Egypt’s only active towerco HOI still owns just 38 sites, but as a managed service provider and manufacturing partner has now completed 2,350 sites alongside the region’s MNOs. It has recently rebranded itself as HOI, and is moving from being a static asset manufacturer to turnkey infrastructure service provider. HOI has increased its geographical footprint and now serves Saudi Arabia, UAE, Sudan and Morocco. Their unique camouflaged multi-tenant towers have enabled them to become key partners of Egypt’s mobile network operators. HOI’s COO Sherif Darwish talks to TowerXchange about his plans to build new sites to meet the demands of 5G rollout and the opportunities presented by Egypt’s new cities and infrastructure.
TowerXchange: What is the history of the firm and where does HOI “House of Invention” fit in the tower industry ecosystem?
Sherif Darwish, Chief Operating Officer, HOI:
Established in 1997, with an ambitious vision to grow as the region’s leading telecom services contractor, HOI quickly proved itself in the Saudi market. Carrying out many projects ranging from; fixed telephone network expansion (1.5m lines), complete turnkey rollout of the first Saudi GSM Network, commissioning of the two Satellite Earth Stations, microwave connectivity and fibre optic connectivity.
With scope and experience, HOI was able to set up a manufacturing arm in 2001 in Egypt for all passive infrastructure elements, including towers and shelters. As a result the business not only increased its footprint across Egypt, Saudi Arabia, UAE, Sudan and Morocco but also managed to build facilities specialised in tower and monopoles manufacturing, rapid deployment units (RDUs) as well as decorative solutions.
HOI endeavours to keep pace with the GSM evolution and in 2012 it achieved a milestone, when it became the first company in Egypt to be granted a towerco license and the only company working with Egypt’s three mobile network operators. We believe that towerco model is a typical development that allows MNOs to outsource the infrastructure elements to someone else who can run the operations. Hence, focusing their efforts on sales, marketing and increasing features in the network, enabling them to acquire more market share and generate more revenues.
TowerXchange: When we interviewed HOI in 2013, you had designed, manufactured and installed over 1,650 telecom towers in Egypt and Sudan, and a further 4,000 towers manufactured by HOI had been installed in other countries. How many sites have been designed, manufactured and installed by HOI since then?
Sherif Darwish, Chief Operating Officer, HOI:
HOI has built around 700 sites over the last six years and by end of 2019 we reached 2,350 sites across the region. In addition to the standard tower designs, HOI introduced many other solutions (camouflage solution, decorative solutions, and rapid deployment solution) to serve the market dynamics.
TowerXchange: We understand that HOI own and operate 38 sites in Egypt, what is the status of your current sites and what are your long-term ambitions in Egypt as a towerco?
Sherif Darwish, Chief Operating Officer, HOI:
HOI is still achieving good results against our SLAs and our tenancy ratio has improved. The legacy of inefficient power systems have been replaced.
TowerXchange: It has been rumoured that two new licenses are to be awarded by the NTRA – one to an international towerco in the first half of 2020. In light of this, how do you view the future competitive landscape of Egyptian towers?
Sherif Darwish, Chief Operating Officer, HOI:
HOI is the only operated company under a towerco license in Egypt. The Egyptian market is big and attractive for investors. We believe once it is well regulated by NTRA, many international towercos will invest and it will create opportunities to acquire more sites.
TowerXchange: How would you characterise the current situation of the Egyptian mobile market? How many more sites will be required and what will be HOI role in the build?
Sherif Darwish, Chief Operating Officer, HOI:
Over the last four years massive infrastructure projects covering new roads and new cities have been completed, and we expect that over the next three years significant investment in new cell sites will be required to provide coverage. Also as Egypt’s MNOs are preparing themselves for 5G, HOI will be participating in this plan aggressively to meet its customers’ targets. We expect to reach around 2,000 new sites per year.
TowerXchange: Tell us about the typical structural capacity of Egypt’s towers. Have the towers you have been maintaining and installing been designed for sharing or required innovative camouflage?
Sherif Darwish, Chief Operating Officer, HOI:
The first GSM licenses were released in Egypt in 1996. Two big MNOs acquired the licenses (Orange and Vodafone). At the very beginning, MNOs were focusing on aggressively rolling out to expand their coverage and acquire further market share. Etisalat acquired the third license in 2007, with market competition continuing to increase. Until 2010, most of the towers had been designed to carry a single tenant. After which the MNOs started co-locating and the design of towers was changed to accommodate more tenants. The most recent license for “WE” was acquired three years ago, and relied on tower sharing with the existing MNOs in addition to any new sites. Camouflage solutions are common in Egypt, since it is required before the municipalities will give the authorisation to build sites, especially in the cities.
As the MNOs are preparing themselves for the 5G, HOI is participating in this plan aggressively to meet its customers’ targets. We expect to reach around 2,000 new sites per year
TowerXchange: Egypt’s Ministry of Communications and Information Technology (MCIT) has revealed plans to build a new telecoms network at an estimated cost of EGP40 billion (USD2.44 billion) as part of the first phase of development of the country’s proposed new capital city. Tell us about the opportunities you feel this will create for both the region and Egypt MNO’s and towercos?
Sherif Darwish, Chief Operating Officer, HOI:
The horizontal expansion that has been made in the new capital, including the new axis roads and the new cities need at least an additional 2,000 sites per year. This will increase the appetite of the international towercos to come and invest. The government has been investing aggressively in infrastructure mega-projects in infrastructure, electrical power and green energy over the last five years. The Egyptian telecoms market is currently equipped with the necessary resources to run with less operational challenges and risks. This is turn is helping businesses to improve and increase their profitability.
TowerXchange: Please summarise how you see the future of the Egyptian tower industry?
Sherif Darwish, Chief Operating Officer, HOI:
The market is moving forward towards the towerco model. If the NTRA release a new towerco licenses, I believe this will increase the appetite for international towerco investment in 2020.
