The strategic vision of EMEA’s largest independent towerco

Q&A with Issam (Sam) Darwish, Executive Vice Chairman and Group CEO of IHS Towers

Read this article to learn:

  • How IHS Towers transitioned from being a tower builder to EMEA’s largest independent tower company by tower count
  • What the most important factors are in developing a successful towerco
  • The outlook for the Nigerian telecoms sector as the country exits recession
  • What CSR initiatives are being driven by the organisation
  • How the pending Kuwaiti agreement fits into the company’s expansion plans
  • Where IHS sees future opportunities in telecoms infrastructure globally

At the 2017 TowerXchange Industry Awards, Sam Darwish, Executive Vice Chairman and Group CEO of IHS Towers received a Lifetime Achievement Award in recognition of transformational impact that he and IHS have had on the region’s tower industry. TowerXchange were delighted to interview Sam to understand how IHS evolved to the present day and what ambitions the company has for the future.

TowerXchange: Please can you introduce your background and how you got into the telecoms sector?

Sam Darwish, Executive Vice Chairman and Group CEO, IHS Towers:

I am the Executive Vice Chairman and Group CEO of IHS Towers, the largest independent tower operator in Europe, the Middle East and Africa by tower count and the third largest independent multinational tower company globally. I studied Telecommunications Engineering at the American University of Beirut in Lebanon and graduated with honors. I then joined MCI, one of the largest telecoms carriers in the world at the time, in 1992 and became a manager shortly thereafter. During this time, I developed a deep understanding of the telecoms industry and eventually joined the first Lebanese mobile network – Libancell, now called Touch – in 1996. Subsequently, in 1998, I moved to Nigeria where I was appointed Deputy Managing Director of CELIA Motophone Ltd, Nigeria’s first GSM operator.

TowerXchange: What prompted you to found IHS Towers?

Sam Darwish, Executive Vice Chairman and Group CEO, IHS Towers:

Following the Nigerian government’s privatisation of telecommunications in 2001, I co-founded IHS Towers alongside a small group of engineers. This is why IHS has always and will continue to have a strong operating core. We believed there was an opportunity to provide focused passive telecoms infrastructure to enable robust and efficient mobile network coverage. Nigeria, a country of 125 million people in 2001 then only had approximately 600,000 working telephone lines! The potential, as eventually illustrated, was immense.

TowerXchange: Can you explain IHS Towers’ journey from being a Nigerian tower builder to being EMEA’s largest towerco by tower count and one of the largest globally – what were some of the most important steps and milestones in its transformation?

Sam Darwish, Executive Vice Chairman and Group CEO, IHS Towers:

IHS Towers has undergone significant transformation since its inception. We began as a tower builder in 2001 and within few years we were increasingly the company of choice for mobile network operators (MNOs) who needed to build towers in Nigeria. Soon after, and as the number of towers constructed grew exponentially, we converted our business to turnkey site management as the MNOs needed specialised third parties to handle the growing complexities of operating their passive infrastructure. In 2010, we decided to evolve the company into a tower ownership model with a strong focus on the operating elements since that’s what makes up our DNA. This concept, though widespread in America and Europe, was not common in Africa and the broader emerging markets until a few years ago.

By focusing on the passive infrastructure elements, we are able to provide MNOs with efficient infrastructure, thereby enabling operators to concentrate on the active side of the business, including network upgrades and expanding network coverage. We believe that our role within the sector has yielded substantial rewards for all stakeholders: our customers, shareholders and mobile phone end users.

The first seed funding from the international community was $79 million anchored by the IFC. Since then, we have raised $3.4 billion of equity from credible global investors and from respected financial institutions, including Wendel, ECP, KIC, GIC, Goldman Sachs amongst many others, and over $2.0 billion of debt (net of refinancings). Today we own or operate over 23,000 towers and our markets remain poised for continued growth.

TowerXchange: What do you think are some of the most important things that you have learned along the way on how to run a towerco successfully?

Sam Darwish, Executive Vice Chairman and Group CEO, IHS Towers:

The importance of strategy, planning and continued innovation with a primary focus on the quality of operations; it cannot be emphasised enough. After the Nigerian telecommunications sector was privatised, the industry became increasingly competitive, with new providers entering and setting up towers throughout the country. Building and maintaining towers requires significant CAPEX, therefore many operators are increasingly keen to outsource their towers. We focus on our engineering expertise and are committed to building robust and sustainable towers which are continuously monitored via our network operating centers (NOCs). Our NOC model is technologically advanced, monitoring many aspects of our towers including access, faults, power and so on.

TowerXchange: Nigeria, where IHS has its largest footprint, has obviously experienced a turbulent time – what is your outlook for the economy and more specifically the mobile sector in the Nigerian market?

Sam Darwish, Executive Vice Chairman and Group CEO, IHS Towers:

Nigeria slipped into a slowdown due to the receding oil prices last year. However, growth has picked up since. Having said that, people will use their mobile phones in good times and in bad times. Emerging markets have the potential to become the face of global commerce in the years to come – and Nigeria is at the heart of that. According to a recent study from the United Nations, Nigeria’s population is projected to exceed that of the United States shortly before 2050, at which point it would become the third largest country in the world – which means that there will likely be a significant growth in demand for mobile services. Furthermore, GSMA suggests that West Africa will see an average subscriber growth of 6%, resulting in an additional 45 million subscribers by 2020. GSMA also forecasts that by 2020, more than 90% of new mobile subscribers will come from developing regions, thus analysts note there are numerous future growth opportunities within the sector. Please also remember that data penetration remains modest in comparison to more developed areas where 3G and 4G is more prevalent. Almost 70% of mobile SIMs in sub-Saharan Africa are still 2G, versus 11% in the US and 31% in Europe, according to industry analysts.

TowerXchange: IHS has been channeling significant investment into solar-hybrid solutions on sites – can you explain some of the motivating factors behind this and what impact the work has been having?

Sam Darwish, Executive Vice Chairman and Group CEO, IHS Towers:

We have a duty to minimise our impact on the environment and protect not only the places where we operate, but the world at large. Social and environmental sustainability are at the heart of what we do and we strive to use renewable energy wherever possible. IHS Towers has significantly reduced its diesel consumption, in respect of the relevant towers on which hybrid systems have been deployed, currently operates numerous hybrid solar sites throughout its portfolio and continues to roll out new green energy solution systems.

TowerXchange: IHS has also put a major focus on supporting the local communities throughout the African markets in which it operates, can you explain some of the important initiatives that IHS has in place?

Sam Darwish, Executive Vice Chairman and Group CEO, IHS Towers:

Our Corporate Sustainability and Responsibility program is tailored to each country’s operations and focuses on four areas: business ethics, people, environment and education. Our flagship Generator Recycling Program has been rolled out in Cameroon, Côte d’Ivoire, Nigeria, Rwanda, and Zambia, which has increased power access for numerous local communities and institutions, including hospitals, orphanages and schools. Earlier this year, we also rolled out various initiatives in Nigeria to address the ongoing famine crisis, including sponsoring an empowerment and training initiative for 40 women to manage 15 community food service centers and various local school feeding programs across Borno State. The Nigeria team is currently pioneering the construction of a new community food service center which is intended as a platform to feed 15,000 people in Borno State annually and is refurbishing the Queen Amina Girls College campus in Kaduna State which serves over 2,000 girls annually. CSR is important to us as a firm and we remain committed to empowering our local communities.

One of the dear projects close to my heart is the recent launch of our IHS Academy. A one-stop online portal which provides education, training and development for our staff and potentially others. I’m a strong believer in the value of skills acquired through education and training and we continue to invest in such initiatives.

One of the dear projects close to my heart is the recent launch of our IHS Academy. A one-stop online portal which provides education, training and development for our staff and potentially others. I’m a strong believer in the value of skills acquired through education and training and we continue to invest in such initiatives

TowerXchange: IHS has reached an agreement to acquire Zain’s towers in Kuwait – marking the Middle East’s first major tower transaction of scale. What role does IHS see itself playing in the Middle Eastern market and how does this compliment your sub-Saharan African portfolio?

Sam Darwish, Executive Vice Chairman and Group CEO, IHS Towers:

Like most emerging markets, the Middle East is undergoing a period of considerable digitalisation and the role of companies like IHS Towers is becoming increasingly important. While completion remains subject to certain conditions precedent, including regulatory approvals, expansion into the Middle East would complement our existing portfolio because it would allow us to apply our learnings from our business in Africa and is in line with our vision to expand operations in emerging markets – the Kuwait agreement is the first step in demonstrating that.

TowerXchange: We see towercos in the US and Europe in particular diversifying beyond owning macro-sites. Whilst significant new macro-site build is still required across sub-Saharan Africa suggesting there is plenty more business in this yet for the region’s towercos, do you see IHS playing a key role in operating other shared infrastructure in the telecoms sector?

Sam Darwish, Executive Vice Chairman and Group CEO, IHS Towers:

IHS is committed to growing its business and capitalising on new and ancillary technologies such as small cell networks, fibre, and 4G-/5G-capable infrastructure. We are optimistic about the potential of wireless data and we continue to evaluate opportunities that will diversify our footprint in emerging markets.

TowerXchange: Finally can you sum up IHS’ vision for the future; what role does the company see itself playing in the global telecoms sector and what should we be watching out for next from the company?

Sam Darwish, Executive Vice Chairman and Group CEO, IHS Towers:

IHS Towers has come a long way since we were founded in 2001 and we feel that we are only getting started. We see ourselves as enablers of telecom growth by providing the various aspects of the shared networks on the global emerging markets stage. My aspiration is to see IHS Towers continue to be a leading multinational tower company, and I hope and believe that we will be at the forefront of meeting the demand for an inclusive wireless communications future that helps improve the lives of billions of people all over the world.

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