Welcome to TowerXchange Meetup MENA · Fire Evacuation: No planned fire tests, if the general alarm...

Welcome to TowerXchangeMeetup MENA

Wi-Fi network: towerWi-Fi password: tower123

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Networking dinner (separate booking required): 19:30 today at the Poolside Lawn at this hotel – follow directions to the pool.

Online networking tool:http://moreconference.com/towerxchange-meetup-mena-2019quote the email address you used to register and use morecode: E345B.

Download presentations and handout:https://www.towerxchange.com/mena-2019

Fire Evacuation: No planned fire tests, if the general alarm sounds, please leave the room immediately by way of the nearest fire exit (at the back of the room and straight out the external doors) and assemble opposite the Conference Centre. The Hotel Staff will alert us when it is safe to re-enter the building.

First Aider: Call the First Aider from our TowerXchange registration desk.


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Welcome to the TowerXchange Meetup MENA

Entrance&

registrationExhibition hall

Elevator

Male prayer room

Walking directions Ground floor First floor Toilets

Main meetuproom

A

H

J

K

G

B

C

D

Note: Female and additional male prayer rooms are available on the ground floor and first floor of the main hotel

FE


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Welcome to the TowerXchange Meetup MENA

The MENA tower landscape and comparisons to international markets

Kieron Osmotherly, Founder and CEO, TowerXchange

Join the conversation: Twitter: #TXMeetupMENA

Community: http://www.linkedin.com/groups/TowerXchange-4536974

Research: www.towerxchange.com

Networking club for towercos, MNOs and partnersMeetups, CXO dinners, must-read-journal, 3 million words of research, who’s whos

Meetup Europe 2019 9-10 April, London

Meetup Americas 2019 9-10 July, Boca Raton

Meetup China 2019 August, Beijing

Meetup Africa 2019 8-9 October, Johannesburg

Meetup Asia 2019 3-4 December, Singapore

Meetup MENA 2020 29-30 January, Dubai

MNO infrastructure sharing strategies


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Joint venture

Barter agreements

Towercos Co-location sales

Active sharing

ESCOs

$

Towerco fundamentals


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Where does revenue come from?

< Long term, non-cancellable leases with creditworthy tenants -> stable and visible cash flows< High contract renewal rate< Built in escalators< Economies of scale< Barriers to entry< Significant growth: data usage, population growth, coverage expansion, densification

Amendment revenue

Build to suit contracts

Co-locationrevenue

Power

The new market structure in which towercos own 67% of towers

TowerXchange is tracking 282 towercos that now own 67.2% of the world’s 4.4mn towers

* China Tower Corporation area reduced to better illustrate the relative global market share of the other towercos – if illustrated to scale, China Tower Corporation’s area would be almost double the scale of the rest of the industry combined

China Tower Corporation*1,920,000

30 other towercos with 5,000-20,000 towers303,144

234+** other towercos with <5,000 towers157,774

American Tower150,975

Indus Towers 124,230

IHS Towers 22,860

Cellnex 21,770

SBA Communications29,357

GTL Infrastructure27,759

edotco 28,490

Deutsche Funkturm28,000

Bharti Infratel 39,946

Crown Castle 40,053

Reliance Infratel43,000

Source: TowerXchange


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Towerco penetration and business models in different regions


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China

India

CALA Oceania

S & SE Asia(Exc India)

Europe

N & E Asia(exc China)

97.5% 2.5%

12.1%

17.6%

10.7%

59.5%44.9%

26.2%

28.8%

100%

11%

42%47.3%

13%

87%

USA & Canada

6.6%

66.5%

27%

10.7%

SSAMENA99.5%

0.01%0.04%

4.5%34.1%

61.4%

Operator-led towerco Pureplay independent towerco Joint venture infraco MNO-captive sites

China

India

CALA Oceania

S & SE Asia(Exc India)

Europe

N & E Asia(exc China)

97.3% 2.7%

15.4%

15.5%

9.6%

59.6%46.6%

21.8%

31.5%

14.7%66.1%

19.2%100%

11%

36.1%48.2%

13%

87%

USA & Canada

7%

66%

27%

15.6%

SSAMENA99.5%

0.01%0.04%

4.6%59.2%

36.2%

Global

52.7%

12.8%1.5%

33.1%

14.4%66.3%

19.3%

Diversity within the 275,104 tower MENA market


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< From mature GCC markets to developing markets< From consolidation of parallel infrastructure to post-conflict rebuilds< From duopolies and competitive three operator markets to the complexities of Iraq< From 5G front runners to 3G and coverage rollouts< From reliable grids to diesel-dependent tower networks


Saudi Arabia35,500

Iran37,106

Pakistan 34,300

Morocco19,054

Algeria19,000

Oman15,400

Egypt22,704

Iraq14,769

UAE13,000

Tunisia8,383

Afghanistan6,645

Qatar5,000

Jordan6,836

Kuwait4,100

Lebanon 2,600

Bahrain1,500

Drivers and inhibitors of the emerging tower industry in MENA


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Drivers < Soaring demand for data< Freeing capital for 5G< Infrastructure sharing to reduce opex< Consolidate parallel infrastructure< Credit worthy anchor tenants< Dollar linked economies< Strong local partners< Investors keen to diversify beyond O&G< Regulatory stimuli

Inhibitors < Less financial pressure to monetise< Less operational complexity< Government stakes & security concerns< Network as competitive differentiator< Lack of clear regulatory frameworks< Political and economic instability< Track record of stalled SLB processes

A history of tower deals attempted in MENA


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2010

2016

2011

2017 2017 2017 2017 2018 2018

2014 2016 2016

2016

Bahrain & Jordan: Batelco explore the sale

of tower portfolios

Saudi Arabia: Zain and TASC

agree tower sale

Saudi Arabia: Saudi Telecom Company and

Mobily explore tower JV

Saudi Arabia: STC acquire GO’s

towers

Pakistan: edotco acquire

Tanzanite

2015

Egypt: Mobinil and Orange agree

tower sale

Pakistan: Jazz and edotco agree

tower sale

Kuwait: Zain and IHS Towers agree

tower sale

Saudi Arabia: STC establish

Communication Towers

Saudi Arabia: Zain and IHS Towers

agree tower sale

Iran: Fanasia commence commercial

operations

Saudi Arabia: Zain and Mobily commence tower

sale processes

Algeria: Djezzy explore tower sale

options

Saudi Arabia: Saudi Telecom Company and Mobily re-

open tower JV discussions

Cancelled Cancelled

Cancelled Cancelled

Mobily process cancelledAbandoned Active

Deal closed Deal closed PendingPending

Pending

Abandoned

Abandoned

See page 64 of your handout

Credit worthy, multi-country anchor tenants


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Source: TowerXchangen.b. Lighter colours indicate the company owning a stake in an MNO in the country

Coutry Etisalat MTN Ooredoo Orange STC Vodafone Zain

AfghanistanAlgeriaBahrain

EgyptIranIraq

JordanKuwait

LebanonLibya

MoroccoOman

PalestinePakistan

QatarSaudi Arabia

SyriaTunisia

UAEYemen

Tower strategies of MENA’s major operatorsSee page 65 of your handout


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Operator Regional footprintHistory of tower deals and working with towercos

Expected activity going forward

Zain

Kuwait, Saudi Arabia, Iraq, Jordan, Sudan & Bahrain (plus management contract in Lebanon)

Deals agreed with IHS Towers in Saudi Arabia and Kuwait

High likelihood the operator will explore further deals should the Kuwait and Saudi deals prove successful

Saudi Telecom Company

Saudi Arabia, Kuwait & Bahrain

In the process of establishing their own towerco subsidiary, Communication Towers, in Saudi Arabia

Communication Towers expected to commence commercial operations in 2019. If successful, the same towerco strategy may be rolled out to other markets

EtisalatUAE, Saudi Arabia, Egypt, Pakistan & Afghanistan (plus 53% stake in Maroc Telecom)

Tower transaction completed in Nigeria (prior to exit of the market due to opco’s insolvency); experience working with towercos in select markets

Keen appetite to increase infrastructure sharing with other operators in a bid to increase utilisation of their assets. Tower deals not ruled out but given experience in Nigeria will remain cautious

OrangeEgypt, Jordan & Morocco (plus non controlling interests in Tunisia & Iraq)

Monetised towers in three sub-Saharan African markets; agreed and then subsequently cancelled a tower deal in Egypt; extensive experience of working with towercos across Africa and Europe

Although has experience of doing tower deals in sub-saharan Africa, currently more focussed on other forms of infrastructure sharing including working with ESCOs and sharing with other operators. Tower deal considered unlikely

BatelcoBahrain & Jordan (plus minority interest in Yemen)

Announced and then cancelled tower sale process in Bahrain and Jordan

Recent restructuring of the business may make doing a tower deal hard but could potentially explore the option once again

OoredooAlgeria, Iraq, Kuwait, Oman, Palestine & Tunisia

Tower sale completed in Indonesia plus experience of working with towercos in Myanmar

No serious rumours of tower deals emerged yet maintains keen focus on furthering infrastructure sharing; potential candidate for tower transaction activity

VEON Algeria and Pakistan

Commenced a major tower monetisation strategy globally but only one deal closed to date. Reached and the cancelled a deal to sell Pakistani towers; expressed an appetite to divest Algerian towers; experience of working with towercos in Russia; successfully sold Wind towers in Italy to Cellnex in 2015

Pakistan deal rumoured to be back on the table; likely to have an appetite to divest their Algerian towers should a willing buyer present themselves

Vodafone Egypt

Keen advocate of infrastructure sharing, forming tower JVs in the UK and Ireland and participating in Indus Towers in India; sold towers in Tanzania and signed MLL arrangement in Ghana; extensive experience in working with towercos across multiple markets

In 2018, Vodafone’s new CEO announced they were assessing the sale of their 53,000 European towers; no tower deal currently expected in Egypt but likely to have a strong appetite to share infrastructure and work with towercos in the market

Current and future tower opportunities in MENA


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Towerco / ESCO activity Towerco activity plus major tower sale rumouredMNOs rumoured to be considering a major tower transactionNo towerco activity or deal rumours

ACG operates 100 towers; ESCO?

edotco active, Jazz mayrestart SLB

Iranian Towers 1000 sites

Could towercos help rebuild?

TASC Towers established

Zain-IHS 1700 tower SLB

Tower sale rumor; OTC est.

Zain-IHS 8100 tower SLB;STC 16400 tower carve out

Licensed towercos, HOI-MEA38 sites; Orange ESCO RFP;

BTS opportunities

Tunisie Telecom rumors

Djezzy retains appetite;Infrashare established Alfa ESCO with IPT

The coveted 35,500 tower KSA market


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Mobily

Zain

16,400

11,000

8,100


Mobily

Zain

16,400

11,000

8,100

< ~2% of sites shared, parallel

infrastructure

< Past SLB and JV discussions stalled

< Zain-IHS $647.7mn, 8100 tower SLB+

1500 BTS

< STC carving out 16400

Communication Towers

< CITC defines wholesale licenses

BTS and ESCO opportunities in Egypt


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Etisalat

Orange

Vodafone

Telecom Egypt

6,000

2,000

8,500

6,166

< 4,500 subs per tower - highest in MENA

< 4 licensed towercos, HOI-MEA active

< 1500 new sites per year attracts BTS

< 4G drives co-lo, 30% of towers shared

< Orange issues ESCO RFP

The tower pioneers of Kuwait


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Zain

Ooredoo

Viva

1,700

1,200

1,200< Zain selling 1700 towers to IHS for $165mn

< Tariff wars, declining ARPU

< MNOs focusing on cost optimisation

< 4100 towers, significant parallel

infrastructure

Culture of infrastructure sharing flourishingin Pakistan


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edotco

Telenor

CMPak (Zong)

Ufone

Jazz (Deodar)

700

7,400

7,100

6,100

13,000 < edotco pays $88.9mn for 700 site

Tanzanite Towers

< edotco+DH Corp acquisition 13000 Jazz

towers cancelled

< Could Jazz reboot? Ufone SLB? Telenor

carve out?

< Prevailing tenancy ratio 1.25

< Power and security challenges

< Decommissioning parallel infrastructure

Could towercos help rebuild Iraq?


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Zain

Asiacell

Korek Telecom

Fastlink

Tishknet

Other 4G LTE players

4,5515,200

3,669850 300

200

< 10-15% of towers require repair

< More sites needed for 3G coverage

< International capital for telecom infra

< High opex: security, logistics & diesel

< Imminent ESCO award

Other MENA markets in brief


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< Afghanistan: 100 site towerco ACG, potential ESCO

< Algeria: Djezzy keen to SLB, FDI permitting

< Bahrain: TRA seeks consolidation from 1500-400

< Iran: MCI+RighTel+Fanasia 1000 site JV

< Jordan: TASC Towers active

< Lebanon: IPT secures 1600 site ESCO with Alfa

< Morocco: Offers the scale to attract international tower investment

< Oman: Sale and leaseback rumoured, Oman Tower Company established

< Tunisia: Tunisie Telecom keen; Active infrastructure sharing; NATIC

poised to BTS

< UAE: 13,000 MNO captive towers; 5G front runners

Demand forecasts for telecom infrastructure equipment and services


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See pages 51-55 of your handout

Vendor opportunity matrix

Energy Data collection and utilization

Tower manufacture Turnkey infrastructure Small cells, microcells,DAS and IBS

Advisors

Afghanistan High High Medium High Low Medium

Algeria Low Medium High Medium Low Medium

Bahrain Low Low Low High Medium Medium

Egypt High High High High Low Medium

Iran Low High Medium High Low Low

Iraq High High High High Low Medium

Jordan Medium Medium Low Medium Low Medium

Kuwait Low Medium Low Medium High Medium

Lebanon Medium Medium Medium Medium Low Low

Morocco Low Low Low Medium Low Medium

Oman Low Medium Low Low Medium High

Pakistan Medium High Medium High Medium High

Qatar Low Low Low Low High Medium

Saudi Arabia Medium Medium High High Medium High

Tunisia Low Medium Low Low Low High

UAE Low Low Low Low High Low

Unlocking operational efficiencies


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< Unpermitted towers can’t be grid connected

< Outdoorisation projects

< Swapping in smaller, more efficient DGs

< Increasing autonomy with hybrid

< Finite hybridisation due to low cost of diesel, shortage of

maintenance skills

Comparing towerco growth in MEA from 2009 with ESCO growth six years later


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60,000

50,000

40,000

Site

s

30,000

20,000

10,000

20092015

20102016

Towerco sitesESCO sites

20112017

20122018

20132019

20142020

20152021

20162022

20172023

20182024


The rise of ESCOs


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July2017

August 2017

September 2016

August 2016

July2016

Undisclosed date

April2018

July2018

August2018

August2018

August2018

Aktivco secures contract with Millicom

Chad (500 sites)

GreenWish Partners secures contract with Orange DRC (then 250

sites, now 300)

Econet carves out Distributed Power Africa

(then "Econet Power") initially managing 1,380 sites

in Zimbabwe (now 1,600)

IHS ‘Big Five’ initiative POs issued to partners Biswal, IPT PowerTech, Makasa

Sun+Ascot, M-P Infrastructure and Uppercrest (then 12,000

sites, now 10,000)

Energy Vision secures contract with Airtel

Gabon (280 sites deployed to date)

Ascot supplies 200 sites in Sudan for Sudatel under ESCO model

Aktivco secures contract with Orange Niger

(500 sites)

Aktivco takes on an existing ESCO contract with Orange

Burkina Faso (site count undisclosed, estimated as 300)

Aktivco secures contract with Orange Côte d'Ivoire

(site count undisclosed, estimated as 500)

IPT PowerTech secures contract with Orange Guinea

Conakry (1,500 sites)

IPT PowerTech secures contract with Alfa in Lebanon (1,600 sites)


The addressable market for ESCOs in MEA


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IHSTowers 12,860

MTN 23,000

Orange MEA

20,000Airtel Africa 4,500

Other MEA MNOs 20,000

Etisalat / Moov ~10,000

Zain 8,337

17,800 contracted

American Tower9,246

Helios Towers

6,485

Eaton Towers

5,000

Other MEA towerco sites

5,852

Already under ESCO contract 17,800MNO sites addressable by ESCOs in short to medium termMTN 23,000Orange MEA 20,000Airtel 4,500Zain 8,337Etisalat / Moov 10,000Other MEA MNOs 20,000

Towerco sites addressable by ESCOs in medium to long term (exc SA)IHS Towers 12,860American Tower 9,246Helios Towers 6,485Eaton Towers 5,000Other MEA towercos 5,852

The criticality of infrasharing in accelerating5G and smart cities


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Macro layer< Massive MIMO is heavy; 5G

power rises 2KW – 4-6KW

< Co-existence of 2G-3G-4G and

5G: multi-band?

< Fiberization critical

< Edge data centres @ cell sites?

< Can 5G be realised without

sharing?

Heterogenous network layer< Accelerating micro site

densification

< Leveraging street furniture

< Overcoming permitting hurdles

< Fiberization critical

< IBS increasingly key

< Role for neutral hosts

Towerco diversification - examples


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Source: Delta Partners

Africa Helios Towers 6.5k

Asia edotco 28.8k

Country/Region Towerco Logo # of towers Service types offered

China CTC 1900k

China Guodong 20k

Czech Republic CETIN 5k

Europe Cellnex 25k

India Bharti Infratel 40k

Indonesia Protelindo 15k

Indonesia Tower Bersama 13.5k

Indonesia STP 6k

Italy INWIT 11k

Malaysia, Myanmar, Vietnam OCK Group 3k

Nigeria & Central Africa IHS 23k

Russia Russian Towers 3k

UK Arqiva 9k

UK, Ireland, Netherlands Wireless Inf. Group 2k

US AMT 170k

US Crown Castle 40k

US Digital Bridge 12k

US Uniti Towers <1K

Data centre Wi-FiGlobal TowerCo P&S benchmark Towers DAS Exploring serviceSmall cells Fibre

Through acquisiDon ofKIO Networks

Have a license todeploy

Investment in thecreation of micro-coverage and fibrebackhauling

Through acquisitionof iForte

Don’t forget tonight’s networking dinner


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Check whether you have booked at our registration desk

Thank you!

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Welcome to TowerXchange Meetup MENA · Fire Evacuation: No planned fire tests, if the general alarm...

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Transcript of Welcome to TowerXchange Meetup MENA · Fire Evacuation: No planned fire tests, if the general alarm...