New towerco Infratel prepares to launch in Southern Africa

Sibusiso Mvelase has over eight years of experience of supplying, constructing and providing power to cell sites across 16 countries in Africa, and includes MTN, Vodacom, Etisalat, Econet, Huawei, ZTE, Telecom Mozambique, Telecom Namibia and Vodacom among his clients. He’s taking that experience to launch a new towerco, Infratel. For an insight into the formative strategies of a new entrant towerco, TowerXchange spoke to Sibusiso earlier this month.

TowerXchange: Please introduce us to yourself and to Infratel.

Infratel is headquartered in Johannesburg. Infratel is a boutique towerco, seeking to build minimum of 100 sites per year. We’re focused on building and leasing telecom towers, and we’re looking at opportunities in South Africa, Zimbabwe, Botswana and Zambia.

I’ve been selling towers to various operators and building sites for my clients for over five years. So we know the market, we understand telecommunication infrastructure acquisitions, planning and building, and that gives us an advantage toward input cost per site. We have an in-house site build team (RF, power and civil works), as well as tower and power system design which gives us an ability to implement faster than the other tower companies in the market. The benefits to operators in offering these services in-house are: faster revenue generation, shorter site build lead times and consolidated project implementation.

TowerXchange: Will Infratel focus on sites in urban or rural areas?

Our main focus will be on dense urban areas where there are capacity problems on a daily basis, such as Sandton, Fourways and Cape Town. We are applying for permits in Johannesburg, Bloemfontein, Cape Town, Durban and Kimberley. We won’t just be deploying towers but also going aggressively after rooftops and our in-house street pole solutions.

TowerXchange: How is Infratel financed?

We have an initial fund of US$20m with which to finance the initial building of towers, but we have access to a big International investor if the right assets become available to acquire.

TowerXchange: Is your strategy to build or buy assets?

Our initial strategy is to build sites and build our experience and credibility as a bidder for sale and leaseback opportunities. American Tower and Eaton Towers are already here in South Africa, so the independent towerco model is familiar.

Infratel is 100% black owned, 100% South African - a local company providing local services - we understand the environment, we understand telecoms, we understand the continent, and we understand the dynamics of market.

TowerXchange: What is Infratel’s proposition to landlords and anchor tenants?

We offer a complete turnkey tower service programme. Our team handles everything from marketing to construction to long-term management. Infratel has refined a process that requires very little effort and capex from our landlord partners and anchor tenants.

TowerXchange: What is the long-term plan for Infratel?

We have a ten year plan to increase the size of our tower portfolio organically by at least 100 sites every year, and to be a credible bidder to acquire existing towers from operators. We’re not planning to build and sell the company in 4-5 years.

Infratel is a new market entrant serving an urban capacity niche, but with the potential to address bigger opportunities. Like IHS, we’d like to grow from our experiences as a small tower construction and service company to become a leading towerco for Southern Africa.