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TowerXchange’s analysis of the global and African tower markets
Laura Graves, Managing Director, EMEA, TowerXchange Kieron Osmotherly, Founder and CEO, TowerXchange
Join the conversation: @TowerXchange
Community: http://www.linkedin.com/groups/TowerXchange-4536974
Research: www.towerxchange.com
Networking club for towercosMeetups, CXO dinners, must-read-journal, 3 million words of research, who’s whos
Meetup Asia 2018 4-5 December, Singapore
Meetup MENA 2019 29-30 January, Dubai
Meetup China 2019 March, Beijing
Meetup Europe 2019 2-3 April, London
Meetup Americas 2019 9-10 July, Boca Raton
Meetup Africa 2019 8-9 October, Johannesburg
The new market structure in which towercos own 67% of towers
TowerXchange is tracking 276 towercos that now own 67% of the world’s 4.4mn towers
* China Tower Corporation area reduced to better illustrate the relative global market share of the other towercos – if illustrated to scale, China Tower Corporation’s area would be almost double the scale of the rest of the industry combined
disclosed updated counts
China Tower Corporation*1,900,000
29 other towercos with 5,000-20,000 towers286,590
235+** other towercos with <5,000 towers213,175
American Tower169,534
Indus Towers 122,962
IHS Towers 22,860
Cellnex 21,770
SBA Communications28,380
GTL Infrastructure27,759
edotco 40,481
Deutsche Funkturm34,700
Bharti Infratel39,363
Crown Castle40,039
RCOM / RJio towerco43,000
Towerco penetration and business models in different regions
Source: TowerXchange
China
India
CALA Oceania
S & SE Asia(Exc India)
Europe
N & E Asia(exc China)
97.3% 2.7%
15.4%
15.5%
9.6%
59.6%46.6%
21.8%
31.5%
14.7%66.1%
19.2%100%
11%
36.1%48.2%
13%
87%
USA & Canada
7%
66%
27%
15.6%
SSAMENA99.5%
0.01%0.04%
4.5%33.9%
61.6%
Operator-led towerco Pureplay independent towerco Joint venture infraco MNO-captive sites
China
India
CALA Oceania
S & SE Asia(Exc India)
Europe
N & E Asia(exc China)
97.3% 2.7%
15.4%
15.5%
9.6%
59.6%46.6%
21.8%
31.5%
14.7%66.1%
19.2%100%
11%
36.1%48.2%
13%
87%
USA & Canada
7%
66%
27%
15.6%
SSAMENA99.5%
0.01%0.04%
4.6%59.2%
36.2%
Global
52.6%
13.5%1.3%
32.6%
Estimated tower counts for selected countries in Sub-Saharan Africa
Source: TowerXchange
Nigeria 29,652
SouthAfrica28,581
Tanzania 8,278
Kenya6,629
Ghana6,296
Mozambique
4,400DRC4,293
Uganda3,554
Cote d’Ivoire
4,142
Senegal3,151
Angola2,600
Namibia2,000
Rwanda1,300
Gabon1,000
Malaawi1,000
BurkinaFaso1,700
Niger1,800
Chad2,000
Botswana850
Congo B 800
Zambia2,300
Madagascar2,020
Cameroon3,200
Zimbabwe2,700
Ethiopia6,600
Towercos now present in 19 (soon to be 20) Sub-Saharan African countries
Owning 39% of the continent’s 150,834 towers
123456
Towercos activeNew tower deal announcedNo known towerco activity
Legend
Source: TowerXchange
Pureplay independent towercooperator-led towercoMNO captive
34%
61%
5%
Africa’s biggest tower transactions to date
| TowerXchange Africa 2018 Dossier | www.towerxchange.com/meetups/meetup-africa4
* announced, not yet closed ** 101 closed as of 31 Dec 2017 *** Deal included 368 SWAP sites under MLL; agreement since cancelled **** MTN’s equity since restructured for additional shareholding at IHS group level + Vodacom acquired a 24.5% stake in HTT, which Helios has since purchased for $58.5mn
Figure 4: MEA’s biggest tower transactions to date Source: TowerXchange
Year Country Seller Buyer Tower count Deal value US$
Cost per tower US$
Deal structure
2018 Kenya Telkom Kenya American Tower 723 SLB*
2016 Tanzania Zantel HTA 185 6,700,000 36,216 SLB**
2016 Senegal Expresso Telecom
Al Karama Towers 450 SLB*
2016 South Africa Eaton Towers American Tower 300 Portfolio Acquisition2016 DRC Airtel HTA 967 165,000,000 170,631 SLB
2016 Nigeria Hotspot Network IHS 85 Portfolio Acquisition
2016 Nigeria HTN Towers IHS 1,211 Company Acquisition***2015 Nigeria Etisalat IHS 555 SLB 2014 Rwanda Airtel IHS 164 SLB2014 Zambia Airtel IHS 949 150,000,000 158,061 SLB
2014 Nigeria Airtel American Tower 4,717 1,060,000,000 224,719 SLB
2014 Niger Airtel Eaton 600 SLB
2014Ghana, Burkina Faso, Kenya &
UgandaAirtel Eaton 2,681 540,000,000 201,417 SLB
2014 Nigeria MTN IHS 8,850 984,000,000 226,911 Joint venture (IHS 49%, MTN 51%)****
2014 Nigeria Etisalat IHS 2,136 485,000,000 227,060 SLB
2014 Congo B Airtel HTA 393 50,000,000 127,226 SLB
2014 Rwanda MTN IHS 550 48,000,000 87,273 SLB
2014 Zambia MTN IHS 748 57,000,000 76,203 SLB
2013 Tanzania Vodacom HTA 1,149 75,000,000 65,274 SLB with direct investment in HTT+
2013 Kenya Telkom Kenya Eaton 1,000 MLL (Contract since cancelled, towers currently for sale)
2013 Cameroon & Cote d'Ivoire Orange IHS 2,000 MLL
Africa’s biggest tower transactions to date (continued)
| TowerXchange Africa 2018 Dossier | www.towerxchange.com/meetups/meetup-africa5
Figure 4: MEA’s biggest tower transactions to date Source: TowerXchange
Year Country Seller Buyer Tower count Deal value US$
Cost per tower US$
Deal structure
2012 Cote d'Ivoire MTN IHS 911 141,000,000 154,775 SLB
2012 Cameroon MTN IHS 820 143,000,000 174,390 SLB
2012 Uganda Warid Eaton 400 SLB2012 Uganda Orange Eaton 300 SLB
2011 Uganda MTN American Tower 962 89,250,000 181,912 Joint venture (AMT 51%, MTN 49%)
2010 Tanzania Millicom/Tigo HTA 1,200 81,000,000 112,500 Joint venture (HTA 60%, Milicom 40%)++2010 DRC Millicom/Tigo HTA 521 41,500,000 132,758 Joint venture (HTA 60%, Milicom 40%)++2010 Ghana MTN American Tower 1,856 218,500,000 230,835 Joint venture (AMT 51%, MTN 49%)2010 South Africa * Cell C American Tower 1,400 200,000,000 142,857 SLB with BTS+++2010 Nigeria Starcomms SWAP 407 81,000,000 199,017 SLB2010 Ghana Vodafone Eaton 750 MLL2010 Nigeria Visafone IHS 800 67,000,000 83,750 SLB2010 Nigeria Multilinks HTN 400 MLL2010 Ghana Millicom/Tigo HTA 831 54,000,000 108,303 Joint venture (HTA 60%, Milicom 40%)++2010 Ghana Millicom/Tigo HTA 750 54,000,000 120,000 Joint venture (HTA 60%, Millicom 40%)
Totals / average 41,248 4,726,950,000 187,486
* announced, not yet closed ++ Millicom restructured their equity into Helios’ operations into a 24% stake at group level (since reduced to 22.83%) which Millicom is now looking to monetis +++ Cell C deal included 1,400 existing towers plus 1800 to be constructed. Total acquisition cost of US$430mn excluded here because the BTS component distorts the average
with Orange. Orange manage 100 sites outside of their arrangement with IHS.
Chad
Subscribers: 8.8mn* Tower count: 2,000 MNOs: Three Towerco activity: None ESCOs: Aktivco
There are three MNOs (Airtel, Tigo and Sotel) and an estimated 2,000 towers in Chad, a country where electrification sits at just 4%.
Airtel had previously agreed the sale of their towers to Helios prior to the transaction being cancelled because of an unfavourable regulatory environment.
To address power issues, Millicom’s Tigo has signed an ESCO contract in the country with Camusat’s
Aktivco. Millicom are looking to exit the African market, with Econet reported to have expressed an interest in acquiring their remaining opcos in Chad and Tanzania
Congo Brazzaville
Subscribers: 5.1mn* Tower count: 800 MNOs: Three Towerco activity: Helios Towers
Gold sponsor: Diamond sponsors: Silver sponsors: Bronze sponsors:
R
Africa’s towerco-owned towers: 2009-2018
0
10,000
20,000
30,000
40,000
50,000
60,000
20182017
20162015
20142013
20122011
20102009
Tower ownership by Africa’s four largest independent towercos
Source: TowerXchange
5000 10000 15000 20000 25000 30000 35000
2284
1200 1300 600
2276 2575 1490
2518 171415503
4757 723*
Nigeria
Ghana
Burkina Faso
DRC
Cote d’Ivoire
Cameroon
Niger
Rwanda
Zambia
Congo B
Uganda
Tanzania
Kenya
South Africa1200
700
870
3508 3841771
814
*Pending closure of Telkom Kenya deal
Towerco footprints in Sub-Saharan Africa
Senegal
AlKarama
Towers*
Helios Towers Africa
Tanzania Congo BrazzavilleDRC
Eaton TowersNigerBurkina Faso
Kenya TowerCo of Madagascar
Madagascar
PowerCom
EightyFour
Dynamics
Zimbabwe
Namibia
Botswana
AfricanTowers
Antosc
Angola
SEAL Towers
Uganda
SouthAfrica
Ghana
Gyro Towers, Atlas Towers, Coast to Coast,
Blue Sky Networks, Sentech, Comco, Eagle
Towers, SA Towers, International Tower
Corporation
IHS Towers
CameroonRwandaZambiaCote d’Ivoire
Nigeria
Nigeria
BCTek Engineering
Hotspot Networks
Communications Towers Nigeria
Pan-AfricanTowers
Atlas Tower
American Tower
PulaTowers
MNO infrastructure sharing strategies
Joint venture
Barter agreements
Towercos Co-location sales
Active sharing
ESCOs
$
Towerco penetration and business models in different regions
Source: TowerXchange
China
India
CALA Oceania
S & SE Asia(Exc India)
Europe
N & E Asia(exc China)
97.3% 2.7%
15.4%
15.5%
9.6%
59.6%46.6%
21.8%
31.5%
14.7%66.1%
19.2%100%
11%
36.1%48.2%
13%
87%
USA & Canada
7%
66%
27%
15.6%
SSAMENA99.5%
0.01%0.04%
4.5%33.9%
61.6%
Operator-led towerco Pureplay independent towerco Joint venture infraco MNO-captive sites
China
India
CALA Oceania
S & SE Asia(Exc India)
Europe
N & E Asia(exc China)
97.3% 2.7%
15.4%
15.5%
9.6%
59.6%46.6%
21.8%
31.5%
14.7%66.1%
19.2%100%
11%
36.1%48.2%
13%
87%
USA & Canada
7%
66%
27%
15.6%
SSAMENA99.5%
0.01%0.04%
4.6%59.2%
36.2%
Global
52.6%
13.5%1.3%
32.6%
Operator carve out towercos: Europe
Ownership Europe’s ~600,000 towers
Operator-led towerco Pureplay independent towerco Joint venture infraco MNO-captive sites
China
India
CALA Oceania
S & SE Asia(Exc India)
Europe
N & E Asia(exc China)
97.3% 2.7%
19%
10%
40%47%
22%
32%
20%66%
14%
100%
11%
40%49%
8%
92%
USA & Canada
7%
66%
27%11%
SSAMENA99.99%
0.01%0.2%
61%
39%
361,750 104,706
72,994
58,000
IPO
Retain
Sale
Attempted IPO
Equity sale
Equity saleSFR Towerco & Towers of Portugal
First Tower Company
SSA tier 1 MNOs: Number of markets in which their towers are operator or towerco owned and managed
* Opco acquired from Tigo which had previously sold towers to Helios (Orange did however sell its Ugandan towers to Eaton prior to selling its opco to Africell) ** In some deals, MNOs have retained equity in either the towers or the towerco parent company (see deal table)
MNO owned MNO owned but towerco managed Towerco owned**
Airtel
Millicom
MTN
Orange
Vodacom/ Vodafone/
Safaricom 1 7 132 8 143 9 154 10 165 11 176 12
+5 ESCO contracts signed
+1 ESCO contract signed
Number of markets
+1 ESCO contract signed
*
Breakdown of Orange’s tower ownership and sharing in Sub-Saharan Africa
0 500 1000 1500 2000 2500Owned (not shared with other MNOs) Owned (shared with other MNOs)Owned (but under towerco mgmt) Leased from other MNOsLeased from towercos (BTS or co-lo)
BotswanaBurkina Faso
CARCameroon
Cote d’IvoireDRC
Guinea BissauGuinea Conakry
LiberiaMadagascar
MaliNiger
SenegalSierra Leone
The emergence of ESCOs in SSA
Who owns the energy equipment on SSA’s cell sites?
ESCOs already have 10.8% of Africa’s cell sites
Source: TowerXchange
ESCOsPower-as-a-service towercos*MNOs15,880
39,443
91,624
*Towerco count excludes 10,284 sites in South Africa, where power-as-a-service is not provided (inc in MNO section), as well as 10,000 IHS Nigeria sites managed by third parties under the ‘Big Five’ initiative (inc in ESCO section)
Comparing towerco growth in MEA from 2009 with ESCO growth six years later
60,000
50,000
40,000
Site
s
30,000
20,000
10,000
20092015
20102016
Towerco sitesESCO sites
20112017
20122018
20132019
20142020
20152021
20162022
20172023
20182024
Source: TowerXchange
Launch velocity: 17,600 MEA cell sites contracted by ESCOs since Q216
Gold sponsor: Diamond sponsors: Silver sponsors: Bronze sponsors:
R
Source: TowerXchange
July2017
August 2017
September 2016
August 2016
July2016
Undisclosed date
April2018
July2018
August2018
August2018
August2018
Aktivco secures contract with Millicom
Chad (500 sites)
GreenWish Partners secures contract with Orange DRC (then 250
sites, now 300)
Econet carves out Distributed Power Africa
(then "Econet Power") initially managing 1,380 sites
in Zimbabwe (now 1,600)
IHS ‘Big Five’ initiative POs issued to partners Biswal, IPT PowerTech, Makasa
Sun+Ascot, M-P Infrastructure and Uppercrest (then 12,000
sites, now 10,000)
Energy Vision secures contract with Airtel
Gabon (280 sites deployed to date)
Ascot supplies 200 sites in Sudan for Sudatel under ESCO model
Aktivco secures contract with Orange Niger
(500 sites)
Aktivco takes on an existing ESCO contract with Orange
Burkina Faso (site count undisclosed, estimated as 300)
Aktivco secures contract with Orange Côte d'Ivoire
(site count undisclosed, estimated as 500)
IPT PowerTech secures contract with Orange Guinea
Conakry (1,500 sites)
IPT PowerTech secures contract with Alfa in Lebanon (1,600 sites)
Source: TowerXchange
The fragmented global ESCO market,by site count
IPT PowerTech9,800
Enertika3,500
M-P Infrastructure2,000
Applied Solar Technologies4,000
Ascot2,110
Distributed Power Africa1,600
Aktivco2,000
Biswal2,000
Bhaskar Solar800
Ardom Towergen500
Cambridge Clean Energy, 464
Pace Power, 400
GreenWish Partners300
MediPower, 150
Energy Vision280
ACME Group, 100
Voltalia, 171
HYBRICO, 40
OMC, 150
Yoma Micro Power, 10
The addressable market for ESCOs in MEA
IHSTowers 12,860
MTN 23,000
Orange MEA
20,000Airtel Africa 4,500
Other MEA MNOs 20,000
Etisalat / Moov ~10,000
Zain 8,337
American Tower9,246
HeliosTowers
6,485
EatonTowers
5,000
Other MEA towerco sites
5,852
39,443 towerco sites
17,800 contracted
Source: TowerXchange
Already under ESCO contract 17,800MNO sites addressable by ESCOs in short to medium termMTN 23,000Orange MEA 20,000Airtel 4,500Zain 8,337Etisalat / Moov 10,000Other MEA MNOs 20,000
Towerco sites addressable by ESCOs in medium to long term (exc SA)IHS Towers 12,860American Tower 9,246Helios Towers 6,485Eaton Towers 5,000Other MEA towercos 5,852
ESCO sites anchor tenants worldwide: MNOs compared to towercos
Source: TowerXchange
20,000
15,000
10,000
5,000
MNOs (36%)
10,950
Towercos (63.1%)
19,165
SSA ESCO sites by grid status
Gold sponsor: Diamond sponsors: Silver sponsors: Bronze sponsors:
R
On grid
Unreliable grid
(<16 usable hours per day)
Off grid
Undisclosed (none)
14.5% 26.9% 58.6%
Source: TowerXchange
Example capex invested into a SSA ESCO site
Source: Industry sources, TowerXchange presentation
4.5kW solar, 1,000AH battery capacity: total capex $38,650
$14,800
$3,700$7,900
$8,500
$3,000$750
Battery, cabinet and accessoriesSolar systemHybrid cabinet (core, controllers, solar chargers, rectifiers, AC&DC dist.)Genset, controller and fuel tankInstallation materialsIn-country logistics and installation
ESCO sites by geographical market
Source: TowerXchange
6.3%
21.1%
7.8%
6.7%0.1%5.6%
52.3%
SSAMENAIndiaMyanmarIndonesiaCALAEurope
Current and prospective ESCO projects, MEA
Source: TowerXchange
Guinea Conakry: IPT with further RFP rumored
Burkina Faso: Aktivco Côte d'Ivoire: Aktivco Chad: Aktivco DRC: GreenWish+Sagemcom Gabon: Energy Vision Niger: Activco Nigeria: IHS ‘Big Five’: IPT, Makasa Sun, M-P Infrastructure, Biswal Lebanon: IPT Sudan: Ascot Zimbabwe: Distributed Power Africa
TowerXchange forecasts ESCOs will have 43,800 cell sites in SSA by 2024
Source: TowerXchange
Representing 65% of the global total of 67,300 ESCO sites
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
ESCO conclusions
< ESCOs have achieved launch
velocity in SSA
< ESCOs will own the power systems
at 25% of SSA towers by 2024
< ESCOs push beyond towercos in
energy efficiency
< ESCOs compliment rather than
competing with towercos
“Generally speaking, in markets where we have a small number of towers, our plan would be to hand the full portfolio over to an ESCO, whereas in our larger markets it will most likely be a subset of towers” - Nat-sy Missamou, Orange MEA
Data from TowerXchange’s annual telecom ESCO market report 2018
Available soon at www.towerxchange.com/esco-report
SSA headlines and trends in 2018 (and late 2017)
< 4 ESCO contracts signed by Orange< Energy upgrades ongoing< Telkom Kenya agrees tower sale with ATC< Viettel hint at towerco formation in Vietnam< Tigo M&A and exit: Ghana, Rwanda & Senegal and now Tanzania< New mobile licensees plus 4G licenses< New build picks up plus rural rollout focus< IHS, Helios and Eaton IPO talks< Nigeria 9mobile sale ongoing< ECA bill, WOAN and 5G talks in SA< Towerco business model diversification steps up
Gold sponsor: Diamond sponsors: Silver sponsors: Bronze sponsors:
R
Energy upgrades and optimisation
< Management of meter top ups< Grid connection < Outdoorisation < Better usage of data< Lithium ion and supercapacitors< DC vs AC DG debate< Plug and play and integration into existing supply chains< Carbon reduction plans< Extending power beyond tower
Power responsibility across Africa’s 150,834 towers
Helios Towers’ 2017 annual cost of power per tower25,000
20,000
15,000
10,000
5,000Congo B DRC Ghana Tanzania
$7,089
$23,271$16,110
$10,144
66% 24% 10%
MNOs
Towercos
ESCOs
Figures calculated as a total cost of power divided by number of towers at year end
Kenya
Towerco activity:<Eaton acquire Airtel sites (2014)<Telkom Kenya agree tower sale to ATC<Safaricom proactively lease space<Atlas Tower begin building sites<SEALTowers present
Key dynamics<Strong economy<Safaricom dominance<4G rollout ongoing<Rural coverage focus<Safaricom commit to going green
Ownership of Kenya’s 6,629 towers and MNO market share
Safaricom Eaton Towers Telkom Kenya Other
4,406
1,200
723300
*Tower sale to American Tower agreed
Nigeria
Key dynamics<Huge market with major growth<9mobile sale<Power upgrade projects<Fibre plans?
Ownership of Nigeria’s 29,652 towers+30,000 needed!
*National Population Commission; **NCC (Aug 2018)
Population: 198mn*Projected to become 3rd most
populous country by 2050 (currently 7th)
MNO market share**
IHS Towers
American Tower
Pan African Towers
BCTek Engineering
Communication Towers Nigeria
Hotspot Network
Other small Nigerian towercos
Globacom
NATCOM
SWAP Technologies
6,000
369550
20075500
7001,000
15,503
4,757
MTN
Airtel
Globacom
9mobile
40% 25% 25% 10% 160.9mn**
Mobile connections
South Africa
Key dynamics<Gyro Towers – Telkom carve out <New build ongoing<New models for rural rollout
<ECA bill and WOAN <Helios considering entry<Towercos exploring fibre and small cells
American Tower
Atlas Tower
SENTECH
SA Towers
Blue Sky Towers
International Tower
Corporation
Eagle Towers
Coast to Coast
Pro High Site
Communication100 200 300 400 500 600 700 800 3000
2,575701
340
323
66
61
50
38
11
Towerco diversification - examples
Source: Delta Partners
Country/Region Towercof Logo # of towers Service types offered
China CTC 1900k
China Guodong 20k
Czech Republic CETIN 5k
Europe Cellnex 25k
India Bharti Infratel 40k
Indonesia Protelindo 15k
Indonesia Tower Bersama 13.5k
Indonesia STP 6k
Italy INWIT 11k
Malaysia, Myanmar, Vietnam OCK Group 3k
Nigeria & Central Africa IHS 23k
Russia Russian Towers 3k
UK Arqiva 9k
UK, Ireland, Netherlands Wireless Inf. Group 2k
US AMT 170k
US Crown Castle 40k
US Digital Bridge 3k
US Uniti Towers <1K
Data centre Wi-FiGlobal TowerCo P&S benchmark Towers DAS Exploring serviceSmall cells Fibre
Through acquisiDon ofKIO Networks
Have a license todeploy
Investment in thecreation of micro-coverage and fibrebackhauling
Through acquisitionof iForte
From towerco to infraco: Crown Castle
30,000 small cells deployed
+30,000 in the pipeline
TowersSmall cellsFibre solutions
60,000 miles (100,000km) fibre
deployed
Breakdown of Crown Castle new lease revenue
$110mn
$55mn
$45mn
Gold sponsor: Diamond sponsors: Silver sponsors: Bronze sponsors:
R
Looking ahead
Gold sponsor: Diamond sponsors: Silver sponsors: Bronze sponsors:
R
< SLB transactions limited< ESCO model to gain further traction< Healthy macro-site new build still ahead< Fibre partnerships and exploration into small cells
Thank you!
Kieron OsmotherlyFounder and CEO
TowerXchangeMobile: +44 7771 148001
Email: [email protected]
Laura GravesManaging Director EMEA
TowerXchangeMobile: +27 72 815 9052
Email: [email protected]