Advising an African tower company on attracting investment to enable growth
Project experience | Transaction support
Analysys Mason supported an African tower company and some of its shareholders with multiple rounds of financing and tower acquisitions. In particular, the company and its shareholders required assistance in validating its business plan, including portfolio size, tenancy ratio, pricing and cost projections, to support discussions with investors.
We reviewed the pricing and volume projections of the business plan. In particular, we developed a proprietary model for forecasting the tenancy ratios and tower numbers achievable by a given portfolio.
Our model was based on several factors, including MNO site roll-out in each settlement to address both future capacity (based on projections of retail mobile traffic and MNO market shares) and future coverage (based on each operator’s stated intentions, current coverage and optimal coverage level).
The model also included the specific location of the tower company’s portfolio, relative to the MNOs’ current sites and their future expected demand, and the propensity of each MNO to use the tower company’s portfolio (and share each other’s portfolios), as well as the current level of co-location on each portfolio.
We also evaluated future energy costs for the towers (typically the major opex item), based on generator sizes, presence of hybrid power solutions and grid connectivity.
Following the completion of our project (at which point the company had around 700 towers), our client had attracted investment from major investors and grown to over 9000 towers over a two-year period. Further significant growth is expected.