For nearly ten years, telecom tower operator Africa Mobile Networks has been working hard to connect rural areas. Enough to convince some giants to support it.
The objective is clearly stated on the official website of Africa Mobile Network (AMN): to be present throughout the continent. To achieve this, this young British UK telecom tower operator specializing in rural areas is relying on the development of the European satellite company, Intelsat, one of its oldest investors.
On the verge of entering seven new markets (Central African Republic, Ivory Coast, Kenya, Madagascar, Niger, South Africa, and Uganda), the start-up based in Milton Keynes in the United Kingdom should be able to establish itself in Mali in a few months thanks to a partnership signed in March between Intelsat and Orange Mali for the coverage of rural areas.
Support from global tech
Since its creation in 2013, CEO Michael Darcy has built towers (currently 2,000) in eleven countries and raised more than $100m from some twenty investors. Among them, big names like the satellite operator Intelsat and the social network Facebook (now Meta).
In the latest financial injection, South African private equity firm Metier led a round that brought together France’s Proparco, the UK’s CDC Group and the German Investment Corporation in a $36m fundraising round that closed in July 2021. “The sum should enable AMN, to expand its coverage to 3,500 towers by the end of 2022 and more than 5,000 in over 15 countries by the end of 2023,” says a company spokesperson.
This vertiginous development, which has also locked in a 20% employee shareholding, is based on the optimization of certain processes that are generally seen as laborious in the industry.
Unlike telecom operators or managers such as IHS Towers, who use tall towers requiring a minimum investment of $100,000 and powered regularly by diesel, AMN uses smaller towers, installed in a day and capable of capturing satellite waves to deliver speeds between 2G and 4G.
“In rural areas, success is based on logistics, and this kind of optimization makes it possible to be profitable in areas covering between 1,500 and 5,000 people,” summarizes Jean-Philippe Gillet, Intelsat’s senior vice president, responsible for international sales.
A turnkey model
AMN also brings a business model that “takes complexity away from customers,” the Intelsat executive assures. Presented as a “network as a service,” it offers operators to absorb and integrate the costs of building, managing and maintaining tower networks in exchange for a flat fee paid by its customers or a share of the revenue generated.
In Africa, where 19% of the territory is still not covered by mobile telephony, where only 64% of the population owns a smartphone and where 3G connections are still in the majority (57% of traffic in 2021 according to the GSMA association), this business model appeals to the continent’s telecom operators such as Orange and MTN, who are often very reluctant to invest in areas with low population density.
To date, the UK company says it covers 7 million users.