Independent tower companies in Nigeria are shopping for fresh funds, particularly from banks and international finance institutions, to up- grade Base Transceiver Stations (BTS) they acquired from three of the big GSM operators in the country. In a business model predicated on cutting operational cost, the GSM companies, South Africa’s MTN, India’s Airtel and United Arab Emirates’ (UAE) Etisalat, out- sourced the management of about 30,000 towers to IHS, Helios Towers and America Tower Corporation (ATC) in a deal valued at about $3 billion. But concerns are mounting in industry circles that the independent tower firms stand the risk of lower returns on investment if the required upgrades are not affected.
it was gathered that most of these towers acquired by independent tower companies are in need of upgrade, as they were original built to accommodate one telecoms company (telco). A senior executive at Helios Towers, who pleaded anonymity, said “most of these towers were built without taking collocation into consideration, which is critical to sustaining industry growth. “At the time, mobile operators were focused on achieving national cover- age.
The current situation restricts us from servicing more operators. For these telecom towers to be of better economic value to us, we must upgrade them to collocation standard, which will allow us accommodate more operators and make more money”, the official said in an interview. BusinessDay gathered that such upgrades are in the area of land space to accommodate other operators’ base stations and generators and height of the towers. Prior to this time, tower companies built towers in anticipation of demand by operators.
“This move enabled us to deliver service to operators anywhere and anytime. If any mobile operator comes to us and says he wants to expand his network, gives us number of towers and locations, we build for them,” he said. Industry observers, however, are of the view that the alleviation of this operational and financial burden through outsourcing of these telecoms towers is already enabling mobile operators to increase their focus on developing innovative services, which would help them to reduce churn and boost Average Revenue per User (ARPUs) as the nation’s telecoms market matures.
