The Chairman, Swap Technologies & Telecoms Plc, Mr. Godwin Adokpaye, has said that the telecoms infrastructure company has recorded a N421m profit in the last 18 months ended June 30, 2011.Swap operates and leases tower space to wireless telecommunications companies in Nigeria, Ghana and Cote DIvoire.While presenting the companys 18-month operational results from January 2010 to June 2011 at Swap Technologies Annual General Meeting in Lagos on Friday, Adokpaye explained that 90 per cent of the companys revenue came from telecoms infrastructure sharing.He said, "Whereas fixed assets grew to N15bn from N1.8bn in 2009, the acquisition has been financed with debt capital resulting in high interest expenses. Operationally, we achieved an operating profit of N421m in the period."The Swap chairman added that the companys turnover increased by 98 per cent from N2.04bn in 2009 to N4.1bn in June 2011.He noted that the company grew its tower portfolio to over 700 sites in the period, up from the 150 sites in 2009.On the companys geometric tower asset growth, Adokpaye said Swap concluded a sale and leaseback transaction with Starcomms in 2010 in which 407 sites were acquired under a 15-year lease. The transaction, he explained, was financed with a loan from Afreximbank, adding that it positioned the company as one of the key players in the telecoms infrastructure business in Nigeria.In his remarks, the Managing Director and Chief Executive Officer of the company, Mr. Tunde Titilayo, recalled that Swaps entry into the co-location business was based on two sale and lease back transactions with two Code Division Multiple Access companies, ZoomMobile in 2009 and Starcomms in 2010.He predicted the entry of a number of international tower companies into the Nigerian telecoms space in 2012, adding that more tower sale and lease back transactions would occur in the country next year."We expect international tower companies to enter into the space in Nigeria in 2012 as the telecoms industry mature and operators seek to fully outsource their infrastructure to third parties," he said.Tower sale and leaseback agreement involves the sale of the assets by telecoms companies to, and leasing them back from independent tower companies.Titilayos expectation, according to experts, is in line with the global trend, via-a-vis tower sale and lease back, and it is expected to continue in 2012.Nigeria has had it share too as Visafone sold and leased back 459 telecoms towers to IHS in a deal reportedly worth $67m. Similarly, Starcomms also concluded a sale and leaseback agreement with Swap. The deal involved 407 towers and was worth $81.4m (N12.2bn).Generally, mobile operators in Africa sold off some 7,000 towers in 2010 in deals worth almost $1bn.As such, telecoms analysts said this would continue because mobile operators could now recognise the advantages of selling and leasing back their mobile towers.There are over 100,000 towers across the African continent and the Chief Executive Officer, IHS, Mr. Issam Darwish, estimated that the total value of the continents tower market was about $50bn.Owing to the poor financial performance of the CDMA companies Swap services, Titilayo lamented that it had affected his companys revenue.He said, "The CDMA companies have not fared well in comparison to the GSM operators as they have struggled with declining business and operating losses leading to the exit of the likes of Telkom of South Africa from Multilinks, a major CDMA operator."In view of the fact that a major part of our revenue is coming from the CDMA sector, their operations have a direct impact on our company. However, in 2010/2011 we have diversified our revenue base and added more GSM and WiMAX tenants on our towers across the country and we currently have them on more than half of our towers and this figure is increasing monthly."He noted that this trend would continue in 2012 as GSM companies grapple with quality of service, coverage and capacity issues, adding that the deployment of 3G services would require more towers and boost infrastructure sharing in the country.While assuring shareholders that telecoms infrastructure sharing as a business would enhance the companys long-term sustainability, Titilayo lamented that power crisis remained a major hindrance to service deliverance as the company had to depend on diesel to render its services.This, according to him, exposes the company to regular diesel price and scarcity shocks.He said, "All our sites are powered by two generators and diesel and we spend billions of naira annually to power these sites and you can imagine the effect on our bottom-line if our government had been able to fulfil its primary responsibility to provide 24 hours or even 12 hours regular power supply."
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