Thursday, September 28, 2023
BusinessMultinational eyes Ethiopia’s USD 1.5 bln telecom tower market

Multinational eyes Ethiopia’s USD 1.5 bln telecom tower market

Helios Towers, a major telecom infrastructure developer, has come to join the Ethiopian market and eyes the USD 1.5 billion tower business, expected to be installed in the coming three to five years.

The company said that, in the stated years, Ethiopia’s demand for telecommunications towers will reach 10,000 units. That in turn will require a total investment of USD 1.5 billion.

Kash Pandya, Chief Executive Officer and Tom Greenwood, Chief Financial Officer with Helios Towers told The Reporter that the company has expressed interests to tap into this potential market and become a major player in the passive telecom infrastructural developments in Ethiopia.  

Explicitly focused on telecom tower business segment, Helios Towers has no intentions of involving in the ongoing telecom sector privatization or to bid for an operation license in Ethiopia. However, according to Pandya, the company is willing to buy existing towers, if Ethio-Telecom intends to sell the properties.

Currently, there are some 8,000 telecom towers in Ethiopia. In addition to standard telecom towers that require a 10 square meter plots, the company is also engaged in rooftops, roads, railways, airports, warehouses, fiber optic submarine cables and the like. In that regard, Helios Towers is also working in partnership with mobile network operators.

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The coming of Helios Towers basically depends on the demands of mobile network operators to which the likes of MTN and Vodacom, are closely following the privatization process.

During a business discussion session held on Thursday and dubbed: “Open access infrastructure: the backbone of the telecommunications Growth,” representatives of MTN and Vodacom have indicated that the government of Ethiopia is about to have a quick rollout of 4G networks across the country, prioritizing major cities. 

However, access to land, access to electricity, security concerns, and currency repatriation issues have been circulating around the discussions. It was requested that the government at least needs to provide hard currency transfers to foreign banks to allow payments for credits that the likes of Helios Towers would need, once joining the Ethiopian market.

Betram Dreyer, representative of German Investment Corporation (DEG), responsible for the telecom infrastructure wing, made it clear that the lender sees three potential challenges in Ethiopia, which includes security concerns, at the top the list. A land lease agreement that will last at least 10 to 15 years is the minimum requirement, on top of the ensured capital transfers to Germany; which is what DEG, and its parent KfW Group are looking at prior to extending funds to companies that are looking for investment opportunities in Ethiopia.

Established in 2009, Helios Towers has become a major infrastructure player in the mobile markets of Africa. The company grew with the purchases of tower networks from mobile network operating companies and by installing its own towers with a view to serving the quickly growing subscribers and technologies across Africa.

Back in 2010, Helios Towers acquired tower infrastructures in Ghana that gave the company 831 towers. In 2011, a further 1,721 towers were acquired in Tanzania and the DRC. In 2012, the company has constructed its first “build-to-suit towers” of 259 sites, in Tanzania. Joining Congo Brazzaville in 2015, Helios Towers has acquired 393 sites from Airtel and currently holds 7,000 towers.

According to Pandya, Helios Towers has managed to link 90 percent of its towers efficient power sources to regulate the downtime, to two seconds per tower per week.

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