How AME Operators Can Avoid Tower-Sharing Pitfalls and Create Value, Pyramid Finds

May 26, 2011

CAMBRIDGE, Mass., May 26, 2011 /PRNewswire/ -- Tower sale-and-leaseback agreements provide an opportunity for mobile operators to cut costs and focus on services, but bringing multiple operators onto the same infrastructure is not a trivial undertaking, according to a new report from Pyramid Research (

Faulty Towers: How Operators Can Avoid Tower-Sharing Pitfalls and Create Value describes and analyzes when and how tower outsourcing/sharing agreements are likely to emerge in the African telecommunications markets. After explaining the logic of tower sharing in different types of markets depending on their prospects of value creation and competitiveness, the report brings evidence from some of the prominent sale-and-leaseback deals that have taken place in Ghana, DRC and South Africa. Since most of these deals are new, Pyramid has yet to observe in which directions they may ultimately develop. Yet, by offering early insights on our expectations, we hope to guide both mobile operators and tower companies in assessing their current situation and the best course of action.

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"Tower outsourcing and sharing deals are giving operators the opportunity to reduce capital and operational expenses through a more efficient use of assets, enabling them to focus on innovative services in more relaxed cost structures," says Kerem Arsal, Analyst at Pyramid. "The expectation is a win-win for all players: Mobile operators will offload their capital requirements and reduce their operational expenses, and tower companies will exploit economies of scale by accessing the needs of multiple operators simultaneously," he adds. The markets will benefit as a whole as lower operating costs translate into lower prices and new, more affordable services.

Pyramid believes that in markets where there are clear differences between market leaders and other players, leading operators may be attracted to the logic of blocking competitors' economies of scale as much as increasing their own. "In such cases, tower sharing is more likely to be observed as an alliance among smaller players, while leading players remain unwilling to provide access to their towers unless considerable privileges are provided," notes Arsal. "Large and resourceful operators that are trailing behind a leader in a specific market can also sponsor tower-sharing efforts," he indicates.

Aside from the immediate benefits of capital gains and operational cost reductions, mobile network operators need to strategically assess the long-term impacts of relinquishing control of their assets. "MNO's should also see tower operations as a means of making alliances and altering competitive dynamics," adds Arsal.

Faulty Towers: How Operators Can Avoid Tower-Sharing Pitfalls and Create Value is part of Pyramid Research's Telecom Insider Report Series and is priced at $595. Download the excerpt here: It can be purchased online here: For more information, please email us at

Contact:  Jennifer Baker, +1-617-871-1910,

SOURCE Pyramid Research