Africa News (Dec 2014)

Eisenstein was a co-founder of American Tower in 1995, after which he has founded and been CEO of Concourse Communications, Optasite and most recently Grupo TorreSur, the largest privately-held towerco in Brazil. Jimmy is also a member of the TowerXchange ‘Inner Circle’ advisory board.

Eisenstein said: “I am delighted to become Chairman of Eaton Towers at this exciting stage of the Company’s development. I want to thank our outgoing Chairman and Co-Founder, Sanjiv Ahuja, for his leadership during this period of dramatic growth, and I am most appreciative that he has agreed to continue as a Director of the Company. I look forward to working with Sanjiv and the full Board as we continue to build Eaton Towers in the years ahead.”

The protracted saga of the potential MobiNil tower sale may be drawing to a close, with the timeline suggesting a Q2 2015 close. Various reports suggest the process was whittled down to a shortlist of two bidders, certainly including Eaton Towers and perhaps also Accelero Capital. Reports that the auction has concluded with Eaton emerging victorious are premature, although that outcome would not be a surprise.

State-owned Telecom Egypt announced in January 2015 that it has signed a deal worth EGP15bn (US$2bn) to provide services including domestic transmission to MobiNil and Vodafone Egypt, reducing the need for extensive new tower builds. The terms of the contracts were set by the operators, with Vodafone lasting three years and MobiNil five.

With initial rollout in Nairobi and Mombassa, Safaricom’s LTE Advanced network will offer peak speeds of up to 100Mbps. Safaricom will leverage the widest network in Kenya, consisting over of 3,200 base stations, nearly half of which are 3G enabled. The independent tower industry has been relatively nascent in Kenya, consisting only of Eaton Towers’ abortive partnership with Orange-Telkom Kenya, followed by the same towerco’s recent acquisition of Airtel’s Kenyan assets.

The particulars of Morocco’s 4G spectrum contest were revealed in November 2014. The bid deadline was recently extended to 12 March 2015. Vivendi sold their 53% stake in market leader Maroc Telecom to Etisalat late last year. Maroc Telecom competes with Medi Telecom, rebranding as Orange, and Inwi. There has been little or no independent towerco activity to date in Morocco, where towers remain operator-captive. It remains to be seen whether the simultaneous capital requirement and need for cell site densification brought about by 4G could stimulate tower sales in the country.

Here’s a rumor out of left field for you - the grapevine suggests Viettel, who stirred up the Mozambique mobile market with the the rapid rollout of an estimated 1,600 towers to date, might consider divesting those assets. That would seem consistent with intimations coming out of Vietnam that the MNO had opened to the idea of infrastructure sharing and echoed in Cameroon, where Viettel has signed a co-location agreement with IHS.

Existing shareholders have re-invested a further US$2bn in IHS, topped up by US$600mn in debt. The equity investment comes from Wendel and four new European and Investors, including FFP and Sofina. The debt raise include US$112.5mn from ICBC, US$50mn from the IFC’s own account, and a further US$37.5mn from the IFC Managed Co-Lending Portfolio Program. IHS has now raised a total of US$4.5bn since 2012, the largest equity raise in Africa since 2007.

Meanwhile, INT Towers, the joint venture towerco formed when IHS acquired a 49% equity stake in 9,151 MTN Nigerian towers last year, is closing in on a US$800mn loan, coordinated by Citi and Standard Chartered, according to a report in GlobalCapital.

With IHS and American Tower acquiring over 16,000 towers from MTN, Etisalat and Airtel in Nigeria, a window may be opening for the restructuring or sale of a couple of local tower companies owning smaller portfolios in the country. TowerXchange is aware of at least two such ongoing processes.

The Commission will offer 14 Lots of 2 X 5 megahertz FDD paired spectrum in the 2.6 GHz band ranging from 2500 - 2570 megahertz and 2620 to 2690 megahertz totaling 2 X 70 megahertz for auction, with a reserve price of US$16mn for each of the 14 lots. The NCC has set a target to raise mobile broadband penetration in Nigeria from its current level of 6% to 30% by 2018.

Cell C spent R2.3bn (US$200mn) rolling out 442 towers in South Africa during 2014, of which 256 were in Gauteng, with a further 158 works in progress due online in early 2015. The regional focus of their investment is reflected in the completion of Cell C’s ‘Gauteng improvement project’ in which the RAN has been upgraded and harmonized, with the replacement of equipment of 1,215 base stations, creating a framework to support Cell C’s LTE strategy.

Bloomberg cites three unnamed sources suggesting that in-market competitors Vodacom, Airtel and Millicom have all bid to acquire Etisalat’s controlling stake in Zantel, which owns the last significant portfolio of operator-captive towers in Tanzania. Zantel’s strength in Zanzibar would make any acquisition additive to existing revenues for any of Tanzania’s three market leading operators, each of whom has sold their towers to Helios Towers Tanzania.

Africell Chairman and CEO Ziad Dalloul said the company plans to invest US$150mn in the network recently acquired from Orange Uganda. Africell will focus on the data business, and targets a market share of 20% within four to five years.

Orange had previously sold their 300 Ugandan towers to Eaton Towers, which added 400 from Warid, while ATC Uganda, an American Tower-MTN joint venture towerco, markets a further 1,226 towers in the country. Africell has a track record of leveraging co-location to accelerate market entry, acquiring 20% market share in just 18 months in DRC without building a tower – the company relied on co-locations on Helios Towers DRC sites.

Zain tower sale may be imminent

Zain emailed a statement to Reuters saying “We have appointed advisors to advise us on the best business model for Zain, whether it’s tower sharing or sale and leaseback of towers across some of our operations.” The Reuters report suggests Citi, which handles the majority of MNO tower asset divestitures in MEA, had been appointed as advisors. “It’s early stages,” continued the statement. “To date, there is no final decision on whether we will sell or form a tower company in any of our operations. Partnering in a newly formed tower sharing company or selling networks to enhance cash positions and then leasing them back are several considerations that Zain, like many other operators across the region, has been deliberating for several years now. Each particular Zain operation is unique and either of the two models may be adapted according to what best serves Zain from both a financial point of view.” Zain operates in Kuwait, Iraq, Sudan, South Sudan, Bahrain and Jordan, and has a 37% stake in Zain Saudi.

Wind tower sale process progressing in Italy

Bloomberg suggest American Tower, Abertis, Italy’s own EI Towers and a consortium including F2i and experienced tower investors Providence Equity are among bidders for 6,000 Wind towers valued at around US$900mn by parent company Vimpelcom.