In November 2023, Pan African Towers (PAT) announced it had emarked on a new strategic phase after partnering with Africa-focused strategic investment firm Development Partners International (DPI) and investment management firm Verod Capital.
PAT’s strategic plan focuses on operational efficiency, expanding its customer base, and increasing new builds to expand into new regions of Nigeria where mobile penetration remains low. Ahead of Meetup Africa, TowerXchange speaks with the PAT team to learn more about how this strategic partnership and what it means for Nigeria's telecom tower ecosystem.
TowerXchange: What made Pan African Towers, and the telecom tower industry, an attractive opportunity for Verod and DPI?
Pan African Towers:
Established in 2017, we are Nigeria’s leading provider of digital infrastructure and have emerged as a prominent telecommunications and tower infrastructure provider.
Pan African Towers (PAT) is positioned third in the sector overall, in terms of scale, operating in the market, and we have built a successful business model centred around establishing tailored, long-term contracts with blue-chip customers, including Nigeria’s leading mobile network operators (MNOs) and internet service providers (ISPs). We currently have a nationwide site presence with ~765 across Nigeria.
Nigeria is an attractive market for digital infrastructure in Africa. Underpinned by its strong demographics, Nigeria is Africa’s leading telecommunications market by number of mobile subscribers (208m). The telecoms sector is increasing in importance in Nigeria, and contributed 13% of the country’s GDP in 2021, up from 8% in 2015. According to Nigeria’s Ministry of Communications, the country needs between 70,000 to 80,000 towers to enable proper quality and coverage for 4G and 5G technology, creating a supply gap of more than 30,000 towers.
This makes the industry an attractive opportunity for Verod Capital (Verod) and Development Partners International (DPI), so Pan African Towers was an attractive choice for penetrating the Telco market.
TowerXchange: What impact has this new partnership had on the strategy and direction of Pan African Towers?
Pan African Towers:
The new partnership has helped and continues to help PAT to capitalise on this opportunity to position towards closing the tower gap, providing world-class digital infrastructure to support Africa's economic development. DPI and Verod’s investment in PAT continue to help to fuel PAT’s continued growth and support the financial strategy and operationalisation of the company.
TowerXchange: New investment often brings in fresh capital to drive business growth, how do you plan on allocating this to maximize value creation?
Pan African Towers:
Our new investment is planned for growth Capex, that would automatically boost our top line. We are spending it to support MNOs new site build in order to close the tower gap in Nigeria. According to Statista 2024, internet penetration rate in Nigeria is around 55%. That means a lot of Capex is needed to increase the penetration rate that would in turn boost Nigeria’s GDP.
TowerXchange: As the largest homegrown digital infrastructure provider, what is your vision for the role Pan African Towers can play in Nigeria?
Pan African Towers:
The investment has continued to help PAT to reinforce critical infrastructure, building confidence in the long-term quality of PAT’s assets from key customers and end-users. The deal will enable PAT to build on its recent achievements and reaffirm its position as Nigeria’s largest homegrown digital infrastructure provider.
We are excited to partner with DPI and Verod and will leverage their sector experience and market expertise to help us achieve these goals. The evolution of Nigeria’s mobile and wireless industry presents significant opportunities for our business, and we look forward to being a part of this next chapter of growth.
TowerXchange: While there is an enormous demand for infrastructure and mobile services in Nigeria alone, do you have an appetite for expansion beyond your home market?
Pan African Towers:
As a proud Nigerian-founded and run business, Pan African Towers is on a mission to accelerate the Nigerian market and support the growth of the mobile telecommunications sector in the country. We also have a clear strategic vision to grow the business sustainably, including actively reducing the carbon footprint of our network to uphold best-in-class ESG practices.
TowerXchange: Pan African Towers has been partnering with vendors and ESCOs (Energy Service Companies) to find a solution to Nigeria’s ongoing energy challenges. Have you found a workable energy strategy?
Pan African Towers:
Our energy strategy includes:
1. Power As a Service (PaaS) Solution to provide the entire power infrastructure management of the sites (operations and maintenance inclusive) for a fixed monthly fee, without up-front CAPEX expenditure. The solution is further customised to optimise energy as per site load requirements. We are partnering with ESCOs to provide solar hybrid solutions and power systems with gas generators, thereby reducing the reliance on diesel and exposure to fuel price changes.
2. Transitioning to Grid: A project is underway to convert the off-grid sites in Lagos and Ibadan, which aims to utilise the public grid by tapping power directly from 33/11KVA transformers. The grid power utilisation at each site is maximised by monitoring the grid availability through remote monitoring solutions (RMS). This energy transition makes the Grid another primary power source and reduces the cost of unit energy.
