A decade spent chasing Techco, while the money was in the ground the whole time.
By: Ahmed Abdel-Latif
For a decade, the telecom industry has been madly chasing a scent.
The Techco. The digital (read: software) company a connectivity provider was supposed to become once it shed its old skin: platform-native and valued like the Internet giants it admired. Everyone caught the smell of it around 2015. It dominated investor summits, analysts’ briefings, and strategy offsites. Transformation programs were named after it. Consultants sold it by the kilo.
Ten years on, the Techco is still mostly a scent.
Telefónica built the most admired version of it. Telefónica Tech booked just over €2 billion in 2024, roughly 5% of group revenue, after years as the sector’s reference case. Most operators never reached even a 10% revenue share from anything beyond connectivity. McKinsey’s verdict on the whole movement ran to four words: diversification has often failed.
The ones who chased the hardest paid the most. AT&T bought Time Warner for $85 billion in 2018 and exited the wreckage four years later at roughly half that. Verizon spent close to $9 billion assembling AOL and Yahoo into something called Oath, then wrote off $4.6 billion of it in a single quarter. The scent drove Telcos mad. They ran straight past the thing that was actually worth real money.
The number that explains the decade
Here is what the strategy decks left out. A tower company trades at 20 to 27 times EBITDA. A data center business trades in the same range. An integrated telco trades at 5 to 8. Same cash flows. Same balance sheet. Three to five times the multiple, purely for sitting in a different corporate box.
With shareholders & investors being acutely aware of this gap, the industry had to react:
- Telefónica sold its Telxius towers to American Tower at about 30 times EBITDA, four times its own multiple, and booked a €3.5 billion gain.
- Deutsche Telekom sold half its towers at a €17.5 billion valuation, around 27 times, and said out loud what the move was about: the distance between what its parts were worth and what the market paid for the whole.
- Telecom Italia sold its fixed network to KKR for an enterprise value up to €22 billion and cut its debt almost in half.
PwC studied more than 30 carriers and found the ones furthest along in separating infrastructure from services traded 30 to 50% above their integrated peers.
The carve-out wave rippled across the industry. The math was just too strong to ignore.
MEA ran the same trade, with sovereign money
The Gulf and Africa took the same arithmetic and moved faster, because the capital was patient and largely state-backed:
- stc spun its towers into TAWAL, then sold control to the Public Investment Fund at a $5.85 billion enterprise value.
- e& sold 40% of Khazna, its data center arm, for $2.2 billion, valuing the business at roughly $5.5 billion and turning a connectivity asset into a $1.4 billion capital gain.
- Ooredoo carved its data centers into a standalone company now called Syntys and put a billion dollars behind it.
- Telecom Egypt agreed to hand 75 to 80% of its Regional Data Hub (RDH) data center portfolio to Helios Investment Partners at a valuation up to $260 million, among the largest such deals in North Africa.
Africa also shows the trade in reverse. IHS Towers bought MTN Nigeria’s towers in 2014 and rode the model up, until dollar debt against naira revenue caught up with it. By early 2026 MTN was buying IHS back at a $6.2 billion enterprise value, roughly 5.5 times EBITDA, while global Towercos traded at 12 to 21. The arbitrage worked until the currency stopped cooperating.
The reason operators keep reaching for these deals sits in the GSMA numbers. Mobile drove $350 billion into MENA’s economy in 2024, around 5.7% of GDP. Yet capex runs at 16 to 17% of revenue while per-user revenue keeps sliding. High investment, falling returns. The infrastructure was always the most valuable thing these companies owned. It took a sale to prove it!
AI moved the deadline forward
For years, disaggregation competed with inertia. Boards were slow to dismantle the integrated machine. AI ended that argument.
The four largest American hyperscalers are guiding to roughly $725 billion of capital spending in 2026, most of it for AI data centers, chips and power. That is more than the combined market value of several national telco champions, spent in a single year, on the layer that sits above connectivity. No Telco operator can match it. Every operator can see what it means: the company that owns the “Compute” owns the value.
Proximity is the opening. Training happens on a few giant campuses. Inference, the part that answers every query, has to sit close to the user, because 80 milliseconds to a distant cloud is too slow for anything real-time. Distributed footprints, regional data centers, in-country presence, data that has to stay home: that is a Telco’s natural ground.
The Gulf understood the lesson early, because it learned it once already with oil. Build your economy on infrastructure you do not own, and you rent your own future. So, the region is buying Compute the way it once pumped crude:
- Saudi Arabia’s Humain plans to deploy up to 600,000 Nvidia GPUs over three years.
- G42 anchors a five-gigawatt campus in Abu Dhabi.
- Ooredoo runs Nvidia’s first large deployment across six markets.
Analysys Mason expects $5 to 7 billion of AI data center investment in the GCC in 2026 alone.
Power is the binding constraint now. Chips can be bought and money is plentiful; megawatts are the thing in short supply. Here the region holds a card the others do not: electricity at five to six cents a kilowatt-hour, about half what a US operator pays. Cheap power and patient capital. The two things AI infrastructure needs most.
I made a version of this argument a long time ago, before the carve-outs and well before AI. The view then described a future Telco operator that is built as several specialist organisms inside a larger ecosystem: the builders of transport and capacity underneath, the providers of services on top. The industry spent the years since proving the structure right. The reality, or irony, in a sense, is that the Finance Department got there before the Strategy team did.
Operators chased the scent of the Techco for ten years and never caught it. The asset worth catching was under their feet the whole time: the towers, the fiber, the data centers, the power. AI just made every operator in the world smell it at once.
About the Author
Ahmed Abdel-Latif is a recognized Tech industry leader at the crossroads of International Business and Technology, with unique expertise in leading International B2B, Digital Infrastructure & Telco Wholesale business units of large privately held & publicly traded operators across the Middle East, Africa, and South Asia markets.
Drawing on three decades of international operator experience, Ahmed advises governments, infrastructure development funds, and private equity investors on digital infrastructure strategy, market expansion, and cross-border connectivity.
Ahmed’s career foundation includes senior executive roles at leading telecommunications operators including Verizon, Global Cloud Xchange, Etisalat Group, and Batelco Group.
As an outspoken industry voice, Ahmed’s thought leadership focuses on positioning MEA markets as emerging leaders in AI adoption and digital infrastructure deployment.
Ahmed holds a bachelor’s degree in Telecommunications & Electronics Engineering from Ain Shams University (Cairo), an M.S. in Computer Science from the University of Louisville (USA), and an MBA with Distinction from The Maastricht School of Management (Netherlands), with a focus on Globalization.
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