Indus Towers’ Africa foray on track, operations to start in September quarter

Passive telecom infrastructure provider Indus Towers’ Africa expansion plan is on track and it plans to start operations from the September quarter, having secured the necessary regulatory approvals and operating licenses in Namibia, Zambia, and Uganda, senior company management said.

The tower company sees the Africa expansion as their largest growth opportunity outside of their core business in India and is prioritising it over other potential diversification areas such as EV charging, data centers or smart city infrastructure.

Indus Towers managing director and chief executive Prachur Sah said the company has secured orders from an anchor customer, likely Airtel Africa, and has placed key supplier orders and initiated the partner onboarding process to start network operations.


“From day one, we have an anchor tenant that fundamentally enables us to confidently expand knowing that we have first tenant on the tower, which in our case, we would have to look for a tenant, so I think that (synergy with Airtel) is enabling us to startup much faster in Africa..,” Sah said in an earnings call with analysts on Tuesday.

Indus expects a single tenant on a tower in Africa will be enough to cover their cost of capital and achieve targeted returns, while adding a second tenant will provide additional operating leverage. Sah said the company is also currently engaging with other potential customers to build a value proposition, however, he did not provide a timeline for when a second tenant might be secured.

The management also clarified that while the company is still finalising the commercial agreements including the master service agreements (MSA) and rate cards, the initial capital expenditure in Africa over the next one-two years will be moderate as compared to their spending in India and is likely to be largely debt-funded.

“For the capex investment, we are actually anticipating largely debt funded investments in Africa. To that extent, the India free cash flow, we don’t really expect Africa business to impact that much,” Sah said.

He added that the board of directors have a mindset of steady and progressive dividend going forward with the cash reserves generated by the company.

Indus Towers said the Africa expansion comes despite strong growth potential in the India market where it is seeing consistent tower and co-location additions driven by increasing data consumption and 5G densification by its customers.

Sah said Indus has a firm and robust order book for the next three to four quarters in India. He added that the company has now started installing integrated in-building solutions in residentials, metro stations and railways, alongside macro towers and co-locations.

Indus added 3,100 macro towers and 4,200 co-locations in the June quarter. Co-locations are towers where multiple network operators place their own antennas and radio gear on one single single tower structure.