and Regulator representatives, 100% discount for qualifying Director - C-level execs from Operators


Towerco

MNO

Managed service provider

Energy equipment

RMS, ILM and access control

ESCO

Investor

Advisory firm

Tower design & manufacture

Others

21%

17%

15%14%

10%

5%

6%

6%5%

2%

Industry breakdown of Meetup Africa 2015

IPS

IPS – International Power Supply is 26 years experienced high-tech company specialized in the R&D and manufacturing of power electronics and energy conversion technologies.

IPS offers high-tech products and integrated solutions for the area of Renewable Energy and Off-Grid Electricity (mini-grids, off-grid power systems, OPEX and fuel safe optimization), Telecommunications, Utilities, Defense. IPS global headquarters is located in Sofia, Bulgaria where it began in 1989. Company subsidiaries are located in US, Australia, Indonesia, Nigeria, UAE. IPS’s products are operated currently in 51 countries and used by clients such as NATO, large telecom groups, mini grid operators, utilities, the armed forces of various countries, international system integrators and many others.

IPS has developed an optimal system for both grid connected and off-grid use in the form of our EXERON range. The EXERON technology can offer power independence for areas with limited or no grid power and can provide cost savings for grid connected objects through on-demand use for any kind of power equipment. The Exeron features stringent modular design, easy-to-maintain hot plug technology, advanced battery management as well as the increased availability thanks to excellent system redundancy.

In Germany, 2014, EXERON won the Intersolar ees Award (ees: electrical energy storage).

www.exeron-power.com www.ips-group.net.

Diamond sponsor:


Our sponsors

Our sponsors

Eltek

Eltek are committed to meeting the power needs of our customers. For more than four decades Eltek has provided power solutions for telecommunication networks globally. Our systems cover the entire range of power requirements; from small to very large, meeting all the power needs of the telecom industry, in both fixed and mobile networks. Our broad range of rectifiers and converters comply with all international standards and requirements. Eltek’s high efficiency solutions and new, innovative designs help the industry achieve the objectives of combating climate change whilst remaining competitive, by reducing energy spend and environmental impact.

Eltek have offices in more than 40 countries and business in more than 100. Our presence and expertise is close to each individual market we serve. This enables us to truly understand the needs of each market and provide solutions and services specifically adapted to local requirements.

Telecom Hybrid Solutions

Eltek’s hybrid solutions are based on the HE technology for optimal utilization of all energy resources. By combining solar or wind energy input with smart

generator control and optimally dimensioned batteries, the scene is set for dramatic OPEX reductions and a positive environmental impact.

www.eltek.com/

Acsys

Acsys is the global leader in cell site access control solutions. Our patented, military-grade technology is utilised by leading tower companies, telecom operators, and vendors throughout the globe to better manage their O&M and eliminate unauthorised access.

Acsys designs simple, yet powerful solutions, with a focus on power-independent locking systems and workforce management software and applications. These technologies are combined to reduce theft, better manage vendors, create fairer and stronger SLAs, and simplify operational workflows. Our solutions equate to increased uptime.

European-rooted with the benefits of China-based production and a highly-specialised and diverse team from around the world, Acsys pushes the boundaries of how technology can be embraced within complex industrial environments for better security and staffmanagement. With a customer-centric, customised approach Acsys follows the belief to think ‘outside the box’ to deliver easy-to-deploy, highly durable and cost

Silver sponsor: effective solutions for the most challenging scenarios.

www.acsys.com

Invendis Technologies

Founded in 2007, Invendis Technologies India Private Ltd. is an M2M/IOT company based out of Bangalore. Invendis designs and delivers IOT technology-enabled business solutions for Telcos & Towercos to provide seamless services to their clients.

Our core products and services include front end equipment, sensors, transducers, business applications, systems integration, product engineering, installation, maintenance and 24X7 Global Monitoring & IT infrastructure services. Invendis also specialises in deploying complete range of Remote Monitoring & Energy Optimization services for the data sensitive infrastructures.

Invendis pioneered customizable IOT enabled Front End Monitoring & Controlling equipment, which empowered Towercos with access to real-time Monitoring & Energy optimization solutions in shortest possible time.

In a span of 8 years, Invendis has set a global footprint with over 1 lakh remote assets across Asia, Middle-East, Africa & Europe.

www.invendis.com

Silver sponsor:

Silver sponsor:


4energy

4energy is a global provider of COOLflow low energy cooling

products and SMARTset intelligent energy management

solutions for technical estates.

The COOLflow range of free-cooling products with

maintenance free air filtration, save up to 90% cooling

energy savings in telecommunication networks and

equipment rooms.

With the open, low cost, easy to operate SMARTset software,

you can connect to any equipment or sensor, undertake

analytics and then, if required, control equipment remotely.

SMARTset is suitable for any size of ICT infrastructure from

the largest data centre to the smallest communications

room.

4energy’s simple innovative solutions are deployed at some

of the world’s largest telecommunication, transport and

power utilities

www.4energy.co.uk

Ascot Industrial

HYBRID GENERATORS DESIGNED FOR TELECOM or

TOWER OPERATORS that want to enter into a multi-tenancy

agreement – CAPEX & OPEX PACKAGE from 5 to 40 KVA

Our sponsors

nexsysone

Nexsysone is your one-stop solution that harnesses the

power of its advance software modules through a single

unified interface to address the needs of operators and

tower owners in planning, efficiently maintaining and

effectively sharing their infrastructure, thereby saving huge

operational costs and enhancing ROI on their CAPEX.

Nexsysone’s all-encompassing software platform is used

by some of the largest technology upgrade roll-outs in the

USA, as well as some of the largest greenfield deployments

in Asia such as in Myanmar where operators and tower

companies use nexsysone to enable the sharing of network

infrastructure.

The nexsysone’s advance software module ‘towerone’

is specifically tailored to make easy the tower sharing

process that tackles the typical technical, contractual and

commercial complications that ultimately stop the common

objective of reducing operational costs via site sharing.

www.nexsysone.com

Ausonia

AUSONIA is leader in customized power solutions,

specifically designed to meet MNOs and TowerCos power

requirements and performance needs.

Among its products portfolio - entirely made in Italy -

AUSONIA offers High Efficiency DC Gensets and Hybrid

Power Systems fully integrated with Solar & Wind, for off-

grid and poor-grid indoor/outdoor sites.

Extended maintenance intervals, very low fuel consumption

levels and a complete web-based Remote Monitoring System

allow Ausonia Customers to significant cut their OPEX and

reduce their TCO.

The use of Ausonia Power Systems in OPEX model is certified

by 13 years of operation in Europe and already replicated in

Africa and LATAM.

www.ausonia.net

IPT PowerTech

IPT PowerTech Group delivers specialized solutions to the power, industrial and telecom sectors in Africa, Middle East and Asia. Combining power expertise with telecom infrastructure specialization, we are market leaders in providing energy solutions, telecom services, and managed maintenance services, and we are the most qualified to provide both models of Guaranteed Savings and ESCO. Our self-manufactured enclosures allow us to create customized energy efficient/hybrid and renewable energy solutions, and to implement new concepts in site renovation.

With offices in 11 countries, our solutions are delivered to more than 80 operators, tower companies and vendors in more than 50 countries.

www.iptpowertech.com


Bronze Sponsor: Bronze Sponsor:

Bronze Sponsor:

Bronze Sponsor:

Bronze Sponsor:

load. More than 30 years of experience in the power sector

and 34000 installations in the Telecom Market, make Ascot

Industrial leader in Africa, Middle East and Asia for tailor

made solution to meet customer needs. A real modular,

flexible, scalable and plug & play solution is designed by

engineers to guarantee cost-effectiveness too.

Portfolio of products

< High Efficiency Diesel AC Generators from 5 to KVA

< Variable Speed and Scalable DC Generators from 5 to 60

KW

< Full Hybrid Solution (DGS+BATTERY+ PV PLUG & PLAY)

www.ascotinternational.com/hybrid-generators/

Cambridge Clean Energy (CCE)

Cambridge Clean Energy (CCE) is a leading distributed clean

energy company, specialised in innovative energy efficient

products and services for African mobile networks. Our

solutions reduce the overall power consumption at tower

sites by up to 95% and provide customers with savings

in excess of 60% on operating expenses associated with

maintaining passive networks. Bundling our solutions with

a comprehensive set of services and remote monitoring and

management enables CCE to offer first of its kind Energy

Management Solution as a Service (EMSaaS™). Through

EMSaaS™ we offer guaranteed availability and a 15-20%

reduction in operating costs for 10 years on a fixed cost model.

www.cambridgecleanenergy.com

eSite is a hybrid power system for off-grid and bad-grid cell

sites that delivers 24/7 network uptime and diesel-related cost

savings of up to 90%. eSite is an integrated single cabinet

system for maximum reliability and speed of installation.

eManager, an all-in-one toolbox for site power infrastructure

management including remote monitoring, power

optimisation, KPI reporting and site logistics, is an integral part

of eSite.

www.flexenclosure.com

Jabil Inala

Jabil Inala is an experienced and trusted systems integrator

and engineering company providing turnkey distributed

energy solutions across Africa. We design, source, commission

and support best-of-breed energy solutions which optimally

meet customer’s needs and which surpass expectations.

Our deployments provide an open path to expansion whilst

protecting existing investments. Jabil Inala’s installed base is

one of the largest distributed energy monitoring systems in

Africa.

Our turnkey distributed energy solutions encompass:

< Generation

< Storage

< Efficiency

< Monitoring

< Analytics.

www.inala.com

Our sponsors and exhibitors

Telemisis

Telemisis SitePro® enables operators of telecommunications

sites to take control of operating expense and improve

reliability, by providing improved visibility into the current

and future performance and status of their estate of assets.

Our team of industry veterans have over 100 years experience

designing and globally deploying full site management

solutions; including power optimisation, fuel management,

electricity metering, environmental management and

machine/equipment control in harsh and demanding

locations.

Telemisis design and manufacture SiteNode®; the industry’s

smallest, most flexible and cost-effective remote telemetry

node. SiteNode units provide interfacing and data collection

capabilities from a wide range of standard devices and sensors

that may already be deployed or will be added during a

deployment.

www.telemisis.com/products

Flexenclosure

Flexenclosure is a designer and manufacturer of intelligent

power management systems and prefabricated data centre

buildings for the ICT industry. The company provides systems

that are fully integrated, modular, factory tested for reliability,

adaptable to local conditions and quick to install.


Exhibitor:

Exhibitor:

Exhibitor:

Exhibitor:

industrial units (total area of 44000m² and a total gross area of 160000m²), with a galvanizing capacity (per year) of 100000 tons.

Metalogalva exports 70% of its own manufacturing for more than 40 different countries. Has invested (6.6M€) on new equipment to face the requirements/delivery times of the international markets.

Metalogalva promote the excellence of its services, investing in the researching, development and innovation of its products

www.metalogalva.pt

GS Yuasa

GS Yuasa is a Japanese company formed in 2004 by the merger of two large 100 year old battery manufacturers, Japan Storage Battery and Yuasa. At US$3.2B in sales, GS Yuasa is one of the worlds largest battery manufacturers.

GS Yuasa manufactures a full line of technologies including lithium, lead acid, nickel metal hydride, and nickel cadmium for the automotive, industrial, and specialty battery markets. Especially for Telecom market, we have developed a 48V lithium ion battery module that has outstanding cyclic life and charge acceptance that can reduce the runtime of generators and the total cost of ownership of telecom base stations.

With 36 affiliates in 16 countries, GS Yuasa has a worldwide presence operating under the GS Yuasa, GS, and Yuasa brands.

www.gsbattery.com

Enatel Energy

Enatel Energy delivers an expansive portfolio of configurable systems designed to meet every telecommunication network power requirement. Solutions offer flexibility and scalability, by way of hot pluggable combinations of modular Rectifiers, Inverters, Converters, Solar/Wind Chargers and encompass advanced energy management. Enatel’s SYNERGi hybrid solutions include unique patented generator control capabilities allowing dynamic optimisation to accommodate off-grid site variables so ensure the highest levels of network uptime, ease of deployment and OPEX savings. Renewable energy inputs can be integrated simply and blended intelligently. Enatel Energy offers renowned support, reliability, and system efficiencies. Solutions are New Zealand made to guarantee design, manufacture and process integrity.

www.enatel.net

Emerson Network Power

Emerson Network Power, a business of Emerson, maximizes reliability, deployment speed and operational efficiency for communications networks and data centers. A trusted industry leader in smart infrastructure technologies, Emerson Network Power provides innovative, rapidly deployable solutions that deliver efficiency and uncompromised reliability regardless of network demands. Emerson Network Power offers expertise in AC & DC Power, renewable energy, precision cooling systems, infrastructure management, integrated racks and enclosures, power switching and controls. Our solutions are supported

Our exhibitorsglobally by local Emerson Network Power service technicians. Learn more about Emerson Network Power products and services at:

www.emersonnetworkpower.eu

Infozech

Infozech is a leading provider of technology-led and data analytical solutions to Telecom – Infrastructure providers, Operators and Communication service providers. Infozech has been delivering cost optimization and revenue management solutions for past 17 years to 80 customers across 25 countries.

Infozech’s innovative offering iTower (Infozech Tower Product Suite) provides an end to end solution for managing and reducing operational costs through tracking real time tower operations, meaningful analytics and helping take smarter decisions. iTower won the prestigious Aegis Graham Bell Award 2015 for being most Innovative solution for telecom tower infrastructure. iTower enables tower companies to drive 99% uptime with minimum operational cost.

www.infozech.com

Metalogalva

Metalogalva is a Portuguese steel manufacturing company with more than 43 years of activity in fields of Energy, Communication, Transport, Lighting, Renewables and Steel protection (hot dip galvanizing and painting). Has three


Exhibitor:

Exhibitor:

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Heliocentris

Heliocentris engineers and operates integrated power systems and hybrid power solutions for mobile and professional radio networks. Its fuel cell based backup systems provide carefree emergency power to grid-connected stations. The hybrid power solutions are designed around its leading Energy Management System and Remote Management Software, comprising various technologies reaching from conventional batteries and gensets to its proprietary self-refuelling fuel cells.

Headquartered in Germany, with operations in Middle East, Africa and South East Asia, the company offers turnkey solutions including O&M services and vendor-financed long-term energy services. So customers worldwide can select to purchase on CAPEX or OPEX basis.

www.heliocentris.com

EnerSys

EnerSys® is the global leader in stored energy solutions for industrial applications. We complement our extensive line of motive power, reserve power and specialty products with a full range of integrated services and systems. With sales and service locations throughout the world. Headquartered in the United States, with regional headquarters in Europe and Asia, EnerSys employs over nine thousand people and operates 32 manufacturing and assembly facilities world-wide. This vast infrastructure and over 100 years of battery experience positions EnerSys at the forefront of both manufacturing capabilities and new product development.

www.enersys.com/GlobalLanding.aspx

Abloy operates in all continents and several telecom customers have chosen ABLOY solutions to be leaders in fast developing telecommunication world.

www.abloy.com

ieng Group

i engineering Group provides end-to-end engineering infrastructure solutions to the telecommunications and power industries across Africa, the Middle East and Southeast Asia. We were established in 2007 and are now operational in nineteen countries: Afghanistan, Algeria, Burkina Faso, Cameroon, Congo, DR Congo, Ethiopia, Ghana, Iran, KSA, Lebanon, Myanmar, Niger, Nigeria, Rwanda, South Sudan, Tanzania, Uganda and Zambia. We procure, build, commission, optimize and maintain telecom infrastructure on one hand; and provide fiber optic services on the other. We manage today over 4,500 sites for Africa’s largest MNOs and all 4 towercos.

www.ieng-group.com

NorthStar

NorthStar is an industry leader in designing and manufacturing high performance lead-acid batteries and high efficiency telecom cabinets. The company has state-of-the-art facilities in the USA and Sweden, and their products are used in more than 120 countries worldwide. NorthStar premium thin plate AGM batteries deliver long life at elevated temperatures, with faster recharge and superior PSOC cyclic performance. NSB Blue Batteries are today reducing 85% of

Our exhibitors

Generator Logic

Generator Logic is an innovative manufacturer of custom-built generators that provide power solutions to a wide variety of industries worldwide.

For the past decade, Generator Logic has concentrated its efforts in providing the telecoms industry with power solutions which are specific to the industry and are built taking into consideration the often harsh environments in which the industry operates in Africa.

Recent innovations include our Hybrid generator incorporating the AC generator, rectifier system and battery bank in a single theft resistant “cube”.

Generator Logic is currently in the process of adding solar to this unit which will be able to be retrofitted to all existing GL hybrids.

ABLOY

Abloy Oy is one of the leading manufacturers of locks, locking systems and architectural hardware and the world’s leading developer of products in the field of electromechanical locking technology.

Experienced PartnerAbloy Oy has a proven history of telecommunication business for decades. Along with the new technology Abloy has introduced new methods and systems to create value and fast pay-back time to customers.


Exhibitor:

Exhibitor:

Exhibitor:

Exhibitor:

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diesel generator run time in offgrid telecom applications. The newly launched NorthStar Academy program will help customers to prolong their battery life and save energy in their telecom network.

www.northstarbattery.com/1/2/3.php

TOTAL

Total is a global integrated energy producer and provider, a leading international oil and gas company, and the world’s second-ranked solar energy operator with SunPower. Our 100,000 employees are committed to better energy that is safer, cleaner, more efficient, more innovative and accessible to as many people as possible. As a responsible corporate citizen, we focus on ensuring that our operations in more than 130 countries worldwide consistently deliver economic, social and environmental benefits.

www.total.com

Energic Plus

Over the past 10 years Energic Plus has focused primarily on how to extend and improve your battery life.

With our existing range of analysis and rejuvenation products we can offer a custom-made solution for all your UPS needs. Our range of products allows you to save on both CAPEX and OPEX without any setback in quality. With customers on every continent, Energic Plus has proven to be a sustainable solution for all your battery management requirements.

grid-scale deployment. Redflow is a publicly-listed company (ASX: RFX) that operates R&D facilities in Australia, as well as offices in the US and Europe. Produced in North America by Flex, one of the world’s largest supply chain solution companies, Redflow’s high energy density batteries are sold, installed and maintained by a global network of system integrators. Redflow batteries connect directly to the telco bus, experience no damage from regular power outages, are 100% depth of discharge and their full capacity is usable over lifetime.

www.redflow.com

NANHUA Electronics Co., Ltd.

NANHUA is an independent enterprise with modern management which is located in Shanghai. We design, manufacture and sell world leading signal, lighting and control products which be applied in industrial areas since 1990, and focusing on aviation obstruction light system for telecom towers from 2007, has full experience in the complete line of cost-effective obstruction lighting and control solutions. NANHUA products have been proven to be professionally designed and highly reliable.

NANHUA will continue to maintain reliable, safety and simple R&D concepts, combine with the latest technology, commit to developing new products to help customer solve problems and enhance customer value.

www.nanhua.com

Our exhibitorsVisit our booth and discover how we can help you save money today.

www.energicplus.com

MER Group

MER Group is a global leader in wireless infrastructure. We supply cutting edge turnkey projects for cellular sites, from the design stage, tower manufacture and supply, site commissioning and installation. MER Group’s tailor-made solutions meet all the needs of a modern operator, and specializes in the growing need for rural low-cost sites supporting hybrid solar energy.

Established in 1948 Mer Group (TASE: CMER), has a substantial global footprint with approximately 30 subsidiaries (10 in Africa), and over 1,200 employees. The Group maintains a diversified portfolio focusing mainly on telecom, security and the CleanTech sectors.

www.mer-group.com/solutions/wireless-infrastructure

Redflow

Redflow Limited is an energy storage specialist that has developed the world’s smallest flow batteries. Redflow’s unique flow batteries are designed for stationary energy storage applications ranging from its ZCell home battery to its ZBM battery range for commercial, telecommunications and


Exhibitor:

Exhibitor:

Exhibitor:

Exhibitor:

Exhibitor:

Beijing Dynamic Power Co., Ltd. (DPC)

Beijing Dynamic Power Co., Ltd. (DPC) is a leading manufacturer of Telecom Power Supply in Beijing China.

Established in 1995 who are the China first IPO (Initial Public Offerings) company in power supply industry in Shanghai Stock Exchange in 2004

Over 2,400,000 Rectifier modules operating on Carrier Networks globally and 30% market share in China owned by Carriers/China Tower(Ranking No.1 in China Tower). More than 20 years of experience in diversity power solutions for tower company.

Over 3000 employees with the main production base of 330, 000m2, with production capacity of 80,000 pcs rectifiers and 15,000 sets systems per month. DPC’s stable high efficient and cost effective Power Supply create maximum value for carriers and tower company.

www.dpc.com.cn

HIMOINSA

HIMOINSA is a global corporation that designs, manufactures and distributes power generation equipment worldwide. It has extensive experience in the telecommunications market, having supplied equipment with power outputs ranging from 8

Our exhibitorsto 45KVA in the international market to well-known companies in the sector. Our telecom range gensets can work remotely, providing efficient and reliable power and incorporate functionalities such as: GPS system, making it possible to locate the machine at any time, fuel level alarm, remote management and remote control for gathering and recording data in real time. HIMOINSA has develops a variable speed hybrid generator sets that reduces fuel consumption by 40% and extend maintenance periods up to 1000 hours.

www.himoinsa.com

Fluidic Energy

As a leader in long duration energy storage, Fluidic Energy brings reliable, clean energy storage to critical applications worldwide. With more than 40MWh of energy storage, and +100,000 batteries globally, Fluidic Energy has delivered its telecom customers significantly improved network availability in some of the harshest environments since 2011. Customers experience not only lower operating costs, but also improved reliability and operations. Fluidic turnkey telecom solutions boast ultra-long duration capabilities, eliminating or significantly reducing the need for diesel gensets ; no theft value; high temperature capabilities (50ºC); built-in intelligence for remote monitoring and maintenance; and long lifetimes with extended warranties.

www.fluidicenergy.com


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Meetup Africa & ME 201619 - 20 October, Sandton Convention Centre, Johannesburg

The 4rd annual retreat for 250 leaders of the African telecom tower community

www.towerxchange.com/meetups/meetup-africa

Why a RESCO association?

The distributed renewable energy-as-a-service space in emerging markets has been in a nascent stage of development for the past six years. To date, the market penetration is less than 1% and best practices are not shared within the industry. However, the business model has been proven in India, the technology & value chain is proven and the impact potential is massive. Therefore, the association was formed to bring the stakeholders together, to establish common practices, educate the market, influence policy and ultimately achieve the high-impact goals that are within reach.

The distributed R-ESCO Association will provide the following benefits to the stakeholders;

For RESCOs:1. Unified voice to influence policy/regulation 2. Accredited technology & value chain3. Shared best practices, contracts, business models 4. Attract investment 5. Accelerate and deepen engagement with MNOs and towercos

For towercos and MNOs: 1. Cut through the hyperbole and learn what independent RESCOs can really do for you 2. Explain the terms under which you will do business with RESCOs 3. De-risk RESCO partnerships4. Learn what technologies, business and governance

Announcing the founding of the Distributed R-ESCO Association models work5. Reduce carbon emissions and accelerate compliance with green energy (CSR) targets

For investors:1. Get to know the management teams at RESCO pioneers 2. Understand the terms under which MNOs and towercos will do business with RESCOs – and the investability of those contracts 3. Accelerate due diligence4. Connect with like-minded investors to form consortia 5. Reduce carbon emissions and accelerate compliance with green energy targets

The association will share best practices, business models, processes, risk mitigation, standardised MSA/ contracts, technology, supply chain and other useful resources, while also establishing a unified voice to influence policy and assure the health of this evolving industry.


How to participate:

1. Founding board positions: Reserved for RESCOs, towercos, MNOs2. Members: For RESCOs & value chain3. Sponsors: For towerCo’s, MNOs, suppliers

Contact Bill Bubenicek at [email protected] for more information and join us onsite at the TowerXchange Meetup Africa & Middle East

TowerXchange & Cambridge Clean Energy are pleased to announce the founding of the distributed R-ESCO Association. The association is aimed at consolidating a fragmented market to address the massive opportunity for RESCO market adoption in the ICT space and its subsequent impact on our environment and people in emerging markets.

There are an estimated 1 million cell towers in emerging markets that hold the key to eliminating over 22 million metric tonnes of carbon, while providing an affordable power platform to over 390 million people. The RESCO Association will target 350,000 cell tower conversions as part of its measurement of success.

The RESCO Association will focus on 3 key initiatives;Policy: Influencing policy and regulation in key markets to facilitate mass-market adoptionBest Practices: Sharing of best practices, common technology, value chain, contracts to assure healthy projects are established for all stakeholders Impact: Driving the impact goal of 350,000 cell tower conversions, publicising the impact, public awareness and the case for independent RESCOs to drive distributed microgrid adoption

TowerXchange who’s who in African and Middle Eastern TowersTowerXchange presents an A to Z of MNOs, towercos, investors and advisors who are key stakeholders in the tower industry in SSA and MENA

African Infrastructure Investment Managers: Joint venture between Macquarie and Old Mutual with capital at work in IHS.

Africell: One of Africa’s new entrant MNO success stories, Africell have used a low cost, rapid rollout strategy, favouring co-locations over new tower build. When last we spoke to them, in the DRC Africell has not built a single tower but has captured 20% market share by co-locating on 180 Helios towers. With a presence in the DRC, Sierra Leone, Gambia and Uganda, Africell have not conducted any tower sales to date but have inherited a network from Orange in Uganda where towers had been sold to Eaton Towers.

Africa Mobile Networks: Rural towerco with an interesting business model that targets either tier one or tier two anchor tenants with a proposition that combines active and passive infrastructure and which focuses on rural areas of countries with less mature coverage. AMN broke ground in Benin in 2014, is now in four countries and expects to have a footprint in seven countries by the end of 2016 including Cameroon, the DRC, Ivory Coast, Nigeria and Guinea.

Airtel: The world’s third largest mobile network operator, Airtel has a footprint in 14 African countries.

Tower sale and leasebacks are a strategic priority for Airtel in Africa and to date, the operator has closed tower transactions in eight countries; Nigeria (with American Tower), Rwanda and Zambia (with

Read this article to learn:< Details of Africa’s independent towercos

< The footprints of Africa’s leading MNOs and their attitudes towards tower divestments and

infrastructure sharing

< An introduction to some of the most credible current and prospective investors into European towers

< An introduction to the TMT advisory firms with experience of tower transactions

TowerXchange takes a deep dive into the African tower industry, providing the most comprehensive directory to date of the key MNOs, towercos, investors and advisory firms active in the market.

Keywords: Africa, African Infrastructure Investment Managers, Africell, Africa Mobile Networks, Airtel, Albright Capital Management, Algeria, American Tower, Analysys Mason, Atlas Towers, BCTek, Blackstone, Burkina Faso, Cameroon, Capital Group Private Markets, The Carlyle Group, Cell C, Central African Republic, Chad, Cote d’Ivoire, Citi, Communication Towers Nigeria, Congo, Connect Africa, Convergence Partners, Credit Suisse, Delmec, Development Partners International, Digital Bridge, Djezzy, DRC, Eagle Towers, Eaton Towers, Econet, Egypt, Emerging Capital Partners, Ernst & Young, Etisalat, Ethos Private Equity, Expresso Telecom, Fanasia, FMO, Gabon, Ghana, Globacom, Goldman Sachs, Guinea, Guinea Bissau, Hardiman Telecommunications, Helios Investment Partners, Helios Towers Africa, HOI-MEA, Hotspot Network, HTN Towers, IFC, IHS Towers, International Finance Corporation, Infratel, ING Bank, Intrepid Advisory Partners, Investec Bank, Iran, J.P. Morgan, Jordan, Kenya, KPR Consult, Kuwait, Lap GreenN, Lazard, Liberia, Liquid Telecom, Macquarie Group, Madagascar, Malawi, Mali, Maroc Telecom, mCel, MENA Towers, Millicom/ Tigo, MNOs, Mobinil, Moov, Mott MacDonald, Mozambique, MTN, Niger, Nigeria, Ooredoo, Orange, Pro High Site Communications, Providence Equity, RIT Capital Partners, Safaricom, Saudi Arabia, Saudi Telecom Company, SBA Communications, Senegal, Sierra Leone, Smile, Sonatel, Soros, South Africa, Standard Bank, Standard Chartered, Sudan, SWAP, Tanzania, TAP Advisors, TASC, Telkom Kenya, Telkom South Africa, Tigo, Towerco, TowerCo of Madagascar, Towershare, TowerXchange Research, Tunisia, UAE, Uganda, Unitel, Viettel, Vodacom, Vodafone, Wendel, Who’s Who, Yield Capital Partners, Zain, Zambia, Zimbabwe


IHS), Ghana, Uganda, Burkina Faso and Kenya (with Eaton Towers) and Congo Brazzaville (with Helios Towers Africa). Airtel has also announced, but not yet closed, the sale of their towers in Niger (to Eaton Towers), Tanzania (to American Tower) and the DRC (to Helios Towers Africa). In total Airtel has now sold, or agreed to sell, 11,100 African towers across ten countries, raising over US$2bn.

Airtel still retains towers in Malawi, Chad, Gabon, Seychelles and Madagascar. Transactions in Malawi and Chad had been cancelled. Rumours have also emerged of a potential tower sale in Gabon. Whether the Malawi and Chad transactions will come back to market remains to be seen. Airtel’s recently agreed the sale of their operations in Burkina Faso and Sierra Leone to Orange, whilst an initial agreement regarding a sale of their opcos in Chad and Congo has lapsed.

Albright Capital Management: Chaired by former US Secretary of State Madeleine Albright, Albright is an investor and advisory firm dedicated to the emerging markets and an investor in Helios Towers Africa.

American Tower: The world’s largest independent commercial towerco with a tower count of over 140,000, American Tower have a portfolio of 10,163 towers in Africa spread across Nigeria, Ghana, South Africa and Uganda and when their transactions with Airtel in Tanzania and Eaton Towers in South Africa close, this number will increase to 11,813.

Favouring markets with relatively stable political

Figure one: Airtel African tower sale - what has closed, and who is buying what?

Sold to Eaton Towers (Niger announced, all

others closed)

Sold to American Tower (Tanzania

announced, all others closed)

Sold to Helios Towers Africa (DRC announced,

all others closed)

Sold to IHS

Currently retains towers

No opco presentSource: TowerXchange


and macroeconomic environments, the company has declined participate in certain processes because of concerns in these areas but remains likely to be a contender for key tower transactions across the continent. In addition to closing the Tanzanian deal, the company is focused heavily on integrating the 4,700 towers acquired from Airtel in Nigeria, including the upgrade of power management systems across most sites.

American Tower now provides full power as a service across their entire African portfolio except in South Africa, where power remains a pass through.

Analysys Mason: Marco Cordoni and his team at Analysys Mason are among the ‘go-to-guys’ for tower market analysis and due diligence on a global basis.

Atlas Towers: US towerco, starting up operations in South Africa. A build to suit towerco, Atlas had built 120 towers in South Africa by Q1 2016. Trying

to build up to scale to bid for MTN’s South African towers, Atlas Tower is an interesting company to watch.

BCTek: Nigerian towerco with a 20 year contract to manage and market a portfolio of 700 towers originally built as a surveillance network, over 80% of which are police compounds.

Blackstone: Serial towerco investor currently working with Phoenix Tower International in CALA. Recently evaluated investment opportunities in one of Africa’s privately owned towercos.

Blue Sky Towers: Privately owned towerco with a portfolio of 20 sites in the western and southern region of South Africa. Part of Merlin Project Services, an MSP which has been operating in the country for 18 years

Capital Group Private Markets: Private equity fund

focus on emerging markets with a diverse portfolio including investments in Eaton Towers.

The Carlyle Group: Private equity and alternative asset management firm with money at work in Indonesian towers. Yet to invest in Africa.

Cell C: South African operator who monetised their towers back in 2010 with a sale to American Tower. Cell C maximised upfront capital in their deal with the towerco in order to raise capital for rollout and to grab market share, but in doing so agreed a high leaseback rate which some commentators feel distorts the South African tower market to this day - where Cell C remain the only MNO to have divested their assets.

Citi: One of the world’s leading tower transaction advisory groups can be found within the TMT team at Citi.

Communication Towers Nigeria: Nigerian towerco which claims to have 500 cell sites across all 36 states. Given the current appetite for Nigerian towers, they could represent an attractive acquisition target.

Connect Africa: Company focussed on bringing connectivity to rural areas in Africa. Most recently Connect Africa has deployed a series of Wi-Fi hotspots in rural areas across Zambia. These base stations costs less than $10,000 and are partly funded by advertising. Connect Africa has over 200 sites deployed successfully with three operators.

Convergence Partners: Firm focussed on early-stage

A history of American Tower’s acquisitions in Africa Source: TowerXchange

*Deals yet to close **Cell C deal included 1,400 existing towers plus the option to acquire up to 1800 to be constructed. Cost of only original 1,400 towers only included here

2016

2016

2014

2011

2010

2010

Year

South Africa*

Tanzania*

Nigeria

Uganda

Ghana

South Africa**

Country

300

1,350

4,700

1,000

1,876

1,400

179,000,000

1,090,000,000

89,000,000

21,850,000

200,000,000

132,600

231,915

174,510

228,375

142,857

Portfolio acquisition

SLB

SLB

Joint venture (AMT 51%, MTN 49%)

Joint venture (AMT 51%, MTN 49%)

SLB with right to acquire 1800 more

Eaton

Airtel

Airtel

MTN

MTN

Cell C

Tower count

Deal value (US$)

Cost per tower (US$)

Deal StructureSeller


investments in the African TMT sector. Had looked at an investment in the tower industry a few years ago.

Credit Suisse: Debt providers playing a key role in the African tower industry.

Delmec: The tower experts in consultation and engineering, providing global solutions to operators, towercos and regulators on standards, guidance and due diligence for portfolio management. Engaging audit, assessment and analysis for structural enhancement, capacity and maintenance as individual activities or by way of managed services.

Development Partners International: Private equity fund focussed on Africa with money at work in Eaton Towers.

Digital Bridge: Serial tower entrepreneurs Mark Ganzi and Ben Jenkins are building another empire having sold their last venture, GTP, to American

Tower for US$4.8bn. Digital Bridge is an investment vehicle through which stakes are invested in towercos around the world. Digital Bridge recently appointed Phil Cooper as Managing Director EMEA and are known to have an interest in the ongoing Mobily and Zain transactions in Saudi (and doubtless would be interested in the STC towers if they come to market).

Djezzy: Algerian MNO owned 51% by the State, 49% by VimpelCom. With VimpelCom having a much publicised strategy to divest their tower portfolio, the operator has initiated the process in Russia with the sale of 10,400 towers expected to close imminently. Whilst a sale of their CIS towers is thought to be next on the cards, it is widely expected that their c. 6,000 Algerian towers will come to market in the near future.

Eagle Towers: Private towerco with a portfolio of 50 towers in South Africa.

Eaton Towers: Well on its way to reaching its goal of having a portfolio of 10,000 towers across a diverse set of markets, Eaton Towers owns and operates over 7,000 towers in Ghana, Uganda, Egypt, Burkina Faso and Kenya with a transaction to acquire Airtel Niger’s towers imminent, plus a substantial supplementary acquisition in Egypt.

Eaton Towers’ South African business, comprising 300 well leased up towers and a strong management team, was recently sold to American Tower for an undisclosed sum.

As a mature business, the company’s focus has switched from acquisitions to the integration and improvement of operational efficiency of their towers.

Currently with Capital International as majority investors, Eaton Towers are thought to be building the company for an eventual sale to a strategic.

Eaton provides full power as a service.

Econet: The leading MNO in Zimbabwe, Econet has been under pressure from the government to share its towers. Econet owns ~500 of Zimbabwe’s 1,400 towers. To date, Econet has not partnered with towercos in any of its jurisdictions.

Emerging Capital Partners: Private equity fund focussed on Africa; investors in IHS.

Etisalat: Etisalat has monetised their Nigerian towers, selling a total of 2,691 towers in two tranches

A history of Eaton Towers’ acquisitions in Africa Source: TowerXchange

* Eaton acquisition of Niger’ tower expected to close imminently

2015

2014

2012

2012

2010

Year

Egypt

Uganda

Uganda

Ghana

Country

1,350

2,500

1,000

1,400

179,000,000

89,000,000

200,000,000

132,600

174,510

142,857

SLB

SLB

SLB

SLB

MobiNil

Airtel

Warid

Orange

Vodafone

Tower count

Deal value (US$)



Ghana, Burkina Faso, Kenya & Uganda*


to IHS. The company has a process under way in KSA, with Mobily’s 9,600 towers up for grabs. The company has a presence in 15 countries across Africa and the Middle East, also operating under the names MOOV, ONATEL, Mauritel, Sotelma and Canar and owning a 53% stake in Maroc Telecom. Maroc Telecom runs its own tower strategy.

Ethos Private Equity: Private equity firm with money at work in Eaton Towers since May 2015.

Expresso Telecom: Tier two MNO Expresso has sought BTS and SLB counterparts in several markets but has not yet consummated a deal. Currently has a footprint in Sudan, Ghana, Guinea, Mauritania and Senegal.

EY: TMT strategy and corporate finance advisory team with extensive experience of advising on tower transactions.

Fanasia: Iranian tower builder with experience of building over 400 sites. Has recently become the first independent telecom tower company in Iran with 27 operational sites.

FMO: Dutch development bank 51% government owned, 49% by commercial banks and financial institutions. Have invested in African towercos.

Globacom: Operator which has to date been disinclined to sell towers and has yet to widely share their assets. A sale by Glo could be highly attractive for towercos, if they did come to market with the company having a footprint in key markets

Etisalat’s footprint and history of tower sales

Sold to IHS

Tower sale underway

Etisalat retains towers

Maroc Telecom (53% owned by Etisalat)

retains towers

No opco present



including Nigeria, Ghana and Cote d’Ivoire where towercos already have a presence. While a tower divestiture remains unlikely, trying to predict Mike Adenuga’s next move is a fool’s errand!

Goldman Sachs: Experienced advisors on tower transactions and lenders to towercos. Investment arm has a minority stake in IHS.

Hardiman Telecommunications: A unique consultancy equally capable advising on engineering and operational issues as they are on commercial strategy and corporate finance. Extensive experience advising on both the buy-side and sell-side in tower transactions.

Helios Investment Partners: Investment firm making private equity investments in Africa, with a primary focus on the sub-Sahara region. Helios’

portfolio companies operate in 35 African countries across a range of industry sectors, with telecom infrastructure and services playing an important part. Founder investors in Helios Towers Africa. Exiting their investment in HTN Towers.

Helios Towers Africa: Following a challenging 2015, marred by operational difficulties and three of four deals with Airtel falling through, Helio Towers Africa enters 2016 with a new management team at the helm. The company, possessing a portfolio of 6,556 towers in Tanzania, the DRC, Ghana and Congo Brazzaville. has put a heavy focus on improving operational efficiencies, with new CEO Kash Pandya coming with experience from the diesel genset industry. Helios Towers Africa announced the acquisition of 950 Airtel DRC towers in May 2016. Local subsidiary Helios Towers Tanzania recently raised US$95mn in funding from Standard Bank

to continue building new sites in the country, where they will soon have competition from American Tower. Joint venture partners Millicom restructured their equity in Helios’ Tanzania, DRC and Ghananian operations into a 24% stake at group level, which Millicom is now seeking to monetise.

Helios Towers Africa provides full power as a service.

HOI-MEA: Egyptian managed service provider and tower manufacturer which also owns a portfolio of 50 towers in the country built for Vodafone and Etisalat.

Hotspot Network: Nigerian towerco which built a network of 160 sites through build to suit contracts with Airtel and Etisalat. Their tower portfolio has recently been acquired by IHS for just over US$5mn and the company will now focus on rural broadband and data centre management.

HTN Towers: One of the oldest towercos in Africa, HTN Towers (formerly Helios Towers Nigeria) built a portfolio of 1,211 towers with a tenancy ratio per live tower of 2.2, turning over US$73.3mn with EBITDA of US$31.7mn in FY2014 before their announced sale to IHS.

IHS Towers: Towerco with the largest African portfolio, totaling 23,493 towers across Nigeria, Cote d’Ivoire, Cameroon, Zambia and Rwanda. Highly acquisitive, having completed ten transactions of scale in the continent, and currently in the process of closing Africa’s first in market consolidation.

Sudan

Senegal

Mauritania

Guinea Conakry

Ghana

500 1000 1500 2000

Source: TowerXchangeEstimated tower count, Expresso Telecom

1600

450

300

150

300


IHS remains a private company (with Wendel as primary investors with a 35% stake in the company) which has raised a huge amount of capital for African telecom infrastructure. IHS are widely expected to be gearing up for an IPO since their scale probably creates a barrier to a strategic sale. IHS are rumoured to now be pursuing towers in Saudi Arabia and MTN’s South African towers, as well as further in-market consolidation in Nigeria.

IHS provides full power as a service.

International Finance Corporation (IFC): The IFC is a member of the World Bank Group, the world’s leading DFI. The IFC has invested around half a billion dollars in debt and equity into eight towercos across emerging markets, with an objective to

double that total investment by 2018.

Infratel: Rural infraco in the DRC whose equipment is on 800 cell sites.

ING Bank: Leading Dutch bank with considerable experience of providing debt finance to the tower industry.Intrepid Advisory Partners: Advisory firm established by Daniel Lee, the “Rainmaker” of the African tower industry – Dan advised on 11 of the first 13 deals to close in Africa.

Investec Bank: South African based bank providing debt and advisory services to the tower industry.

J.P. Morgan: Leading TMT advisory team with

extensive experience in towers, including some of the landmark European transactions.

KPR Consult: Renowned ‘tower doctors’ – go-to guys for structural / technical due diligence, improvement capex planning, decommissioning and just about anything to do with tower design and maintenance.

Lap GreenN: Operator who has tried to monetise towers in Uganda but has been hindered by trading restrictions placed on the Libyan owned parent. The company also has a presence in Cote d’Ivoire, Sierra Leone and South Sudan.

Lazard: Investment advisory firm with extensive experience in the tower industry. Has represented Orange in most tower transactions.

Liquid Telecom: Leading independent data, voice and IP provider in Eastern, Central and Southern Africa.

Macquarie Group: Serial towerco investors, with capital at work in Arqiva, Russian Towers, Axicom (formerly Crown Castle Australia), Mexico Tower Partners and Viom Networks (soon to be part of ATC India). Macquarie also has an excellent TMT advisory practice with experience of advising on tower transactions.

Maroc Telecom: Etisalat injected their Atlantique Telecom assets while acquiring 53% equity in Maroc Telecom, which has a footprint in Morocco, Benin, Burkina Faso, CAR, Cote d’Ivoire, Gabon,

A history of Helios Towers Africa’s acquisitions in Africa Source: TowerXchange

* TowerXchange estimates, transaction values and tower counts not disclosed

** Vodacom sold 100% of equity in towers but subscribed to acquire a 24.5% interest in Helios Towers Tanzania

***Millicom/ Tigo restructured stake into a 24.5% stake at group level, now looking to monetise

2016

2014

2013

2010

2010

2010

Year

DRC

Congo B

Tanzania

Tanzania

DRC

Ghana

Country

950

390

1,149

1,020

729

750

*58,027,671

75,000,000

80,000,000

45,000,000

54,000,000

*148,789

87,616

130,719

102,881

120,000

SLB

SLB

SLB with direct investment in HTT**

Joint Venture (Helios 60%, Millicom 40%)***



Airtel

Airtel

Vodacom

Millicom/ Tigo

Millicom/ Tigo

Millicom/ Tigo

Tower count

Deal value (US$)




Mali, Mauritania, Niger and Togo. Maroc Telecom has not yet monetised any towers.

mCel: Former fixed line incumbent, mCel has about 1,200 of Mozambique’s 4,800 towers. The former market leader is under huge pressure from the aggressive network rollout investments of Vodacom and new entrant Viettel, and may respond my monetising their towers.

MENA Towers: Early stage towerco with offices in the UAE, Cote d’Ivoire and Pakistan.

Millicom/ Tigo: Millicom / Tigo undertook the first pioneering tower transactions with Helios Towers Africa in Ghana, DRC and Tanzania from 2010-11, but the group hasn’t done a SSA tower deal since. With IHS acquiring #1 and #2 ranked operators MTN and Airtel’s towers in Rwanda, if Millicom is ever going to part with their Rwandan towers, it’s going to be sooner rather than later. In Senegal it is also thought that if the Sonatel (Orange) towers come to market, it is highly likely that Millicom would look to follow suit. Millicom owns, and is in the process of selling, a 24% stake in Helios Towers Africa.

Mobinil: Orange opco in Egypt. See Orange.

Mott MacDonald: Digital Infrastructure team has extensive experience of advising on tower transactions and investments.

MTN: MTN, with a presence in 20 African countries, has monetised their towers in seven – representing the majority of their most attractive portfolios.

The company has raised around US$2.5bn to date and retained equity in selected markets. MTN commenced their passive infrastructure monetisation strategy in 2010-11 with the formation of joint venture towercos with American Tower in Ghana and Uganda, in which MTN retained 49% equity. This was then followed up with sale and leasebacks of 100% of the equity in their towers in Cameroon, Côte d’Ivoire, Rwanda and Zambia - this time with IHS as the counterparty. Their most

recent transaction was a sale of 49% equity in their Nigerian towers to IHS, with MTN retaining a non-controlling 51% stake with protective rights in the new entity.

Whilst the remainder of their opcos on the content are relatively small entities with modest tower portfolios - their 9,000 South African towers represent one attractive target for acquisition. Whilst the company stepped back from a potential


A history of IHS’ acquisitions in Africa Source: TowerXchange

* Transaction expected to close Q2 2016**Plus HTN’s managed services and co-location marketing agreement concerning SWAP Telecoms & Technologies 702 towers will be transferred to IHS following completion of the transaction

2016

2016

2015

2014

2014

2014

2014

2013

2012

2012

2010

Year

Nigeria

Nigeria*

Nigeria

Rwanda & Zambia

Nigeria

Nigeria

Rwanda & Zambia

Cameron & Cote d’Ivoire

Cote d’Ivoire

Cameroon

Nigeria

Country

160

1,211**

555

1,113

8,850

2,136

1,269

2,000

931

827

800

181,000,000

882,000,000

485,000,000

141,000,000

143,000,000

67,000,000

162,624

196,700

227,060

151,450

172,914

83,750

Company acquisition

Company acquisition

SLB

SLB

Joint Venture (IHS 49%, MTN 51%)

SLB

SLB

MLL

SLB

SLB

SLB

Hotspot

HTN

Etisalat

Airtel

MTN

Etisalat

MTN

Orange

MTN

MTN

Visafone

Tower count

Deal value (US$)



South African tower sale to American Tower back in 2013 (still viewing their towers as a source of competitive advantage), the recent fine in Nigeria (US$5.2bn reduced to US$3.9bn) may be a motivator for them to once again consider monetisation.

Ooredoo: Ooredoo with a presence in Algeria, Iraq, Kuwait, Oman and Tunisia has preferred to retain towers but has been exposed to deep partnerships with towercos in Myanmar which may influence their strategy as the MENA tower market starts to open up. Back in early 2016, Ooredoo launched a RANsharing agreement with Tunisia Telecom to minimise the costs of their network rollout.

Orange: Orange may have only agreed deals with towercos in three markets (Cameroon, Cote d’Ivoire and Egypt), but they represent three of their most investable markets. In Cameroon and the Cote d’Ivoire, Orange entered into an MLL agreement with IHS, whilst in Egypt, MobiNil sold one third of their towers to Eaton Towers (to whom Orange had also sold towers in Uganda prior to the operation being transferred to Africell). In terms of future potential transactions, Mobinil may not be done monetising Egyptian towers, with a few thousand still retained by the company. Orange towers in Senegal (Sonatel) had been rumored to be coming to market under an MLL deal structure, bundled with less attractive portfolios in Mali and the Guineas, but that transaction seems to have gone cold, possibly because of the opposition of entrenched Union interests in Senegal. Orange has recently acquired Millicom’s local opco in the DRC (whose towers had previously been sold to Helios Towers Africa) and

Millicom’s footprint and history of tower sales

JV with Helios Towers Africa

JV with Helios Towers Africa, Millicom

opco subsequently sold to Orange

Millicom retains towers

No opco present Source: TowerXchange


Liberia’s Cellcom, their acquisitions of Airtel’s opcos in Sierra Leone and Burkina Faso are expected to close imminently whilst in Kenya, they have recently exited the market, selling their stake in Telkom Kenya to Helios Investment Partners.

Pro High Site Communications: South African towerco with a portfolio of eleven towers.

Providence Equity: Communications and media investment specialists with capital at work in Indus Towers (India), Grupo Torresur (Brazil) and KIN (Indonesia). Believed to have an interest in the Mobily and Zain processes in the Middle East.

RIT Capital Partners: Chaired by Lord Rothschild, RIT Capital Partners is an investment trust, listed on the London Stock Exchange with a widely diversified portfolio, including an investment in Helios Towers Africa.

Safaricom: Kenyan MNO, possessing Vodafone as a shareholder, dominates its the Kenyan mobile market. Whilst the company considers its towers too strategic to sell, Safaricom has for some time been swapping or leasing their tower portfolio, by far Kenya’s largest and most extensive, to MNOs and other tenants.

Saudi Telecom Company: Market leading operator reported to be considering the sale of their ~16,400 towers in KSA. Has previously explored forming a JV towerco with competitors Mobily and Zain.

SBA Communications: Publicly listed US towerco with over 25,000 towers in North and South America. Has a

MTN’s footprint and history of tower sales

Sold to IHS

JV with IHS

JV with American Tower

Cancelled transaction looking likely to return

MTN retains towers

No opco present



potential interest in Africa.

Smile: LTE pioneer, Smile, with a presence in major cities in the DRC, Nigeria, Tanzania and Uganda rely primarily on co-location on third party towers in order to rollout their network.

Sonatel: See Orange

Soros: Quantum Strategic Partners (QSP) is a private investment vehicle, managed by Soros Fund Management LLC. QSP focuses globally on investments in several strategies, including capital-intensive start-ups, buyouts, and growth equity transactions. Investors in Helios Towers Africa.

Standard Bank: Bank with a presence in 20 sub-Saharan countries, Standard Bank has extensive experience in the tower industry, most recently completing a US$95mn equivalent upsizing of the syndicated term loan facilities for Helios Towers to finance its next phase of expansion in Tanzania.

Standard Chartered: South African bank with extensive experience providing debt and advisory services to the telecoms sector.

SWAP: Another claimant to the title of Africa’s first towerco, SWAP owns 702 Nigerian towers which were being managed and marketed by HTN Towers, the agreement for which will be transferred to IHS upon completion of the acquisition.

TAP Advisors: Boutique M&A and investment advisory firm with long history of advising on tower deals.

Orange’s footprint and history of tower sales

MLL with IHS

1/3 of towers sold to Eaton, sale of remaining

towers on the cards

Opco acquired from Millicom who previously

sold towers to with Helios Towers Africa

Orange retains towers

Orange present with non controlling interest

Orange presence pending closure of

acquisition of Airtel local opco

No opco present

Sold to Eaton Towers, operation subsequently

sold to Africell



TASC: Towerco with an undisclosed number of sites in Jordan.

Telkom Kenya: Orange recently announced the sale of their 70% stake in Telkom Kenya to Helios Investment Partners. Telkom Kenya’s 2013 Manage with License to Lease (MLL) arrangement with Eaton Towers governing 1,000 towers was subsequently cancelled.

Telkom South Africa: South African MNO with just 2.9% mobile market share in the country. Telkom have had an on/off tower sale of with estimates suggesting their portfolio includes around 3,500 sites. The regulator’s recent rejection of a network sharing deal with MTN could further motivate the operator to look at monetisation of their passive infrastructure

Tigo: See Millicom

TowerCo of Madagascar: Present solely in their domestic market, TowerCo of Madagascar has built an impressive reputation in the African tower industry. Originally carving towers out of MNO TELMA’s portfolio and subsequently building new towers, TowerCo of Madagascar has established a portfolio of 700 towers. A challenging market, with poor infrastructure and annual floods, TowerCo of Madagascar’s performance in Madagascar is made even more impressive and their track record is thought to be one of the reasons why Airtel has struggled to sell their Madagascan towers.

Towershare: Towerco with a portfolio of 800 sites in

Vodafone, Vodacom and Safaricom’s African footprint

Sold to Helios Towers with 24.5% stake

acquired in Helios Towers Tanzania

MLL with Eaton Towers

Vodafone retains towers

Vodacom retains towers

Safaricom retains towers

No opco present Source: TowerXchange


Pakistan known to be interested in transactions in the MENA region.

Unitel: Largest of Angola’s MNOs.

Viettel: Africa’s most aggressive new entrant, Vietnamese military backed Viettel had initially seemed reluctant to accelerate time to market by leveraging co-location. However they have since reached co-location agreements with IHS in Cameroon and Helios Towers in Tanzania, the latter of whom attracted ~1,000 co-locations. Meanwhile rumours suggest that Viettel’s rapidly deployed

network of guyed masts in Mozambique may be coming to market, although the structural capacity of the towers is uncertain.

Vodafone/ Vodacom: Apart from an early ‘manage with license to lease’ (MLL) deal in Ghana with Eaton Towers and the sale of 1,149 Tanzanian towers to Helios Towers Africa in 2013 (where Vodacom acquired a 24.5% stake in Helios Towers Tanzania), Vodacom and its parent company, Vodafone consider their tower assets too strategic to divest. Under the Vodacom brand, the company has a presence South Africa, Tanzania, the Democratic

Republic of Congo, Mozambique, Nigeria and Lesotho whilst Vodafone is present in Egypt and has a controlling stake in Safaricom in Kenya. Vodacom South Africa runs what is effectively an in-house tower company, with around 9,500 towers and a tenancy ratio of around 1.8.

Wendel: Family fund, leading investor in IHS.

Yield Capital Partners: Investment advisors involved with Helios Towers Africa.

Zain: Operator with a process under way to sell 5,200 towers in Saudi Arabia and a further 1,600 towers in Kuwait, Zain is also rumoured to be looking at a tower sale in South Sudan. The company also has operations in Iraq, Sudan, Bahrain and Jordan but has sold most of their African operations to Airtel

Who have we missed?

Advance apologies: we’re bound to have missed

one or two key stakeholders in African and

Middle Eastern towers – if so we’d like to know

as we’re on a mission to assemble everyone at

the 4th Annual TowerXchange Meetup Africa and

Middle East on October 19-20 in Johannesburg! If

you feel your company should be profiled in the

TowerXchange who’s who in African and Middle

Eastern towers, please email Laura Graves, Head

of MEA, TowerXchange, at:

[email protected]

Tower portfolios of Africa’s big four towercos

2408

1400 1600 700

1793**** 787 3582

2126

2000 500***

2227* 1393

2435 1964

1350

**

15882

4717

South Africa

Nigeria

Ghana

Burkina Faso

DRC

Cote d’Ivoire

Cameroon

Niger

Rwanda

Zambia

Congo B

Egypt

Unknown Country

Uganda

Tanzania

Kenya

500 70

IHS Africa

American Tower Eaton Towers

Helios Towers Africa

394

804

* Pending closure of the Eaton Towers South Africa acquisition;** Pending closure of the Airtel transaction (expected Q2 2016); *** Airtel transaction expected imminently****Pending closure of the Airtel DRC acquisition


TowerXchange’s analysis of the independent tower market in Africa and the Middle EastOperational excellence, SSA integrations and MENA transactions

Africa’s first towerco consolidation

The African market is no stranger to tower transactions with just under thirty deals of significant scale having been completed in the past six years. Whilst sale and leaseback (SLB) transactions, management with a license to lease (MLL) arrangements and the formation of joint ventures between towercos and operators have been widely

Figure 1: Estimated number of towers owned or managed by towercos in MEA

carried out, 2016 saw the continent’s first significant towerco consolidation with IHS’s announced acquisition of Nigeria’s HTN Towers.

In Nigeria inorganic growth opportunities are limited, with only Globacom and NATCOM’s towers remaining on MNO balance sheets, and Globacom having shown little appetite to divest. The market does however have a number of smaller towercos

but faced with competition from IHS and American Tower, these companies have begun to be absorbed by their larger competitors with HTN and then subsequently Hotspot, being acquired by IHS. Whilst IHS possesses plenty of opportunity for organic growth in the market, with an estimated 40,000 additional towers needed to meet growing data requirements, the acquisition of HTN and of Hotspot’s portfolio helps to bolster their position as Nigeria’s leading towerco. From HTN and Hotspot’s perspective the acquisitions also make a lot of sense. With little room for inorganic growth and two sizeable competitors in the built to suit market in the form of IHS and American Tower, the two companies were being increasingly squeezed out of the Nigerian tower market.

Whilst we don’t expect any major wholesale consolidation amongst the big four towercos in the immediate future, this landmark deal could be the start of the rolling up of mid-market towercos or the sale of smaller towerco portfolios. However American Tower’s recent acquisition of Eaton Towers’ South African business marks the first wave of activity between the big four towercos, with both Helios and Eaton Towers’ investors expected to be looking for an exit in the next 18-24 months.

Next round of SLBs imminent

Progress has been made in Airtel’s tower disposal with their Tanzanian towers being awarded to American Tower (adding a fifth country to the AMT’s African footprint), their towers in the DRC being awarded to Helios and the operator’s Niger transaction all but closed with Eaton Towers.


IHS Africa

5000 10000 15000 20000 25000

American Tower

Eaton Towers

TowerCo of Madagascar

2408

1400 1600

700

500***

70

500

Helios Towers Africa 787 3582 394

2146

2000

2227* 1393 1350**

2435

804

196415882

4717

South Africa

Nigeria

Ghana

Burkina Faso

DRC

Cote d’Ivoire

Cameroon

Niger

Rwanda

Zambia

Congo B

Egypt

Madagascar

Unknown Country

Uganda

Tanzania

Kenya

700

* Pending closure of the Eaton Towers South Africa acquisition ** Pending closure of the Airtel transaction (expected Q2 2016); *** Airtel transaction expected imminently ****inclusive of Airtel deal just announced governing 950 towers

1793****


Whilst few developments have been observed with the Middle Eastern Mobily and Zain processes, Saudi Tower Company, with a portfolio of 16,400 sites, is now reportedly looking into a tower sale meaning that all three of Saudi Arabia’s operator portfolios could be coming to market, although the formation of a joint venture between the operators has not been ruled out. Sticking with the MENA region, it is widely thought that further towers of the recently rebranded Orange Egypt may come to market following the sale of 2,000 sites to Eaton Towers late last year. Eaton again in pole position to close that deal. Meanwhile, in Algeria VimpelCom are yet to appoint an advisory firm to oversee a proposed sale of Djezzy’s ~6,000 sites, with priority first being given to the divestments in Russia, the CIS, Bangladesh and Pakistan.

In sub-saharan Africa, Mozambican operator mCel have reportedly hired Barclays to oversee the sale of their ~2,000 towers. Whilst in the much earlier stages of discussion, competitor Viettel is reportedly also looking at a potential sale of its assets and, with no independent towercos yet in Mozambique, 2016 could see this about to change.

In other operator news, Orange continues to extend its presence on the continent, closing its takeover of Tigo in the DRC , Airtel’s Burkina Faso subsidiary and Liberia’s Cellcom, whilst its acquisition of Airtel’s subsidiary in Sierra Leone is expected to close shortly.

Tower owners examine new energy business models to reduce opex and operational challenges

There is a growing appetite amongst operators and towercos to explore the ESCO model to help alleviate a

significant proportion of their operational challenges. Finding an ESCO with the operational experience and balance sheet such that the towercos feel confident they can deliver the uptime required to meet stringent SLAs (or shoulder the MNO penalties should they not) still presents a challenge. Conversely ESCOs, taking on the operational challenges and risks need to create healthy margins to make the business bankable. With energy already representing the most significant opex cost at cell sites, whether ESCOs can make the model work at a return that attracts investors, and a price the towerco or operator would be willing to pay, remains to be seen.

In Nigeria, a similar arrangement has been put in place between IHS and Flexenclosure. Flexenclosure have agreed an order to supply 1,000 eSite power systems (hybrid solutions combining battery, solar and genset power sources) for IHS’s sites in Nigeria’s Abuja region. Under the terms of the agreement, IHS will provide a portion of upfront capex for each installation and then pay a managed services fee for the delivery of power to the sites. It marks a significant step for Flexenclosure in their transition from being an equipment supplier to a quasi-ESCO.

In Jordan, Orange have explored an alternative business model, signing an agreement with an energy consortium to build five solar PV plants, totally 33.7MW, which will power the company’s operations in the country. The project will make use of a wheeling arrangement in place in Jordan, whereby the sites will be constructed at a remote location and then use the grid (paying transmission fees and absorbing distribution losses) to bring power to cell sites, with excess power being sold to the grid. Whilst such a

model may not be suitable for sub-Saharan African countries with underdeveloped grid infrastructure or which lack the necessary solar irradiation, the innovative approach is indicative of the increased emphasis that the telecoms sector is putting on find its way to reduce its energy costs and thus TCO.

Alternatives to the reduce TCO of mobile networks?

Speaking to Orange recently on their solar project they underscored the message that the transferring of sites to towercos represents just one option in the drive to bring down the cost of their networks; energy efficiency and measures such as RANsharing are equally important considerations when looking at TCO.

In the last edition of the journal we reported that Ooeredoo and Tunisia Telecom had launched a RANsharing programme to reduce the cost of network rollout and maintenance, estimating savings of over 50% through the move and just recently it has been reported that Etisalat and du are exploring the formation of a JV infraco in the UAE.

2016 will see operators and towercos continuing to explore new models to improve connectivity across the continent. In South Africa, small cells and DAS are becoming increasingly important as data usage in urban areas continues to grow. At last month’s Europe Meetup small cells was a hot topic, with many towercos looking to diversify into the field and whilst we don’t expect this to become a significant portion of African towerco business models just yet, it is an interesting trend to watch.


2016 201620162016201620152015201420142014201420142014201420132013201320122012201220122011201020102010201020102010201020102010

EatonAirtel

Hotspot Airtel ******

HTN Towers******

EtisalatMobiNil

AirtelAirtelAirtelMTN

EtisalatAirtelMTN

VodacomTelkom Kenya

OrangeMTNMTN

WaridOrange

MTNMillicom/TigoMillicom/Tigo

MTNCell C

StarcommsVodafoneVisafone

MultilinksMillicom/Tigo

American TowerHTAIHS

American TowerIHSIHS

EatonIHS

American TowerEatonIHSIHS

HeliosIHS

HeliosEatonIHSIHSIHS

EatonEaton

American TowerHeliosHelios

American TowerAmerican Tower

SWAPEatonIHSHTN

Helios

Totals / average

300950160

1,350*****1,211

5552,0001,1134,8002,5009,1512,136394

1,2691,1491,0002,000931827400300

1,0001,020729

1,8761,400407750800400750

42,337

$179,000,000

$131,150,000$181,000,000

$1,050,000,000

$882,000,000$485,000,000

$75,000,000

$141,000,000$143,000,000

$89,000,000$80,000,000$45,000,000$21,850,000

$200,000,000$81,000,000

$67,000,000

$54,000,000

$3,945,000,000

$123,593

$65,575$162,624$218,750

$196,700$227,060

$87,616

$151,450$172,914

$174,510$130,719$102,881$228,375$142,857$199,017

$83,750

$120,000

$126,450

Portfolio acquisitionSLB

Portfolio acquisitionSLB

Company acquisitionSLBSLBSLBSLBSLB

Joint venture (IHS 49%, MTN 51%)SLBSLBSLB

SLB with direct investment in HTT*****

MLL (Contract since cancelled)MLLSLBSLBSLBSLB

Joint venture (AMT 51%, MTN 49%)Joint venture (HTA 60%, Milicom 40%)Joint venture (HTA 60%, Milicom 40%)

Joint venture (AMT 51%, MTN 49%)SLB with right to acquire 1800 more

SLBMLLSLBMLL

Joint venture (HTA 60%, Milicom 40%)

South AfricaDRC +

NigeriaTanzania +

NigeriaNigeriaEgypt

Rwanda & ZambiaNigeria

Ghana, Burkina Faso, Kenya & Uganda ****NigeriaNigeriaCongo B

Rwanda & ZambiaTanzaniaKenya ***

Cameroon & Cote d’IvoireCote d’Ivoire

CameroonUgandaUgandaUganda

Tanzania **DRC **Ghana

South Africa *NigeriaGhanaNigeriaNigeria

Ghana **

* Cell C deal included 1,400 existing towers plus the option to acquire up to 1,800 more to be constructed. Cost of original 1,400 towers only included here ** Millicom restructured their equity in Helios’ operations into a 24% stake at group level, which Millicom is now seeking to monetise *** Telkom Kenya-Eaton deal subsequently cancelled ***** Vodacom sold 100% of equity in towers but subscribed to acquire a 24.5% interest in HTT **** Plus Niger deal expected to be announced imminently, ***** Plus HTN’s managed services agreement governing 702 SWAP towers transfered to Helios, + deal announced, not yet closed

Figure 2: MEA’s biggest tower transactions to date

Year Country Seller Buyer Tower count

Deal valueUS$

Cost per tower US$ Deal structure




CameroonCote d’IvoireRwandaZambia

Tanzania

Congo BrazzavilleDRC Kenya

NigerBurkina Faso

South Africa

Uganda

Ghana

Nigeria

IHS

American Tower

Helios Towers Africa

Eaton Towers

Figure 3: Forecast African towerco footprints

Egypt

Country overviews Algeria: VimpelCom have now appointed an executive to run Djezzy’s sale of ~6,000 towers in the market. Algeria is one of several countries which currently limits foreign direct investment (FDI) to 49%. Under such circumstances, an international investor or towerco considering putting capital into an Algerian tower play, whether BTS or more likely sale and leaseback, is limited to a minority stake and must source a local partner in a market with no pre-existing independent tower industry. The formula is further complicated in the case of Djezzy, recently reorganised so that the government owns a controlling stake. Burkina Faso: Orange have completed the acquisition of Airtel in Burkina Faso, with Airtel having previously sold their towers to Eaton. Orange will now vie with Telemob (Onatel) for market leadership, with Telecel (Planor Afrique) not far behind. It hasn’t been an easy period for Burkina Faso – within days of Eaton announcing the deal to acquire Airtel’s towers, a coup had toppled the government, and there is now the looming threat of terrorist action spilling over into the State. 3G was launched in 2013 but mobile broadband penetration remains just 4%*. SIM penetration is just 79%* in Burkina Faso, a country of some 18.4mn. Cameroon: New entrants Viettel’s Nexxtel launched in September 2014 and claimed to have 2mn subscribers by Q2 2015, although their window of 3G exclusivety expired at the end of 2014. MTN has launched 4G in four cities and committed to hang 3G and 4G equipment on 700 sites during 2016. State-owned CamTel has commenced rollout of their GSM network, completing Cameroon’s transition from a


Figure 4: Estimated tower counts for selected countries in SSA

Nigeria 30,996

South Africa 25,000


two to a four MNO market. YooMee are one of several non-traditional MNO tenants on Cameroon’s towers. Prior to Nexxtel and CamTel’s rollouts, IHS owned and operated 90% of Cameroon’s towers, having acquired 1,000 towers from MTN and secured an MLL (Manage with License to Lease) deal with Orange for a further 900 towers. IHS eventually persuaded Nexxtel to co-locate on a limited basis, but Viettel have also built hundreds if not thousands of their increasingly familiar guyed-mast towers. CamTel may leverage co-location more substantially, and have engaged Huawei to deploy their GSM network.

The GSMA Green Power for Mobile “Best Practices for Energy Provision in Telecoms: Francophone Africa” report, released in April 2014, suggested there were 2,090 towers in Cameroon at that time, of which 533 were off-grid, 34% of which were using solar power (plus two on-grid grid-DG-solar hybrids). According to Orange, fuel represents 52% and the grid 48% of the total energy cost in Cameroon. IHS provides a full service tower+power service in Cameroon, and thus is the principle buyer of telecom energy equipment and services. SIM penetration stood at 93%* and mobile broadband penetration at 5%* in Cameroon in Q4 2015, up from 72% and 1% respectively a year earlier.

Chad: Airtel cancelled their sale of passive infrastructure in Chad to Helios Towers Africa, who had until that points seemed poised to become the first towerco in a country with less than 2,000 towers. One of the reasons for the collapse of the HTA transaction was subsequently revealed as Chad was identified as one of four countries for which Airtel had entered

exclusive negotiations to sell their opco to Orange, but the deadline for that transaction has since lapsed. SOTEL is Chad’s third MNO, with YooMee heading a list of prospective non-traditional tower tenants. Although it is a relatively small market, TowerXchange don’t think we’ve heard the last of potential tower deals in Chad – whoever owns the opco, Airtel or Orange may be motivated to re-open dialogue (presumably with Helios Towers Africa) and resume the process of transferring assets.

At the 2015 TowerXchange Meetup Africa, Millicom hinted at having an appetite to partner with an ESCO in Chad.

Congo Brazzaville: Helios Towers Africa is the sole towerco in Congo Brazzaville, having closed a deal to acquire Airtel’s 394 towers, representing around 44% of the country’s towers. Negotiations to sell Airtel’s Congolese opco to Orange recently lapsed, but MNO consolidation is not a new phenomenon in Congo, Airtel having acquired Warid’s operation in the country in 2014 vaulting them over MTN to become market leaders. BinTel’s Azur are ranked a distant third. SIM penetration climbed just 2% to 102%* and mobile broadband penetration grew by the same percentage to 9%* in Congo between Q4 2014 and Q4 2015.

Cote d’Ivoire: While SWAP operates a handful of towers in the country, IHS holds a dominant position in the Cote d’Ivoire tower market having acquired a total of ~2,000 towers from market leaders MTN (under SLB) and Orange (MLL) in 2014. IHS owns

Tanzania 8,800

Kenya 6,600

Ghana 5,983

Mozambique5,000

Uganda 3,485

DRC 4,350

Senegal 3,350

Zimbabwe1,400


more than two in three of the towers in Cote d’Ivoire, androvides a full tower+power service. According to Orange, fuel represents 36% and the grid 64% of the total energy cost in Cote d’Ivoire. Number three MNO Moov was part of a package of assets transferred from Etisalat to Maroc Telecom. The regulator has revoked the licenses of MNOs Comium and GreenN and is now considering offers from Monaco Telecom, LPTIC and Viettel for a fourth license - Viettel is thought to be the front runner.

YooMee launched a TD-LTE network in Cote d’Ivoire in 2014, prompting CEO Dov Bar-Gera to tell TowerXchange “We entered Cote d’Ivoire after IHS had secured the rights to market MTN and Orange’s towers for co-location, and that has had a

Figure 5: How rapidly can a region adapt to the independent towerco model? SSA comparison


huge impact in terms of shortcutting our to time to market. Whereas previously we needed to negotiate with landlords, secure permits and engineer power solutions in order to get new sites up and running, leveraging the independent towerco’s sites reduced our lead time significantly.”

There are 26.1mn* SIM cards among Cote d’Ivoire’s 23mn* citizens, with mobile broadband penetration at 35%*.

DRC: The sale of Airtel’s 950 towers to Helios was announced earlier this year, further strengthening Helios’ position in the market. Helios is the sole towerco and has been delivering reliable service and strong tenancy ratio growth in the DRC since entering the market on the back of a US$45mn deal

to acquire 729 towers from Millicom Tigo back in 2010 (Millicom originally retained 40% equity in Helios Towers DRC which they then restructured into a 24% stake at group level - which Millicom is now seeking to monetise). Helios Towers DRC provides full service tower+power. Grid power is reasonably reliable in Kinshasa, but less reliable in Lubumbashi and Goma. Almost all sites outside these three cities are off-grid and fuel costs can be 2.5x more expensive in rural areas.

Infratel claims to have built over 800 rural sites for Vodacom DRC.

With around 4,250 towers serving 48.75mn connections, DRC has one of the highest number of SIMs per tower in the world at 11,470, illustrating the DRC’s huge growth potential.

There are three leading MNOs in the market; Airtel, Orange and Vodacom (following Orange’s recent acquisition of Tigo), while aggressive cut-price operator Africell claimed to have 7mn subscribers in DRC by the end of 2014. Africell leveraged co-locations on over 200 Helios Towers DRC sites to accelerate time to market, and the operator is launching 3G. Smile plans to launch LTE in DRC in 2016. Raga Sat has launched broadband services leveraging O3b’s “fibre from the sky” MEO satellite service. SIM penetration was just 62%* and although 3G was launched in 2012, mobile broadband penetration remained at 11%* in DRC in Q4 2015. Egypt: Eaton announced a US$131mn deal to acquire 100% of the equity in 2,000 towers from Mobinil

150,000

Q4 2009

Q4 2011

Q4 2013

Q4 2015

Q4 2010

Q4 2012

Q4 2014

Q4 2016(f)

120,000

60,000

90,000

30,000200

(<1%)8,700(9%)

10,932(11%)

16,661(16%)

23,060(27%)

46,765(39%)

49,149(40%)

69,849(54%)

0

Independent towerco owned towersMNO-captive towers


(recently rebranded Orange following Orange’s 99% buyout) in April 2015, representing a third of the MNO’s towers and 10% of the ~20,000 towers in the country. The towers Eaton will acquire are concentrated in the Delta, Upper Egypt and Red Sea regions, but notably do not include assets in the rooftop-centric Cairo market. It is however expected that further divestments could be on the cards from the operator. A raft of mega-projects, including the construction of a new capital East of Cairo, the discovery of offshore gas, and the enlargement of the Suez canal, could drive economic prosperity and demand for towers.

With SIM penetration of 102%* and mobile broadband penetration of 42%*, plus an established culture of infrastructure sharing in the country, the potential for towerco profitability is good in Egypt. While 3G coverage is currently fairly extensive, with most

Figure 6: Estimated number of towers in MENA

Source: Delta Partners data, TowerXchange presentation

SaudiArabia30,600

Iran35,000

Egypt 19,000

Kuwait5,100

Yemen3,900

Libya5,000

Oman3,200

Lebanon2,000

Bahrain1,700

Qatar1,100

Jordan5,900

Algeria 17,500

Morocco 17,000

Iraq 12,300

UAE 8,500

UAE 8,500

Tunisia 7,000

operators focusing on capacity upgrades ahead of a potential 4G auction once the political situation is more stable, Egypt still has more SIMs per tower than any other country in MENA (4,690 versus the regional average of around 2,500), illustrating potential for new tower builds. Vodafone Egypt leads the market followed Orange with Etisalat Nisr, the third operator, making three credit worthy prospective tenants, each of which could potentially divest further towers in Egypt. Telkom Egypt’s long mooted mobile launch may finally happen in 2016, with the government launching a proposal to grant them the 4th license for $375mn. Grid connections for Egyptian tower sites are slow and expensive, so DGs are widely used – the business case for renewables may be boosted if fuel subsidies, which currently mean diesel is around a

fifth the cost of other African markets, are reduced. Local tower manufacturer / service provider HOI-MEA also operates a network of around 40 towers in Egypt, with a vision to scale to 300 by 2018. HOI-MEA’s tenancy ratio is already approaching 1.5. Gabon: The future of Airtel’s towers in Gabon is uncertain. The operator had originally set out to divest towers in all 17 African countries, but Gabon seldom seemed to mentioned on the grapevine. For now, we assume the towers will remain on Airtel / Africa Towers’ balance sheets, meaning there will be no independent towercos in Gabon. Airtel is deploying LTE, but mobile broadband penetration was still negligible in Gabon at the end of 2014. Etisalat’s Moov subsidiary in Gabon was acquired by Maroc Telecom. Libertis (Gabon Telecom) and Azur (BinTel) make up the rest of the MNO market. Oil and Gas wealth partly accounts for Gabon’s soaring 164%* SIM penetration rate. Ghana: Eaton are adding Airtel’s Ghanaian towers to the 750 Vodafone towers they are managing with license to lease. There are three major towercos active in Ghana, which have been snapping up tenancies for over three years. Back in 2010, Helios Towers Africa setup a joint venture towerco with Millicom Tigo as minority partners, to which 750 towers were transferred. Shortly afterward Eaton Towers closed their deal with Vodafone Ghana, then American Tower set up another joint venture with MTN to which 1,876 towers were transferred


(ATC Ghana now markets 2,052 Ghanaian towers, representing around a third of the country’s tower stock). All of Ghana’s towercos now provide a full service tower+power. With strict permitting and environmental policies in Ghana, it’s tough to get new towers built and towercos expect less than 100 new structures to go up in 2016. However, this amplifies appetites for co-location: tenancy ratios in Ghana are already around two. MTN leads a crowded market for operators, followed by Vodafone, Tigo, Airtel and Glo, with Expresso struggling to establish a foothold. The devaluation of the Ghanaian Cedi, compounded by deregulation of fuel prices, led to spiralling opex costs and crippling fuel shortages in 2015. Every industry was affected, and towercos struggled to achieve SLAs, while EBITDA margins suffered. However, Ghana’s towercos have developed dynamic processes able to get ahead of fuel shortages. SIM penetration rose from at 113% to 121%* and mobile broadband penetration from 24% to 30%* in Ghana between Q4 2014 and Q4 2015. Iran: With 38,000 towers, three nationwide operators MCI, MTN-Irancell and Rightel and little infrastructure sharing to date, Iranian towerco Fanasia is working in partnership with municipalities to reduce the level of parallel infrastructure in the country. The towerco has completed one project in trade free zone, Kish Island reducing 110 towers to 27, has a second project underway in Mashhad, Iran’s second largest city (with the goal of reducing 1,000 towers to 350) and is in discussions with several other municipalities.

Kenya: Eaton Towers are integrating several hundred towers recently acquired from Airtel Kenya into their portfolio. Eaton is the sole towerco in Kenya and has long coveted the market, having secured an MLL deal with Orange that was soon cancelled after a change in strategic direction by the operator, which culminated in the announcement of the sale of Orange’s 70% stake in Telkom Kenya to Helios Investment Partners. Eaton’s number one issue: how to engage with Safaricom as a tenant and as a de facto competitor – Safaricom selectively leases their own towers to other MNOs at attractive rates. Safaricom has a dominant position in Kenya with 66.3% market share. Airtel has 19.1%, Telkom Kenya 11.8% and new entrant Equitel 2.9%, according to CAK statistics for Q3 2015. Kenya has ~6,600 towers, grossly insufficient for a country of 46mn people and with a land area of 570,000 sq km. SIM penetration is just 80%* with plenty of room for mobile broadband growth, at 18%* penetration at Q4 2015. Safaricom launched LTE at the end of 2014. Kingdom of Saudi Arabia: Zain is divesting ~5,700 towers, while Etisalat (Mobily) is divesting ~9,600 towers in KSA. American Tower, Digital Bridge, IHS, Providence Equity, Quippo, TASC Towers, Towershare and a number of local investors have all been linked with the opportunity. Following the movements of its competitors, Saudi Tower Company are also reportedly looking at a sale of their ~16,400 towers, although the formation of a joint venture between MNOs is still being considered.

KSA’s 3G network is mature and the rollout of LTE is well under way. SIM penetration was at 181%* with

mobile broadband penetration at 71%* in Q4 2015. Kuwait: Market leaders Zain are divesting 1,600 towers in Kuwait, representing around a third of the country’s ~5,100 towers. Ooredoo and STC’s Viva are Zain’s competitors. With population coverage at 100%, any organic growth for towercos entering Kuwait must be driven by network densification rather than extension. SIM penetration was at 192%* with mobile broadband penetration at 81%* in Q4 2015. Madagascar: TowerCo of Madagascar (ToM), initially spun out of TELMA but now an independent towerco in it’s own right, operates around 700 towers on the island of Madagascar. The operational challenge of operating a distributed tower network, particularly during rainy season, is not for the feint hearted, while the success of ToM has deterred other towercos from bidding for Airtel’s Madagascan towers, which seem set to be returned to the local Africa Towers subsidiary. Orange is also active in Madagascar.

SIM penetration was just 31%* and mobile broadband penetration 19%* in Q4 2015.

Malawi: Eaton’s deal to acquire Airtel’s towers in Malawi was cancelled in late 2015, but the assets may be brought back to market. Mobile services are among the most expensive in Africa in Malawi, contributing to SIM penetration of just 38%*, and mobile broadband penetration of 15%*. Airtel lead a dupoloy with TNM. Efforts to inaugurate a third operator have floundered with Expresso and Celcom failing to launch – the regulator’s latest pony to back is Lacell, who were licensed in October 2015. Xinwei has announced plans to rollout a low cost rural network.


Athonet is deploying an LTE service. There are around 800 towers in Malawi. Mozambique: State owned operator, mCel has appointed Barclays to oversee the sale of its c. 2000 towers, reportedly targeting a valuation of US$300mn. With no towercos currently in the Mozambique market, the move has piqued the interest of Africa’s resident towercos. A potential driver may be the government’s drafting of a bill mandating the sharing of telecoms infrastructure. We understand there are around 5,000 towers in Mozambique, including 1,500-1,800 guyed mast towers erected by low cost new market entrant operator Viettel. Indeed it is the turbulence caused by Viettel’s entry that may have precipitated passive infrastructure monetisation, both on the part of incumbent mCel, which has seen market share eroded by both Viettel and Vodacom,

Estimated tower ownership in Nigeria


and indeed potentially by Viettel themselves. Viettel’s Mozambique subsidiary Movitel is co-owned by Viettel and a holding company run by FRELIMO (Frente de Libertação de Moçambique – the main political party in the country).

Niger: When Eaton Towers opens up the first towerco in Niger when their deal with Airtel finally closes, they’ll need to be ready to engage with a challenging energy logistics scenario, low population density, and sub US$5 ARPU. Airtel has recently secured a 3G license in Niger where it competes with Orange, SahelCom and Moov (recently sold by Etisalat to Maroc Telecom). SIM penetration is just 34%* in Niger, and mobile broadband penetration 2%*. Nigeria: Nigeria is a benchmark tower market for many reasons. It’s the largest towers and largest

mobile market in SSA, with 154.3mn* connections among a population of 184.6mn*. It’s the oldest growth independent towerco market in Africa; towercos have been building towers in Nigeria since 2006. Almost half (24,746) of SSA’s towerco-owned towers (49,149) are in Nigeria, and over US$2.5bn has been spent by towercos to acquire 79% of Nigeria’s towers. Towercos have proved their ability to deliver 99.9% uptime in challenging grid conditions in Nigeria. Nigeria is not just a benchmark for African towers, it’s proof of the efficacy of the independent towerco model in any emerging market. Competition for BTS opportunities is increasing among Nigeria’s three major and many middle market towercos. Most commentators agree Nigeria needs to double the country’s current stock of towers and despite market leader MTN’s financial challenges as a result of the NCC’s fine, MTN have announced they are to more than double 2015’s capex spend this year, citing figures of ZAR11.1bn. Nigerian cell site energy efficiency programmes are also becoming a benchmark for the rest of Africa, with battery hybrids widely deployed and solar being added, particularly in the north of the country. In early 2016 Nigeria also saw the first towerco consolidation in the African market, when IHS acquired HTN Towers portfolio in the country. IHS have subsequently acquired Hotspot Network’s portfolio of 160 sites. Rwanda: IHS has closed the acquisition of Airtel’s 184 Rwandan towers, to be added to their acquisition of 550 towers from MTN Rwanda in 2013. IHS Rwanda’s managing director Kunle Iluyemi was quoted in The


IHS own and BTS towers

IHS towers acquired from MTN

IHS towers acquired from Etisalat

IHS towers acquired from HTN

SWAP Telecoms & Technology (management and

marketing agreement transferred to IHS following HTN

acquisition)

American Tower Assets acquired from Airtel

BCTek

Communication Towers Nigeria

Other small Nigerian towercos

Globacom

NATCOM

2,575

8,850

2,671

4,716

700500

200

6,000

550

1,211702

New Times as saying IHS erected 34 towers across the country in 2014, with plans to build further 50 towers in 2015. TowerXchange estimate there are around 1,300 towers in Rwanda, of which IHS own 804. Rwanda is home to three tier one MNOs, so has no shortage of credit worthy tenants. MTN leads the market, followed by Tigo and Airtel. Korea Telecom secured a joint venture with the Rwandan Ministry of Youth and ICT to build a nationwide LTE network. SIM penetration in Rwanda rose from 61% to 75%* with mobile broadband rising from 28% to 35%* between Q4 2014 and Q4 2015.

Senegal: Sonatel, in which Orange is a controlling stakeholder, had been investigating the potential sale and leaseback of their 1,800 structures in Senegal, but the challenges aligning all stakeholders, including powerful unions and government shareholders, now suggest Sonatel will instead seek a managed services provider. Sonatel is the market leader (which has recently secured a 4G license in the country) with 55.7% market share, followed by Millicom-Tigo on 22.8% and Expresso on 21.3% (according to statistics from ARTP for September 2015). Expresso are seeking a towerco partner in Senegal (and beyond) – they are seeking to add 250-350 towers to their existing network of 450. It remains to be seen whether Tigo, with around 1,100 towers in Senegal, might also be interested in partnering with a towerco. There are around 3,350 towers in Senegal serving a population of just over 15mn with SIM penetration of 96%* and mobile broadband penetration having

increased 63% YOY to 14%*. South Africa: Amidst financial pressures by NCC’s fine on MTN, most commentators expect the MNO to divest their most valuable remaining tower assets to raise capital – and MTN’s South African towers would be top of many towercos’ shopping lists! The South African tower market is up for grabs: only 8.7% of South Africa’s estimated 25,000 towers are currently in towerco hands.

American Tower’s landmark acquisition of 1,400 towers from Cell C back in 2011 has been the only transaction of note until their recent acquisition of Eaton Towers’ South African business unit with a portfolio of 300 towers built by the towerco. Speaking on the transaction in an exclusive interview to TowerXchange, Eaton Towers’ CEO Terry Rhodes said “Eaton Towers’ strategy in South Africa was to establish a build-to-suit presence and then scale up by buying a substantial portfolio of towers from one of the operators. However, the operators in South Africa have not given this opportunity, and they still own over 90% of the total towers. We have outperformed American Tower in South Africa over the last few years but our operation is about 1% of the total South African market, so when American Tower approached us it made sense to sell.”

Build to suit opportunities for towercos in the market have also been limited with operators working closely with OEMs in the rollout of their networks. Alongside American Tower, further towercos active in the market include middle market players Infratel, Eagle Towers, Pro High Site Communications and Blue Sky Towers.

Recent reports in Bloomberg suggest that MTN has 19,000 sites to sell in South Africa; that total may be inflated by counting sites instead of towers – with a prevailing tenancy ratio as high as 1.8 in South Africa, and reducing the total to exclude rooftops, TowerXchange reckon MTN’s South African tower count is nearer 10,000. Should MTN bring their South African Towers to market, TowerXchange counts at least five prospective strategic buyers, supplemented by the usual array of infrastructure fund bidders. Most commentators rate IHS as the favourite to secure MTN’s South African towers. Africa’s largest towerco has a track record of acquiring MTN towers, are amenable to flexing deal structures to meet MTN requirements, and the two parties hold each other in high esteem. While IHS would benefit from adding some lower risk ‘ballast’ to their West Africa-centric portfolio, it remains to be seen whether they would have the appetite to acquire assets in KSA and SA, should they emerge successful in bidding for Mobily and Zain’s towers in Saudi. Meanwhile, Telkom’s stop-start tower monetisation programme has stopped again. Telkom asked for expressions of interest in a portfolio of around 6,000 shareable structures in South Africa, but that process was discontinued. Telkom have instead recently formed a new passive infrastructure team to manage their tower portfolio internally. Vodacom South Africa, which operates their ~10,000 tower network as an internal towerco, and leases space to third parties, would seem less inclined to monetise their towers.


Tanzania: Helios Towers Tanzania (HTT) owns around 3,450 of Tanzania’s ~8,800 towers, acquired in a US$75mn deal with Vodacom in 2013 and a US$80mn deal with Millicom-Tigo in 2010 for 1,149 and 1,020 towers respectively. Millicom recently restructured their equity stakes in HTA’s local towercos to acquire a 24% stake in HTA’s parent company. Millicom are now looking to exit that investment. In order to fund further infrastructure expansion in the country, Helios Towers Tanzania has just secured a US$95mn loan facility with Standard Bank.

American Tower have now entered the Tanzanian market following the acquisition of Airtel’s 1,350 sites, raising competition in the country for resident towerco Helios Towers Tanzania Vodacom and Tigo are supplementing their network in anticipation of aggressive competition from new market entrants Viettel, which launched on October 15 2015 under the Halotel brand. Viettel has 3,000 new towers in the air or under construction, and has begun co-locating. Zantel (acquired by Millicom from Etisalat), Smart, Smile and TTCL complete the MNO landscape in Tanzania, which lends itself to co-location as each of Tanzania’s four main MNOs is dominant in a different region of the country, providing a strong incentive for co-location to accelerate nationwide coverage. The sheer scale of Tanzania amplifies maintenance costs, which can be as high as US$7,000 per annum – ten times the cost in the US.

Uganda: Eaton Towers has added Airtel’s Ugandan towers to the 700 towers they acquired from Orange

and Warid back in 2012. Airtel since acquired Warid, while Orange sold out to Africell. Uganda remains ripe for further in-market consolidation, with seven licensed MNOs. American Tower is also active in Uganda, where they have a joint venture with MTN and currently market 1,388 towers. TowerXchange estimate there are a little over 4,000 tenancies on 3,485 towers in Uganda, suggesting an average tenancy ratio just under 1.2. Expect this number to rise driven by the enthusiasm of new entrant MNO Africell, which operates an asset-light model and prefers to co-locate rather than build thus accelerating time to market.

Organised crime compounds the effect of administrative fuel theft in Uganda, making site hardening a priority for towercos. SIM penetration is just 72%* in Uganda, with multi-SIMing meaning actual penetration is under 50%, with mobile broadband penetration at 16%*.

Zambia: IHS have acquired the towers of market leaders Airtel Zambia to supplement their 2014 acquisition of MTN’s Zambian 719 towers, which supplemented by new build gives them 1,964 towers in this this ~2,300 tower market. Capital constrained Zamtel is the third of three MNOs, although the government is a fourth player in Zambia’s tower market through towers built by the Universal Service Fund. Whilst the announcement is yet to be confirmed, it is rumoured that Vodafone has been awarded the fourth operator license by the Zambia Information and Communications Technology Authority. The government issued an ultimatum to the country’s three operators – MTN, Airtel and

Zamtel in October 2015 to improve their service or face the introduction of a new operator in the market. A six month period was given to improve their service and with the deadline imminent it is reported that Vodafone have already appointed a CEO for their Zambian operations.

SIM penetration is 72%* in Zambia, and mobile broadband penetration 16%. ARPU is low: in the US$2-3 range. Zimbabwe: There are around 1,400 towers in Zimbabwe of which clear market leader Econet owns around 500. Grid availability is typically around 12 hours per day, so effectively almost all cell sites in Zimbabwe are on unreliable grids, requiring line conditioning and CDC battery backup - the market is therefore a key target for renewable energy plays. Operational risk is compounded by significant country risk, but currency risk has been significantly reduced since dollarisation

*Statistics courtesy of GSMA Intelligence, Q4 2015.

TowerXchange are looking forward to once

again hosting the top 250 decision makers

in African towers at the 2016 TowerXchange

Meetup Africa & Middle East, hosted in

the prestigious ballroom at the Sandton

Convention Centre on October 19 and 20 2016!

For more information visit:

www.towerxchange.com/meetup/meetup-africa


Insights from the TowerXchange Africa & Middle East 2015

55 Tanzania

56 Egypt

59 DRC

60 Evaluating the best power options for sites

across Africa

62 Rwanda and Zambia

63 Creating a sustainable energy mix for Africa

64 Senegal

64 Uganda

66 Ghana

68 Nigeria

www.towerxchange.com

Tanzania, DRC, Egypt, Ghana, Nigeria, Uganda, Rwanda and Zambia plus energy roundtable reportsLessons learned at the TowerXchange Meetup Africa 2015

Country roundtable: Tanzania As Helios Towers Africa’s most important market in terms of size and investment, TowerXchange Meetup Africa’s Tanzania focus roundtable was hosted by HTA Executive Chairman, Chuck Green. Historically having had a focus on integration of acquisitions and organic growth, with huge build to suit demand from both Tigo and Vodacom, 2015 saw a change in strategy for HTA with a shift towards operational excellence. With a new Group CEO (Kash Pandya) at the helm, bringing creative and innovative thinking to the business, HTA presented their plans to adopt a hands on approach, from the maintenance contractors on the ground, all the way up to the board room. With this operational focus put to the forefront, discussions honed in on the main challenges to achieving SLAs in the Tanzanian market, with power troubles being identified as the number one challenge. Participants agreed that there needed to be a better way to optimise power provision, with power accounting for half of tower opex in the country and power failure being at the root of over half the cases of SLAs not being met. Participants discussed the importance of getting back to basics on power and with HTA’s new CEO hailing from Aggreko, the company has firmly demonstrated its intention to tackle the issue. Diesel theft was unanimously cited as a significant challenge, with organised crime rather than pure opportunists underlying much of the activity. Increasingly creative strategies from criminals

Read this article to learn:< Experiences from the frontlines of operating towers in Tanzania, DRC, Egypt, Ghana, Nigeria, Uganda,

Rwanda and Zambia

< Baseline data on selected markets: who owns the towers, tenancies ratios where known, as well as

mobile market stats

< The impact of currency devaluations, operational and financial measures to mitigate risk

< Energy efficiency business models, priorities and investments

< Experiences and ideas for combating fuel and equipment theft

TowerXchange Meetups are renowned for our small group roundtable breakouts. Attended by towercos, MNOs, investors, leading managed services subcontractors and suppliers, each roundtable assembles a cross section of the local tower ecosystem in each market, including many of the most influential telecom infrastructure decision makers. As those roundtables are held under the ‘Chatham House Rule’, protecting the confidentiality of contributors, we can share here some of the main lessons learned.

Keywords: Africa, American Tower, Batteries, Build-to-Suit, Business Model, Community Power, Country Risk, Customs, DG Runtime, DRC, ESCOs, Eaton Towers, Egypt, Energy Efficiency, Fuel Cell, Fuel Security, Ghana, HTN Towers, Helios Towers Africa, Hybrid Power, IHS, Infrastructure Sharing, LTE, Leasing & Permitting, Lithium, Manage With License To Lease, Market Overview, Microgeneration, Nigeria, O&M, Off-Grid, Operational Excellence, Opex Reduction, Procurement, QoS, RMS, Regulation, Research, Rooftop, Rwanda, SWAP Telecoms and Technologies, Sale & Leaseback, Skilled Workforces, Solar, Spare Parts, Tanzania, Tax, Tenancy Ratios, Tower Count, TowerXchange Research, Uganda, Unreliable Grid, Zambia

www.towerxchange.com | TowerXchange Issue 15 | XX| TowerXchange Meetup Africa 2016, 19-20 October 2016, Sandton Convention Centre, Johannesburg | www.towerxchange.com/meetups/meetup-africa55

- from watering down diesel with paraffin to tampering with gauges - requires companies to adapt and respond to meet these challenges. The biggest source of theft most parties agreed was administrative, requiring a much closer focus on being able to track what is actually being delivered rather than what is being stolen post delivery. Battery theft is also an increasing problem. When it comes to tackling crime, some interesting strategies were presented by participants with extensive experience of living and working in the market. Community engagement was seen as a critical way to help alleviate problems, providing power to the local community, delivering lighting and offering a charging point as mobile phone usage instils a sense of ownership in the community. One participant discussed making the community the owner of the diesel genset so that they look after it well. Engaging with the chief within a given village was seen as key strategy as the community respect him - a security guard appointed by the chief is likely to be more honourable than one that has been selected through other means. With regards to other challenges in the market, participants cited tough labour laws as something that people entering the market easily under-estimate. Within Tanzania, there is very much a culture of employees taking employers to court - and the employees generally win. A tough hand that may help reap results in other African countries does not work well in the Tanzanian market. In order to be successful there you need professional man managers in your team, and those of Tanzanian

descent will understand the culture better than others. There was a comment from a couple of participants that one of the risks people encounter in Tanzania is a false sense of security, whilst it is generally seen as a non threatening society, that does not necessarily translate into it being easy to do business there. Discussions naturally led to the importance of recruiting and retaining reliable staff. The personality and values of the person that you employ is often more valuable than their qualifications. It is also important to maintain a continuous training programme. As employees

or contractors progress and become more senior in their roles, they may often forget some of the essentials they learnt along the way and so re-training is important. Beyond the social challenges tower operators face, it was commented that maintenance costs for a tower in Tanzania were extremely high - typically US$7,000 per year, ten times the costs in the US. A large part of this can be attributed to generators, with participants discussing how to minimise downtime and prolong the usable lifetime of the assets. The causes of generator failure can be diverse, and there is a real need to dig down into the root


In order to be successful several participants agreed that it was of paramount importance to have Egyptian management and knowledge, whilst international experience carries a lot of merit, often where the real agreements happen are in a much less structured setting, and mainly in Arabic. Military permissions, and therefore military contacts or ex-military staff, were reportedly required to facilitate the acquisition of many sites in Egypt. One of the biggest challenges cited in the Egyptian market was obtaining finance. With currency control, dollars are extremely hard to come by and sometimes must be purchased on the black market - when operating in Egypt you want to be buying in Egyptian Pounds. There were comments that many issues in finance stem from the local banks, they often make a lot of false promises, first inferring they have a lot of money and then further down the line saying they can’t get dollars. Following discussions on finance, a large part of the remaining discussions focussed on the other big challenge that towercos face in Egypt - power. Grid interconnection processes are extremely slow, with it taking far too long to get the license to secure power from the authorities and as a result, many sites in Egypt are off-grid. The mentality of the authorities seems to be that the electricity grid is for the use of citizens and not to be prioritised for businesses. Most sites in the country are reliant on diesel generators, with one towerco at the table mentioning

boxes for towercos. When it came to setting the stage for discussions, it was highlighted that there are currently 20,000 towers in the market of which all but 40 (which were built by HOI MEA) have been built by MNOs. With both Eaton Towers and HOI MEA at the table, plenty of practical experience was offered with regards to operating in the country and whilst participants generally agreed that there is scope for more tower companies to enter the market, it was highlighted that there were big challenges in doing so. In spite of the concerns of some participants who were not yet familar with Egypt, those already active the market mentioned that when it comes to security there are no major issues. Contrary to discussions being held on other African markets, theft and vandalism do not constitute major problem areas. The only area where towercos and their suppliers experienced heightened security concerns was Sinai. Where concerns do sit however, relate to the political instability of the country which can make operating there tough. Participants questioned international investors at the table as to their outlook for the Egyptian market and the sentiment was that Egypt was too big and too important a country to go the way of countries such as Syria and Yemen and so they had more confidence in the market. Youth unemployment needs to be addressed as a priority to improve the economy, and those around the table agreed that the recently discovered offshore gas reserves could also have a marked positive impact.

causes - simple things such as a lack of water or coolant. Putting in place timelines for preventative maintenance and sticking to them is key. Taking a step away from the day to day management of towers, the biggest topic on the table was the entrance of new MNO, Viettel into the market. In the 6-12 months leading up to the Meetup, dramatic changes had been seen in the Tanzanian market as a result of their entrance and participants were keen to see how this would evolve as we moved into 2016. It was confirmed that Viettel have big expansion plans with 1,500 orders to process. Some participants commented that as a company, Viettel have an unorthodox way of rolling out their sites and as a result have done a lot of work on their own. Some participants raised concerns surrounding health and safety and poor training. As to whether this represented a concern to other tower owners in the market, it was commented that if Viettel were to try and put a tower near an existing site it would be blocked by the regulator.

Country roundtable: Egypt Our Egypt roundtable, hosted by Eaton Towers, kicked off with an enthusiastic explanation of why the country represents such an exciting market at present. There is a big population, fast growing data usage, a presence of tier one MNOs (Vodacom, Etisalat and MobiNil) and a fourth operator coming to the market as well as a focus on 4G rollout and rapid urbanisation - as a country it ticks a lot of


that due to the high load on the majority of their sites, some needed as many as three generators. This led to questions as to whether towercos in the market have tried renewable sources of power generation, primarily solar PV. A key factor which has potentially the stymied the switch to alternative sources of power is the low cost of diesel in the Egyptian market. The price is a lot lower than elsewhere in Africa, currently around a fifth of that in other markets. There are plans however to normalise the cost of diesel with a programme being introduce to reduce the government subsidies on the fuel. With regards to solar, towercos at the table had some experience. Some sites they had recently acquired had solar on them and they had also trialled solar-hybrid solutions in the delta region. Speaking about these trials, which have been running for

three years, the towerco reported good feedback with savings of power opex savings of 76% being reported. There are however lots of issues which still need to be tackled in order to optimise performance, such as monitoring or dealing with the high dust levels in the region. It was noted that the Egyptian government were very supportive when it came to granting land to develop solar projects. When it came to power, participants enquired as to the potential impact of ENI’s discovery of off-shore gas reserves. With production expected to commence within five years, the discovery has the potential to change the geo-political situation in Egypt and beyond, and may lead to the creation of substantial new infrastructure, including telecom towers. Other mega-projects which could stimulate demand

for new towers in Egypt include the enlargement of the Suez Canal and the building of a new capital East of Cairo. Before rounding up discussions, questions led to the rooftop market and what opportunities were presented there. Thinking amongst participants was that managing and marketing rooftops would be a difficult business model in Egypt, the biggest problems being finding the permit and securing an electricity connection - finding the responsible parties that you need to deal with can be extremely challenging and often more effort than its worth. It is notable that Eaton’s acquisition of 2,000 towers from MobiNil did not include assets in the rooftop-dominated Cairo market. In terms of a build to suit market, HOI-MEA is the only company that entered the market with this business model. It is a difficult market, with the process to start approaching customers being long and obtaining two tenants for new sites being challenging due to MNO’s differing strategic interests in different cities. When it comes to tower acquisitions in the market, it was referenced that towercos have had the opportunity to pick specific regions that they were keen to acquire, delivering some flexibility on that front.

A subsequent round table focused on building towers in Egypt, and was hosted by HOI MEA (‘’House of Inventions’’), which has offices in KSA, UAE, Morocco, Sudan, Qatar and Egypt. At the time of the 3rd TowerXchange Meetup Africa (October 2015), HOI MEA had 40 sites in Egypt and they were

“ “managing and marketing rooftops would be a difficult business model in Egypt, the biggest problems being finding the permit and securing an electricity connection - finding the responsible parties that you need to deal with can be extremely challenging


option, that can provide up time for a few hours a day, would make the single tenant business model work. Whilst coverage would be limited, giving six hours of connectivity where there used to be none is a significant step forward. Currently operators are mostly building their own rural sites due to the lack of a towerco solution. Revenue sharing business models where an operator and rural towerco work together in a rural area have been proposed – although to date the most progress is Infratel’s project to build some 800 rural sites for Vodacom in DRC, albeit under a conventional supplier model. In order to drive the market further one participant called upon DRC regulators to look at the example set by India in stimulating the rollout of rural networks. In India, if operators were not covering

upcoming elections in December 2016 would likely have some impact on the market however, with generally everything in the country shutting down around election time. Rural coverage dominated a large part of discussions with participants commenting that operators were generally reluctant to go into rural areas, although there was a push from regulators to force the issue. The challenge for a towerco in servicing the rural market is that the likelihood is that you would only have one tenant on your tower. With the towerco business model being built on adding a second tenant, discussions centred on how companies were looking at technical solutions and business models that could make rural coverage a viable strategy for a towerco. It was suggested that a low power

planning to drive toward 300+ in the next three years, mostly through organic growth. Insights from HOI MEA’s round table have been integrated into the above notes. Country roundtable: DRC As the only towerco in the market, Helios Towers Africa played host to our DRC focus roundtable. Whilst referenced as the toughest market in which they operate, and with the company’s SLA values being slightly lower than in other regions due to the inherent complexities, the company has outperformed their acquisition economics in the DRC from day one. The key to this, they felt was putting in strong processes from the off. In spite of the challenges of working there, they view the country as a huge market with the potential for significant growth. Being the only towerco present in the DRC and owning just under 25% of the country’s ~4,250 towers, Helios Towers Africa were hopeful that the Airtel DRC tower deal would come back to the table with their portfolio of assets having the strongest national coverage. Asked as to whether they thought another towerco would enter the market, HTA thought it unlikely as it is a very challenging market where local relationships are more important than ever (Editor: TowerXchange subsequently learned that negotiations to acquire Airtel’s DRC towers have resumed, with Helios Towers Africa and Eaton Towers interested). When discussing the political situation in the DRC participants with experience of living and working in the country felt it was pretty stable. The


villages and rural areas they were required to pay a default fee. Most operators were happy to pay this penalty as it was a more cost effective solution that rolling out a rural network. These penalty fees created a fund and when operators were asked to bid for the least amount of subsidy they would require to take on the rollout to key rural locations this fund was to be made available. Interestingly however, in the auction companies bid with negative subsidies, the mindset in the market had shifted and since then rural coverage has expanded significantly in India. When it came to operational challenges in the country, logistics and power were cited as the two biggest issues. The DRC is a huge country with very limited transport infrastructure, which makes the movement of materials and services extremely difficult. Power accounts for half of operating costs

at sites and also failure accounts for half of site down time. Fuel theft is a big problem. Furthermore outside of Kinshasa, fuel costs can be 2.5 times that in the capital (thus necessitating different pricing structures for these regions). With such significant power challenges, one participant questioned whether towercos should seek an ESCO model in order to remove some of the risk. Whilst this wasn’t ruled out as an option, others commented that the penalty for SLA failure would need to be passed along to the ESCO and in such an instance the ESCO would need to have a big enough balance sheet to take be exposed to such risks (which many don’t). Another solution posed was the use of alternative energy in order to reduce diesel usage. HTA commented that they have had a positive experience in Tanzania working with solar and would be open to the opportunity, whilst HTN Towers have a major

solar programme currently going on in Nigeria. The conditions in the DRC are such that there is little dirt or dust on roads which would interfere with the performance of a PV system and so the country could be an ideal candidate for solar rollout. With the government facing such power issues it was suggested that Helios Towers Africa (or a third party) could look to built a central site, in the magnitude of 20MW, whereby excess power was fed into the grid. With it being proposed that Helios Towers Africa were arguably the DRC’s biggest power consumer they should have some sway with the government in promoting such initiatives. Evaluating the best power options for sites across Africa This was one of the most popular roundtables at the TowerXchange Meetup Africa 2015. It was moderated by Samuel Tanon of Millicom, whose remit includes both tower strategy and opex improvements. Samuel introduced himself and Millicom. He emphasised the fact that Millicom has outsourced their towers in most countries, thus transferring responsibility for power to their towerco partner – in many cases Helios Towers Africa, whose then COO Kevin Koch also participated in the roundtable. Samuel hinted that Millicom might be interested in outsourcing to an ESCO in Chad, where they retain ownership of their towers. Mobiles operators are ready to pay a premium to maintain 99.99% uptime at certain sites. On the

“ “The DRC is a huge country with very limited transport infrastructure, which makes the movement of materials and services extremely difficult. Power accounts for half of operating costs at sites and also failure accounts for half of site down time


moderated the session. Enda had been working for the Zambian Advisory Council and had done some consultancy projects in Rwanda and Zambia, in particular with Millicom. The Rwandan and Zambian tower markets are both dominated by IHS, which owns around 2,700 towers across the two countries, including 1,100 acquired from Airtel in late 2015 plus 1,269 acquired from MTN in 2014 and topped up with BTS. There are around 2,000 towers in Zambia, giving IHS 85% market share, and 1,300 in Rwanda, of which IHS has around 77%. IHS remain bullish about achieving a tenancy ratio of two in Rwanda and Zambia with five years, driven by data growth and technology upgrades. Naturally IHS’s tenancy ratio dropped with the integration of the Airtel towers, which had historically not been widely shared with competitive MNOs beyond a few bi-lateral swaps. However, MTN’s enthusiasm to co-locate on Airtel towers, particularly in Zambia, should see tenancy ratios recover quickly. According to GSMA intelligence, in Q4 2015 there were 8.8mn connections in Rwanda among a population of 11.7mn, representing 75% SIM penetration, with 35% mobile broadband. The same source suggests that in Zambia there were 11.9mn connections among a population of 16.5mn, representing 72% SIM penetration, with 16% mobile broadband. Rwanda is a great place to do business. With GDP growth over 8%, it’s a well managed country with a stable government. The Rwandan regulator

theft included trying to make them look less like batteries, and burying them under concrete, an approach widely used in the US. Administrative theft remains the number one source of leakage, with guards sometimes making use of DGs for their own needs. A few market snapshots gleaned from the roundtable. Grid power in Chad was reportedly at 180V rather than 220V with a significant proportion of towers off grid. Reducing genset noise is reportedly a priority. Millicom intended to upgrade their power equipment before outsourcing to an ESCO. Meanwhile, in Tanzania Millicom were undertaking a project to connect 200-250 off-grid villages. In Rwanda and Senegal electricity grid power was reportedly improving, although prices had increased, with more and more solar panels seen on roofs. Nonetheless, solar power was not considered competitively priced compared to grid in those markets. While grid conditions were improving in many SSA countries, the situation had worsened in Ghana, compounded by currency devaluation and fuel shortages. In conclusion, the roundtable agreed that towercos and aspiring ESCOs would have to adapt energy solutions to meet the unique requirements of each site. Country roundtable: Rwanda and Zambia Enda Hardiman of Hardiman Telecommunications

other hand, at smaller sites (e.g. below 500W), they can sometimes accept uptime lower uptime of 99.95%. The average capacity for existing sites was reportedly 1.5-2KW. For new sites, the capacity is typically much lower. The importance of ‘’community power’’ in rural areas was emphasised, where more and more sites consume less than 500W, and where perhaps one or two operators might share the same BTS. On the question as to whether energy consumption at cell sites was generally increasing or decreasing, response was not very clear. On one hand, consumption was decreasing as technology evolved, but this was offset by the increase in traffic meaning more capacity was needed and thus more consumption. Millicom gave the example of Ghana where they have replaced their old sites (6-8KW) with new sites with less than 2KW. Most equipment was running in DC rather than AC. In future batteries would be preferred which run in higher temperatures therefore with less requirement for cooling. Towercos continue to report encountering challenges with energy storage and battery logistics, although report significant ‘quick wins’ could be achieved by investing in deep-cycle batteries. Battery theft was almost as big a concern as fuel theft, although solar panel theft was less of a concern. Measures taken to prevent battery


mandates tower sharing, helping the development of towercos in the country. MTN are market leaders in Rwanda, with Tigo and Airtel completing a roster of credit-worthy tower tenants, whereas Airtel are the market leaders in Zambia, followed by MTN and capital-constrained Zamtel. There are rumors of a prospective fourth MNO or MVNO entrant. ARPUs are low in Zambia; in the US$2-3 range. Towerco lease rates in both markets are inclusive of power. Grid power is more extensive and reliable than other SSA markets in Zambia and Rwanda, where battery banks are often the sole backup power needed. Power availability is improving but remains a challenge, and diesel theft remains a big issue. Dion Djerling introduced the activities of Connect Africa in Zambia: a series of Wi-Fi hotspots installed in rural areas across Zambia. Base stations costs less than $10,000 and are partly funded by advertising. Connect Africa has over 200 sites deployed successfully with three operators. Connect Africa’s experiences illustrate how smaller cells present both threat for MNOs and opportunity for towercos. Creating a sustainable energy mix for Africa Another popular roundtable, with the conversation ably structured by Laurent Roineau, Group CTO of managed service provider Camusat. Laurent previously served as CEO of TowerCo of Madagascar.

The discussion started with an identification of towercos’ energy needs in Africa, including energy generation, energy storage and the measurement of key performance indicators through RMS. For rural areas, low cost sites with integrated power solutions, or minigrid solutions were propsed. While Africa’s ‘Big Four’ towercos remain focused on sites with a more obvious path to a second tenant, a class of turnkey rural towerco is slowly emerging, represented at the Meetup by Africa Mobile Networks (AMN), Connect Africa and Infratel. MNOs also continue to be key stakeholders in rural

connectivity, for example Tigo plans 100 low cost rural sites this year, 160 next year. Business models and pricing was another hot topic, with regulation restricting options in some countries. While there was no clear consensus around the preferred model to deliver energy as a service, fixed monthly fees of charging per kWh, the prevailing preference among towercos at the TowerXchange Meetup Africa was still to drive energy efficiency through their own capital investments, capturing the value on their own balance sheets.


could be an interesting opportunity for a second tier towerco. For example, Expresso plans to expand from their current network of 450 to 700-800 towers. A potential partnership could also involve Millicom-Tigo, which retains their 1,000+ towers in Senegal. Senegal could be one of the next countries in SSA to move toward a shared infrastructure business model – there are plenty of stakeholders lobbying government about the inefficiency of having three parallel mobile networks in a market where the total cost for a new macro tower is around US$200,000. Country roundtable: Uganda Terry Rhodes, Acting CEO of Eaton Towers, hosted the Uganda roundtable, supported by insightful contributions from Thomas Sonesson, CEO of ATC Uganda, as well as the leaders of several of

multi-SIMing means unique subscriber penetration is nearer 60%. 3G penetration reached a double figure percentage in 2015. Orange-branded Sonatel are market leaders with around 55% of subscribers. Sonatel have been reluctant to sell their 1,800 towers (government and union opposition to any prospective sale has not helped), although Sonatel have been considering a managed services agreement. For challenger MNOs to prosper, they need to quickly and cost effectively achieve coverage, but to date there has been little bi-lateral infrastructure sharing in Senegal, with #2 and #3 MNOs Tigo and Expresso keen to get onto Sonatel’s towers, but the market leaders reluctant to share. While partnering with a challenger MNO often doesn’t garner appetite of Africa’s large towercos, Senegal

Deep cycle batteries continue to offer a ‘quick win’. The vast majority of battery banks at African cell sites still use lead-acid rather than lithium-ion or fuel cells. Battery recycling is seen as cost-neutral – the residual value of the equipment covering the cost of recycling, with the added complication that lithium-ion batteries would have to be exported to be recycled. Battery theft remains a critical concern, particularly in markets like Uganda where organised criminals extract the lead from batteries to resell on the black market. The business case for fuel cells is still felt to make more sense for datacenters than at individual cell sites. Diesel gensets still represent a significant majority of distributed and backup generation solutions in SSA, with solar still perceived as being relatively risky and costly. Wind turbines remain a rare sight at SSA cell sites. Country focus: Senegal Abdalla Saeed, CEO of Expresso Senegal moderated the roundtable, joined by Expresso’s Group CEO Tarig Rahamtalla. The discussion focused on creating a market for Expresso’s towers in Senegal, and perhaps beyond. Senegal is an attractive investment with low country risk: a stable political environment, steady 4.5% GDP growth and 2% inflation. Expresso has around 2.5mn of the 14.7mn subscribers in Senegal, a country of just over 15mn people. While SIM penetration is approaching 100%,

Sudan

Senegal

Mauritania

Guinea Conakry

Ghana

500 1000 1500 2000

Source: TowerXchangeExpresso’s tower count

1600

450

300

150

300


the country’s most important managed service providers and equipment suppliers. Uganda has a young, fast growing, geographically dispersed population of just under 40mn, meaning there is need for broader coverage than in more urbanised emerging markets. Uganda had 28.7mn mobile connections at Q4 2015, 16% of which are mobile broadband customers, according to GSMA Intelligence. Uganda’s local currency is under pressure (37% devaluation in one year) and the reserve position isn’t as strong as investors would like. With material costs often linked to the US dollar, and much of the revenue generated in local currency, towercos are exposed to currency risk.

The Ugandan MNO market has substantially restructured since the entrance of the towercos in 2011: Airtel acquired Warid, Orange sold out to Africell, and newer operators Smart and Smile started to establish themselves. While there are seven operators in Uganda, the market structure is essentially two leaders, a contender and some smaller niche players. Newest entrants Africell prefer a capex-light model, and are natural co-locators, so expect tenancy ratios to rise more swiftly in 2016. The regulator, the UCC, are not keen on further consolidation, but speculation continues surrounding the future of UTL (as ever, the politics around a struggling incumbent are complex!) MTN are mobile market leaders in Uganda – they formed a 1,000 tower, 49:51% joint venture towerco

with American Tower in 2011. ATC Uganda currently owns 1,388 towers. Eaton Towers entered Uganda soon after, combining 400 Orange towers with 300 Warid towers, to which they are in the process of adding Airtel’s towers, giving Eaton a count of around 1,600 Ugandan towers. TowerXchange estimate that there are just under 3,500 towers and a little over 4,000 tenancies in total in Uganda, suggesting an average tenancy ratio approaching 1.2. There are a decent number of non-traditional MNO tenants on Uganda’s towers. There are national security tenants, weather information systems and various ISPs. Google recently started taking tenancies, as well as new entrant 4G operators. Tower Cash Flow (TCF) is a more important metric than tenancy ratios, and there is lots of revenue generating equipment on towers which isn’t reflected in tenancy ratios, such as new microwave dishes, a second RAD centre et cetera. In terms of new tower build, MNO consolidation initially slowed the build out, but a growth period is foreseen in the coming years. Towercos report Uganda has perhaps another 3,500 towers to build, particularly in Northern parts of the country. An annual growth rate in terms of total tower count of around 10% is anticipated. There has been less decommissioning than the towercos expected, due to underlying market growth, particularly rising data demand. Nobody is stopping Uganda’s MNOs from building their own towers, but most of the new build is being

“ “In terms of new tower build, MNO consolidation initially slowed the build out, but a growth period is foreseen in the coming years. Towercos report Uganda has perhaps another 3,500 towers to build, particularly in Northern parts of the country. An annual growth rate in terms of total tower count of around 10% is anticipated


However, daily interruptions of one to three hours are common even in Kampala, so one towerco’s vision is to replace diesel with fast chargeable energy storage that can recharge 50% of the battery’s capacity in half an hour. There has been a fair amount of hybridisation of power solutions in the Ugandan, with extra incentive since ATC Uganda moved from the power pass through business model to providing full power as a service (PaaS). Uganda’s towercos will invest in connecting towers to the grid, although they often have to pay for the transmission network extension. What are the Ugandan towercos’ appetites to partner with ESCOs? Investors in American Tower view it as a stable, annuity play, so it might be appealing to offload risk and secure cashflow. On the other hand Eaton report having hybridised 300 sites from the original 700 they acquired in 2012 – “we’re keen to retain the benefits of that investment on our balance sheet, but once we know what we’re dealing with, we might consider partnering with an ESCO.” However, the near term view was that towercos were reluctant to partner with unproven, technology-centric ESCOs that haven’t given sufficient thought to the operational aspects of the business. “I’m seeing too much vaporware,” said one towerco. “We’ve put a lot of focus on energy efficiency ourselves,” said the other towerco, “we’re good at this.” At a smaller level than a full ESCO proposition, Uganda provides a special license for community power projects which could foster the development of new distributed generation plays – towercos would be interested in having a site or sites

One towerco reported having put a prosecutor and ex-policemen on their payroll to ensure the perpetrators of theft are jailed. Nonetheless, security troubles have not been enough to dissuade American Tower and Eaton from continuing to invest in Ugandan towers “we’ve put a lot of money into buying Airtel’s towers – we believe in this country,” said Eaton’s Terry Rhodes. The opportunity to serve rural communities has not been fully met by any stakeholders us yet, but MNOs are generally looking for expanded coverage, somewhat driven by Mobile Financial Services. Telecoms and particularly telecoms infrastructure is relatively lightly regulated in Uganda – for example there is no regulation specifically for infrastructure or transmission companies. However, the regulator certainly seems aware of the need for coverage and capacity: Uganda has around 50% more subscribers per tower than Kenya. Permitting new sites in Uganda is reportedly easier than other SSA markets, although identifying the genuine landlord is always a challenge. A lot of the acquired towers lacked some of the necessary environmental permits – fortunately the retrospective application process has been relatively painless. What proportion of Uganda’s towers are on unreliable grids or off-grid? ATC Uganda say around 400 of their 1,388 sites are off grid, with around half the new build off grid. Eaton said “more of our towers are off grid than on”. Unreliable grid sites need backup DGs and battery banks, although “a few mobile DGs are sufficient to cover Kampala”.

done through the towercos. However there is always competition – the MNOs have been in this business for 20 years, they know what they’re doing, so there is always a make or buy decision. So there is always a benchmark cost. Build costs are reportedly “higher than average for SSA, similar to Ghana, but not as high as Nigeria.” As a landlocked country with no domestic steel industry, getting towers and accessories into Uganda can be time consuming and expensive. The import of equipment is subject to a 5% duty just to cross the border. Maintenance costs are reportedly as much as double those in Ghana. Limited maintenance capabilities and capacity in Uganda forced one towerco to bring O&M for half their network in-house (”we don’t regret insourcing maintenance – it enabled us to really get to know the costs and the pain points, so now have a tender out for a five year maintenance contract, we’re in a stronger position to negotiate a new deal!”) However, the towercos report that, apart from steel, there is now an established ecosystem of local suppliers in Uganda. There are significant logistical challenges to operating a tower network in Uganda, including operational management and delivery of fuel. While many SSA towercos struggle to combat fuel and battery theft, the difference in Uganda is that the administrative theft is compounded by the impact of organised crime, with armed robberies having a material effect on opex. This makes Uganda’s towercos keen on site hardening techniques.


as anchor tenants in such an ecosystem. Country focus: Ghana Chuck Green, Executive Chairman of Helios Towers Africa (HTA), hosted the Ghana roundtable, with valuable contributions from Eaton’s Terry Rhodes. HTA completed the first sale and leaseback in Africa when they acquired 750 towers from Millicom-Tigo in Ghana for US$54mn back in 2010. Shortly afterward MTN came to a marketing services agreement with American Tower, creating joint venture ATC Ghana which currently has 2,098 towers in the country. Both Eaton and HTA were involved in the Vodafone Ghana process, which oscillated between a sale and leaseback opportunity, then a managed services deal, then back to a sale and leaseback before ultimately closing as a ‘manage with license to lease’ deal with Eaton. The Vodafone towers were a legacy of the old Ghana Telecom network, and needed substantial improvement capex to be readied for co-location. So within 12 months there were three towercos in Ghana. While Airtel’s Africa Towers was registered in Ghana a couple of years ago, they were never really active, and the Airtel towers are in the process of being transferred to Eaton, bringing their Ghanaian tower count to around 1,400. To illustrate the economies of scale in emerging market towers, Eaton Towers Ghana reportedly needed add only three extra fulltime employees to their existing team of just under 40 to manage a network almost doubling in size. TowerXchange estimate there are around 6,000 towers in total in Ghana.

According to GSMA Intelligence, in Q4 2015 Ghana had a 27.7mn population with 121% SIM penetration, not reflective of the real level of penetration as multi-SIMing is common, and there is little stickiness. Ghana hosts a crowded MNO market with Airtel, Glo, MTN, Tigo and Vodafone all present, as well as a host of smaller operators. There has been an injection of new blood into the MNO landscape with the licensing of 4G pioneers. Licensing rules restricted spectrum to local companies – and these are full LTE plays, not just fixed wireless. The rollouts of these new entrants have been reported as “more like ISPs” with “single poles not towers, and few with DG backups.” Towercos are inclined to view tenancies from such companies as short term incremental revenue because they know they won’t be around forever. The history of the Ghanaian tower market had been

one of stable operations, virtually unblemished SLA performance, and leaseup almost exactly as per acquisition business cases, until the Ghanaian Cedi started it’s dramatic and extended slide. While grid availability at the time of the tower acquisitions averaged around 14 hours per day, it had improved to 22 hours, then rapidly slid back to 14 hours from January 2015. The result? Nationwide fuel shortages and power outages, compounded by a fuel transport strike. Deregulation of the fuel price in 2015 led to bulk suppliers holding stock as the price went up 25% in a matter of days. In parallel, electricity prices have been soaring. Maintenance contractors are paid in Cedi, but those same contractors have to buy many consumables in US$, which risks forcing them to buy cheap, lower quality parts and spares, in turn putting more pressure on uptime and SLA performance. Ghana’s towercos learned hard lessons about the

“ “The history of the Ghanaian tower market had been one of stable operations, virtually unblemished SLA performance, and leaseup almost exactly as per acquisition business cases, until the Ghanaian Cedi started it’s dramatic and extended slide


Hybridisation of cell site energy solutions is in the relatively early stages in Ghana. A common concern is the complexity of solutions from a maintenance point of view and the associated struggles to find the right skillset among O&M contractors. Eaton initially managed security and maintenance in-house, but having built confidence in the local supplier ecosystem later decided to outsource. Contractor performance management and performance improvement is a priority for towercos in Ghana and beyond. “The big stick approach hasn’t worked,” said one towerco executive. “We have to help our guys in the field understand the consequences of what we’re doing and of what they’re not doing. If a site goes down and there’s a medical emergency, emergency services won’t work. We’ve got to mold a culture to be more responsible.” The reality is that field engineers and security guards are not always paid enough to counter the temptations of fuel theft. Instead of unqualified security guards being paid a low wage, one towerco advocated hiring junior electricians – maybe combining security with maintenance. Give your staff a career path, reduce theft and improve MTTR (Mean Time To Response) in the process! Ghanaian towercos have active security on around 80% of sites, the other 20% with roving patrols, but they’re all looking at site hardening solutions to reduce opex. Theft of batteries is a big problem, with the re-use cases of 12V lead acid batteries too readily apparent. Contractors ieng shared

builds next year across the whole of Ghana,” said one towerco. However, the towercos have generally been very contented with the Ghanaian regulator’s promotion of infrastructure sharing and their efforts to minimise the proliferation of towers. How has the level of competition affected towerco performance in the only African market where three of Africa’s ‘Big Four’ towercos are active? “Permitting challenges and a lack of BTS has driven up lease up rates,” said one towerco. “We’re generating less dollar EBITDA solely because of currency exposure, and opex has been rising because of declining grid quality. But the factors affecting performance aren’t related competition. However, would I go in as a third towerco in another market now? No. If there’s two strong towercos in a country, then you look elsewhere.” Towercos are trying to figure out the right model to serve rural Ghana. They may need Universal Service Fund subsidies where revenues are less secure, but they also have to have a business model that works in the long term. Shared revenue and shared risk models don’t overcome the simple fact that with the capital cost of sites at the moment there has to be the prospect of a second tenant in the near to medium term. Ultimately many felt that the rural market was better suited to specialist revenue share infrastructure operators built around low cost technical solutions (short, lightweight structures with solar+batteries power solutions, no DGs so near zero maintenance costs, and low power base stations with low power backhaul). Such solutions might make economic sense with just one tenant.

need to have dynamic processes able to get ahead of fuel shortages. At the time of the Meetup Ghana’s towercos had achieved nine consecutive weeks of positive SLA performance. Despite the currency crash, one towerco reported still trading EBITDA positive albeit at a significantly lower margin due entirely to forex exposure. “Indexation and escalation clauses are vitally important when prices move around so much,” suggested one towerco. Ghana’s currency devaluation prompted at least one towerco to amend contractual terms that had previously provided for a once annual adjustment of power prices, bundled into lease costs – they’ve shortened the time between adjustments now. Securing at least a portion of revenues in US$ may have been another means of minimising forex exposure, but the Ghanaian government banned US$ contracts, and Ghanaian banks are not allowed to lend US$. Another challenge in Ghana has been strict permitting and environmental policies, with tight definitions of where you can build (“you have to demonstrate you can’t co-locate on an existing tower in order to be permitted to build a new tower”). This has affected BTS volumes. However, this has the positive effect of driving up tenancy ratios because everyone has to share. One towerco reported a tenancy ratio approaching two nationwide, another said their tenancy ratio was significantly above two in urban areas, and around 1.5 in rural Ghana. Ultimately new tower build volumes in Ghana have not been what towercos were led to expect by MNOs: “I feel there are unlikely to be more than 100 new


some experience of reinforcing cell site security with concrete bunkers. Other site modernisation approaches include building facilities for guards outside the fence to minimise risk of staff theft, while partnerships with communities provide incentives for the protection of sites. A community cell charging unit bolted onto the outside of a site’s perimeter fence – with the key to the box given to the closest house – means your nearest neighbor is going to look after the site because he’s providing an important community resource. Many sites are beyond the electricity grid, so towercos (or MNOs) can supply a refrigerator. Sickle cell and other vaccines can be kept cool in such facilities. This sends a message to the community: we’re protecting your families, if you steal from this, it’s your babies you’re going to harm. How is procurement managed between towercos and their subcontractors? Towercos buy the large batteries (3-4,000 per year, according to one towerco!), rectifiers et cetera – the expensive stuff – but the contractors buy the consumables. One towerco was considering setting up supplier agreements with a price book, and driving their partners to use that at cost. Country focus: Nigeria

Lawrence Onyema of SWAP Telecoms and Technology moderated the Nigeria roundtable, joined by senior representation from American Tower and several of IHS’s local contractors, including IPT PowerTech and MP Infrastructure.

Nigeria has a population of 170mn, around 60%

of whom are youths. Coverage is maturing but incomplete: discussion suggested that MTN’s coverage was over 90%, Glo close to 90%, Airtel in the 80s. While more towers are needed for coverage, QoS issues also illustrate the need for capacity and infill sites: explosive data growth meant some participants felt Nigeria may need as many as 40,000 more towers beyond the current ~32,000. Voice revenue and ARPU is dropping in Nigeria, but data traffic is growing: there are around 38mn smart phones in Nigeria. There are other tenants on Nigeria’s towers beyond Nigeria’s GSM operators. CDMA operators Visafone and Multilinks had 2,042,015 subscribers, plus 66,319 fixed-wireless subscribers. Fixed LTE operators SWIFT have over 100,000 subscribers. NATCOM acquired the NITEL license with intend to rollout LTE.

The structure of the Nigerian tower market may change now that 79% of the country’s towers are owned and operated by towercos, with three sizable towercos who could drive consolidation. While there was some speculation around the table as to whether ATC Nigeria would embark on a rollup strategy in an effort to close the market share gap on IHS, TowerXchange feel American Tower may acquire one or two of Nigeria’s four decent sized middle market towercos (SWAP, BCTek, Communication Towers Nigeria and Hotspot), but American Tower has always had the discipline to walk away from deals that don’t meet their investment thesis and valuation. There is simply not enough independently owned stock in Nigeria for ATC Nigeria to catch IHS. HTN Towers are somewhat in limbo: they now have two large scale competitors, and four hungry smaller players, to compete with for BTS. HTN’s efforts to restructure their balance sheet have been ongoing for over a year, with their IPO cancelled citing interest from a prospective strategic investor. HTN Towers have reached an agreement with SWAP Telecoms and Technology, enabling HTN to manage and market the combined portfolio and pay commission back to SWAP. This may be a precursor to a merger.

As much as 70% of opex in Nigeria is diesel, with DGs running 24/7 on many sites. SWAP’s 702 sites consume a million litres of diesel per month on their own (that’s an average of 1,424.5L per site). IHS burned 1,900L of diesel per site per month when they acquired towers, they have brought that down to 1,200L with a technology pathway to 700L.

“ “explosive data growth meant some participants felt Nigeria may need as many as 40,000 more towers beyond the current ~32,000


efficiency programmes. “For the first six months after an acquisition we will typically use the existing inventory of energy equipment, and the existing managed service providers,” said one towerco. “After 6-12 months we have enough performance data to start reviewing suppliers.” One of IHS’s contractors reported that they were already managing the first 96 sites from an acquisition closed less than a year ago, with a further 180 sites to follow. While the time lag is generally manageable, managed service providers will often have to put deposits down on equipment before their new managed sites start generating revenue, creating a financing gap. “We send out an RFP, do the usual proof of concept testing on any new innovations,” another towerco said. “We prefer an opex model where the provider

of systems. The process of hybridisation is not just about getting equipment into the country and installed: a cultural change is required throughout the supply chain. Maintenance companies prefer sites to run on DG because they make more money that way! Roundtable participants were unanimous in their call for stable PPAs (Power Purchase Agreements) from the government, enabling the sale of excess capacity back to the grid, a critical incentive to renewable projects. American Tower confirmed that power costs would not be a pass through for ATC Nigeria, which means Nigeria’s four largest towercos all provide power as a service (PaaS).

TowerXchange asked Nigeria’s towercos to explain the timelines for their investment in energy

SWAP reportedly have around 250 of their 702 sites on-grid, but grid power is only usable at as few as 20 of those sites. One towerco stated “in Nigeria there is no such thing as a reliable grid site – and we define on grid as twenty plus hours per day of usable grid power”. “Most sites have a grid connection but it is often not working, or the voltage may be high, low or one phase may be off,” said another towerco. “You can try to connect off grid sites to the grid, but many local authorities are too indebted to invest, and even where they can, their priorities will be residential and industrial electrification first,” he concluded. Nigeria’s generation capacity is gradually improving with plans to grow from 4,500MW at the time of the Meetup (October 2015), to 5,000MW by the end of 2015, rising to 10,000MW by the end of 2016. While generation capacity is improving, transmission problems remain. Diesel theft in Nigeria is systemic, well planned and choreographed, and accounts for ~30% leakage from the ecosystem. Theft isn’t restricted to fuel, with batteries and even whole diesel gensets targeted. A growing proportion of Nigeria’s cell site energy solutions have been hybridised, with solar hybrid solutions to be deployed at many new sites. The opportunity was felt to be greatest in Northern Nigeria, where weather conditions were most suited to solar.One vendor reported problems importing hybrid energy solutions into Nigeria, with different customs duties for PV and batteries requiring the dismantling

MTN

Globacom

Airtel

Etisalat

Source: NCC, September 2015

Mobile subscriber numbers, GSM operators, Nigeria

62,493,732

31,306,472

31,134,625

23,492,214


owns the equipment and guarantees savings,” he concluded. Building new sites is expensive and complex in Nigeria, with layers of bureaucracy and taxation to be navigated, and environment impact regulations dictating that new sites cannot be built closer than 10m to any existing buildings – this constitutes a major obstacle to rollout. “I have ten new site builds locked by local government and environmental legislation,” said one participant. Landlords in Nigeria are getting smarter and greedier – one towerco cited an example of a site in a second tier city where the rent had been 3mn NGN per year, who now wants 8mn NGN. Lease rates in Abuja, Lagos and Port Harcourt are particularly high. Opinions differed about the comparative costs of rural leases “you can get sites as cheap as US$150pcm in some locations”, said one participant. “Rural landlords are getting smarter and demanding more,” said another. Most of the land under towers in Nigeria is leased not owned. Land is typically passed on within families, and leases don’t typically exceed 15 years with five year extensions. The majority of landlords in Nigeria own the land under a single tower, there isn’t much aggregation. There hasn’t been the same level of activity from ground lease aggregators like we’ve seen in the US. Financing, scaling and packaging ground leases would be tough in Nigeria. While there may be an opportunity for towercos to acquire the land under Nigeria’s towers, the general feeling is that there are better ways to spend capital.

De-risking long term leases is a greater priority. In contrast to towers, Nigeria’s fibre is largely retained and rolled out by the country’s MNOs. One participant estimated that MTN had around 6,000km of fibre, with Glo, Airtel and Etisalat having around 4,000km each. The MNOs have created a media gateway to media gateway backbone; the next challenge is to connect points of aggregation to terminal sites, amid huge demand for backhaul capacity. So there is an opportunity for third party infracos, including towercos, to run FTTT or to aggregation points. However, most towercos remain conservative about diversifying into fibre given the cost and lack of clarity about who will make those investments, and given the difficulty maintaining control of timelines given the difficulties securing rights of way. “Fibre adds a lot of execution risk,

we’d prefer to stick to our core business,” said one towerco. IHS may be an exception: they are one of two infracos licensed by the government to rollout fibre, perhaps hinting at the beginning of a drive to share fibre. Challenges in Nigerian fibre include a lack of redundancy, for example fibre can be unintentionally cut or uprooted during road construction – an alternative backhaul solution is needed. Rights of way remain another major inhibitor – “you have to pass through the eye of a needle to get rights of way in Lagos”. For tower counts and further analysis of the Nigerian tower market, see “The new Nigerian tower market” and “What we learned about HTN Towers prior to their cancelled IPO”


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