CAK Grants Unconditional Approval for French Fund STOA’s $27 Million Strategic Stake in Atlas Tower Kenya

The Competition Authority of Kenya (CAK) has granted unconditional approval for the proposed acquisition of control of Atlas Tower Kenya (ATK) Limited by STOA S.A., a France-based impact investment fund, in a transaction valued at $27 million. The regulatory clearance, announced on Wednesday, November 5, 2025, marks a significant milestone in Kenya’s telecommunications infrastructure development and represents one of the largest foreign investments in the country’s independent telecom tower sector.

The proposed transaction involves the acquisition of a 31.03% minority shareholding with veto rights in Atlas Tower Kenya by STOA. In a statement issued by the competition watchdog, CAK confirmed that it had determined the transaction is “unlikely to lead to a substantial prevention or lessening of competition in the market for the provision of telecommunication infrastructure in Kenya, nor elicit negative public interest concerns.”

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Understanding the Key Players: STOA and Atlas Tower Kenya

STOA S.A. is an impact investment fund incorporated in France and focused on large-scale infrastructure and energy projects in emerging and developing countries. Created in 2017 by the Agence Française de Développement (AFD) and Caisse des Dépôts et Consignation (CDC), STOA operates with a mandate to finance and support the development of sustainable and resilient infrastructure for future generations across Africa, Latin America, and Asia. The fund has €650 million committed across 22 portfolio companies, with over 54% of its investments concentrated in Africa.

In Kenya, STOA’s operations are managed through STOA Africa Limited, its local subsidiary. The fund’s investment philosophy centers on promoting sustainable infrastructure that contributes directly to achieving the United Nations’ Sustainable Development Goals (SDGs), particularly in the areas of renewable energy, telecommunications, transport, and essential services.

Atlas Tower Kenya is a telecommunications infrastructure company incorporated in Kenya and wholly owned by Kalahari Capital LLC, a private investment firm focused on infrastructure and technology ventures in Africa. Since commencing operations in 2019, ATK has emerged as one of Kenya’s fastest-growing independent telecom tower companies, developing, building, and maintaining telecommunication towers and related infrastructure for mobile network operators and internet service providers across the country.

The company currently owns and operates more than 450 telecom towers nationwide, providing critical digital infrastructure that enables mobile network operators to deliver reliable and widespread connectivity. Atlas Tower Kenya’s portfolio includes a strategically blended mix of sites in urban centers, rural areas, and underserved communities, positioning the company to address Kenya’s persistent digital divide while supporting the country’s ambitious digital transformation agenda.

The $27 Million Investment: Strategic Rationale and Implications

The investment, first announced in September 2025, represents a strategic equity investment in one of Kenya’s most dynamic telecommunications infrastructure providers. STOA’s $27 million commitment will enable Atlas Tower Kenya to accelerate its expansion plans while advancing its mission of quality, efficiency, and positive impact in Kenya’s telecommunications sector.

The partnership brings together STOA’s extensive development expertise and long-term capital with Atlas Tower Kenya’s operational excellence and deep understanding of the local market. For STOA, the investment aligns perfectly with its mandate as an impact investor with a strong focus on emerging markets, climate change mitigation, and expanding access to essential digital services.

“Atlas Tower Kenya has built a strong reputation for operational excellence and for addressing Kenya’s digital divide,” said Marie-Laure Mazaud, CEO of STOA. “This partnership reflects our confidence in the company’s strategy and our shared commitment to advancing the country’s digital transformation. By bringing long-term capital and development expertise, STOA will support Atlas Tower Kenya in its next phase of growth.”

For Atlas Tower Kenya and its parent company Kalahari Capital, the STOA partnership provides the necessary resources to accelerate asset growth and network expansion. Nathan Foster, CEO of Atlas Tower Kenya and founding member of Kalahari Capital, emphasized the strategic value of the collaboration: “We are thrilled to welcome STOA. Their investment underscores the fundamental value of Atlas Tower Kenya and provides the necessary resources to accelerate asset growth while continuing our mission of quality, efficiency, and positive impact. Partnering with STOA will help further unleash our speed strategy while leaning in on more efficient green power production.”

Regulatory Framework: Understanding CAK’s Merger Approval Process

The CAK approval represents a critical regulatory milestone that allows the transaction to proceed to completion. Under Kenya’s Competition Act (CAP 504), the transaction qualifies as a merger within the meaning of sections 2 and 41 of the Act. The legislation stipulates that a merger or takeover may occur when an undertaking directly or indirectly acquires control over another business in Kenya through various means, including the purchase or lease of shares, the exchange of shares, or vertical integration.

Crucially, parties to a merger whose combined turnover or assets exceed KSh 1 billion are required to seek approval from the Competition Authority before implementing a proposed transaction. “The transaction between STOA S.A. and Atlas Tower Kenya met this threshold for mandatory notification and full analysis as provided in the Competition (General) Rules, 2019,” CAK stated in its determination.

The competition watchdog’s review process involves a comprehensive assessment of several critical factors, including the potential impact on market competition, consumer welfare, employment, and broader public interest considerations. For technology and telecommunications transactions, regulators pay particular attention to whether the proposed merger could create or strengthen a dominant position, reduce innovation, or limit consumer choice.

In its analysis of the STOA-Atlas Tower Kenya transaction, CAK conducted a thorough market assessment and concluded that the post-merger market share of the merged entity would not change significantly, as the acquirer is not currently engaged in similar telecommunications infrastructure operations. Therefore, the structure and concentration of the telecommunications infrastructure market are unlikely to be affected by the transaction.

Competitive Landscape: Kenya’s Telecommunications Tower Market

Kenya’s telecommunications tower market operates in a dynamic and competitive environment characterized by multiple independent tower companies and mobile network operators’ own infrastructure. According to industry data, the Kenyan telecom tower market includes approximately 3,230 towers as of 2025, with projections indicating growth to 3,420 units by 2030, representing a compound annual growth rate (CAGR) of 1.18%.

The market structure reflects a mix of ownership models, including operator-owned towers, private independent tower companies, and mobile network operator (MNO) captive sites. Major players in Kenya’s telecommunications infrastructure sector include American Tower Corporation (ATC Kenya), which operates approximately 2,500 sites and holds a significant market share of approximately 38.81% in the passive infrastructure market, making it the largest tower company in the country.

Atlas Tower Kenya, despite its relatively recent entry into the market in 2019, has established itself as a formidable competitor with its fleet of over 450 towers. Other significant players include Eaton Towers Kenya Limited and various operator-owned tower portfolios maintained by major mobile network operators such as Safaricom, Airtel Kenya, and Telkom Kenya.

According to CAK’s assessment, following the STOA investment, Atlas Tower Kenya will continue to face robust competition from other players that collectively account for 96.75% of the market share. This competitive dynamic ensures that the merged entity will not possess market power sufficient to substantially lessen competition or harm consumer interests.

The telecommunications infrastructure sector in Kenya is experiencing sustained growth driven by several key factors. The expansion of mobile networks to meet increasing demand for voice and data services, the progressive rollout of 4G and 5G technologies, growing internet penetration rates, and government initiatives to extend connectivity to underserved rural areas all contribute to rising demand for tower infrastructure.

Mobile subscriptions in Kenya reached a peak of 76.16 million in Q3 2025, pushing penetration to an impressive 145.3%. This reflects the deep integration of mobile services into daily life and underscores the critical importance of reliable telecommunications infrastructure. Additionally, machine-to-machine (M2M) connections rose by 3.5%, nearing 2 million, signaling increased adoption of Internet of Things (IoT) technologies across various sectors including logistics, agriculture, and smart cities.

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Sustainable Infrastructure: The Green Energy Dimension

A distinguishing feature of the STOA-Atlas Tower Kenya partnership is its strong emphasis on environmental sustainability and green energy solutions. The investment is specifically designed to support Atlas Tower Kenya’s transition toward more sustainable operations through the deployment of solar power and battery storage systems across its network of over 450 tower sites.

Diesel consumption currently represents 20-40% of operational costs for tower companies operating in Africa, making it a significant expense that also contributes to carbon emissions and environmental degradation. By integrating renewable energy solutions, Atlas Tower Kenya aims to substantially reduce its reliance on diesel generators, thereby lowering operating costs, improving profit margins, and reducing its carbon footprint.

“This investment fully aligns with STOA’s mandate to promote sustainable infrastructure,” explained Marie-Laure Mazaud. “We’re enabling Atlas Tower Kenya to increase solar energy usage and battery storage systems across its network, reducing diesel consumption and the company’s carbon footprint.” The green energy initiative positions Atlas Tower Kenya at the forefront of sustainable telecommunications infrastructure in East Africa.

STOA’s broader portfolio demonstrates its commitment to climate action and sustainable development. The fund’s investments have already generated significant results in climate impact, with forecasts indicating that portfolio projects under construction will achieve an installed capacity of 1,772 MW of renewable energy, an annual reduction of 3.1 million tons of CO2, and access to essential services for millions of people across emerging markets.

The focus on sustainability also reflects growing pressure on telecommunications infrastructure companies throughout Africa to balance expansion with operational efficiency and environmental responsibility. Regulators, investors, and consumers increasingly demand that companies adopt sustainable practices, making the integration of green energy solutions not just environmentally beneficial but also commercially strategic.

Implications for Kenya’s Digital Transformation

The CAK approval of STOA’s investment in Atlas Tower Kenya carries significant implications for Kenya’s broader digital transformation agenda. The Kenyan government has made substantial commitments to expanding digital infrastructure as a foundation for economic development, with initiatives including the Digital Superhighway Program that aims to deploy 100,000 kilometers of fiber optic cable nationwide.

Kenya has already expanded its national fiber optic network to 13,590 kilometers in 2025, up from 8,900 kilometers in 2022, with substantial additional investments allocated for further rollout, particularly in marginalized counties. The expansion of telecommunications infrastructure, including tower networks like those operated by Atlas Tower Kenya, complements these fiber optic deployments by ensuring comprehensive mobile coverage that can leverage high-speed data connectivity.

The partnership between STOA and Atlas Tower Kenya also supports the government’s efforts to bridge the digital divide between urban and rural areas. By operating a blended mix of sites in urban centers, rural areas, and underserved communities, Atlas Tower Kenya helps extend connectivity to populations that have historically lacked reliable access to digital services. This expansion of digital access has profound implications for economic opportunity, education, healthcare delivery, financial inclusion, and social development.

Through the Universal Service Fund (USF), the Kenyan government has provided support for deploying telecommunications infrastructure in remote areas, with more than 800,000 rural residents gaining mobile access via newly constructed base stations in 24 remote counties. Independent tower companies like Atlas Tower Kenya play a crucial role in these expansion efforts by providing cost-effective infrastructure that mobile network operators can share, reducing the capital expenditure burden on individual operators while accelerating network deployment.

The Role of Infrastructure Sharing in Market Development

Infrastructure sharing has become a cornerstone of telecommunications market development in Kenya and across Africa. The model, which Atlas Tower Kenya and other independent tower companies facilitate, allows multiple mobile network operators to share passive infrastructure such as towers, power systems, and site facilities, while maintaining their own active equipment including antennas and transmission equipment.

This infrastructure-sharing approach delivers multiple benefits that have proven particularly valuable in emerging markets. By sharing tower infrastructure, mobile network operators can significantly reduce capital expenditure requirements, as they avoid the need to build duplicate towers in the same areas. Operational expenses also decline through shared site maintenance costs, security services, and power consumption. The model accelerates network deployment, as operators can quickly access existing towers rather than undertaking lengthy processes to acquire land, obtain permits, and construct new towers.

From a broader market perspective, infrastructure sharing promotes more efficient use of resources and reduces the environmental impact of telecommunications networks by minimizing the proliferation of redundant towers. It also enables smaller mobile network operators to compete more effectively by providing access to quality infrastructure that might otherwise be unaffordable.

Safaricom, Kenya’s market-leading mobile network operator, has deployed approximately 1,000 new towers over recent years, while Airtel Kenya has pursued aggressive expansion with a similar annual rollout. These expansions create substantial opportunities for independent tower companies like Atlas Tower Kenya, which can provide build-to-suit services and offer existing infrastructure for colocation arrangements.

Looking Ahead: Growth Prospects and Market Evolution

With regulatory approval now secured, Atlas Tower Kenya and STOA can proceed to complete the transaction and implement their strategic growth plans. The partnership positions Atlas Tower Kenya for accelerated expansion in several key areas, including deployment of new tower sites in underserved areas, modernization of existing infrastructure with green energy solutions, enhanced service offerings to mobile network operators, and potential expansion into adjacent markets within East Africa.

The telecommunications infrastructure market in Kenya is projected to maintain steady growth through 2030, driven by continued expansion of mobile networks, increasing data consumption, the rollout of 5G technology, growing adoption of IoT applications, and government initiatives to expand connectivity. The Kenya Telecom Market size is expected to reach $3.87 billion in 2025 and grow at a CAGR of 2.24% to reach $4.33 billion by 2030.

For STOA, the Atlas Tower Kenya investment represents an opportunity to support critical infrastructure development while generating financial returns and measurable impact aligned with the UN Sustainable Development Goals. The fund’s focus on telecommunications infrastructure in Africa reflects the sector’s fundamental importance for economic development and its potential to deliver sustainable, inclusive growth.

The transaction also signals growing international investor confidence in Kenya’s telecommunications sector and the country’s broader economic prospects. Despite challenges including regulatory complexities, infrastructure costs, and market competition, Kenya remains an attractive destination for infrastructure investment due to its relatively stable political environment, growing middle class, strong mobile money ecosystem anchored by M-Pesa, and government commitment to digital transformation.

Regulatory Precedents and Market Dynamics

The CAK’s unconditional approval of the STOA-Atlas Tower Kenya transaction continues a track record of the competition authority facilitating investments that support market development without creating anti-competitive concerns. In recent years, CAK has evaluated numerous transactions in the telecommunications sector, applying rigorous analysis while generally supporting deals that bring capital, expertise, and innovation to the market.

The regulatory approach reflects a balance between protecting competition and enabling market development through strategic investments. By focusing on whether transactions substantially lessen competition or create dominant positions, rather than simply preventing all consolidation, CAK creates space for companies to pursue growth strategies that ultimately benefit consumers through improved services, expanded coverage, and greater innovation.

The telecommunications sector’s regulatory environment has evolved significantly in recent years, with frameworks designed to promote infrastructure sharing, facilitate new market entrants, protect consumer interests, encourage investment in underserved areas, and support the transition toward next-generation technologies. These policies have contributed to Kenya’s position as a regional leader in telecommunications innovation, exemplified by the success of mobile money services and the relatively rapid adoption of 4G and 5G technologies.

Conclusion: A Milestone for Kenya’s Digital Infrastructure

The Competition Authority of Kenya’s approval of STOA’s strategic investment in Atlas Tower Kenya represents more than a routine regulatory clearance—it marks a significant milestone in the evolution of Kenya’s telecommunications infrastructure sector. The transaction brings together a leading international impact investor with deep expertise in sustainable infrastructure and one of Kenya’s most dynamic independent tower companies, creating a partnership with the potential to accelerate digital infrastructure development while advancing environmental sustainability.

For Atlas Tower Kenya, the partnership provides crucial capital and expertise to support its ambitious growth plans and strengthen its competitive position in a dynamic market. For STOA, the investment expands its African portfolio while advancing its mission to support sustainable, resilient infrastructure that contributes to achieving the Sustainable Development Goals. For Kenya’s broader telecommunications ecosystem, the transaction signals continued international confidence in the sector’s growth prospects and the country’s digital transformation agenda.

As Kenya continues its journey toward comprehensive digital connectivity, independent tower companies like Atlas Tower Kenya will play an increasingly important role in ensuring that mobile network operators can efficiently extend coverage to all communities, urban and rural alike. The integration of sustainable energy solutions into tower operations, facilitated by strategic partnerships like that with STOA, demonstrates how commercial objectives can align with environmental responsibility and social impact.

With the regulatory approval now secured, attention turns to implementation and the realization of the partnership’s potential to contribute meaningfully to expanding digital access, supporting economic development, and advancing sustainable infrastructure in Kenya and beyond. The transaction stands as a testament to the continuing evolution of Kenya’s telecommunications sector and the important role that strategic international partnerships can play in driving progress toward universal connectivity and inclusive digital transformation.

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By: Montel Kamau

Serrari Financial Analyst

6th November, 2025