#76: IHS Towers - How the telecom infrastructure company is building and managing towers across Africa and beyond

[00:00:00] Welcome to Afrobility, a conversation about African business and technology.

[00:00:08] Today we're going to explore IHS Towers, the African telecommunications infrastructure company.

[00:00:13] We'll discuss the story across the following areas. One, we'll first give some context about

[00:00:17] telecom tower infrastructure. Second, we'll talk about IHS Towers' early history. Third,

[00:00:22] its product modernization strategy. Fourth, its competitive position and potential exit options.

[00:00:26] And then fifth, we'll end with our views on its overall outlook. This episode was recorded

[00:00:29] on May 5th, 2024. Oh, Afrobility is back, finally. Afrobility is back. It's been a while. How are

[00:00:35] you doing my man? It's been okay. I've been staying alive. It feels like it's been ages,

[00:00:39] but I looked it up. It's been two and a half months. February was the last episode, I think.

[00:00:45] Yeah. Well, I'm excited to be back and talking about something near and dear to my heart,

[00:00:50] digital infrastructure and in this case, IHS Towers. Why is that near and dear to your

[00:00:54] heart? Because it's under invested and it's like the thing that underpins,

[00:00:58] that powers a lot of the things that we talk about instead. A lot of the flutter waves and

[00:01:03] pay stacks and other pieces is all happens because of this. And is at least to me just

[00:01:08] as interesting going into the prep for this episode. And the characters are just as

[00:01:11] colorful as well. Let's get into it. Okay. So I love infrastructure companies for the same

[00:01:15] reasons. They're like they're foundational and important, but they tend to be overlooked

[00:01:18] because they're more B2B facing or they tend to be more, they tend to be a little bit

[00:01:22] more boring to an everyday consumer because they don't interact with them. Okay. So we're

[00:01:26] talking about, you know what they say very quickly is like opportunities show up disguised

[00:01:30] as work. Infrastructure is the perfect example of that. It's like a market opportunity that

[00:01:33] should have this guy's as, Oh my God, that's a ton of effort. I didn't just have to call

[00:01:38] the nibs API and accept cards or whatever. This is like, Oh my goodness. That's a ton

[00:01:44] of work. We're talking about IHS Towers, AKA IHS holdings. And in corporate speak,

[00:01:50] IHS Towers is one of the largest independent owners, operators and developers of shared

[00:01:54] communications infrastructure in the world. Cool definition. So the quick intro is one

[00:01:59] of the largest independent owners, operators, developers of shared communication infrastructure,

[00:02:04] blah, blah. I have my own favorite definition, which is a little bit different. There are

[00:02:08] communications, infrastructure company that builds and manages towers and emerging markets for

[00:02:12] telcos like MTN, Airtel, Orange. That's easier for me to understand. That's not a fancy

[00:02:17] one. Yeah. What I was most impressed by is the relative size, right? Yes. According to them,

[00:02:22] they're the third largest independent operator in the world. And it's just a large number

[00:02:26] of tiles compared to competitors in all these different countries from seemingly humble roots.

[00:02:31] Yes. Yes. And they were founded in 2001. So they're quite an OG old school company.

[00:02:36] And as you know, from prior Affordability episodes, I have a soft spot for

[00:02:40] longevity and companies that experience. Okay. Before we start a few things to know.

[00:02:43] They're the third or fourth largest tar Co in the world, depending on how you define that.

[00:02:47] They're in a lot of different countries, around 10 to 11 markets, Nigeria, Brazil,

[00:02:51] Cameroon, Colombia, Ivory Coast, Ecuador, Egypt, Kuwait, Peru, Rwanda, South Africa,

[00:02:56] Zambia. And they have around 40,000 towers. They're a big deal. Before we start, we're going

[00:03:01] to do biases. Yeah. So I'm very, I'm very, no, I'm positive on, on digital infrastructure as

[00:03:10] a whole, but I'm neutral on, so there are two different things. I always say like,

[00:03:13] I can like a business, but different, I can feel different about it as an investment.

[00:03:17] I don't think they're necessarily correlated even how I feel about the business. So I knew

[00:03:20] how I felt about it as a business. I was neutral about it as an investment,

[00:03:24] an investment opportunity in particular, like IHS versus the industry itself.

[00:03:28] Makes sense. But what I did, what I underappreciated, even knowing

[00:03:32] a bit more than average about this is the complexity and the competition in this business.

[00:03:37] It's not just like, Oh, build a bunch of towers and pay some area boys. It's,

[00:03:40] essentially slightly more complicated than that.

[00:03:42] Oh, you've started again with this shit. Okay. Okay. Fine. My bias is very, very positive.

[00:03:47] Obviously I, I like infrastructure companies. I love telco stuff, combination of telco plus

[00:03:53] very, very positive. I like the fact they've been in it since 2001. I'm going to be very

[00:03:58] positive. I will say based on negative information I found out about the company

[00:04:04] doing research, especially the stock performance, my biases were sort of tempered by the reality

[00:04:09] of the performance of the business, but we'll come back to that later. But I'll say mostly

[00:04:12] positive. I don't know if that'll be enough to overcome the negative financial performance,

[00:04:18] but I like the company. PSA's and public service announcement, listeners, founders,

[00:04:22] operators, investors link up with us, email us info at affability.com. You can join our

[00:04:27] sub stack, which is affability.com and click on subscribe or affability.substack.com.

[00:04:32] We'll be using a lot of terminology in this podcast. Whenever I see a telco

[00:04:37] or telecom provider or MNO or carriers, those all mean the same thing. Those are cell phone

[00:04:43] providers like MCN, Airtel, Verizon, AT&T. So we'll use the terms interchangeably. I'll

[00:04:47] probably say telco most of the time. And then when we say towercos, those are like

[00:04:52] tower operating companies like IHS and they manage the cell phone towers for the telcos.

[00:04:58] So those are the terminology we'll be using back and forth.

[00:05:01] The right way to frame this for me is to really talk about what towers are, how they

[00:05:05] work, how companies like IHS have come to be what they do and how the entire system is set up.

[00:05:12] The lens of say Nigeria, which is IHS largest market just to bring everything back home

[00:05:16] and link everything to the African context. So what are telecom towers? They function by

[00:05:25] hosting different kinds of communication equipment. They enable wireless communication.

[00:05:29] So the towers that you see if you're in Lagos or in Nigeria or in any part of the

[00:05:34] world really, it tends to be a base station, small base station with a small housing that

[00:05:41] has a bunch of equipment in it that is used to communicate, transmit and process signals

[00:05:46] they receive when you make calls or when you receive calls. It's kind of very simple in that

[00:05:50] way. What they do is that they transmit just some signals. They process some of the

[00:05:56] signals in the base station themselves because you can't just transmit signals at the same

[00:05:59] frequency you receive them. They also connect you to the network itself and connect you to

[00:06:03] other customers or other switching stations depending on the nature of the network itself

[00:06:08] as well. The towers themselves are what many people think about as network is what you try

[00:06:14] to do when you step outside and you put your phone up and try to catch a signal,

[00:06:20] which doesn't happen as often in Nigeria at least. In the parts of Nigeria that I may know

[00:06:25] doesn't happen as often but that ends up being like how people think about it. However,

[00:06:30] it's not just a base station or some equipment. It ends up being very complex. You need air

[00:06:33] conditioning, you need lighting protection, you need fire protection, you need maintenance

[00:06:38] crews to periodically visit the sites, you need AC power and lighting for the maintenance crews.

[00:06:44] You also need it to last a very long time and you also need it to be future proof,

[00:06:48] not just in equipment but also in actual physical space. The actual complexity of a

[00:06:54] base station or base transceiver station as I called is not as straightforward as

[00:07:00] a station in a box. It does a lot of things, a lot of things that need to happen for

[00:07:03] me to call with MTN from my house in the Middle East or wherever.

[00:07:07] Yes, so these telcos and the telcos are providing cell service to people

[00:07:11] and people using the cell service to make calls but I guess these days also a lot more

[00:07:15] data and in order to get quote unquote good signal your phone needs to connect to the tower

[00:07:21] or the base station and then the tower works by transmitting signals between different devices.

[00:07:26] It sort of makes sense I think in a very, very practical example. The phone sends out a signal,

[00:07:31] the signal goes to the nearest tower, the tower picks up the signal and then the tower

[00:07:36] connects your call or gives you data and then magically you make a call or you have data.

[00:07:41] That's how it works in a nutshell. What I thought was very interesting in the cell phone

[00:07:44] tower aka base station is there are two different components. There's the active

[00:07:48] component and the passive component. I learned this while researching the podcast and I love it.

[00:07:52] The active components are the parts of the cell phone tower that actually transmit and receive

[00:07:56] the cellular signal from the person's phone or let's just say handset or data set and that

[00:08:01] includes the radio equipment, the antennas and all that stuff. The passive equipment are not

[00:08:06] used for cell phone signals. They're used to provide a platform for the antennas. They're

[00:08:10] like the structure so there's the tower body, the metal, the actual metal design,

[00:08:15] the cables that connect everything together and they're miscellaneous mounts and fasteners.

[00:08:19] This may sound like we're getting into minutiae. The reason why this separation is important is

[00:08:23] in some market there may be different owners. A different person may own the passive part and

[00:08:27] the active part. That's the first thing to know. Another thing to support what Banquoli said is

[00:08:30] because this episode is about IHS and IHS focus on emerging markets, emerging market towers

[00:08:35] tend to have some additional things that may not be as needed in American or European towers.

[00:08:40] For example, power supplies are immediately issued in a lot of development markets,

[00:08:43] especially in Nigeria, which is IHS biggest market, which means they need their own power

[00:08:48] supply, which is a fancy way of saying diesel generator or solar panel. That's the first

[00:08:52] thing. Also because security is an issue in emerging markets, you may need to have additional

[00:08:58] security guards to protect against vandalism or theft. These are two things that are

[00:09:03] not so common in developed markets but more common in IHS and emerging markets. That's a

[00:09:07] quick overview of terminology, how it works and the components.

[00:09:11] For the vast majority, for the first decade or so I felt confident in saying that a lot of

[00:09:15] the internet infrastructure of Nigeria is powered by generators which is insane to think about.

[00:09:19] We had 100 million phone lines in the first decade and it was all 27,

[00:09:24] 65 kVA generators in all these independent base stations, thousands of base stations,

[00:09:28] constantly with trucks refilling them with diesel at regular intervals, dealing with

[00:09:33] all the vagaries of doing business in Lagos at scale. That's one of the challenges

[00:09:39] of doing this as well. If you listen to the CEO of IHS, Sam, he says a lot about solar panels

[00:09:45] and the transition to that. It's unclear how that transition is going and how much

[00:09:49] of it is talk versus reality but it is something they say they're doing a lot.

[00:09:53] Okay, one last thing on this. Earlier I spoke about the passive and active components

[00:09:58] and we're going to talk about this more later but think about the active components,

[00:10:02] I said the radio, the antennas as things that these telcos themselves want to operate.

[00:10:07] MCN, Airtel, AT&T, T-Mobile, they want to operate those parts because that's part of

[00:10:11] their core business of providing cellular service to consumers. Then think about

[00:10:14] everything else, aka the passive components of the towers, they can outsource to anyone else.

[00:10:19] So they can either have a model where they have shared ownership or they have

[00:10:23] full ownership to a third party. We'll come back to that later. We're going to talk more

[00:10:26] about leasing versus joint ownership. I just wanted to give a quick taste in the intro

[00:10:30] before we get into some of the details later.

[00:10:32] And the one other thing is the towers themselves tend to be a significant part of the setup cost

[00:10:37] of a network. So for added context, when we get into the stories, for Nigeria, which I'm most

[00:10:45] familiar with, when the telcos got the first JSM license in 2001, they had 90 days to set up

[00:10:51] a network in 30 or 36 states or something ridiculous like that.

[00:10:54] 90 days isn't a lot dude.

[00:10:56] Yeah, oh yeah.

[00:10:57] It was, it was, it was, shut up.

[00:10:59] Better have your money.

[00:11:01] No, no, no, they are already paid. They are already paid. You know what I said.

[00:11:04] They're already paid $295 million for the license and they said 90 days to roll out.

[00:11:10] But a lot of that will require you to, so in addition to paying for the license,

[00:11:14] it's a significant part of the cost. At least 40, 50% or more of your costs are just

[00:11:20] based on just towers alone. Like energy, customer support.

[00:11:24] But is that 40% of the operating ongoing or just initial capex?

[00:11:29] Total cost, total cost. Total cost is actually linked to just the towers itself.

[00:11:35] And that's significant if that's a big cost structure. So whoever can optimize that big

[00:11:39] cost. If you think about Nigeria where the largest taxpayer is MTN, a telco company,

[00:11:45] and if 50% of their total cost of operation is in towers, optimizing that cost is really

[00:11:50] going to squeeze out a lot of margins for MTN, but also for anybody in that value chain

[00:11:53] who's making some money as well as IHS is. Okay, let me talk about how telcos typically work with

[00:12:01] towers and how companies like IHS in particular in Nigeria sort of come to be. And I'm talking

[00:12:06] about the IHS founding story. So historically in Nigeria in 2001, in many parts of the world,

[00:12:13] which are much more advanced, it's a bit different, but let me focus on Nigeria.

[00:12:18] If you care about tech, this is very controversial, but if you care about tech

[00:12:21] in Nigeria, there's two parts. There's pre-JSM and post-JSM. Pre-JSM nobody even wants to know

[00:12:26] who was selling mobile phones and intercellular and it was multi-links and I don't know those

[00:12:29] people. But post-JSM historically the way it works is that mobile network operators, the MNOs

[00:12:36] build on and manage their own infrastructure and calling telecom towers. So MTN will build

[00:12:40] their own, ITSAL will build theirs, GlobalComm will build theirs independently. In some places

[00:12:44] they would work together and try to manage it, but there was no clear framework. There was

[00:12:50] a lot of duplication in towers because MTN tower is here. And if MTN has coverage in

[00:12:54] VIA, it has coverage in Victoria Island as well. So they go have towers. It was not

[00:12:59] particularly efficient, but because of the speed, because of the nature of the network,

[00:13:03] because of the size of the opportunity and frankly they were making money hand over

[00:13:06] fist so it was not really that much of an issue, which is crazy. So it's like,

[00:13:10] oh we'll build it and operate it ourselves. And companies like IHS helped them build it

[00:13:13] by the way, which is there were lots of people like again, it's just to build. It's

[00:13:18] a contract work like building a house or building a shop. Hey, go build me this with these

[00:13:21] specifications. Putting the equipment and companies like MTN and Cold War manage it

[00:13:26] or use subcontractors to manage it as well. Yes, but clearly inefficient because of the

[00:13:31] duplication. So for example, if you say we want to make a lot of money in a high income area.

[00:13:37] So if you pick some of the richer cities and you put towers there, it makes more sense for

[00:13:41] another person to share the same tower than to build another tower in the exact same spot

[00:13:45] because they can't build it far away because the distance of the cell phone,

[00:13:48] the person holding the phone to the carrier affects the signal. So inevitably everyone

[00:13:52] wants to give the same level of signal to the same people and they're not sharing

[00:13:55] towers. It's likely going to be inefficient because you're building in the same areas.

[00:13:59] Yeah. And it's also some parts of the world, parts of Africa where real estate is really

[00:14:04] expensive. You find that signal tends to be terrible because you have to pay the real estate

[00:14:10] to put a tower. MTN is like, we're not doing this anymore. I don't know how true this is

[00:14:18] recently, but I remember being in Banana Island maybe a decade ago and the signal is just

[00:14:22] terrible. It's a part of Banana Island. Yeah. Who's going to pay the rent to put up a tower?

[00:14:27] If you want to get signal in Banana Island, go close to the gate, go close to the entrance.

[00:14:33] You won't signal in Banana Island because there was a lot of duplication that was

[00:14:38] expensive to manage it. I don't know if that's true anymore. If you live in Banana Island and you

[00:14:41] think that's not true, message me so that I can come to your house. Email info.

[00:14:50] So that's how it worked. So MTN, Etel, Zane, Seltel, whatever it was called, built their own

[00:14:56] towers, operated themselves or used service companies like IHS to operate or build for them.

[00:15:02] Now in 2008, 2009, it was interesting to... Oh, sorry. One more thing just

[00:15:07] to close for anyone who's very, very interested in the full details of the telecom infrastructure

[00:15:14] telecom story in Nigeria before 2001. The full details. So we're going to listen to our MTN

[00:15:20] episode, episode five, afrobudy.com. Banquo is only given a teaser now because this episode is

[00:15:25] more about IHS, but we do have a full episode that talks about Nitell deregulation, all

[00:15:29] that. You can also listen to our GLOW episode afrobudy.com slash GLOW because actually,

[00:15:34] you know, I take it back. The MTN episode is more about South Africa. So listen to episode 49

[00:15:38] afrobudy.com slash GLOW. Banquo, you were talking about 2008.

[00:15:41] Exactly. That's a good one. So 2009, a lot of things were happening in the world. If you were

[00:15:46] not under a tree, a rock, realized that there was a global financial crisis as a credit crunch

[00:15:50] was the technical term that people use a lot. You don't even hear credit crunch anymore.

[00:15:54] No, no, no. No one uses that. You just hear recession now. Inflation.

[00:15:57] You hear recession. You hear inflation and recession. Anyways, there's a significant

[00:16:00] credit crunch. There's a lot of competition in the sector. Margins were reducing. And it was

[00:16:08] obvious looking at the West that these telcos are sitting on a large amount of just cash assets.

[00:16:15] So a lot of this is for, at least initially, you start from an accounting perspective. So

[00:16:21] if you're a telco, you hold the asset, the towers on your balance sheet, right? And the

[00:16:25] just assets you hold, you take the position against them to shield your taxable income.

[00:16:30] And you get some benefits off that. What if you could sell that and instantly get a windfall of

[00:16:36] cash for other your operations, right? And then you can still guarantee access to the same

[00:16:41] equipment by paying rent to use it. So these arrangements are called sale leaseback. Very

[00:16:47] common in other parts of the world, not particularly new in 2009 when the telcos did

[00:16:52] it, but it was very clear this was the nature, the way he had to evolve as well.

[00:16:55] Yes. Okay, so let me give a little bit more detail on this leasing thing because it's very

[00:17:00] important. So the tower owner, aka TowerCo, like IHS, they become the landlord. Okay,

[00:17:07] they own and operate the physical infrastructure, the tower, the land, everything. They provide

[00:17:13] a security power. Then the cell operator, the MNO, EG, MCM, they become like a tenant

[00:17:18] because they still need to provide service. So they pay a monthly rent fee, service fee,

[00:17:23] whatever, to IHS, the TowerCo. And all this is under the lease agreement. And the lease

[00:17:28] agreements can be a long-term agreement for years. And it basically says the cell phone

[00:17:32] carrier, MNO, will pay a regular fee, could be monthly, quarterly, annually to use the tower

[00:17:36] under some stipulation. And they can have a renewal clause and a duration clause.

[00:17:40] And the reason telcos want this like MCM is it avoids the upfront costs of building and

[00:17:45] maintaining and upgrading the tower because operating becomes very important when you go from

[00:17:49] 2G, 3G, 4G, 5G. And the reason it's good for IHS is because IHS builds more expertise.

[00:17:55] And then over time, hopefully their costs will be lower because they have more skills

[00:17:59] doing it themselves. So both parties win. The telco gets more flexibility. They get

[00:18:03] more capital because they convert the capex, the up-ex and the TowerCo like IHS, they build

[00:18:08] more specialty and they grow. It seems like a win-win, but that's how it's supposed to work

[00:18:12] under the leasing agreement. Yeah. It's like if you own a house and you sold it to somebody

[00:18:17] and you stay there as a tenant, that's pretty much the consumer analogy of what the

[00:18:21] sell this back here is. Yes. And in this case, the landlord wouldn't want to kick you out

[00:18:25] because they're only a few people that can live in the house. Like the house is too bougie.

[00:18:28] No regular person can live in the house. Just the artist known as Prince and Michael Jackson

[00:18:35] and all those people as well. So if you want to get... Okay, go for it. No, go ahead.

[00:18:41] No, I was going to wrap it, but if you hadn't finished, you should finish. Yeah.

[00:18:44] So essentially the sell this back strategy is one that was obvious to the investors in the

[00:18:49] telcos, but also the investors in the tower, in the tower cause themselves managing them

[00:18:54] and a lot of tower calls globally as well. And the idea is everybody can focus on the one

[00:18:59] that they know how to do. Exactly specialization. If you want to, because MTN does not really

[00:19:04] want to be in the business of paying Agbe Rose in Yanagua to pay area boys in a remote

[00:19:09] part of Zamfara to take diesel to somewhere. MTN is like, I don't know the CEO of MTN,

[00:19:17] the former CEO of Cifiso Dabengo. I was like, it's not knowledgeable in that stuff. It's

[00:19:22] not really knowing how to talk to Agbe Rose, but IHS is their core business. They can figure

[00:19:26] those things out so they can specialize in those things. They can be much more efficient.

[00:19:31] It might even cost them even less because you're saying sticking with the consumer analogy,

[00:19:34] you're saying I will sell my house to you. You'll take me as a tenant and I would accept

[00:19:39] a roommate for a lower cost is what you're saying. I'll accept three roommates for a lower cost. All

[00:19:43] of a sudden your costs start to become even lower. Now that makes money, you make money,

[00:19:46] everybody's happy. Everyone is happy and you don't have to interface with the roommates.

[00:19:49] They're not stinky. They shower every day. They have their own kitchen. They're not

[00:19:52] messing up the toilet. It's like a win-win. Let's summarize. If you want to listen to

[00:19:58] more of this, listen to our MTN episode, our orange episode, air tell episode, glue

[00:20:03] episode. We have a lot of episodes about specific telcos in specific countries,

[00:20:06] but the summary from a tower perspective is MNOs initially built and managed their own towers,

[00:20:12] support their networks. Eventually because of specialization of skill sets and because of high

[00:20:16] capital costs, power supply issues and complexities, they decided to start to outsource

[00:20:22] some of the tower support and tower building services so they could focus on their core

[00:20:27] services. That led to the birth of tower codes such as IHS we're going to talk about shortly.

[00:20:32] Tower codes evolved as a business to offer the management of towers. They specialize in building,

[00:20:37] own and operating. The first major independent tower code was IHS in 2001 in Nigeria. That is

[00:20:44] the foundational context for the story of our friends at IHS. That was a very good intro.

[00:20:52] I feel very satisfied. I feel like someone listening to this point is ready to understand

[00:20:57] what's going on. Exciting. Okay, IHS, our friends at IHS 2001. Bunkley, how do I always

[00:21:01] start this part of the podcast? It's been long. What do I say in this moment?

[00:21:05] You say he was born in, what did he want to become when he was a child?

[00:21:10] He used to eat mangoes under the street.

[00:21:16] I'm going to say that in 10 seconds, but before we talk about sound,

[00:21:19] I'm going to give some broad context. 2001, all is happening. Wikipedia was launched,

[00:21:24] my favorite website in the world. Shout out to Wikipedia. Stop begging for donations,

[00:21:26] by the way. You guys just stop that. I'm not interested in giving you guys even a dime.

[00:21:29] Okay. Apple iPod was released. I'm a hater. I'm anti-Apple. So whatever. Great product,

[00:21:34] but against the company. Napster, the controversial file share service was shut down

[00:21:41] due to copyright and legal issues. Shout out to Napster. I never use it just for the

[00:21:45] record. Bluetooth released the first commercially viable headset. Can you believe Bluetooth

[00:21:50] headsets were only released for the first time in 2001? That's crazy. What were you using before

[00:21:54] Bluetooth, dude? Like, Oh, I could tell the Walkmans man. Oh, wow. The bright,

[00:22:00] bright yellow Sony Walkmans with the red foam in the air. Did you ever use those Palito,

[00:22:04] those Palito earphones with a scanning FM? Nah, don't worry. My people that know Palito,

[00:22:09] just message me. Message only me so we can connect. No one knows I know Palito.

[00:22:14] I have no idea what you're talking about, but it sounds funny. The people that know,

[00:22:17] if you are hearing Palito, you know, you have a certain age and class in Lagos,

[00:22:20] in Nigeria. You know my people know. I know the Walkman, the disc man. Palito sounds like

[00:22:26] a terrible Italian designer, fashion designer. You know, you know, don't worry. All that stuff

[00:22:30] was happening around the world in tech, but this podcast is for emerging markets. So

[00:22:35] emerging market, the most important thing to happen in 2001 was telco services started to

[00:22:40] launch in Nigeria, most notably MTN. And MTN launch of telcos in Nigeria was very important

[00:22:45] because even today as a recording in 2024, Nigeria is the biggest market for MTN by subscribers,

[00:22:50] by revenue and by profits. So that's what was happening. Okay. But we're going to talk about

[00:22:54] IHS today and we're going to talk about its founder Sam Darwish. So Sam was born in Beirut

[00:23:02] in Lebanon in the seventies. He studied computer communications at the American University

[00:23:06] of Beirut. Actually Banco, we've never spoken about Beirut before, right? We haven't even

[00:23:09] ever spoken about Lebanon on this podcast. I don't think we have, right?

[00:23:12] Lebanon is baby. Lagos is baby Lebanon. Sorry. I know.

[00:23:19] Have you been to Beirut? Have you been to Beirut before? If you want to know.

[00:23:22] I went to Beirut then I realized that. Area boys, you know what I grew up.

[00:23:27] Shout out to my Lebanese people. I love y'all. Every time I meet someone from Lebanon,

[00:23:30] they're so familiar with Nigeria and Lagos. It's like a second home. They're like,

[00:23:34] oh, are you? You were about my, oh wow, surprise, blah, blah, blah. My cousin. I'm

[00:23:37] like, so it's like we're very culturally similar and we share a lot in common.

[00:23:41] Shout out to Lebanese people. I love y'all. But I'm actually surprised

[00:23:43] that haven't come up yet. I don't think it's in Nigeria thing. I think

[00:23:48] Adrisco is coming across the wrong way. Lebanese people are everywhere.

[00:23:52] How can that come across the wrong way? That's a good thing.

[00:23:54] No, because no, no, no, because no, there was a big war which was part of Sam

[00:24:00] Darwish story where a lot of people left. So payroll media, like so much of people

[00:24:06] that you wouldn't even realize are Lebanese. Yeah. Of Lebanese origin as well. You'd be

[00:24:12] surprised. Okay, okay. So we're talking about Sam. So Sam was born in the 70s, like I said,

[00:24:17] computer communications, American University of Beirut. In 1992, in his early 20s,

[00:24:22] he started his first job. He joined MCI, the overseas branch of MCI, which at the time

[00:24:27] was one of the largest telcos in the world. Obviously they later went bankrupt

[00:24:31] after their accounting scandal. Shout out to accounting scandals. From 1994 to 1980,

[00:24:36] he was a network manager at Libancell, Libancell. God, I don't know how to pronounce that. But

[00:24:42] anyway, it was a Lebanese telecom company which later changed its name to MTC Touch.

[00:24:46] Mankheli, what does MTC stand for in MTC Touch? Mobile telecommunications.

[00:24:53] We've been there. This joke could never die. I don't know what was going on with the

[00:24:58] marketing and naming department of these companies. Anyway, so he worked for Libancell,

[00:25:03] we ran his MTC Touch, but it's now just called Touch. And it's actually a big deal because it

[00:25:07] was the first MNO in Lebanon, first JSM MNO. And it's still one of the biggest today, even in

[00:25:13] 2024. So that was his second job. One of my favorite stories, I saw this somewhere else,

[00:25:18] about his story about his first job where he said he had to... When he got his first...

[00:25:24] I'm going to read this quote. I didn't understand this quote. When he got his first job,

[00:25:27] was so poor that his boss had to lend him $8,000 to buy a car so he could get to work.

[00:25:32] I'm like, first of all... First of all, when I got my first job, I don't think I was credit

[00:25:45] worthy for $8,000. Imagine if my first job where I didn't have a car, somebody said it was

[00:25:50] $8,000.

[00:25:52] That's not inflation adjusted. Inflation adjusted. That's almost $20,000.

[00:25:56] Come on. Come on, Sam. Come off it. He was so poor.

[00:26:02] I'm so poor. Like I didn't eat for two days and I had to like eat sarjins for dinner.

[00:26:07] My guy said he had to borrow $8,000. Do I have people that will borrow me $8,000 today?

[00:26:13] Who do I have that will borrow me $8,000? Today after everything I've done in life,

[00:26:16] where will I borrow $8,000?

[00:26:20] You might die. I died. I died.

[00:26:22] Is it 1992 people were borrowing me $8,000? Today?

[00:26:26] He was giving me $24 years old and he was going to give me $8,000.

[00:26:30] In Lebanon. In Lebanon. That's hilarious, bro.

[00:26:34] Okay. If you can borrow me $8,000,

[00:26:36] you are leading this podcast.

[00:26:38] We'll take the money. Oh my God.

[00:26:42] Anyways, that was my favorite story.

[00:26:44] I love that. That is that's classic. Oh my God. I'm almost in tears.

[00:26:48] That's classic. He also dreamt about winning a Nobel Prize in Physics as a teenager as well.

[00:26:52] For real? Okay. Intriguing. Well, we all have our dreams.

[00:26:56] All right. So, tonight's the night he was the director of projects

[00:27:04] at Lintel. Lintel was a Lebanese holding company. Shout out. Shout out.

[00:27:08] Okay. At this point in the story is in his late 20s, early 30s,

[00:27:12] and he's been in Lebanon the whole time, right? And most of his experiences focused on

[00:27:16] the Lebanese market and that whole region. But at this point,

[00:27:20] this company, Lintel, the holding company, he was responsible for global implementation

[00:27:24] in West Africa and the Middle East. So now his career is transitioning

[00:27:30] a little bit to Africa and he's doing more work there.

[00:27:32] So putting everything together at this point, he's doing a little bit in Lebanon,

[00:27:36] Middle East, a little bit in Africa. And after this role was when he decided

[00:27:40] to see the opportunity to start IHS. And the opportunity is exactly what we said before.

[00:27:46] The telecom landscape is changing. Emma knows we want to focus more on the core services

[00:27:50] and how can I help them? But at the time, just to be clear, the vision and the initial idea

[00:27:54] was a little bit smaller. They were just going to help the telcos build towers.

[00:27:58] It wasn't about like lease agreements or that. It was just a little bit of building

[00:28:02] and managing existing stuff. Did you talk about like why and how he came to Nigeria?

[00:28:07] Oh, no, no, no, no. Please share. Oh, so to the uninitiated people are not familiar

[00:28:13] with the machinations of Nigerian politics after the previous military ruler died,

[00:28:17] after Jaroslani Abacha died in questionable circumstances, reportedly

[00:28:20] questionable circumstances, which I will not get into. Google it if you want to go on.

[00:28:24] Yes, or bring, turn off the bank, yo. 18% of the picture.

[00:28:27] There was a separate leader, Absalom Abubakar, who first gave out licenses for telcos

[00:28:33] in Nigeria. Yes, they gave out licenses to two different companies, United Telecommunications

[00:28:37] and Celia Moto Phone Nigeria Limited. Our superhero Sam Darwish came to Nigeria

[00:28:45] as a deputy M.D. for Celia Moto Phone. So they built up the networks.

[00:28:49] He helped them set up the network, build it up, and they sold some lines.

[00:28:53] But at the same time, we're doing election. You know, that was military elections.

[00:28:56] Now the election in 1999 and democracy, you know, yeah, that was a transit show.

[00:29:01] We had democracy in Nigeria May 27th. And one of the first things that the president did,

[00:29:06] President Abacha said, that licensing was fraudulent. So there are a lot of context

[00:29:09] around why it was fraudulent. Again, go back to the history, no point rehashing it.

[00:29:13] But it evoked all of those licenses. Right. So all these guys.

[00:29:17] So at this point, Sam Darwish and the other co-founders were unemployed.

[00:29:21] They came here to set up a network and they said they can't set up a network anymore.

[00:29:24] I don't know about unemployed. They were just coasting or maybe the company said

[00:29:28] do anything you like. You do. We are not in Nigeria anymore.

[00:29:34] So if you want to stay, we're not running a sleep something.

[00:29:39] So if you want to stay, you stay. If you want to go, you go.

[00:29:42] As long as you don't call me anymore. Do whatever you want, but just don't call me.

[00:29:46] So that's what brought them to Nigeria in the first place. Right. So doing Celia Moto Phone.

[00:29:49] So at the time when they lost the licenses and in short order.

[00:29:52] So the license regime that MTN and Econet and I can't remember the third one now.

[00:29:58] Got front in 2001 was very quick.

[00:30:02] So they went through it. They jacked up the price so much.

[00:30:05] Rehabilitar was first. They charged them $285 million per license.

[00:30:08] They give him 90 days to set up. The IHS founders are sitting here with the expertise of setting up

[00:30:14] actually setting up a network because they started to do that with their previous.

[00:30:17] Because that's what they were supposed to do. That was supposed to do. Right.

[00:30:20] And that's what he has also been a network engineer in Lebanon as well.

[00:30:23] So he's very familiar with doing those things.

[00:30:25] So they looked at his friends.

[00:30:28] So now that the festival. We need money and these guys need towers.

[00:30:32] So let's do it. Now that the festival hasn't really popped up. Right.

[00:30:34] So what are we going to do? So it was easy.

[00:30:36] It was an obvious transition, I think, to him and to the team.

[00:30:41] Hey, we can build towers for MTN because they need people to build towers.

[00:30:45] So they can build some themselves, but they need a lot of contract.

[00:30:47] They're going to need a ton of people to roll out in all this coverage area and the coverage requirements in 90 days.

[00:30:52] So that's how they got their start off with IHS towers.

[00:30:54] It's like, hey, we're just going to start building towers for the telcos since we are not doing network stuff.

[00:30:59] Okay, this is so fucking awesome. Okay, so let's put everything together.

[00:31:03] So Sam superhero, right? Born in Lebanon, has a bunch of experience in Lebanon on the network tower side,

[00:31:10] has an opportunity to come to Nigeria and West Africa to help start the mobile revolution and build towers with a license.

[00:31:17] The license, they have some licensing problems.

[00:31:20] Eventually they lose the license. License goes to other carriers.

[00:31:23] So they start to support those carriers to build towers because they were already doing that.

[00:31:27] They had the experience and that's the foundational story. Fascinating.

[00:31:30] And interestingly, he already was in a pretty high role at Celia.

[00:31:33] The original company was already a deputy MD. So it wasn't like he was a low level person.

[00:31:38] He should have had high level experience and knowledge of what was going on.

[00:31:41] Plus he had six, five to six years of experience in Lebanon already.

[00:31:47] So he was like his mid career stage. So that is very young. It was 27. Yes. Very young. Exactly.

[00:31:52] Exactly. And we have a wide variety of founders on AfroBilly. His career was a lot more concentrated.

[00:31:57] His degree was in computer communications. His first job was a network engineer.

[00:32:02] Second job projects and so very focused career on what he was doing.

[00:32:06] So even though he was young, he already had a lot of experience.

[00:32:08] So that is the initial founding story. Anything else you want to add?

[00:32:11] Yeah. The part that jumped out to me from looking up the things he did is he talks a lot about being self taught and self driven, especially in his first job.

[00:32:21] He was a lot about just getting exposure to the different parts of the system other than what he was actually working on.

[00:32:26] So it gave him a real breadth of experience the way allowed him to continue getting more and more responsibility

[00:32:30] to eventually be in a position to move to Nigeria to set this up as well.

[00:32:33] So that's something that was a pretty cool thing. And he came to Nigeria and so to speak has never left.

[00:32:39] He's become a Nigerian citizen. 100% with dual citizenship. Also has others just in case to bail out if you need to.

[00:32:45] Shout out to Sam for what you need to do.

[00:32:47] I don't know about other citizenship. I know.

[00:32:53] He also is the Adimola of Erina. He is the chief tenancy title holder in Quara State as well.

[00:32:59] I guess all of that to say that he's become or he has attempted to be or has become fully integrated into Nigeria.

[00:33:09] He presents as such and brands as such and it's definitely credible. If you know anything about Lagos, running towers.

[00:33:17] It's 100% credible because if he moved around 2000 and now as a recording is 2024, he's been there for at least 24 years.

[00:33:25] So I mean 100% my hats off. One additional thing to note is even though we call him Sam Darwish, his full name is actually Issam Darwish.

[00:33:33] So you can search either he has a lot of good videos on YouTube where he talks about his background.

[00:33:37] Okay, we're going to talk about funding. Now because they were private for most of their history, the funding information is sparse.

[00:33:46] But I will try to piece together whatever information we have.

[00:33:50] And then after I talk about the funding, Banco will talk about growth and expansion.

[00:33:54] And I'll talk about the IPO after that because the IPO is a big part of the funding.

[00:33:57] But I want to talk about the IPO story later in the podcast.

[00:34:00] Okay, 2001 founded between 2001 and 2007. There was a lot of it seems to be self-funded growth because there weren't a lot of announcements.

[00:34:11] Somewhere between 2007 and 2011, they got an undisclosed amount from EMP.

[00:34:16] EMP, Emerging Markets Partnership Africa Infra Fund.

[00:34:20] 2011, they got a massive windfall from Goldman Sachs, which means they're already doing quite well.

[00:34:25] Goldman Wendel Group, Wendel, Wendel, so if you can pronounce that email, BancoLeadAfricaBuddy.com.

[00:34:30] Don't email me, I don't care about the pronunciation.

[00:34:32] And African Infrastructure Investment Managers, AII.

[00:34:36] Some sources say between 100 and 300, but I'm clear the actual amount.

[00:34:40] 2013, they got even more money between 400 and a billion again from Goldman Sachs.

[00:34:46] This time with some participation potentially by IFC.

[00:34:49] 2014, they got a large debt financing round between 500 and 2 billion.

[00:34:54] Between 500 million and 2 billion. What a widespread.

[00:34:56] From a lending syndicate.

[00:34:58] 2015, they got additional debt financing between 500 and a billion.

[00:35:02] Again, wide range.

[00:35:03] 2016, they got a combined debt and equity round undisclosed figure,

[00:35:07] but could be between a billion, 2 billion from Emerging Capital Partners, ECP.

[00:35:11] And then 2017, the Public Investment Corporation of South Africa

[00:35:15] lended between 400 and 800 million.

[00:35:17] And then 2018, they raised around a billion.

[00:35:20] So a lot of numbers. Let's not get lost.

[00:35:23] Let's just summarize it in a way that's simple.

[00:35:25] Between their founding in 2001 and their IPO in 2021,

[00:35:28] within those 20 years, they raised a large amount of money from a mix of private investors,

[00:35:32] some DFI development finance institutions, and some PE companies

[00:35:36] to focus on growing and developing markets.

[00:35:39] The key thing to take care of is they have a good track record of raising money

[00:35:43] because they got it from a wide variety of sources.

[00:35:45] Some DFIs, funds, Goldman, and they did it consistently for 20 years.

[00:35:49] The actual amount that they raised 400, 500, 1 billion, 2 billion, not so important.

[00:35:54] Just to know, they raised a lot of money before the IPO.

[00:35:57] When I was...

[00:35:59] The other co-founders, and I will speak of Sam as like his superpower is raising money.

[00:36:04] His superpower is finance and being a visionary.

[00:36:07] And the only other founder I've seen raise at this clip is Chipper Cash.

[00:36:10] Shout out to Chipper in the house.

[00:36:12] But this is like a crazy clip.

[00:36:14] And a lot of these individual announced rounds were almost strategic.

[00:36:18] So I'm sure there's a lot of things that were not even announced

[00:36:20] because a lot of the rounds coincided with deals that they were purchasing

[00:36:23] to house from different sources.

[00:36:25] Oh, Banco Lee.

[00:36:26] They'll announce the raised money and then they'll sign up and do different things.

[00:36:29] So I was going to leave this out of the IPO part,

[00:36:31] but since Banco Lee said this, I'll just say it now.

[00:36:33] One of the strategic investors in a lot of the rounds was MTN.

[00:36:37] And at some point around 2017, 2018, MTN had so many investments,

[00:36:41] so much money in IHS that they owned around 30%.

[00:36:44] So I'll talk more about that in the IPO.

[00:36:45] I was going to leave it out.

[00:36:46] But Banco Lee, since you said it, you can also talk about,

[00:36:48] they also got some strategic investors.

[00:36:50] The other thing that they did is, I found this,

[00:36:53] is that they listed a Nigerian subsidiary on a Nigerian stock exchange actually in 2008.

[00:36:59] Why not?

[00:37:00] They did list in 2014, again, because for the same reason that people did list,

[00:37:04] flexibility and the one to invest heavily for the future.

[00:37:08] The stock market is not liquid enough.

[00:37:10] It's not enough purchase.

[00:37:12] And so it was interesting that they did list in Nigeria,

[00:37:17] but there was no joy in Nigerian stock market.

[00:37:20] In retrospect, it was also maybe a good time to even delist

[00:37:23] because of what happened to the Naira from 2014 onwards,

[00:37:26] much like exposure in their funding to that as well.

[00:37:29] So they took the company private and they were able to then take the company private

[00:37:34] and then grow and invest with all this capital they were raising from all these different multiple sources.

[00:37:38] Right. Apart from Fowry, we have very few examples of very large African tech companies

[00:37:43] in the local markets on the local stock exchanges.

[00:37:47] I guess we can say the Telcos, but the Telcos aren't really tech companies,

[00:37:51] they're infrastructure companies.

[00:37:52] But anyway, Fowry is one example where they listed in the Egyptian market

[00:37:54] and they've stayed there for most of their time.

[00:37:57] Growth?

[00:37:58] And their investors are Who's Who, right?

[00:38:01] Teco Bank, InvestTech, Standard Chatter, Standard Bank, Goldman Sachs, IFC.

[00:38:07] It's just all over the place.

[00:38:08] MCN, MCN is a big one.

[00:38:10] DMO, FMO, Netherlands FMO, South African Bank, just Wendel, all of them, lots of other things.

[00:38:16] So they've been able to raise a lot of money.

[00:38:20] Maybe one thing we didn't talk about a lot is how capital intensive this business is.

[00:38:24] You need a lot of money to build and operate these towers.

[00:38:26] And then you basically sort of...

[00:38:28] Like every infrastructure business, you need a lot of money,

[00:38:30] which is why you see at some point they start to get a lot of debt.

[00:38:33] Around 2014-15, they started to raise more debt than equity, which makes sense.

[00:38:39] Yeah. So now let me talk about the growth and how they've grown.

[00:38:43] So as we talked about earlier, they started in Nigeria, right?

[00:38:46] And they still have a good chunk of their business in Nigeria,

[00:38:49] but also in a lot of other countries.

[00:38:51] Nigeria is a very Nigerian centric business.

[00:38:54] We'll go through all the numbers later.

[00:38:55] Very Nigerian centric business.

[00:38:57] So I will talk about the countries where IHS is operating

[00:39:03] and how big they are in those different countries.

[00:39:05] So excuse me.

[00:39:07] Deet.

[00:39:08] I'll talk about the countries where IHS is operating

[00:39:10] and how big they are in each of these different countries.

[00:39:12] In Brazil, they entered Brazil in 2019,

[00:39:14] and they have 6,000 towers in Brazil.

[00:39:17] In Cameroon, they have 1,500 towers.

[00:39:19] Côte d'Ivoire, Kuwait,

[00:39:21] largest independent tower in Nigeria as well.

[00:39:23] Rwanda, South Africa, Zambia as well.

[00:39:26] So then all of these countries,

[00:39:28] their typical way of expanding in these countries is through deals

[00:39:33] and acquisitions and transactions.

[00:39:34] Of course.

[00:39:35] Just M&A or current towers doing this thing.

[00:39:39] And Liesbark, we talked about earlier,

[00:39:40] which is just different companies.

[00:39:42] So I'll go through a timeline.

[00:39:44] This is actually fun.

[00:39:45] There's a lot more detail.

[00:39:46] Kudos to IHS.

[00:39:47] Put all the details on their website.

[00:39:48] Good website, by the way.

[00:39:49] Really nicely designed website.

[00:39:51] I like it.

[00:39:52] Yeah.

[00:39:53] They are listed on the New York Stock Exchange.

[00:39:55] I'm not here for jokes.

[00:39:56] We're here for the cash.

[00:39:58] I looked up their holdings.

[00:40:00] I'm saying serious people are following their stock.

[00:40:02] Serious people.

[00:40:03] Yes.

[00:40:04] Those comedians on TopPass.

[00:40:05] Shout out to africoleague.com.

[00:40:07] But anyway, so 2001 is when they started operations.

[00:40:11] So there's a big gap.

[00:40:13] 2001, they were just doing manic services.

[00:40:15] They were service business.

[00:40:16] MTN pays them, they manage the towers.

[00:40:18] Ettoll pays them, manage the towers.

[00:40:19] 2009, they began owning and leasing

[00:40:22] network operators in Nigeria, which is, again,

[00:40:24] that's about the time when they went public in Nigeria

[00:40:26] because you need to raise money to do all of this.

[00:40:27] To buy and then lease back, you need to raise money.

[00:40:30] And 2013 is when they started the expansion.

[00:40:33] And that's when they started deciding to go private.

[00:40:35] So 2013, they expanded to Cameroon, Cote d'Ivoire,

[00:40:38] buy our current MTN portfolios in those countries,

[00:40:41] and Orange as well.

[00:40:42] 2014, Zambia and Rwanda as well.

[00:40:45] So they started going outside of Nigeria.

[00:40:47] Yes, but they were still focused on Africa.

[00:40:49] Nothing else outside Africa.

[00:40:50] Still focused on Africa.

[00:40:51] The big deal that really started to,

[00:40:53] at least for me, looking at the numbers,

[00:40:55] was in 2014 as well when they purchased towers

[00:40:57] from Etisalat and MTN.

[00:40:59] So they acquired 9,000 towers from MTN.

[00:41:02] If you compare that to numbers I just went through,

[00:41:04] it's pretty significant.

[00:41:05] That is very significant.

[00:41:06] And another 2,000 from Etisalat as well.

[00:41:09] So there was a significant competitive deal

[00:41:12] that they were able to win in 2014

[00:41:15] to purchase all these towers

[00:41:16] so they could own and operate it

[00:41:17] on behalf of MTN and Etisalat.

[00:41:20] Well, because even as of today,

[00:41:21] they have around 40k.

[00:41:22] So in just those two transactions,

[00:41:24] they did around 11k.

[00:41:26] So that's massive.

[00:41:27] It almost probably doubled or tripled

[00:41:29] their existing portfolio at the time.

[00:41:30] So big deals, which is also why

[00:41:32] they were raising a lot of money at that time.

[00:41:34] And debt.

[00:41:35] Exactly.

[00:41:36] And 2015, towers in Zambia and Rwanda.

[00:41:38] So basically, it's kind of like it's the same people.

[00:41:41] It's MTN, ETL, and you go to their countries

[00:41:43] and see what portfolios make sense

[00:41:44] and where it works and who works with them.

[00:41:47] 2016 as well, there was a competitor.

[00:41:49] They acquired Helios Towers Nigeria,

[00:41:51] which also owned a number of towers.

[00:41:53] Big deal.

[00:41:54] I was much more familiar with Helios

[00:41:55] in Nigeria at the time.

[00:41:56] So it's kind of funny.

[00:41:57] And 2020 was when they started zero interest rates.

[00:42:01] Started going everywhere else in the world.

[00:42:04] They went to Middle East, Latin America,

[00:42:06] went, bought towers from Zain, Kuwait, Brazil, Peru,

[00:42:10] Colombia.

[00:42:11] 2021, they went to Brazil, Egypt,

[00:42:14] and started going to different countries.

[00:42:16] Massive expansion.

[00:42:17] It was impressive.

[00:42:18] And maybe it's depending on how you look at it

[00:42:19] and the stock price takes the opposite point of view

[00:42:22] is that they went and made all those investments

[00:42:26] when capital was cheap,

[00:42:27] but it also depends on how it was structured

[00:42:29] and how they pay for it.

[00:42:30] Right?

[00:42:31] So maybe somebody has looked at through the books

[00:42:32] and decided that there wasn't maybe such a good idea

[00:42:34] as what the stock prices have been in the doldrums,

[00:42:36] but a lot of their expansion has been from acquiring from telcos

[00:42:40] and they've been aggressive about expanding

[00:42:42] and raising money to expand to do this.

[00:42:44] Yeah, which is why today they're the third or fourth largest tower core

[00:42:47] in the whole world.

[00:42:48] Not in emerging markets, not in Nigeria, globally.

[00:42:50] So they've actually made a lot of progress,

[00:42:52] especially because a lot of their expansion happened later in their history.

[00:42:55] They were founded in 2001,

[00:42:56] but they didn't start a lot of expansion

[00:42:57] until like five, six, seven years later outside of Nigeria.

[00:43:00] Yeah.

[00:43:01] And in each of these markets,

[00:43:02] they are like first, third, fourth.

[00:43:03] Yes.

[00:43:04] Like they don't go in and buy a couple of towers

[00:43:06] and see how it goes.

[00:43:07] Nah, bro, to the top.

[00:43:08] They're going big.

[00:43:09] So that's good.

[00:43:10] That's very impressive for a company from this background,

[00:43:14] just starting managing towers and being a service provider.

[00:43:17] Now let's talk about people, like where their office is set up.

[00:43:20] They're in London and they have a corporate office in New York,

[00:43:24] but I couldn't figure out what else is happening in New York

[00:43:27] other than the comms people.

[00:43:28] But London seems to be where the headquarters is

[00:43:31] and where any of the people were there.

[00:43:33] And London seems to be where it makes sense

[00:43:34] because you can travel to Kuwait,

[00:43:36] but you can also travel to Nigeria and Zambia and Cameroon

[00:43:40] with possibly direct flights from London.

[00:43:43] So it makes sense.

[00:43:44] And a good time zone.

[00:43:45] A good time zone for Middle East.

[00:43:47] A good time zone as well.

[00:43:48] Exactly.

[00:43:49] Exactly.

[00:43:50] So they're actually in London.

[00:43:51] So they operate their head office.

[00:43:52] For Nigeria in particular,

[00:43:53] they're in Lagos as their head office

[00:43:55] and they have offices everywhere else

[00:43:57] where they manage and do a bunch of these towers as well.

[00:44:00] I was going to talk about their corporate structure on the board,

[00:44:04] but if you had something else to say, you can go for that.

[00:44:06] But I have a lot of thoughts on the board.

[00:44:07] It looks so cool.

[00:44:08] No, no, go ahead.

[00:44:09] No, go ahead.

[00:44:10] OK, so their board.

[00:44:11] I was looking at their board

[00:44:12] and it has a very interesting group of people.

[00:44:15] First of all, it has Ursula Burns.

[00:44:17] So I guess everyone is familiar with Ursula Burns.

[00:44:19] Jeb Bush, crazy.

[00:44:21] And then the former CEO of MTN.

[00:44:23] So they have a former high level politician in Nigeria.

[00:44:26] They have a lot of well connected political figures

[00:44:29] and former executives.

[00:44:31] Nicely designed board.

[00:44:33] I don't think we've seen a board like that probably before.

[00:44:36] When I told you they're a serious company with serious people,

[00:44:39] what did they all talk about?

[00:44:41] Is this a serious company?

[00:44:43] So when I was looking up IHS,

[00:44:45] I was trying to figure out how big they are

[00:44:47] relative to the largest tower operators in the world

[00:44:51] or in the emerging markets.

[00:44:53] So in Nigeria, they're the largest.

[00:44:56] They have 16,700, 17,000 towers in Nigeria

[00:44:59] depending on what dates you look at.

[00:45:02] The closest competitor is American Towers has 8,000.

[00:45:06] So 7,700 sites in Nigeria as well.

[00:45:08] Globally IHS has 40,000 sites, 5,000 towers.

[00:45:13] But if you talk to IHS,

[00:45:15] I'm sure they feel they still have a long way to go

[00:45:17] and there's a lot of opportunity

[00:45:18] because American Towers has 220,000 towers.

[00:45:23] And IHS has 40,000.

[00:45:25] So they're like, oh we can be as big

[00:45:27] but it's very competitive.

[00:45:28] And the businesses try to...

[00:45:30] The telcos, let's talk about monetization.

[00:45:32] Telcos try to be strategic

[00:45:34] about playing them off against each other as well.

[00:45:37] As you would for all vendors.

[00:45:39] Yeah, not constantly letting them in one place.

[00:45:41] So it's very competitive and very difficult for them to...

[00:45:44] It's not obvious that there's a prize or a prize of winning

[00:45:47] or they can get the benefits of scale outside those markets.

[00:45:49] But IHS would say we're better in these specific markets.

[00:45:52] So it doesn't matter that American Tower has 100,000 towers in America

[00:45:56] but they cannot have 20,000 towers in Nigeria

[00:45:58] or in Cameroon or Angkor Wat.

[00:46:00] So they'll say it's a different business.

[00:46:02] It's a localized business.

[00:46:03] So you can tell a local strategy

[00:46:05] even if the global partners are in different geos.

[00:46:07] It makes sense.

[00:46:08] Yeah.

[00:46:09] But particularly...

[00:46:10] Because you can only use the tower in a specific location.

[00:46:12] You can't use it internationally.

[00:46:13] It's literally based on the geographical radius

[00:46:15] of the antenna strength.

[00:46:17] Yeah, the takeaway is they're the biggest by miles in Nigeria

[00:46:21] which is a good thing but can be a bad thing.

[00:46:24] You know, Nigeria gives and takes.

[00:46:26] Nigeria happens to everybody eventually.

[00:46:28] For better or for worse.

[00:46:30] Banquilis called it an acquired taste many years ago.

[00:46:32] Should I talk about the other pieces?

[00:46:34] Anything else you want to wrap up on the team strategy?

[00:46:36] No, no, that's it.

[00:46:38] Alright, I will talk about IPO, product strategy, monetization strategy

[00:46:43] and then I'll add a few user metrics to supplement what we said before.

[00:46:48] So IPO, I'm going to divide it into three sections.

[00:46:51] The pre-IPO slash context, the actual IPO details

[00:46:55] and then post-IPO performance and details.

[00:46:58] Pre-IPO.

[00:46:59] So MTN had been a massive investor in IHS

[00:47:02] and as I said earlier, it got to a stage where they even

[00:47:04] boosted their stake to almost 30% in 2017.

[00:47:07] So that's the first context.

[00:47:09] And MTN is of course the biggest telco in Africa by a mile.

[00:47:11] Listen to AfroBilly episode 10, afrobilly.com slash MTN.

[00:47:16] The market conditions before the IPO were investors were interested.

[00:47:22] IHS had a stable revenue stream.

[00:47:25] There were no more than a lot of their markets.

[00:47:27] The revenue seemed to be growing.

[00:47:28] There were a bunch of other tower co's,

[00:47:30] aka tower companies considering IPOs at the time.

[00:47:33] That was the general market condition.

[00:47:35] And for IHS specifically, their story was emerging market

[00:47:40] growth narrative, a lot of room for future.

[00:47:44] Like smartphone penetration is low in these markets.

[00:47:47] We're number one.

[00:47:48] We're the biggest in emerging markets.

[00:47:49] Emerging markets have potential.

[00:47:51] That was a whole narrative and market conditions around the IPO.

[00:47:54] So let's actually talk about the IPO next.

[00:47:56] What happened in the actual IPO?

[00:47:57] So they raised around $300 million.

[00:47:59] That initial valuation of between $6 billion and $8 billion.

[00:48:03] And since IHS was based in Mauritius,

[00:48:07] since they were based in Mauritius,

[00:48:09] this IPO was the biggest African IPO on a US stock exchange ever.

[00:48:14] Because even the Jumia one, which got way more market hype and market talk,

[00:48:18] was only around a billion.

[00:48:19] So this is literally 8x massive,

[00:48:22] biggest IPO by an African company ever in the US stock exchange.

[00:48:25] And this just happened in 2021.

[00:48:26] So it's three years before the recording.

[00:48:28] This recording is 2024 Q2.

[00:48:31] That's what happened.

[00:48:32] Investor interests oversubscribed.

[00:48:34] Massive demand, institutional focus.

[00:48:37] Investor composition was institution standard pension funds,

[00:48:40] sovereign wealth funds, asset management funds.

[00:48:43] And what was the use of the proceeds?

[00:48:45] So they raised this money.

[00:48:46] They raised $300 million to do what?

[00:48:48] Two things, expansion and debt reduction.

[00:48:51] Let's talk about debt reduction first because that's easy.

[00:48:53] They needed to pay off a bunch of debt

[00:48:55] because they had raised debt to build all the towers,

[00:48:57] like we said in the fundraising section.

[00:48:58] And for expansion,

[00:48:59] this is what Sam Darwish said about why he was raising money.

[00:49:03] Proceeds will be used to build within our current markets

[00:49:06] and to move into new markets.

[00:49:08] We have high growth markets that require new sites.

[00:49:11] So basically we need more money to get into new markets

[00:49:16] and to expand in our markets.

[00:49:17] Fine.

[00:49:18] And also the PE guys were like, hello.

[00:49:22] Hi.

[00:49:23] Hello.

[00:49:24] Hello.

[00:49:25] Is it not time?

[00:49:26] Has it not due?

[00:49:27] Yeah, exit.

[00:49:28] So everybody wanted to call out their money back.

[00:49:29] Of course.

[00:49:30] Is it time?

[00:49:31] IPO performance.

[00:49:32] What happened?

[00:49:33] Unfortunately, it's been horrible.

[00:49:35] As of 2024 Q2 as of recording,

[00:49:39] it's between 75 and 85% down.

[00:49:42] Let's just say 80% down.

[00:49:43] Really, really horrible.

[00:49:45] And what have been the reasons for the poor performance?

[00:49:47] The first one is their biggest market by towers,

[00:49:50] by revenue, by profits is Nigeria.

[00:49:52] And they face significant Naira headwinds,

[00:49:55] Naira devaluation, currency devaluation.

[00:49:57] And because they report their revenue in dollars,

[00:50:01] every time there's devaluation, it reduces that first thing.

[00:50:03] They've also had macro economic.

[00:50:05] Yeah.

[00:50:06] We can add something.

[00:50:07] Yeah.

[00:50:08] Sorry.

[00:50:09] I want to add a Niger piece just to give people a sense of scale.

[00:50:11] If you look at that Q4 2023 earnings report,

[00:50:13] and they have this nice waterfall charts, right?

[00:50:16] Some of their contracts are linked to dollar sum or not.

[00:50:18] It's literally 50% of the revenue.

[00:50:20] Like just because because Emifili and Cardoso

[00:50:23] were doing what they're doing.

[00:50:25] 50% of the revenue,

[00:50:26] those are Nigerian central bank owners.

[00:50:28] 50% of the revenue just down.

[00:50:30] But hey, that's what Nigeria happens to you.

[00:50:32] It gives and it takes, right?

[00:50:33] Right.

[00:50:34] And if you want to see more details,

[00:50:35] listen to our wealth tech episode.

[00:50:37] I said the Nigeria,

[00:50:38] if you look at the Naira currency from 2014 to now,

[00:50:41] it's like 80 to 90% down

[00:50:43] if you add currency devaluation and inflation.

[00:50:46] Now for a company, you don't need to add an inflation.

[00:50:48] It was actually inflation benefits them.

[00:50:50] But the actual currency devaluation is probably 60, 70, 80% down.

[00:50:53] It's unfortunate.

[00:50:54] It's gotten really worse in 2003, 2004,

[00:50:58] which is why Bancoly is referring to their last report.

[00:51:01] That's the first reason.

[00:51:02] Second of all, just general economic uncertainty.

[00:51:04] They're an emerging market.

[00:51:05] So by definition,

[00:51:06] these markets tend to have issues around rising interest rates,

[00:51:10] government problems, yada, yada, yada, yada.

[00:51:13] They've also had debt concerns.

[00:51:14] They paid off some of their debt,

[00:51:15] but they're still having financing issue for their debt.

[00:51:18] They had some specific problems around board.

[00:51:21] I'm going to talk about that later

[00:51:22] and some governance issues.

[00:51:24] But overall, the biggest issue with the poor stock performance

[00:51:26] is the Naira, Nigeria, and macro factors

[00:51:29] across the markets they're in.

[00:51:31] I was trying to find what is actually the second biggest reason.

[00:51:35] I understand the Naira one.

[00:51:37] It seems there was just negative sentiments.

[00:51:40] It's hard to put a finger on the second biggest reason

[00:51:42] because when you say macro factors,

[00:51:44] that's like you're aggregating so many small things,

[00:51:46] almost like your hand wavy.

[00:51:47] So I went through a bunch of things.

[00:51:49] But if you ask me, it's really just two things.

[00:51:51] The Naira issue plus negative sentiments,

[00:51:53] the general feeling around the investor base.

[00:51:56] If I had to guess, as somebody who's not looked at this

[00:51:59] from an investor or not looked at their financial reports

[00:52:02] with any amount of investor-level scrutiny,

[00:52:05] investor-level rigor,

[00:52:07] I would say it's just the cost of capital has changed.

[00:52:10] If your business is capital intensive and capital was 0%

[00:52:13] and capital was free to expand, you'd be valued very highly.

[00:52:17] And if your capital is now 7%, 8%, you'd be valued very...

[00:52:20] I find the cost of capital is just such a significant part.

[00:52:22] It doesn't matter if everything else, even if Naira was fine,

[00:52:24] is that you're a capital intensive business.

[00:52:26] For you to continue providing the margins that you...

[00:52:28] Because all the contracts are priced in right now.

[00:52:30] So all the rest are annuities.

[00:52:31] You need to go get me more food to eat

[00:52:33] to come down to the cash flow statement.

[00:52:35] And that's going to cost you...

[00:52:37] Either way, the average cost of capital is going to be very high

[00:52:39] for equity and for debt.

[00:52:41] How can you access cheaper debts?

[00:52:43] I don't know how much cheaper debt can you access?

[00:52:44] And you need debt to work.

[00:52:45] And you are already seeing all this debt

[00:52:47] that may or may not be inflation linked or LIBOR linked.

[00:52:50] So I think the cost of capital tends to be something

[00:52:52] that is for a capital intensive business,

[00:52:55] really, really frowned upon.

[00:52:57] Yeah. So if you look at just the stock price,

[00:52:59] you'd have a negative sentiment for all the reasons we just said.

[00:53:02] However, there've been some very positive trends

[00:53:05] for IHS since their IPO.

[00:53:08] And I'm going to pick two data points I'll expand on

[00:53:10] to drive from this point.

[00:53:11] June 2022, MTN sold 13,000 of its tower locations to IHS

[00:53:16] for $400 million.

[00:53:18] 2024 April, so literally just about a month ago,

[00:53:22] Telcom, which is one of the largest telcos in South Africa,

[00:53:24] listen to our AfroBully episode, slash 48,

[00:53:26] listen to me rail on them.

[00:53:28] They also decided to sell their tower infrastructure business,

[00:53:32] which means in South Africa, only Vodacom owns its towers.

[00:53:36] So if you add these two data points,

[00:53:37] and a lot more I'm not going to talk about,

[00:53:39] the trend is accelerating for African telcos

[00:53:41] to realize that selling their towers is a good idea,

[00:53:44] which bodes very well for IHS

[00:53:46] because IHS is the biggest tower co- in Africa.

[00:53:49] And I'm going to give a little bit of detail about that now.

[00:53:53] If you look at the market share in Nigeria,

[00:53:54] IHS is number one.

[00:53:56] They have about 17,000 towers and they have 60% market share.

[00:53:59] If you look in South Africa, IHS again is number one.

[00:54:02] They have about 5,000, 6,000 towers.

[00:54:04] They have 52% market share.

[00:54:06] In Cote d'Ivoire, number one, 2,000 towers, 100% market share.

[00:54:10] How is that even possible?

[00:54:12] 100% of tower co-market share.

[00:54:14] Cameroon, number one, 100%, 2,000 towers.

[00:54:17] Zambia, number one, 60% market share.

[00:54:19] Rwanda, number one, 100% market share.

[00:54:21] So without going down the full list,

[00:54:23] they're number one in 70% of the markets they're in

[00:54:28] and they have between 80 and 100% of the tower co-market share.

[00:54:31] So compared to American Tower, all these other guys,

[00:54:35] they tend to have a higher percentage,

[00:54:36] which is a good place to be.

[00:54:39] So Banco, any thoughts on your relative position in African markets

[00:54:42] and the trend post-IPO?

[00:54:44] It does seem to be a good business with solid tailwinds supporting it.

[00:54:49] People are going to need much more data, much more intensive data.

[00:54:53] On the plus side, it's going to mean they're going to be much more important.

[00:54:55] On the downside, it's going to mean people can squeeze them

[00:54:58] and they need to invest more to upgrade their network

[00:55:00] as people's demands increase.

[00:55:02] They need more money.

[00:55:03] Data intensity increases, meaning they need more money.

[00:55:05] There's something to be carefully managed.

[00:55:07] But we've seen businesses like this go the way the economy goes almost.

[00:55:12] When people start to become much more optimistic,

[00:55:13] everybody starts making money.

[00:55:15] It's cyclical, right?

[00:55:17] Yes, cyclical.

[00:55:18] It's a strong, healthy business from the outside in

[00:55:21] and we'll continue rooting for them.

[00:55:23] Okay, so some aggregate level data.

[00:55:25] If you look at Africa as a whole,

[00:55:27] around half of towers are owned by telcos

[00:55:29] and around half are owned by tower co-s.

[00:55:32] So tower co-s, the biggest ones, IHS, American Tower

[00:55:36] and there are a bunch of smaller ones we're not going to get into,

[00:55:38] but they own about half.

[00:55:39] And the trend is for tower co-s to continue to increase their share,

[00:55:43] which means over time tower co-s are going to own more and more towers

[00:55:46] and the telcos are going to own fewer and fewer

[00:55:48] because it was around 40% five years ago

[00:55:51] and now it's 50% on the tower co-side.

[00:55:53] All right, so that's the IPO.

[00:55:54] I'm going to talk about their product strategy evolution over time.

[00:55:57] So reminder, they started by helping MNOs build towers around 2001.

[00:56:03] But since then they've evolved and now they do a bunch of different things.

[00:56:06] So most notably, they do six different things

[00:56:09] and these six things actually put on the work.

[00:56:11] So like I said, the website is very, very nicely designed.

[00:56:13] So what are the six services they offer to MNOs?

[00:56:16] Co-location and lease amendments, number one.

[00:56:20] Number two, new sites development, aka they build sites for you.

[00:56:24] Number three, in building solutions,

[00:56:27] aka they help you optimize whatever site you have.

[00:56:30] Number four, small cell provisions, aka they make smaller sites

[00:56:35] for urban areas that are more dense.

[00:56:37] Number four, fiber connectivity.

[00:56:39] Number five, rural services, aka rural locations in less urban areas.

[00:56:46] Out of these six, it still seems the first one is their core business,

[00:56:50] which is the co-location and lease amendment

[00:56:53] because that's where they make most of their money.

[00:56:55] And I'll just give a little bit more detail on that core business model.

[00:56:59] The co-lo and lease amendment is the biggest one.

[00:57:01] What basically happens is the lease agreements we spoke about before.

[00:57:05] The TowerCo, like IHS, they have a leasing agreement with the telco

[00:57:10] and the telco pays them a monthly fee

[00:57:12] and the TowerCo is responsible for electricity, security, diesel, all that.

[00:57:18] And hopefully they gain expertise over time

[00:57:21] to get better at managing all those services and become more efficient.

[00:57:24] From a timeline perspective, they were primarily in the co-location primary business

[00:57:30] for most of their lifespan

[00:57:32] and only recently started the fiber rural stuff 10 years ago.

[00:57:35] So that's basically their product strategy and how it's evolved over time.

[00:57:38] They offer a lot more services.

[00:57:40] I'll say these are more specialized niche services.

[00:57:42] But from a revenue perspective, the primary business is building, acquiring,

[00:57:46] and leasing tower infrastructure to telcos.

[00:57:49] It's a very straightforward business from the outside in.

[00:57:51] It can be complicated when you look at it in detail.

[00:57:53] Like all these businesses.

[00:57:55] We simplify to make it easy, but it's actually way more complicated.

[00:57:59] There's like Greenfield site, there's rooftop sites, there's rural sites, urban sites.

[00:58:04] Every country has slightly different configurations.

[00:58:07] And then when you get into co-lows,

[00:58:09] you have to figure out the network bandwidth between different things.

[00:58:12] When you switch into 5G, one of the tenants doesn't want you to.

[00:58:14] So infinitely complicated.

[00:58:15] But for the sake of a comedic podcast, let's keep it at the base level.

[00:58:18] OK, monetization.

[00:58:20] Of course, the primary revenue, as we said, is the lease agreements.

[00:58:23] The MNOs pay them monthly, quarterly, whatever revenue for that.

[00:58:27] They have a few additional revenue streams, but we're not going to get into them.

[00:58:30] They're not that important.

[00:58:31] The only thing I'll mention as an additional revenue stream is when they co-locate MNOs,

[00:58:36] which in regular English means you have multiple tenants,

[00:58:39] let's say MTN and Airtel on the same site,

[00:58:41] it's a great way for them to make a lot more money with only limited additional costs.

[00:58:45] So think about additional revenue streams not as,

[00:58:47] Oh, let's find new attractive ways to make money like cell service in rural areas,

[00:58:51] but like getting more tenants on the same tower.

[00:58:54] That's by far the biggest lever they have for additional revenue.

[00:58:57] Yeah, that's what makes this business,

[00:59:00] that's what can make it attractive, but also can make it problematic as well.

[00:59:03] Yes, depending on how feasible that growth and multi-tenancy potential is.

[00:59:07] Cost structure, straightforward, site leases, energy depreciation, security.

[00:59:14] Most of the things are obvious.

[00:59:15] The only thing I just want to reiterate is because you're in developing markets,

[00:59:18] the energy costs and the security costs tend to be a larger proportional

[00:59:22] of the overall cost structure than a tower co-developed market.

[00:59:25] So just reiterating what I said before, but the rest of it is as expected, right?

[00:59:28] They need to pay for the land, they need to pay to upgrade the machines, all that stuff.

[00:59:32] But it's the security and stuff that's important.

[00:59:35] Is there anything you wanted to highlight on the cost side for the audience?

[00:59:38] No, maybe capital is the one that is not that much money cost.

[00:59:43] Yes, yes, yes.

[00:59:44] It's capital and the cost of capital is going to be significant.

[00:59:47] They basically need to continue to raise money, right?

[00:59:50] That's the thing. Unlike cheaper cash, these guys need to continue to raise money, like to exist.

[00:59:55] Which is why they're public because they can access the public market as a public company.

[00:59:59] They can also access debt markets as well.

[01:00:01] So it helps them to be public, then be private.

[01:00:03] The IPO was only a matter of time, given the size of their ambition.

[01:00:08] Okay, so where are we today? IHS, all the numbers today.

[01:00:11] Let's summarize it.

[01:00:12] Around 40,000 towers, they're in 10 to 11 countries.

[01:00:16] Their revenue is around $2 to $2.5 billion.

[01:00:20] And their EBITDA is around $1 to $1.1 billion.

[01:00:25] That's high level summary.

[01:00:26] But let's actually go into a little bit.

[01:00:27] They're a public company so we can have some fun looking at some of the numbers.

[01:00:31] So revenue growth over the past five years, 5% revenue.

[01:00:34] I'm talking about year on year revenue growth.

[01:00:36] The revenue went from $1.2 billion to $1.4 billion to $1.6 billion, $2 billion, $2.1 billion.

[01:00:42] These are all annual numbers.

[01:00:43] So it's increasing, but the rate of increase is reduced drastically in the last 12 months because of the Naira stuff.

[01:00:50] So they had 10% growth, 14% growth, 15% growth, 20% growth, then 6% growth.

[01:00:55] Yeah, it's going from 20 to 6.

[01:00:57] Now, it's not...the sad thing about the numbers is if you look at the Naira version, it would be way higher.

[01:01:02] But no one looks at it from a Naira perspective.

[01:01:03] So the revenue growth is good, but it's highly impacted by the Naira devaluation problem.

[01:01:09] Yeah.

[01:01:10] One of the things that they...like this is obvious and you might ask why don't they charge money in dollars?

[01:01:17] The person that's paying you, are they collecting money in dollars?

[01:01:20] That's hilarious.

[01:01:21] No, are they selling at time in dollars?

[01:01:23] Let's all get money in dollars.

[01:01:25] It's that easy.

[01:01:26] You know, is MTN selling me dollar at time?

[01:01:28] Exactly.

[01:01:29] So the telcos also have this friction where they don't want to pay.

[01:01:33] They do allow some...the IHS annual reports talk about FX resets,

[01:01:39] where they do allow IHS to link some of their contracts to USD and get a catch up in terms of terms.

[01:01:45] But those things can be definitely complicated.

[01:01:47] I've seen some of those things can be definitely complicated.

[01:01:49] It's not as linear as it should be.

[01:01:53] It tends to be complicated. It doesn't mean what it's thinking means.

[01:01:56] MTN is like, I'm not your banker. I'm not your hedge.

[01:01:59] I'm not your financial consultant.

[01:02:01] I'm not your financial consultant to be giving you if the dollar goes down, increase my money.

[01:02:05] Unless you have headache.

[01:02:07] Zooming at me and go...

[01:02:09] MTN has the exact same problem.

[01:02:11] MTN announced that the revenues were massively impacted by the magic devaluation last year.

[01:02:15] Okay, so that's all the revenues.

[01:02:17] They're basically saying what do you want me to do?

[01:02:19] So they just stop putting a rock on a hard place.

[01:02:21] Yeah, on the gross margins side, gross profit 0.4 billion, 0.6 billion, 0.7 billion, 1 billion.

[01:02:29] Basically 40% gross margin business consistently for five years seems good.

[01:02:34] I'm not going to go through all the income lines.

[01:02:36] But if you go to the net income, they've been losing money steadily throughout their history.

[01:02:41] And the rate of loss accelerated last year.

[01:02:43] Again, broken record. Apologies.

[01:02:45] Because of the Nair thing.

[01:02:46] So they lost around 400 million in 2019.

[01:02:49] 300 million in 2020.

[01:02:51] They didn't lose any money. They were flat in 2021.

[01:02:54] In 2022, they lost around 500 million.

[01:02:56] And then 2023, 2 billion losses.

[01:02:58] Some of it is COVID. It's hard to remove COVID.

[01:03:01] But the takeaway from the net income line is it's a loss making business.

[01:03:05] And the losses don't seem to be getting any better.

[01:03:08] Those are the only numbers I'm going to talk about for now on the financial side.

[01:03:13] But my uncle, if you had any thoughts on the financials?

[01:03:16] I would say I wasn't as concerned about the losses.

[01:03:19] I don't read past the top line.

[01:03:21] At least for this podcast.

[01:03:23] At least one of us is reading more than that.

[01:03:26] No, no, no.

[01:03:27] I read top line and I read cash flow statement.

[01:03:29] Those are the two things I read for this podcast.

[01:03:32] So the business has just generated some cash.

[01:03:36] And they're able to finance their debts that they're raising and they're spending.

[01:03:40] People just have questions on how they can continue to finance that into the future.

[01:03:43] It's a factor of surprise today.

[01:03:45] So the losses for me and Anita here and there,

[01:03:47] they make many different product choices that can make that number go up or down.

[01:03:51] Because for them to go from, and how you know, a hater might say,

[01:03:55] how come it was flat in 2021 when it was about to IPO?

[01:03:58] But I'm not a hater. I'm definitely not saying that.

[01:04:01] No one is saying that on this podcast.

[01:04:03] That's what another person would say on another podcast.

[01:04:07] Hypothetical person.

[01:04:10] I was going to go into the cash flow statement.

[01:04:12] Do you want to talk about it or do you want me to keep on going?

[01:04:14] No, no, no, go ahead. Go ahead.

[01:04:16] OK, so I spoke about this earlier, but I'm going to give a little bit more detail because this is very important.

[01:04:20] So in their key markets, you would think they have a wide variety of tenants, but they don't.

[01:04:27] So in Nigeria, who are their tenants?

[01:04:29] MCN, AirTel, NineMobile.

[01:04:31] In South Africa, MCN, Telcom.

[01:04:33] Cameroon, MCN, Oranje.

[01:04:35] Zambia, MCN, Airtel.

[01:04:37] Rwanda, MCN, Airtel.

[01:04:39] Vivo, TIM.

[01:04:41] So in almost all their markets, they have just two or three tenants.

[01:04:44] But then is that really a problem?

[01:04:46] Because in almost all these markets, it's an oligopoly anyway.

[01:04:49] The only reason I'm raising this point is that they may get to a situation where they don't have that much contractual power with the telcos because they have very few telcos in the markets.

[01:04:59] Because the telcos by definition only have few telcos.

[01:05:02] So MCN is such a big partner in their six biggest markets.

[01:05:05] Nigeria, South Africa, Cote d'Ivoire, Cameroon, Zambia, Rwanda.

[01:05:08] MCN is the biggest tenants in all those markets.

[01:05:10] It's one of those things where, what's the joke?

[01:05:12] If I owe the bank a million dollars, it's my problem.

[01:05:14] If I owe them a billion dollars, it's their problem.

[01:05:16] And there's some line there, this is that.

[01:05:18] The power seems to be on the MCN side, even though it looks like it's on their side.

[01:05:23] But MCN also owns 26%.

[01:05:25] So we all die together.

[01:05:27] We're all fucked.

[01:05:29] So when you go for the meeting, you say, eh, yeah sure.

[01:05:34] I should double the price.

[01:05:36] We're all dying in this.

[01:05:38] We're all together now.

[01:05:39] There's no need to.

[01:05:40] So at some point you're not worried.

[01:05:42] There's a, there is a, it's somewhat crass.

[01:05:46] But if you listen to this.

[01:05:47] Mitchell assured destruction, MAD Russia and America.

[01:05:50] You have to be, Pitey, don't you say you have to be very careful when you're attacking a fly that lands on the testicle.

[01:05:57] You can't just attack it anyhow.

[01:05:59] If you smash it then there goes.

[01:06:02] You have to be very careful.

[01:06:05] I've died.

[01:06:06] I've died.

[01:06:07] I've died of affrability.

[01:06:08] But yeah, so there's a mutual aid.

[01:06:10] They are investors together.

[01:06:12] Nobody is worried.

[01:06:13] I know it makes sense to be worried about that, but nobody's worried.

[01:06:15] Everybody's having, because MCN needs money too.

[01:06:17] Everyone needs, because that 26%.

[01:06:18] How do you report it in your own income matters.

[01:06:21] So if that number goes away, it matters.

[01:06:23] Everybody's focused.

[01:06:24] Yes.

[01:06:25] I just know right about that at all.

[01:06:26] And then because of affrability, sometimes we have the tendency to go down all these crazy rabbit hole.

[01:06:30] I'll just summarize again.

[01:06:32] Nigeria is such an important market that between 55 and 65% of the revenue is from Nigeria.

[01:06:39] First thing to emphasize for the summary.

[01:06:41] Second thing to emphasize for the summary is in their top seven markets, they're number one in TowerCo market share.

[01:06:48] So those are the two summary points without leaving all the minutiae behind.

[01:06:52] In terms of towers, they have around 40,000, 16,000 in Nigeria, 7,000 Brazil, 5,000 South Africa, 2,000 Quid De Var, 2,000 Cameroon.

[01:07:00] And then 1,000 or less in other Middle Eastern and Ladam countries.

[01:07:04] In terms of...

[01:07:07] So we said Nigeria is 50 to 60% of revenue.

[01:07:10] The rest of SSA is around 23% of revenue.

[01:07:13] So if you add Nigeria and the rest of SSA, it means their Africa revenue is around 80 to 85%.

[01:07:19] So even though they say when the Middle East, we're in Ladam, blah, blah, blah, Middle East plus Ladam is around 10% of the revenue.

[01:07:26] So it's a very, very Africa business.

[01:07:28] 80% of revenue.

[01:07:29] Very, very Nigeria business.

[01:07:30] 60% of revenue.

[01:07:31] In terms of towers, we already spoke about that.

[01:07:34] In terms of global competitors, if you said American Towers has 200,000, Cellnex has 127,000.

[01:07:40] They're third, fourth-ish because they have 40,000.

[01:07:43] But there's another company that also has 40,000 called GD Towers.

[01:07:47] And then two last things on their product and monetization strategy.

[01:07:51] And then I'll close out.

[01:07:52] Banco is going to talk about competition.

[01:07:53] As of 2023, they seem to be going through some portfolio rationalization, which is a nice way of saying they're selling off assets to pay off their debt.

[01:08:02] So they've been selling up a bunch of assets.

[01:08:06] That's the first thing.

[01:08:07] And the second thing is they've been having some board issues.

[01:08:09] So MCN and Wendell have board seats because they're massive shareholders, but they don't really have governance and influence rights.

[01:08:18] So they want to appoint board members from those companies, but they're not able to.

[01:08:22] So they're going through some issues right now.

[01:08:24] And I don't know if this is related or unrelated.

[01:08:27] In Q4 of 2023, MCN selected ATC, so American Towers, not IHS to take over MCN's Nigeria Tower operation.

[01:08:36] Again, that's where IHS is getting 50 to 70 percent of the revenue.

[01:08:41] And their biggest shareholder who owns 26 percent of them doesn't want them to manage their site.

[01:08:46] So it's sort of embarrassing that a company that owns a quarter of your stock and has been your partner for so many years is not letting you into your biggest country.

[01:08:53] But I don't know if it's related to governance stuff, but it doesn't look good for the stock.

[01:08:56] It doesn't look good for the investors.

[01:08:59] The way I heard that they describe it is much more strategic.

[01:09:02] Like they wanted to diversify their vendors and all that good stuff.

[01:09:05] Right.

[01:09:06] That's what you would say.

[01:09:07] It's not what you would say.

[01:09:09] It doesn't look good, but no one knows all the details.

[01:09:11] People have more money than me.

[01:09:14] Shut up. Competition. Competition.

[01:09:16] Yeah.

[01:09:17] So there are competition.

[01:09:18] We've talked about this in a lot of detail.

[01:09:20] We've talked about this before.

[01:09:22] Essentially, these competition is going to be companies that the telcos would pick instead of IHS towers.

[01:09:27] In their markets, that could vary from the telcos managing themselves, which is a whole class.

[01:09:32] So that would be MCN or any of the telcos in any of these markets as well.

[01:09:36] Latam and Zain, Kuwait, ATC.

[01:09:39] But more in the tower side would be American Tower companies, their major competitor in Nigeria.

[01:09:43] So American Towers is an independent tower company, really big.

[01:09:47] The largest tower operators in the world.

[01:09:49] 5X bigger.

[01:09:50] In almost every market in the world.

[01:09:53] I thought I would instead spend time on how the telcos...

[01:09:57] Because when I saw the MTN going with ATC for the tower story,

[01:10:01] I tried to think about how the telcos make that decision.

[01:10:03] Yes, exactly.

[01:10:04] Between all these tower providers.

[01:10:06] So let me talk about what I found.

[01:10:08] And by the way, Bangko, you know there's a higher level.

[01:10:10] How did they pick between the top providers versus also keeping it in-house?

[01:10:14] So the first decision is in-house or not.

[01:10:16] And then after you make that decision, which provider?

[01:10:19] And then the renewal.

[01:10:20] I feel like the in-house part is kind of like, duh, money.

[01:10:24] But that's what is much more understandable.

[01:10:27] It's much more reasonable.

[01:10:28] Yes, it's much more reasonable.

[01:10:30] But it has a slight nuance of yes, you convert the capex to opex,

[01:10:35] but sometimes the location of the tower is so strategically important.

[01:10:40] You may want to keep it anyway, regardless of the financial impact.

[01:10:43] So for example, let's make up some stuff.

[01:10:45] Let's say you're MTN in South Africa, right?

[01:10:48] And there's a specific tower in a very, very rich part of the neighborhood.

[01:10:51] Let's say Santa, Johannesburg.

[01:10:53] Even though you may be financially better off in the short term by letting ATC helios do...

[01:10:58] I usually want to take the risk because if you use those customers,

[01:11:00] the longer-term impact on revenue is going to be bad.

[01:11:02] So I don't know. It's simple, but sometimes you don't want to risk it.

[01:11:05] Yeah.

[01:11:06] The telcos will tend to think about it.

[01:11:08] So a couple of things.

[01:11:09] So financial factors cost.

[01:11:11] How much are they going to charge you?

[01:11:13] Basically, some things can be a risk to the bottom

[01:11:15] because the service may not be differentiated than what level.

[01:11:18] So what lease rates are you able to...

[01:11:20] The one tower providers are financially strong and durable.

[01:11:22] So if you look at a company like ATC versus say IHS,

[01:11:26] one has a bigger balance sheet than the other,

[01:11:28] and that may be a factor for a company like MTN, it is telcos.

[01:11:31] You want expertise depending on the kind of network you have,

[01:11:33] depending on the kind of access you have.

[01:11:35] What they need to operate in Zambia or Zimbabwe,

[01:11:37] maybe even from Nigeria or South Africa,

[01:11:39] depending on the access and the network maturity system,

[01:11:41] you need track record, you need geographic coverage.

[01:11:44] Because the one thing I'll be curious about is how they figured out

[01:11:48] the approaches in Brazil because I don't feel like...

[01:11:51] To just go into parts of Brazil, Manoel,

[01:11:53] it's one thing to say Rio or Sao Paulo,

[01:11:56] but Brazil is a pretty big country.

[01:11:58] It's like going rural, it's like going to Amazon,

[01:12:00] I just sent to assemble and install towers with the language barriers.

[01:12:03] It can be somewhat difficult, somewhat interesting.

[01:12:06] Yes, but let me give you a hint.

[01:12:08] Sub-sub-subcontractors all the way down.

[01:12:11] Eventually there's a guy that can do it.

[01:12:13] He's lived there his whole life, he knows the neighborhood,

[01:12:15] and then he knows another guy, middleman.

[01:12:16] You contract it all the way down.

[01:12:17] The problem is the more middleman subcontractors you have,

[01:12:19] the more expensive it gets.

[01:12:20] Eventually it's better to be direct when you build a skill set,

[01:12:23] but in the short term you can't.

[01:12:24] So Sao Paulo is not legal.

[01:12:26] Exactly.

[01:12:27] Those are the factors that the telcos will pick,

[01:12:29] and they will say they want to have the flexibility of being able to...

[01:12:32] You know, when they want to renew,

[01:12:34] tell them, you see here I'm going to go back to this one or that one or the other.

[01:12:38] But it's a very...

[01:12:39] There's an economic time for everybody,

[01:12:40] but the word escapes me.

[01:12:42] But there are only a few buyers for the service they're selling.

[01:12:44] So that ends up being very...

[01:12:46] It creates its own market dynamics as well.

[01:12:48] And so huge amount of economic research on what happens in markets like this.

[01:12:52] Intriguing.

[01:12:53] Yeah.

[01:12:54] Makes sense.

[01:12:55] So that's it on the competition for me.

[01:12:57] Yeah.

[01:12:58] They've IPed already, it's not a lot.

[01:13:00] Yeah, I don't know...

[01:13:01] How was that?

[01:13:02] Was there anything I was going to add on the competition?

[01:13:04] I mean, the only thing I'll just re-emphasize,

[01:13:07] we said it 20 minutes ago so I'll keep it short is,

[01:13:09] if you look at the raw numbers,

[01:13:11] it looks like they're in third or fourth place.

[01:13:14] But if you look at the numbers in the markets that are important to them,

[01:13:17] they're in first place in almost all those markets.

[01:13:20] And then if you look at some of the cities,

[01:13:23] they're the only tower cove.

[01:13:25] So if you dive, if you go two or three levels deeper,

[01:13:28] they're actually in a very, very advantageous position.

[01:13:30] It just doesn't look that way.

[01:13:31] Because if you say high level, American ATC is 5X more towers.

[01:13:34] Yes, but in Nigeria where they get 57% of the revenue,

[01:13:37] they're number one and they have 60% market share, IHS.

[01:13:42] So it's very, very different.

[01:13:44] And they have the biggest telcos and they've had the most experience with them.

[01:13:47] So I won't reiterate it because we said it twice or thrice,

[01:13:49] I just want to say it again because it's important once.

[01:13:52] The real question I have, I don't know,

[01:13:56] and maybe I will never know is,

[01:13:58] do they tell their growth story as a growth?

[01:14:01] Obviously they probably do actually.

[01:14:03] As a growth opportunity versus like a utilities opportunity.

[01:14:06] Because the idea is,

[01:14:07] are we just getting a reliable steady stream of cash flows

[01:14:10] that don't show a lot of growth?

[01:14:12] Or we're getting a lot of really growing stream of cash flows.

[01:14:14] Looking at their past returns moving Nigeria,

[01:14:16] they clearly want to be doing 20 plus percent.

[01:14:18] Yes, top, top, top.

[01:14:19] Paranorm.

[01:14:20] Yes, that's the problem.

[01:14:21] And that's pretty ambitious for a company in this industry

[01:14:24] in this size at this time.

[01:14:25] But there's ways to do it for them I guess.

[01:14:29] If there were ATC outages and dishes,

[01:14:32] the advantage they have is smartphone penetration

[01:14:35] in a lot of their countries is 30-40%.

[01:14:38] And then data penetration is even lower.

[01:14:41] So if they tell an emerging market story of handset penetration,

[01:14:44] data penetration, it sort of makes sense.

[01:14:46] The only reason it's sometimes so hard to believe is

[01:14:49] sometimes people tell stories,

[01:14:50] but then you say what's the timeline for the story?

[01:14:52] A story that's happening in five years

[01:14:53] is different than a story that's happening in 35 years.

[01:14:55] Because you need the money, right?

[01:14:56] And the timeline for the cash flows is very important.

[01:14:58] It's as important as the narrative,

[01:14:59] the timeline for the cash flow.

[01:15:00] Oh man.

[01:15:01] Okay.

[01:15:02] Anyway.

[01:15:03] If I have a penny for everything I'm hearing about

[01:15:05] like the emerging market opportunity.

[01:15:07] Every time I go, I always ask the question,

[01:15:09] like what is different now?

[01:15:10] And I never get a satisfactory answer.

[01:15:12] This story was the same in 2012

[01:15:14] when I was making slides in McKinsey.

[01:15:15] So what is different now?

[01:15:16] Anyways, let me wrap before we get into

[01:15:18] the pontificating.

[01:15:20] I have three parts of my summary.

[01:15:22] One is about the founder's story and the founder.

[01:15:24] Second is the opportunity or the ability to start somewhere

[01:15:27] without knowing what the end would look like, I would say.

[01:15:30] And the second, the last part is on just Nigeria

[01:15:33] happening to businesses.

[01:15:34] So Sam Dowish's story and his co-founders,

[01:15:37] his brother, Mo Dowish and William Saad,

[01:15:39] their founding story is very impressive.

[01:15:42] Just being that young, figuring out the relationships,

[01:15:45] wherever it is supporting them.

[01:15:46] At the end of it is really just a bunch of dudes

[01:15:49] coming here, building the relationships

[01:15:52] and building relationships and getting things done.

[01:15:56] So almost starting from where a service provider,

[01:15:59] we just do this thing.

[01:16:00] And through six years of doing that very well,

[01:16:02] taking the next big step in the business,

[01:16:04] which has been very risky.

[01:16:05] And laddering from that to becoming

[01:16:08] top five independent top providers in the world is insane.

[01:16:12] It's an insane story to me.

[01:16:13] It's almost that.

[01:16:14] And I'm raising a lot of money,

[01:16:15] so building a lot of trust over and over again

[01:16:17] up to the public markets.

[01:16:19] You can borrow conviction from all the fancy names

[01:16:21] on this cap table to say,

[01:16:23] this is a super sharp, well-run company

[01:16:25] and super sharp investment story.

[01:16:27] And I want to contrast that to some of the stuff

[01:16:29] that we talk about as well,

[01:16:30] is a lot of these things are being validated

[01:16:33] not just in private markets, but in public markets.

[01:16:35] So what you do find in this IHS story in particular

[01:16:38] is diversity of the investor base.

[01:16:40] It's not the same two to three investors.

[01:16:42] It's like anybody with this amount of capital

[01:16:45] in their market is putting money in.

[01:16:47] The people that are selling things to them

[01:16:49] is putting money in.

[01:16:50] There's a lot of different signals you can take

[01:16:52] to make a judgment call about the quality

[01:16:54] of the organization and the business and the operations.

[01:16:57] And this business hits the mark on all of them.

[01:16:59] So very, very impressive story

[01:17:00] to even be in this conversation right now.

[01:17:02] To gloss over and look at the stock price,

[01:17:04] it was at 15, 16 when the IPO now is at $3.

[01:17:07] And it's like $8 billion at IPO now is like 1.2.

[01:17:10] But I do think the story of IHS is not complete yet.

[01:17:13] So super impressive entrepreneurial story.

[01:17:15] Yes. And by the way, even at the 1.2,

[01:17:17] they're still top five, top 10 most valuable

[01:17:20] African company in the world.

[01:17:21] So it's like, yeah, 80% down,

[01:17:23] but what would we be comparing to?

[01:17:26] Yeah, but they've also,

[01:17:27] they're even playing a different game, right?

[01:17:29] Anyways, second part is I say this,

[01:17:32] this is actually, you have to start from somewhere.

[01:17:35] Most people want to do something

[01:17:37] and they want to do like build towers or work in,

[01:17:41] and like starting from being a service provider

[01:17:43] allows you to demonstrate understanding of the business.

[01:17:45] And it's a bit difficult to do

[01:17:48] or suggest or present that way.

[01:17:50] A lot of it is getting in on the ground floor.

[01:17:53] 2001 was the best time to start doing total services.

[01:17:56] Right?

[01:17:57] But at the same time, that allowed them a lot of the expertise

[01:18:00] that when they come in 2009 and they say,

[01:18:02] I will buy from you and I will listen back to you.

[01:18:04] They knew towers as well as anybody else.

[01:18:06] Like they could price things better than anybody else

[01:18:08] and they could get better deals than anybody else.

[01:18:10] And they had the relationships

[01:18:12] and operational expertise from years of doing it.

[01:18:15] Years of doing it actually.

[01:18:16] So then when service provider

[01:18:18] and just going literally off the value chain.

[01:18:19] And I was thinking mentally how, oh, why don't they,

[01:18:22] can they become telcos?

[01:18:24] That's ultimate low end disruption at that point.

[01:18:29] But a telco is really a marketing operation.

[01:18:31] It's a different skill set.

[01:18:32] It's kind of like,

[01:18:33] it's not really a technical operation as such.

[01:18:35] Telco people bite me,

[01:18:37] but it's really a marketing operation.

[01:18:38] Correct.

[01:18:39] And the technical stuff is outsourced.

[01:18:40] If telcos are having Ericsson and Huawei,

[01:18:42] managing entire network can be SLEs.

[01:18:44] Like how is that a technical operation?

[01:18:47] But it's a marketing operation

[01:18:48] and that comes down complexities that I don't know.

[01:18:51] It's a marketing operation

[01:18:52] and that comes down complexities

[01:18:54] that are very different from managing towers.

[01:18:56] But it's an interesting way to go up

[01:18:57] and realize what they can do

[01:18:59] and what their limits are.

[01:19:00] That would be intriguing.

[01:19:01] I don't even.

[01:19:02] You know, it's funny you say that.

[01:19:04] My mind started to think of,

[01:19:06] it would be incredible,

[01:19:07] but I don't think,

[01:19:08] we don't have another data point, right?

[01:19:10] I've seen MVNOs become MNOs,

[01:19:12] but telcos, towercos become,

[01:19:14] haven't seen that yet.

[01:19:15] That would be incredible.

[01:19:16] You usually see providers become,

[01:19:18] like TVs is a common one.

[01:19:19] It's in VZO,

[01:19:20] like the guys who make the panels on all TVs and Sharp.

[01:19:22] Yes.

[01:19:23] Make the microarrayers.

[01:19:24] So you do see them try to build their own consumer brands.

[01:19:26] Yes.

[01:19:27] But it ends up not having stick because

[01:19:30] the reason why Sharp is able to sell,

[01:19:32] or Dell is able to sell monitors and TVs

[01:19:34] is not because they make the monitors,

[01:19:35] it's because they have an intense marketing

[01:19:37] and sales operation

[01:19:38] that's linked to every large corporate in America

[01:19:39] that go and tell them,

[01:19:40] buy 3 million,

[01:19:41] 3,000 monitors from us

[01:19:42] who supply you every two weeks.

[01:19:44] Right.

[01:19:45] VZO doesn't have that.

[01:19:46] VZO can pull that through.

[01:19:47] Or Microsoft monitor.

[01:19:48] We've seen it on the television side.

[01:19:50] We've seen it on the cell phone side,

[01:19:52] but on the telco side, not yet.

[01:19:54] It would be incredible.

[01:19:55] I would love that.

[01:19:56] Yeah.

[01:19:57] It's a very different...

[01:19:58] It's very different.

[01:19:59] They also see you coming from a mile off.

[01:20:03] It's highly regulated.

[01:20:04] Right.

[01:20:05] I would love it,

[01:20:06] but it's very, very difficult.

[01:20:07] It's a completely different skill set.

[01:20:10] You know how,

[01:20:11] what I bought is,

[01:20:12] you think the price is low now,

[01:20:13] let them announce something like that.

[01:20:14] That's the end.

[01:20:15] That's the end.

[01:20:16] People said...

[01:20:17] Investors are fleeing jobs.

[01:20:19] Even if I were an investor,

[01:20:20] I'd sell immediately.

[01:20:21] They've lost their minds.

[01:20:22] That's what happened with Zillow, right?

[01:20:25] Zillow said they won't start buying houses.

[01:20:27] People said, bye-bye.

[01:20:28] That's not the reason.

[01:20:29] I got it to asset light.

[01:20:30] You're doing what?

[01:20:31] For what?

[01:20:33] In America,

[01:20:34] even in some shithole place in America,

[01:20:36] houses still 300k.

[01:20:37] If you go to San Francisco,

[01:20:40] houses are a million.

[01:20:41] So if you're only going to buy like 100 houses,

[01:20:44] that's a hundred million dollars.

[01:20:46] Are you crazy?

[01:20:47] But like,

[01:20:48] several months later,

[01:20:49] the CEO said, I'm sorry,

[01:20:50] we made a mistake.

[01:20:52] If you're underpriced,

[01:20:53] the houses have been massive losses.

[01:20:54] Shout out to Zillow.

[01:20:55] Back to IHS.

[01:20:56] Yeah, back to IHS.

[01:20:57] So they have all these things

[01:20:58] that they started early.

[01:20:59] They were early.

[01:21:00] They did a lot of partnerships very,

[01:21:02] very early,

[01:21:03] allowing them to win different business models.

[01:21:05] They're told,

[01:21:06] top role,

[01:21:07] do anything you want to do.

[01:21:08] We will build tower sites,

[01:21:10] lease them to you,

[01:21:11] acquire your tower sites,

[01:21:12] we'll lease it back to you,

[01:21:13] we'll take over the management of your sites,

[01:21:14] we'll lease it to other operators to reduce your own costs.

[01:21:17] So they just,

[01:21:18] they met the customers where they were.

[01:21:20] They invested heavily in infrastructure and technology,

[01:21:22] TBD,

[01:21:23] and they raised money, man.

[01:21:25] Just Singapore,

[01:21:26] GIC,

[01:21:27] just they raised money.

[01:21:28] Yeah, Goldman,

[01:21:29] IFC,

[01:21:30] MCN.

[01:21:31] That helped them set up.

[01:21:33] The final part is,

[01:21:34] I won't even spend time on it.

[01:21:35] We talk about this a lot.

[01:21:36] Nigeria,

[01:21:37] it's just a tough place to do business.

[01:21:38] Six Five of the Arena is NGM based.

[01:21:40] And if you look at,

[01:21:41] they do this nice waterfalls or their revenue chart,

[01:21:44] it's half the like for full year 23,

[01:21:47] F we are 22 revenue was $1.96 billion.

[01:21:51] FX was $660 million in the opposite direction.

[01:21:55] It's just,

[01:21:56] it just comes to you man.

[01:21:58] Like a third,

[01:21:59] like a third,

[01:22:00] like a third for 20,

[01:22:01] for,

[01:22:02] for,

[01:22:03] so basically to get to where you go,

[01:22:05] the waterfall between 22,

[01:22:07] year 22 revenue and year 23 revenue.

[01:22:09] Is like 600 million of that is just of the loss.

[01:22:12] Like if the revenue was,

[01:22:13] if there was no FX,

[01:22:14] they would make $600 million more in theory or $300 million more.

[01:22:17] If you account for some other things in the chart,

[01:22:19] that's public company.

[01:22:20] So that's also part of it.

[01:22:21] They get,

[01:22:22] they get really killed.

[01:22:23] So yeah,

[01:22:24] incredible founder story.

[01:22:25] Now you're being a tough place to do business and just starting small

[01:22:27] and building up from the bottom and doing low end disruption and

[01:22:30] starting,

[01:22:31] starting,

[01:22:32] starting small and building up.

[01:22:33] That's tough.

[01:22:34] Yeah.

[01:22:35] To go from,

[01:22:36] from,

[01:22:37] from borrowing $8,000 to this money.

[01:22:40] Yo,

[01:22:41] for $8,000 to IPO and for an $8 billion company.

[01:22:44] My goodness.

[01:22:45] What a story.

[01:22:46] I love,

[01:22:47] I love these affability stories every time I'm just so,

[01:22:50] I feel like I get captivated into another world when I learn

[01:22:53] about these companies and the founders and the business models.

[01:22:55] It's,

[01:22:56] it's,

[01:22:57] it's been a journey.

[01:22:58] My summary also has three sections.

[01:22:59] So quite short,

[01:23:00] the telco business customers,

[01:23:02] positive bull case,

[01:23:03] negative bear case.

[01:23:04] Then I'll close the end.

[01:23:05] So telco business customers.

[01:23:06] So I was living in Nigeria in 1999,

[01:23:10] 2000,

[01:23:11] 2001,

[01:23:12] 2002,

[01:23:13] that era when cell phones became a thing.

[01:23:15] And I remember,

[01:23:16] I remember at the time I was like,

[01:23:17] Oh my God,

[01:23:18] this is so fucking expensive.

[01:23:20] It was 50 Naira per minute for the calls and the calls were

[01:23:23] rounded to the minute.

[01:23:24] So if you spoke for one minute,

[01:23:26] one second,

[01:23:27] there was a hundred Naira and the handsets were expensive.

[01:23:30] A piece of shit Alcatel phone was like $50,000.

[01:23:33] Like literally crap phone.

[01:23:34] Nasty phone was expensive on 50,000 Naira back then was a lot of money.

[01:23:38] Now it's peanuts.

[01:23:39] So I remember thinking my first initial thoughts was this was very

[01:23:42] expensive,

[01:23:43] but I didn't understand then what I understood now.

[01:23:45] The second order,

[01:23:47] third order impact of like cheaper handsets,

[01:23:51] cheaper calls,

[01:23:52] entrepreneurs opportunity.

[01:23:53] I can call any time I can start a business on this.

[01:23:56] It's not just about calls.

[01:23:57] It's about texts.

[01:23:58] It's not just about texts.

[01:23:59] It's about data.

[01:24:00] It's about the technology.

[01:24:01] It's not just about text.

[01:24:02] It's about data.

[01:24:03] It's not just about data.

[01:24:04] It's about building services on top of that infrastructure.

[01:24:07] Basically changed the whole country,

[01:24:09] especially because I remember growing up and using all that night tell shit

[01:24:12] crap. No one had phones.

[01:24:14] They were unreliable.

[01:24:15] They used to cut off.

[01:24:16] They were expensive.

[01:24:17] So just to me,

[01:24:18] the Delta of witnessing that firsthand as a teenager and seeing the

[01:24:21] impact of telecom service on Nigeria is very,

[01:24:24] very moving to me emotionally.

[01:24:26] And because tower calls are behind the telcos like IHS is

[01:24:30] providing services to those telcos.

[01:24:32] I'm just like,

[01:24:33] I'm rooting for them to do a good job because the telcos need more financial

[01:24:37] flexibility to offer those services for us to be able to do things on the

[01:24:40] internet.

[01:24:41] Like the whole about for ability.

[01:24:42] Yes.

[01:24:43] It's an Africa tech story,

[01:24:44] but it's also like an Africa tech internet story.

[01:24:46] Like it's hard to disconnect the internet from tech.

[01:24:48] Yes.

[01:24:49] You have some non internet services,

[01:24:50] but inevitably you need to get in order to get scale.

[01:24:52] You need the internet for scale.

[01:24:53] So I'm rooting for them and I'm rooting for them to give the telcos

[01:24:57] more leverage to do bigger things, to help emerging markets.

[01:25:00] That's why I have such a positive bias.

[01:25:02] That's the first thing positive bull case.

[01:25:04] So if we think about the bull case,

[01:25:05] they focus on emerging markets emerging markets potentially have more room

[01:25:08] to grow their first mover that first move advantage in almost all their

[01:25:12] countries and almost all countries they're in,

[01:25:14] in Africa,

[01:25:15] they did a lot of M and a stuff in Latam,

[01:25:17] but there were the first mover there,

[01:25:19] which means they have the most relationships.

[01:25:20] They have the longest track record.

[01:25:21] Yeah.

[01:25:22] Leaving aside the weird empty and issue,

[01:25:23] they seem to have established relationships with almost all the big MNOs in

[01:25:26] Africa.

[01:25:27] They have a good track record of operational excellence.

[01:25:30] It's interesting to see Sam always talk about security power,

[01:25:33] diesel solar.

[01:25:34] How do we get better?

[01:25:35] We're tracking our costs.

[01:25:37] They seem to be focused on that.

[01:25:38] Some other CEOs seem to talk about different things,

[01:25:40] but he spends a larger percentage of his time talking about cost

[01:25:44] management,

[01:25:45] which to me is assigned for operational focus from the CEO.

[01:25:48] They seem to have expertise in navigating regulatory logistical.

[01:25:52] They have very few issues of government stepping into like giving them a slap

[01:25:57] on the wrist.

[01:25:58] I don't know if it's because governments just like infrastructure maybe,

[01:26:01] but after doing 40, 50 hours of research,

[01:26:03] it seems to be they had very,

[01:26:04] very few instances of government going against them.

[01:26:07] So the positive bull stories just emerging markets and the one almost all

[01:26:11] their countries, a lot of experience,

[01:26:12] same CEO for 20 years,

[01:26:14] good track record,

[01:26:15] the bear cases.

[01:26:16] I mean, we've said it a billion times.

[01:26:18] It's just, I mean,

[01:26:20] 75 to 85% down stock price on three years.

[01:26:24] It's bad, man.

[01:26:26] The investor sentiments is so negative and rightfully so because of the

[01:26:31] Nigerian revenue stuff.

[01:26:32] If you can't get the revenue up,

[01:26:34] which means you can't get your cash.

[01:26:36] If you can't get all the way to cash hacking service,

[01:26:38] your debts,

[01:26:39] what does a debt heavy business,

[01:26:40] which means we need to raise money.

[01:26:42] So they can get into a word vicious cycle where the revenues

[01:26:45] decelerating so much that they don't have enough cash to service their

[01:26:48] debt, but they still need money to fund their towers,

[01:26:50] which means they need to restrict the growth,

[01:26:51] which is why they may have been selling off some of their assets six

[01:26:54] months ago.

[01:26:55] So I understand where it's going.

[01:26:56] Also the empty and board governance issue just looks so nasty.

[01:26:59] I did.

[01:27:00] I will say, I will say that the most recently,

[01:27:02] the recent disclosure,

[01:27:03] they resolved it actually.

[01:27:05] Yes, supposedly they gave them board seats.

[01:27:07] I saw that.

[01:27:08] So we'll see.

[01:27:09] But then it's like,

[01:27:11] it took them nine months to resolve this thing started happening.

[01:27:14] This thing started happening mid 2023.

[01:27:16] They announced the stuff back only saying a month ago as a recording early

[01:27:19] 2024.

[01:27:20] Should it take nine months to do that?

[01:27:22] I don't know.

[01:27:23] Board seats are things you can do in a special board meeting next week,

[01:27:25] but fine.

[01:27:26] Who am I?

[01:27:27] They know what's going on.

[01:27:28] It doesn't look good.

[01:27:29] It seems resolved.

[01:27:30] We'll know if it's fully resolved over the next few months of everything

[01:27:32] settled.

[01:27:33] All right.

[01:27:34] So where do I land?

[01:27:35] Strangely enough,

[01:27:36] even though the stock price is down 70 to 80%,

[01:27:37] I'm still on the positive bull case.

[01:27:38] I'm 60% of the positive bull case,

[01:27:40] 40% of the negative bear case.

[01:27:41] I still,

[01:27:42] it's going to sound very weird for me to say this because normally I'd go on

[01:27:45] the side of the investors.

[01:27:46] I still believe them being in emerging markets,

[01:27:49] having first mover advantage and having 20 years of experience and being

[01:27:54] in a business.

[01:27:55] They're not in any shit random business.

[01:27:57] They're in a core business.

[01:27:58] Everyone needs to make calls.

[01:27:59] Everyone needs to have data.

[01:28:01] It's needed.

[01:28:02] It's just a matter of is it priced appropriately based on the market

[01:28:06] constraints?

[01:28:07] So it's not,

[01:28:08] it's not a,

[01:28:09] there are a lot of startups where the businesses are not even needed by the

[01:28:11] market.

[01:28:12] This isn't that the biggest problem is what's the actual right price based

[01:28:15] on all the constraints in the markets they're in.

[01:28:17] And I am optimistic on the company.

[01:28:19] I mean,

[01:28:20] not very much with 60% is basically close to the fence,

[01:28:22] but I'm going to go against the popular trend here and say,

[01:28:25] I like the company.

[01:28:26] I like the founder.

[01:28:27] I like the fact that number one in almost all their markets.

[01:28:29] Yeah.

[01:28:30] I like them.

[01:28:31] Not a lot because close to 50,

[01:28:32] but I don't care about the stock price decline.

[01:28:34] The company has a lot of potential.

[01:28:36] Yeah.

[01:28:37] I'm really rooting for IHS to be,

[01:28:38] it will be actually the company and nobody's cause it's,

[01:28:40] it's literally founded by Nigerian citizen around by Nigerians.

[01:28:44] Yeah.

[01:28:45] Yeah.

[01:28:46] I don't know.

[01:28:47] I don't know what else is left.

[01:28:48] It's the one we should be talking about.

[01:28:49] Yes sir.

[01:28:50] Okay.

[01:28:51] Recommendations as always.

[01:28:52] I can go.

[01:28:53] So I have two recommendations actually.

[01:28:54] Two recommendations after four months.

[01:28:56] You have seven recommended.

[01:28:57] That's crazy.

[01:28:58] I'll be quick.

[01:28:59] I have two.

[01:29:00] Don't be quick.

[01:29:01] Take your time.

[01:29:02] One is,

[01:29:03] I'm searching for the perfect door.

[01:29:04] It's a video about physical penetration security.

[01:29:06] So when people talk about like pen testing,

[01:29:08] penetration testing,

[01:29:09] Oh, I know something about software.

[01:29:10] Yes.

[01:29:11] Right.

[01:29:12] But people do the,

[01:29:13] the companies that do physical pen testing for installations.

[01:29:16] And this guy talks about the whole talk is an hour long.

[01:29:18] I've watched it twice now.

[01:29:19] Focus on just the door.

[01:29:20] Okay.

[01:29:21] And then you realize that man,

[01:29:23] the level is complex.

[01:29:25] There's three levels to this stuff.

[01:29:26] And what do you think is safe?

[01:29:27] It's not even safe.

[01:29:28] But I was fantastic.

[01:29:30] What you think is the most dangerous shit in the world.

[01:29:32] It's just some wild, weird stuff.

[01:29:34] I always talk about security is only,

[01:29:36] it's like, oh, it's not safe.

[01:29:37] I'm like,

[01:29:38] what are you protecting yourself from Russia?

[01:29:40] The U S government or random homeless person,

[01:29:43] the different levels of security.

[01:29:44] So if you're,

[01:29:45] so you have to realize what you're protecting.

[01:29:46] What's your,

[01:29:47] you have to create your own risk profile.

[01:29:49] Yes.

[01:29:50] That's for physical internet security.

[01:29:51] Most people would do like,

[01:29:52] Oh, it's not safe.

[01:29:53] Like you think you're,

[01:29:54] you're stupid as the two carers going to stop you from doing anything.

[01:29:56] Your two FAs is going to stop,

[01:30:01] is going to stop the Korean hackers from getting into your Gmail.

[01:30:04] You think the joke among security experts is when it comes to national

[01:30:08] governments,

[01:30:09] just forget about it.

[01:30:10] You're screwed.

[01:30:11] Focus on what you can do.

[01:30:12] Focus on yourself.

[01:30:14] So I was like,

[01:30:16] Oh, I need to protect myself from China.

[01:30:19] I'd be like,

[01:30:20] there's no,

[01:30:21] we don't do that.

[01:30:22] Forget about that.

[01:30:23] So anyways,

[01:30:24] this is an interesting thing about,

[01:30:26] but what I found is that like a lot of things talked about are things that

[01:30:29] anybody can do.

[01:30:30] Anybody does without any.

[01:30:32] Second recommendation.

[01:30:33] No, no, please on the first one.

[01:30:34] We can't leave it like that.

[01:30:35] Come on, man.

[01:30:36] I have too many questions.

[01:30:37] So what's the story behind how you even found it?

[01:30:40] Because that's such a specific niche video.

[01:30:42] What were you looking for?

[01:30:43] You got,

[01:30:44] what were you searching on the internet dude?

[01:30:45] It's funny.

[01:30:46] I have a lot of videos on my YouTube watch later or podcast saved to

[01:30:49] listen to that whenever it comes up,

[01:30:50] I'm just like,

[01:30:51] how did you find this stuff?

[01:30:52] And like,

[01:30:53] and I have to think about it because I don't know.

[01:30:55] Cause I just,

[01:30:56] I see videos through over time.

[01:30:57] Over 10 years.

[01:30:58] You don't want to disclose publicly that.

[01:31:00] Don't say you don't know.

[01:31:01] How would I know?

[01:31:02] How can you not know about security of doors?

[01:31:04] That's so specific.

[01:31:05] Obviously you were searching something related to that.

[01:31:08] Oh,

[01:31:09] or maybe no,

[01:31:10] maybe a newsletter.

[01:31:11] Maybe somebody sent it to me.

[01:31:12] I don't know.

[01:31:13] At least somebody send me videos.

[01:31:14] I save them.

[01:31:15] For example,

[01:31:16] on my Kindle,

[01:31:17] I received a bunch of newsletters.

[01:31:18] I saved them to reader.

[01:31:19] I sent a bunch of samples,

[01:31:20] books to my Kindle,

[01:31:21] samples to read.

[01:31:22] Sometimes I read a book on Kindle.

[01:31:23] I have no idea where I got recommendation from.

[01:31:24] So that's kind of how it happens.

[01:31:25] Just I collect a bunch of stuff and then I process it.

[01:31:27] Until I die.

[01:31:28] The second,

[01:31:29] my second recommendation is this.

[01:31:30] At school in Bloomberg about crazy features in electric cars in

[01:31:33] China.

[01:31:34] And I'm like,

[01:31:35] I don't know what to do.

[01:31:36] I'm like,

[01:31:37] I don't know what to do.

[01:31:38] I'm like,

[01:31:39] I don't know what to do.

[01:31:40] I'm like,

[01:31:41] I don't know what to do.

[01:31:42] I'm like,

[01:31:43] I don't know what to do.

[01:31:44] I'm like,

[01:31:45] I don't know what to do.

[01:31:46] I'm like,

[01:31:47] I don't know what to do.

[01:31:48] I'm like,

[01:31:49] I don't know what to do.

[01:31:50] And I did this activity for a little while and for now it's

[01:31:53] kind of cool.

[01:31:54] I'm kind of excited about it.

[01:31:55] It's cool.

[01:31:56] It's been going from.

[01:31:57] I think it's a really good time.

[01:31:58] Yeah.

[01:31:59] Yeah.

[01:32:00] Publishing going from 1000% electric cars in China.

[01:32:01] So.

[01:32:02] Tesla is not doing that well in China.

[01:32:03] China has.

[01:32:04] A bunch of BYD is the popular one that does electric cars,

[01:32:06] but there's a lot more.

[01:32:07] And I was like,

[01:32:08] what kind of features are the electric calm ones?

[01:32:09] I have.

[01:32:10] I read,

[01:32:11] I saw the headline.

[01:32:12] I was like,

[01:32:13] what kind of features?

[01:32:14] Oh no.

[01:32:15] You'd be so.

[01:32:16] hot plate and a kettle and a table, like a kitchen,

[01:32:20] a micro kitchen.

[01:32:21] When you open the back door,

[01:32:22] you can make a micro kitchen with a mattress.

[01:32:24] They have a greenhouse in them

[01:32:27] that collects rainwater from outside.

[01:32:30] And what has the plants?

[01:32:32] That's hilarious.

[01:32:33] I could go on and on.

[01:32:34] They have this car that does the frequency

[01:32:37] of the thing to match your heartbeat.

[01:32:39] It syncs to your heartbeat,

[01:32:40] so it makes the ride less bumpy.

[01:32:41] I'm like, what the...

[01:32:42] Wow.

[01:32:44] I could go on and on.

[01:32:45] And I'm like, what is happening in China, man?

[01:32:48] Because I was thinking,

[01:32:48] Elon Musk is like, here's a tent

[01:32:50] that allows you to turn your Tesla into a camping vehicle.

[01:32:51] And people are like, yay.

[01:32:54] Rivian is like, here's a torch light that lets you,

[01:32:56] and there's a Bluetooth speaker.

[01:32:57] And these guys are like, no, no, no, no, no.

[01:32:58] Here's a mattress.

[01:32:59] Wow, wow, wow, wow.

[01:33:00] Here's, you can grow a plant in your car.

[01:33:03] We manage the temperature

[01:33:03] and we collect rain to water the plants.

[01:33:05] I'm like, what the...

[01:33:07] I respect that.

[01:33:08] Who asked for this?

[01:33:09] But anyways, but essentially what's happening in China

[01:33:13] is all of these things are necessary to attract customers.

[01:33:17] That's why the Tesla is not doing well.

[01:33:18] Cause Tesla is like, I mean, it's nice, it's fast,

[01:33:21] but so what?

[01:33:22] Cause everything is nice and fast.

[01:33:24] But the mattress though,

[01:33:25] with the stove...

[01:33:26] There's one that has a drone in it.

[01:33:31] Like the car has a drone

[01:33:33] that you can use the drone on the display

[01:33:35] to make videos while you're just driving.

[01:33:37] You just press release the drone

[01:33:38] and it comes and docks and charges on your car.

[01:33:40] Very, very safe.

[01:33:41] Yeah. Create that video while you're driving.

[01:33:43] Lord have mercy.

[01:33:44] Dude, yeah, I don't know, but think about it.

[01:33:47] Isn't it cool?

[01:33:48] Wouldn't you at least test drive that car?

[01:33:50] I would test drive it.

[01:33:50] I would risk my life for that car.

[01:33:52] I would test drive it.

[01:33:53] I don't know if I would buy it,

[01:33:54] but I would test drive a car

[01:33:55] that came with its own personal drone.

[01:33:57] That's like, that's Batman stuff.

[01:33:59] You'd be like, go and check me over that fence.

[01:34:01] What's happening there?

[01:34:02] What?

[01:34:03] Go and check if the riddler is gonna commit a crime

[01:34:05] or come right back.

[01:34:06] No, no, go check.

[01:34:07] Go check.

[01:34:08] You go on the line to enter Landmark Beach.

[01:34:12] You traffic.

[01:34:13] Go and check what's blocking the traffic in front.

[01:34:16] I didn't even believe that she dropped a shit on them.

[01:34:20] Hello?

[01:34:21] Oh, somebody threw stone on your drone.

[01:34:23] Stone.

[01:34:24] Lagos people are so rude.

[01:34:26] I don't know how to fly a drone.

[01:34:27] People that fly drone in Lagos,

[01:34:28] they have to fly it very high.

[01:34:33] If I see anybody's drone,

[01:34:35] my first instinct, I didn't even know where that's from

[01:34:37] because I'm among them.

[01:34:38] If I see a drone,

[01:34:39] my first instinct is just take a stone and stone it.

[01:34:41] Let me see who come out that cover.

[01:34:42] Come on, let me see.

[01:34:44] Those are my recommendations for this podcast.

[01:34:46] Thank you.

[01:34:48] All right.

[01:34:48] I don't even know what to say.

[01:34:49] I'm still trying to,

[01:34:51] the car thing is a lot.

[01:34:52] Okay, I have one, two, three, four, five,

[01:34:54] I have about six or seven recommendations.

[01:34:57] The first recommendation is,

[01:34:58] I don't know how to put it into words.

[01:34:59] It's like a dance video to a song,

[01:35:03] but it's not done by the person that sang the song.

[01:35:05] It's done by like a professional African dance group.

[01:35:09] It's incredible.

[01:35:09] It's like one minute long.

[01:35:11] I'm gonna put it in the chat.

[01:35:12] It's fabulous.

[01:35:13] It's so good.

[01:35:14] They're like, oh my God, if I sang the song

[01:35:15] and I saw them dancing,

[01:35:16] I'm like, yo guys, let's make a music video together.

[01:35:18] I'll add that.

[01:35:19] Second thing is, so Chris Brown had a live performance

[01:35:23] for one of his songs called Sensational.

[01:35:25] Oh my God, dude.

[01:35:26] The live performances.

[01:35:28] It's like watching a master of their crafts.

[01:35:32] Incredible.

[01:35:33] I was just watching, I was like, oh my,

[01:35:35] cause he's like, he's half singing, half dancing.

[01:35:38] And for the African part of this,

[01:35:40] an African artist comes in halfway through as a surprise.

[01:35:43] I'm not gonna say which artists, you can figure it out.

[01:35:44] I'll put a link.

[01:35:45] Incredible video.

[01:35:46] I've watched it like a dozen times.

[01:35:48] And then next, all my recommendations

[01:35:50] are Nas recommendations from different albums.

[01:35:53] Rare, I just heard it.

[01:35:54] Dude.

[01:35:56] Okay.

[01:35:57] Like, I'm not gonna start rapping it now,

[01:35:59] but let's just say epic.

[01:36:01] ED2, Nas and Eminem on the same song.

[01:36:04] Oh my Lord.

[01:36:05] Nice.

[01:36:05] Oh my God.

[01:36:07] All these songs are like four or five years old, by the way.

[01:36:09] I don't listen to music, so.

[01:36:11] I'm testing up on all my years of music,

[01:36:13] but the Eminem verse, woo.

[01:36:15] Lord, Eminem is, I could write an article

[01:36:18] for why Eminem is the best rapper of all time.

[01:36:21] I could write another article

[01:36:22] for why Nas is the best rapper of all time.

[01:36:24] Jay-Z, Biggie Pac, like they're all,

[01:36:26] they're different reasons,

[01:36:27] but when you listen to that song,

[01:36:28] you understand the reason why Eminem is great.

[01:36:30] So listen to that at EPMD2.

[01:36:32] So Nas, Eminem, featuring EPMD as well.

[01:36:35] And then two songs, Let Nas Down by J. Cole, which was-

[01:36:39] I love that song.

[01:36:40] Dude, I just listened to it the first time.

[01:36:41] Oh my God, that's my shit.

[01:36:42] Oh my God.

[01:36:43] I listened to the song-

[01:36:44] I've listened to that song for years.

[01:36:45] I just-

[01:36:46] You know this is the earlier song, right?

[01:36:46] I just learned everything last week, dude.

[01:36:49] Like I heard the song, I was like,

[01:36:51] oh my God, what is happening?

[01:36:53] And then I read, I listened to the remix,

[01:36:55] Make Nas Proud by Nas.

[01:36:56] Dude, it was too much.

[01:36:58] It was too much for me.

[01:36:59] I was emotionally distraught.

[01:37:01] Like I was in tears.

[01:37:02] Cause I was like,

[01:37:03] I remember the reason I was emotional about it.

[01:37:04] I've never witnessed anything like that happen

[01:37:09] in music ever.

[01:37:10] So for the audience, what happened?

[01:37:11] So J. Cole is a rapper, prominent rapper.

[01:37:15] So he writes this song, Let Nas Down.

[01:37:18] And the concept of the song is,

[01:37:20] this song is on his second album.

[01:37:22] And the concept of the song is,

[01:37:23] on my first album,

[01:37:24] I had to release this commercially viable song

[01:37:28] just to get some sales,

[01:37:29] just to get media reputation,

[01:37:31] just to get the album released.

[01:37:32] But he heard that Nas didn't like the song.

[01:37:35] And he felt that he let Nas down

[01:37:36] because when he was a kid,

[01:37:37] he idolized Nas as a rapper

[01:37:40] and he liked all his songs

[01:37:41] and specifically the lyrical artistic intents.

[01:37:44] And he felt he didn't live up to his own standards

[01:37:48] by quote unquote selling out

[01:37:49] and make something more commercial.

[01:37:50] But the way he does the song is so emotionally,

[01:37:52] but then Nas did a response.

[01:37:54] Oh my God.

[01:37:55] Oh man.

[01:37:56] Okay, I'm gonna get tired of God.

[01:37:58] No, it's too much.

[01:37:59] It's emotionally moving.

[01:38:02] Especially because when Nas did the response,

[01:38:06] it wasn't,

[01:38:07] the response is so touching

[01:38:10] because he's not just talking about J. Cole specifically.

[01:38:13] He's talking about in general,

[01:38:15] so in life you have a goal

[01:38:17] and you want to achieve the goal.

[01:38:19] But then sometimes you may have to do things

[01:38:21] that you don't like in order to get the goal.

[01:38:22] So it's much broader than just the songs.

[01:38:25] And the way he did it,

[01:38:27] like man, it's incredible.

[01:38:29] Anyway, listen to the songs,

[01:38:30] I could talk about it for hours.

[01:38:31] Let's just say I love it.

[01:38:32] So a lot of songs,

[01:38:33] basically I've listed like five Nas albums

[01:38:35] over the last two weeks and Jesus man.

[01:38:37] To be doing that for 30 years,

[01:38:39] Nas is on a level that's unprecedented man.

[01:38:43] 30 years, 15 albums,

[01:38:46] the quality of the albums are just like,

[01:38:49] whew, anyway I'll stop.

[01:38:50] People get the gist.

[01:38:51] So those are all my recommendations.

[01:38:52] Chris Brown, Dancing His Ass Off,

[01:38:55] another dance routine,

[01:38:56] and a bunch of Nas songs.

[01:38:57] But the J. Cole song is God man.

[01:39:00] Whew.

[01:39:01] That's my jam.

[01:39:01] That's not my life.

[01:39:02] That's not my life running.

[01:39:03] When I do my running,

[01:39:05] so I go to my own small wing.

[01:39:06] My small wing is I've been doing like intervals,

[01:39:09] which I never really did.

[01:39:09] I just used to run till I get tired,

[01:39:11] which is funny.

[01:39:12] I never run, my wife runs marathons and stuff

[01:39:14] and she was like,

[01:39:15] oh you should run,

[01:39:16] like take off your headphones, focus on your phone.

[01:39:17] I'm like, no dude,

[01:39:17] I run so I can listen to music and dance.

[01:39:20] Like I'm not running,

[01:39:22] I'm not running.

[01:39:23] I'm not doing competition with anybody.

[01:39:25] But so I've started doing intervals

[01:39:26] because I wanna run faster.

[01:39:29] Starting intervals.

[01:39:30] And it's just so much fun

[01:39:32] because I'm much more aware,

[01:39:34] what I've been aware of is how fast I'm running.

[01:39:36] I run at different paces,

[01:39:37] but I try to run at the same pace

[01:39:38] for like five miles,

[01:39:40] seven miles, eight miles.

[01:39:41] And now I'm just much more aware

[01:39:42] of how I can control.

[01:39:44] I wanna run this two miles really quickly.

[01:39:46] I wanna run this two miles really slowly.

[01:39:47] And it's just,

[01:39:48] it's empowering.

[01:39:49] It's so much fun.

[01:39:50] It makes me wanna run just thinking about it.

[01:39:50] But yeah, that's my small wing.

[01:39:51] What's the tool used to track it?

[01:39:54] Watch, phone?

[01:39:55] So what's funny,

[01:39:56] the Apple Watch has been underused.

[01:39:57] I've had an Apple Watch for five years now.

[01:39:59] I never really use it.

[01:40:00] But you can actually create this interval workouts on it

[01:40:03] that it will just ping you

[01:40:05] and you can use like heart rate zones or pace to set,

[01:40:07] like, hey, I wanna do this five and a half,

[01:40:09] six minute mile, this one eight minute mile.

[01:40:11] And when you're going too fast,

[01:40:12] it tell you slow down.

[01:40:13] Like fantastic.

[01:40:14] So I've been doing it a lot more.

[01:40:15] I really love it.

[01:40:16] Like it makes running,

[01:40:17] it adds a different flavor to running

[01:40:18] because you can basically do the same run,

[01:40:20] but bigger intervals, shorter intervals.

[01:40:23] So it ends up,

[01:40:24] this is my running was becoming a bit flat,

[01:40:27] like just boring,

[01:40:28] full life to the routes I do.

[01:40:30] Dope, dope small win.

[01:40:32] If you run and you listen this far,

[01:40:33] you can email me, I'll add you on my Strava.

[01:40:36] Stalkers.

[01:40:37] Support each other.

[01:40:39] Shout out to all our stalkers,

[01:40:40] email Banco.com,

[01:40:41] don't email me anything about running.

[01:40:42] I'll delete your email.

[01:40:43] Okay, my small win is

[01:40:46] I was listening to a bunch of new books,

[01:40:48] but I got somehow not interested

[01:40:52] or enthusiastic about the new books.

[01:40:55] It hasn't happened to me before,

[01:40:56] but like I read a book and I was like,

[01:40:57] it was meh.

[01:40:58] And I read another book, it was meh.

[01:40:59] So I just,

[01:41:00] I did a full reset two months ago

[01:41:02] and I stopped listening to any new books.

[01:41:04] I just, I went back to all my old books

[01:41:06] and I fell in love with reading again.

[01:41:08] So I read Homo Deus, Sapiens,

[01:41:11] The Slight Edge,

[01:41:13] The Evolution of Everything.

[01:41:14] Basically all the books I've already read

[01:41:15] and they're so much better.

[01:41:16] I'm just gonna do a reset later on.

[01:41:18] Maybe I'll get back to new books,

[01:41:18] but it's just the books I read originally were so good.

[01:41:21] The quality bar is just so high.

[01:41:22] When you read The Evolution of Everything

[01:41:25] and then you read another book,

[01:41:26] you're like, wait, it's not even on the same level.

[01:41:27] When you read The Slight Edge,

[01:41:28] you read another book.

[01:41:29] So it's like Atomic Habits, you know the book.

[01:41:31] I don't know.

[01:41:31] Maybe the recommendation,

[01:41:33] maybe the way I got the books was suboptimal,

[01:41:35] but I'm just gonna do a clean reset for now.

[01:41:36] Old classics are, man.

[01:41:39] Like I read Eat That Frog, Brian Tracy,

[01:41:41] classic, maximum achievement, Brian Tracy.

[01:41:44] Just some of these books are just like,

[01:41:46] you know why they're amazing?

[01:41:47] I'm funny enough, my memory is so bad.

[01:41:49] I read Sapiens again

[01:41:50] and it went completely different than I thought.

[01:41:52] I thought at the end,

[01:41:53] we talked more about the scientific revolution in the future.

[01:41:56] Dude, that's like 10% of the book.

[01:41:57] That's what Mudeo's,

[01:41:58] my memory is like all intertwined with different shit.

[01:42:01] It's scattered. Yeah, all scattered.

[01:42:02] Cause I mean, I read it like seven years ago.

[01:42:03] So how many books have I read?

[01:42:05] Anyway, summary, I went long.

[01:42:07] I just reset all my old books,

[01:42:08] went back to classics

[01:42:09] and I'm falling in love with rereading again.

[01:42:11] But at some point I'll get to the new stuff.

[01:42:13] That's it.

[01:42:14] Thanks for listening.

[01:42:15] We'd love to hear from you.

[01:42:16] If you have any feedback,

[01:42:17] topics you'd like to hear,

[01:42:19] or just want to say hello,

[01:42:20] please email info at Afroability.com.

[01:42:23] Thanks.