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IHS Towers poised for growth in African and Middle East markets


Towerco seals largest ever bond issuance

In Q3 of 2019 IHS Towers announced a successful refinancing deal of its 2021 bond, raising a record US$1.3bn. The telecoms infrastructure giant is poised to take advantage of the robust market conditions in the African market and new areas of growth in the Middle East and North African territories. TowerXchange talk to Sam Darwish, Group CEO on the towerco’s plans to deploy this new capital and ambitions for future growth. 

IHS Towers are Gold Sponsors of the 2nd Annual TowerXchange Meetup MENA 2020, in Dubai on the 28-29 January, find more details on how you can meet them on site here

Download TowerXchange MENA Dossier 2020

TowerXchange: Congratulations on your US$1.3bn bond issuance, why did IHS Towers raise capital in this way and what does it mean for your ‘digestive capacity’ to acquire or build more towers?

Sam Darwish, Group CEO, IHS Towers:

We were really pleased with the support we received during our recent bond issuance –the largest issuance ever by an African corporate. We set out to capitalise on our three-year track record of performance in the debt capital markets despite challenging conditions over that time. This and greater familiarity with our Nigerian business helped deliver the largest high yield corporate African bond. We achieved numerous objectives with the refinancing including reducing our cost of debt, significantly extending and splitting the maturities of the bonds, simplifying our Nigeria capital structure and increasing our borrowings a little in the most mature business within the broader IHS Group. Our strategy is to continue growing through a combination of building additional towers in existing markets, introducing innovative solutions for existing clients and executing acquisitions in new markets – we are always evaluating our options and determining where best to deploy our capital.

TowerXchange: Do you think the entry of SBA, the exit of Eaton and Helios going public mark a significant shift for the African telecom tower market?

Sam Darwish, Group CEO, IHS Towers:

These recent developments are evidence of strong and growing appetite for access to the African towerco market – a trend that we have witnessed for several years now. Large US-listed businesses such as American Tower and SBA Communications deploying billions of dollars into Africa, and Helios Towers attracting further institutional investors through its London listing, provide validation of the African towerco business model and underline the interest in the sector. We remain excited about the market prospects going forward.

Figure 1: IHS Towers’ tower portfolio and expected acquisitions across MEA


TowerXchange: You’re Africa’s largest towerco, but can you tell us why an expansion into the Middle East fits your investment thesis? How do you assess which Middle Eastern market is appropriate?

Sam Darwish, Group CEO, IHS Towers:

Investing in the Middle East is another important step in our growth strategy to apply the expertise and capabilities that we have developed over the past 18 years to additional global markets. Upon close of either the Kuwait or Saudi Arabia deals with Zain Group, we could be the first independent towerco in the region and are well-placed to serve the increasing demands of a tech-savvy, data hungry population.

As the rollout of 5G services continues across the region, many anticipate exponential demand for new spectrum frequencies that travel a shorter distance, which will require additional towers. GSMA estimates a 16% 5G adoption rate among Gulf States by 2025 – the highest in the MENA region – with 81% of the population using smartphones. At least 15 MENA countries, including Kuwait and Saudi Arabia, are expected to have rolled-out 5G commercially by then. We are keen for IHS Towers to be one of the key enablers of this technological revolution.

TowerXchange: What lessons from Africa can IHS Towers bring to the Middle East to accelerate the adoption of infrastructure sharing in a new region?

Sam Darwish, Group CEO, IHS Towers:

IHS Towers has a unique African success story with ambitions to duplicate this success outside of Africa, including the Middle East.

IHS Towers is working to be the first independent tower operator in the Middle East, and the lessons we are bringing to this market first and foremost include helping MNOs become comfortable with the tower sharing model, given we are an independent operator of infrastructure. This does not exist in the Middle East today. Additionally, we will introduce the value of bespoke Network Operating Centres to optimise solutions, radio-frequency planning teamwork with specific operators, as well as innovative tower solutions e.g. in-building solutions, street furniture antenna and camouflage towers in urban areas, the roll-out of fibre to support MNO customers’ digital solutions and a myriad of green energy solutions.

TowerXchange: How can IHS Towers transfer energy innovations and other operations from Africa to markets in the Middle East?

Sam Darwish, Group CEO, IHS Towers:

The energy solutions that are required are bespoke to each and every market.  The energy innovations we deliver can cover all geographies, and we are confident the technologies we deploy – including our hybrid and solar solutions – can be transferred to the Middle East and beyond, where required.

Moreover, the IHS Academy online training platform also remains a popular, dynamic and accessible learning platform for employees and vendors. This year we surpassed our 2018 course completions and new courses are being continuously added to the 1,800 existing courses.

We are also proud of our Group-wide Sustainability Strategy, focused on four key pillars: Education, Environment, People and Ethics, and based on the UN Sustainable Development Goals. As we expand into the Middle East, we will look to bring that same ethos. By investing in our tower communities through multilateral partnerships and educational initiatives we have helped push STEM initiatives to help create the next generation of technology and infrastructure talent. Talent which will be the enabler in an infrastructure sharing landscape.

TowerXchange: The Gulf States are developed telecom markets and MNOs are less capital constrained, how have you adjusted your offer for those markets?

Sam Darwish, Group CEO, IHS Towers:

MNOs in the region are on the cusp of multi-billion investments in upgrades and 5G roll-out and are looking for ways to optimise this network roll-out.  We will help MNOs achieve their infrastructure goals quickly and efficiently by bringing the independent tower sharing model to the region. Additionally, our strategy in the Gulf States seeks to support local initiatives — such as Saudi Arabia’s Vision 2030 – and promotes the purchase of physical tower infrastructure, enabling MNOs to expand their networks quickly and at a lower cost, while receiving best-in-class service.

Our services are aligned with our mission to help accelerate the development of telecommunications infrastructure throughout the region, which includes expanded coverage and capacity to further improve network quality and 5G upgrades.

TowerXchange: How are towercos going to need to change in the 5G era? What will be the role for street furniture, small cells and inbuilding solutions?

Sam Darwish, Group CEO, IHS Towers:

5G presents a tremendous growth opportunity for towercos because it requires investment in new and upgraded sites that are able to broadcast signal better in order to meet increased data usage demand. For towercos, this requires fast adaption and the ability to deploy 5G spectrum bands across cell sites. The towerco service offerings will evolve with 5G, but these are products we already offer today at IHS Towers. We are at the forefront of this changing era.

IHS Towers are Gold Sponsors of the 2nd Annual TowerXchange Meetup MENA 2020, in Dubai on the 28-29 January, find more details on how you can meet them on site here

Download TowerXchange MENA Dossier 2020