African expansion: Helios Towers snaps up 500 cell towers in SA

JOHANNESBURG — For years, Helios Towers has been buying up cell towers from mobile networks across Africa in addition to building its own base stations. Its model is very much one in which it relies on a growing trend for mobile operators looking to lease rather than own cell towers in order to drive down their capital expenditure. This trend has taken root across Africa as well as the rest of the world. But South Africa has been rather slower to the mark – it’s still common to see, for example, a Cell C tower, a Vodacom tower and an MTN tower side-by-side on various highways across the country. But with Helios Towers now making a push further south on the continent, it could mean that various towers could disappear in the country as networks start to share more infrastructure, and in turn, boost their network efficiencies and costs. Hopefully, this will trickle down to lowered data costs in turn. – Gareth van Zyl

By Loni Prinsloo

(Bloomberg) — Helios Towers Plc agreed to buy control of a company with more than 500 new telecommunication tower sites in South Africa, gaining a foothold in Africa’s second biggest economy as it gears up for an initial public offering.

SA Towers has a pipeline of potential urban sites across the country where it is ready to build new towers or is seeking construction permits, Helios said in an emailed statement Friday. Helios wants to raise cash for expansion across Africa, where it sees a growth opportunity from the emergence of fifth-generation mobile networks and accelerating broadband take-up.

Helios Towers plans to develop its South African towers as well as fixed-line infrastructure in partnership with Vulatel Pty Ltd. a local company that builds telecom networks. Helios and Vulatel’s partnership will fund and support the build out and expansion of the pipeline of permitted locations, it said.

Terms of the deal weren’t disclosed. Helios, Eaton Towers Ltd. and African market leader IHS Towers Ltd. abandoned IPOs last year year that were intended to raise funds to pay for network expansion. Chief Executive Officer Kash Pandya said in October Helios could return to the market as soon as this year to seek funds.

South Africa is one of the more politically stable of the sub-Saharan African markets, and Helios is looking out for opportunities to acquire additional towers from wireless carriers such as MTN Group Ltd. and Vodacom Group Ltd. The company plans to spend as much as $100 million over the next three years.