TOA Tanzania has secured a US$30mn investment from British International Investment (BII) to expand telecom infrastructure and enhance connectivity in Tanzania. BII’s financing will be used to construct 200 new telecom sites, increasing coverage in urban areas and bridging the digital divide across Tanzania.
The 200 new sites, which will be strategically deployed across the mainland and Zanzibar, will increase coverage, particularly in rural regions, connecting previously isolated communities and reaching 600,000 people.
About TowerCo of Africa and BII
TowerCo of Africa has been making a name for itself as one of the fastest growing towercos in Africa, despite the current macroeconomic climate. The towerco was born out of parent company AXIAN Telecom in 2011, combining a carve-out of the MNOs sites in Madagascar as well as a sale leaseback with local MNO Telma.
TowerCo of Africa has since expanded into three new markets. In 2021 they acquired local Ugandan towerco Ubuntu which has since been rebranded to TowerCo of Africa Uganda. In Tanzania, AXIAN Telecom handed over a small portfolio of around 400 sites to TowerCo of Africa after their acquisition of Millicom’s business unit.
Most recently, the towerco launched organically in the DRC to compete in the markets challenging but active organic build-to-suit market alongside Eastcastle Infrastructure and Helios Towers.
BII is the UK’s development finance institution and a trusted partner to business in Africa, Asia and the Caribbean. It invests to create productive, sustainable, and inclusive economy in eligible markets. The company has investment in over 1,470 businesses in emerging economies across 65 countries and total assets of US£8.1bn.
BII has previously invested in large-scale ICT projects to develop digital infrastructure connectivity in Africa and Asia. Earlier this year, BII partnered with the International Finance Corporation and French development finance institution Proparco to provide EUR 87mn in financing to expand Sonatel’s telecoms infrastructure including towers and cables in Senegal.
Other investments in the telco sector made by the BII include their partnership with Vodafone, Vodacom, Safaricom and Sumitomo Corporation into Safaricom Ethiopia, a US$180mn investment into LiQuid Telecom, and a EUR 50mn equity investment in Africa Internet Group. It’s also not the first time BII has provided financing for AXIAN Telecom, as the institution has previously provided US$30mn as part of the MNO’s public bond offering in 2022.
Tanzania is ripe for organic tower growth
Tanzania has one of the most active tower markets in Africa, helped by the fact it is home to 5 different MNOs. Vodacom leads the fixed and mobile market with 30% share, followed closely by both Airtel and Tigo at 27% each.
Also active in the market are Halotel with 13% and TTCL with just 3%. With three multinational MNOs occupying near-equal shares of the market acts a a strong foundation to ensure operators remain competitive in their network coverage and quality.
Tanzania has also seen strong growth, with a 7% year-on-year increase in the number of mobile subscribers from 47.7mn in 2017 to 64.1mn in 2023. Telecom penetration has also gone up from 88% in 2019 to 101% in 2023 with 3G coverage at 77% and 4G at 65%.
As a result, the country has seen plenty of investment into network infrastructure, with the number of base stations growing from 4,593 in 2012 to over 15,000 in 2023. Not only the MNOs, but the Tanzanian government has also been investing in the sector. In 2021, the government launched a Universal Access Fund (USF) to subsidise network expansion into rural areas.
Helios Towers has been the market leader in Tanzania, and the country is one of the towercos core markets since acquiring Millicom-Tigo's sites in 2010. In 20202, Airtel sold its towers to Minara Towers, a joint venture between SBA Communications and ex-American Tower team Paradigm Infrastructure.
TowerCo of Africa is the latest to join the market, but with plenty of room for organic growth. According to the press release, a core part of the BII funding was to deploy rural sites, which are critical to the government's connectivity development plans as 36% of Tanzania’s geography remains uncovered.
While three towercos means competition for new builds are high, TowerCo of Africa has a unique advantage as the only towerco with sites on the island of Zanzibar, a tourist hub and region of rapid growth.
About the deal in their own words
Innocent Mushi, CEO of TOA Tanzania commented “this financing agreement with BII reinforces our commitment to expanding connectivity and bridging the digital divide in Tanzania. With BII’s invaluable support, we are well-equipped to accelerate our growth trajectory and deliver essential telecom services to underserved communities.”
“We are deeply committed to environmental sustainability and community development. The design of our new sites prioritises environmental protection through meticulous site selection, utilisation of renewable energy sources, and responsible waste disposal practices.”
Richard palmer, Director and head of Private Debt at British International Investment, commented “expanding digital infrastructure is critical for fostering sustainable economic development in Tanzania.
“By focusing on rural areas, TOA Tanzania is not only promoting inclusivity but also ensuring that the benefits of technological advancements reach the most underserved communities. We are delighted to work with TOA Tanzania on a shared vision for catalysing the telecom sector for a digitally empowered society.”
David Concar, British High Commissioner to Tanzania, commented “we are delighted to witness the signing of this important BII investment, which will help to expand telecom connectivity and support isolated populations in Tanzania. BII is a key part of the UK’s effort to boost investment into Tanzania, with this investment supporting the recently signed UK-Tanzania Mutual Prosperity Partnership.”
