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Airtel Africa Halts Investments Into Tower Infrastructure

Airtel Halts investments into Infrastructure

Telecommunications company Airtel will no longer channel its investments towards tower infrastructure in select African markets, including Kenya. According to the company’s financier, International Finance Corporation (IFC), Airtel plans to liquidate most of its existing assets in favor of leasing infrastructure from other companies.

“Airtel Africa is focusing on an asset-light business model and has divested most of its telecommunications tower portfolio and is in the final stages of divesting the majority of its remaining tower portfolio to tower companies,” IFC said in its investment disclosures.

The company currently has an estimated 2,500 tower sites across the continent.

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“Airtel Africa currently maintains a limited number of strategic tower sites across its business, and presently has no foreseeable plans to materially expand its owned towers portfolio.”

According to the IFC, Airtel uses two types of independent telecoms tower firms to develop its network. One way is to rent space on their current infrastructure. The second option is to hire them to build towers tailored to Airtel’s network coverage requirements, in which case the telco becomes the “anchor tenant.”

Mobile network operators in Kenya have been spending billions building, maintaining and upgrading their own towers and infrastructure annually. The telcos are now adopting to sharing of infrastructure as a way of cutting annual expenditure.

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Safaricom announced last year that it would start leasing towers from third parties, despite having invested in a huge chunk of the infrastructure in the country.

Last year, Telecommunications infrastructure firm Atlas Towers announced its entry into the market, with a Sh5.4 billion investment to install 4G towers which will be leased out to mobile network operators Safaricom, Airtel and Telkom Kenya.

Safaricom and Airtel are already mapping out the roll out plan for 5G. However, a huge chunk of the Kenyan market is still on 3G, an issue that the telcos need to address. The telcos have been in a rush to provide 4G coverage to subscribers across the country in a bid to attract and retain a huge percentage of smartphone users.

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Written by Vanessa Murrey

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