We’re sharing this post with non-subscribers for a limited time, please email Anna Mayhew (amayhew@towerxchange.com) for a copy of the report, if you are not already a subscriber.
After speaking with countless leaders among African towercos, MNOs and their supply chain, TowerXchange present our forecast for new site build in Sub Saharan Africa for 2020 through 2022. This analysis breaks down that forecast by country, gives some insights into the mix of site typologies, and provides some commentary on the extent to which new build is offset by decommissioning. TowerXchange predicts an acceleration in new sites after a slower 2019.
TowerXchange expects 7,202 new towers, rooftops, urban-poles, DAS and IBS systems to be added in 2020 in sub-Saharan Africa, net of the decommissioning of over a thousand sites. In 2021 we predict 9,519 new sites and in 2022 we predict a further acceleration to 10,719 new sites.
Figure one: TowerXchange new site build forecast for SSA 2020, broken down by country
Count shows forecast new site build net of decommissioning
Over 80% of new build sites will continue to be ground based macro towers, with rooftops representing most of the balance, and IBS and DAS continuing to represent less than 1%. For the purposes of this study, a DAS implementation with multiple antenna in an airport or a stadium is counted as a single site.
Figure two: Breakdown of new site build forecast 2020 in other SSA countries
Count shows forecast new site build net of decommissioning
This is a qualitative market research study, in that these figures are derived from the hundreds of conversations we have each year with the industry on the ground, they are not derived from a formal survey, because we don’t believe such an approach would generate an adequate sample size. Where a range of forecast has been suggested, we have generally taken the mid-point. We have favoured forecasts based on actual budget and build volumes, rather than on, for example, proclamations that a given country needs XXXXs towers to achieve target population coverage.
Figure three: TowerXchange new site build forecast for SSA 2020-22
Count shows forecast new site build net of decommissioning
While towercos continue to represent the majority of new site build volume, MTN’s ambitious plans for a 5,000 annual new build programme for rural, ultra rural and ultra-ultra rural sites will push Africa’s network deeper into the interior, and lift new site build volumes in the future. Similarly, Vodacom’s rural programme, financed by Facebook, will see over 3,000 rural sites added to their network over the next five years.
Figure five: Ethiopia – TowerXchange central projections for cell site and power, year end
Ethiopia’s liberalising opening should lead to 5,800 new sites being added there in the next three years as two new licence holders add new sites and Ethio Telecom’s new investor rebuilds and expands their network. Expect towercos to enter Ethiopia as soon as the licenses are awarded, and to undertake the majority of the new build. Nigeria and South Africa should also see an uptick in new build volumes as networks require densification for 4G. Likewise, countries like Ghana, or Kenya, with already relatively good coverage will see more sites added as 4G investment increases demand.
Figure seven: Projected tower build in South Africa
South Africa, Ethiopia and Nigeria all offer potential downside risks to our projections, if Ethiopia’s government does not proceed with its liberalisation it is unlikely to see triple digit growth in tower stock, let alone quadruple digits. Cell C’s financial ill-health could hold back net new build in South Africa and could lead to some decommissioning. And Nigeria always retains the potential for volatility even if many anticipate that the most challenging currency fluctuations and market restructuring is behind us. A triple digit count of towers continue to be decommissioned every year in Nigeria, partly as a function of the market adapting to co-location, and partly the continuation of decommissioning of naked towers that originated with the CDMA operators.
Figure six: Projected tower build in Ghana
The proportion of new site build per country remains relatively consistent year to year. As such, our 2020 breakdown for new build volumes are presented as area graphs, and we predict broadly similar breakdowns for 2021 and 2022.
Figure four: How is responsibility for power forecast
to evolve across Sub-Saharan Africa’s 157,542 cell sites?
Conclusion
After a slower 2019, an acceleration in new build volumes is more than welcome. Nevertheless, many readers may still be disappointed to read TowerXchange’s forecast that less than 10,000 new sites will be built in SSA in 2020 and 2021, but SSA has not seen more than a net 10,000 towers added to SSA’s total stock in any single year since TowerXchange initiated coverage of the market in 2013. It is also important to remember that this forecast is net of substantial decommissioning, originating both from the rational consolidation of overlapping sites to increase tenancy ratios and reduce duplicate land expenses, and originating from continuing consolidation of African MNOs. It is also important to re-emphasise that these are conservative forecasts. Does SSA need communications infrastructure to be built faster than TowerXchange forecast to realise Digital Agendas and accelerate rural connectivity? Absolutely. We have factored in substantial investments in rural networks by MTN and Vodacom / Facebook, but the volume of new site build from rural operators like Africa Mobile Networks could hit 2,000 sites annually, providing significant upside on this forecast.
