Helios Towers buys stake in SA Towers to build 500 cellphone masts

London-based Helios Towers has bought a majority stake in SA Towers, a network infrastructure company, with plans to build at least 500 urban cellphone towers across the country.

Earlier this week, Helios Towers, which owns and leases out 6,560 cellphone masts in Africa, said it was entering the South African market through a joint venture with Vulatel.

The company followed that up with an announcement on Friday that it would buy 89.5% of SA Towers for an undisclosed sum.

The Vulatel and SA Towers agreements “will help us get off to a quick start in SA”, said Helios Towers’ chief commercial officer Alexander Leigh.

“The SA Towers pipeline is over 500 urban locations. They’ve specialised in the Gauteng region but also in KwaZulu Natal — locations where the operators have capacity issues. These towers offer quick, capital-efficient solutions,” Leigh told Business Day.

SA Towers, which has contracts in place with some of the country’s main mobile network operators, was launched in 2016 by local entrepreneurs Rico Marx and Harm Kelderman. It is backed by real-estate investor Africa Property Partners.

“We have the ambition to turn this into a material tower company within the next 12 to 24 months,” Leigh said.

Some towers were already operational and the pipeline of sites was expected to grow, he said.

While SA’s mobile operators were probably not yet ready to sell their tower portfolios, “they’re willing to use tower companies for expansion given the capital efficiency and speed to market”.

The SA Towers entity would help facilitate Helios Towers’ plans to spend about $100m (R1.4bn) on building network infrastructure in the country over the next three years, Leigh said.

Marx, co-founder and director of SA Towers, said in a statement: “We have ambitious expansion plans in order to meet the burgeoning demand for high-quality tower infrastructure by the mobile network operators.”

“In partnership with Helios Towers, we will be able to accelerate the development of this tower pipeline,” Marx said.

Helios Towers CEO Kash Pandya told Business Day separately this week that SA has about 30,000 telecommunications towers and probably needs another 7,000-10,000.

Pandya said that in addition to new builds, Helios Towers would consider acquisitions of tower portfolios in SA since only about 10% of existing towers are owned by independent infrastructure providers.

He also said Helios Towers would consider an initial public offering (IPO) within the next two years after an earlier plan to do so was shelved.

The group pulled its IPO in London and on the JSE in 2018 as market conditions were no longer suitable, he said.

hedleyn@businesslive.co.za