01 Sep South Africa trails Nigeria in embracing independent tower management
Sub-Saharan Africa will be worth approximately US$1.5 billion in the next four years, according to Frost & Sullivan research.
South African telecommunication companies are lagging behind their Nigerian counterparts when it comes to allowing tower management companies to take control of base station sites, say industry experts.
Frost & Sullivan analysts estimate that the mobile network tower industry in Sub-Saharan Africa will be worth approximately US$1.5 billion in the next four years.
This will be on the back of increased take up of tower management arrangements in some markets, with authorities in various regions also pressing telecom firms to share infrastructure.
However, South Africa still lags with regards to tower management companies taking control of sites.
Laura Graves, Managing Director for Africa at Tower Exchange said only Cell C had given up a good number of its towers to independent management companies.
“In South Africa, fewer than 10% of the country’s 29,500 sites are owned by independent towercos with Cell C having been the only operator to have sold their towers (although they are now in the process of rebuilding their tower portfolio),” said Graves by email.
However, each of the mobile operators in South Africa – including MTN and Vodacom – have moved in to “embrace infrastructure sharing, not only through site swaps but increasingly through commercial arrangements.”
Telkom recently announced the formation of a new subsidiary, Gyro Towers, to better manage their tower portfolio.
The take up of tower management arrangements in South Africa is in stark contrast to establishments in Nigeria, where a massive 77% of the country’s 28,241 towers are owned by independent towercos, according to Tower Exchange.
Etisalat, MTN and Airtel in Nigeria have all “divested their portfolios through transactions with IHS Towers and American Tower”.
Globacom is the only GSM in Nigeria that has not sold its tower network and has publicly stated that they have no intention to do so.
“Whilst Globacom still own their own sites they do share towers with other MNOs through co-locations on the sites owned by American Tower and IHS Towers as well as other smaller towercos in the market,” Graves explained.
“Despite the growing demand for wireless connectivity, particularly in remote areas, the business case for infrastructure investment is not always compelling.”
Lehlohonolo Mokenela, ICT industry analyst at Frost & Sullivan said, “To accelerate market growth, tower companies will need to convince MNOs, particularly the larger ones, of the reduced total cost of ownership of either outsourcing or selling off their infrastructure.”
The market for mobile network towers in Sub Saharan Africa is currently worth about US$991.7 million, according to Frost & Sullivan’s Mobile Telecom Infrastructure Market, Forecast to 2021 report.
Source: IT Web Africa