Helios Towers' Strategic Turnaround: A Compelling Case for Long-Term Investment in a Resilient Sector

The telecom infrastructure sector has long been a battleground for resilience, with companies navigating volatile capital expenditures, regulatory hurdles, and the high costs of 5G deployment. Yet, amid these challenges, Helios Towers (LSE:HTWS) has emerged as an outlier—a firm not only surviving but thriving through disciplined strategy and operational ingenuity. With the global telecom tower market projected to grow at a 7% CAGR to $85 billion by 2033, the question for investors is whether Helios's recent turnaround—marked by improved profitability, a leaner balance sheet, and a strategic pivot to organic growth—justifies a long-term stake in this historically cyclical sector.

A Financial Turnaround Fueled by Operational Discipline

Helios Towers' H1 2025 results paint a picture of a company in transformation. Adjusted EBITDA rose 9% year-on-year to $225.5 million, driven by a 100-basis-point margin expansion to 54%. This improvement stems from two key drivers: a 7% revenue increase to $418.3 million and a 1% rise in operating profit to $133.1 million. Crucially, the company's net leverage ratio has fallen to 3.8x from 4.2x in H1 2024, while free cash flow surged by $39.7 million to $29.9 million. These metrics underscore a shift from debt-laden growth to a more sustainable model.

The company's tenancy ratio—a critical metric in the telecom tower business—has also expanded to 2.11x, up from 2.01x in H1 2024. This 100-basis-point improvement reflects Helios's ability to maximize asset utilization, a strategy that outperforms the sector's reliance on aggressive site additions. By focusing on colocation (sharing towers among multiple mobile operators), Helios has boosted revenue per site without incurring the high costs of new infrastructure.

Strategic Reorientation: From M&A to Organic Growth

Helios's strategic pivot mirrors broader industry trends. In 2024, the company shifted focus from mergers and acquisitions to asset optimization, a decision that has paid dividends. CEO Tom Greenwood has emphasized the importance of “firing on all cylinders” through tenancy growth, site efficiency, and cost management. This approach has allowed Helios to outperform peers in high-growth but resource-constrained markets like the DRC and Oman, where it operates in regions with unreliable electricity grids.

The company's ability to deploy solar-powered towers and backup generators in such environments has become a competitive moat. As reveals, 50% of its $54.2 million in capital spending was directed toward growth initiatives, while 21% went to site upgrades. This balance between expansion and efficiency is rare in a sector often plagued by overinvestment.

Navigating a Fragmented Sector with a Long-Term Lens

The telecom infrastructure sector remains highly fragmented, with consolidation through M&A dominating in developed markets. However, Helios's focus on emerging markets—where 4G adoption is the primary growth driver and 5G is nascent—positions it to benefit from secular trends. The company's Central & Southern Africa - DRC segment, which contributes 37% of revenue, exemplifies this. Despite high costs of sales (52% of revenue), Helios's non-operating expenses have fallen from $216.6 million in FY 2023 to $150 million in H1 2025, reflecting improved cost controls.

Moreover, Helios's ESG credentials—highlighted by an AAA MSCI ESG score and a Gold EcoVadis rating—add a layer of resilience. As shows, the sector's average EBITDA multiple has stabilized at 14x, while Helios trades at a discount of 12x as of July 2025. This valuation gap suggests the market has yet to fully price in its ESG-driven growth potential.

Risks and the Path Forward

Helios's journey is not without risks. The company's exposure to hyperinflation accounting in certain markets introduces volatility, as seen in its FY 2024 profit swing from a $24.5 million loss to a $30.9 million gain. Additionally, the telecom sector's capital intensity means Helios must balance growth with deleveraging. However, its 2026 Sustainable Business Strategy—aiming to cover 156 million people and achieve 99.99% power uptime—provides a clear roadmap for mitigating these risks.

The upcoming Capital Markets Day on November 6, 2025, will be pivotal. Investors will be watching for updated tenancy targets, capital allocation policies, and guidance on free cash flow. Current projections for $40–60 million in free cash flow in 2025, coupled with a 7.1% revenue CAGR forecast, suggest Helios is on track to outpace the European telecom industry's 2.7% growth.

Investment Thesis: A Buy for the Long-Term

For investors seeking exposure to the telecom infrastructure sector, Helios Towers offers a compelling case. Its strategic reorientation toward organic growth, margin expansion, and ESG leadership positions it to capitalize on the 7% global market CAGR. The company's ability to generate free cash flow while reducing leverage further enhances its appeal.

While short-term volatility is inevitable, the fundamentals—driven by tenancy growth, operational efficiency, and a disciplined capital structure—support a long-term investment. As the sector grapples with 5G's high costs and regulatory uncertainty, Helios's focus on 4G-driven markets and asset utilization creates a durable competitive advantage.

In conclusion, Helios Towers is not just surviving in a challenging sector—it's transforming. For those with a 5–10 year horizon, the company's turnaround and strategic clarity make it a high-conviction buy.