African mobile telecoms operators, infrastructure owners and service providers are ramping up investment and targeting acquisitions across the region to meet the surge in demand for connectivity, according to a telecom transaction adviser.
“The African TMT vista remains extraordinarily vibrant. Fundamental demand is not in doubt, and neither is exponential growth in demand,” says Enda Hardiman, managing partner of Hardiman Telecommunications. “This is reflected by telecommunications operators seeking economies of scale. This holds across the mobile sector, the towers sector and the broadband connectivity sector.”
“In mobile, transnational groups are consolidating operations,” Hardiman comments. “This holds across countries and regions. It also holds in the case of potential acquisition of single-play LTE operators. New commercial strategies emphasise social media, entertainment and finance. ‘Basic’ connectivity no longer suffices. Investment continues apace.”
“In towers, critical mass achieved by transactions to date is now being consolidated. Further transactions, including major liquidity events, are in prospect. Significant impetus is lent to the sector, together with corresponding capital requirements, by developments in fibre connectivity, power, and, not least, the burgeoning IoT sector,” he says.
“In broadband connectivity, the capacity of international submarine landing points is being extended inland. Major initiatives are under way, following African trade routes. Spurs are continually added to transnational and transcontinental terrestrial backbones, enhancing both mobile and fixed line connectivity. Satellite has experienced a resurgence in serving demand in outlying regions. These initiatives are capitally intensive, engaging equity, debt and project finance.”
Hardiman will host the Telecom Leadership Panel at TMT Finance Africa 2017 on May 24 in London.