TowerXchange-Issue_10

Tower Xchange
Tower Xchange
Plus! Huawei and Ericsson on the implications of tower deals for managed services
ISSUE 10 | October 2014 | www.towerxchange.com
How to raise capital for towers
Debt, bond issuance and the impact of
country risk and MNO consolidation
Journal of the telecom tower industry in Africa, CALA and Asia
TowerXchange Africa:
< 17,877 towers sold: new African tower market analysis
< How Etisalat Nigeria accelerated the tower sale process
< Case studies on Nigeria, Kenya, Cameroon, South Africa
TowerXchange Americas:
< Latest tower counts and market size data for CALA
< Costa Rica opens up to operators and towercos
< Interview with José Escobar, President of Catalina
TowerXchange Asia:
< Umang Das predicts bright future for India and Myanmar
< The structure of the tower industry in Malaysia
< How Digicel has excelled in its first towerco venture
Terry Rhodes back on familiar ground:
Eaton acquires 3,500 African towers from Airtel

www.towerxchange.com | TowerXchange Meetup | 11| TowerXchange Issue 10 | www.towerxchange.com2
Chairman: Daniel Lee
Managing Director
Intrepid Advisory Partners
Michel Faivre
Directeur Programme Partage
d’Infrastructure AMEA
France Telecom-Orange
Jim Eisenstein
Chairman & CEO
Grupo TorreSur
Alan Harper
CEO
Eaton Towers
Marc Ganzi
President, Digital Bridge Holdings &
Mexico Tower Partners
Thorsten Schaefer
CEO
azeti Networks
Areef Kassam
Director of Infrastructure
GSMA Mobile for Development
Andrew Doyle
Managing Director
Tech & Comms Practice
Mott MacDonald
Nina Triantis
Managing Director, Global
Head of Telecoms & Media
Standard Bank
John Stevens
CEO
Irrawaddy Green Towers
Chuck Green
CEO
Helios Towers Africa
Hal Hess
EVP, International Operations and
President, EMEA and Latin America
American Tower
John Stevens
CEO
Irrawaddy Green Towers
Nobel Tanihaha
President Director
PT SOLUSI TUNAS PRATAMA (STP)
Tunde Titilayo
Vice Chairman
SWAP International
David Meganck
Founder & COO
Acsys
Ayman Al Adl
Executive Director, TMT MEA
Standard Chartered Bank
Adeel Bajwa
Senior GM of Legal Affairs and
Contracts
Warid Telecom
Chris Gabriel
former CEO, Zain Africa
Senior Adviser, Macquarie Group
Chairman, Clean Power Systems
Torsten Esbjørn
Regional Director, Africa
Ramboll
Kurt Bagwell
President International
SBA Communications
Riana Donaldson
Manager: International Network
Operations Support
Vodacom
James Maclaurin
Former CEO
edotco
Inder Bajaj
CEO
Helios Towers Nigeria
Jeffrey Eldredge
Partner
Vinson & Elkins
Gary Staunton
CEO
Likusasa Group
Ahjeeth JaiJai
Consultant
Investec
Laurentius Human
Senior Director
Corporate Finance
Jabil
Suresh Sidhu
CEO
edotco
Aniko Szigetvari
Head, Africa & Latin America TMT
IFC
With special thanks to the TowerXchange “Inner Circle”
About TowerXchange
TowerXchange is your independent community
for operators, towercos, investors and
suppliers interested in African, Latin American
and Asian towers. We’re a community of
practitioners formed to promote and accelerate
infrastructure sharing in Africa, Latin America
and Asia. TowerXchange don’t build, operate
or invest in towers; we’re a neutral community
host and commentator on African, Latin
American and Asian telecoms infrastructure.
The TowerXchange Journal is free to qualifying
recipients. We also provide webinars and
regular meetups. TowerXchange monetizes
this community through hosting annual
Meetups and the sale of advertising, without
compromising editorial integrity.
TowerXchange was founded by Kieron
Osmotherly, a TMT community host and events
organizer with 16 years’ experience, and is
governed with the support and advice of the
TowerXchange “Inner Circle” – an informal
network of advisors
Our informal network of advisers:
© 2014 Site Seven Media Ltd. All rights reserved. Neither the
whole nor any substantial part of this publication may be re-
produced, stored in a retrieval system, or transmitted by any
means without the prior permission of Site Seven Media Ltd.
Short extracts may be quoted if TowerXchange is cited as the
source. TowerXchange is a trading name of Site Seven Media
Ltd, registered in the UK. Company number 8293930.

Contents
Regular features
29 Africa, Asia, CALA analyses and news
64 TowerXchange Meetup Africa agenda
133 TowerXchange Meetup Asia agenda
37&1595&46 35&122
168
CALA: Tower counts,
transactions and Costa Rica
Africa: Nigeria, Kenya,
Cameroon and South Africa
Asia: India, Malaysia
and Myanmar
Impact of tower deals on
managed services
37 CALA tower industry news
39 CALA tower counts and transactions
159 TowerXchange’s Costa Rica case study
165 Interview: José Escobar, President, Catalina
5 Terry Rhodes interview, Airtel tower sale analysis
46 Nigeria migrates to towerco business model
84 Introduction to the Kenyan tower market
91 Cameroon: YooMee, BMI; SA: Eaton, Square1
35 Asia tower counts and transactions
125 Umang Das: the future for India & Myanmar
142 TowerXchange’s Malaysia case study
152 Interview: Oliver Coughlan, CEO, Digicel MTC
108 How to raise capital
for towers
109 BMI: impact of country risk on African towers
114 Norton Rose’s introduction to debt finance
117 HTN’s successful bond issuance
119 UBS: Consolidation among MNOs and towercos
169 Huawei link MS with network quality assurance
172 Ericsson: collaboration with MNOs and towercos
175 Mer, TKM Maestro, i engineering, and Camusat
190 TowerXchange’s who’s who in managed services
www.towerxchange.com | TowerXchange Issue 10 | 3| TowerXchange Issue 6 | www.towerxchange.com3
Special features
41 Delta Partners on Middle East towers
195 Energy storage: NorthStar and Amara Raja
204 TowerPower: Huawei, Mecc Alte & Bladon Jets
219 Rooftops, masts and towers: TIA and Ganges
229 RMS, ILM and SMS: WebNMS and Infozech
236 H&S: NATE and Capital Safety
Source: BMI
80
TanzaniaCote
d’Ivoire
Rw
anda
D
RC
N
igeria
U
ganda
M
alaw
i
Zam
biaSouth
A
frica
K
enya
Sudan
G
hana
70
60
50
40
30
20
10
Economic Growth
Monetary Policy
Fiscal Policy
External Factors

Africa’s leading,
independent,
telecom tower
company
HTA acquires, builds and manages wireless
telecom infrastructure, leasing it to mobile
network operators across Ghana, Tanzania
and the Democratic Republic of Congo.
HTA’s model of shared telecoms infrastructure,
and its scale, helps to deliver improved
efficiency and network quality and reliability
for operators, reduced costs for users and
increased accessibility.
Find out more about our business
www.heliostowersafrica.com

Terry Rhodes back on familiar ground:
Eaton acquires 3,500 African towers from Airtel
Exclusive interview with Eaton Co-founder; from deal structure and operational
transition plans, to improvement capex and the implications for BTS
www.towerxchange.com | TowerXchange Issue 10 | 5| TowerXchange Issue 10 | www.towerxchange.comXX
TowerXchange: Respecting the fact that Airtel
don’t want to disclose which countries are
included, we can deduce from the announcement
that the transaction must include Airtel’s towers
in Ghana, Uganda and Kenya. What are you able
to tell us about Eaton’s footprint in SSA after this
transaction?
Terry Rhodes, Co-founder and Director, Eaton
Towers: This agreement to add 3,500 Airtel towers
in six countries gives Eaton Towers the most
diversified footprint of the African towercos,
transforms the scale of our business and brings the
total number of towers we own and manage to over
5,000.
This is the first time anyone’s signed so many deals
concurrently, which illustrates the effort put into
negotiations by both parties and their advisors.
Eaton hired Mott MacDonald for market due
diligence, Moelis as our financial adviser, Allen
& Overy for legal and PwC for tax advice. Airtel
managed the process largely in-house with help
from their external lawyers
This acquisition will supplement our established
operations in Ghana, Kenya and Uganda, where
we already have strong relationships with the
local mobile operators. Airtel prefer that we don’t
disclose the other countries whilst regulatory
dialogues are ongoing.
However, I can reveal that we chose not to go to into
Nigeria after IHS recently bulked up their portfolio
in the country significantly. Instead we’ve focused
Read this article to learn:
< Creating the most diversified footprint of the African towercos: supplementing Eaton’s established
operations and entering three new markets
< Guidance on the valuation, financing and structure of the transaction
< Eaton’s operational transition plan and improvement capex budget
< Securing right of first refusal on BTS, and the impact of this deal on BTS opportunities
< Why their operating credibility cements Africa’s ‘Big Four’ towerco’s leadership position – and what
their next phase of development might look like
Keywords: News, Towercos, Acquisition, Investment,
EBITDA, Capex, Deal Structure, Valuation, Transfer Assets,
Co-locations, Capacity Enhancements, Market Entry, Build-
to-Suit, Exit Strategy, NOC, Multi-Country Partner, Sale &
Leaseback, Private Equity, Debt Finance, C-Level Perspective,
Improvement Capex, Infrastructure Sharing, Africa, Ghana,
Uganda, Kenya, Airtel, Mott MacDonald, Moelis, Allen & Overy,
PwC, Eaton Towers
Congratulations to Eaton Towers and Bharti Airtel on the
conclusion of a year-long negotiation, culminating in the
announcement of an agreement for Airtel to sell over 3,500
towers in six countries to Eaton. Terry Rhodes, Co-founder and
Director of Eaton Towers, is uniquely qualified to discuss the
transaction; as a 20 year veteran of African telecoms and as one
of the co-founders of Celtel, many of Airtel’s towers were built
under Terry’s watch before being sold to Zain then Airtel and
now Eaton.
Terry Rhodes, Co-founder and Director, Eaton Towers

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on markets with 500-1000 Airtel towers where we’re
either strengthening our existing position or where
we’re the first towerco in the market.
There has been an outbreak of rationality – there
will be no more experiences like Ghana with
multiple towercos chasing same assets – with this
deal we’re focusing on markets where we have an
established presence or new markets where there
is an opportunity to have a regional presence.
We weren’t bidding for the same towers as Helios
Towers Africa, for example, not as a result of any
collusion, it just fell that way naturally.
TowerXchange: What can you tell us about the
structure of the deal?
Towers: It’s a straight 100% sale and leaseback.
No joint venture equity stake has been retained by
Airtel. So Eaton Towers continues to be completely
independent with no operators sitting in our
boardrooms.
The deal includes all the Airtel towers in each
country, with a ten-year anchor tenant lease.
TowerXchange: Appreciating the valuation
is not in the public domain, can you give
TowerXchange readers some guidance?
Towers: At beginning of the process, the Indian
press speculated that Airtel had an objective to
realise US$1.8-2bn from the sale of their African
towers. With this deal and the sale of 3,100 towers
to Helios Tower Africa, I believe they are broadly on
track to achieve that, with their portfolio in Nigeria
still pending.
You can usually assume African towers will raise
US$150-200k per tower unless the deal is structured
to focus on opex reduction, which is not the case
in this instance; Airtel is using the cash released to
retire debt.
TowerXchange: Are Eaton raising new capital to
finance the deal?
Towers: We have deployed very little of our third
round of equity finance which raised US$195mn
in Q1 2013 - most of that capital is still available.
Plus, as you would expect, we are in negotiation
with banks to provide debt finance in each country
before the closing of the deal, which typically takes
3-6 months.
We do currently have an active fund raising process,
being led by Moelis, seeking further equity and debt
finance ready for new opportunities.
TowerXchange: Does this transaction conclude
Eaton Towers’ interest in Airtel’s African towers?
Towers: We were originally negotiating for the
towers in seven countries and have announced
the acquisition of six. Airtel have several thousand
African towers still for sale.
With the deals declared to date including 3,500 sold
to us and 3,100 sold to Helios Towers Africa, there
are still plenty of Airtel towers left on the market.
TowerXchange: How has the creation of Airtel’s
Africa Towers subsidiaries affected the transfer
of assets?
Towers: The legal structures are different for
different countries. In markets where Airtel has
transferred their tower assets into a separate Africa
Towers towerco, we’re acquiring that towerco.
The timetable for our operational transition plan is
accelerated in countries where we already have a
team on the ground, compared with the countries
“ “
You can usually assume African
towers will raise US$150-200k
per tower unless the deal is
structured to focus on opex
reduction, which is not the case
in this instance; Airtel is using
the cash released to retire debt

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where we’re setting up a new operation.
Eaton’s COO Pankaj Kulshrestha has run similar
transition plans integrating acquisitions during his
tenure with American Tower in India; it’s all about
the detail, from asset management to regulatory
issues and tax structures which need to be correct
before the real business starts: providing superior
service to customers.
TowerXchange: Are there many tenants on
these towers prior to the deal? Or will you have
to evangelise infrastructure sharing in the
markets where Eaton will be the first towerco?
Towers: Yes there are some colocations in each
country where we’re acquiring Airtel towers, but
we want to increase tenancy ratios significantly.
Each of our new markets has also got one or more
of Africa’s other leading MNOs who are in favour
of partnering with towercos at a corporate level as
they’ve sold towers themselves. So entering new
markets is not about evangelising infrastructure
sharing – it’s about implementing and improving
local operations, and about more about moving
from bi-lateral swaps to full commercial
arrangements with no restrictions.
TowerXchange: Talk to us about the resourcing
of your new operations in the green field
markets.
Towers: Eaton had already added to our
management team and had recruited several more
people provisionally who will now join us. Plus
we will take some people from Airtel – and we are
always trying to recruit the best people locally.
We like to operate our own independent NOC
rather than using the operator’s, so after an initial
period, that’s another priority. We had already
established legal structures and local offices in the
new countries – so now all we need do is accelerate
our programme.
TowerXchange: What is the improvement
capex budget to refurbish these towers for co-
location?
Towers: We have budgeted for refurbishment and
upgrade capex, both to make towers available for
co-location, and to make sure we can meet the
service level targets Airtel have set.
The improvement capex required per tower
depends on the average lifetime of the structure;
how recently they were built, the quality of the
steel and the build, and whether they were built
with capacity for multiple tenants – it can vary
significantly within a portfolio. Some of these
towers date back to my Celtel days, and they’ve
lasted well.
(Editor: as we’ve seen with previous tower
transactions, sometimes maintenance projects
are postponed when tower portfolios are for
sale. With Airtel’s towers having been for
sale for a year, there’s bound to be a lag in
maintenance investment which needs catching
up. TowerXchange estimate that the budget will be
around US$10-15k per tower).
TowerXchange: Does the deal include any build
to suit (BTS) programmes in these markets?
What will be the effect of the current wave of
sale and leasebacks on BTS in Africa, now that
so many more towers are being made available
by independent towercos for co-location?
Towers: We are expecting to undertake some
BTS programmes, but scale of BTS opportunities
depends on demand and quality in each market.
When towercos enter a new market, you often
see a big pickup in co-locations as it’s quicker and
cheaper than building towers, but when the co-
location opportunities start being exhausted, BTS
programmes are typically led by the towerco in
locations where there is the possibility of a second
tenant.
Like most towercos, Eaton like to secure right of
first refusal on BTS, but we need to make sure that
the new towers are economic in their own right
– as we are doing in South Africa where we have
chosen to build a portfolio from scratch rather than
to acquire towers.
TowerXchange: Why did Eaton choose to bid for
these particular towers?

Towers: Eaton evaluated the countries individually
based on the existing market structure, competitive
position and growth potential. It helped that,
personally, I was familiar from my Celtel days with
all the countries in which Eaton has acquired Airtel
towers.
TowerXchange: Why did Airtel choose to partner
with Eaton?
Towers: While Bharti Airtel are exploring various
options to pay down debt, selling towers is a
ten-year deal, it’s not like a normal M&A deal
from which you can just sell and walk away –
your counterparts have to be able to perform
operationally.
Airtel have been a significant customer of Eaton’s
in Ghana and in Uganda, so they know our
operational track record and they know we can
deliver. MNO’s emphasis on knowing and trusting
who they do business with is one of the reasons you
don’t see many new entrant towercos successfully
coming into Africa.
That’s why operating credibility is so important – if
tower deals were just about maximising cash, the
MNOs could sell directly to, say, a private equity
house. But the operational complexity of Africa
means private equity has preferred to invest in
companies like Eaton with management teams with
operational expertise.
The four African tower deals in the last few weeks
cement the status of the four serious towercos in the
market.
TowerXchange: Those three deals (Eaton
acquiring 3,500 Airtel towers, Helios Towers
Africa acquiring 3,100 Airtel towers and IHS
acquiring 11,287 towers from Etisalat and MTN
Nigeria) bring the ownership of African towers
by independent towercos above 25%, with over
41,000 towers now owned and operated by
towercos, and a over 20,000 more towers still
on the market or coming to market in the next
quarter. At what point should we consider the
African tower market saturated for independent
towercos?
Towers: I think we’re all getting more selective
about the countries we’ll invest in and the deal
structures we’ll agree to.
Tower deals won’t be as concentrated in SSA
in future as they are today – there are also
opportunities in North Africa. But the very
small markets are not really interesting now
for companies with 5000+ portfolios. The Airtel
transaction has attracted interest because the
towers sold were in markets of decent size.
TowerXchange: What will be the next phase of
development for Africa’s towercos?
Towers: Everyone participating in this latest round
of deals will spend a year or so getting their arms
around their new assets.
The next phase may see financial rather than
operator deals – consolidation and potential
changes of ownership. Our strategy has been to
develop a balanced portfolio across Africa where
we are not over-dependent on one country or
one customer. This deal gives Eaton Towers the
most diversified portfolio in Africa – which is
particularly attractive to investors seeking to
minimise risk and maximise returns.
TowerXchange: Does the progression toward
major capital events preclude Africa’s towercos
from making capitally intensive investments,
such as hybrid energy and energy storage
innovations?
Towers: While as a management team we are
certainly concerned about total cash flow, the
financial community still tend to measure towercos’
performance in terms of EBITDA – they spend less
time looking at capex, so operating performance
matters. If investment in capitally intensive assets
reduces opex and improves EBITDA, we’re always
going to be interested
Terry Rhodes and Keith Boyd will be representing
Eaton Towers, and hosting several round tables,
at the TowerXchange Meetup Africa on October 20
and 21 in Johannesburg. To reserve one of the last
remaining tickets, visit:
www.towerxchange.com/meetups/africa

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TowerXchange’s forecast for how
the Airtel towers will be distributed
among Africa’s ‘Big Four’ towercos
Plus snapshots of the tower market in each Airtel country
Which towercos acquired Airtel’s towers in
each African country?
According to TowerXchange research, Eaton
Towers has acquired Airtel’s towers in Ghana,
Niger, Burkina Faso, Kenya, Uganda and Malawi.
Our research also suggests that Helios Towers
Africa has acquired Airtel’s towers in Tanzania,
Chad, DRC and Congo Brazzaville.
Burkina Faso: Eaton Towers will be
introducing the independent towerco
business model to Burkina Faso, where Telemob
and Airtel vie for market leadership, with Telecel
not far behind. 3G was launched in 2013. Mobile
penetration was 72.1% at y/e 2013, according to
BMI.
Chad: Helios Towers Africa are the first
and only towerco in Chad, where their
old friends Tigo compete with new counterparts
Airtel and national operator Sotel Tchad. Airtel has
launched 3G, Tigo has a 3G/LTE license and plans
to launch imminently. Mobile penetration was just
36.8% at y/e 2013, according to BMI.
Congo Brazzaville: Helios Towers
Africa will hop over the Congo river
(not literally of course) into Congo Brazzaville,
with obvious potential to share resources HTA’s
neighboring operations in DRC and with the
imminent acquisition of towers in Gabon. Congo
B saw in-market consolidation with Airtel’s recent
acquisition of Warid vaulting them over MTN to
< Which towercos acquired Airtel’s towers in each African country?
< How did Africa Towers add value to the sites pre-sale?
< How will the sale of 15,000+ Airtel towers across Africa affect the landscape of the tower industry?
< How have the capital markets responded to Bharti Airtel’s African tower sale?
Airtel’s tower sale enables Africa’s towercos to achieve scale and
to diversify country and counterparty risk, while the transactions
will enable Bharti Airtel to retire ~US$2.5bn of their estimated
US$10bn debt. As the deals have been announced, frustratingly
the countries involved have not been confirmed – here we present
TowerXchange’s educated guess as to which towerco is acquiring
the towers in which country, together with an overview of the
tower market in each country.
Keywords: News, MNOs, Towercos, Research, Deal Structure,
Acquisition, 3G, First Mover Advantage, ARPU, Country
Risk, Anchor Tenant, Sale & Leaseback, Private Equity,
Infrastructure Sharing, Africa, Burkina Faso, Chad, Congo
Brazzaville, Democratic Republic of Congo, Ghana, Gabon,
Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Sierra
Leone, Tanzania, Uganda, Zambia, American Tower, IHS
Africa, Helios Towers Africa, Helios Towers Nigeria, Eaton
Towers, Airtel
By Kieron Osmotherly, CEO, TowerXchange

become market leaders. Bintel’s Azur are ranked a
distant third.
DRC: Helios Towers Africa will add Airtel’s
tower network, renowned as the farthest
reaching in DRC, to the more urban-centric 729
towers acquired from Tigo in 2010. DRC is a
poster-child for growth potential, with just 4,000
towers covering a population of 75.5mn (that’s
18,875 per site!), spread over 2.3mn sq km, and
mobile penetration still under 20%. DRC’s scale
and growth potential has attracted four tier one
MNOs, Airtel, Orange, Tigo and Vodacom, while
Africell quickly grabbed 20% market share
through aggressive pricing. When TowerXchange
spoke to Africell in July 2014, the company had
co-located on 180 Helios Tower Africa sites, and
had not yet felt the need to build any of their own
towers.
Ghana: Eaton is already active in Ghana,
where they will add Airtel’s towers to
the 750 Vodafone towers they are managing with
license to lease. There are three major towercos
active in Ghana, which have been snapping up
tenancies for over three years. Back in 2010, Helios
Towers Africa setup a joint venture towerco with
Millicom Tigo as minority partners, to which 750
towers were transferred. Shortly afterward Eaton
Towers closed their deal with Vodafone Ghana,
then American Tower set up another joint venture
with MTN to which 1,876 towers were transferred
(ATC Ghana now markets 1,998 Ghanaian towers,
on which the tenancy ratio was 1.4, as reported at
the end of 2013). MTN leads a similarly crowded
How TowerXchange forecast the Airtel towers will be divided among
Africa’s towercos
Eaton Towers
IHS
American Tower and/or Helios Towers Nigeria
Unknown
Source: TowerXchange

smart integrated energy
SYNERGi

market for operators, followed by Vodafone,
Tigo, Airtel and Glo, with Expresso struggling
to establish a foothold. Mobile penetration has
passed 100% within Ghana’s population of 26mn.
Kenya: Eaton Towers haven’t had it easy
in Kenya. Their contract to manage with
license to lease 1,000 Orange / Telkom Kenya
towers was cancelled after their counterparty hit
financial troubles – Orange are rumored to be
keen to exit Kenya, while yu (Essar Telecom) have
already divided up their assets and left. Why are
they leaving? It’s tough competing with Safaricom,
their 68% market share, their deserved reputation
for innovation, and their sticky mobile money
service, the world famous M-PESA, through which
25% of Kenya’s GNP now flows. With 16% market
share, Airtel is a healthier counterpart for Eaton,
but with uncertainty surrounding the #3 and
#4 ranked operators, and an ‘Open Access’ LTE
network mooted, the economic fundamentals in
Kenya may be more attractive than the operator
landscape, at least in the short term. There are
around 6,000 towers in Kenya, of which around
3,500 have 3G antenna.
Malawi: Eaton’s acquisition of Airtel’s
towers in Malawi marks the debut of the
independent towerco business model in one of
Africa’s most under-developed telecom markets.
According to Mott MacDonald, mobile penetration
is just 35% in Malawi, and growing at just 2.3%.
Airtel lead a dupoloy with TNM. 3G was launched
as long ago as 2009. According to the GSMA,
geographical coverage is 79%, with 94% of the
Malawian population covered, with around 800
towers in the country.
Niger: When Eaton Towers opens up the
first towerco in Niger shortly, they’ll need
to be ready to engage with a challenging energy
logistics scenario, low population density, and
sub US$5 ARPU. Airtel has recently secured a 3G
license in Niger where it competes with Orange,
SahelCom and Moov (recently sold by Etisalat
to Maroc Telecom). Mobile penetration was just
34.8% at y/e 2013, according to BMI.
Uganda: Eaton Towers will be adding
Airtel’s Ugandan towers to the 700 towers
they acquired from Orange and Warid back in
2012. Airtel since acquired Warid, while Orange
sold out to Africell. Uganda remains ripe for
further in-market consolidation, with seven
licensed MNOs. American Tower is also active
in Uganda, where they have a joint venture with
MTN and currently market 1,226 towers. At y/e
2013 ATC Uganda’s tenancy ratio was 1.1.
Tanzania: By adding Airtel’s towers to
those already acquired from Tigo and
Vodacom, Helios Towers Africa now has over 75%
of the towers in a country which couldn’t be more
perfectly setup for infrastructure sharing. Each
of Tanzania’s four main operators (to which one
must add Zantel), is dominant in a different region
of the country, providing a strong incentive for
co-location to accelerate nationwide coverage.
Substantial BTS programmes are also under way,
led by Vodacom.
Which towercos are the most likely buyers of
Airtel’s remaining towers?
Gabon: TowerXchange sources suggest
Helios Towers Africa have agreed in
principle to acquire Airtel’s towers in Gabon, and
the deal is pending regulatory approval. Gabon’s
oil wealth is partly responsible for the country
having one of Africa’s few mobile penetration
rates above 100%. Airtel competes with Libertis,
Azur and Moov, recently sold by Etisalat to Maroc
Telecom.
Madagascar: We understand Eaton
Towers are in pole position to acquire
Airtel’s towers in Madagascar, with the deal agreed
in principle and pending regulatory approval.
Airtel are the market leaders in a Madagascar
with around 40% of subscribers, with TELMA and
Orange splitting the remainder between them.
Mobile penetration remains around the 30% mark.
Madagascan telcos are already familiar with the
concept of independent towercos after the success
of TowerCo of Madagascar, formed from an initial
carve out of assets from TELMA, and with a tower
count already approaching 300. Madagascar offers
significant potential amendment revenue as 3G
deployment continues for the next 18 months or
so, with operators pushing for LTE as soon as mid
2015.
Nigeria: We hear conflicting suggestions
from sources, but there seems to be a
consistent view that American Tower and Helios
Towers Nigeria are at Airtel’s negotiating table,

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possibly tabling some kind of joint bid, more likely
bidding for either different segments of a split
portfolio, or indeed simply bidding for 100% of the
assets against one another. There would be some
merit in IHS acquiring Airtel’s Nigerian towers
from a defensive point of view, but a significant
degree of overlapping locations with the assets IHS
already acquired from Etisalat and MTN Nigeria
would seem to reduce the potential value of the
portfolio to IHS. Airtel’s towers may simply be
worth less (although not worthless) to Africa’s
most aggressive tower bidder, illustrating that last
mover disadvantage can be a factor even when
deals are closed within months of one another. For
a detailed analysis of the Nigerian tower market,
check out the “Nigeria migrates to the independent
tower company business model” editorial in this
edition.
Rwanda: IHS are rumored to be in pole
position to acquire Airtel’s Rwandan
towers, following their acquisition of 550 towers
from MTN Rwanda in 2013. Rwanda is home to
three tier one MNOs, so has no shortage of credit
worthy tenants. MTN leads the market, followed
by Tigo and Airtel. Korea Telecom secured a joint
venture with the Rwandan Ministry of Youth and
ICT to build a nationwide LTE network. Mobile
penetration in Rwanda is around 65%, but ARPU
below US$3 had been reported by MTN in 2013,
one of their lowest in Africa.
Sierra Leone: Airtel’s Sierra Leone towers
simply have not appeared on the radar
of TowerXchange’s research. It’s possible Airtel’s
towers in Sierra Leone may yet be bundled with
one or more remaining countries, but it’s hard
to imagine towercos being overly enthusiastic
to launch in Sierra Leone given the very low
penetration rate and lack of other licensed tier one
MNOs (the market is led by Africell, while licenses
are also held by Airtel, Lap GreenN and Comium).
Zambia: IHS are likely to acquire Airtel’s
Zambian assets in a strategy again
mirroring their recent acquisition of MTN’s
Zambian 719 towers. Mobile penetration is
Forecast African towerco footprints
Cameroon
Cote d’Ivoire
Rwanda
Zambia
Tanzania
Chad
Congo Brazzaville
DRC Kenya
Niger
Burkina Faso
Malawi
South Africa
Uganda
Ghana
Nigeria
IHS
American Tower
Eaton Towers
HTN & SWAP

French group Camusat specialises in
the deployment and management of tele-
communications networks. The group has
a presence in five continents, 35 countries
and boasts a staff complement of over
2 100 employees.
Always on the cutting edge of new technologies,
Camusat has worked with many telecoms
operators, equipment manufacturers, tower
companies and integrators as well as government
and local authorities. Its business lines include:
· Telecom sites construction and installation.
· Power systems and renewable energy.
· Equipment installation and commissioning.
· Fibre optics.
· Managed services and maintenance.
In November this year, Camusat will present its
various products and services at the AfricaCom
exhibition in Cape Town, South Africa. These
include the following:
ePower by Camusat
Telecom power supply is a subfield that is
constantly developing as operators strive to
lower their operating expenditure as well as
their initial capital expenditure.
Thanks to its extensive knowledge of field
constraints of installation and maintenance,
Camusat has developed ePower, an industrial
multi-source, multi-tenant hybrid power system
that is cost-effective too.
eSight by Camusat
Camusat offers an attractive and comprehen-
sive solution for the monitoring, management
and control of telecoms sites.
eSight is an end-to-end technology solution
that effortlessly integrates a suite of software
applications and hardware devices to provide
a complete set of tools to manage network
performance, minimise outages/service
interruptions, reduce repair time and meet
strict service level agreement targets.
Visit us at AfricaCom from 11 to 13 November in Cape Town, South Africa (stand P35) to see these and much more.
For more information, email Sébastien Martin, COO of Camusat Africa at smartin@camusat.com • www.camusat.com

approaching 80% in Zambia, where Airtel lead the
market joined by MTN and Zamtel.
How will the sale of 15,000+ Airtel towers
across Africa affect the landscape of the tower
industry?
The Airtel transaction has helped create the
critical mass, scale and diversification of country
and counterparty risk that Africa’s private equity
backed towercos have targeted since inception.
TowerXchange don’t think Africa’s current wave
of sale and leasebacks are finished, but as Africa’s
towercos approach and pass the 10,000 tower
mark, attention will turn to operational excellence
and improving margins.
The Airtel tower deals illustrate how in many
markets one towerco is now dominant; a healthier
scenario that in the early days when, for example,
three towercos competed for a finite number
of tenancies in a country of just 26mn (Ghana).
The reality is that most African countries don’t
have capacity for more than one towerco,
especially when one considers that the first and
second ranked operators are frequently the
only counterparties turning a profit. Therefore,
future tower transactions may see more in-
market consolidation of tower portfolios under
a single towerco, rather than widespread entry
into new and competitive markets. Africa’s ‘Big
Four’ towercos have established beachheads in
most of the markets where the fundamentals are
most attractive, leaving smaller, riskier markets
increasingly open to new entrants.
Even if the tower transaction pipeline slows down
after the final Airtel deals and the MobiNil deal
in Egypt is finally closed, there remains plenty of
scope for African tower industry growth. Tenancy
ratios are climbing fast but are still well below
hypothetical glass ceilings, which themselves
are raised all the time with next generation
technologies stimulating amendment revenue and
new entrants seeking co-locations to accelerate
time to market. TowerXchange expect to see at
least one tower opportunity come to market in the
attractive South African market in the next year,
while Orange continues to seek partners for an
MLL deal in Senegal, Mali, Guinea B and Guinea C.
And the rumor needle is starting to twitch in North
Africa.
How did Africa Towers add value to the sites
pre-sale?
Africa Towers (Airtel’s tower company)
subsidiaries were registered in all 16 countries
for 12-18 months prior to the tower transactions.
Airtel’s towerco were more active in some
countries than others, but what was their focus?
Africa Towers consolidated Airtel’s tower assets,
demerging them from the parent MNO and making
the tower transactions easier to complete. They
refocused manpower on passive infrastructure.
They improved uptime in many countries from
99.2 or 99.3% to 99.5%. Perhaps most importantly,
Africa Towers increased the tenancy ratio from
less than 1.1 to 1.3 in many markets.
Was the strategy a success? Value was certainly
added, but did Airtel lose first mover advantage
in several markets, including the critical Nigerian
market, by changing course from a carve-out
towerco to a sale and leaseback? We’ll reserve
judgement until the last of the transactions closes.
How have the capital markets responded to
Bharti Airtel’s African tower sale?
Airtel’s share price is up almost 20% since the
first of their African tower transactions was
announced.
From the moment Airtel’s African tower sale was
rumored, reports had suggested Bharti Airtel had
targeted raising US$2-3bn from the tower sale to
pay down part of the operator’s ~US$10bn debt.
How are Airtel faring against that objective?
TowerXchange forecast the African tower sale will
net Airtel around US$2.5bn when complete.
While the purchase prices agreed in Airtel’s
transactions with Helios Towers Africa (3,100
towers) and Eaton Towers (3,500 towers) aren’t
in the public domain, TowerXchange can make
an informed guess that around US$1.1bn has
been raised from the sale of 6,600 towers to date,
suggesting a cost per tower of around US$175,000.
If the cost per tower agreed was nearer US$200,000
in Nigeria, which would be consistent with recent
tower transactions in the country, Airtel’s Nigerian
towers could net a further US$1bn. Add in Gabon,
Madagascar, Rwanda and Zambia and a further
US$400,000 could be raised

TowerXchange’s analysis of the
independent tower market in Africa
A quarter of Africa’s towers (41,500 ) are now owned or operated by independent
towercos, and a further 20,000+ are currently for sale
Over 17,887 additional African towers will be
transferred from MNOs to independent towercos
in four major deals announced over the Summer of
2014, with at least one more transaction imminent.
The size of Africa’s tower industry almost doubled
in a single quarter, with major transactions
announced by IHS (acquiring 2,136 towers from
Etisalat Nigeria and 9,151 from MTN Nigeria), Eaton
Towers (3,500 from Airtel) and Helios Towers Africa
Figure 1: Estimated number of towers owned or managed by towercos in Africa
(3,100 also from Airtel). The previously slumbering
giant American Tower returned to the bidding
table, and may be closing in on a deal to acquire
Airtel’s ~4,000 Nigerian towers.
Independent towercos now own and operate 25%
of Africa’s estimated 165,000 towers. TowerXchange
continue to forecast that towercos will own 38.8%
of Africa’s towers by y/e 2014, rising to 50% by y/e
2015. The sale and leaseback of ~3,500 MobiNil
towers in Egypt is believed to be imminent. Orange
also has processes under way in Senegal, Mali and
the Guineas. The South African market may be
reawakening soon, and North Africa is stirring!
The current wave of sale and leasebacks is likely
to conclude by Q1-2 2015, enabling towercos to
concentrate on transferring assets and deploying
hundreds of millions of dollars of improvement
capex to bring newly acquired sites up to a
standard suitable to achieve challenging SLAs and
to upgrade structures for co-location.
We’re also seeing towercos refocusing on owned
rather than managed towers. For example, IHS
absorbed a managed services contract with MTN
Nigeria and a managed with license to lease
contract with Etisalat Nigeria. IHS also stepped
away from a managed services contract with MTN
in Sudan and South Sudan, so the towerco now
own 90% of the assets in their portfolio. Similarly
Eaton has moved from a managed service to an
owned tower environment in Kenya. With all the
opportunities for towercos to chose from in Africa,
it’s going to be difficult for operators preferring
managed services deals to attract counterparties.
The future of the African tower market
The three private equity backed players among
Africa’s ‘Big Four’ towercos are achieving scale.
They are diversifying country and counterparty
risk. They are starting to ripen in the eyes of
investors, and major capital events may be as
IHS Africa
5000 10000 15000 20000 25000
American Tower
Eaton Towers
SWAP Technologies
Helios Towers Nigeria
1900
750
700700
700
509
250
1300
170
3,500
750 2449 3851
1998 1912 1226
2230
550
719
38014222

Heliocentris Group . Rudower Chaussee 29 . 12489 Berlin, Germany
Partner in Power
Technology & Operation
Lower emissions, lower cost & higher performance.
Power for the 21st Century
WWW.HELIOCENTRIS.COM

< Square1 Infrastructure (Nigeria and South
Africa)
< TASC (targeting MENA)
< TowerCo of Madagascar
< Towershare (targeting MENA)
little as 2-3 years away, whether IPO, trade sale
or offload to a sovereign wealth or infrastructure
fund.
The big sale and leaseback deals will continue in
Africa for at least the next 3 quarters. The ‘Big Four’
towercos will leave some smaller, riskier markets
and local BTS, rooftop and billboard opportunities
open to new entrants, but TowerXchange don’t
anticipate any ‘middle market’ towercos achieving
a portfolio of over 1,000 African towers in the next
year, unless an established international towerco
enters Africa – one or two are maintaining a
watching brief.
Africa’s telecoms infrastructure ecosystem is being
transformed, one tower at a time. Where is the
opportunity for your business?
Every towerco with at least 20 towers in Africa will
be represented at the forthcoming TowerXchange
Meetup Africa, taking place on October 20 and 21 in
Johannesburg.
18 different African towercos will be represented,
including senior delegations from American
Tower, Eaton Towers, IHS, Helios Towers Africa,
Helios Towers Nigeria and SWAP, plus 10 regional
and would-be new entrant African towercos.
We also have unprecedented investor and MNO
participation, including tower strategists and heads
of infrastructure and procurement from five of
Africa’s top six operators. Our exhibition is already
sold out and the last tickets are selling fast; register
now at www.towerxchange.com/meetups/africa
Figure 1a: Count differentiating towers that are owned from those that are managed
and marketed by towercos
Unfilled bars = Managed and marketed towers
Filled bars = Owned Towers
Figure 2: Africa's regional and prospective new entrant towercos
TowerXchange are tracking several towercos who are active in or targeting Africa (there are a couple
more, but we’re not at liberty to disclose them!):
< Communication Towers Nigeria
< Frontier Tower Solutions (targeting Burundi)
< Hotspot Network Limited (Nigeria)
< Infratel (South Africa)
< Pro High Site Communication (South Africa)
< Shared Networks Tanzania (active
infrastructure sharing)
TowerXchange estimate that these towercos own
or operate a total of around 800 African towers.
18000 2000
700
5000 10000 15000 20000
700
759
800
700
7800
5136
4370

www.towerxchange.com | TowerXchange Issue 8 | XX| TowerXchange Issue 10 | www.towerxchange.com26
Please feel free to contact the TowerXchange team
Kieron Osmotherly
Founder & CEO
E: kosmotherly@towerxchange.com
M: +44 7771 148001
For editorial & speaking enquiries regarding Americas or Asia:
Arianna Neri
Head of Americas & Asia
E: aneri@towerxchange.com
M: +39 338 111 2103
For editorial & speaking enquiries regarding Africa or Europe:
Frances Rose
Head of EMEA
E: frose@towerxchange.com
M: +44 7793 045718
For advertising opportunities & event participation:
Annabelle mayhew
Chief Commercial Officer
E: amayhew@towerxchange.com
M: +44 7423 512588
Toya Smith
Business Development Manager
E: tsmith@towerxchange.com
M: +44 7967 441110
For media partnerships & to request additional subscriptions:
Harpreet Sohanpal
Head of Marketing
E: hsonanpal@towerxchange.com
For the designers of the TowerXchange Journal & brand:
Jon Whitty
Senior Designer & Brand Development
E: jon@blacklightdesign.co.uk
The TowerXchange Journal is published by Site Seven Media Ltd.
© 2014 Site Seven Media Ltd. All rights reserved. Neither the whole nor any
substantial part of this publication may be re-produced, stored in a retrieval
system, or transmitted by any means without the prior permission of Site
Seven Media Ltd. Short extracts may be quoted if TowerXchange is cited as the
source. TowerXchange is a trading name of Site Seven Media Ltd, registered in
the UK. Company number 8293930.

2010 Millicom / Tigo Ghana Helios 750 $54m for 60% Joint venture
2010 Vodafone Ghana Eaton 750 Not applicable Operational lease
2010 Cell C South Africa American 1,400* $430m Sale and leaseback
2010 MTN Ghana American 1,876 $218.5m for 51% Joint venture
2010 Starcomms Nigeria SWAP 407 $81m Sale and leaseback
2010 Millicom / Tigo DRC Helios 729 $45m for 60% Joint venture
2011 Millicom / Tigo Tanzania Helios 1,020 $80m for 60%** Joint venture
2011 MTN Uganda American 1,000 $89m for 51% Joint venture
2012 Orange Uganda Eaton 300 Unknown Sale and leaseback
2012
2013
Warid
Orange
Uganda
Cameroon & Cote d’Ivoire
Eaton
IHS Africa
400
2,000+
Unknown
Unknown
Sale and leaseback
Managed services
2012 MTN Cameroon IHS Africa 827 $143m Sale and leaseback
2012
2013
2014
2014
2013
2014
2014
MTN
Vodacom
Airtel
MTN
MTN
Etisalat
Airtel
Cote d’Ivoire
Tanzania
Unknown
Nigeria
Rwanda & Zambia
Nigeria
Unknown
IHS Africa
Helios
Helios
IHS Africa
IHS
IHS Africa
Eaton
931
1,149
3,100
9,151
2,136
3,500
1,269
$141m
Approx $75mn for 75.5%
~$400-550mn
~$1,800mn
Unknown
~$400mn
~$525-700mn
Sale and leaseback
Joint venture
Sale and leaseback
Joint Venture
Sale and leaseback
Sale and leaseback
Sale and leaseback
*Cell C deal included 1,400 existing towers plus additional towers under construction **Millicom/Tigo’s stake in Helios Towers Tanzania reduced to 24.5% after Helios acquired towers from Vodacom Tanzania in 2013
Figure 3: Africa’s biggest tower sharing transactions to date
Figure 4: African tower industry achieves launch velocity
Year Operator Country TowerCo Est. # of towers
Publicly stated
purchase price
Deal structure
End of Year
Est total # of towers in Africa
Est # of African towers owned or operated by towercos
% of African towers owned by towercos
*Includes an estimate of the number of towers owned by a small but growing segment of regional ‘middle market’ towercos
2009
120,000
100
0.001%
2010
125,000
6,000
4.7%
2011
130,000
9,000
6.9%
2012
140,000
16,661
11.9%
2013
150,000
*25,510
17%
2014(f)
165,000
*64,000
38.8%
2015(f)
180,000
*84,500
46.9%

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CamTel awarded fourth license in
Cameroon, Viettel finally launches
State-owned fixed line incumbent CamTel has been
awarded the fourth mobile license in Cameroon,
joining recently launched Viettel, whose request for
an extension of their period of exclusivity offering
3G has been turned down, as well as established
market leaders MTN and Orange. IHS owns, or
manages with license to lease, the majority of the
telecom towers in Cameroon.
Airtel brings 3G to Chad
India’s Economic Times report that Airtel has
launched the first 3G network in Chad. Airtel
have also recently sold their towers in Chad, with
Helios Towers Africa widely believed to be the
counterparty.
Vodacom extends into Kasai-Occidental
and Kasai-Oriental
Vodacom is deploying 61 new antennas in remote
areas of Kasai-Occidental (Western Kasai) and
Kasai-Oriental (Eastern Kasai).
Orange to close MobiNil tower sale
before end of 2014 – sources
TowerXchange understand that Orange’s drawn
out process to sell an estimated 3,500 MobiNil
towers in Egypt may finally be drawing toward a
conclusion. Sources suggest that Naguib Sawwiris’
Accelero Capital and Eaton Towers have both been
shortlisted to acquire the assets.
Airtel Nigeria tower sale imminent
The sale of Airtel’s towers in Nigeria could be closed
in Q4 2014, with American Tower and Helios Towers
Nigeria both believed to be involved in final rounds
of discussion, and IHS potentially interested in
adding assets to those acquired from Etisalat and
MTN Nigeria earlier this year.
InfraCos to be licensed in Nigeria
Seeking to stimulate fibre deployment, the NCC has
sought bidders for InfraCo licenses, a key component
of the country’s National Broadband Plan.
Orange Senegal pilots 4G; towers remain
on the block as part of MLL opportunity
Orange Senegal has extended their 4G pilot from
Dakar to Saly, bringing the total number of 4G sites
to 40. Tigo and Expresso are believed to be starting
their own 4G trials imminently.
Meanwhile, Orange continues to be in negotiation
with several towercos about making their towers in
Senegal, Mali, Guinea B and C available on a Manage
Africa News
with License to Lease basis.
Sontatel’s operating licenses are due to expire in
October 2017.
Vodacom not planning to sell South
African towers, but speculation continues
that Telkom might
Vodacom spokesman Richard Boorman told
BizTechAfrica that the company had no plans to sell
towers: “One of the key reasons for doing this type of
deal is to facilitate a fast rollout of network coverage,
especially if you’re balance sheet constrained. We
already have extensive coverage in South Africa, and
balance sheets are generally pretty healthy, so the
basic drivers aren’t there. On top of that, we already
have extensive site sharing between the operators.”
Meanwhile, Telkom are believed to be considering
options for the sale or outsourcing the management
of their tower portfolio.
Cell C hints at nationwide LTE launch,
Telkom launches LTE-A
Already serving Johannesburg, Cape Town and
Pretoria with LTE, Cell C would like to roll out a
national LTE network, using the spectrum that
becomes available when broadcasters switch from
analogue to digital.
Meanwhile, Telkom South Africa will introduce LTE
Advanced extending its coverage to a total of 50
suburbs in Greater Johannesburg, Western Cape,
Cameroon
Nigeria
Nigeria
Senegal
South Africa
South Africa
Chad
DRC
Egypt

Tshwane and KwaZulu-Natal by Spring 2015.
Zantel sale rumors denied, 3G extended,
future of towers remains uncertain
Bloomberg quoted unsourced rumors that Etisalat
may be seeking to dispose of it’s 65% stake in
Zantel, with Vodacom and Millicom believed
to be interested. However, within days Etisalat
Chairman Essa Al Haddad stated “last week Etisalat
increased its shares from 65% to 85% in Zantel.”
Meanwhile, Zantel has launched it’s 3G network
in mainland Tanzania. Zantel’s Zanzibar-centric
tower portfolio is the last substantial portfolio
of operator-captive towers in Tanzania. Helios
Towers Tanzania previously acquired Millicom and
Vodacom’s tower assets, and are believed to have
added Airtel’s Tanzanian tower assets in a recent
transaction.
Airtel Zambia accelerates 3G rollout,
tower transaction imminent
Almost a third of Airtel Zambi’s estimated 1,000 base
stations in Zambia are now 3G enabled. Zambia
remains one of the last remaining Airtel countries
where the towers have not yet been sold – IHS are
the most likely counterparts following on from their
acquisition of MTN Zambia’s towers.
Zamtel join MTN in launching 4G
Zamtel plan to extend their LTE network beyond
Kitwe, according to ITWedbAfrica, following MTN
who launched LTE in January 2014
Tanzania
Zambia
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Zong first operator offering 4G LTE
China Mobile’s Zong is the first national operator
to launch 4G LTE network in the country. 4G
services are now available in seven cities including
Islamabad, Lahore and Karachi. Zong plans to
invest US$ 1bn over the next three years and add as
many as 4,000 sites by the end of 2014.
Telenor extends 3G coverage
Telenor is extending its 3G services to thirteen new
cities bringing the total number of locations covered
by the operator to thirty-two.
Reliance Jio signs deal with Indus Towers
Reliance Jio has signed a deal to utilise all of the
113,490 telecom towers of Indus Towers in fifteen
indian circles. Under its license, Reliance Jio must
launch services by May 2015 and is currently
planning to rollout 4G LTE on schedule. The
telco has previously signed infrastructure deals
with Reliance Communications, Bharti Infratel,
Viom Networks, American Tower Corporation,
Tower Vision, Ascent Telecom, BSNL and GTL
Infrastructure.
Providence Equity sells Idea Cellular
stake
The private equity firm sold a 2.4% stake in
India Cellular for an estimated US$ 234.7 million,
corresponding to 85 million shares.
Indus Towers rolling out 2,000 new
towers
Indus Towers, the largest towerco in India, plans to
roll out 2,000 new towers across the country with
20% of them located in the Maharashtra and Goa
circle.
Bharti Infratel to buy
towers from Airtel,
Vodafone and Idea
Indian towerco Bharti Infratel is considering
buying telecom towers from Airtel in Sri Lanka and
Bangladesh and from Vodafone and Idea in India.
Ollo contracts ZTE for 4G rollout
Mobile operator Ollo has contracted Chinese ZTE
to roll out its 4G LTE network. BTRC has recently
approved Ollo’s request to import equipment and
start rolling out the network.
XL Axiata selling telecom towers
PT XL Axiata is planning to sell 3,500 telecom towers
to STP for US$ 459 million. The cash deal should be
completed by the end of this year.
Telkom Indonesia reconsiders tower
plans
Telkom aims at becoming the largest towerco in
Indonesia by acquiring a majority stake in a local
towerco during Q1 2015. The company is reportedly
assessing the capital needed for the deal which
could be in the range of US$ 427-854 million. Last
year, the company evaluated the potential sale of
a stake in Mitratel and then considered merging
Mitratel with a publicly listed towerco.
Telkom Indonesia expanding into the
Middle East
State-owned Telkom Indonesia is disclosing its
international plans to expand into the Middle East
and, in particular, into Saudi Arabia. The telco is
seizing the opportunity to capitalise on the one
million Indonesian living in Saudi Arabia.
DTAC to build 3G and 4G LTE towers
DTAC is planning to spend US$ 308 million to build
new towers in Bangkok and other major cities by
March 2015. The expected project will create 3,800
new 3G towers and 2,700 4G LTE stations.
True Corp to sell 18% stake to China
Mobile
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Thai telecom group True Corp has signed a strategic
partnership agreement with China Mobile to sell
an 18% stake to China Mobile for US$ 881 million.
According to TelecomAsia, the partnership between
the two companies will include 4G technology
transfer, joint procurement of handsets and
networks as well as shared strategies against over-
the-top service providers.
Pan Asia signs first non-recourse, cross-
border financing in Myanmar
DBS Bank, ING Bank, OCBC Bank, Standard
Chartered Bank and Sumitomo Mitsui Banking
Corporation organised the first ever non-recourse,
cross border financing in Myanmar for Pan Asia
Majestic Eagle Limited, a towerco involved in the
rollout of telecom infrastructure. The agreement
will assign US$ 85 million of financing to the
towerco.
Telenor Group connecting first
customers
Telenor Group has announced that it has begun
connecting customers in Myanmar on September
27, as stated in a company’s press release. The roll
out started in the city of Mandalay to then continue
in Nay Pyi Taw, Yangon and into more towns,
villages and rural areas.
“It is rewarding for Telenor Group to be able to
contribute to the rapid development of a nation
by providing essential infrastructure that will
drive connectivity and new opportunities for
Myanmar. Telenor is excited to introduce products
and services that will include everyone in the
country’s digital future, and fuel innovation and
entrepreneurship,” said Jon Fredrik Baksaas,
President and CEO of Telenor Group.
Ooredoo reaching 1 million customers in
three weeks
Ooredoo reportedly reached 1 million subscribers
in Myanmar in three weeks. The telco soft-launched
services on 4 August with free services to then start
its commercial offering on 15 August.
“The response to our launch has been inspiring,”
said Ross Cormack, CEO of Ooredoo Myanmar.
”Pent-up demand for mobile communication
services has surpassed even our expectations,”
he said. “This growth will enable more people to
experience our life-enriching services and see the
life-changing opportunities technology can bring.”
True Corp and YTP’s negotiation on hold
True Corp and YTP have put commercial talks on
hold. The companies were in discussions to co-
launch mobile services but haven’t reached an
agreement. True is planning to launch services in
Myanmar and has recently created a subsidiary.
MobiFone attracts Telenor and Comvik
The Vietnamese operator MobiFone is attracting
potential investors such as Telenor Group and
Comvik International. Negotiations are ongoing
while the operator is being privatised.
China Communications Facilities
Services Corporation ramping up
The joint towerco, also referred to as National
Tower Company, owned by China’s three telcos is
set to start operating by the end of the year with
a development plan including initial construction
works on 120,000 new towers by the end of 2014,
with roll out by 2017
Mynamar
Mynamar
Mynamar
Mynamar
Vietnam
China
Tower Xchange

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In the following pages, we are pleased to offer our readers TowerXchange’s initial findings on tower counts and major deals in Southern and
Southeast Asia. If you are aware of further details and would like to discuss them with us, feel free to contact Arianna Neri, Head of Asia and
Americas, at aneri@towerxchange.com
Updated Southern and Southeast Asian tower count and deals
Estimated number of towers owned or managed by towercos in India
State owned MNOs Bharat Sanchar Nigam Ltd and
Mahanagar Telephone Nigam retain 70,000 towers
Viom Networks
GTL Infrastructure
American Tower
Tower Vision
Ascend
Indus Towers
Bharti Infratel
Reliance Infratel
20,000 40,000 60,000 80,000 100,000 120,000
Source: TowerXchange research quarterly filings, site lists
112,936
50,000
42,000
29,432
11,529
8,400
4,000
34,000 49,368 - 42% equity stake in Indus Towers
Protelindo
Tower Bersama
Mitratel
STP
IBS Tower
Komet Infra Nusantara
Retower Asia
Balitowers
2,000 4,000 6,000 8,000 10,000 12,000
Estimated tower counts for Indonesia’s largest independent towercos
Source: TowerXchange, companies’ website, filings, third-party news
10,300
9,382
4,000
3,500
2,079
500
450
208
Forecast Myanmar tower count by end 2014*
Source: TowerXchange research
MPT
Apollo Towers
*Removal of duplicate sites at the request of MCIT notwithstanding
5000 1000 1500 2000
Irrawaddy Green
Towers
Pan Asia Towers
MTC
1800
1500
1250
1250
1001
Estimated tower count for Malaysia
Sacofa 765
Touch Matrix 460
D’harmoni 346
KJS 309
Common Tower 260
Infra Quest 201
Yikedbina 200
Perak Integrated Networks 150
Asia Space 137
Desabina 118
Melaka ICT Holdings 9 5
Rangkaian Minang 9 0
PDC Telecommunications 4 3
Perlis Comm 23
edotco
3,500
13,300
Remaining
MNO-captive 3,200
State-backed and other independent
towercos

Updated Southern and Southeast Asian tower count and deals
Asia Tower Deals
* Company aquisition
Year Seller Buyer Country USD/Tower Tower Sites Value (USD)
2012 KPN Telecom Protelindo Indonesia 371.6 261 97 million
2014
KJS* company
aquisition
YTL Power
International
Malaysia 48.5 309 15 million
2010 Essar Group American Tower India 97.1 4450 432 million
2012 Hutchinson Protelindo Indonesia N/A 503 N/A
2009 Xcel* company American Tower India 80 1700 136 million
2012
PT Central
Investindo
Protelindo Indonesia N/A 152 N/A
2008 Bakrie STP Indonesia 64.45 543 136 million
2012 Indosat Tower Bersama Indonesia 207.6 2500 519 million
2008 Hutchinson Protelindo Indonesia 135.43 3692 500 million
Two thirds of the 400,000+ Indian towers are
independently owned and the trend is expected to
grow as towercos and MNOs work towards ensuring
rural coverage while adopting alternative urban
solutions such as IBSand DAS. After a period of
operator market restructuring temporarily halted
tower transactions, a pipeline of opportunities is
now perceptible, driven by trade acquisitions as
few attractive tower assets remain in the hands of
operators.
In the meantime, Indonesia’s towers are changing
hands and more than 40% of them are already owned
by towercos. With MNOs increasingly involved in 3G
and 4G network rollout, we expect new SLB deals to be
announced over the next few months.
Malaysia is home to edotco, the only multi-country
towerco in the region and the Diamond Sponsor of our
Meetup Asia. We are thrilled to follow the evolution
of edotco in Malaysia and across the region, while we
report on the wide array of towercos and State-backed
companies operating in this mature market.
Finally, Myanmar continues to thrive with Ooredoo
and Telenor both having launched commercial
services over the past two months and four main
towercos working extremely hard to meet the
country’s ever expanding coverage demands
Interested in finding out more and meeting top
executives from these markets and beyond? Join us
in Singapore, 9-10 December 2014 or email me for
further details at aneri@towerxchange.com
The independent towerco model extends across Asia: snapshots into India,
Indonesia, Malaysia and Myanmar
Tower Xchange
Meetup Asia 2014
December 9-10, Singapore
www.towerxchange.com

Phoenix Tower International acquires
AMT Panamanian business
Phoenix Tower International has announced the
acquisition of approximately 60 Panamanian
telecom sites from American Tower. The
portfolio represents a mix of urban and
suburban locations and further contributes to
the company’s expansion into Latin America
following its creation, back in 2013.
Telefónica announces Mexican 4G LTE
investments
Telefónica will invest US$ 225ml in Movistar to
expand its 4G LTE coverage to 300 cities by the
end of 2015.
700MHz tests ahead of open access
wireless network investment
The Mexican Secretario de Comunicaciones y
Transportes (SCT) is planning 700MHz tests to
collect useful information ahead of the planned
US$ 10bn open access wifi network. Local news
sources reported that the Mexican government
has already received the first bid for the state-
owned network but information on the bidder
haven’t been made public.
Bank of America hired by América
Móvil to sell part of its assets
América Móvil has hired Bank of America to
sell certain domestic telecoms, as reported by
Bloomberg earlier this month. The Mexican
giant is planning the sale to cut its market share
below 50%, as required by the newly enforced
telecom regulation. Interested buyers include
AT&T and Softbank Corp of Japan.
Iusacell in talks with Softbank Corp
Softbank Corp of Japan might invest in Mexican
telco Grupo Iusacell. The Japanese company
already controls Sprint Corp in the United States
and is reportedly in talks with América Móvil
too.
Tigo and Une-EPM merged in August
The merger between Colombian telco Tigo and
fixed line operator Une-EPM was successfully
completed on 14 August. The newly formed
entity will be able to offer its customers a broad
array of services including fixed and mobile
voice and data as well as TV services. Millicom
International Cellular, owner of Tigo, will take
on net debt of US$ 1.3 billion as part of the deal.
Conatel announces four pre-qualified
MNOs for 4G licenses
Four companies have pre-qualified for 4G
licenses which should be assigned within the
month of October. The pre-qualified companies
are Movinet, Telefónica’s Movistar Venezuela
and two potential new entrants: Multiphone
Venezuela and Galaxy Entertainment
Venezuela.
Conatel, the national telecom regulator,
announced that the final allocation will
occur within ten working days from the
announcement and after the technical analysis
of the tenders. License conditions include 4G
rollout in key cities within the first year of
operation and coverage in all state capitals
within four years.
LTE spectrum auction concluded
The 700MHz LTE spectrum auction ended
on September 30 and assigned nationwide
spectrum blocks to Vivo, TIM Brasil and Claro.
Algar Telecom increased its spectrum in the
regions covered by its services. As previously
announced, Oi and Nextel didn’t participate in
the auction. The auction raised a total of US$
2.3bn instead of the expected US$ 3.2bn.
T4U to launch IPO
T4U Holding Brasil, a Brasilian towerco, and its
Panama
Mexico
Mexico
Mexico
Mexico
LatAm news
Brazil
Brazil
Colombia
Venezuela
A roundup of tower new across Latin America

Entel discloses investment plans for
Peruvian entity
Chilean Entel disclosed its investment plans for
its Peruvian operations which will reach US$ 1.2
billion for the period 2015-2020. Nextel Peru will
receive as much as US$ 250 million per year in
capital with the aim to boost its operations. Entel
plans to expand Nextel Peru’s market share from
5% to 30% and has announced its intention to
entirely rebrand the company by the end of the
year.
Movistar expands rural coverage
Movistar Peru announced its investment plans
just under US$ 100 million to connect 2,327 rural
locations by 2017. To date, the Spanish backed
telco has installed 1,000 towers as part of its rural
rollout programme, as agreed with the government
when renewing its license in January 2013.
Movistar launches LTE in Montevideo
Movistar has launched LTE services in selected
locations in Montevideo which will be offered to
existing subscribers for free. The operator plans to
expand its 4G services to other locations over the
next few months.
Claro announces investment plans
Claro Paraguay will invest as much as US$ 100
million to further expand its infrastructure. The
shareholder D Dots Investments are planning
to sell an undisclosed amount of shares via an
IPO.
Tim and Oi enhance LTE network
sharing deal
Tim and Oi are extending their network
sharing deal to 88 new locations by 2015.
The two operators have firstly signed an LTE
network sharing agreement in 2013 which
currently reaches 45 cities.
Telecom Italia set price for Brazilian
stake
Telecom Italia has set the asking price for its
67% stake in TIM Brasil at US$ 16.8 billion,
with the company’s valuation reaching
approximately US$ 25.5 billion. Companies
reportedly interested in TIM’s stake include
Oi and América Móvil, who are said to be
discussing a possible joint bid.
Telecom Italia assessing tower
listing
Telecom Italia is said to be assessing a possible
stock market listing of its Italian and Brazilian
telecom towers. The company aims at cutting
debt and raising capital and the sale of its
assets could raise US$ 2.6 billion or more,
sources report.
company is the third operator of the country with
a 7.6% market share.
NII Holdings divesting its Chilean
subsidiary
NII Holdings is planning to sell its Chilean
operations to a joint venture of companies
including US private equity firm Optimum
Advisers, Argentinian Grupo Veintitres and
UK investment firm ISM Capital. Troubled NII
Holdings might file for Chapter 11 bankruptcy
after failing to agree with bondholders on debt
restructuring.
3G and 4G LTE spectrum to be assigned
in October
Four companies have presented documents to
take part in the upcoming 3G and 4G LTE auction.
Spectrum permits should be awarded by the end of
October and operators currently bidding include
Claro Argentina, Telecom Personal, Movistar and
Airlink.
Telecom Italia still seeking regulatory
approval to sell Argentinian unit
The Secretaría de Comunicaciones (SECOM) has
not yet approved Telecom Italia’s plan for the sale
of its unit to Mexican investment company Fintech,
which offered US$ 960 million back in November
2013. The deadline for the approval has been
delayed twice already
Paraguay
Chile
Uruguay
Argentina
Argentina
Brazil
Brazil
Brazil
Peru
Peru

Updated Americas tower count and deals
American Tower
SBA Communications
Grupo TorreSur
Torres Unidas
Mexico Tower Partners
T4U
IIMT
CSS
Phoenix Tower
International
5,000 10,000 15,000 20,000 25,000 30,000
11,411
6,792
6,094
3,496 8,412
1,163 457
498
58
341
In the following page, we are pleased to offer our readers TowerXchange’s initial findings on tower counts and major deals in Latin America. If
you are aware of further details and would like to discuss them with us, feel free to contact Arianna Neri, Head of Asia and Americas, at
aneri@towerxchange.com
Will 2015 be the most important year to date for the
CALA tower industry?
So far, 2014 has been a relatively quiet year for the
regional tower industry if compared to the wave of
transactions that took place in 2013. However, it’s
interesting to note how the two major transactions
of 2014 - namely AMT-BR Towers and SBA-Oi - were
valued US$ 1.5bn versus US$ 2.5bn of all eight transac-
tions we reported on in 2013. We may be entering a
period where trade acquisitions will be as common as
SLB deals, with several parties seeking assets in Brazil
and Mexico.
While towercos have been relatively quiet, carriers
have been busy launching 4G LTE services in Mexico,
Brazil, Peru and Uruguay. Venezuela and Argentina
both geared up for 4G LTE auctions while critical
regulatory changes are affecting the landscape of the
local tower industry in Mexico and Chile. And we
shouldn’t forget that up to 16,000 towers are reportedly
for sale in Brazil alone.
We expect the next few months to bring some
excitement to the industry as consolidations, IPOs
and possi-ble transactions could turn 2015 into the
most exciting year to date for the CALA telecom tower
market
Key executives from American Tower, Grupo
TorreSur, Torrecom, Catalina Inc., Torres Andinas
and Digital Bridge Management have already
confirmed that they will speak at the 2nd Annual
TowerXchange Meetup Americas, taking place in
Hollywood, FL, 28-30 April 2015, in co-location with
PCIA’s Wireless Infrastructure Show. Contact me for
further information at aneri@towerxchange.com
Will 2015 be the most important year to date for the CALA tower industry?

Major tower transactions in Latin America 2012/2013
Date
Q3 2013
Q4 2013
Q3 2014
Q3 2013
Q2 2014
Q3 2013
Q2 2014
Q3 2013
Q2 2013
Q2 2013
Q3 2012
Q1 2013
Q1 2013
Q4 2012
Q4 2012
Q4 2012
Q2 2012
Q1 2012
Seller Buyer Country USD/Tower Value in USDTower Sites
Oi
Oi
American Tower
Nextel
BR Towers*
Nextel
Oi
SBA
Communications
SBA
Communications
Phoenix Tower
Intl.
American Tower
American Tower
American Tower
SBA
Brazil
Brazil
Panama
Brazil
Brazil
Mexico
Brazil
343 million163
645 million
N/A
321
N/A
413 million
978 million
148
212
398 million
527 million
239
321
2,113
2,007
60
2,790
2,530+ 2,100
excl. rights
1,666
1,641
Global Tower
Partners*
Oi
Oi
American Tower
Grupo TorreSur
BR Towers
US/Costa Rica
Brazil
Brazil
4.8 billionN/A
293 million138
251 million119
15,700
2,113
2,113
Telefonica
Sitesharing
BR Towers
BR Towers
Brazil
Brazil
252 million132
N/AN/A
1,912
350
Axtel American Tower Mexico 250 million283 883
Telefonica Torres Unidas Chile N/AN/A 400
Telefonica
SBA
Communications
Brazil 178 million223 800
OI Grupo TorreSur Brazil 258 million214 1,208
Telefonica American Tower Brazil 225 million150 1,500
Telefonica American Tower Chile 96 million172 558
* company acquisition
Special thanks to Jonathan Atkin, Managing Director at RBC Capital Markets for his contribution
Tower Xchange
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Passive infrastructure
potential in the Middle East
Recent developments and Delta Partners’ perspective on the tower market going forward
Passive infrastructure outsourcing has been
a global trend for more than a decade. Tower
transactions which first occurred in the US and
Europe have spread to other regions such as South
America, Africa and Asia while fuelling the growth
of tower companies such as American Towers,
Crown Castle, Bharti Infratel, Tower Bersama,
Helios Towers, Eaton Towers, IHS and others.
In this context, the Middle East is one of the few
remaining ‘virgin’ markets. Even though site
sharing among operators in the region is relatively
common, there have been virtually no transactions
to date.
In 2011 STC and Mobily were in talks to spin off
their towers in Saudi Arabia into a joint venture
with the operators retaining ownership in the
joint venture and becoming anchor tenants. The
deal was expected to reduce passive infrastructure
related capital and operating spend. However, no
agreement has been reached as yet. Separately, in
2012 Batelco kicked off a sale process for its towers
in Bahrain and Jordan, but in the end decided
not to proceed with the deal because according
to the Group’s CEO Sheikh Mohamed Al-Khalifa
the various proposals received “did not create
sufficient, long-term economic value”. Batelco
would instead look for tower sharing opportunities
in its countries of operation.
So, why have there been no transactions in the
Middle East?
There are a number of reasons behind the
relatively underdeveloped tower market in the
< Update on recent developments in the passive infrastructure markets in the Middle East
< Reasons for the lack of tower deals in the Middle East
< Overview of each tower market in terms of tower count, expected market growth and regulatory
environment
< Zoom-in on the tower markets in Saudi Arabia, Iraq and Kuwait
Federico Membrillera heads up Delta Partners’ Corporate
Finance division and he has served clients globally across
different aspects including investment banking and
mergers & acquisitions, corporate finance and strategic
management consulting. He has over 20 years of experience
in the telecoms, media and digital (TMD) industry.
Yana Kamburova has been with Delta Partners for close to
five years, executing Corporate Finance mandates in the
telecom, media and digital (TMD) space in the Middle East,
Africa, Europe and Asia. She has worked on a number of
tower transactions and passive infrastructure strategy
engagements.
Keywords: MNOs, Towercos, Strategic Consultancy, Research, Market Overview, 3G, 4G, Tenancy
Ratios, Market Forecasts, Network Rollout, Business Case, First Mover Advantage, New Market Entrant,
Densification, Regulation, Country Risk, Anchor Tenant, Decommissioning, Operator-Led JV, Sale & Leaseback,
Infrastructure Sharing, Middle East, Saudi Arabia, Iraq, Kuwait, UAE, Jordan, Yemen, Oman, Lebanon,
Bahrain, Qatar, Zain, Omantel, Nawras, Batelco, STC, Mobily, Vodafone, Ooredoo, Etisalat, Du, Asiacell, Korek,
Mobitel, Viva, Wataniya, Delta Partners
Federico Membrillera, Managing
Partner and Head of Corporate
Finance, Delta Partners
Yana Kamburova, Associate,
Delta Partners Corporate
Finance

Middle East. To begin with, the mobile telecom
market has been historically characterised by high
ARPUs, healthy EBITDA margins and reasonable
debt levels, which has reduced the operators’
need for funds or need for cost reductions.
Secondly, passive infrastructure outsourcing
has not received the necessary regulatory
support. There is no mention of tower sharing
in the telecom regulations of Kuwait and Yemen,
while only recently Qatar, Lebanon and Iraq
have started to look closely into the matter. The
remaining regulatory frameworks encourage
infrastructure sharing but there is little clarity on
the requirements for the set-up and licensing of a
towerco and the transfer of passive infrastructure.
Lastly, some operators continue to perceive their
towers as a strategic asset and are reluctant to
outsource them in light of the threat of increased
competition and market share loss.
Green shoots in the desert
Despite the lack of tower deal making in the Middle
East, we expect the tower market in the region to
become active in the next 12 to 18 months given
the willingness of some of the leading operators
to put passive infrastructure in the centre of their
strategy and the interest expressed by leading
towercos in the market. Potential transactions
could be executed on a country by country basis
or could be targeted at the full tower portfolio of
the regional players (e.g. Zain Group, Ooredoo,
and STC). In either case, the optimal transaction
structure for each market needs to be tailored
according to its maturity, growth prospects, the
operators’ own ambitions and the regulatory and
tax environment in the market in which they
operate.
There are over 70,000 mobile telecom towers
in the Middle East, according to our estimates.
The markets with most towers are Saudi Arabia
(~30,600), Iraq (~12,300), UAE (~8,500), Jordan
(~5,900) and Kuwait (~5,100).
The outlook for tenancy ratios is good given the
No significant transactions around tower sharing and outsourcing in the Middle East
Estimated number of towers in the
Middle East
July 2014
Date Players Country Details
Jordan
April 2014 Oman
May 2012 Bahrain, Jordan
June 2011 KSA
May 2009 Qatar
August 2007 UAE
Zain Jordan signed an agreement with the military’s
Special Communications Commission on site sharing
Omantel and Nawras agreed to jointly deploy sites to
remote villages across Oman
Batelco announced focus on infrastructure sharing with
other operators and parked sale-and-lease-back talks
Mobily and STC were in discussions to spin off their
towers into a separate company, however, agreement
has not been reached
Ooredoo and Vodafone signed outdoor site sharing
agreement
Source: Press releases
Agreement between Etisalat and Du to share sites
Source: Operators’ annual reports, press releases, Delta Partners analysis

expected coverage expansion in certain countries
(e.g. Iraq, Yemen), capacity additions in the mature
markets and potential new entrants (e.g. Iraq). The
relatively high network overlap in most markets
supports the case for the simultaneous carve out of
more than one tower portfolio per market (similar
to the STC and Mobily deal) which would allow for
significant site decommissioning and optimisation,
increased tenancy ratios and cost savings.
We perceive as most attractive from a passive
infrastructure perspective the following markets:
Saudi Arabia, Iraq and Kuwait. Even though
UAE and Jordan have a sizeable tower base, they
are considered as less attractive for a variety of
reasons. In the case of the UAE, there are only
two mobile players (Etisalat and du) operating in
a closed environment which limits the tenancy
ratio upside. The value creation potential of the
tower market in Jordan, on the other hand, is
hindered by its high electricity costs and the tax
environment.
Saudi Arabia
Saudi Arabia is the most sizeable mobile telecom
market in the Middle East with 54.8 million
subscribers. It comprises of three mobile operators
(STC, Mobily and Zain) and is expecting the
launch of three MVNOs. Saudi Arabia’s mobile
penetration has grown steadily and is forecast
to reach approximately 180% by the end of 2014,
making it one of the top SIM-penetrated markets in
the world. The growth in voice services is slowing
down and future growth is expected to be driven
by a focus on high-value services and stronger
uptake of 3G and 4G services.
We estimate that there are approximately 30,600
towers in Saudi Arabia. The operators have 2G
network coverage ranging from 90% to 97% of
population and all of them have launched 3G
and LTE services. Future rollout requirements
are expected to be fuelled mostly by 3G and LTE
coverage improvements and capacity upgrades
needed to support the data growth in the country.
The MVNO licenses per se would not contribute
substantially to the demand for towers given
that they will be leasing capacity from existing
operators, however the MVNOs would increase
the competitiveness of the mobile telecom market
which would in turn lead to the operators’
enhanced consciousness of their cost base.
So far the discussions between STC and Mobily
to set up a towerco have not been successful. At
present, passive tower infrastructure is shared
between STC, Mobily and Zain on a selective and
one-on-one basis. Overall, Saudi Arabia’s market
attractiveness is driven by its size and future
network capacity expansion. Additionally, the
potential set-up of a towerco would be facilitated
by Saudi Arabia’s well developed regulatory
structure that promotes a liberal and competitive
telecom market and infrastructure sharing.
Iraq
Iraq is the second largest market in the Middle
East in terms of number of towers (estimated at
approximately 12,300). There are four mobile
“ “The outlook for tenancy ratios is good given the expected coverage
expansion in certain countries (e.g. Iraq, Yemen), capacity additions in the
mature markets and potential new entrants (e.g. Iraq). The relatively high
network overlap in most markets supports the case for the simultaneous
carve out of more than one tower portfolio per market

operators present in Iraq (Zain, Asiacell, Korek
and Mobitel, the latter operating solely in the
Kurdistan region). Mobile penetration currently
stands at approximately 100% which, taking
into account the double SIM effect, allows for
further subscriber growth. 2G network coverage
is generally good, with Zain and Asiacell covering
98% and 97% of the population respectively,
however, Korek is lagging behind. The mobile
data market is still underdeveloped because of
the government’s delay in granting 3G licenses.
Currently 3G services are only offered by Mobitel
in Kurdistan. All in all, the demand for towers is
expected to be strong, fuelled by further 2G and 3G
rollout. Additionally, the network overlap is less
than perfect (i.e. Zain’s network is concentrated in
the South while Asiacell and Korek’s networks are
concentrated in the North of Iraq), which underlies
an attractive tower company business case.
Furthermore, substantial savings at the operator
P&L level are expected because of the efficiencies
in fuel (including fuel security), security and
maintenance that a specialised tower operator
would bring.
From a tower market opportunity perspective, the
current timing for setting up a tower company
is very attractive – the Iraqi government has just
granted the mobile operators the right to rollout
3G services, therefore 3G rollout will be under way
soon; also, a new mobile license has been on the
regulator’s agenda for some time. However, it is
unlikely that any tower transaction will take place
before the difficult security and political situation
in Iraq is resolved.
Kuwait
Kuwait is another sizeable, yet mature market. It
is characterised by high penetration rates (180%)
and historical growth attributed to multiple SIM
ownership, temporary visitors and immigrant
workers. There are three operators present in
Kuwait: Zain, Viva and Wataniya, accounting for
a total of 5,100 towers. The network coverage in
Kuwait is extensive: 2G services cover 100% of
the population, 3G services in the range of 95%
and 98% and LTE has been deployed nationwide.
Therefore, there will be only limited rollout for
coverage purposes going forward, however 3G and
LTE capacity upgrades will be needed to cater for
the data growth in the market. The limited market
growth in Kuwait and significant network overlap
supports the business case of simultaneous carve
out of more than one tower portfolio, because this
will enable healthier tenancy ratios.
Middle East towers: opportunity in the waiting
The telecom markets in the Middle East are rather
diverse, ranging from highly penetrated markets
boasting the latest technologies to voice-only
markets with ample opportunities for growth.
The common aspect of these markets is the lack
of tower outsourcing activity, which is otherwise
present virtually everywhere else, from the
Americas to South East Asia. In other words,
the Middle East presents a unique first mover
opportunity for both mobile and tower operators.
Being a first mover in the tower space has its
inherent risks but the potential rewards typically
outweigh the risks. One thing is for sure - being
the last mover is almost always the worst possible
outcome
Delta Partners is the leading Advisory and Investment firm specialised in Telecoms, Media and Digital
with offices in the Middle East, Africa, Europe, Asia, Latin America and the United States of America.
We partner with global and regional telecom providers, digital players and other TMD clients to help
them address their most challenging strategic issues.
Our unique combination of Management Consulting, Corporate Finance and Private Equity creates
unparalleled value for our clients, investors and business partners.
For more information, please visit www.deltapartnersgroup.com
Delta Partners Corporate Finance Limited and Delta Partners Capital Limited are members of the Delta
Partners Group of companies and are authorised and regulated by the DFSA.
About Delta Partners

Source: IMF, Wireless Intelligence, operators’ annual reports, press releases, Delta Partners analysis
Main drivers of the tower markets in the Middle East
30.6mPopulation (2014E)
GDP / Capita (PPP) (2014E)
GDP growth (2014E-17E, CAGR)
Number of mobile operators
Subscribers (2014E)
Penetration (2014E)
Estimated number of towers
Population coverage
Regulatory environment
Expected future rollout
TowerMarketMobileMarketMacro
Expected new entrants
Existing tower sharing
prevalence (high/mid/low)
Networks overlap (high/mid/low)
Data subscriber growth
(2014E-17E, CAGR)
$32,300
3.2%
3
54.8m
179%
10.6%
30,600
97%
Mid
Further
3G/LTE
rollout and
capacity
upgrades
3 MVNOs
Mid
Promotes
infrastructure
sharing
35.9m
$7,700
7.2%
4
36.8m
103%
6.8%
12,300
98%
Mid
3G rollout
New mobile
license
possible
Low
In the process
of formulating
infrastructure
sharing
regulation
4.0m
$40,200
1.8%
3
7.2m
180%
9.4%
5,100
100%
High
3G/LTE
capacity
upgrades
No
Mid
No
regulation on
infrastructure
sharing
9.3m
$31,000
4.1%
2
17.3m
186%
13.7%
8,500
100%
High
3G/LTE
capacity
upgrades
No
Low
Informal
support for
site sharing
6.7m
$6,300
7.0%
3
10.0m
149%
16.2%
5,900
100%
High
Further
3G rollout
and LTE
deployment
Fourth
mobile
license has
been delayed
High
Mandatory site
sharing, subject
to availability
27.5m
$2,400
4.1%
4
16.4m
60%
24.4%
3,900
75%
Mid
Further 2G
rollout
No
Low
No
regulation on
infrastructure
sharing
3.3m
$30,300
2.7%
2
6.0m
182%
13.0%
3,200
97%
High
Further
3G/LTE
rollout and
capacity
upgrades
Further
3G/LTE
rollout and
capacity
upgrades
No
Low
Promotes
infrastructure
sharing
4.5m
$15,100
5.6%
2
4.1m
92%
15.9%
2,000
99%
High
Third mobile
license
possible after
2015
Low
Intends to
establish
infrastructure
sharing
regulation
1.2m
$36,000
3.1%
3
2.9m
246%
15.4%
1,700
100%
High
Further LTE
rollout
No
Mid
Promotes
infrastructure
sharing
2.2m
$97,000
6.3%
2
4.1m
187%
12.6%
1,100
100%
High
3G/LTE
capacity
upgrades
No
Low
In the process
of introducing
mandatory site
sharing
KSA Iraq Kuwait UAE Jordan Yemen Oman Lebanon Bahrain Qatar

Special feature:
At the beginning of 2014, 14% of Nigeria’s towers were owned by
independent towercos. By the end of 2014, 85% of the country’s towers will
be owned by towercos, representing almost all the tower assets except those
owned by Glo.
Airtel triggered this wave of activity with their pan-African tower sale,
although the Nigerian component is yet to close. Meanwhile, Etisalat and
MTN Nigeria have gotten to market first, selling 2,136 and 9,151 towers
respectively to IHS for a total of over US$2bn. But the transactions are
markedly different – Etisalat divested around four fifths of their tower
portfolio in a 100% sale and leaseback deal, while MTN retained an
unprecedented 51% equity in a joint venture towerco over which IHS will
have full operational control.
TowerXchange’s Nigeria special feature shares Enda Hardiman’s vision of the
new Nigeria, contrasts that with TowerXchange’s own editorial commentary
on the convergent telecom, tower and power markets in the country, and
takes a closer look at the Etisalat and MTN tower deals with IHS, including an
exclusive interview with Andrew Kemp, CFO of Etisalat Nigeria.
Nigeria ushers in an era of
infrastructure sharing
In this comprehensive special feature:
47 Editorial: Nigeria migrates to the independent tower company
business model
52 How Etisalat Nigeria accelerated the tower sale process and realised
a good valuation
55 IHS secures 9,151 towers from MTN Nigeria, Africa’s largest tower
transaction to date
58 The case for MNOs to retain “Schmuck Equity” in joint venture
towercos
61 Enda Hardiman on “The new Nigeria”

TowerXchange-Issue_10

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