As independent telecoms tower infrastructure company Helios Towers settles its entry into new markets, South Africa being the most recent, the group aims to continue on its profitable growth path over the next year.
Helios marked the start of 2019 with its entry into the South African market, through a partnership with Vulatel and the acquisition of SA Towers, to address an infrastructure gap and deliver lower-cost, higher-quality services to mobile network operators.
“I am thrilled to announce our entry into South Africa, which delivers against our stated strategy [to provide] mobile network operators with open-access infrastructure to meet the growing demands of their customers in Africa for fast, stable and available networks,” says Helios CEO Kash Pandya.
“We have long considered South Africa an attractive opportunity, owing to its economic growth, population demographics and demand for advanced telecommunications services,” he adds.
Helios now aims to leverage its partnerships and sharing expertise to deploy wireless and fixed-line open-access infrastructure and investments in South Africa over the next few years.
Currently, only 10% of the estimated 30 000 towers in South Africa are owned by independent tower companies.
“In addition to the significant inorganic opportunities, there are organic opportunities through supporting the growth strategies of all the mobile network operators by building towers and other open-access infrastructure in the country, providing support for their current fourth-generation needs and additional requirements for their extensive roll-out plans for fifth-generation networks,” Pandya notes.
To this end, the group, through its partnership with Vulatel, established the Helios Towers South Africa infrastructure platform, which subsequently acquired a controlling stake in local tower company SA Towers.
SA Towers, formed in 2016, already has a pipeline of potential tower sites, ready to be built or in the permitting process, in more than 500 urban locations.
Helios also raised a $100-million term-loan facility to fund future expansion in current markets and opportunities in new markets, including South Africa.
“A focus for us in 2019 is to find new fertile markets in Africa where we can also bring our proven model and skills,” he says.
Helios remains focused on the “considerable opportunities” in its existing markets and continued organic growth through additional colocation volumes, amendment revenues and build-to-suit tenancies, as well as margin expansion driven by additional operational efficiencies in the company’s five markets.
Helios Towers, however, says it is well positioned to play a pivotal role in the growth of the African mobile telecommunications sector in the years ahead, particularly across South Africa, the Democratic Republic of Congo, Tanzania, Congo Brazzaville and Ghana.
Africa’s underpenetrated markets are some of the fastest growing in the world, driven by young and urbanising populations, high gross domestic product (GDP) growth and minimal fixed-line availability, says Pandya.
“Our five markets are projected to grow by 37-million people to 266-million by 2023. That’s a 3% yearly increase, compared with 0% annual growth across the G7 (Group of Seven countries comprising Canada, France, Germany, Italy, Japan, the UK and the US),” he highlights.
Further, opportunities lay in the rising demand for mobile services on the back of urbanisation, with 26-million people expected to move into cities in the five markets by 2023.
In Helios’s five markets, where mobile penetration is significantly lower than in Western economies and fixed-line availability remains extremely low, mobile subscriptions are forecast to grow 6% a year, or by 48-million, by 2023.
With two-thirds of the population under 30, there is further opportunity as this demographic consumes the most data.
In addition, the markets are forecast to achieve strong GDP growth of 5.1% a year to 2023, compared with the forecast growth of 1.6% across the G7
,” he highlights.
Further, opportunities lay in the rising demand of mobile services on the back of urbanisation, with 26-million people expected to move into cities in the five markets by 2023.