Telecoms

Helios well placed to exploit SA market demand

Read time 3min 30sec
Alexander Leigh, chief commercial officer, Helios Towers.
Alexander Leigh, chief commercial officer, Helios Towers.

Independent telecoms tower infrastructure company Helios Towers has confirmed senior executive Jeffrey Schumacher will head up Helios Towers South Africa (HTSA), which was established this month with Vulatel.

Schumacher has served as CEO of Helios Towers Ghana since September 2015 and of Helios Towers Congo Brazzaville since October 2016.

He will oversee the company's approach to the South African market, underpinned by Helios's recently announced agreement with SA Towers to acquire a controlling interest in the local tower company and fund future rollout.

Helios chief commercial officer Alexander Leigh told ITWeb Africa that the company spent between 18 and 24 months considering the South African market, including potential partners and assets.

He reiterated the company's view that the alliance with SA Towers will enable it to scale local operations and leverage an immediate pipeline of 500 urban build-to-suit tower opportunities, relationships with MNOs and SA Towers' town planning expertise/capabilities for managing building permit applications with municipalities.

"For us the South African towers market is quite unique in terms of how long the permitting process takes to actually be able to build this infrastructure in the urban centres. And what's quite unique about the SA Towers team and what they've achieved is that they've really come at it from a property angle, and the expertise and town planning and managing that building permit process really adds a strong string to our bow."

HTSA will focus on building out wireless and fixed line open-access infrastructure. Leveraging the alliance with SA Towers and applying expertise to projects, Leigh said the intention is to deploy $100 million in capital in the South African market.

He added the company is not concerned about the size of SA's market, nor any limitation in terms of available room for further tower infrastructure development.

Spectrum capacity

A key factor in both developed and developing markets is that the increased access to data means more consumption, Leigh said.

"No matter how quickly the technology gets better, they're always limited by the capacity of the available spectrum, which means they need to reuse it and that means they need more infrastructure. So there are a large number, I think 30 000 existing towers within the SA market, and only around 10, 15% are owned by independents.

"And the way we look at Africa is that one day maybe the operators will sell their towers as they look to have more efficient balance sheets and operating costs. However, today that is not necessarily a priority for them, but what is a priority is rolling out new infrastructure to support the capacity in their network."

HTSA and SA Towers propose that operators exploit the opportunity to have existing infrastructure and pay a monthly rent, rather than pay a million rand to build a new tower.

Leigh explains that by doing so, operators not only reduce the capital intensity in having to invest in new base stations and new technology (including upcoming spectrum auctions when the 5G spectrum is eventually released), but they also meet the needs of the customer a lot quicker.

"They [customers] don't have to wait for a tower to be built, because we've already started that process."

According to its market research, Helios believes there will be a need for 7 000 towers in the next five years, as well as for small cells and other products to meet the demand in urban centres like Johannesburg and Cape Town.

Leigh says spectrum auction and open access networks continue to be in discussion in SA, and the company will continue to target the tower space, as well as fibre and data centre development segments as resources are mobilised to support next-generation networks.

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