Investment will help fill the additional 30,000 towers needed to improve and extend coverage, including the introduction of 5G
Nigeria-based Pan African Towers (PAT) has announced strategic investment from Development Partners International (DPI), an investment firm focused on Africa, and Verod Capital, an African investment management firm. DPI and Verod intend to fuel PAT’s continued growth and “reaffirm its position as Nigeria’s largest homegrown digital infrastructure provider”.
No details were provided about how much the two will invest, or over how long or other terms and conditions.
PAT was founded in Nigeria in 2017 and built a successful business model by establishing tailored, long-term contracts with blue-chip customers, including Nigeria’s leading mobile network operators and ISPs.
Market attractions
Nigeria is an attractive market for digital infrastructure in Africa, as Africa’s biggest telecoms market in terms of number of mobile subscribers (208 million) and the sector’s growing contribution to GDP which rose to about 13% in 2021 compared to 8% in 2015.
As of December 2021, there were 41,120 towers in Nigeria, mostly supporting 3G and 4G. Nigeria’s Ministry of Communications says the country needs between 70,000 to 80,000 towers to enable good quality of service and coverage for 4G and 5G. Hence 30,000 more towers are needed and this investment is intended to enable PAT to close this gap.
PAT’s management team will work closely with DPI and Verod to accelerate its strategic plan, leveraging their expertise in areas such as market entry, operational efficiency and talent management. With the support of both investors, PAT plans to deepen relationships with partners, expand its customer base, and grow its footprint of towers to reach new parts of the country where mobile and wireless penetration remains low.
PAT will also benefit from DPI’s experience in scaling towers companies, as the first institutional investor in Eaton Towers, another of Africa’s telecoms businesses, which it exited in 2019.
Surge in data consumption
Daniel Adeoye, Principal and Head of Investments at Verod Capital, said, “The Nigerian demographic is currently experiencing a surge in data consumption and related services, driven by a generation of tech-savvy digital natives that are unparalleled.
“The ‘Verod Consumer Spend Index’ indicates that telecommunication expenses are increasing significantly, providing a tailwind for tower companies like PAT. Verod is delighted to support PAT’s management with ample capital and value-creation expertise to navigate this period of growth.”
Azeez Amida, CEO of Pan African Towers (pictured), added, “Pan African Towers is on a mission to accelerate the Nigerian market and support the growth of the mobile telecommunications sector in the country. We also have a clear strategic vision to grow the business sustainably, including actively reducing the carbon footprint of our network to uphold best-in-class ESG practices.
“We are excited to partner with DPI and Verod and will leverage their sector experience and market expertise to help us achieve these goals. The evolution of Nigeria’s mobile and wireless industry presents significant opportunities for our business, and we look forward to being a part of this next chapter of growth.”