Who is Pan African Towers’ new CEO?

Pan African Towers entered the market in 2017 in Nigeria, expanding to 1,000 towers across every state in the country and building a platform with which they hope to develop up to 3,000 towers across Nigeria within the next three years. Pan African Towers hopes to play a significant role in bridging the broadband coverage gap and launching the continent into a new digital age. TowerXchange was eager to sit down with their new CEO, Azeez Amida to discuss his experiences, insights, and plans for achieving Pan African Towers’ ambitious goals. 

I have been in telecoms for eight years now, but I started my career in media, moving into financial advisory and from there to several other industries including healthcare, FMCG, agribusiness, private equity, and investment banking. When I joined telecoms in 2014 it was to explore an opportunity as a manager with IHS Towers, growing through the ranks until eventually becoming Director of Financial Planning and Analysis (FPA) in Nigeria.

I was the local guy that broke through the ceiling in an environment where not a lot of directors at IHS Towers had been promoted through the ranks, becoming the first Managing Director to do so. I joined IHS Towers when the company was small, around 2,000 towers in Nigeria, and helped build it up. Coming to Pan African Tower was about finding the next growth option, from a large corporate to an up-and-coming firm with great potential, which seemed like it was too good to not be part of.

My previous experiences have given me a broad view of things; with an economics background and strong mathematical capacities you can adapt things into numbers, so it was easier to understand both the engineering and financial aspects of the business; a skill that is hard to come by in the telecoms industry. This is what I have always brought to the companies I have worked with, being able to breach that gap between the technical and financial guys and communicating the right solutions within the right framework. At IHS Towers we went six years without once missing the budget because we understood things from both technical and financial ends.

Currently, we have around 1,000 towers across every state in Nigeria operating at a 1.58x active tenancy ratio.

When Pan African Towers started in 2017, we wanted to become the best infrastructure provider in Africa, now we are expanding that goal and are shifting to more specialised goals with a particular focus on becoming the best digital infrastructure provider. Most towercos, especially in Africa, rely on the MNOs to set the trend. We do not want to wait for the MNOs but create this opportunity to push for creative and innovative solutions ourselves and lead the MNOs into areas of high growth opportunities. Over the coming years, you will see a lot of initiatives from us to drive digital engagement with the MNOs.

We are also focusing on our services; in this industry everything is about margin and so we are going to be looking into a lot of our core service delivery systems, optimising and upskilling our personnel and partners to make sure everything is working effectively and efficiently. Part of this is moving beyond turnkey services; it’s no longer enough to look at whether power is running but ensuring we can get to sites faster to solve problems, with our teams working 24/7 to provide round-the-clock uptime to help drive our responses. 

We are also the only one of the large towercos which provide a no-dollar pricing system in Nigeria, working predominantly in Naira which allows us to provide top-service delivery with lower-risk pricing. The Naira has depreciated significantly in my time in the industry, from 119 to the dollar to 415 today. We are currently focused on creating a local currency market in Nigeria and offering a lot of flexibility with our contracts.

For the first year, we are planning to build between 200-500 sites, which is one of the core reasons we have raised financing and working very hard to ensure we can hit this by the end of the year. Our aims are divided into focus on key milestones of 2,000 and 3,000 towers. 

I have found in my experiences that in the telecoms industry December and January are usually very slow so most of our activities occur over the middle 10 months. The next 6 months will be capacity building, optimising the network and greening existing sites as much as possible in order to be in a position where our financing, systems and structures support the rollout of an approximate 300 sites per month.

If you have been tracking Pan African Towers’ story over the past few months you will see a lot of investment and backing from private equity firms, debt providers and guarantees from large funds like InfraCredit among others. A key part of our funding strategy is our access to local capital markets and working with our local partners which allows us to maximize our financing capabilities, largely in Naira. With this we plan to reduce our carbon footprint and are moving towards renewable energy as well as looking at an optimised strategy to give us the best return on investment. 

It’s simple; if towercos won’t do it, someone else will. As the industry evolves, there is a growing need for rural coverage to cover the non-connected parts of the population, and if towercos don’t step in someone else will. It was the same with co-location; where MNOs used to hold on to towers, towercos saw the opportunity and stepped in. Towercos might stay competitive without these additional services, but they might not be as relevant. Despite this, moving into new additional services won’t change the role of the towerco a lot as our model is still based around providing infrastructure and taking away the capex from the MNOs, allowing them to focus on their core business. Although there will be changes to the scope and structure of towercos, I don’t see much difference between what we do now and what we are going to be doing in the future; we will still be an intermediate player within the telecom space.

Rural rollout is an area of the tower business which appears simple but is actually quite complex due to the upfront investment required and uncertain returns on rural coverage. This is why the revenue share model is being pushed by MTN. We need to take the industry to the next stage by ensuring that we can keep the towerco business model sustainable across the rural platform. This is why we are spending a lot of time looking at the optimum solutions to deploy rural coverage and ensuring connectivity across the nation and continent.

Open RAN will always be an option on the table, but a lot of things need to be discussed across the rural platform in order to create an optimal position based on the technology we have. We are working with solutions and technology providers to try and find that balance between creating something that provides rural coverage while remaining part of a profitable business model. 

We are currently focused on a lot of capacity building with the aim of supporting MNO requests for rollout and to support our goal of becoming a digital infrastructure provider, but these things don’t happen overnight. Nigeria will need at least 6,000 more towers in ten cities in Nigeria in order to facilitate a 5G rollout efficiency. To put that in context, the two main towercos have around 22,000 towers between them but the majority of these, around 15,000 of that were towers that were acquired from MNOs. This means the industry would need to build almost as many towers as we built in the last decade to be able to rollout 5G. This will create a lot of market opportunities for everyone and is the reason for our focus on capacity building.

Regarding scaling power capacity for 5G I like to look at things on a numerical basis because power, at the end of the day, is about the kilowatts and we are prepared to offer as much as our customers demand. What we can show our partners is that whatever site we are providing will have the capacity to support their equipment.

There will always be benefits and drawbacks to working with ESCOs but we have mostly seen the benefits as we have been able to significantly reduce our reliance on diesel and reduce our operational costs, getting some of the biggest savings we have seen around energy consumption to date. We can still do better and are working with them to ensure that we take that service to the next level but it is a continuous learning process in an evolving market but we always use the best available option at all times. 

ESCOs will always be critical in whatever strategy we will pick but at the same time the important factor is that we work with ESCOs that have the capacity to scale as we scale. It is of no use to have an ESCO that isn’t ready to meet our growing energy demands or the uptime requirement of our customers as we expand, that is why we ensure our ESCOs have the right scalability and the right approach to our plans and our goals. As you grow, your partners grow as well, and if they aren’t growing they will leave for other businesses. What’s important is that we have partners that we can rely on. The reason why it’s important for us to have a balance is that ESCOs require a lot of investment from their end and a lot of performance management from our end. The good thing is that we are continuing to plan and grow alongside our ESCO partners and we will remain actively involved as we go forward.

There’s always plans for high return on investment markets. If the opportunity presents itself for markets outside Nigeria of course we will go for it, but our focus right now is to consolidate our position domestically because there are still many opportunities for us here. I would like to say that within three years we hope to reach 3-5,000 sites and that is at the core of our entire strategy; to grow as fast as possible in the next two to three years. The thing about becoming the leading provider in Africa is that a lot of it will stem from a sustainable and scalable model as well as having the infrastructure in place to support it. At the moment we are focusing on optimising that model and ensuring that it is scalable with minimal risk and then we can begin to expand from there.