Versatile Amphibian

The market went tower mad (or should that be "mast crazy"?) in October, with large sales of cellular towers in the USA , Brazil , Cameroon and Cote d'Ivoire . Nearly $3b was spent on assets that the buyers - generally infrastructure or private equity funds - thinking they will represent an excellent long term investment as the market goes increasingly mobile.* One thing I noticed in analysing the amounts being paid was that once again African operators sold off their assets on the cheap. The chart shows valuations of tower infrastructure globally for the last three years. The orange dots are African. Even if you remove the inflating effects of the USA from the data, it's clear that African countries underperform in asset sales. And these aren't wartorn countries ruled by tinpot dictators. Both Cameroon and Cote d'Ivoire are reasonably stable growth economies with 20m citizens. I suppose we should thank market capitalism for asset owners seeking an early...

In geekier moments, it entertains me that mobile telecoms towers – one of the dullest parts of the TMT world - are also one of the hottest areas in telecoms rights now. Nowhere is this more true than in Africa, which regular readers will know is the market I find most interesting. This post focuses on the opportunity in towers in Africa. Cellular towers are the building blocks of mobile telephone networks. Typically they consist of a pylon on a leased site (“passive” network components), to which is attached the base station and antenna (“active” network components). In a country like the UK the average network has about 14,000 of these location, many of which are shared. In India, Airtel alone has over 70,000 towers, whereas in Africa networks even in the largest countries like Nigeria make do with a few thousand apiece. The latter fact hints at why towers are hot property and why the three largest infrastructure companies are involved in a land grab for these assets. Tower sharin...

$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 Da...

$723Mn of investments in African telecoms infrastructure were announced in December 2011, taking total publicly released investments for the year to $10.2Bn. Towers remain a hot market, with American Tower and Vodacom investing a total of $264Mn for a Ugandan towers joint venture. My estimate is that American Tower paid about $175,000 per tower, which looks like a good deal for Vodacom - $100,000 is the mean value for towers in comparable African markets this year and the only emerging market deal to top this was American Tower's almost simultaneous acquisition of 2,500 Pegaso PCS' towers at $200,000 per unit in the much larger and more mature Mexican market. If this Uganda deal was the largest of the month, probably the most important news was Cameroon's activation of 10GBit/s of metro fibre in the second city of Douala. This upgrade from the previous 20MBit/s loop should have massive benefits for the public and service sectors in the city. I think that this kind of small ...