Africa news (Apr 2011)

Vodafone Group and Botswana Telecommunications Corporation Limited (BTC) have signed a new Partner Market agreement. The agreement will allow BTC to access Vodafone’s global data reach and offer customers a competitive cost base and Vodafone will be given access to BTC’s extensive local network.

Ghana

MTN Ghana has unveiled plans to invest GHS460 million (US$122 million) in network improvement work in 2015, following infrastructure investments of GHS311 million in 2014. MTN Ghana has deployed an additional 112 3G BTS in the last few months. MTN’s tower network in Ghana is managed by a joint venture tower company with American Tower.

State-owned operator CamTel is preparing to deploy a mobile communications network after being awarded a wireless license in September 2014. In addition MTN and Orange Cameroon have received permission to launch 3G and 4G services which will open up competition with Viettel Cameroon’s high speed data offering.

As the row over infrastructure sharing, particularly in relation to market leader Econet’s network continues, the government’s latest plan to create an entity to take control of the country’s telecoms infrastructure. Their aim is to see one independent company setting up infrastructure to end any debates about ownership and to promote competition on service levels rather than network coverage.

Ericsson has signed a contract with Tigo Senegal to manage and maintain Tigo’s network and technical capabilities. Although Ericsson will take over responsibility for operational management, Tigo will retain control over strategic issues such as ownership of equipment, network development and investment strategy.

A changing of the guard at American Tower in Africa will see Francois Van Zyl moving from Cell C to become CEO of ATC Ghana. Thomas Sonesson will move from Ghana to take over as CEO of ATC Uganda as the previous Ugandan CEO Gordon Porter will head up the new ATC Nigeria.

Cell C has announced a planned investment of ZAR8 billion (UD$667.2 million) to fund LTE roll-out in targeted areas in South Africa over the next three years. The strategy will be to target highly populated metropolitan areas. Huawei and ZTE have been engaged as primary partners in the rollout which will cover some 4,000 sites.

More detail is emerging of the Telkom tower sale process, incorrectly rumoured to have been discontinued in one media outlet. It seems Telkom only wants to sell a small proportion of their macro towers, while they are seeking that the same counterpart manage the balance of their tower assets.

TowerXchange believes that Vodacom Group would be open to sharing network infrastructure with competitors Millicom and Bharti Airtel, in order to reduce costs related to O&M as well as for furute network deployments. This represents a new way of approaching infrastructure sharing in Africa, where the towerco-led ‘Sale and Leaseback’ model is more prevalent. This plan would see Bharti Airtel, Millicom and Vodacom sharing infrastructure in the markets they have in common, such as Tanzania and DRC.

Huawei has won a contract to build new telecom infrastructure in Zambia, as part of a US$65 million initiative to increase connectivity. The towers will be used by all three Zambian mobile operators and will be overseen by the Zambia Information and Communication Technology Authority (ZICTA), the country’s telecom regulator.

IHS has been licensed by the Nigerian Communications Commission (NCC) to improve broadband services in the northern central states of the country. According to rumours, IHS will focus on urban areas in this region, where there is currently no broadband provision and very limited mobile internet.

The government is said to be considering the possibility of tendering for a fourth mobile operator later in 2015. While Alpha Telecom has begun to deploy infrastructure they have hit many roadblocks, to the point where in November 2014 it was revealed that a prosecutor for the Ministre de l’Economie et des Finances had begun an investigation into their license. This delay has led the government to investigate the possibility of issuing a further concession to another company once the block on licensing lifts later this year.

Rumours in TMTfinance that IHS is already gearing up for an IPO are premature. All three private equity backed African towercos, Helios Towers Africa, Eaton Towers and IHS, will ideally need two to three years’ trading history at scale before having a realistic option to list. 2015 and 2016 will be about integrating and consolidating their acquisitions, IPOs or trade sales are unlikely to occur until 2017 given the time lapse between announcing and closing deals