Subscribe

Helios Towers targets expanded rural connectivity

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 14 Jun 2024
Helios Towers CEO Tom Greenwood.
Helios Towers CEO Tom Greenwood.

Telecoms tower infrastructure company Helios Towers aims to provide coverage for an additional 20 million people by 2026.

So says CEO Tom Greenwood, in an interview with ITWeb, providing a business update and outlining the towerco’s plans to enable rural connectivity.

“At the moment, our 14 000 towers cover around 144 million people. We are forecasting an extra 20 million people covered by our towers by 2026.

“A lot of that comes from the fact that…a lot of people don’t have connectivity, or have low coverage today. Our business exists to enable sharing; enabling mobile operators to roll out at a lower cost than what it would be to do it themselves, which helps in rolling out in more rural locations. Through this, we hope to get more and more people connected in a faster time.

“In some markets, we work closely with the regulators and in collaboration with the mobile operators, in terms of pinpointing the optimum rural locations to roll out. We’ve got an active programme in some markets on that, which is organised pretty well by the regulators.”

Nine is fine

UK-based Helios owns and operates 14 000 telecoms tower sites in eight African markets and one in the Middle East: Tanzania, Democratic Republic of the Congo (DRC), Congo Brazzaville, Ghana, SA, Senegal, Madagascar, Malawi and Oman. Its largest markets in the group are Tanzania, the DRC and Oman.

Greenwood says the towerco is happy with the nine markets it services and is taking time to focus on the quality of the work in those markets. For now, it is not looking to expand further afield, he notes.

Helios is in the middle of its five-year sustainable business strategy, which runs through to 2026, he adds.

“We’ve got a big focus on organic growth in the nine markets in which we operate. A couple of years ago, we had a strategy to geographically expand and diversify the portfolio. From 2020 to 2022, we doubled the business from 7 000 to 14 000 towers, from five markets and now nine markets.

“Following closing the last of the four acquisitions in December 2022, we have been moving well in terms of fully integrating new assets and new people into our group, establishing our business processes across all new markets and driving organic growth across the entire nine-market business.

“In 2023, we had a record year for new organic tenancy rollout, and we’ve had a strong start to 2024.”

The business strategy, he says, focuses on three core pillars: customer service excellence, people and business excellence, and sustainable value creation.

“That’s the shape of how we encapsulate everything and our main focus for the next three years through 2026 is to focus on organic growth and increase the utilisation of our towers.

“The ambition is to get to 2.2 tenants per tower by 2026, and we're at 1.95 per tower as of Q1 and we've got a good runway to get there. Tenancy ratio in this industry is the key driver for a lot of the main metrics that we look at, including margin, return on investment capital and carbon reduction.”

In SA, the company has been operational since 2019 − a market Greenwood describes as “small but sweet”. It has a little less than 400 sites in the country and is seeing good growth in this market, he notes.

As one of the first on the continent to roll out 5G, Helios is able to take learnings from its South African business to other markets within the business when it comes to 5G rollout, says the CEO. “Strategically, we appreciate those learnings that we get from South Africa as a business location.”

Infrastructure sharing

Telephony firms MTN and Telkom have disposed of their masts and tower portfolios, as they look to streamline their focus on core business operations and zero-in on financial opportunities.

Additionally, it’s “easier” to shift that responsibility to tower companies and allow them to focus on the passive telecoms services, says Greenwood. Besides the environmental benefits, sharing of infrastructure provides a competitive advantage.

“You get a 40% to 50% carbon reduction per tenant through sharing versus everyone having their own towers. There are a lot of reasons for getting that tenancy ratio as high as possible, to enable as much sharing as possible.

“Mobile operators have built up their business through building tower sites to put their antennas on. At some point in that evolution, some mobile operators take a strategic view that the passive element of those sites – the real estate, steel and power systems – is not a competitive advantage anymore, because all of their competitors have sites in similar areas.

“The competitive advantage from a mobile operator’s standpoint becomes the technology side – the antennas and the transmission side of the network and how good that is versus that of a competitor.

“There’s also the customer service, sales distribution…and for that reason a lot of mobile operators in SA, other parts of Africa and across the world have taken the decision to sell their tower assets. This is mainly to realise a large upfront cash payment because the towers are sold for a high price…they also secure a lease or service rate for those sites, which is easy to manage because they’re just dealing with one supplier.”

However, not all mobile operators choose to go this route, he points out. “For example, Vodacom has a different strategy, as do some others around the world.”

Share