18 months on from Telecom Advisory Servies report Latin American Telecommunications At The Crossroads Of Passive Infrastructure Sharing, the consultancy, with support from SBA Communications and TowerXchange, has completed a new report The Independent Tower Industry As A Key Enabler Of The Development Of African Telecommunications. The report is now available to download and includes an analysis of the benefits of passive telecom infrastructure sharing that will be familiar to readers, but underappreciated by policy makers across much of Africa.
Mobile network successes and failures in Africa
The report draws on data on network coverage, market structure, subscription penetration and towerco activity to build a picture of how independent towercos support the development of mobile infrastructure.
By the end of 2023 3G coverage had reached 92.46% of the population, five percentage points higher in North Africa than Sub-Saharan Africa. 4G coverage reached 77.49% of the population of sub-Saharan Africa and 99.23% in North Africa. 5G coverage remains slow with just at 5.05% of the continent’s population covered. But by 2030, 5G is expected to reach 36.84% of the population, although the exact figure remains uncertain and subject to the success of network rollouts yet to be planned or executed.
Despite these successes 7.5% of the African population or 111,377,000 people still cannot access basic mobile broadband service. 19.6%, or 289,964,000 people, cannot access 4G networks to receive what we would call good quality service.
However it isn’t just a lack of network that holds back connectivity in Africa, but a demand gap, measured by the non-subscribing population. As of 2023, 62.10% of the population that do have access to mobile coverage do not subscribe because services are affordable. Towercos have a vital role in expanding coverage, but helping mobile operators reduce costs for end-users is just as important.
In a simulated average African country policy allowing infrastructure sharing would increase mobile broadband subscriptions by 14.63% and an increase in gross domestic product (GDP) per capita of 4.82%. This 0.59% increase over a span of eight years would be material given Sub-Saharan Africa GDP grew at just 1% per capita in 2022 (World Bank data).
The towercos difference
The report looks at how towercos have helped and can help further investment through two analytical lenses, correlational studies and econometric analysis; on both, infrastructure sharing is shown to be beneficial. African countries with more than 40% of tower stock owned by independent tower companies and tower deployment in excess of 150 per million population exhibit higher wireless industry performance metrics than those with less than those figures. They have better 4G coverage, faster network speeds, more capex, better affordability, higher adoption broadband adoption rates and more intense competition. These correlations have also been validated by econometric analyses: towercos cause improvements, they don’t just cherry pick the best markets.
Supportive telecom regulation
A review of the research literature and interviews with regulators and policymakers have led to the identification of several policy and regulatory initiatives that can contribute to the development and sustainability of an independent tower sector:
Passive infrastructure regulatory framework
Specific tower regulation
No need for service concession of tower operators
Regulatory harmonisation between central governments and municipalities
Fast permit approvals driven by consistent and reasonable timeframes
Establishment of a cap on fees and taxes, and rights of construction
Regulations to prevent over-deployment
Implement policies to promote infrastructure sharing for the deployment of 5G
No price regulations on tower leasing deals
Define long-term guarantees in regulations and permit
The report goes into greater detail on the most and least supportive telecom tower regulatory regimes, but offers this useful summary and chart. Are you happy with the regulatory environment in the markets in which you operate?
· All countries except Ethiopia and Mozambique include the passive infrastructure provider as a figure for the operation of independent towers, and many have a specific standard on the subject.
Independent tower companies currently operate in all countries except Ethiopia, Morocco, Mozambique and South Sudan, however, in all of them, they are required to apply for some form of registration in order to obtain a passive operator license. In those three countries, authorization is a discretionary regulatory decision because they do not have a well-defined licensing framework.
Only Kenya and Ghana can be considered to have national standards harmonized with local ordinances. In most countries there are general standards that do not precisely establish the technical mechanisms of deployment (e.g., distance, height, co-location, mimicry) coexisting with ordinances that regulate exclusively the civil construction of the building (e.g., building permit, land fees, landscape environment). In other words, the national regulators leave the local authorities free to determine the processes for civil permits or the establishment of fees.
Aspects related specifically to tower over-deployment should include clear guidelines regarding distances and co-location as a way to avoid over-deployment. In this regard, Ghana, Kenya, Morocco, Rwanda, Uganda and Zambia contain guidelines for the construction and sharing of towers considering these requirements that encourage efficiency in the deployment and occupation of structures.
Only South Africa, Tanzania, Uganda and Zambia have implemented “light” regulatory processes for the deployment and operation of passive infrastructure; the other countries have permitting procedures in place, although in practice they delay the construction of a site.
Egypt, Ghana, Kenya, Kenya, Nigeria, Rwanda, South Africa, Tanzania, Uganda and Zambia have established procedures and reference tables that determine the use of space or land for tower deployment and licensing fees, respectively.
The image of Africa as a continent of wireless pioneers is correct, but the image of smaller entrepreneurial firms rapidly rolling out 2G is outdated. The modern African telecommunications industry is capital intensive and supported by major international investors. Regulation must be put in place that supports further investment, as outlined in the report The Independent Tower Industry As A Key Enabler Of The Development Of African Telecommunications.
It is imperative that governments enhance policies and regulations to generate the right kind of incentives for the development of the sector. Regulators and policymakers should recognise that independent towercos are critical enablers of the future deployment of 5G and coverage expansion. The report contains many ideas for how policy can aid continued telecommunication expansion in Africa.
