Helios Towers Enters South Africa With Vulatel Partnership

(Bloomberg) -- Helios Towers Plc entered the South African market by forming a partnership with Vulatel Pty Ltd. to build wireless and fixed-line infrastructure in the country.

  • Helios Towers expects South Africa to lead the way on 5G rollout in sub-Saharan Africa, it said in a statement on Monday.

Key Insights

  • Establishing a towers business in South Africa could help pave the way for a long-planned initial public offering, after the U.K. company and two Africa-focused rivals were forced to abandon share-sale plans last year.
  • Helios and its peers are desperate to raise cash for expansion across Africa countries, where the emergence of 5G networks and accelerating broadband take up presents a growth opportunity.
  • South Africa is one of the more stable of those markets, and Helios suspects that there may be opportunities to buy towers from wireless carriers such as MTN Group Ltd. and Vodacom Group Ltd. The company plans to spend as much as $100 million over the next three years, CEO Kash Pandya said in an interview.
  • Vulatel is 69 percent owned by black investors, giving Helios a South African partnership that complies with government initiatives to redress inequalities stemming from apartheid. That gives Helios an advantage when seeking approval for deals in the country.

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  • Helios Towers has the ability to meet its $100 million investment target in South Africa through existing funds and cash flow, Pandya said. Earnings before interest, taxes, depreciation and amortization is increasing 20 percent year-on-year, he said.
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