TowerCo buys Ubuntu, resets competition in telecom sector
The entry of TowerCo in Uganda sets a new direction in the mobile phone masts space. Photo / File
What you need to know:
- TowerCo, which is a Madagascar family-owned business, has already invested $40m (Shs146b) in its tower business in Uganda, setting up 360 green towers
Ubuntu Towers, a local company involved in building telecom towers has rebranded after TowerCo of Africa acquired a 90 percent stake.
The acquisition sets a new precedent in the tower market that seeks to break the virtual monopoly held by American Tower Corporation (ATC) that controls almost 90 percent of the market.
The Madagascar family-owned business, which has operations in Madagascar, DR Congo, Uganda and Tanzania has already invested $40m (Shs146b) in its tower business in Uganda, setting up 360 green towers.
Ubuntu Towers was formed in 2020 by former employees of Eaton Towers after its acquisition by ATC.
The new acquisition will leave co- founders with a 10 percent stake in TowerCo of Africa.
The co-founders include the chief executive Geoffrey Donnels Oketayot, chief legal George Ssamula, Mr Ronald Onzia who heads operations, Mr Mark Otai, in charge of finance and Harold Luzinda, who handles commercial operations. Mr Oketayot said the company expects to end the year with more than 450 sites.
TowerCo, a subsidiary of Axian Telecom domiciled in Mauritius, will now have to overcome the ATC dominance, whose success largely relies on MTN and Airtel as the largest consumers of its tower operations.
Mr Stephane Beuvelet, the TowerCo chief executive officer, said monopoly was not good in any country, noting that it actually creates a lot of resistance, and less innovation.
“Pricing is usually high, so I think [competition] is good,” he said.
The acquisition kicked off in July 2021 as Ubuntu paved way for a case submitted to Uganda Communication Commission (UCC) over unfair competition practices.
On November 30, 2021, UCC said it had received a complaint from Ubuntu alleging breach of rules.
Ubuntu had alleged that some clauses of the Master Tower Sharing Agreement signed between Eaton and Airtel had bestowed ATC a right of first refusal, which perpetrated exclusive dealing between Airtel and ATC.
In the ruling, UCC noted that some clauses executed between Eaton (now ATC), Airtel contravened major sections of the competition regulations in the telecom sector.
