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Cape Town - African mobile tower giant IHS has raised $2.6bn in capital to fund its acquisitions after more than doubling the size of its portfolio on the continent.
IHS leases out cell towers to mobile networks in countries such as Nigeria, Zambia and Rwanda. The result is that these mobile operators save on infrastructure costs such as energy and security.
Following recent acquisitions of MTN and Etisalat’s tower portfolios in Nigeria, IHS says it expects to have over 20 000 towers in Africa. In September, IHS reached an agreement in principle with MTN to operate its 9 151 mobile network towers in Nigeria.
And amid its growing cell-tower portfolio, IHS’ latest capital raise comprises $2bn in equity and a loan facility of $600mn.
In total, IHS says it has raised $4.5 billion in total since 2012.
“We will continue to follow and act on good opportunities that add value to our stakeholders,” Rhys Phillip, chief commercial officer, IHS Africa (UK) Limited, told Fin24.
“The tower business is a compelling investment opportunity given the long term nature of the contracts and the quality of the major customers. There is significant growth yet to be realised in Africa given relatively low penetration rates and the huge increases in data usage expected,” Phillip said.
Africa’s mobile phone market is booming, driving up demand for network services.
“Sub-Saharan Africa is the fastest-growing region globally, with 328 million unique mobile subscribers and an annual growth rate of 18% over the last five years,” said Tom Phillips, chief regulatory officer for the GSMA, in a statement released earlier this year.
“However, with subscriber penetration of just 37%, there is clearly still huge potential for greater growth ahead,” said Phillips.
Managing director of Africa Analysis, Dobek Pater, told Fin24, "The market has been growing, but IHS has been outgrowing competitors. This may provide more of a reflection of IHS’ success than of the total market."
Competitors to IHS in the Africa mobile tower space include the likes of Eaton Towers, which reached a deal to acquire over 3 500 towers belonging to Airtel in six African countries.
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