African telecoms, tech and infrastructure – where are the opportunities for investment?

As organic growth in African telecoms continues to slow, operators are increasingly looking to diversify revenue streams through new technology and services such as fintech, IoT and security. Meanwhile, investment in communications infrastructure is booming, especially in areas such as datacenters, wireless towers, satellite, subsea cable and fibre. 


In a series of interviews in the leadup to TMT Finance Africa 2019, TMT Finance speaks to some of Africa’s leading digital communications, technology and investment businesses, including Millicom, SEACOM and Africa Data Centres to assess new deal trends and growth strategies for the region. 


The next wave of transactions in Africa


The increasing pressure on telcos to diversify revenue streams is expected to be one of the key driving factors for M&A transactions in Africa, according to Mohamed Dabbour, EVP, Head of Africa at Millicom. 


“As organic growth can be slower, we’ll see telcos acquiring companies in other sectors such as fintech and digital services and technologies. The fintech industry remains very fragmented and keeps on attracting a large number of companies in Africa. I would not be surprised to see some transactions in that space, though I’m not excluding consolidation in the telecom sector.”


Telecom infrastructure is another sector that has enjoyed a tremendous amount of activity over the past few years and it is expected to continue to do so due to the increasing demand for data. 


“I believe we will continue to see infrastructure consolidation, as FTTH and FTTB gather more momentum in many African markets where fibre infrastructure is still developing’’, says Byron Clatterbuck, CEO of South African submarine cable and fibre company SEACOM. ‘’Datacentres, both large and small, will continue to attract investment.”


The rush to hot sectors 


The rush towards fintech alone is expected to generate a high number of transactions, whether via fundraisings or acquisitions by telecom operators, banks or sponsors. “Telcos have definitely entered the space and banks will not be left behind,” Dabbour says. “Clean tech is another area that is attracting more attention and capital. Some Telcos will probably look at ways to build partnerships in these sectors. Solar power, of course, is leading the way. With two-thirds of Africans not having access to electricity, this is a promising sector provided a solid business model. Solar energy is the door to Africa for many European energy giants.”


For Africa Data Centres’ CEO Stéphane Duproz, “datacentres are the cornerstone of every business and the linchpin of the internet.” 


A large number of transactions in the space are currently taking place, especially in markets such as Western and Eastern Africa, as well as South Africa. With data traffic in Africa skyrocketing, improved connectivity is required more than ever. “Datacentres also help to transport data at scale across the continent, which in turn is driving demand for digital content, mobile money, cloud services and more,” Duproz adds. 


Which are the key markets?


A few select markets are underpinning the main bulk of transactions and investment activity across the region. South Africa, Nigeria and Kenya are among the most active, while Ethiopia is opening its telecom market and is expecting new investors to target the country.


Clatterbuck says: “There are numerous opportunities across the spectrum and across all geographies. As some markets continue to leap ahead with clear and open investment environments, and some fall further behind, this presents opportunities along all stages of development. Having said that, it is becoming clearer that markets that are taking the lead now will become the focus of growth and investment going forward”, he comments.


Duproz adds: “According to the latest research by RMB, Egypt, Morocco, South Africa, Kenya, Rwanda and Ghana are considered the most attractive investment targets, in that order. Africa is made up of a range of unique investment destinations, with each region and country having its pros and cons. However, research suggests that African private equity activity has remained stable over the past seven years, which indicates that investors are confident in the long-term feasibility of the continent.”


What role should regulators have?


As the Africa market offers unprecedented opportunity to leverage technological advances, without the burden of expensive legacy infrastructure such as in the USA or Europe, Duproz reckons “policymakers can help drive this growth in a number of ways, such as making lower-spectrum bands available, promoting infrastructure sharing, providing rollout incentives, and, even possibly by lowering rural license fees.”


Meanwhile, Dabbour thinks policymakers should work more in partnership with mobile op-erators and other stakeholders: “Some policy makers and regulators recognise the need to focus on the long term and attract investments to grow their economies. However, in prac-tice policies are often reactive and not always well adapted to the digital age. I’m worried that many countries will miss out on the benefits of the fourth industrial revolution if they don’t quickly adopt a clear strategic plan and if we don’t collaborate more to ensure sus-tainable digital progress”


TMT Finance Africa 2019 will take place in London on November 28 and feature over 80 speakers including leaders from MTN, Vodacom, Orange, Millicom, Csquared, Etisalat, Angola Cables, Dark Fibre Africa, Rand Merchant Bank, Standard Bank, Citi, iROKO, Helios Investment Partners, Global Voice Group, American Tower Corp, IFC, Interswitch, Helios Towers, Worldremit, Jumia Group, Google, Carlyle, Kobo360 and many more. 


For more information about TMT Finance Africa including tickets please visit or contact for speaker and sponsor opportunities.