Although a consolidation phase has set in, entry of new players cannot be ruled out
During the past few years, the tower market consolidated from a market with 25 players 23 years ago to a market where the majority of towers are managed by 12 players. Most of the consolidation has been the result of mobile operators exiting their investments in tower entities by selling stakes to independent infrastructure companies in order to sustain capex requirements. During the next three years, we believe more consolidation will happen in the independent infrastructure company space, with the market ending up with 57 players per service area. However, this will not impact any investments from potential new players in the market. We believe that some of the utility companies, such as Powertel and Railtel, will consider leveraging their existing real estate in order to provide passive infrastructure to mobile operators, especially in areas where existing players currently find it difficult to get the required government clearance to set up new towers.
The writer is an Ovum analyst.
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