London-based telecommunications company Eaton Towers has raised $150 million in private equity capital to expand its tower-sharing business in Africa, Reuters reported Monday. The company said that Eaton Towers expected to raise significant new debt on the back of the funding from Capital International Private Equity Funds, Reuters wrote.
(Reuters) – Telecoms company Eaton Towers has secured $150 million of private equity funding to expand its tower-sharing business in Africa, which is enabling mobile operators to roll out services to remote areas more cheaply, it said on Monday.
The London-based company specialises in Africa and last year signed a 10-year telecom tower outsourcing agreement with Vodafone Ghana.
Chief Executive Alan Harper said in a statement that Eaton Towers expected to raise significant new debt on the back of the funding from Capital International Private Equity Funds, which has invested $3 billion in emerging markets companies.
“Their backing, combined with our management team’s expertise in Africa and telecoms management, will give further momentum to our efforts to become a major independent provider of shared tower facilities across Africa,” he said.
Africa, where only 39 percent of people own a mobile phone, represents a major growth opportunity. But operators have been reluctant to invest in infrastructure because of the population’s low spending power.
Those who do own a mobile phone in Africa spend on average 17 percent of their income on it, according to the United Nations’ telecoms agency, the ITU.
Mobile operators cut capital expenditure in developing markets by 8 percent last year, according to U.S. telecoms data and analysis firm Wireless Intelligence, to preserve their balance sheets during the economic downturn.
Network and tower sharing has been a key strategy for reducing telecoms capital expenditure, which totalled $197 billion globally, or 19 percent of operators’ revenue, in 2010.
Eaton Towers is run by former executives from telecoms companies including Vodafone and Orange to help operators cut costs by operating shared telecom towers, which carry mobile signals. (Reporting by Georgina Prodhan; Editing by Helen Massy-Beresford)