Helios Towers earmarks R1.4-billion for SA infrastructure investment

Helios Towers has earmarked US$100-million (about R1.4-billion) for spending on telecommunications infrastructure in South Africa in the next three to four years.

The company’s CEO, Kash Pandya, revealed this figure in an interview with TechCentral on Monday after announcing it was setting up shop in South Africa in partnership with the black-owned telecoms specialist Vulatel.

Helios Towers will own 66% of Helios Towers South Africa (HTSA), with Vulatel holding the remaining 34%, Pandya said.

He said Helios has been “on the ground” in South Africa for the past year, building relationships and considering the optimal way of entering the market.

TechCentral reported earlier on Monday that the company plans to work with Vulatel to make “major greenfield wireless and fixed-line telecoms infrastructure investments” in South Africa.

Vulatel is led by its CEO and chairman, Tlhabeli Ralebitso, who was the founding MD of Vodacom Ventures and previously led Vodacom Group’s M&A and investor relations functions. Ralebitso is supported by Vulatel’s MD, Jean-Pierre Crouse, who was chief implementation officer at Dark Fibre Africa. The company began operations in 2017 after acquiring Dimension Data’s fibre and wireless division (formerly Plessey South Africa).

HTSA will build open-access infrastructure that it will then lease to other companies.

Attractive opportunity

Helios Towers, which operates about 6 500 towers in Tanzania, the Democratic Republic of Congo and Congo-Brazzaville, and which has urban operations in Ghana, said it has long considered South Africa an attractive opportunity due to the size of its economy, its population dynamics and the demand for advanced telecoms services. The company’s investors include Helios Investment Partners, Quantum Strategic Partners, Albright Capital Management, RIT Capital Partners, International Finance Corp and Millicom International Cellular.

Pandya said Helios evaluated several potential partners in South Africa before settling on Vulatel. He praised Vulatel’s management team and its knowledge of the South African telecoms sector.

Though he said he can’t speculate on plans by South African mobile operators to sell their tower portfolios — so far, only Cell C has done so, offloading its tower assets to American Tower Corp — Pandya said it makes sense for them to do so. It allows the operators to use the money they get from the asset sales to invest in new technologies and growing their market share.

“This will happen in South Africa. There are 30 000 towers in South Africa, and less than 10% of those towers are with independent tower companies.”

Pandya said the planned $100-million investment in South Africa is an indicative figure only. The actual money invested will depend on the opportunities that present themselves. It plans to invest in towers, small cell sites, fibre and “edge” data centres, he said.

Helios Towers pulled the plug on plans to launch an initial public offering last year after equity markets came off the boil. It has no immediate plans to file for a new IPO, Pandya said.

“We made that decision with confidence in the business. We have delivered 20% year-on-year growth over three years. The shareholders felt there was no point in losing value in a climate where equity markets were in turmoil.”

An IPO is “always an option” to access more investment and bring in additional investors. “We will look at the market conditions, but we are in no rush for a listing.”  — © 2019 NewsCentral Media