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The Business Council for Africa and Invest Africa’s flagship event, The Annual Debate 2018 returns 24th April for its forth edition. It has established itself as an important platform for everyone interested in and committed to African business.

Tech transformations: American Tower Corporation on building Africa’s broadband

NEWS

Tech transformations: American Tower Corporation on building Africa’s broadband

BCATEST

If there is one way of charting Africa’s turn to connectivity, it is in the rise of the mobile. Mobile subscription continues to grow in Africa, outpacing every other region worldwide. A crucial driver of this is the demand for internet access, and it is a drive which is changing the way Africa is communicating, socializing – and doing business. 

Mobile technology is the primary way for consumers and enterprises to communicate; access the internet and drive economic growth.
— Hal Hess

With this in mind, perhaps it was only a matter of time until American Tower Corporation, one of the US’s largest broadband and wireless technology operators, would develop an interest in the Continent. After successfully establishing themselves in the developing broadband markets of South America, ATC turned their sights to Africa, where an explosion in the population, to a billion people was promising an expanded market – and a whole generation of new internet users.

Hal Hess interview - T.png

Regional internet users stood at 110.9 million in 2010, when American Tower Corporation began operation. This figure has been dwarfed by internet use today, with unique subscribers in Africa expected to reach 725 million by 2020. Similarly, American Tower Corporation have gone from strength to strength – since 2010 ATC have established sites across South Africa, Ghana, Uganda and Nigeria; constructing over 8000 towers as part of their wireless network deployment.

There is also a positive correlation between the diffusion of mobile broadband and a country’s economic development in terms of GDP
— Hal Hess

We spoke to Hal Hess, President of Latin America and EMEA at American Tower, on the transformation of Africa’s ICT sector, the impact of connectivity on the Continent – and markets American Tower are most excited about going forward.

  Hal Hess, President, Latin America and EMEA, American Tower International

Hal Hess, President, Latin America and EMEA, American Tower International

You're giving our keynote address on the transformation of Africa’s ICT sector. How crucial do you think connectivity is to development in Africa?

Connectivity is vital to driving continued development in Africa, and we believe that mobile broadband has the potential to fundamentally transform people’s lives for the better in a number of different ways - everything from improving the region’s economies, to enhancing access to information to the most simple element of improving the ability to communicate with your friends and family.

There are very limited fixed line deployments in most African countries. Therefore, mobile technology is the primary way for consumers and enterprises to communicate, access the internet and drive economic growth. For example, in two of our largest markets in the region, Nigeria and South Africa, less than 1% of the population has access to fixed line communications, meaning that mobile connectivity represented the first opportunity for most Nigerians and South Africans to have access to communications services.

There is also a positive correlation between the diffusion of mobile broadband and a country’s economic development in terms of GDP. A joint study conducted by Ericsson and Imperial College London suggests that a 10% increase in mobile broadband adoption may drive a 0.6 - 2.8% increase on average in economic growth.

It was reported recently that broadband providers were increasing their investment to meet Africa's surge in demand for data. What's key to sustainable improvement in Africa's digital infrastructure?

Sustainable improvement in digital infrastructure is in many ways predicated on maintaining a predictable and fair regulatory environment, which in turn helps to ensure access to capital and allows for transparency throughout the value chain. This includes reasonable spectrum policies, fair tax regimes, measured rules and regulations governing technology, as well as incentives for technology investment.

We are now looking to play an expanded role in driving industry-wide efficiencies throughout global markets – a great opportunity for us to do that is in Africa
— Hal Hess

Having this visibility enables infrastructure providers to most efficiently allocate capital and enter into long-term contracts that serve as the backbone of wireless infrastructure investments, which drives further investment and continued improvement. As a result, we carefully assess the government and regulatory frameworks before entering a market to ensure they have the necessary government, judicial and regulatory framework for us to accurately assess the investment cases in the market.

You entered Ghana and South Africa in 2011, Uganda in 2012, Nigeria in 2015 - where is next for American Tower Corporation? Are there any markets you're especially interested in seeing develop?  

We’re always looking for potential incremental investment opportunities. Our first preference for additional investment would be to add more scale in our existing markets given we have the necessary infrastructure in place to support incremental portfolio growth.

We would also be interested in expanding to other markets in the region assuming they pass our three gate investment criteria. Firstly, meeting governmental/legal requirements; democracies with independent judiciaries and legal systems based on Western European tradition. Secondly, a competitive wireless market; at least three strong wireless carriers capable of making long-term investments in their networks, markets with recent or upcoming spectrum auctions and reasonable regulatory regimes. Finally, the potential for scale; attractive entry point with path for us to build a nationwide portfolio and become the largest or second largest tower company

American Tower Corporation is a global provider of wireless communications infrastructure, where do you believe the company has made its biggest impact to date?

We’re proud of our well-diversified portfolio of more than 160,000 sites across 16 countries and five continents, and believe that we have played a significant role in expanding access to broadband connectivity for billions of people within those markets.  Our contributions have been different depending on the geography and timing along the continuum of the evolution of wireless ecosystems.

In the United States, we were a founding company in the creation of the independent tower model that commercialized wireless infrastructure owned by the mobile network operators (MNOs), which partly financed the expansion of the wireless broadband industry. This led to our 2010 investments in Africa, first in South Africa and later in Ghana, Uganda and Nigeria, increasing competition and helping to accelerate the deployment of advanced wireless services.

We strongly believe that the independent tower model is the most efficient way to deploy today’s modern wireless networks in the vast majority of geographies. Our focus continues to be not only on driving strong total returns for our shareholders, but also on helping to incrementally drive global connectivity - and that goal applies to all of our served markets.

Additionally, we are now looking to play an expanded role in driving industry-wide efficiencies throughout global markets – a great opportunity for us to do that is in Africa where we are working hard to improve the fuel efficiency of our sites and to drive costs down for the wireless ecosystem as a whole. If we are successful, we are optimistic that the pace of development can be further accelerated, benefiting not only our company, but also the people who reside where we operate.


Hear more from Hal Hess, at The Annual Debate 2018, where he will give a keynote address: Leaders in the Transformation of Africa's ICT Sector.