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The Global Telecoms Tower Market: One million more towers to be built by 2020
This report is one of two that represent the second edition of StatPlan Energy’s “Global Market For Towers and Poles” originally published in 2012. The second report covers pylons and poles in the electricity sector. If you have acquired this report on its own and would like to purchase the electricity sector report as well, please contact us directly to benefit from the combined report price.
Globally, the mobile industry has seven billion users (subscriptions), generating annual service revenues approaching $1,000 billion each year. 74% of users are in emerging markets. China and India together account for almost one-third of all users (18% and 14% respectively), emerging Asia another 15%, Africa 11%, South America 10% and the Middle East 5%. But the market for the infrastructure does not track the growth in mobile services. Significant developments in terms of tower sharing and independent ownership make the tower market much more complex. Towers constitute almost 50% of the total capital expenditure for an operator, so the cost of towers involves tying up large amounts of capital in costly infrastructure and is a significant drag on operating liquidity. As many MNOs face declining revenues they have sought to free up the capital tied into infrastructure and the towerco was born. In turn the concept of asset sharing has become another key trend in the industry.
We estimate there are 4 million telecoms towers installed in the world, growing at a cagr of 4.1% to 2020. In 2014 the market for tower construction is estimated at $20.3 billion globally. By 2020 the total installed base will have risen from 4 million towers to 5 million towers. But the rate of growth, and the structure of the industry that is developing, varies by region. Taking into account the industry structure and trends in tower sharing, we forecast double digit growth in Sub-Saharan Africa and Latin America, but the volume regional market will be Asia, with some “hotspots” evident.
We therefore conclude that companies seeking to grow rapidly must choose their battlegrounds carefully; as a consequence of a “lumpy” market we envisage significant activity in terms of mergers and acquisitions in the sector in coming years. The current “hotspot” for independent tower ownership (then leased back to MNOs) is sub-Saharan Africa, where some $30 billion in infrastructure transactions are currently under review. The towerco industry is also established in North America and Europe, and the first steps are being made in China with the development of a joint venture between China Telecom, China Mobile and China Unicorn. In Africa, forecasts suggest that 30% of all telecoms towers could be independently operated by 2020.
Currently, we estimate that 18% of all telecoms towers globally are independently operated.
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