ME telecom firms could save $8bn with tower-share deals

Telecom operators in the Middle East and Africa (MEA) region could save more than $8bn in the next five years by sharing their network towers, according to a white paper drawn up by a leading telecoms advisory and investment firm.

Delta Partners, released the white paper on Sunday stating that the potential of network sharing in the MEA region was being severely underutilised.

There are currently more than 200,000 mobile network towers in operation across the MEA, with an extra 100,000 towers expected to be rolled out in the next five years, the paper, called 'Tower Sharing in the Middle East, points out.

On average operators invest between 10 and 20 percent of their revenues each year in the roll out of new sites, to increase population coverage, and on upgrading existing sites, which could be cut back if operators agreed to share towers, it adds.

'Network sharing is not a recent trend, but the current economic environment, increasing competition and pressure on margins across MEA markets is making operators consider it in order to achieve significant savings in capex and opex,” said Victor Font, managing partner at the firm.  

“In some cases, infrastructure sharing is the only viable way to access rural areas and penetrate lower end segments. We believe that over $8bn can be saved in the next five years if operators collaborate and start sharing their networks assets,” he added.

Recent multi-billion dollar network sharing deals have been concluded in India.

Last month announcement Vodafone and Telefonica announced they would share parts of their European network infrastructure – a move that was hailed as a milestone of pan-European collaboration that would result in better quality and coverage, as well as save hundreds of millions of Euros for shareholders.

”The same shareholder value can be created in the MEA region, but many operators are still a little cautious as they see their network assets as a key asset and differentiator,” added Chris Datta, Delta partners principal.

“Our analysis has shown, however, that a potential downside in market share is far outweighed by the extra benefits of cost saving on both opex and capex. In other words, operators would have to drop their market share by over 10 percent to not create value,” he added.

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