Meetup MENA CXO fireside chats: key takeaways

his month in Dubai where over 260 attendees from across the regions tower ecosystem gathered amidst a tower market buzzing with activity. At Meetup MENA we kicked off with a bang as the CXOs of leading tower owners sat down 1 to 1 to talk about their strategy and plans for either growing or selling their portfolios and the role they hope to play in the region.

First up on stage was Iyaz Mazhar, Founder and CEO of TASC Towers. Although TASC Towers first started commercially sharing towers in Jordan in 2011, Iyad noted that the path to their current position has not been an easy one.

TASC spent some time quietly preparing themselves for an explosive acceleration of sale leaseback activity via their ongoing acquisition of Multinational-MNO Zain’s towers. Now that TASC have closed two of the five country portfolios in Jordan and Iraq for a total of 8,200 sites, the focus is on consolidating in existing markets as well as closing their acquisition of portfolios with Zain and beyond.

Iyad recognises that their presence in the region brings some much-needed competition to existing towercos such as TAWAL and IHS Towers who already lead in some markets. Iyad aims to differentiate TASC Towers from other market players through the flexibility of their deal structure, inviting MNOs to take a stake in the towerco, adding value to their customers and deepening the bonds between towerco and MNO. Stronger and more meaningful partnerships between towercos and MNOs was a note raised by operators in Meetup Africa last year.

Iyad stated that the key to success has been careful planning and preparation. Building TASC from the ground up with new systems and processes to quickly deploy taylor-made solutions and solve problems for their clients allows the team to make MNOs feel comfortable handing over their assets. This puts TASC in a strong position to compete with regional and international players, something that is already achieving strong results based on several new developments the team hopes to announce later this year.

Next up on stage was Tom Greenwood, CEO of Africa’s 3rd largest towerco Helios Towers. Helios Towers hit a milestone last year finalising their acquisition of Omantel’s sites in Oman, marking their first venture outside Africa.

Helios Towers is now operational in Oman and Tom discussed how the focus is on optimising the Oman business to support their new MNO customers and further expanding their presence in the market. However, Tom highlighted Helios’s wider interest in opportunities across the region, with Oman acting as a potential spring board into further MENA markets later down the line.

While the African telecom tower industry is primarily focused on 4G expansion and driving rural connectivity, Helios’ entry into MENA means that the towerco needs to tackle live commercial 5G. While Tom stated that Helios Towers will stay on the passive side, the evolution of the network into the 5G era means MNOs have to densify their networks and towercos will need to provide greater infrastructure support with new site deployments and in-door solutions.

“5G is a very exciting product for everyone involved and we are certainly serving customers with 5G in a number of markets. While the standard 50-meter tower needs to evolve, we also need new sites for urban densification”. Denser antenna networks and more products such as in-building solutions are key to supporting MNO customers and driving tower product evolution. While high capacity 5G might not be up and running now it is coming and Helios Towers is keen to ensure their customers are planning the network early and well in advance of commercial rollout.

Helios Towers also brings a fresh new wave of ESG priorities to the region, with sustainability forming a core pillar of their strategy. Helios teams across the business have a focus on inclusion, poverty reduction, female empowerment and carbon reduction and publish carbon emissions targets and targets for female representation in the business. Tom highlighted how carbon reduction is a particular interest to the tower industry. Towercos long-term outlook makes them ideal for working towards carbon-neutral goals.

Next up was Abdulrahman Almoaiqel, Chief Commercial Officer at TAWAL, MENA’s largest towerco. While TAWAL are championing telecom infrastructure sharing primarily in Saudi Arabia, Abdulrahman highlighted the toweco’s interest in moving from a leader in its home country to becoming a regional leader in the infraco business, even stating that “we don’t call ourselves a towerco”.

TAWAL are facing multiple challenges in the Saudi market from increasing site loads, building 5G networks, increasing mm wave capacity and working across different typographies including mountains, deserts and cities. TAWAL hopes to export the various skill sets they have mastered here into new markets across MENA, many of which share similar challenges.

Digitalisation has been top of the agenda for TAWAL, who have been supporting numerous smart cities and megaprojects in the Kingdom, moving beyond the traditional towerco-MNO relationship to work with a broader array of customers from developers, enterprises and electric vehicle companies.

Identifying as more than a towerco, TAWAL has been moving into new asset classes having expanded into IBS and looking at opportunities in data centres and fibre resale to meet the demands of their partners as increases in data use continues to put pressure on networks. TAWAL have already started piloting small cells as the telecom industry is pushing TAWAL to become a broader provider of connectivity infrastructure.

Finally, Abdulrahman touched on some private discussions between PIF and the shareholders of TAWAL now that Zain’s tower portfolio has been acquired by PIF’s new tower entity LATIS. No outcome has been concluded yet, but consolidation in the Saudi tower market seems to be the likely conclusion.

Representing IHS Towers was Ashutosh Mathur, VP and Head of Commercial & Strategy. IHS Towers is the most international towerco present in MENA, and Ashutosh highlighted their experience in markets across Africa, Latin America and the Middle East as a global infrastructure provider.

As the majority of towers remain under the ownership of MNOs, IHS see a huge opportunity for towerco growth in the region. These opportunities for operational management play to IHS’s wealth of experience and expertise from Latin America and Africa.

While towers remain the core of their business, IHS Towers recognise the possibilities in fibre infrastructure and have already built successful vertical fibre services in Brazil and Nigeria. Levels of site fiberisation vary largely across the MENA region, but some key markets require significant last-mile fibre, especially where commercial 5G rollout is in the works.

Like Helios Towers, IHS Towers also emphasised how ESG is a core part of their strategy. IHS Towers recently announced their carbon reduction roadmap, and Ashutosh reaffirmed the towerco’s commitment to reducing its carbon footprint by moving away from diesel and towards solar and battery solutions. By 2030 IHS plans on cutting carbon emissions by 50%, expecting to spend US$214mn by 2024 under their Project Green roadmap.

From the operator side we heard from Jean-Francois Thomas, Chief Strategy Officer for MEA at Orange, who had been reviewing the MNOs telecom towers across their 14 MEA markets. His review has led toforming the infrastructure strategy branch of the group’s new ‘Lead the Future’ plan.

In Europe, Orange has deployed a third of Europe's fibre connections and carved-out their towers into an MNO-led towerco TOTEM across France and Spain. TOTEM has plans to expand into Orange’s other European markets but no plans for TOTEMs expansion internationally or for other carve-outs across MEA set to take place. Jean-Francois described their African and Middle Eastern telecom infrastructure as “sitting on a pile of gold” where each infrastructure class has its own business strategy.

As a result, Orange is retaining its tower infrastructure, committing to invest in the network themselves rather than look at a carve-out or sale leaseback.

Orange has always been a leading player in the sustainability space for telecom towers, and Jean-Francois reaffirmed their commitment to driving a carbon-reduction agenda. While this usually takes the form of discussing renewable on-site energy alternatives, the Orange MEA team is encouraging greener grid electricity and ensuring that their grid power relied as much as possible on sustainable energy sources such as solar or hydroelectric. Orange is already ‘wheeling’ power from solar farms to on-grid telecom sites in Morocco and Jordan.

Finally, we heard from Norbert Prihoda, Deputy CEO of Tunisie Telecom, who has been breaking ground planning North Africa’s first tower carve-out. Tunisie Telecom is the national MNO in Tunisia and is a key stakeholder in the country’s ambitions for digital transformation. To achieve this, Tunisie Telecom are looking at how to manage their infrastructure in a more efficient and standardised way.

“We have launched a new business unit responsible for owning and managing our towers across Tunisia’s diverse geography. We want to make sure the business is running smoothly, and we want to better understand the tower industry, but the next step will to be to move towards asset monetisation.”

Norbert announced Tunisie Telecom’s launch of their tower business unit which seeks to address these management goals with a separate entity operating under focused objectives and KPIs. Currently this process is ongoing, and Tunisie Telecom is looking at financial partners and backers who can support this process.

And this portfolio is certainly an attractive one. Tunisie Telecom has a tenancy ratio of 1.4x, high even by towerco standards in MEA. As a government-owned entity Tunisie Telecom has the backing of the Tunisian government and regulators, as well as having significant fibre backhaul from previous investment. Many 4G sites are also 5G ready, in preparation for the country’s 5G commercial rollout.