We need more towers for better internet experience, says Oketayot
What you need to know:
Ubuntu Towers rebrand into TowerCo of Africa Uganda has set a new precedent in Uganda’s tower market that seeks to break the virtual monopoly held by American Tower Corporation controlling almost 90 percent market stake. Prosper Magazine’s Paul Murungi sat down with Geoffrey Donnels Oketayot, the chief executive of TowerCo of Africa Uganda to digest the company’s growth prospects.
How did you feel starting out as a Ugandan tower company in a market that had the dominance of one major player?
Our biggest inspiration was to create jobs and contribute to the industry.
If you know the history of Ubuntu (now TowerCo of Africa Uganda), we initially were employees of Eaton Towers, and when ATC bought Eaton Towers, it meant some people were going to be redundant because all senior positions were already taken, and we saw that the market really needed a second player.
It is like when you wake up, and hear MTN has bought Airtel, I think it begs for the market to have another player so that there is a balance.
The challenge is, if you don’t have another player that can support the market, the communications environment becomes very expensive because they can use that to their advantage.
We also needed a local company to show the youth that it is possible to have a dream and make it happen. So we had to jump into a space that was predominantly headed by international companies.
You started in 2020. How were you able to transition from being former employees [of Eaton Towers] to building your own company as a team?
The journey hasn’t been easy. If we were not able to succeed, we would be back in the village, so we sacrificed everything with hope.
There was a bit of luck when we started because of the government narrative to uplift many Ugandan companies which gave us an edge.
But also the opportunity of being knowledgeable. I think once you are knowledgeable in the field, and you know what exactly you can achieve; then it is easy for you to make certain bets beyond jumping into the business just for the money.
What about the capital requirements considering this is a capital intensive industry?
If you are to look at it from a financial point of view, building one tower site requires Shs300m, that means it is capital intensive. But we are grateful to Uganda Development Bank that believed in our dream, and thought it was right for them to actually invest in us.
That was the first amount of money we got to put into the business.
We were able to scale using Stanbic Bank, and now we have TowerCo of Africa (Axian Group) supporting us.
How much investment is TowerCo committing to the business?
They have invested quite a lot. We have over $40m (Shs146 billion) invested in the company, and I think it is only a start with quite more coming through the pipeline.
If you read about the Axian group, it is a company that is turning over a billion dollars in revenues so we have become part of that company, and have access to funds for future investments.
Early this year, we saw telecoms hitting the ground with the 5G promise. What is your assessment of our readiness for this new technology as consumers, and your capacity to deliver?
I think the new spectrum that has been acquired by mobile network operators opens an opportunity for most people in the market, whether it is for businesses and individuals.
If you are a content producer, 5G is the sort of network you need to transmit information on real time without having hiccups of latency. So, we as infrastructure providers extend this service closer to different organisations.
In terms of readiness, we have a population that does not have the handsets, or opportunities in business advancements to utilise it.
But, it is a scenario where you cannot put the cart before the horse. So, without laying the road for services to actually come in, it becomes difficult. That is why even if we are not ready now, there’s so much that can be achieved once the telecos prepare the market for that service to be enjoyed.
What is your assessment of the tower demand in the country?
There was an analysis that was done about a year and a half ago. The size of Kampala city is almost equal to the size of Abuja city in Nigeria. But in Nigeria [Abuja], we have 600 more towers than we have in Kampala.
Even based on experience, I believe sometimes city dwellers try to make phone calls within the city, and they still can’t access the network.
It means the demand is there to increase towers not just within the cities, but also into the suburban and rural areas.
We look at a potential that is going to be enormous. Even as technology advances, the propagation of tower frequencies becomes shorter and that means, for you to access that service, tower operators have to come closer to you.
It is the same way you look at fibre today. For a person to enjoy internet in their home, or office; the fibre connectivity has to come to you, but if you are to get internet through microwave links, there is a lot of interference, latency, and so on…, and you will not get the best of service. But if you have fibre closer, the service improves, so that is the same sort of experience that we are bringing to Uganda.
We have observed TowerCo adopt green towers that use solar energy instead of diesel generators which speaks to the global Environmental, Social, and Governance (ESG) requirements. Does it bother you that this shift to new energy sources is likely to cause an increase in the company’s operational costs?
Actually, it’s to the contrary, we are using green energy such as solar which is free, and we pass on some of those rebates to our customers. That means that they also reduce their costs of operation.
This provides a ripple effect on the service they render to the actual end user who gets it cheaply.
It is a point where we want to ensure that at least 80 - 90 percent of our sites remain green so that we can pass on those benefits to the final user.