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Mobile Tower Deals Are Expected To Significantly Pick Up In Africa In The Next 12 Months With High Value At Stake For Many Players
Published Sep 20, 2010
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Delta Partners, the leading specialized telecoms advisory and investment firm released its latest White Paper, titled "Tower assets in Africa: Move now before it's check-mate" - the publication discusses the current landscape of tower assets across Africa and the significant value potential from sharing and selling.
Africa has yet to see sizeable pan-regional tower carve-outs mainly due to operational challenges and deal complexities. However, significant activity in the space brought about a number of smaller deals in 2010 across several markets and the continent's major operators (e.g. Bhati, former Zain Africa) are on the verge of pushing ahead with their tower strategies.
The tower space in Africa is attracting significant interest not only from operators attempting to improve their bottom line but also from tower companies such as Bharti-Infratel, Helios, Eaton Telecom, IHS, American Towers and from equity investors such as Soros Strategic Partners and RIT Capital Partners. All this interest creates an impetus for action.
"Operators must follow Tigo (Millicom) path and act soon or risk being left out in the cold with assets whose value is declining and with a higher cost base than competitors. Once the large tower deals in any given market are executed, the value of the remaining towers in the market tends to drop dramatically. Thus, seizing a first mover's advantage translates into favourable valuations", says Joao Sousa, Partner.
In several countries, the need for new antennas is still high as rollouts are underway to satisfy capacity requirements, 3G coverage and rural expansion. These factors contribute towards the attractiveness of tower deals at large.
'The business rationale for tower deals is still valid as a means of improving operators' profitability and extract value. The question is how much value is there, for whom and how to extract it?' says Dimitris Lioulias, Manager. 'The value potential is different for mobile players, tower companies and equity investors - as should their game plan be.'
'We believe there is still significant value in the African tower space for specialized players with strong relationship with the key Operators - TowerCos which main value proposition for the "tower seller" is overpaying for the towers will likely destroy investors value', concludes Joao Sousa. 'However, assessing the potential of each market is not always straight forward and every aspiring tower company needs to carefully assess the market's 'addressable demand' and 'accessible supply', whilst realising that the market size alone is not what will drive returns, instead achieving greater scale is the best guarantee for success.'
For more on the White Paper please visit http://www.deltapartnersgroup.com/our_insights/whitepapers
Posted by
VMD - [Virtual Marketing Department]
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