[Transcript] #76: IHS Towers - How the telecom infrastructure company is building and managing towers across Africa and beyond
Transcript for podcast originally recorded in May 2024
😉 In January 2024, we explored the story of IHS Towers, the African telecommunications infrastructure company. IHS was founded in Nigeria in 2001, the company owns, operates, and develops tens of thousands of telecom towers, enabling mobile network operators to deliver wireless services efficiently. They are primarily focused on emerging markets in Africa, Latin America, and the Middle East.
Their business model involves leasing tower space to multiple operators, promoting infrastructure sharing and cost savings. IHS Towers plays a crucial role in expanding mobile connectivity and bridging the digital divide in these regions. The company has grown rapidly through acquisitions and partnerships, expanding its portfolio to 40,000+ towers, and became publicly traded on the New York Stock Exchange in 2021.
Companies discussed: IHS Towers, MTN, Airtel, Telkom, Orange, Etisalat / 9 Mobile, American Tower Company, Globacom, Libancell, Helios Towers Nigeria, Telkom, Vodacom, Goldman Sachs, (IFC), Public Investment Corporation of South Africa, Ecobank, Investec, Standard Bank.
Business concepts discussed: Tower Infrastructure, Shared communication infrastructure, Tower Leasing and Ownership Models, Market Expansion, Sale and Leaseback, Local vs Global Strategy, Capital-intensive business models, Currency devaluation
Olumide Ogunsanwo
Personal: Website
Afrobility Podcast: Stories and analyses of African technology companies (Website, Listen: Apple podcasts, Spotify & Google podcasts & Read: Substack Newsletter)
Adamantium Fund: African B2B fund focused on education, health, finance, food and transportation (Website & memo)
Firedom Book: Financial Independence stories of African Immigrants (Website, Substack Newsletter & Buy: Print, eBook or Audiobook)
Transcript starts here
[00:00:00] Olumide Ogunsanwo: Today we're going to explore IHS Towers, the African Telecommunications Infrastructure Company. We'll discuss the story across the following areas. One, we'll first give some context about telecom tower infrastructure. Second, we'll talk about IHS Tower's early history. Third, its product monetization strategy. Fourth, its competitive position and potential exit options. And then fifth, we'll end with our views on its overall outlook. This episode was recorded on May 5th, 2024.
Afrobility is back!
[00:00:25] Bankole Makanju: Afrobility is back. It's been a while. How are you doing, my man?
[00:00:28] Olumide Ogunsanwo: It's been okay. I've been staying alive. It's, it feels like it's been ages, but I looked it up. It's been two and a half months. February was the last episode, I think?
[00:00:37] Bankole Makanju: Yeah. Well, I'm excited to be back and talking about it. Something near and dear to my heart, Digital Infrastructure, in this case, IHS Towers.
[00:00:44] Olumide Ogunsanwo: Why is that near and dear to your heart?
[00:00:46] Bankole Makanju: Because it's under invested and it's like the thing that underpins that powers a lot of the things that we talk about instead.
A lot of the Flutterwaves, Paystacks and the other pieces. And IHS is just as interesting going to the prep for this episode. And the characters are just as colorful as well. Let's get into it.
[00:01:05] Olumide Ogunsanwo: do it. I love infrastructure companies for the same reasons.
They're like they're foundational and important, but they tend to be overlooked because they're more B2B facing or they tend to be more. It tends to be a little bit more boring to an everyday consumer because they don't interact with them. Okay. So we're talking about iHub. You know what they…
[00:01:18] Bankole Makanju: say very quickly is like opportunities show up disguised as work.
Infrastructure is the perfect example of that. It's like a market opportunity that shows up disguised as, Oh my God, that's a ton of effort. I don't just have to call the Nibs API and accept cards or whatever. This is like, Oh my goodness, that's a ton of work.
[00:01:37] Olumide Ogunsanwo: We're talking about IHS towers, aka IHS holdings.
And in corporate speak, IHS towers is one of the largest independent owners, operators, and developers of shared communications infrastructure in the world. Cool definition.
So the quick intro is one of the largest independent owners, operators, developers of shared communication infrastructure, blah, blah. I have my own favorite definition, which is a little bit different. They're a communications infrastructure company that builds and manages towers in emerging markets for telcos like MTN, Airtel, Orange.
That's easier for me to understand.
[00:02:09] Bankole Makanju: Yeah. What I was most impressed by is their relative size, right? Yes. According to them, they're the third largest independent tower operator in the world. And it's just a large number of towers compared to competitors in all these different countries from seemingly humble roots.
[00:02:23] Olumide Ogunsanwo: Yes. And they were founded in 2001. So they're quite an OG old school company. And as you know, from prior Afrobility episodes, I have a soft spot for longevity and companies that experience. Okay. Before we start a few things to know, they're the third or fourth largest tower co in the world, depending on how you define that.
They're in a lot of different countries. Around 10 to 11 markets, Nigeria, Brazil, Cameroon, Colombia, Ivory Coast, Côte d'Ivoire, Egypt, Kuwait, Peru, Rwanda, South Africa, Zambia, and they have around 40, 000 towers. They're a big deal. Before we start, we're going to do a biases