Angola’s first towerco forecasts 450 new sites in the next seven years

With a new law mandating infrastructure sharing in the country having come into force in 2016 and the entrance of a third mobile network operator looking likely in 2018 as fixed line incumbent Angola Telecom looks for an MNO partner enter the mobile space and make use of its license, Angola represents an attractive market for an independent infrastructure provider. TowerXchange speak to Angola’s first towerco, Antosc, to learn more about the country’s telecoms sector and Antosc’s ambitions for growth

TowerXchange: Please can you share with TowerXchange, details of the tower industry in Angola. Is there a culture of infrastructure sharing?

Angola has two MNOs, Unitel and Movicel with Unitel having around about two thirds of the market share in terms of subscribers and Movicel the other third. Unitel has the larger portfolio of towers, possessing 1,700 sites and Movicel is a relatively young network with just 800 sites. In order to reach the level of coverage they are targeting, Unitel needs to add a further 1,000 sites and Movicel a further 2,000. There is a high degree of competition between the two operators and as such, they have been reluctant to share infrastructure.

TowerXchange: TowerXchange understand a new law having come into force in 2016 which will necessitate infrastructure sharing between the operators. Can you give us details of this?

Due to the aforementioned reluctance of Movicel and Unitel to share infrastructure, sites have been in close proximity to each other. The new law prohibits the construction of a new site in close proximity to an existing one and as such, will force the operators to share their towers. This creates an opportunity of an independent infrastructure provider such as ourselves.

TowerXchange: What has been the reaction of Unitel and Movicel towards infrastructure sharing and using the sites of a third party such as Antosc?

As mentioned, the MNOs have in the past been very reluctant to share infrastructure but attitudes are starting to change. They are starting to see the benefits of using third party towers to rollout their networks, realising that the model offers them the opportunity to save considerable amounts of money. Angola is passing through some difficult economic times and the operators are feeling the pressure from this and so are keen to look at ways to preserve capital.

We are in touch with the MNOs on a weekly basis and are currently developing the business model for infrastructure sharing in the country. There are no other independent infrastructure providers present and they are very interested to speak to us. The MNOs are keen to look at different scenarios and so we are working with them to generate the figures on this, examining how the economics compare.

The intention from both Movicel and Unitel is that they will give Antosc contracts to build sites on which they will lease space. Current plans are to add 30 sites in 2017 and Antosc are forecasting building 100 sites for the two operators in 2018 with a view to extending this to 450 sites until 2023.

TowerXchange: Will the new sites be located in urban or rural areas?

Due to the improved economics, the operators are currently focusing on improving coverage in the major urban centers and this is the area in which Antosc see themselves playing a role initially.

TowerXchange: What is the electricity grid like in Angola? What proportion of sites are off-grid?

The grid in Angola is unfortunately very poor, with only about 30% if the population having access to electricity. There is a big plan by the government to improve the grid in the country, with major investment going into the sector to reach a target of 60% coverage by 2025. The poor grid situation as it stands today however means that 85% of towers are operating with diesel generators. Unitel in particular have put a lot of focus on renewables, looking at solar hybrid systems on a number of their sites. Going forward, Antosc will be looking at hybrid solutions for the sites which we build.

TowerXchange: Have either of the MNOs expressed an interest in divesting their existing portfolios of sites?

There are slightly differing attitudes between the two MNOs. Movicel has already started to look at selling a percentage of their sites, whereas for the time being, Unitel have not expressed an appetite to sell their sites. Both companies have contracts in place with landlords who own the land on which their sites sit, once the contracts start to near the end of their life, we think that the two will look at selling sites further.

TowerXchange: We understand there to be the possibility of a third MNO entering the Angolan market, can you give us further detail on this?

Fixed line incumbent, Angola Telecom possesses a mobile license and are In the process of assessing how they will enter the mobile market. In order to enter the mobile space, they will need a partner with experience and they are reportedly in talks with Vodafone regarding this. We are expecting the entrance of a third MNO in the market in 2018 which will present further opportunities for Antosc as an independent infrastructure provider.

TowerXchange: Do Antosc have ambitions to enter other markets beyond Angola?

Yes, whilst our idea is to own 450 sites in Angola within the next seven years, we also have plans to enter neighbouring countries. We are looking at Zambia, Namibia, Congo, Senegal and Cape Verde – and have entered negotiations already in the latter two markets.

TowerXchange: Can you tell us a little bit about how Antosc is financed and how they have obtained their experience in the telecoms sector?

Antosc’s shareholders consist of Anglobal, an experienced telecom infrastructure services company in the market, which possesses a 34% share, a second local investor has a 30% share and a Chinese company owns  31% of the company. The company is currently seeking external investors and are open to such parties owning up to a 49% stake in the company.

In terms of experience of the management team, we have been active in the telecoms infrastructure space in both Angola (through MSP Anglobal) and Brazil, where there are a number of different towercos.