$388Mn of new African telecoms infrastructure investments were announced in March 2012. It’s too early to tell whether this is a sign of any kind, but the first quarter of this year has been the weakest for African telecoms investment for 3 years.
On the flip side, it could just be that investment opportunities are now more difficult to come by – both MTN and Maroc Telecom made announcements this month that they were seeking to invest billions more in “bolt on” operations in African countries in which they don’t currently operate, however with nearly $8Bn of M&A done in the last 3 years targets are getting bigger and more expensive (and that doesn’t include the $10.75Bn Airtel spent on Zain, because it was officially done in Kuwait).
The standout deal was actually the smallest. Movicel in Angola spent $10Mn to buy a stock of 100,000 3G enabled tablets from Datawind. By my estimation, there are fewer than half a million PCs in Angola, so this one order almost certainly means that Datawind will be the largest computer supplier in the country this year. I’ve long thought that the tablet, like the smartphone will not be the computing device for Africa, but perhaps it will be the appetiser that will catalyse demand. Datawind’s tablets, incidentally, are Android-based and pretty rudimentary. Everyone has to start somewhere...
Elsewhere, Eaton Towers joined American Tower in acquiring tower infrastructure in Uganda. American Tower’s deal with MTN netted them 1,000 towers, whereas Eaton’s more complex acquisition of 300 towers from Orange and 400 from Warid got them a total of 700 and an entertaining integration task. The towers business in Africa is still rather hot and I expect a number of large deals in the next couple of quarters as operators seek further opex reductions.
Finally, it was an interesting month for digital media in Africa. First, the Ghanaian government announced that it would support the country’s broadcasters and movie makers in digitising production and distribution. Second, and more excitingly, the African Film Library went live, offering digital rental of African film titles for $5 a movie. While this is rather expensive, it is a starting point for the widespread distribution of Africa’s movie output – Nollywood alone puts out 1,000 movies a year but they are distributed on physical disc and without an organised supply chain. Movies and TV will be a boom industry on the continent over the next decade, in my view.
So there we are: towers, tablets and movies are the best investments in Africa right now. You heard it here first!