September 16, 2014
StatPlan Energy estimates there are 4 million telecoms towers installed in the world, growing at a CAGR of 4.1% to 2020. In 2014 the market for tower construction is estimated at US$20.3 billion globally. By 2020 the total installed base will have risen to 5 million towers. But the rate of growth, and the structure of the industry that continues to develop, varies significantly by region. Taking into account the industry structure and trends in tower sharing, forecast double digit growth in Sub-Saharan Africa and Latin America, but the volume regional market will be Asia, with some “hotspots” evident.
“Towers constitute almost 50% of the total capital expenditure for an operator, so the cost of towers ties up large amounts of capital in costly infrastructure and is a significant drag on operating liquidity,” says principal author and director Euan Blauvelt.
“As many MNOs face declining revenues they have sought to free up the capital tied into infrastructure and the towerco was born. In turn the concept of asset sharing has become another key trend in the industry.”
StatPlan Energy concludes that companies seeking to grow rapidly must choose their battlegrounds carefully; as a consequence of a lumpy market we envisage significant activity in terms of mergers and acquisitions in the sector in coming years so that companies are best placed for investment in infrastructure.
The current “hotspot” for independent tower ownership (then leased back to MNOs) is sub-Saharan Africa, where it has been estimated some US$30 billion in infrastructure transactions are currently under review. The towerco industry is also established in North America and Europe, and the first steps are being made in China with the development of a joint venture between China Telecom, China Mobile and China Unicorn. In Africa, forecasts suggest that 30% of all telecoms towers could be independently operated by 2020. Currently, the research firm estimates that 18% of all telecoms towers globally are independently operated.