Tower Xchange

Journal of the telecom tower industry in Africa, CALA and Asia

ISSUE 10 | October 2014 | www.towerxchange.com

How to raise capital for towers

Debt, bond issuance and the impact of
country risk and MNO consolidation

TowerXchange Africa:
< 17,877 towers sold: new African tower market analysis
< How Etisalat Nigeria accelerated the tower sale process
< Case studies on Nigeria, Kenya, Cameroon, South Africa

TowerXchange Americas:
< Latest tower counts and market size data for CALA
< Costa Rica opens up to operators and towercos
< Interview with José Escobar, President of Catalina

TowerXchange Asia:
< Umang Das predicts bright future for India and Myanmar Terry Rhodes back on familiar ground:
< The structure of the tower industry in Malaysia
< How Digicel has excelled in its first towerco venture
Eaton acquires 3,500 African towers from Airtel

Plus! Huawei and Ericsson on the implications of tower deals for managed services Tower Xchange
With special thanks to the TowerXchange “Inner Circle”
Our informal network of advisers: About TowerXchange

TowerXchange is your independent community

Chairman: Daniel Lee Chuck Green Kurt Bagwell
Managing Director CEO President International for operators, towercos, investors and
Intrepid Advisory Partners Helios Towers Africa SBA Communications suppliers interested in African, Latin American
Michel Faivre Hal Hess Riana Donaldson and Asian towers. We’re a community of
Directeur Programme Partage EVP, International Operations and Manager: International Network practitioners formed to promote and accelerate
d’Infrastructure AMEA President, EMEA and Latin America Operations Support
France Telecom-Orange American Tower Vodacom infrastructure sharing in Africa, Latin America
and Asia. TowerXchange don’t build, operate
Jim Eisenstein John Stevens James Maclaurin or invest in towers; we’re a neutral community
Chairman & CEO CEO Former CEO
Grupo TorreSur Irrawaddy Green Towers edotco host and commentator on African, Latin
American and Asian telecoms infrastructure.
Alan Harper Nobel Tanihaha Inder Bajaj
CEO President Director CEO
Eaton Towers PT SOLUSI TUNAS PRATAMA (STP) Helios Towers Nigeria The TowerXchange Journal is free to qualifying
recipients. We also provide webinars and
Marc Ganzi Tunde Titilayo Jeffrey Eldredge
President, Digital Bridge Holdings & Vice Chairman Partner regular meetups. TowerXchange monetizes
Mexico Tower Partners SWAP International Vinson & Elkins this community through hosting annual
Thorsten Schaefer David Meganck Gary Staunton Meetups and the sale of advertising, without
CEO Founder & COO CEO compromising editorial integrity.
azeti Networks Acsys Likusasa Group

Areef Kassam Ayman Al Adl Ahjeeth JaiJai TowerXchange was founded by Kieron
Director of Infrastructure Executive Director, TMT MEA Consultant Osmotherly, a TMT community host and events
GSMA Mobile for Development Standard Chartered Bank Investec
organizer with 16 years’ experience, and is
Andrew Doyle Adeel Bajwa Laurentius Human governed with the support and advice of the
Managing Director Senior GM of Legal Affairs and Senior Director
TowerXchange “Inner Circle” – an informal
Tech & Comms Practice Contracts Corporate Finance
Mott MacDonald Warid Telecom Jabil network of advisors

Nina Triantis Chris Gabriel Suresh Sidhu

former CEO, Zain Africa CEO © 2014 Site Seven Media Ltd. All rights reserved. Neither the
Managing Director, Global
Senior Adviser, Macquarie Group edotco whole nor any substantial part of this publication may be re-
Head of Telecoms & Media
produced, stored in a retrieval system, or transmitted by any
Standard Bank Chairman, Clean Power Systems
Aniko Szigetvari means without the prior permission of Site Seven Media Ltd.
Head, Africa & Latin America TMT Short extracts may be quoted if TowerXchange is cited as the
John Stevens Torsten Esbjørn
IFC source. TowerXchange is a trading name of Site Seven Media
CEO Regional Director, Africa
Ltd, registered in the UK. Company number 8293930.
Irrawaddy Green Towers Ramboll

2 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Meetup | 11

Contents

5 & 46 35 &122 37 &159

Africa: Nigeria, Kenya, Asia: India, Malaysia CALA: Tower counts,
Cameroon and South Africa and Myanmar transactions and Costa Rica
5 Terry Rhodes interview, Airtel tower sale analysis  35 Asia tower counts and transactions 37 CALA tower industry news
46 Nigeria migrates to towerco business model 125 Umang Das: the future for India & Myanmar 39 CALA tower counts and transactions
84 Introduction to the Kenyan tower market 142 TowerXchange’s Malaysia case study 159 TowerXchange’s Costa Rica case study
91 Cameroon: YooMee, BMI; SA: Eaton, Square1 152 Interview: Oliver Coughlan, CEO, Digicel MTC 165 Interview: José Escobar, President, Catalina

80

Regular features
Economic Growth
70
Monetary Policy

60 Fiscal Policy

External Factors
50
29 Africa, Asia, CALA analyses and news
40

30
64 TowerXchange Meetup Africa agenda
20
133 TowerXchange Meetup Asia agenda
10
re

a
ia

da

RC

ia

da

ya

a
Special features
aw

bi

ic

n
da
er
an

oi

en
an

ha
D

fr
m
al

Su
ga
Iv

ig
nz

K
A
Rw

G
Za
M
N
d’

U
Ta

h
ut
te

Source: BMI
So
Co

168 108 How to raise capital 41 Delta Partners on Middle East towers
Impact of tower deals on
195 Energy storage: NorthStar and Amara Raja
managed services for towers
204 TowerPower: Huawei, Mecc Alte & Bladon Jets
169 Huawei link MS with network quality assurance 109 BMI: impact of country risk on African towers
219 Rooftops, masts and towers: TIA and Ganges
172 Ericsson: collaboration with MNOs and towercos 114 Norton Rose’s introduction to debt finance
229 RMS, ILM and SMS: WebNMS and Infozech
175 Mer, TKM Maestro, i engineering, and Camusat 117 HTN’s successful bond issuance
236 H&S: NATE and Capital Safety
190 TowerXchange’s who’s who in managed services 119 UBS: Consolidation among MNOs and towercos

3 | TowerXchange Issue 6 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 3

Africa’s leading, HTA acquires, builds and manages wireless
telecom infrastructure, leasing it to mobile
independent, network operators across Ghana, Tanzania
telecom tower and the Democratic Republic of Congo.
company HTA’s model of shared telecoms infrastructure,
and its scale, helps to deliver improved
efficiency and network quality and reliability
for operators, reduced costs for users and
increased accessibility.
Find out more about our business
www.heliostowersafrica.com
Terry Rhodes back on familiar ground: TowerXchange: Respecting the fact that Airtel
don’t want to disclose which countries are
included, we can deduce from the announcement
Eaton acquires 3,500 African towers from Airtel that the transaction must include Airtel’s towers
in Ghana, Uganda and Kenya. What are you able
Exclusive interview with Eaton Co-founder; from deal structure and operational
to tell us about Eaton’s footprint in SSA after this
transition plans, to improvement capex and the implications for BTS
transaction?

Congratulations to Eaton Towers and Bharti Airtel on the

Terry Rhodes, Co-founder and Director, Eaton
conclusion of a year-long negotiation, culminating in the
Towers: This agreement to add 3,500 Airtel towers
announcement of an agreement for Airtel to sell over 3,500
in six countries gives Eaton Towers the most
towers in six countries to Eaton. Terry Rhodes, Co-founder and
diversified footprint of the African towercos,
Director of Eaton Towers, is uniquely qualified to discuss the
transforms the scale of our business and brings the
transaction; as a 20 year veteran of African telecoms and as one
total number of towers we own and manage to over
of the co-founders of Celtel, many of Airtel’s towers were built
under Terry’s watch before being sold to Zain then Airtel and 5,000.
now Eaton.
This is the first time anyone’s signed so many deals
concurrently, which illustrates the effort put into
Keywords: News, Towercos, Acquisition, Investment,
EBITDA, Capex, Deal Structure, Valuation, Transfer Assets, negotiations by both parties and their advisors.
Co-locations, Capacity Enhancements, Market Entry, Build- Eaton hired Mott MacDonald for market due
to-Suit, Exit Strategy, NOC, Multi-Country Partner, Sale & diligence, Moelis as our financial adviser, Allen
Leaseback, Private Equity, Debt Finance, C-Level Perspective, & Overy for legal and PwC for tax advice. Airtel
Improvement Capex, Infrastructure Sharing, Africa, Ghana, managed the process largely in-house with help
Uganda, Kenya, Airtel, Mott MacDonald, Moelis, Allen & Overy,
from their external lawyers
Terry Rhodes, Co-founder and Director, Eaton Towers PwC, Eaton Towers

This acquisition will supplement our established

Read this article to learn: operations in Ghana, Kenya and Uganda, where
< Creating the most diversified footprint of the African towercos: supplementing Eaton’s established we already have strong relationships with the
operations and entering three new markets local mobile operators. Airtel prefer that we don’t
< Guidance on the valuation, financing and structure of the transaction disclose the other countries whilst regulatory
< Eaton’s operational transition plan and improvement capex budget dialogues are ongoing.
< Securing right of first refusal on BTS, and the impact of this deal on BTS opportunities
< Why their operating credibility cements Africa’s ‘Big Four’ towerco’s leadership position – and what However, I can reveal that we chose not to go to into
their next phase of development might look like Nigeria after IHS recently bulked up their portfolio
in the country significantly. Instead we’ve focused

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 5

 Sorry,
We Lost 2% Energy

Huawei Telecom Energy Solution

Huawei 98% Super High Efficiency Rectifier Module

 “
on markets with 500-1000 Airtel towers where we’re Plus, as you would expect, we are in negotiation
either strengthening our existing position or where with banks to provide debt finance in each country
we’re the first towerco in the market. before the closing of the deal, which typically takes
3-6 months.
There has been an outbreak of rationality – there
will be no more experiences like Ghana with You can usually assume African We do currently have an active fund raising process,
multiple towercos chasing same assets – with this towers will raise US$150-200k being led by Moelis, seeking further equity and debt
deal we’re focusing on markets where we have an per tower unless the deal is finance ready for new opportunities.
established presence or new markets where there
structured to focus on opex
is an opportunity to have a regional presence.
We weren’t bidding for the same towers as Helios
Towers Africa, for example, not as a result of any
collusion, it just fell that way naturally.
reduction, which is not the case
in this instance; Airtel is using
the cash released to retire debt
“ TowerXchange: Does this transaction conclude
Eaton Towers’ interest in Airtel’s African towers?

Terry Rhodes, Co-founder and Director, Eaton

Towers: We were originally negotiating for the
TowerXchange: What can you tell us about the towers in seven countries and have announced
structure of the deal? the acquisition of six. Airtel have several thousand
African towers still for sale.
Terry Rhodes, Co-founder and Director, Eaton towers. With this deal and the sale of 3,100 towers
Towers: It’s a straight 100% sale and leaseback. to Helios Tower Africa, I believe they are broadly on With the deals declared to date including 3,500 sold
No joint venture equity stake has been retained by track to achieve that, with their portfolio in Nigeria to us and 3,100 sold to Helios Towers Africa, there
Airtel. So Eaton Towers continues to be completely still pending. are still plenty of Airtel towers left on the market.
independent with no operators sitting in our
boardrooms. You can usually assume African towers will raise TowerXchange: How has the creation of Airtel’s
US$150-200k per tower unless the deal is structured Africa Towers subsidiaries affected the transfer
The deal includes all the Airtel towers in each to focus on opex reduction, which is not the case of assets?
country, with a ten-year anchor tenant lease. in this instance; Airtel is using the cash released to
retire debt. Terry Rhodes, Co-founder and Director, Eaton
TowerXchange: Appreciating the valuation Towers: The legal structures are different for
is not in the public domain, can you give TowerXchange: Are Eaton raising new capital to different countries. In markets where Airtel has
TowerXchange readers some guidance? finance the deal? transferred their tower assets into a separate Africa
Towers towerco, we’re acquiring that towerco.
Terry Rhodes, Co-founder and Director, Eaton Terry Rhodes, Co-founder and Director, Eaton
Towers: At beginning of the process, the Indian Towers: We have deployed very little of our third The timetable for our operational transition plan is
press speculated that Airtel had an objective to round of equity finance which raised US$195mn accelerated in countries where we already have a
realise US$1.8-2bn from the sale of their African in Q1 2013 - most of that capital is still available. team on the ground, compared with the countries

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 7

 Cables so 90ë s. are

Step into the

future with

!"#$%$&&' &$(&)#&' "*+#),$' -' ./0' #)%%1)23' 45' *-6"(7' 8-4%"(7'

9:"&' %$-;&' 3)' -' <-&3$#' ;$+%)5*$(3' -(;' #$;28$&' "(&3-%%-3")('

;)=(3"*$>' "&' 8)*+%$3$%5' #$*),$;' =:"%$' -%&)' ?2"86'

where we’re setting up a new operation. Towers: Eaton had already added to our sale. With Airtel’s towers having been for
management team and had recruited several more sale for a year, there’s bound to be a lag in
Eaton’s COO Pankaj Kulshrestha has run similar people provisionally who will now join us. Plus maintenance investment which needs catching
transition plans integrating acquisitions during his we will take some people from Airtel – and we are up. TowerXchange estimate that the budget will be
tenure with American Tower in India; it’s all about always trying to recruit the best people locally. around US$10-15k per tower).
the detail, from asset management to regulatory
issues and tax structures which need to be correct We like to operate our own independent NOC TowerXchange: Does the deal include any build
before the real business starts: providing superior rather than using the operator’s, so after an initial to suit (BTS) programmes in these markets?
service to customers. period, that’s another priority. We had already What will be the effect of the current wave of
established legal structures and local offices in the sale and leasebacks on BTS in Africa, now that
TowerXchange: Are there many tenants on new countries – so now all we need do is accelerate so many more towers are being made available
these towers prior to the deal? Or will you have our programme. by independent towercos for co-location?
to evangelise infrastructure sharing in the
markets where Eaton will be the first towerco? TowerXchange: What is the improvement Terry Rhodes, Co-founder and Director, Eaton
capex budget to refurbish these towers for co- Towers: We are expecting to undertake some
Terry Rhodes, Co-founder and Director, Eaton location? BTS programmes, but scale of BTS opportunities
Towers: Yes there are some colocations in each depends on demand and quality in each market.
country where we’re acquiring Airtel towers, but Terry Rhodes, Co-founder and Director, Eaton
we want to increase tenancy ratios significantly. Towers: We have budgeted for refurbishment and When towercos enter a new market, you often
upgrade capex, both to make towers available for see a big pickup in co-locations as it’s quicker and
Each of our new markets has also got one or more co-location, and to make sure we can meet the cheaper than building towers, but when the co-
of Africa’s other leading MNOs who are in favour service level targets Airtel have set. location opportunities start being exhausted, BTS
of partnering with towercos at a corporate level as programmes are typically led by the towerco in
they’ve sold towers themselves. So entering new The improvement capex required per tower locations where there is the possibility of a second
markets is not about evangelising infrastructure depends on the average lifetime of the structure; tenant.
sharing – it’s about implementing and improving how recently they were built, the quality of the
local operations, and about more about moving steel and the build, and whether they were built Like most towercos, Eaton like to secure right of
from bi-lateral swaps to full commercial with capacity for multiple tenants – it can vary first refusal on BTS, but we need to make sure that
arrangements with no restrictions. significantly within a portfolio. Some of these the new towers are economic in their own right
towers date back to my Celtel days, and they’ve – as we are doing in South Africa where we have
TowerXchange: Talk to us about the resourcing lasted well. chosen to build a portfolio from scratch rather than
of your new operations in the green field to acquire towers.
markets. (Editor: as we’ve seen with previous tower
transactions, sometimes maintenance projects TowerXchange: Why did Eaton choose to bid for
Terry Rhodes, Co-founder and Director, Eaton are postponed when tower portfolios are for these particular towers?

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 9

Terry Rhodes, Co-founder and Director, Eaton The four African tower deals in the last few weeks of deals will spend a year or so getting their arms
Towers: Eaton evaluated the countries individually cement the status of the four serious towercos in the around their new assets.
based on the existing market structure, competitive market.
position and growth potential. It helped that, The next phase may see financial rather than
personally, I was familiar from my Celtel days with TowerXchange: Those three deals (Eaton operator deals – consolidation and potential
all the countries in which Eaton has acquired Airtel acquiring 3,500 Airtel towers, Helios Towers changes of ownership. Our strategy has been to
towers. Africa acquiring 3,100 Airtel towers and IHS develop a balanced portfolio across Africa where
acquiring 11,287 towers from Etisalat and MTN we are not over-dependent on one country or
TowerXchange: Why did Airtel choose to partner Nigeria) bring the ownership of African towers one customer. This deal gives Eaton Towers the
with Eaton? by independent towercos above 25%, with over most diversified portfolio in Africa –  which is
41,000 towers now owned and operated by particularly attractive to investors seeking to
Terry Rhodes, Co-founder and Director, Eaton towercos, and a over 20,000 more towers still minimise risk and maximise returns.
Towers: While Bharti Airtel are exploring various on the market or coming to market in the next
options to pay down debt, selling towers is a quarter. At what point should we consider the TowerXchange: Does the progression toward
ten-year deal, it’s not like a normal M&A deal African tower market saturated for independent major capital events preclude Africa’s towercos
from which you can just sell and walk away – towercos? from making capitally intensive investments,
your counterparts have to be able to perform such as hybrid energy and energy storage
operationally. Terry Rhodes, Co-founder and Director, Eaton innovations?
Towers: I think we’re all getting more selective
Airtel have been a significant customer of Eaton’s about the countries we’ll invest in and the deal Terry Rhodes, Co-founder and Director, Eaton
in Ghana and in Uganda, so they know our structures we’ll agree to. Towers: While as a management team we are
operational track record and they know we can certainly concerned about total cash flow, the
deliver. MNO’s emphasis on knowing and trusting Tower deals won’t be as concentrated in SSA financial community still tend to measure towercos’
who they do business with is one of the reasons you in future as they are today – there are also performance in terms of EBITDA – they spend less
don’t see many new entrant towercos successfully opportunities in North Africa. But the very time looking at capex, so operating performance
coming into Africa. small markets are not really interesting now matters. If investment in capitally intensive assets
for companies with 5000+ portfolios. The Airtel reduces opex and improves EBITDA, we’re always
That’s why operating credibility is so important – if transaction has attracted interest because the going to be interested
tower deals were just about maximising cash, the towers sold were in markets of decent size.
MNOs could sell directly to, say, a private equity Terry Rhodes and Keith Boyd will be representing
TowerXchange: What will be the next phase of Eaton Towers, and hosting several round tables,
house. But the operational complexity of Africa
at the TowerXchange Meetup Africa on October 20
means private equity has preferred to invest in development for Africa’s towercos?
and 21 in Johannesburg. To reserve one of the last
companies like Eaton with management teams with
remaining tickets, visit:
operational expertise. Terry Rhodes, Co-founder and Director, Eaton www.towerxchange.com/meetups/africa
Towers: Everyone participating in this latest round

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 11

MER Group. Global Turnkey
Wireless Infrastructure Provider Telecom Division

1. Single to Multi-Tenant
Cell-Site Solutions 2. Low Cost & Rapid
Deployment Sites 3. Innovative In-Building
& Coverage Solutions

Branch
Unit

Mobile
Subscribers

Fiber Optic
Cables

Root Unit

Tower/Site auditing Low CAPEX & OPEX cell-site solutions Multi-service, multi-operator and multiple
Structural analysis No-fuel running sites bands in a single system
Tower & foundation reinforcement Fixed, COW & dismantable sites End to end solution:
Innovative & cost effective site collocation &GmDJFOUMPXDPOTVNQUJPONJDSP#54solutions - Survey
solutions - Design
In-house design & manufacturing of FGmDJFOU - Supply
heavy-load, multi-tenant towers - Installation & commissioning

Visit us at the Tower Xchange Meetup Africa, 20-21 October 2014, Stand No. 36 | Contact Email: [email protected] | mer-group.com
TowerXchange’s forecast for how Which towercos acquired Airtel’s towers in
each African country?

the Airtel towers will be distributed According to TowerXchange research, Eaton

Towers has acquired Airtel’s towers in Ghana,
among Africa’s ‘Big Four’ towercos Niger, Burkina Faso, Kenya, Uganda and Malawi.

Plus snapshots of the tower market in each Airtel country Our research also suggests that Helios Towers
Africa has acquired Airtel’s towers in Tanzania,
Airtel’s tower sale enables Africa’s towercos to achieve scale and Chad, DRC and Congo Brazzaville.
to diversify country and counterparty risk, while the transactions
will enable Bharti Airtel to retire ~US$2.5bn of their estimated Burkina Faso: Eaton Towers will be
US$10bn debt. As the deals have been announced, frustratingly introducing the independent towerco
the countries involved have not been confirmed – here we present business model to Burkina Faso, where Telemob
TowerXchange’s educated guess as to which towerco is acquiring and Airtel vie for market leadership, with Telecel
the towers in which country, together with an overview of the not far behind. 3G was launched in 2013. Mobile
tower market in each country. penetration was 72.1% at y/e 2013, according to
BMI.

Keywords: News, MNOs, Towercos, Research, Deal Structure,

Chad: Helios Towers Africa are the first
Acquisition, 3G, First Mover Advantage, ARPU, Country
and only towerco in Chad, where their
Risk, Anchor Tenant, Sale & Leaseback, Private Equity,
old friends Tigo compete with new counterparts
Infrastructure Sharing, Africa, Burkina Faso, Chad, Congo
Airtel and national operator Sotel Tchad. Airtel has
Brazzaville, Democratic Republic of Congo, Ghana, Gabon,
Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Sierra launched 3G, Tigo has a 3G/LTE license and plans
Leone, Tanzania, Uganda, Zambia, American Tower, IHS to launch imminently. Mobile penetration was just
Africa, Helios Towers Africa, Helios Towers Nigeria, Eaton 36.8% at y/e 2013, according to BMI.
By Kieron Osmotherly, CEO, TowerXchange Towers, Airtel
Congo Brazzaville: Helios Towers
Africa will hop over the Congo river
Read this article to learn: (not literally of course) into Congo Brazzaville,
< Which towercos acquired Airtel’s towers in each African country? with obvious potential to share resources HTA’s
< How did Africa Towers add value to the sites pre-sale? neighboring operations in DRC and with the
< How will the sale of 15,000+ Airtel towers across Africa affect the landscape of the tower industry? imminent acquisition of towers in Gabon. Congo
< How have the capital markets responded to Bharti Airtel’s African tower sale? B saw in-market consolidation with Airtel’s recent
acquisition of Warid vaulting them over MTN to

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 13

become market leaders. Bintel’s Azur are ranked a How TowerXchange forecast the Airtel towers will be divided among
distant third. Africa’s towercos
DRC: Helios Towers Africa will add Airtel’s
tower network, renowned as the farthest
reaching in DRC, to the more urban-centric 729
towers acquired from Tigo in 2010. DRC is a
poster-child for growth potential, with just 4,000
towers covering a population of 75.5mn (that’s
18,875 per site!), spread over 2.3mn sq km, and
mobile penetration still under 20%. DRC’s scale
and growth potential has attracted four tier one
MNOs, Airtel, Orange, Tigo and Vodacom, while
Africell quickly grabbed 20% market share
through aggressive pricing. When TowerXchange
spoke to Africell in July 2014, the company had
co-located on 180 Helios Tower Africa sites, and
had not yet felt the need to build any of their own
towers.

Ghana: Eaton is already active in Ghana,

where they will add Airtel’s towers to
the 750 Vodafone towers they are managing with
license to lease. There are three major towercos
active in Ghana, which have been snapping up
tenancies for over three years. Back in 2010, Helios
Towers Africa setup a joint venture towerco with
Millicom Tigo as minority partners, to which 750
towers were transferred. Shortly afterward Eaton
Helios Towers Africa
Towers closed their deal with Vodafone Ghana,
Eaton Towers
then American Tower set up another joint venture
with MTN to which 1,876 towers were transferred IHS
(ATC Ghana now markets 1,998 Ghanaian towers, American Tower and/or Helios Towers Nigeria
on which the tenancy ratio was 1.4, as reported at Unknown
the end of 2013). MTN leads a similarly crowded Source: TowerXchange

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 15

SYNERGi
smart integrated energy
market for operators, followed by Vodafone, Malawian population covered, with around 800 Which towercos are the most likely buyers of
Tigo, Airtel and Glo, with Expresso struggling towers in the country. Airtel’s remaining towers?
to establish a foothold. Mobile penetration has
passed 100% within Ghana’s population of 26mn. Niger: When Eaton Towers opens up the Gabon: TowerXchange sources suggest
first towerco in Niger shortly, they’ll need Helios Towers Africa have agreed in
Kenya: Eaton Towers haven’t had it easy to be ready to engage with a challenging energy principle to acquire Airtel’s towers in Gabon, and
in Kenya. Their contract to manage with logistics scenario, low population density, and the deal is pending regulatory approval. Gabon’s
license to lease 1,000 Orange / Telkom Kenya sub US$5 ARPU. Airtel has recently secured a 3G oil wealth is partly responsible for the country
towers was cancelled after their counterparty hit license in Niger where it competes with Orange, having one of Africa’s few mobile penetration
financial troubles – Orange are rumored to be SahelCom and Moov (recently sold by Etisalat rates above 100%. Airtel competes with Libertis,
keen to exit Kenya, while yu (Essar Telecom) have to Maroc Telecom). Mobile penetration was just Azur and Moov, recently sold by Etisalat to Maroc
already divided up their assets and left. Why are 34.8% at y/e 2013, according to BMI. Telecom.
they leaving? It’s tough competing with Safaricom,
their 68% market share, their deserved reputation Uganda: Eaton Towers will be adding Madagascar: We understand Eaton
for innovation, and their sticky mobile money Airtel’s Ugandan towers to the 700 towers Towers are in pole position to acquire
service, the world famous M-PESA, through which they acquired from Orange and Warid back in Airtel’s towers in Madagascar, with the deal agreed
25% of Kenya’s GNP now flows. With 16% market 2012. Airtel since acquired Warid, while Orange in principle and pending regulatory approval.
share, Airtel is a healthier counterpart for Eaton, sold out to Africell. Uganda remains ripe for Airtel are the market leaders in a Madagascar
but with uncertainty surrounding the #3 and further in-market consolidation, with seven with around 40% of subscribers, with TELMA and
#4 ranked operators, and an ‘Open Access’ LTE licensed MNOs. American Tower is also active Orange splitting the remainder between them.
network mooted, the economic fundamentals in in Uganda, where they have a joint venture with Mobile penetration remains around the 30% mark.
Kenya may be more attractive than the operator MTN and currently market 1,226 towers. At y/e Madagascan telcos are already familiar with the
landscape, at least in the short term. There are 2013 ATC Uganda’s tenancy ratio was 1.1. concept of independent towercos after the success
around 6,000 towers in Kenya, of which around of TowerCo of Madagascar, formed from an initial
3,500 have 3G antenna. Tanzania: By adding Airtel’s towers to carve out of assets from TELMA, and with a tower
those already acquired from Tigo and count already approaching 300. Madagascar offers
Malawi: Eaton’s acquisition of Airtel’s Vodacom, Helios Towers Africa now has over 75% significant potential amendment revenue as 3G
towers in Malawi marks the debut of the of the towers in a country which couldn’t be more deployment continues for the next 18 months or
independent towerco business model in one of perfectly setup for infrastructure sharing. Each so, with operators pushing for LTE as soon as mid
Africa’s most under-developed telecom markets. of Tanzania’s four main operators (to which one 2015.
According to Mott MacDonald, mobile penetration must add Zantel), is dominant in a different region
is just 35% in Malawi, and growing at just 2.3%. of the country, providing a strong incentive for Nigeria: We hear conflicting suggestions
Airtel lead a dupoloy with TNM. 3G was launched co-location to accelerate nationwide coverage. from sources, but there seems to be a
as long ago as 2009. According to the GSMA, Substantial BTS programmes are also under way, consistent view that American Tower and Helios
geographical coverage is 79%, with 94% of the led by Vodacom. Towers Nigeria are at Airtel’s negotiating table,

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 17

 www.karam.in
E-mail ID : [email protected]
Vertical Anchorage Line System

PROVIDING SAFE ANCHORAGE SOLUTION FOR HEIGHT SAFETY IN TELECOM INDUSTRY

Vertical Anchorage Line System on Vertical Anchorage Line System on Vertical Anchorage Line System on
Rigid Cable Line Rigid Aluminium Rail Rigid Aluminium Rail
Ref. VERTEX PN 7000 Ref. VERTEX PN 8000 Ref. VERTEX PN 9000
possibly tabling some kind of joint bid, more likely
bidding for either different segments of a split Forecast African towerco footprints
portfolio, or indeed simply bidding for 100% of the
assets against one another. There would be some
merit in IHS acquiring Airtel’s Nigerian towers Helios Towers Africa
from a defensive point of view, but a significant
Tanzania
degree of overlapping locations with the assets IHS
Chad Eaton Towers
already acquired from Etisalat and MTN Nigeria
Congo Brazzaville
would seem to reduce the potential value of the
DRC Kenya
portfolio to IHS. Airtel’s towers may simply be
worth less (although not worthless) to Africa’s Niger
Ghana Burkina Faso
most aggressive tower bidder, illustrating that last
mover disadvantage can be a factor even when Malawi
deals are closed within months of one another. For South Africa
a detailed analysis of the Nigerian tower market, Uganda
check out the “Nigeria migrates to the independent HTN & SWAP
tower company business model” editorial in this
edition.
Nigeria
Rwanda: IHS are rumored to be in pole
position to acquire Airtel’s Rwandan American Tower
towers, following their acquisition of 550 towers
from MTN Rwanda in 2013. Rwanda is home to
Cameroon
three tier one MNOs, so has no shortage of credit
Cote d’Ivoire
worthy tenants. MTN leads the market, followed
Rwanda
by Tigo and Airtel. Korea Telecom secured a joint
Zambia
venture with the Rwandan Ministry of Youth and IHS
ICT to build a nationwide LTE network. Mobile Source: TowerXchange
penetration in Rwanda is around 65%, but ARPU
below US$3 had been reported by MTN in 2013, towers in Sierra Leone may yet be bundled with are also held by Airtel, Lap GreenN and Comium).
one of their lowest in Africa. one or more remaining countries, but it’s hard
to imagine towercos being overly enthusiastic Zambia: IHS are likely to acquire Airtel’s
Sierra Leone: Airtel’s Sierra Leone towers to launch in Sierra Leone given the very low Zambian assets in a strategy again
simply have not appeared on the radar penetration rate and lack of other licensed tier one mirroring their recent acquisition of MTN’s
of TowerXchange’s research. It’s possible Airtel’s MNOs (the market is led by Africell, while licenses Zambian 719 towers. Mobile penetration is

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 19

French group Camusat specialises in · Fibre optics. Camusat has developed ePower, an industrial
the deployment and management of tele- · Managed services and maintenance. multi-source, multi-tenant hybrid power system
communications networks. The group has that is cost-effective too.
a presence in five continents, 35 countries In November this year, Camusat will present its
and boasts a staff complement of over various products and services at the AfricaCom eSight by Camusat
2 100 employees. exhibition in Cape Town, South Africa. These Camusat offers an attractive and comprehen-
include the following: sive solution for the monitoring, management
Always on the cutting edge of new technologies, and control of telecoms sites.
Camusat has worked with many telecoms ePower by Camusat eSight is an end-to-end technology solution
operators, equipment manufacturers, tower Telecom power supply is a subfield that is that effortlessly integrates a suite of software
companies and integrators as well as government constantly developing as operators strive to applications and hardware devices to provide
and local authorities. Its business lines include: lower their operating expenditure as well as a complete set of tools to manage network
· Telecom sites construction and installation. their initial capital expenditure. performance, minimise outages/service
· Power systems and renewable energy. Thanks to its extensive knowledge of field interruptions, reduce repair time and meet
· Equipment installation and commissioning. constraints of installation and maintenance, strict service level agreement targets.

Visit us at AfricaCom from 11 to 13 November in Cape Town, South Africa (stand P35) to see these and much more.
For more information, email Sébastien Martin, COO of Camusat Africa at [email protected] • www.camusat.com
approaching 80% in Zambia, where Airtel lead the Even if the tower transaction pipeline slows down Was the strategy a success? Value was certainly
market joined by MTN and Zamtel. after the final Airtel deals and the MobiNil deal added, but did Airtel lose first mover advantage
in Egypt is finally closed, there remains plenty of in several markets, including the critical Nigerian
How will the sale of 15,000+ Airtel towers scope for African tower industry growth. Tenancy market, by changing course from a carve-out
across Africa affect the landscape of the tower ratios are climbing fast but are still well below towerco to a sale and leaseback? We’ll reserve
industry? hypothetical glass ceilings, which themselves judgement until the last of the transactions closes.
are raised all the time with next generation
The Airtel transaction has helped create the technologies stimulating amendment revenue and How have the capital markets responded to
critical mass, scale and diversification of country new entrants seeking co-locations to accelerate Bharti Airtel’s African tower sale?
and counterparty risk that Africa’s private equity time to market. TowerXchange expect to see at
backed towercos have targeted since inception. least one tower opportunity come to market in the Airtel’s share price is up almost 20% since the
TowerXchange don’t think Africa’s current wave attractive South African market in the next year, first of their African tower transactions was
of sale and leasebacks are finished, but as Africa’s while Orange continues to seek partners for an announced.
towercos approach and pass the 10,000 tower MLL deal in Senegal, Mali, Guinea B and Guinea C.
mark, attention will turn to operational excellence And the rumor needle is starting to twitch in North From the moment Airtel’s African tower sale was
and improving margins. Africa. rumored, reports had suggested Bharti Airtel had
targeted raising US$2-3bn from the tower sale to
The Airtel tower deals illustrate how in many How did Africa Towers add value to the sites pay down part of the operator’s ~US$10bn debt.
markets one towerco is now dominant; a healthier pre-sale? How are Airtel faring against that objective?
scenario that in the early days when, for example, TowerXchange forecast the African tower sale will
three towercos competed for a finite number Africa Towers (Airtel’s tower company) net Airtel around US$2.5bn when complete.
of tenancies in a country of just 26mn (Ghana). subsidiaries were registered in all 16 countries
The reality is that most African countries don’t for 12-18 months prior to the tower transactions. While the purchase prices agreed in Airtel’s
have capacity for more than one towerco, Airtel’s towerco were more active in some transactions with Helios Towers Africa (3,100
especially when one considers that the first and countries than others, but what was their focus? towers) and Eaton Towers (3,500 towers) aren’t
second ranked operators are frequently the in the public domain, TowerXchange can make
only counterparties turning a profit. Therefore, Africa Towers consolidated Airtel’s tower assets, an informed guess that around US$1.1bn has
future tower transactions may see more in- demerging them from the parent MNO and making been raised from the sale of 6,600 towers to date,
market consolidation of tower portfolios under the tower transactions easier to complete. They suggesting a cost per tower of around US$175,000.
a single towerco, rather than widespread entry refocused manpower on passive infrastructure. If the cost per tower agreed was nearer US$200,000
into new and competitive markets. Africa’s ‘Big They improved uptime in many countries from in Nigeria, which would be consistent with recent
Four’ towercos have established beachheads in 99.2 or 99.3% to 99.5%. Perhaps most importantly, tower transactions in the country, Airtel’s Nigerian
most of the markets where the fundamentals are Africa Towers increased the tenancy ratio from towers could net a further US$1bn. Add in Gabon,
most attractive, leaving smaller, riskier markets less than 1.1 to 1.3 in many markets. Madagascar, Rwanda and Zambia and a further
increasingly open to new entrants. US$400,000 could be raised

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 21

TowerXchange’s analysis of the 2015. The sale and leaseback of ~3,500 MobiNil
towers in Egypt is believed to be imminent. Orange
also has processes under way in Senegal, Mali and
independent tower market in Africa the Guineas. The South African market may be
reawakening soon, and North Africa is stirring!
A quarter of Africa’s towers (41,500 ) are now owned or operated by independent
towercos, and a further 20,000+ are currently for sale The current wave of sale and leasebacks is likely
to conclude by Q1-2 2015, enabling towercos to
Figure 1: Estimated number of towers owned or managed by towercos in Africa concentrate on transferring assets and deploying
hundreds of millions of dollars of improvement
550 capex to bring newly acquired sites up to a
IHS Africa 1900 2230 14222 380 standard suitable to achieve challenging SLAs and
719 to upgrade structures for co-location.
Helios Towers Africa 750 750 2449 3851

We’re also seeing towercos refocusing on owned

American Tower 1998 1912 1226 rather than managed towers. For example, IHS
absorbed a managed services contract with MTN
Eaton Towers 700700 3,500 Nigeria and a managed with license to lease
170 contract with Etisalat Nigeria. IHS also stepped
SWAP Technologies 700 250 away from a managed services contract with MTN
509 in Sudan and South Sudan, so the towerco now
Helios Towers Nigeria 1300 own 90% of the assets in their portfolio. Similarly
Eaton has moved from a managed service to an
5000 10000 15000 20000 25000
owned tower environment in Kenya. With all the
Source: TowerXchange opportunities for towercos to chose from in Africa,
it’s going to be difficult for operators preferring
Over 17,887 additional African towers will be (3,100 also from Airtel). The previously slumbering managed services deals to attract counterparties.
transferred from MNOs to independent towercos giant American Tower returned to the bidding
in four major deals announced over the Summer of table, and may be closing in on a deal to acquire The future of the African tower market
2014, with at least one more transaction imminent. Airtel’s ~4,000 Nigerian towers.
The size of Africa’s tower industry almost doubled The three private equity backed players among
in a single quarter, with major transactions Independent towercos now own and operate 25% Africa’s ‘Big Four’ towercos are achieving scale.
announced by IHS (acquiring 2,136 towers from of Africa’s estimated 165,000 towers. TowerXchange They are diversifying country and counterparty
Etisalat Nigeria and 9,151 from MTN Nigeria), Eaton continue to forecast that towercos will own 38.8% risk. They are starting to ripen in the eyes of
Towers (3,500 from Airtel) and Helios Towers Africa of Africa’s towers by y/e 2014, rising to 50% by y/e investors, and major capital events may be as

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 23

 Power for the 21st Century

Partner in Power
Technology & Operation
Lower emissions, lower cost & higher performance.

Heliocentris Group . Rudower Chaussee 29 . 12489 Berlin, Germany

WWW.HELIOCENTRIS.COM
Figure 1a: Count differentiating towers that are owned from those that are managed little as 2-3 years away, whether IPO, trade sale
and marketed by towercos or offload to a sovereign wealth or infrastructure
fund.

18000 2000 The big sale and leaseback deals will continue in
Africa for at least the next 3 quarters. The ‘Big Four’
7800
towercos will leave some smaller, riskier markets
and local BTS, rooftop and billboard opportunities
open to new entrants, but TowerXchange don’t
5136 anticipate any ‘middle market’ towercos achieving
a portfolio of over 1,000 African towers in the next
year, unless an established international towerco
4370 700
enters Africa – one or two are maintaining a
watching brief.
Filled bars = Owned Towers
800 700
Unfilled bars = Managed and marketed towers Africa’s telecoms infrastructure ecosystem is being
transformed, one tower at a time. Where is the
700 759
opportunity for your business?

5000 10000 15000 20000

Every towerco with at least 20 towers in Africa will
Source: TowerXchange be represented at the forthcoming TowerXchange
Meetup Africa, taking place on October 20 and 21 in
Figure 2: Africa's regional and prospective new entrant towercos Source: TowerXchange
Johannesburg.
TowerXchange are tracking several towercos who are active in or targeting Africa (there are a couple
more, but we’re not at liberty to disclose them!): 18 different African towercos will be represented,
including senior delegations from American
< Communication Towers Nigeria < Square1 Infrastructure (Nigeria and South Tower, Eaton Towers, IHS, Helios Towers Africa,
< Frontier Tower Solutions (targeting Burundi) Africa) Helios Towers Nigeria and SWAP, plus 10 regional
< Hotspot Network Limited (Nigeria) < TASC (targeting MENA) and would-be new entrant African towercos.
We also have unprecedented investor and MNO
< Infratel (South Africa) < TowerCo of Madagascar
participation, including tower strategists and heads
< Pro High Site Communication (South Africa) < Towershare (targeting MENA) of infrastructure and procurement from five of
< Shared Networks Tanzania (active TowerXchange estimate that these towercos own Africa’s top six operators. Our exhibition is already
infrastructure sharing) or operate a total of around 800 African towers. sold out and the last tickets are selling fast; register
now at www.towerxchange.com/meetups/africa

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 25

 Please feel free to contact the TowerXchange team

Kieron Osmotherly
Founder & CEO
E: [email protected]
M: +44 7771 148001

For editorial & speaking enquiries regarding Americas or Asia:

Arianna Neri
Head of Americas & Asia
E: [email protected]
M: +39 338 111 2103

For editorial & speaking enquiries regarding Africa or Europe:

Frances Rose
Head of EMEA
E: [email protected]
M: +44 7793 045718

For advertising opportunities & event participation:

Annabelle mayhew
Chief Commercial Officer
E: [email protected]
M: +44 7423 512588

Toya Smith
Business Development Manager
E: [email protected]
M: +44 7967 441110

For media partnerships & to request additional subscriptions:

Harpreet Sohanpal
Head of Marketing
E: [email protected]

For the designers of the TowerXchange Journal & brand:

Jon Whitty
Senior Designer & Brand Development
E: [email protected]

The TowerXchange Journal is published by Site Seven Media Ltd.

© 2014 Site Seven Media Ltd. All rights reserved. Neither the whole nor any
substantial part of this publication may be re-produced, stored in a retrieval
system, or transmitted by any means without the prior permission of Site
Seven Media Ltd. Short extracts may be quoted if TowerXchange is cited as the
source. TowerXchange is a trading name of Site Seven Media Ltd, registered in
the UK. Company number 8293930.

26 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 8 | XX

Figure 3: Africa’s biggest tower sharing transactions to date Source: TowerXchange

Publicly stated
Year Operator Country TowerCo Est. # of towers Deal structure
purchase price

2010 Millicom / Tigo Ghana Helios 750 $54m for 60% Joint venture
2010 Vodafone Ghana Eaton 750 Not applicable Operational lease
2010 Cell C South Africa American 1,400* $430m Sale and leaseback
2010 MTN Ghana American 1,876 $218.5m for 51% Joint venture
2010 Starcomms Nigeria SWAP 407 $81m Sale and leaseback
2010 Millicom / Tigo DRC Helios 729 $45m for 60% Joint venture
2011 Millicom / Tigo Tanzania Helios 1,020 $80m for 60%** Joint venture
2011 MTN Uganda American 1,000 $89m for 51% Joint venture
2012 Orange Uganda Eaton 300 Unknown Sale and leaseback
2012 Warid Uganda Eaton 400 Unknown Sale and leaseback
2012 MTN Cameroon IHS Africa 827 $143m Sale and leaseback
2012 MTN Cote d’Ivoire IHS Africa 931 $141m Sale and leaseback
2013 Orange Cameroon & Cote d’Ivoire IHS Africa 2,000+ Unknown Managed services
2013 Vodacom Tanzania Helios 1,149 Approx $75mn for 75.5% Joint venture
2013 MTN Rwanda & Zambia IHS 1,269 Unknown Sale and leaseback
2014 Airtel Unknown Helios 3,100 ~$400-550mn Sale and leaseback
2014 Etisalat Nigeria IHS Africa 2,136 ~$400mn Sale and leaseback
2014 MTN Nigeria IHS Africa 9,151 ~$1,800mn Joint Venture
2014 Airtel Unknown Eaton 3,500 ~$525-700mn Sale and leaseback

*Cell C deal included 1,400 existing towers plus additional towers under construction **Millicom/Tigo’s stake in Helios Towers Tanzania reduced to 24.5% after Helios acquired towers from Vodacom Tanzania in 2013

Figure 4: African tower industry achieves launch velocity

End of Year 2009 2010 2011 2012 2013 2014(f) 2015(f)

Est total # of towers in Africa 120,000 125,000 130,000 140,000 150,000 165,000 180,000
Est # of African towers owned or operated by towercos 100 6,000 9,000 16,661 *25,510 *64,000 *84,500
% of African towers owned by towercos 0.001% 4.7% 6.9% 11.9% 17% 38.8% 46.9%

*Includes an estimate of the number of towers owned by a small but growing segment of regional ‘middle market’ towercos

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 27

 BIG
INTRODUCING THE HIGHEST CAPACITY
GOES

PREMIUM 12V BATTERIES

NORTHSTAR 210 RED AND BLUE+

VISIT US AT TOWERXCHANGE BOOTH 31 OR WWW.NORTHSTARBATTERY.COM

Africa News
with License to Lease basis.

Sontatel’s operating licenses are due to expire in

October 2017.
Cameroon out process to sell an estimated 3,500 MobiNil
CamTel awarded fourth license in
towers in Egypt may finally be drawing toward a South Africa
Cameroon, Viettel finally launches Vodacom not planning to sell South
conclusion.  Sources suggest that Naguib Sawwiris’
Accelero Capital and Eaton Towers have both been African towers, but speculation continues
State-owned fixed line incumbent CamTel has been that Telkom might
shortlisted to acquire the assets.
awarded the fourth mobile license in Cameroon,
Nigeria
joining recently launched Viettel, whose request for Vodacom spokesman Richard Boorman told
Airtel Nigeria tower sale imminent
an extension of their period of exclusivity offering BizTechAfrica that the company had no plans to sell
3G has been turned down, as well as established towers: “One of the key reasons for doing this type of
The sale of Airtel’s towers in Nigeria could be closed
market leaders MTN and Orange. IHS owns, or deal is to facilitate a fast rollout of network coverage,
in Q4 2014, with American Tower and Helios Towers
manages with license to lease, the majority of the especially if you’re balance sheet constrained. We
Nigeria both believed to be involved in final rounds
telecom towers in Cameroon. already have extensive coverage in South Africa, and
of discussion, and IHS potentially interested in
Chad adding assets to those acquired from Etisalat and balance sheets are generally pretty healthy, so the
Airtel brings 3G to Chad MTN Nigeria earlier this year. basic drivers aren’t there. On top of that, we already
Nigeria
have extensive site sharing between the operators.”
India’s Economic Times report that Airtel has InfraCos to be licensed in Nigeria Meanwhile, Telkom are believed to be considering
launched the first 3G network in Chad. Airtel options for the sale or outsourcing the management
have also recently sold their towers in Chad, with Seeking to stimulate fibre deployment, the NCC has of their tower portfolio.
Helios Towers Africa widely believed to be the sought bidders for InfraCo licenses, a key component
counterparty. of the country’s National Broadband Plan. South Africa

DRC Senegal
Cell C hints at nationwide LTE launch,
Vodacom extends into Kasai-Occidental Orange Senegal pilots 4G; towers remain Telkom launches LTE-A
and Kasai-Oriental on the block as part of MLL opportunity
Already serving Johannesburg, Cape Town and
Vodacom is deploying 61 new antennas in remote Orange Senegal has extended their 4G pilot from Pretoria with LTE, Cell C would like to roll out a
areas of Kasai-Occidental (Western Kasai) and Dakar to Saly, bringing the total number of 4G sites national LTE network, using the spectrum that
Kasai-Oriental (Eastern Kasai). to 40. Tigo and Expresso are believed to be starting becomes available when broadcasters switch from
their own 4G trials imminently. analogue to digital.
Egypt
Orange to close MobiNil tower sale
before end of 2014 – sources Meanwhile, Orange continues to be in negotiation Meanwhile, Telkom South Africa will introduce LTE
with several towercos about making their towers in Advanced extending its coverage to a total of 50
TowerXchange understand that Orange’s drawn Senegal, Mali, Guinea B and C available on a Manage suburbs in Greater Johannesburg, Western Cape,

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 29

Tshwane and KwaZulu-Natal by Spring 2015.

Tanzania
Zantel sale rumors denied, 3G extended,
future of towers remains uncertain

Bloomberg quoted unsourced rumors that Etisalat

may be seeking to dispose of it’s 65% stake in A CHAMELEON
Zantel, with Vodacom and Millicom believed
to be interested. However, within days Etisalat BLENDS IN
Chairman Essa Al Haddad stated “last week Etisalat
increased its shares from 65% to 85% in Zantel.” EVERYWHERE
Meanwhile, Zantel has launched it’s 3G network
in mainland Tanzania. Zantel’s Zanzibar-centric
tower portfolio is the last substantial portfolio
of operator-captive towers in Tanzania. Helios
Towers Tanzania previously acquired Millicom and
Vodacom’s tower assets, and are believed to have
added Airtel’s Tanzanian tower assets in a recent
transaction.

Zambia
Airtel Zambia accelerates 3G rollout,
tower transaction imminent
POWER FOR TOMORROW’S TELECOM INFRASTRUCTURE
People want capacity, not visual pollution. The Chameleon from Eltek blends
in with its compact and neutral exterior and stands out with its powerful interiour.
Almost a third of Airtel Zambi’s estimated 1,000 base
stations in Zambia are now 3G enabled. Zambia Your job is to offer people the freedom they take for granted – to access and
remains one of the last remaining Airtel countries process any kind of information anywhere, at any time. So you need to expand
where the towers have not yet been sold – IHS are your 4G/LTE networks – fast. Chameleon small cells power from Eltek gives you
the most likely counterparts following on from their the power you need to succeed.
acquisition of MTN Zambia’s towers.
INSTALLATION VIDEO
Take a look at our installation
Zambia
video, it shows you all the
Zamtel join MTN in launching 4G benefits and how easy it is to
install.

Zamtel plan to extend their LTE network beyond www.eltek.com, e-mail: [email protected]

Kitwe, according to ITWedbAfrica, following MTN

who launched LTE in January 2014

30 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Asia News
to STP for US$ 459 million. The cash deal should be
completed by the end of this year.
Indonesia

Pakistan Telkom Indonesia reconsiders tower

Zong first operator offering 4G LTE The private equity firm sold a 2.4% stake in plans
India Cellular for an estimated US$ 234.7 million,
China Mobile’s Zong is the first national operator corresponding to 85 million shares. Telkom aims at becoming the largest towerco in
to launch 4G LTE network in the country. 4G India
Indonesia by acquiring a majority stake in a local
services are now available in seven cities including Indus Towers rolling out 2,000 new towerco during Q1 2015. The company is reportedly
Islamabad, Lahore and Karachi. Zong plans to towers assessing the capital needed for the deal which
invest US$ 1bn over the next three years and add as could be in the range of US$ 427-854 million. Last
many as 4,000 sites by the end of 2014. Indus Towers, the largest towerco in India, plans to year, the company evaluated the potential sale of
Pakistan roll out 2,000 new towers across the country with a stake in Mitratel and then considered merging
Telenor extends 3G coverage 20% of them located in the Maharashtra and Goa Mitratel with a publicly listed towerco.
circle.
Indonesia
Telenor is extending its 3G services to thirteen new India Sri Lanka Bangladesh
Telkom Indonesia expanding into the
cities bringing the total number of locations covered Bharti Infratel to buy Middle East
by the operator to thirty-two. towers from Airtel,
India
Vodafone and Idea State-owned Telkom Indonesia is disclosing its
Reliance Jio signs deal with Indus Towers international plans to expand into the Middle East
Indian towerco Bharti Infratel is considering and, in particular, into Saudi Arabia. The telco is
Reliance Jio has signed a deal to utilise all of the buying telecom towers from Airtel in Sri Lanka and seizing the opportunity to capitalise on the one
113,490 telecom towers of Indus Towers in fifteen Bangladesh and from Vodafone and Idea in India. million Indonesian living in Saudi Arabia.
indian circles. Under its license, Reliance Jio must Bangladesh Thailand

launch services by May 2015 and is currently Ollo contracts ZTE for 4G rollout DTAC to build 3G and 4G LTE towers
planning to rollout 4G LTE on schedule. The
telco has previously signed infrastructure deals Mobile operator Ollo has contracted Chinese ZTE DTAC is planning to spend US$ 308 million to build
with Reliance Communications, Bharti Infratel, to roll out its 4G LTE network. BTRC has recently new towers in Bangkok and other major cities by
Viom Networks, American Tower Corporation, approved Ollo’s request to import equipment and March 2015. The expected project will create 3,800
Tower Vision, Ascent Telecom, BSNL and GTL start rolling out the network. new 3G towers and 2,700 4G LTE stations.
Infrastructure. Indonesia
Thailand
XL Axiata selling telecom towers True Corp to sell 18% stake to China
India
Providence Equity sells Idea Cellular Mobile
stake PT XL Axiata is planning to sell 3,500 telecom towers

31 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 31

 global picture. local insights
[email protected] | www.ieng-group.com

ment Fib
ploy er
e

Op
ork

ti cs
Netw
SERVICES
700 ISO 3008

M V, H

es
rvic
V&

Se
HV

E
e
EMPLOYEES CERTIFIED SITES UNDER

d
Health & Safety Quality
Ne ag
tw or
Man
OHSAS 18001 ISO 9001
k
MANAGEMENT

A leading provider of infrastructure solutions

LEBANON

Telecommunications and Power Services

SOUTH SUDAN Design, Engineering Procurement, Logistics &
& Construction Warehouse Management
ALGERIA
Power Supply Operations & Maintenance

MYANMAR
BURKINA FASO Mast & Tower Solutions Testing & Commissioning
GHANA
Site Planning, Acquisition Network Equipment Installation
& Property Services Commissioning & Swap-out

CAMEROON
ETHIOPIA
CONGO

UGANDA
DR CONGO RWANDA
Thai telecom group True Corp has signed a strategic drive connectivity and new opportunities for potential investors such as Telenor Group and
partnership agreement with China Mobile to sell Myanmar. Telenor is excited to introduce products Comvik International. Negotiations are ongoing
an 18% stake to China Mobile for US$ 881 million. and services that will include everyone in the while the operator is being privatised.
According to TelecomAsia, the partnership between country’s digital future, and fuel innovation and
China
the two companies will include 4G technology entrepreneurship,” said Jon Fredrik Baksaas, China Communications Facilities
transfer, joint procurement of handsets and President and CEO of Telenor Group. Services Corporation ramping up
networks as well as shared strategies against over-
Mynamar
the-top service providers. Ooredoo reaching 1 million customers in The joint towerco, also referred to as National
three weeks Tower Company, owned by China’s three telcos is
Mynamar
Pan Asia signs first non-recourse, cross- set to start operating by the end of the year with
border financing in Myanmar Ooredoo reportedly reached 1 million subscribers a development plan including initial construction
in Myanmar in three weeks. The telco soft-launched works on 120,000 new towers by the end of 2014,
DBS Bank, ING Bank, OCBC Bank, Standard services on 4 August with free services to then start with roll out by 2017
Chartered Bank and Sumitomo Mitsui Banking its commercial offering on 15 August.
Corporation organised the first ever non-recourse, Visit the TowerXchange.com website
cross border financing in Myanmar for Pan Asia “The response to our launch has been inspiring,”
Majestic Eagle Limited, a towerco involved in the said Ross Cormack, CEO of Ooredoo Myanmar.
< Access to the “Internet of People” in emerging market
rollout of telecom infrastructure. The agreement ”Pent-up demand for mobile communication towers – a trust web of over 7,500 decision makers in
will assign US$ 85 million of financing to the services has surpassed even our expectations,” passive infrastructure
towerco. he said. “This growth will enable more people to
< Independent analysis and commentaries on the
experience our life-enriching services and see the prospects for tower transactions in selected countries
Mynamar
Telenor Group connecting first life-changing opportunities technology can bring.”
< The latest industry emerging market tower industry
customers
Mynamar news – BEFORE it’s published in the TowerXchange
True Corp and YTP’s negotiation on hold Journal, accessible 24/7 from desktop, tablet or mobile
Telenor Group has announced that it has begun
< A comprehensive archive of TowerXchange’s
connecting customers in Myanmar on September True Corp and YTP have put commercial talks on interviews and analyses, searchable by topic, country,
27, as stated in a company’s press release. The roll hold. The companies were in discussions to co- company or grouped by category (e.g. interviews or
out started in the city of Mandalay to then continue launch mobile services but haven’t reached an how to guides)
in Nay Pyi Taw, Yangon and into more towns, agreement. True is planning to launch services in < The latest news and registration information about
villages and rural areas. Myanmar and has recently created a subsidiary. TowerXchange’s Meetups.

Vietnam
“It is rewarding for Telenor Group to be able to MobiFone attracts Telenor and Comvik
contribute to the rapid development of a nation Tower Xchange
by providing essential infrastructure that will The Vietnamese operator MobiFone is attracting

33 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 33

 Energy & Fuel Optimization &
Monitor and Control End$to$End$Remote$Tower$Infra$
Operation Optimization Monitoring$Solu6on
Invendis, does it… $www.invendis.com$

Smart&Energy&Monitoring&&&Management&&
• Precise&Energy&Monitoring&with&easy&billing&
• Power&Source&Op;misa;on&with&built&in&rule&engines&and&remote&control&
op;on&
• Hybrid&swapping&of&power&sources:&Grid&Power&A&Solar&/&Wind&A&Generator&A&
BaEery&
• Reports&on&power&source&u;lisa;on&

Monitor&&&Control&Towers&elements&on&a&click&&
• Control&Generator,&Aircondi;oner&in&sites&at&the&click&of&a&buEon&
• Smart&rule&engine&built&into&the&hardware&controlls&the&tower&elements&on&
demand&basis&
• Site&Environmental&Parameters&Monitoring&

Monitor&and&Save&Fuel;&Get&Alerts&on&fuel&theO&and&filling&&
• Con;nuous&real&;me&fuel&level&monitoring&in&sites&
• Alerts&for&fuel&pilferage&and&fuel&filling&&
• Reports&on&fuel&consump;on&of&generator&in&sites&
• Smart&rule&Engines&will&op;mise&the&usage&of&Generator&enhancing&the&fuel&
efficiency&

Invendis Site&Alarm&Monitoring,&Site&Security&Monitoring&and&Site&
Access&Monitoring&
Invent, Discover. • Alarm&monitoring&with&&email&and&SMS&no;fica;on&to&concerned&team&
• Shelter&Access&informa;on&&no;fica;on&
• Smart&Mo;on&Sensor&to&detect&undesirable&movements&in&site&
• Get&Alarm&no;fica;on&through&SMS&and&Email&
Updated Southern and Southeast Asian tower count and deals
In the following pages, we are pleased to offer our readers TowerXchange’s initial findings on tower counts and major deals in Southern and
Southeast Asia. If you are aware of further details and would like to discuss them with us, feel free to contact Arianna Neri, Head of Asia and
Americas, at [email protected]

Estimated number of towers owned or managed by towercos in India Estimated tower counts for Indonesia’s largest independent towercos

Indus Towers 112,936 Protelindo 10,300

Bharti Infratel 34,000 49,368 - 42% equity stake in Indus Towers Tower Bersama 9,382

Reliance Infratel 50,000 Mitratel 4,000

Viom Networks 42,000 STP 3,500
GTL Infrastructure 29,432 IBS Tower 2,079
American Tower 11,529 Komet Infra Nusantara 500
Tower Vision 8,400
Retower Asia 450
Ascend 4,000
Balitowers 208
20,000 40,000 60,000 80,000 100,000 120,000
State owned MNOs Bharat Sanchar Nigam Ltd and 2,000 4,000 6,000 8,000 10,000 12,000
Mahanagar Telephone Nigam retain 70,000 towers Source: TowerXchange research quarterly filings, site lists Source: TowerXchange, companies’ website, filings, third-party news

Forecast Myanmar tower count by end 2014* Estimated tower count for Malaysia Source: TowerXchange

State-backed and other independent

towercos
Sacofa 765
MPT 1800 Touch Matrix 460

Irrawaddy Green D’harmoni 346

Towers
1500 KJS 309
13,300 Common Tower 260
Pan Asia Towers 1250 Remaining
Infra Quest 201
MNO-captive 3,200
Yikedbina 200

MTC 1250 Perak Integrated Networks 150

Asia Space 137

Apollo Towers 1001 Desabina 118

edotco Melaka ICT Holdings 9 5
3,500
Rangkaian Minang 9 0
0 500 1000 1500 2000 PDC Telecommunications 4 3
Perlis Comm 23
*Removal of duplicate sites at the request of MCIT notwithstanding Source: TowerXchange research

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 35

Updated Southern and Southeast Asian tower count and deals
Asia Tower Deals
Malaysia is home to edotco, the only multi-country
Year Seller Buyer Country USD/Tower Tower Sites Value (USD) towerco in the region and the Diamond Sponsor of our
KJS* company YTL Power Meetup Asia. We are thrilled to follow the evolution
2014 Malaysia 48.5 309 15 million
aquisition International
of edotco in Malaysia and across the region, while we
2012 Hutchinson Protelindo Indonesia N/A 503 N/A report on the wide array of towercos and State-backed
PT Central companies operating in this mature market.
2012 Protelindo Indonesia N/A 152 N/A
Investindo

2012 Indosat Tower Bersama Indonesia 207.6 2500 519 million Finally, Myanmar continues to thrive with Ooredoo
and Telenor both having launched commercial
2012 KPN Telecom Protelindo Indonesia 371.6 261 97 million services over the past two months and four main
towercos working extremely hard to meet the
2010 Essar Group American Tower India 97.1 4450 432 million
country’s ever expanding coverage demands
2009 Xcel* company American Tower India 80 1700 136 million
Interested in finding out more and meeting top
2008 Bakrie STP Indonesia 64.45 543 136 million executives from these markets and beyond? Join us

2008 Hutchinson Protelindo Indonesia 135.43 3692 500 million

in Singapore, 9-10 December 2014 or email me for
further details at [email protected]
* Company aquisition

The independent towerco model extends across Asia: snapshots into India,
Tower Xchange
Indonesia, Malaysia and Myanmar

Two thirds of the 400,000+ Indian towers are

independently owned and the trend is expected to
few attractive tower assets remain in the hands of
operators. Meetup Asia 2014
grow as towercos and MNOs work towards ensuring
rural coverage while adopting alternative urban In the meantime, Indonesia’s towers are changing
December 9-10, Singapore
solutions such as IBSand DAS. After a period of hands and more than 40% of them are already owned
operator market restructuring temporarily halted by towercos. With MNOs increasingly involved in 3G
tower transactions, a pipeline of opportunities is and 4G network rollout, we expect new SLB deals to be
www.towerxchange.com
now perceptible, driven by trade acquisitions as announced over the next few months.

36 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 35

LatAm news
Venezuela
Conatel announces four pre-qualified
MNOs for 4G licenses

A roundup of tower new across Latin America Four companies have pre-qualified for 4G
Panama
Mexico
licenses which should be assigned within the
Phoenix Tower International acquires Bank of America hired by América month of October. The pre-qualified companies
AMT Panamanian business Móvil to sell part of its assets are Movinet, Telefónica’s Movistar Venezuela
and two potential new entrants: Multiphone
Phoenix Tower International has announced the América Móvil has hired Bank of America to Venezuela and Galaxy Entertainment
acquisition of approximately 60 Panamanian sell certain domestic telecoms, as reported by Venezuela.
telecom sites from American Tower. The Bloomberg earlier this month. The Mexican
portfolio represents a mix of urban and giant is planning the sale to cut its market share Conatel, the national telecom regulator,
suburban locations and further contributes to below 50%, as required by the newly enforced announced that the final allocation will
the company’s expansion into Latin America telecom regulation. Interested buyers include occur within ten working days from the
following its creation, back in 2013. AT&T and Softbank Corp of Japan. announcement and after the technical analysis
Mexico Mexico
of the tenders. License conditions include 4G
Telefónica announces Mexican 4G LTE Iusacell in talks with Softbank Corp rollout in key cities within the first year of
investments operation and coverage in all state capitals
Softbank Corp of Japan might invest in Mexican within four years.
Telefónica will invest US$ 225ml in Movistar to telco Grupo Iusacell. The Japanese company Brazil
expand its 4G LTE coverage to 300 cities by the already controls Sprint Corp in the United States LTE spectrum auction concluded
end of 2015. and is reportedly in talks with América Móvil
Mexico
too. The 700MHz LTE spectrum auction ended
700MHz tests ahead of open access Colombia on September 30 and assigned nationwide
wireless network investment Tigo and Une-EPM merged in August spectrum blocks to Vivo, TIM Brasil and Claro.
Algar Telecom increased its spectrum in the
The Mexican Secretario de Comunicaciones y The merger between Colombian telco Tigo and regions covered by its services. As previously
Transportes (SCT) is planning 700MHz tests to fixed line operator Une-EPM was successfully announced, Oi and Nextel didn’t participate in
collect useful information ahead of the planned completed on 14 August. The newly formed the auction. The auction raised a total of US$
US$ 10bn open access wifi network. Local news entity will be able to offer its customers a broad 2.3bn instead of the expected US$ 3.2bn.
sources reported that the Mexican government array of services including fixed and mobile Brazil
has already received the first bid for the state- voice and data as well as TV services. Millicom T4U to launch IPO
owned network but information on the bidder International Cellular, owner of Tigo, will take
haven’t been made public. on net debt of US$ 1.3 billion as part of the deal. T4U Holding Brasil, a Brasilian towerco, and its

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 37

 Peru
shareholder D Dots Investments are planning Entel discloses investment plans for company is the third operator of the country with
to sell an undisclosed amount of shares via an Peruvian entity a 7.6% market share.
IPO.
Chile
Chilean Entel disclosed its investment plans for NII Holdings divesting its Chilean
Brazil
Tim and Oi enhance LTE network its Peruvian operations which will reach US$ 1.2 subsidiary
sharing deal billion for the period 2015-2020. Nextel Peru will
receive as much as US$ 250 million per year in NII Holdings is planning to sell its Chilean
Tim and Oi are extending their network capital with the aim to boost its operations.  Entel operations to a joint venture of companies
sharing deal to 88 new locations by 2015. plans to expand Nextel Peru’s market share from including US private equity firm Optimum
The two operators have firstly signed an LTE 5% to 30% and has announced its intention to Advisers, Argentinian Grupo Veintitres and
network sharing agreement in 2013 which entirely rebrand the company by the end of the UK investment firm ISM Capital. Troubled NII
currently reaches 45 cities. year. Holdings might file for Chapter 11 bankruptcy
Peru
after failing to agree with bondholders on debt
Brazil
Telecom Italia set price for Brazilian Movistar expands rural coverage restructuring.
stake
Argentina
Movistar Peru announced its investment plans 3G and 4G LTE spectrum to be assigned
Telecom Italia has set the asking price for its just under US$ 100 million to connect 2,327 rural in October
67% stake in TIM Brasil at US$ 16.8 billion, locations by 2017. To date, the Spanish backed
with the company’s valuation reaching telco has installed 1,000 towers as part of its rural Four companies have presented documents to
approximately US$ 25.5 billion. Companies rollout programme, as agreed with the government take part in the upcoming 3G and 4G LTE auction.
reportedly interested in TIM’s stake include when renewing its license in January 2013. Spectrum permits should be awarded by the end of
Oi and América Móvil, who are said to be Uruguay
October and operators currently bidding include
discussing a possible joint bid. Movistar launches LTE in Montevideo Claro Argentina, Telecom Personal, Movistar and
Airlink.
Brazil
Telecom Italia assessing tower Movistar has launched LTE services in selected
Argentina
listing locations in Montevideo which will be offered to Telecom Italia still seeking regulatory
existing subscribers for free. The operator plans to approval to sell Argentinian unit
Telecom Italia is said to be assessing a possible expand its 4G services to other locations over the
stock market listing of its Italian and Brazilian next few months. The Secretaría de Comunicaciones (SECOM) has
telecom towers. The company aims at cutting Paraguay
not yet approved Telecom Italia’s plan for the sale
debt and raising capital and the sale of its Claro announces investment plans of its unit to Mexican investment company Fintech,
assets could raise US$ 2.6 billion or more, which offered US$ 960 million back in November
sources report. Claro Paraguay will invest as much as US$ 100 2013. The deadline for the approval has been
million to further expand its infrastructure. The delayed twice already

38 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Updated Americas tower count and deals
In the following page, we are pleased to offer our readers TowerXchange’s initial findings on tower counts and major deals in Latin America. If
you are aware of further details and would like to discuss them with us, feel free to contact Arianna Neri, Head of Asia and Americas, at
[email protected]

period where trade acquisitions will be as common as

SLB deals, with several parties seeking assets in Brazil
1,163 and Mexico.
457
American Tower 11,411 3,496 8,412
While towercos have been relatively quiet, carriers
498
SBA Communications 6,792 have been busy launching 4G LTE services in Mexico,
Brazil, Peru and Uruguay. Venezuela and Argentina
Grupo TorreSur 6,094
both geared up for 4G LTE auctions while critical
Torres Unidas regulatory changes are affecting the landscape of the
local tower industry in Mexico and Chile. And we
Mexico Tower Partners
shouldn’t forget that up to 16,000 towers are reportedly
T4U for sale in Brazil alone.

CSS 341 We expect the next few months to bring some

excitement to the industry as consolidations, IPOs
IIMT
and possi-ble transactions could turn 2015 into the
Phoenix Tower 58 most exciting year to date for the CALA telecom tower
International market
Source: TowerXchange
5,000 10,000 15,000 20,000 25,000 30,000
Key executives from American Tower, Grupo
Will 2015 be the most important year to date for the CALA tower industry? TorreSur, Torrecom, Catalina Inc., Torres Andinas
and Digital Bridge Management have already
Will 2015 be the most important year to date for the transactions that took place in 2013. However, it’s confirmed that they will speak at the 2nd Annual
CALA tower industry? interesting to note how the two major transactions TowerXchange Meetup Americas, taking place in
of 2014 - namely AMT-BR Towers and SBA-Oi - were Hollywood, FL, 28-30 April 2015, in co-location with
So far, 2014 has been a relatively quiet year for the valued US$ 1.5bn versus US$ 2.5bn of all eight transac- PCIA’s Wireless Infrastructure Show. Contact me for
regional tower industry if compared to the wave of tions we reported on in 2013. We may be entering a further information at [email protected]

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 39

Major tower transactions in Latin America 2012/2013
Participate in the
Date Seller Buyer
Phoenix Tower
Country USD/Tower Tower Sites Value in USD
TowerXchange
community
Q3 2014 American Tower Panama N/A 60 N/A
Intl.

Q2 2014 BR Towers* American Tower Brazil 2,530+ 2,100

212 excl. rights 978 million

Q2 2014 Oi SBA Brazil 321 1,641 527 million

Tower
SBA Brazil 321 2,007 645 million manufacture
Q4 2013 Oi Communications & installation
Q3 2013 Nextel American Tower Brazil 148 2,790 413 million

Q3 2013 Nextel American Tower Mexico 239 1,666 398 million

Investors & Independent
SBA advisers towercos
Q3 2013 Oi Brazil 163 2,113 343 million
Communications
Global Tower
Q3 2013 American Tower US/Costa Rica N/A 15,700 4.8 billion
Partners*

Q2 2013 Oi BR Towers Brazil 119 2,113 251 million

Tower Xchange
Q2 2013 Oi Grupo TorreSur Brazil 138 2,113 293 million Decision
Regulators makers
& policy at
Q1 2013 Sitesharing BR Towers Brazil N/A 350 N/A makers operators

Q1 2013 Axtel American Tower Mexico 283 883 250 million Equipment
& managed
Q4 2012 Telefonica Torres Unidas Chile N/A 400 N/A services

SBA
Q4 2012 Telefonica Brazil 223 800 178 million
Communications

Q4 2012 OI Grupo TorreSur Brazil 214 1,208 258 million

Q3 2012 Telefonica BR Towers Brazil 132 1,912 252 million Join the TowerXchange LinkedIn™ group at

Q2 2012 Telefonica American Tower Brazil 150 1,500 225 million

www.linkedin.com/groups/
TowerXchange-4536974
Q1 2012 Telefonica American Tower Chile 172 558 96 million

* company acquisition
Special thanks to Jonathan Atkin, Managing Director at RBC Capital Markets for his contribution

40 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 40

Passive infrastructure Passive infrastructure outsourcing has been
a global trend for more than a decade. Tower
transactions which first occurred in the US and

potential in the Middle East Europe have spread to other regions such as South
America, Africa and Asia while fuelling the growth
Recent developments and Delta Partners’ perspective on the tower market going forward of tower companies such as American Towers,
Crown Castle, Bharti Infratel, Tower  Bersama,
Federico Membrillera heads up Delta Partners’ Corporate Helios Towers, Eaton Towers, IHS and others.
Finance division and he has served clients globally across In this context, the Middle East is one of the few
different aspects including investment banking and remaining ‘virgin’ markets. Even though site
mergers & acquisitions, corporate finance and strategic sharing among operators in the region is relatively
management consulting. He has over 20 years of experience common, there have been virtually no transactions
in the telecoms, media and digital (TMD) industry. to date.

Yana Kamburova has been with Delta Partners for close to In 2011 STC and Mobily were in talks to spin off
five years, executing Corporate Finance mandates in the their towers in Saudi Arabia into a joint venture
telecom, media and digital (TMD) space in the Middle East, with the operators retaining ownership in the
Africa, Europe and Asia. She has worked on a number of joint venture and becoming anchor tenants. The
Federico Membrillera, Managing Yana Kamburova, Associate,
Partner and Head of Corporate Delta Partners Corporate tower transactions and passive infrastructure strategy deal was expected to reduce passive infrastructure
Finance, Delta Partners Finance
engagements. related capital and operating spend. However, no
agreement has been reached as yet. Separately, in
Keywords: MNOs, Towercos, Strategic Consultancy, Research, Market Overview, 3G, 4G, Tenancy 2012 Batelco kicked off a sale process for its towers
Ratios, Market Forecasts, Network Rollout, Business Case, First Mover Advantage, New Market Entrant, in Bahrain and Jordan, but in the end decided
Densification, Regulation, Country Risk, Anchor Tenant, Decommissioning, Operator-Led JV, Sale & Leaseback, not to proceed with the deal because according
Infrastructure Sharing, Middle East, Saudi Arabia, Iraq, Kuwait, UAE, Jordan, Yemen, Oman, Lebanon, to the Group’s CEO Sheikh Mohamed Al-Khalifa
Bahrain, Qatar, Zain, Omantel, Nawras, Batelco, STC, Mobily, Vodafone, Ooredoo, Etisalat, Du, Asiacell, Korek,
the various proposals received “did not create
Mobitel, Viva, Wataniya, Delta Partners
sufficient, long-term economic value”. Batelco
would instead look for tower sharing opportunities
Read this article to learn: in its countries of operation.
< Update on recent developments in the passive infrastructure markets in the Middle East
< Reasons for the lack of tower deals in the Middle East So, why have there been no transactions in the
< Overview of each tower market in terms of tower count, expected market growth and regulatory Middle East?
environment
< Zoom-in on the tower markets in Saudi Arabia, Iraq and Kuwait There are a number of reasons behind the
relatively underdeveloped tower market in the

41 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 41

No significant transactions around tower sharing and outsourcing in the Middle East or could be targeted at the full tower portfolio of
the regional players (e.g. Zain Group, Ooredoo,
Date Players Country Details
and STC). In either case, the optimal transaction
Zain Jordan signed an agreement with the military’s structure for each market needs to be tailored
July 2014 Jordan Special Communications Commission on site sharing according to its maturity, growth prospects, the
operators’ own ambitions and the regulatory and
Omantel and Nawras agreed to jointly deploy sites to
April 2014 Oman tax environment in the market in which they
remote villages across Oman
operate.
Batelco announced focus on infrastructure sharing with
May 2012 Bahrain, Jordan There are over 70,000 mobile telecom towers
other operators and parked sale-and-lease-back talks
in the Middle East, according to our estimates.
Mobily and STC were in discussions to spin off their The markets with most towers are Saudi Arabia
June 2011 KSA towers into a separate company, however, agreement (~30,600), Iraq (~12,300), UAE (~8,500), Jordan
has not been reached
(~5,900) and Kuwait (~5,100).
Ooredoo and Vodafone signed outdoor site sharing
May 2009 Qatar
agreement The outlook for tenancy ratios is good given the

Estimated number of towers in the

August 2007 UAE Agreement between Etisalat and Du to share sites Middle East
Source: Press releases

Middle East. To begin with, the mobile telecom Lastly, some operators continue to perceive their
market has been historically characterised by high towers as a strategic asset and are reluctant to
ARPUs, healthy EBITDA margins and reasonable outsource them in light of the threat of increased
debt levels, which has reduced the operators’ competition and market share loss.
need for funds or need for cost reductions.
Secondly, passive infrastructure outsourcing Green shoots in the desert
has not received the necessary regulatory
support. There is no mention of tower sharing Despite the lack of tower deal making in the Middle
in the telecom regulations of Kuwait and Yemen, East, we expect the tower market in the region to
while only recently Qatar, Lebanon and Iraq become active in the next 12 to 18 months given
have started to look closely into the matter.  The the willingness of some of the leading operators
remaining regulatory frameworks encourage to put passive infrastructure in the centre of their
infrastructure sharing but there is little clarity on strategy and the interest expressed by leading
the requirements for the set-up and licensing of a towercos in the market. Potential transactions
towerco and the transfer of passive infrastructure. could be executed on a country by country basis Source: Operators’ annual reports, press releases, Delta Partners analysis

42 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 42

 “
uptake of 3G and 4G services.

We estimate that there are approximately 30,600

towers in Saudi Arabia. The operators have 2G
network coverage ranging from 90% to 97% of
population and all of them have launched 3G
The outlook for tenancy ratios is good given the expected coverage and LTE services. Future rollout requirements

expansion in certain countries (e.g. Iraq, Yemen), capacity additions in the

mature markets and potential new entrants (e.g. Iraq). The relatively high
network overlap in most markets  supports the case for the simultaneous
carve out of more than one tower portfolio per market
“ are expected to be fuelled mostly by 3G and LTE
coverage improvements and capacity upgrades
needed to support the data growth in the country.
The MVNO licenses per se would not contribute
substantially to the demand for towers given
that they will be leasing capacity from existing
operators, however the MVNOs would increase
the competitiveness of the mobile telecom market
which would in turn lead to the operators’
enhanced consciousness of their cost base.
expected coverage expansion in certain countries ratio upside. The value creation potential of the
(e.g. Iraq, Yemen), capacity additions in the mature tower market in Jordan, on the other hand, is So far the discussions between STC and Mobily
markets and potential new entrants (e.g. Iraq). The hindered by its high electricity costs and the tax to set up a towerco have not been successful. At
relatively high network overlap in most markets environment. present, passive tower infrastructure is shared
supports the case for the simultaneous carve out of between STC, Mobily and Zain on a selective and
more than one tower portfolio per market (similar Saudi Arabia one-on-one basis. Overall, Saudi Arabia’s market
to the STC and Mobily deal) which would allow for attractiveness is driven by its size and future
significant site decommissioning and optimisation, Saudi Arabia is the most sizeable mobile telecom network capacity expansion. Additionally, the
increased tenancy ratios and cost savings. market in the Middle East with 54.8 million potential set-up of a towerco would be facilitated
subscribers. It comprises of three mobile operators by Saudi Arabia’s well developed regulatory
We perceive as most attractive from a passive (STC, Mobily and Zain) and is expecting the structure that promotes a liberal and competitive
infrastructure perspective the following markets: launch of three MVNOs. Saudi Arabia’s mobile telecom market and infrastructure sharing.
Saudi Arabia, Iraq and Kuwait. Even though penetration has grown steadily and is forecast
UAE and Jordan have a sizeable tower base, they to reach approximately 180% by the end of 2014, Iraq
are considered as less attractive for a variety of making it one of the top SIM-penetrated markets in
reasons. In the case of the UAE, there are only the world. The growth in voice services is slowing Iraq is the second largest market in the Middle
two mobile players (Etisalat and du) operating in down and future growth is expected to be driven East in terms of number of towers (estimated at
a closed environment which limits the tenancy by a focus on high-value services and stronger approximately 12,300). There are four mobile

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 43

operators present in Iraq (Zain, Asiacell, Korek Kuwait will enable healthier tenancy ratios.
and Mobitel, the latter operating solely in the
Kurdistan region). Mobile penetration currently Kuwait is another sizeable, yet mature market. It Middle East towers: opportunity in the waiting
stands at approximately 100% which, taking is characterised by high penetration rates (180%)
into account the double SIM effect, allows for and historical growth attributed to multiple SIM The telecom markets in the Middle East are rather
further subscriber growth. 2G network coverage ownership, temporary visitors and immigrant diverse, ranging from highly penetrated markets
is generally good, with Zain and Asiacell covering workers. There are three operators present in boasting the latest technologies to voice-only
98% and 97% of the population respectively, Kuwait: Zain, Viva and Wataniya, accounting for markets with ample opportunities for growth.
however, Korek is lagging behind. The mobile a total of 5,100 towers. The network coverage in The common aspect of these markets is the lack
data market is still underdeveloped because of Kuwait is extensive: 2G services cover 100% of of tower outsourcing activity, which is otherwise
the government’s delay in granting 3G licenses. the population, 3G services in the range of 95% present virtually everywhere else, from the
Currently 3G services are only offered by Mobitel and 98% and LTE has been deployed nationwide. Americas to South East Asia. In other words,
in Kurdistan. All in all, the demand for towers is Therefore, there will be only limited rollout for the Middle East presents a unique first mover
expected to be strong, fuelled by further 2G and 3G coverage purposes going forward, however 3G and opportunity for both mobile and tower operators.
rollout. Additionally, the network overlap is less LTE capacity upgrades will be needed to cater for Being a first mover in the tower space has its
than perfect (i.e. Zain’s network is concentrated in the data growth in the market. The limited market inherent risks but the potential rewards typically
the South while Asiacell and Korek’s networks are growth in Kuwait and significant network overlap outweigh the risks. One thing is for sure - being
concentrated in the North of Iraq), which underlies supports the business case of simultaneous carve the last mover is almost always the worst possible
an attractive tower company business case. out of more than one tower portfolio, because this outcome
Furthermore, substantial savings at the operator
P&L level are expected because of the efficiencies About Delta Partners
in fuel (including fuel security), security and
maintenance that a specialised tower operator Delta Partners is the leading Advisory and Investment firm specialised in Telecoms, Media and Digital
would bring. with offices in the Middle East, Africa, Europe, Asia, Latin America and the United States of America.
We partner with global and regional telecom providers, digital players and other TMD clients to help
From a tower market opportunity perspective, the them address their most challenging strategic issues.
current timing for setting up a tower company
is very attractive – the Iraqi government has just Our unique combination of Management Consulting, Corporate Finance and Private Equity creates
granted the mobile operators the right to rollout unparalleled value for our clients, investors and business partners.
3G services, therefore 3G rollout will be under way
soon; also, a new mobile license has been on the For more information, please visit www.deltapartnersgroup.com
regulator’s agenda for some time. However, it is
unlikely that any tower transaction will take place Delta Partners Corporate Finance Limited and Delta Partners Capital Limited are members of the Delta
before the difficult security and political situation Partners Group of companies and are authorised and regulated by the DFSA.
in Iraq is resolved.

44 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Main drivers of the tower markets in the Middle East
KSA Iraq Kuwait UAE Jordan Yemen Oman Lebanon Bahrain Qatar

Population (2014E) 30.6m 35.9m 4.0m 9.3m 6.7m 27.5m 3.3m 4.5m 1.2m 2.2m
Macro

GDP / Capita (PPP) (2014E) $32,300 $7,700 $40,200 $31,000 $6,300 $2,400 $30,300 $15,100 $36,000 $97,000
GDP growth (2014E-17E, CAGR) 3.2% 7.2% 1.8% 4.1% 7.0% 4.1% 2.7% 5.6% 3.1% 6.3%
Number of mobile operators 3 4 3 2 3 4 2 2 3 2
Mobile Market

Subscribers (2014E) 54.8m 36.8m 7.2m 17.3m 10.0m 16.4m 6.0m 4.1m 2.9m 4.1m
Penetration (2014E) 179% 103% 180% 186% 149% 60% 182% 92% 246% 187%
Data subscriber growth
10.6% 6.8% 9.4% 13.7% 16.2% 24.4% 13.0% 15.9% 15.4% 12.6%
(2014E-17E, CAGR)

Estimated number of towers 30,600 12,300 5,100 8,500 5,900 3,900 3,200 2,000 1,700 1,100
Population coverage 97% 98% 100% 100% 100% 75% 97% 99% 100% 100%
Networks overlap (high/mid/low) Mid Mid High High High Mid High High High High

Further Further Further

Further
3G/LTE 3G/LTE 3G/LTE 3G/LTE 3G/LTE 3G/LTE
3G rollout Further 2G Further LTE
Expected future rollout rollout and 3G rollout capacity capacity rollout and rollout and capacity
and LTE rollout rollout
capacity upgrades upgrades capacity capacity upgrades
deployment
upgrades upgrades upgrades
Tower Market

Fourth Third mobile

New mobile
mobile license
Expected new entrants 3 MVNOs license No No No No No No
license has possible after
possible
been delayed 2015

Existing tower sharing

prevalence (high/mid/low) Mid Low Mid Low High Low Low Low Mid Low

In the process Intends to

No No In the process
Promotes of formulating Informal Mandatory site Promotes establish Promotes
regulation on regulation on of introducing
Regulatory environment infrastructure infrastructure support for sharing, subject infrastructure infrastructure infrastructure
infrastructure infrastructure mandatory site
sharing sharing site sharing to availability sharing sharing sharing
sharing sharing sharing
regulation regulation

Source: IMF, Wireless Intelligence, operators’ annual reports, press releases, Delta Partners analysis

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 45

Special feature:

Nigeria ushers in an era of

infrastructure sharing
At the beginning of 2014, 14% of Nigeria’s towers were owned by
independent towercos. By the end of 2014, 85% of the country’s towers will
be owned by towercos, representing almost all the tower assets except those
owned by Glo.

Airtel triggered this wave of activity with their pan-African tower sale,
although the Nigerian component is yet to close. Meanwhile, Etisalat and
MTN Nigeria have gotten to market first, selling 2,136 and 9,151 towers
respectively to IHS for a total of over US$2bn. But the transactions are
markedly different – Etisalat divested around four fifths of their tower
portfolio in a 100% sale and leaseback deal, while MTN retained an
unprecedented 51% equity in a joint venture towerco over which IHS will
have full operational control.

TowerXchange’s Nigeria special feature shares Enda Hardiman’s vision of the

new Nigeria, contrasts that with TowerXchange’s own editorial commentary
on the convergent telecom, tower and power markets in the country, and
takes a closer look at the Etisalat and MTN tower deals with IHS, including an
exclusive interview with Andrew Kemp, CFO of Etisalat Nigeria.

In this comprehensive special feature:

47 Editorial: Nigeria migrates to the independent tower company
business model
52 How Etisalat Nigeria accelerated the tower sale process and realised
a good valuation
55 IHS secures 9,151 towers from MTN Nigeria, Africa’s largest tower
transaction to date
58 The case for MNOs to retain “Schmuck Equity” in joint venture
towercos
61 Enda Hardiman on “The new Nigeria”

46 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Nigeria migrates to the independent Nigeria is Africa’s largest mobile market with over
125mn* SIMs circulating among a young population
of around 170mn*. While penetration may sound
tower company business model substantial at 72%, multi-SIMing and an urban-rural
divide contribute to a low 32%* unique subscriber
TowerXchange’s analysis of the Nigerian tower market, where 85% of penetration rate.
towers will be owned or operated by independent towercos by y/e 2014
Estimates vary as to the size of Nigeria’s tower
IHS acquired 2,136 towers from Etisalat Nigeria network. If you add up the number of towers each
in August, then added a further 9,151 towers operator claims to have, and add the independent
from MTN Nigeria in September 2015, giving IHS towers, you get to a figure of 28,340. But if you avoid
an estimated 56% share of Nigeria’s towers. With double counting tenancies on shared towers, the
Airtel’s Nigerian towers also ‘on the block’, and total may be nearer 25,000.
Helios Towers Nigeria, SWAP and several smaller
What we know for sure is that there are not enough
towercos already accounting for a further 2,000
towers in Nigeria – the Association of Licensed
plus towers, TowerXchange forecast that 85% of
Telecommunications Operators of Nigeria (ALTON)
Nigeria’s towers will be owned or operated by
estimates that the market needs another 50,000
independent tower companies by the end of 2014, to 60,000 towers for optimum mobile network
representing almost all the country’s towers coverage across the country, perhaps less now the
Kieron Osmotherly, CEO, TowerXchange except Globacom’s. market is increasingly geared up for efficient co-
location. Indeed, IHS figure on a more conservative
Keywords: Editorial, O&M, Construction, Market Overview, Investment, 3G, 4G, Capex, Rental Rates, Valuation, total of around 40,000 macro towers being sufficient
Batteries, Urban vs Rural, Tenancy Ratios, Capacity Enhancements, Fuel Security, Market Forecasts, QoS, Build-to- for coverage and capacity.
Suit, Site Level Profitability, Densification, Permits, Regulation, SLA, Tax, Uptime, Off-Grid, Unreliable Grid, Hybrid
Power, Greenfield, DG Runtime, Site Visits, Sale & Leaseback, Fencing, RMS, Site Management System, Infrastructure
Network extensions cannot come quick enough
Sharing, Africa, Nigeria, IHS, Helios Towers Nigeria, SWAP, American Tower, Etisalat, MTN, Airtel, Globacom
for some. Last year Nigeria’s Communications and
Technology Minister complained that 40% of the
Read this article to learn: rural population in her country had no coverage.
< The current size and change shape of the Nigerian telecom tower market The business case for rural network extension is
< Nigeria enters an era of collaborative network planning complex in Nigeria, given the high costs of building
< Why Nigeria’s towers are worth valuations above their replacement cost towers, the low mobile penetration and ARPU to
< Contenders for Airtel’s Nigerian towers, which have yet to be sold be found in remote areas, the lack of electricity
< The challenge of bringing cell site energy solutions in Nigeria up to co-location standard (99.9% uptime) and poor quality of transport infrastructure, and
persistent security threats in some areas.

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 47

Nigerian mobile market generates a significant proportion of SSA’s mobile revenue a highway may be behind Nigeria, as networks will
be planned on a more collaborative basis, where
possible leveraging the nearest independent tower,
Connects (mns) blue line Recurring revenue (US$mns) green bars
rather than building new towers.
150 10000
At the turn of this year, IHS, Helios Towers Nigeria
8000 and SWAP accounted for around a quarter of
Nigeria’s towers. IHS alone now own 14,222 or
120
6000 56% of Nigeria’s towers, and two thirds of Nigeria’s
towers are now operated by towercos. By the end
of the year, almost 21,500 Nigerian towers will
4000
90 be owned or operated by independent towercos,
representing 85% of the assets. The only substantial
2000
operator-captive portfolio remaining will be
Globacom’s, who have hitherto indicated no interest
60 0

“
2010 2011 2012 2013
Source: GSMA Intelligence

In urban areas, substantial cell site densification and local authorities add layers of bureaucracy that
is required to overcome Nigeria’s notorious QoS can slow site builds to a snail’s pace. In many areas,
problems, which culminated in the regulator’s state and local authorities have imposed swingeing
network planners in Nigeria have
suspension of SIM card sales by MTN, Airtel taxes on cell sites. However the Federal government had the option to co-locate on a
and Globacom earlier this year. 3G is still being recently pledged to tackle this latter problem, which finite inventory of independent
rolled out and a wave of data demand is swelling. may result in as much as 70% of investment in towers, but the number of
With 3G services launched as long ago as 2007, infrastructure being spent on taxes.
leasable sites will increase
3G penetration is around 15%* at present. LTE
trials have been undertaken, and smart phone
penetration (believed to be in the mid-teens%) is
growing.

Federal regulators encourage infrastructure sharing

The changing structure of Nigeria’s tower
market

For several years, network planners in Nigeria have

had the option to co-locate on a finite inventory of
exponentially this year. The days
of building parallel infrastructure
on either side of a highway may
be behind Nigeria
“
and by extension the development of Nigeria’s independent towers, but the number of leasable
tower industry, but the telecoms, consumer sites will increase exponentially this year. The days
protection and environmental regulator, plus state of building parallel infrastructure on either side of

48 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Tower ownership / operation in Nigeria (based on estimated tower counts) to more than one vintage of shared towers with
tenancy ratios nearer three than two, and many
600
sites in sought after metropolitan locations have
IHS four or more tenants on long term leases (tier one
MNOs aren’t the only tenants on the towers). The
2,935 Existing IHS towers
4,000 economics make sense, which is why so many
Towers to be acquired from MTN
parties are vying for a ‘piece of the action’ in
Towers to be acquired from Etisalat Nigeria.

With Airtel’s towers still on the block, who are

HTN
the contenders for Nigeria’s remaining towers?
9,151
SWAP
4,000 Smaller Nigerian towercos Helios Towers Nigeria has raised capital through a
recent bond issue and are believed to be bidding for
Airtel, currently ‘on the block’
Airtel Nigeria’s towers. IHS will doubtless scrutinize
Remaining towers, primarily belonging to Glo whether the portfolio adds sufficient unique
200 700 locations to be worthy of their participation in
Etisalat's retained towers
1,300
the process. TowerXchange believe that American
2,136

“
Source: TowerXchange

in divesting a tower portfolio that may now include Nigeria is a painfully slow process, and time to
a limited number of unique locations, thus attract a market is critical. In our dialogues with leading
significantly reduced valuation were they to come stakeholders at Africa’s MNOs, we think there is A structurally sound tower in
to market in the future. A structurally sound tower considerable “pent up demand” for co-locations, Nigeria in an attractive location
in Nigeria in an attractive location could fetch a which could signal a healthy increase in tenancy could fetch a valuation of US$200-
valuation of US$200-300k, if brought to market in ratios in the short term after assets change hands.
a timely manner. And judging by the swathe of
transactions, that time is now!

With the cost to build a tower in Nigeria coming in

at around US$200-250k, is the premium justified
For example, it’s notable that Etisalat Nigeria’s
recent transaction with IHS didn’t include the usual
a build to suit programme, in anticipation of the
impending opportunity to co-locate on MTN and
Airtel’s towers.
300k... With the cost to build
a tower in Nigeria coming in
at around US$200-250k, is the
premium justified...? Absolutely!
“
given that IHS paid an estimated US$277k per
tower for Etisalat’s towers? Absolutely! Acquiring, Lease rates have generally been higher in Nigeria
permitting and building a green field tower in than in much of the rest of SSA, Nigeria is host

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 49

How many of Nigeria’s towers are on position to announce the acquisition of Airtel’s are acquiring one of the largest energy generation
reliable or unreliable grid connections Nigerian towers in Q3-4 2014 for more than US$1bn. resources in the country – MTN Nigeria alone
and how many are off-grid? Helios Towers Africa and Eaton Towers are not generates enough power to provide for 10 Nigerian
believed to be bidding to acquire Airtel’s Nigerian states!
towers, and the smaller local Nigerian towercos
probably lack the necessary capital. The challenge isn’t just the scale of Nigeria’s cell
site energy requirement, nor the unreliability of a
Some commentators had suggested that one or grid typically available for just five hours a day, at a
1,047 reliable grid (<6
hours outage per day)
more of Nigeria’s larger portfolios may be split quality so variable that only 60% of it can be used.
between two towercos along a North-South divide, Quoting from the GSMA Green Power for Mobile’s
creating competition between the towercos to (GPM) most recent bi-annual report, “In Nigeria,
provide the best service, potentially resulting in the where the national grid meets only 30% of the
10,645 transfer of towers, or at least BTS opportunities, to country’s energy requirements, even base power
unreliable grid the superior service provider. At present this seems requirements are largely met through the use of
an unlikely outcome and a North-South split would diesel generators (with the associated cost and
have separated the relatively prosperous South environmental implications).” At the GPM Working
from the poorer Northern region – a Northern Group in Lagos earlier in 2014, it was revealed
Nigerian towerco would have faced very difference that 7,066* of Nigeria’s cell sites run on dual diesel
operational challenges from a Southern Nigerian gensets 24/7, burning vast energy opex. Despite
towerco. the hyperbole of press releases, there are few solar
12,560 off grid hybrid sites in Nigeria, but no shortage of hybrid
Operational challenges battery sites (MTN alone has installed 2,660*). This
leaves an inviting opportunity for a towerco, or an
With the sale of the majority of Nigeria’s towers to ESCO that can live with a towerco’s exacting terms,
independent towercos, the operational challenges to invest in Nigeria’s towerpower infrastructure and
that were the MNO’s problem are now the tower unlock energy opex savings.
Source: GSMA GPM
companies’ opportunities. Those opportunities
include: improving site level profitability through Fuel theft in Nigeria is believed to add more
Tower (AMT) bid for Etisalat and MTN’s towers investment in energy efficiency; reducing fuel theft; than 30% to diesel costs. The ‘diesel mafia’ are
(and yes they were prepared to provide both AC and unlocking economies of scale in maintenance entrenched in some supply chains, rendering
and DC power). AMT had previously distanced processes. certain roads impassable without paying a “toll”
themselves from bidding for any assets in Airtel’s and vandalizing solar panels which threaten the
pan-African tower sale, but their appetite appears Power is the primary challenge facing the new flow of diesel. Tales of generators being stolen by
to have changed; the Economic Times of India quote owners of Nigeria’s towers. In acquiring Nigeria’s ramming through palisade fences or lifting them
unnamed sources suggesting that AMT is in prime distributed communication network, towercos out with cranes are too common to be considered

50 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 “
mere anecdotes. Robust site hardening solutions Towercos will have paid around US$4bn to build
are required, a substantial investment for Nigeria’s and acquire 85% of Nigeria’s towers by the end
new tower owners, but one which will pay of 2014. Pent up demand for co-locations will see
dividends both in reduced shrinkage and in service tenancy ratios rise fast, generating tower cash
differentiation from towercos whose investment in flow that quickly justifies the capital deployed. But
Pent up demand for co-locations
site hardening may lag, and who may thus find the the spending spree will not be over – hundreds
achievement of SLAs more challenging.
will see tenancy ratios rise fast, of millions of dollars of improvement capex will
generating tower cash flow that be deployed bringing tower structures and power
By consolidating Nigeria’s tower portfolios,
towercos such as IHS have a unique opportunity to
unlock economies of scale by creating efficiencies
in site operations and maintenance (O&M). The
management of active and passive infrastructure
But the spending spree will not
be over – hundreds of millions of
dollars of improvement capex will
be deployed
“
quickly justifies the capital deployed. solutions up to a standard to ensure the exacting
SLAs of multiple tenants can be met. Towercos will
now oversee the vast majority of BTS programmes
in Nigeria, a country where a further 15,000 towers
could be added in the coming year. So in conclusion,
at Nigeria’s cell sites has hitherto been outsourced, TowerXchange call this as a win for Nigeria’s
primarily to Ericsson and Huawei, under contracts MNOs, a win for Nigeria’s towercos, a win for their
which in many cases may have to be restructured investors, a win for tower and power equipment
after the transfer of passive infrastructure assets of the tower transactions in Nigeria has even forced and service vendors and, most importantly, a great
from MNOs to towercos. tier one OEM’s to stand up and take notice – a opportunity for the enhancement and extension of
partner like Ericsson or Huawei could perform Nigeria’s communications infrastructure – a win for
Below the tier one OEMs, Nigeria is host to a a valuable role in consolidating and managing the people of Nigeria!
fragmented ecosystem of frontline O&M and all those local subcontractors, while unlocking
*Source: GSAM Market Intelligence and GSMA GPM. All other
refuelling subcontractors, with smaller contracts efficiencies by sharing resources across passive and statistics drawn from the TowerXchange Journal and our
divided among a plethora of regional players. active infrastructure maintenance. So, this is a great proprietary research.
Where previously O&M resources were duplicated, opportunity for the towercos and site monitoring
for example with one regional subcontractor and management vendors, and the shake out will
All the leading stakeholders in the Nigerian
maintaining 50 sites for MTN, another 30 sites for see winners and losers at the managed services
tower industry, including C-level representation
Airtel and a third 20 sites for Etisalat Nigeria, there layer of the value chain.
from IHS, American Tower, Helios Towers
may now be the opportunity to consolidate those
Nigeria, SWAP and their counterparts at MTN,
contracts and resources under a single regional Conclusion
Etisalat and Airtel, will be participating in the
supplier, reducing the drive time that amplifies the
TowerXchange Meetup Africa, taking place on
cost of site visits. Supplementing such efficiencies Nigeria’s migration to the independent tower
October 20 and 21 in Johannesburg.
with robust remote monitoring solutions and company business model will be complete by
advanced site management systems back at the the end of 2014, releasing substantial capital and For details of how to join them, visit www.
NOC also offers the opportunity to progress from ushering in a new era of collaborative network towerxchange.com/meetups/africa/
scheduled to preventative maintenance. The scale planning for MNOs.

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 51

How Etisalat Nigeria accelerated Launched in 2008 as the fourth GSM operator to
come to market in Nigeria, Emerging Markets
Telecommunication Services (EMTS) trades as
the tower sale process and realised a Etisalat Nigeria and is a 40-30-30% partnership
between Etisalat, Mubadala and a consortium of

good valuation Nigerian investors.

How the vision of the executive sponsor and the sale of other Nigerian MNO’s TowerXchange: Tell us about your role in the
transaction, and what motivated you to do this
towers galvanised the sale process deal now?

In this exclusive interview, TowerXchange speaks to Andrew Andrew Kemp, CFO, Etisalat Nigeria: When I joined
Kemp, CFO of Etisalat Nigeria. Andrew was executive sponsor of Etisalat two years ago as CFO, I looked at our
Etisalat Nigeria’s recent sale of 2,136 towers to IHS Africa. Andrew balance sheet and felt we had trapped a lot of value
had advocated the disposal of previously outsourced towers to by outsourcing rather than disposing of our towers.
unlock the value of co-location, and he oversaw a process that At the time Huawei, Nokia and IHS managed our
enabled Etisalat Nigeria to bring their towers to market first, towers, and I felt this structure failed to unlock the
securing one of the highest valuations per tower on the African co-location revenue opportunity.
continent.
Etisalat had previously tried to sell all our towers
Keywords: Interview, MNOs, Acquisition, 3G, Deal Structure, across sub-Saharan Africa as a portfolio transaction,
Rental Rates, Valuation, Co-locations, Network Rollout, Data an ambitious plan which required the buy-in of
Room, QoS, First Mover Advantage, SLA, Anchor Tenant, Uptime, so many different stakeholders that it ultimately
Sale & Leaseback, C-Level Perspective, Stakeholder Buy-In,
proved too complex to complete.
Infrastructure Sharing, Africa, Nigeria, IHS, American Tower,
Nokia, Huawei, Standard Bank, Norton Rose Fulbright, PwC,
KPMG, Banwo&Ighodalo, Etisalat Nigeria However, I remained an advocate of divesting
Andrew Kemp, CFO, Etisalat Nigeria
our towers to drive network rollout and QoS
improvements, and I started to get some traction in
Read this article to learn: the second half of 2013 after extensive analysis of
< Execution focus: how Etisalat Nigeria started their tower sale process last but accelerated to close first our tower asset options and engagement with key
< The importance of conducting critical negotiations face to face stakeholders. I became the executive sponsor of
< The structure and valuation of the deal including which assets were included and implications for power the transaction, and made a case to the Board that
< How the deal has been structured to facilitate Etisalat Nigeria’s ongoing 3G rollout if we could put ourselves in the mix for bidding
< The need for a collaborative approach to radio planning in a market where most towers are shared on Nigeria’s towers, then we could optimise the
valuation of the portfolio. The Board approved the

52 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

strategy in December 2013. Fulbright as our lawyers. We took some tax advice Andrew Kemp, CFO, Etisalat Nigeria: For now we’ve
from PwC and accounting from KPMG. Lagos law retained c600 sites and are looking at options for
So Etisalat Nigeria were the last to start the tower firm Banwo&Ighodalo were also an important part some of those sites. We’ll certainly keep the data
sale process, but the first to close. of the team. centres, media gateways and BSCs – they won’t
pass over to the towerco, but they will continue to
TowerXchange: Given that around a year ago it I have a personal rule with complex transactions manage those sites.
became apparent that Airtel had switched from like this that I don’t negotiate by email. So we got
a strategy to launch their own towerco to instead everyone into the office for seven solid days to TowerXchange: Is power passed through, or
divesting their African towers, which prompted break the back of the drafting of the deal. Thanks is IHS assuming responsibility for energy
MTN to bring their Nigerian towers to market, to the pragmatism of both buyer and seller, we got equipment and logistics?
what were the keys to expediting Etisalat’s 90% of the work done in that time, which made
transaction to bring your towers to market first subsequent approvals and scheduling easy. A Andrew Kemp, CFO, Etisalat Nigeria: IHS are buying
when you started the process last? transaction like this must be led by business people. all the DGs, batteries et cetera. They’re providing a
full service and they’ll be responsible for diesel, site
Andrew Kemp, CFO, Etisalat Nigeria: My team and TowerXchange: Can you confirm a few details security, community relations and environmental
I had a strong execution focus. We quickly secured of the deal – is a pure sale and leaseback or has issues.
stakeholder engagement, and created a detailed EMTS retained any equity?
project plan with small deadlines and milestones, TowerXchange: I read that Etisalat Nigeria
such as getting an MOU out in good time, and Andrew Kemp, CFO, Etisalat Nigeria: It’s a 100% were exploring hybrid and renewable energy
allowing adequate time to set up the virtual pure asset sale. solutions a year or so ago – did those investments
data room. The motivation to get to market first materially affect the valuation of the assets?
galvanised the business to respond, and I had a very TowerXchange: Appreciating the financial terms
supportive Board whose approval was required at of the deal are not in the public domain, can Andrew Kemp, CFO, Etisalat Nigeria: We did
several milestones. you give us some guidance on the valuation you evaluate and deploy some renewable energy
achieved? solutions for lower power consumption sites a
We also had some practical advantages. We were year or so ago, but it wasn’t a significant enough
only selling 2,136 towers as we have been co- Andrew Kemp, CFO, Etisalat Nigeria: You’re programme to have a material effect on the
locating on independent towers for many years. right that the purchase price is not in the public valuation of the portfolio. We looked at higher
All our sites were less than five years old, so site domain. We remain pleased with an outcome power consumption sites too but found renewables
documentation was more complete than one might which balanced cash released with ongoing were less effective for media gateways and BSCs.
imagine for portfolios up to twelve years old. operating costs in line with the market and a strong
commitment to quality of service. However, once we made the strategic decision
I should also give credit to a very strong advisory to sell our towers, we de-prioritsed our focus on
team who supported this transaction. We engaged TowerXchange: Have EMTS sold all your sites to renewable energy recognising this would become
Standard Bank as advisers, and Norton Rose IHS? a towerco responsibility post any sale. Under the

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 53

terms of our deal IHS will invest significant capex Andrew Kemp, CFO, Etisalat Nigeria: There are in Nigeria and for data quality in particular. These
over next two years to harmonise power provision no people moving from Etisalat Nigeria to IHS in factors have been contemplated in our agreement
with their existing sites. this deal. Since inception, Etisalat Nigeria have with IHS.
had Huawei, Nokia, IHS and their subcontractors
TowerXchange: Were American Tower interested operating our sites, so those capabilities have TowerXchange: Did your deal with IHS include a
in Etisalat Nigeria’s towers? If so, were they largely resided on their payrolls even before the BTS programme? How do you anticipate the BTS
prepared to offer a tower+power full service? tower sale. Etisalat Nigeria still maintain a modest market evolving as towercos acquire an ever-
team to manage and monitor network performance, increasing proportion of Nigeria’s towers?
Andrew Kemp, CFO, Etisalat Nigeria: American all that changes is who is doing the work; now it’s
Tower were interested and they were prepared more IHS and less Huawei and NSN. Andrew Kemp, CFO, Etisalat Nigeria: There was no
to provide tower+power. We went to visit them in BTS programme incorporated into our deal with
Uganda and saw some innovative and impressive TowerXchange: How are your existing managed IHS, although we could construct one should it be
approaches to both security and power. services contracts with Nokia and Huawei going required.
to be transitioned?
Both IHS and American Tower’s offers were However, we’re currently working on the premise
compelling propositions, but in the end IHS’s Andrew Kemp, CFO, Etisalat Nigeria: Some of our IHS will be able to close another deal with a major
existing capabilities in Nigeria suggested they could managed services contracts were up for renewal, Nigerian MNO, in which we’d be encouraged to take
provide a lower risk transition. so we were able to anticipate that with the timing more space on existing sites to which we haven’t
of this transaction. However, in some cases more previously had commercial access.
TowerXchange: Given that Etisalat Nigeria has substantive contract restructuring will be necessary.
the best QoS in the country, you’ve set the bar The details will be agreed through a tripartite One of the impacts of Nigeria’s towers changing
fairly high for IHS, what are your KPIs around transition plan between Etisalat Nigeria, IHS and hands is that our radio planning needs to be driven
QoS and availability? our current managed services partner in which by a more integrated and collaborative approach.
we’ll examine each service in turn and, where Economics are going to be driven by colocation on
Andrew Kemp, CFO, Etisalat Nigeria: Our SLAs are appropriate, transition those from out current the nearest available site, not by building a new site
fairly simple with a focus on passive uptime. We managed service provider to IHS. at a specific grid reference.
know IHS are capable of 99%+ availability on their
own sites, so that’s what we’re asking for going TowerXchange: How have you structured the TowerXchange: How are Etisalat Nigeria going to
forward. deal with IHS to facilitate Etisalat’s ongoing 3G manage the relationship with IHS post-sale?
rollout?
TowerXchange: What are the implications of the Andrew Kemp, CFO, Etisalat Nigeria: We had
tower sale for the restructuring of any internal Andrew Kemp, CFO, Etisalat Nigeria: IHS already started a migration to a contract manager
competencies and teams concerned with passive understood Etisalat Nigeria requirements for structure, so that won’t change dramatically. We’ll
infrastructure? further growth and flexibility to enable us to ensure our regular executive governance meetings
maintain our reputation as having the best network with IHS work to the fullest extent

54 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

IHS secures 9,151 towers from MTN Examining the valuation and structure of the
deal, and the context of the Nigerian towers
In early September 2014, IHS has announced a
Nigeria, Africa’s largest tower transaction to date deal to acquire 9,151 towers from MTN Nigeria,
Deal consolidates IHS’s African market leadership and defends their home market of Nigeria representing all the towers in the Nigerian market
leader’s network.

Nigeria 14,222 Congratulations to IHS Africa on the acquisition

The deal value was not announced, but
of one of the most attractive tower portfolios
TowerXchange sources suggest the transaction
in emerging markets! The deal sets records as
value was around US$1.8bn. With MTN retaining
Africa’s largest tower transaction to date in scale
a substantial equity stake, the valuation works out
(9,151 towers) and deal value (around US$1.8bn),
as close to US$200,000 per tower. Cost per tower
securing some of the most valuable towers in
remains an imperfect means of evaluating tower
Africa for IHS, at a cost of around US$200k per
transactions without knowing the lease rate,
site. In this analysis, TowerXchange looks at the
and without detailed knowledge of the condition
terms of the transaction and it’s implications
and location of sites. However, Nigeria is known
for BTS, for investor perceptions of IHS, and for
to support healthy lease rates, and MTN’s sites
potential interest in Airtel’s Nigerian towers,
are renowned for the quality of structures and
which remain for sale.
equipment. MTN’s is also Nigeria’s largest network,
supporting the largest subscriber base – MTN has
Keywords: News, Towercos, 3G, Deal Structure,
Cote d’Iviore 2,230 Cameroon 1,900 market share of around 46%.
Valuation, Transfer Assets, Due Diligence,
Batteries, Capacity Enhancements, Build-to-
Suit, Densification, Country Risk, SLA, Hybrid TowerXchange feel there is solid justification
Zambia Rwanda ? 720 Power, Improvement capex, Joint venture, for IHS outbidding rival towercos to secure this
719 550
Infrastructure Sharing, Africa, Nigeria, portfolio. Nigeria is the largest market in Africa in
Goldman Sachs, Allen & Overy, Citi, Freshfields, terms of mobile consumption, with over 125mn
Airtel, Etisalat, MTN, IHS SIMs in circulation. Indeed CEO Sifiso Dabengwa
Source: TowerXchange
recently said “Nigeria (was) by far the major
Read this article to learn: contributor” to MTN’s 9% increase in profits in H1
< An examination of the valuation and structure of the deal 2014.
< Why IHS has been able to secure 56% of Nigeria’s towers
< How IHS will invest US$500mn into upgrading the towers and power systems Nigeria’s market fundamentals are excellent for
< What does this mean for the 15,000 more towers Nigeria needs? towercos. Nigeria has a healthy competitive MNO
< Implications of the MTN and Etisalat Nigerian tower sales for the remaining Airtel towers environment, with new data providers entering
the market. There is potential for substantial

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 55

amendment revenue with 3G still being rolled Tower ownership / operation in Nigeria (based on estimated tower counts)
out, and LTE being piloted. Nigeria has a long
runway for growth among a young population 600
with a burgeoning middle class, yet where unique
subscriber penetration remains just 32% (source: IHS
GSMA). 2,935 Existing IHS towers
4,000
Towers to be acquired from MTN
Under the terms of the deal, a joint venture
Towers to be acquired from Etisalat
newco will be formed which will be an IHS Group
company, but in which MTN has a significant
stake. IHS will have 100% operational control – the HTN
independence the tower company being important 9,151
SWAP
for customer relations and future business.
4,000 Smaller Nigerian towercos
Goldman Sachs and Allen & Overy advised IHS on Airtel, currently ‘on the block’
the transaction; Citi and Freshfields advised MTN.
Remaining towers, primarily belonging to Glo
200 700
Why IHS? Etisalat's retained towers
1,300
IHS has a substantial presence in Nigeria, with 2,136
600 staff ready to ensure they ‘hit the ground
running’ with both the 9,151 MTN and the 2,136 Source: TowerXchange
towers recently acquired from Etisalat. IHS has
a tried and tested methodology for transferring A closer look at the portfolio and the capex to be years. With no BTS programme explicitly bundled
assets from MTN – they are a trusted partner and invested in it into the deal, this suggests a substantial investment
the two companies are used to working together in This is a high quality portfolio of assets. A number averaging just under US$55k per tower.
Cameroon, Cote d’Ivoire, Rwanda and Zambia – it of the towers IHS are acquiring from MTN Nigeria
will be easier to assimilate these new assets into an already have a second tenant on them.  IHS The five year term of this investment suggests
IHS business that was already running 4,000 towers conducted the usual rigorous due diligence on the it incorporates initial improvement capex and
in Nigeria. towers, many of which they will have been familiar subsequent phases of investment. TowerXchange
with as IHS previously had a managed services understands the US$500mn budget will be deployed
IHS has already delivered on challenging SLAs contract with MTN Nigeria. for the usual post-transaction augmentations;
despite the energy complexity that characterises the new battery banks and generators, strengthening
Nigerian tower market. Uptime of 99.9% has been The press release announcing the IHS / MTN towers to increase load for co-location, maintenance
achieved across IHS’s owned towers in Nigeria, Nigeria deal calls attention to IHS’s investment programmes and, in due course, alternative energy.
thanks in no small part to IHS’s state of the art NOC. of US$500mn into the network over the next four IHS has invested over US$100mn into proprietary

56 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

hybrid energy resources to accelerate the pace What this deal means for IHS lease on a fifteen year contract in Cameroon and
of tower innovation and energy management in IHS was born in Nigeria. With the deal to acquire Cote d’Ivoire. In Nigeria IHS had a small ‘manage
Africa. all 9,151 of MTN Nigeria’s towers, combined with license to lease’ business with Etisalat, and
with IHS’s previously announced deal to acquire a managed services business with MTN, both of
An additional 15,000 towers for Nigeria 2,136 of Etisalat Nigeria’s towers, investors will which have been absorbed as owned towers in
Estimates of the current number of towers in perceive IHS as focused on Nigeria (where 71% of this transaction. After these transactions, IHS
Nigeria vary between 24,000 and 26,000. IHS’s towers are located), with some interesting now owns all their towers in Nigeria, consisting of
additions to diversify country risk. IHS has also 14,222 towers, or around 56% of the towers in the
The professionalisation of co-location sales and established themselves as the market leading country.
service is unlikely to suppress demand for new towerco in SSA – they will have 20,001 towers on
towers in Nigeria. Operators and towercos were the continent when the Nigerian transactions close. What next for Nigeria
equally reluctant to build within a few hundred IHS’s long term contracts, proven operational Airtel’s Nigerian towers remain for sale.
meters of an existing site before the recent deals successes, and blue chip counterparties make the TowerXchange has been able to confirm that
closed, and nothing will have changed – the towerco highly investible. neither the 3,100 Airtel towers acquired by Helios
transfer of assets from MNOs to towercos is Towers Africa (HTA), nor the 3,500 Airtel towers
unlikely to adversely impact demand for build to TowerXchange have spoken to some investors acquired by Eaton Towers includes Airtel’s towers
suit programmes. IHS, for example, are achieving with a higher tolerance for country risk who in Nigeria. Neither HTA nor Eaton is expected
organic growth of around 6% per annum within feel Nigeria is SSA’s most investible telecom to bid for Airtel’s Nigerian towers. It remains to
their network. market, and thus IHS is the continent’s most be seen whether the location of Airtel’s Nigerian
investible towerco. Other investors favour a more towers means their acquisition would be additive
Geographical coverage extensions and population conservative approach to country risk and to deal to IHS’s already substantial footprint, or whether
growth could see Nigeria’s tower count increase structure – indeed more than one African towerco IHS might also be motivated to bid for the towers
to 40,000 towers, but the main driver of growth balked at MTN’s equity requirement in the joint as a defensive strategy. TowerXchange expects
will be data demand. Data penetration in Nigeria venture, but with IHS and their partners’ greater American Tower and Helios Towers Nigeria to also
is currently below 10% but is forecast to rise appetite for risk may come the potential for greater be interested in Airtel’s Nigerian portfolio.
beyond 40% in the next four years. With such reward.
unprecedented growth, the weight of data carried When the Airtel Nigeria tower transaction closes,
by the network will drive cell site densification The deals with MTN and Etisalat in Nigeria have as many as 85% of Nigeria’s towers will be owned
initially in dense urban areas but, as data usage enabled IHS to finalise their transition from by independent tower companies. With Globacom
becomes more pervasive, the need for densification managed services to focusing on owned towers. remaining disinclined to divest their towers,
will spread to suburban and rural areas. IHS now owns 90% of the towers in their portfolio, one will be able to consider the Nigerian tower
Amendment revenue (adding 3G and eventually 4G having also previously stepped back from a acquisition market mature, and attention will turn
antenna to 2G sites) has fuelled the success stories managed services deal with MTN in Sudan and to absorbing newly acquired assets, improvement
of the independent towerco business model in so South Sudan. IHS’s sole managed towers remain capex and efficiency improvement programmes,
many markets – Nigeria will be no different. 2,000 Orange towers managed with license to delivering on SLAs and expansion of the network

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 57

The case for MNOs to retain “schmuck MTN selectively retains equity stakes in joint
venture towercos

equity” in towerco joint ventures In an interview with Moneyweb in August 2014,

MTN CEO Sifiso Dabengwa suggested “in Nigeria we
MTN retains a 51% stake in Nigerian towers, 49% in Ghana and Uganda intend to have 51%”, referring to MTN’s equity stake
in what we now know is a towerco joint venture
between MTN Nigeria and IHS.
The African independent towerco business model
seems to be working. More and more towers are
MTN retaining a majority stake is a markedly
transferring from MNOs to towercos, more and
different approach to the operator’s strategy in
more tenants are being added to towers. As 2G voice
Rwanda, Zambia, Cameroon and Cote d’Ivoire,
networks are overlaid with 3G and even 4G data
where MTN sold 100% of the equity in pure sale and
networks, anchor tenants are starting to add second
leaseback deals (with IHS as counterparty). It’s also
antennas to selected towers, generating amendment
a different approach to Uganda and Ghana, where
revenue. BTS programmes are yielding organic
MTN retained a 49% minority stake in joint venture
growth (and even better tenancy ratios). Efficiency
towercos (with American Tower as counterparty).
programmes are reducing opex costs. It’s looking like
betting on African towercos might pay dividends. So I
Independent towerco retains operational
thought I’d have a look at the bet MNOs are making on
control, trust
African towercos by retaining equity in joint ventures.

It is important to note that IHS retains 100%

Keywords: Editorial, MNOs, Towercos, Deal operational control of the joint venture towerco
Structure, Valuation, Tenancy Ratios, Business being formed from their acquisition of MTN’s
Model, Exit Strategy, SLA, Anchor Tenant, Uptime, Nigerian towers.
ROI, Sale & Leaseback, Infrastructure Sharing,
Africa, Nigeria, American Tower, Helios Towers The independent tower company business model
Africa, MTN, IHS is dependent on that first word, “independent”, to
By Kieron Osmotherly, CEO, TowerXchange
secure the trust of tenants. Elaborate ‘Chinese walls’
are structured within the contracts and governance
Read this article to learn: processes of joint venture tower companies;
< Which MNOs are retaining equity in which joint venture towercos and how much they are retaining having MNOs as board members does not mean
< How the towerco ensures they retain independence, operational control and trust their representatives stay in board meetings when
< A closer look at the recent joint venture between IHS and MTN Nigeria sensitive matters, such as other tenant’s leaseback
rates, are discussed. So MTN retaining a majority

58 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 “
stake in their joint venture towerco with IHS in their agreement with MTN, and therefore what the
Nigeria requires no compromise in the protection implications are for future refinancing and exit
of competitively sensitive data. So there is no strategies. IHS’s investors scrutinised the structure
implication that the structure of the joint venture of their deal with MTN exhaustively, such that they
as 49-51% as opposed to 51-49% adversely affects became comfortable with its unique structure.
the prospects for co-location sales, nor does it affect Perhaps most critical for IHS and
it’s investors is whether and how
the level of trust those tenants can place in their
towerco partner.

“Schmuck equity”

At TowerXchange, we’re advocates of MNO’s

a path from their 49% minority to
a 51% majority equity ownership
is defined within their agreement
with MTN
“ IHS and MTN create a win win scenario

So MTN, IHS and their partners are embarking

into uncharted territory with the unique structure
of their Nigerian joint venture. Could further
emerging market towerco joint venture towercos
structuring tower transactions to retain what Helios be structured with the operator as the majority
Towers Africa’s Chuck Green called “Schmuck shareholder? I feel this deal structure is unlikely to
Equity” – retaining some equity in the joint venture be repeated.
towerco to benefit from the relative favorable African tower assets, they considered retaining a
relative multiple arbitrage between MNO and minority stake, but chose instead to complete a pure IHS were committed to their vision of building and
towerco valuations. Retaining “Schmuck Equity” asset sale to maximise cash released to pay down defending a market leading position in Nigerian
makes sure the tower strategists don’t look like debt. towers. That commitment is justified by the fact
Schmucks for selling assets for US$200mn that a few that towercos have been trading in Nigeria for long
years later are valued at US$1bn! Unprecedented enough to prove that tenancy ratios well in excess
of two can be achieved in urban areas. Combine
There are plenty of examples of African tower You may have noticed that all the aforementioned that with the need for network extension and
transactions where the operator retained “Schmuck towerco joint ventures in Africa involve the densification, and you have a potent set of Tower
Equity”, starting with the ground-breaking deals operator retaining only a minority stake. Speaking Cash Flow drivers. So when IHS saw an opportunity
between Helios Towers Africa and Millicom (Tigo) to one of the other analysts covering the telecom to acquire Africa’s leading operator’s tower assets,
in Ghana, DRC and Tanzania, where Millicom tower sector, neither he nor I could think of a in Africa’s most profitable telecoms market, in IHS’s
retained a 40% stake in the joint venture. Indeed, precedent worldwide where an operator retained a priority market, they were prepared to be flexible
Helios Towers Tanzania was restructured to reduce majority stake in a towerco, operator-led carve out about the structure of the deal.
Millicom’s stake to 24.5% and enable Vodacom towercos such as Indus Towers, Bharti Infratel and
to retain a 24.5% stake when their towers were edotco notwithstanding. MTN were in a strong position. They didn’t need
acquired and rolled into the same entity. to sell their Nigerian towers. So they could name
Perhaps most critical for IHS and it’s investors is their terms. And MTN’s terms included retaining
Retaining an equity stake comes at a cost of course. whether and how a path from their 49% minority to an unprecedented majority stake. I’m not sure any
When Airtel first floated the idea of divesting their a 51% majority equity ownership is defined within other towerco would or could have done the deal.

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 59

 “
Operator stakes in African towercos and the number of assets each injected

51% 49% 49%

MTN The “Schmuck Equity” retained by
9,151 1,998 1,226
some of Africa’s leading operators
is substantial. If one can buy tower
Nigeria assets at six to seven times Tower
40% 40% 24.5%
Millicom Cash Flow, add value through co-
750 729 1,020 Ghana
locations and efficiency programmes,
Uganda
after which those same assets attract
DRC valuation multiples in the high teens
Vodacom
24.5%
1,149

Towers: 3,000 6,000 9,000 12,000

Tanzania

15,000
every stakeholder wins when high
quality towers are released from
balance sheets – regardless of who
has the majority stake
“
or twenties, you can start to see why

Point of clarification: the above chart does NOT include the tens of thousands of towers Africa’s
MNOs retain 100% - TowerXchange focuses only on towers marketed for commercial co-location. Source: TowerXchange

For most towercos, owning a minority stake would counterparties bidding at auction, which may have
constitute deviating too far from the established had some effect on the valuation realised. Despite class customer experience. Meanwhile, the tower
business model. But for IHS, it was worth deviating this, I also think this is a great deal for MTN. strategists at MTN are quietly, and deliberately,
from the business model for this particular building up a very selective, attractive portfolio of
opportunity. MTN Nigeria is a very profitable operation, whose African tower assets.
principle challenge is (or was) energy logistics. Prior
IHS has struck a great deal with MTN Nigeria. to this transaction, MTN Nigeria generated enough The “Schmuck Equity” retained by some of Africa’s
IHS now owns 56% of Nigeria’s towers, no other power to provide for ten Nigerian States. But MTN leading operators is substantial. If one can buy
towerco will catch them as market leaders, and has now washed their hands of energy logistics tower assets at six to seven times Tower Cash Flow,
they have two extremely credit worthy anchor in Nigeria. MTN have structured an SLA which add value through co-locations and efficiency
tenants (MTN and Etisalat). IHS acquired Africa’s requires that IHS deliver 99.9% uptime on priority programmes, after which those same assets attract
most desirable tower portfolio at a cost per tower sites, a level of performance IHS have proved they valuation multiples in the high teens or twenties,
of less than US$200,000. One advantage of MTN’s can achieve on their existing Nigerian towers. So you can start to see why every stakeholder wins
unique requirement to retain a majority stake was MTN are free to concentrate on their core business when high quality towers are released from balance
that it doubtless meant there were less potential of selling bytes and minutes, and delivering a first sheets – regardless of who has the majority stake

60 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

The new Nigeria
During the course of 2013, the Nigerian government
recast the mechanism by which GDP is calculated.
The new mechanism, generally agreed to provide
Stability, clear trends and imminent middle-income status a more accurate measure than those in use
previously, sizes the economy at US$510bn. This
Current trends indicate that Nigeria will easily outstrips the corresponding South African
be the first African country to reach the figure of US$370bn. Nigerian economic growth has
international metric of 75% of towers under averaged 7% pa over the last 10 years.
GDP per capita is approaching US$2,900, and is
independent ownership. This results from
forecast by the IMF to reach US$4,000 by 2018. The
a flurry of major transactions during the country is rapidly approaching middle-income
course of 2014. Factors including rapid status, and already boasts an affluent middle
traffic growth, implementation of much- class.  Nigeria as African economic leader is here to
enhanced Quality of Service, and rollout stay.
of fixed and moble broadand combine to
Vibrancy of the Nigerian telecommunications
sustain an interesting and vibrant outlook
sector mirrors that of the economy overall. Mobile
for the towers sector. Enda Hardiman of
penetration grew at a CAGR of 14% over the 5 years
consultancy Hardiman Telecommunications to 2013, and now runs to an impressive 74%.  There
By Enda Hardiman, Managing Partner,
Ltd. reviews the Nigerian vista and is ample room for further economically efficient
Hardiman Telecommunications prospects forward. growth. Extrapolation forward, against conservative
assumptions, indicates that 100% will be reached by
2020.
Keywords: Strategic Consultancy, Research, Market Overview, Valuation, EBITDA, Tenancy
Ratios, Market Forecasts, Sale & Leaseback, Africa, Nigeria, HIS, Helios Towers Africa, MTN, Physical rollout of mobile networks has been
Etisalat, Globacom, Airtel, Hardiman Telecommunications equally impressive. Mobile service is available
across 85% of the national territory.

Nigeria has seen consolidation of the mobile

Read this article to learn:
sector, as a plethora of erstwhile operators, notably
< GDP and GDP per capital indications that Nigerian is approaching middle-income status
CDMA operators struggled for market share and
< Indicators of the growth and profitability of the Nigerian telecommunications sector
profitability. GSM, WCDMA and, incipiently, LTE
< Tower industry approaching global metric of 75% of towers under independent management are now the dominant technologies. MTN Nigeria
< Why tenancy rations of two may be forecast with some confidence exhibits EBITDA exceeding 50% of revenues. Airtel
continues, with some success, to reduce costs

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 61

Market share of Nigeria’s principal MNO tower ownership in Nigeria, before recent and anticipated transactions
mobile operators

MTN 10,000
16%

44% Airtel 5,000

20%

Globacom 6,200

20%
Etisalat 2,800

MTN Globacom

Airtel Etisalat 2,000 4,000 6,000 8,000 10,000

and has targeted pan African EBITDA of 40% of While there are thus no indications that further current base runs to 1,200 again acquired from
revenues within two years.  Globacom is relatively consolidation is imminent, it is not impossible. If it various sellers.  However, this will change radically
conservatively managed. Etisalat, as the last occurs, it will not significantly affect the underlying if Helios Towers Nigeria emerges as winner of a
market entrant, has faced challenges to acceptable dynamics of the towers sector. The rate of increase current process engaging 80% of Airtel’s towers. On
performance in Nigeria as elsewhere in Africa, but in traffic, and consequently demand for network conclusion of that transaction, fully 74% of Nigerian
there are no current indications that other than capacity, will not abate. towers will be under independent management.
reinforcement and performance improvement are Nigeria is thus converging on the global metric of
planned.  Interestingly, alone amongst Etisalat’s The Nigerian tower sector has followed the recent 75% of towers under independent management.
African operations, Nigeria was not placed under trend toward disposal of towers to independent
the management of MarocTel on acquisition of operators.  The principal independent tower Recent transactions place Nigerian towers at the
equity therein by Etisalat. operators are IHS and Helios Towers Nigeria. IHS upper end of African valuations. Unit valuations
acquired 9,151 towers from MTN, 2,136 towers have exceeded $200,000. This reflects both current
Unusually in sub-Saharan Africa, the Nigerian from Etisalat and built / acquired 1,950  towers requirements and requirements forward that may
market is of a scale that can support four operators. from various others.  Helios Towers Nigeria’s clearly be forecast.

62 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 made by some commentators and analysts with
respect to Africa in general, but is certainly much
better sustained. Lease-up rates in urban areas
may exceed two. This is because demand will be
forthcoming from Wireless Local Access operators
in addition to demand from ‘Traditional’ mobile
operators. The prognosis for these, and indeed for
rollout of urban LTE in general, is good.

Nigeria features a market that has matured rapidly

and recently come of age. Dynamics increasingly
resemble those of a developed, rather than
emerging market. Regulation, in recent years, has
been consistent and less susceptible to random
or capricious intervention than is often the case
elsewhere in Africa.  Governance, while by no
Lagos, Nigeria
means perfect, has much improved.  Market
MTN, Airtel and Globacom were all recently status. Required cell sizes thus reduce. understanding of major players is good. Trends
directed by the regulatory authority, the NCC, to forward are visible and can rigorously be sustained
desist temporarily from sale of SIMs. This was Demand will also be accentuated by enforcement by quantitative analysis. The outlook, in summary,
because of alleged failure to meet mandated of construction and siting regulations by the NCC. is clement and encouraging
quality of service metrics.  The allegations were While these have been on statute books for some
not seriously challenged. Thus, each of the three is time, it is clear that against the rapid maturing
constrained to additional network capacity in order of the industry, the NCC is committed to ensuring Enda Hardiman (hardiman@telecoms.
to improve quality of service.  In the case of MTN, adherence to stated requirements.  Relevant net) is Managing Partner of Hardiman
this immediately translated to reduction in the regulations include those governing zones in which Telecommunications Ltd. (http://www.
number of subscribers supported per base station, towers may be constructed, permitted tower heights telecoms.net), a boutique consultancy with
per TRx and per site, and, consequently, deployment in urban areas and mandatory real estate area
offices in London and Hong Kong and an
of further base stations, TRxs and sites. Demand for of tower sites. The regulations are not onerous,
strong track record in emerging markets
real estate on current sites and towers is increasing. but they have not always been either observed or
worldwide. Hardiman Telecommunications
Demand for new sites, both rooftop and free- enforced.
Ltd. advises operators, towercos,
standing is also increasing. This is particularly the
investment banks and PE funds on strategy,
case in urban areas. Demand for data capacity is Lease-up rates of two tenancies per tower may
operations and M&A.
already high, and will accentuate further as the thus be forecast with some confidence. This is
national economy approaches middle-income not egregious against forecasts that have been

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 63

Meetup Africa 2014 October 20 - 21
Gallagher Convention Centre, Johannesburg
Take YOUR seat at the table with 250 leaders of the African tower industry

To discuss your participation, contact Annabelle on +44 7423 512588 or email [email protected]
Diamond Gold Silver Sponsors: Bronze Sponsors:
Sponsor: Sponsor:
The unique experience of a TowerXchange Meetup
Personal development
< Learn from 250 peers, the leaders of the African tower industry Experience
< Align your role and strategy with the needs of the ecosystem
< Networking
< Selective audience
Infrastructure focused < Curated exhibition
< Relax and enjoy
< Undiluted focus on passive
< Professionally hosted
infrastructure
< Real estate
< Power
< Construction Learning
< Monitoring
< African market forecasts
< O&M
< Q&A with the CEOs
< Round tables add insight
< Structured introductions
< Select your own agenda
< Local market knowledge

Insights
< Market transformation
< Next sale & leasebacks Connections
< BTS opportunities < Top 250 decision makers
< Site upgrades < Towerco CXOs
< Energy opex reduction < MNO tower strategists
< Country specific round tables < Investors
< Strategic advisors
< Proven suppliers

For more information visit www.towerxchange.com/meetups/africa

TowerXchange Meetup Africa 2014 Agenda
Day one, Monday October 20  3:40 Afternoon coffee and networking 10:40 Introducing the leading energy equipment and
  service providers
9:00 TowerXchange market analysis and forecasts for 4:00 Keynote panel: investors < CPS (a CCE company), Cummins, ELTEK, Emerson,
the growth of the African tower industry Moderator: Enda Hardiman, Managing Partner, Enatel, Flexenclosure, Huawei, Heliocentris and
< Kieron Osmotherly, Founder & CEO, Hardiman Telecommunications PRAMAC
TowerXchange < Ed Stumpf, Director, Asset Management, AIIM  
  < Ayman Al Adl, Executive Director, TMT MEA, 11:00 Introducing the leading energy storage
9:20 Keynote panel: CXOs of Africa’s leading towercos Standard Chartered Bank companies
Moderator: Marco Cordoni, Senior Partner, Analysys < Aniko Szigetvari, Head, Africa & Latin America TMT, < Amara Raja, EnerSys, GS Yuasa and NorthStar
Mason IFC  
< Chuck Green, CEO, Helios Towers Africa < Nina Triantis, MD, Global Head of Telecoms & Media, 11:20 Morning coffee and networking
< Terry Rhodes, Co-founder and Director, Eaton Standard Bank
Towers   11:40 Round table breakouts
< Pieter Nel, CEO: Africa, American Tower 5:00 Close of day one  
< Abhulime Ehiagwina, CFO, Helios Towers Nigeria 1:00 Networking lunch
  Followed by drinks reception  
11:00 Morning coffee and networking   2:00 Round table breakouts
   Day two, Tuesday October 21  
11:20 Round table breakouts   3:20 Afternoon coffee and networking
  9:00 MNO passive infrastructure procurement priorities  
12:40 Introducing the leading turnkey infrastructure < Edwin Mantsha, Senior Procurement Manager, MTN 3:40 Middle market and potential new entrant
providers in Africa < Jawad Chaudhary, Head of Network Site towercos
< Camusat, Huawei, Leadcom, Likusasa, Mer Group, Infrastructure, Vodafone < Ray Hassan, CEO, Tower share
Sagemcom and TKM Maestro   < Dan Ryan, CEO, Square1 Infrastructure
  9:30 Keynote panel: MNO tower strategists < Laurent Roineau, General Manager, TowerCo of
1:00 Networking lunch Moderator: Gulfraz Qayyum, MD, TMT Investment Madagascar
  Banking, Citi < Chris Lundh, COO, Frontier Tower Solutions
2:00 Round table breakouts < Prakash Ranjalkar, CEO, Africa Towers (Airtel) < Morenikeji Aniye, MD/CEO, Hotspot Network
  < Michel Faivre, Directeur Porgramme partage < Kesavan Madhavarao, Acting CEO, SWAP
3:20 Introducing the leading RMS, access control and d’Infrastructure AMEA, Orange   
Site Intelligence Platforms < Tim Knowles, Head of M&A, Etisalat 4:40 Close of conference
< Acsys, azeti, Galooli, HMS, Inala, Infozech and < Riana Donaldson, Manager: Network Int’l, Vodacom
Telemisis < Sudhir Chopra, Group CTO, Smile

66 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 3

TowerXchange round table topics and expert hosts
First round table breakouts, 11:20-12:40 day one, Monday October 20 Second round table breakouts, 2:00-3:20 day one, Monday October 20

1. Country focus: South Africa 15. Regional focus: Latin America

< Keith Boyd, MD, Eaton Towers South Africa < Bill Bates, VP Business Development, SBA Communications
16. Country focus: Tanzania
2. Country focus: Ghana
< Chuck Green, CEO, Helios Towers Africa
< Terry Rhodes, Co-founder, Eaton Towers 17. Regional focus: Russia and CIS
3. As a towerco matures, how do our priorities shift? < Host to be announced
< Chuck Green, CEO, Helios Towers Africa 18. New tower markets created by Airtel tower sale: Sierra Leone, Niger, Malawi
4. Country focus: DRC and Burkina Faso
< To be confirmed, Helios Towers Africa < Ken Okeleke, Senior Analyst, Business Monitor International
19. How to fund a ‘building’ towerco
5. Investibility
< Nathan Foster, CEO, Atlas Tower
< Nina Triantis, MD, Global Head of Telecoms & Media, Standard Bank 20. African towers in a global context: how opportunities compare and the
6. Country risk: How to prepare for short term ‘flashpoints’ extent to which they compete for capital
< Ken Okeleke, Senior Analyst, Business Monitor International < Enda Hardiman, Managing Partner, Hardiman Telecommunications
7. How the IFC evaluates investments in towercos 21. Why and when Africa’s MNO’s divest tower assets - and what they are
< Aniko Szigetvari, Head Africa & Latin America, TMT, IFC seeking to achieve
< Gulfraz Qayyum, MD, TMT Investment Banking, Citi
8. How to operate towers in frontier markets
22. How to measure and improve Tower Cash Flow
< Chris Lundh, COO, Frontier Tower Solutions < Udhay Mathialagan, CEO, Tarantula
9. Lessons learned running the world’s largest RESCO 23. How to minimise the total cost of evaluating and strengthening towers
< Kapil Kathpalia, CEO, AST < Henrik Kamstrup, CEO, Intelli Towers
10. Low cost sites deployment: How to reduce capex and opex 24. How towercos and their subcontractors can ensure adherence with
< Arie Ben Dayan, VP, MER Group, Telecom Division challenging SLAs
< David Meganck, COO, Acsys
11. Translating data into intelligence
25. How to reduce energy opex
< Louw Cilliers, Group Executive- Telecoms, Inala < Richard Brown, VP, Global Channel, azeti
12. What are the main reasons for batteries failing early? What are the 26. Site hardening
remedies for it? < To be confirmed, Eltek
< Thierry Tardivent, Head of MEA and APAC, NorthStar Battery 27. How to manage a broad diversity of managed services, O&M and EPC
13. Community power project management: licensing, implementation, partners
< Fabio Akira, Head of Assurance and Managed Services Solution Development,
O&M
Huawei
< Daniel Becker, Managing Director, E.ON Off Grid Solutions GmbH 28. When will hybrid power reach the ‘tipping point’ where the opex savings
< Dr. Veit Goehringer, Energy Advisor, PREEEP, GIZ justify the capex?
14. Master lease agreements - how to ensure the tenant has operational < Rocco Incardona, Area Manager, Africa, Ascot Industrial
flexibility while the towercos can add maximum value 29. How to build a successful business selling to towercos and MNOs
< Rob Dixon, Partner, Vinson & Elkins < Laurentius Human, Senior Director, Corporate Finance, Jabil

4 www.towerxchange.com | TowerXchange Issue 10 | 67

TowerXchange round table topics and expert hosts
Fourth round table breakouts, 2:00-3:20 day two,
Third round table breakouts, 11:40-1:00 day two, Tuesday October 21
Tuesday October 21

30. Regional round table: MENASA 43. Country focus: Madagascar

< Ray Hassan, CEO, Tower share < Laurent Roineau, GM, TowerCo of Madagascar

31. Country focus: Rwanda and Zambia 44. New tower markets created by Airtel tower sale: Chad, Congo B
< Ken Okeleke, Senior Analyst, Business Monitor International and Gabon
< Ken Okeleke, Senior Analyst, Business Monitor International
32. Country focus: Kenya and Uganda
< Terry Rhodes, Co-founder, Eaton Towers
45. Country focus: Nigeria
33. MNO consolidation: implications for the tower industry < Abhulime Ehiagwina, CFO, Helios Towers Nigeria
< Chris Grundberg, Head of Equity Research – South Africa, UBS Investment Bank
46. How tower transactions create capital value
34. What you need to know about the commercial and technical due diligence < Enda Hardiman, Managing Partner, Hardiman Telecommunications
undertaken on tower transactions
< Marco Cordoni, Senior Partner, Analysys Mason 47. The contractual terms that create (and destroy) value
< Andres de Orleans Borbon, CFO, Helios Towers Africa
35. The impact of nextgen networks and transmission infrastructure
< Bora Varliyagci, Head of Africa, Mott MacDonald
48. Rural network extension
36. BTS economics: the real cost of African towers < Dion Jerling, Special Projects Director, Connect Africa
< Gary Staunton, CEO, Likusasa
49. How to audit your asset register
37. How and what Helios Towers Africa buys < Lance Dickerson, TIA Telecom
< Alex Leigh, Business Development Director, Helios Towers Africa
50. Tower power system design: standardisation versus
38. The legal issues in the relationship between towerco and landlord customisation
< Collins Onumajuru, CEO, Secured Towers < Fred Tyler, VP Global Sales, Energy Systems, Emerson Network Power
39. Fixed price, distributed renewable power: can towercos deliver? 51. Selecting the right energy storage solution to meet your
< Chris Luckhurst, Clean Power Systems, a Cambridge Clean Energy company
requirements
40. How to combat fuel theft and energy waste at your site < Vincent Baudelet, Business Director, MEA, EnerSys & Wouter
< Bartek Candell, Global Key Account Manager - Telecom Infrastructure and Energy, HMS Vink, Sales Manager, EnerSys Powertech

41. Extended Q&A with Jawad Chaudhary, Head of Network Site Infrastructure, 52. A unified approach to the management of remote towers
Vodafone < Sebastien Martin, COO Africa, Camusat
< Jawad Chaudhary, Head of Network Site Infrastructure, Vodafone
53. What is the best power solution for different site scenarios?
42. Extended Q&A with Edwin Mantsha, Senior Procurement Manager, MTN < Mr. Ma Xiangmin, Director of Hybrid Power Solution
< Edwin Mantsha, Senior Procurement Manager, MTN Development, Huawei

68 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 5

TowerXchange’s unique structured networking round tables
How our structured networking round tables work
< Select round tables focused on your priority countries or issues
< 80-minute ‘deep dive’ structured networking session
< Participants represent the whole tower ecosystem
< Director to C-level participants only
< Subject matter expert host introduces the discussion
< Participants introduce themselves, share questions AND answers
< Held under the Chatham House Rule to protect confidentiality
< Sales pitches strictly prohibited

TowerXchange roundtables bring together 8-10 representatives of

different segments of the tower industry ecosystem, brought together
by a common geographical focus or hot topic. There are 4 roundtable
sessions at the Meetup, each new roundtable “reshuffles” the decision
maker-level participants at your table so you will meet several different
prospective partners.

250 Director, VP and C-level Decision makers broken down

as follows:
Towercos

Mobile Network Operators

Investors and Investment Management Advisors

Lawyers and Strategic Consultants

Energy Equipment Providers

OEMs & Managed Service Providers

Static Assets, Access Control & Monitoring and Management

6 | TowerXchange Meetup Africa | www.towerxchange.com/meetups/africa/ www.towerxchange.com | TowerXchange Issue 10 | 69

 Tower Industry Value Chain
How TowerXchange ensure an audience
of decision makers
Investors: private equity, debt finance, infrastructure funds
Many of our clients complain that similar events have
Investment management advisors Law firms failed to deliver genuine decision makers; that won’t be
the case at TowerXchange.
Strategic consultancy Group level strategists
Independent Towercos Due diligence C-suite & network planners at local OpCos
Sell co-locations
The TowerXchange Meetup is exclusively for Director, VP
Demand forecasts
Upgrade capacity Valuations and C-level decision makers. If registrants are substituted,
Build-to-suit
Mobile Network Operators we will only accept replacement registrants of equal or
Transfer assets to
Maximise uptime greater seniority than those pre-approved.
Some become

Reduce opex
towerco

Invest in network Outsource

to Through our passive infrastructure focused journal

Subcontract
Tier 1 OEMs Outsource
publication and research, TowerXchange have cultivated
to relationships with 5,503 (at time of press) decision
Subcontract
or in-house makers in emerging market towers, 84% of whom are
Managed service providers Director, VP or C-level.

Construction services Static assets Monitoring & 0&M services More importantly, we have personal relationships with
Turnkey infrastructure rollout Towers & masts management Maintenance the 250 or so individuals with genuine strategic and
Manufacture of steelwork Shelters RMS Staffing procurement decision making responsibilities. The
Import, customs & delivery Brackets Intelligence/analysis Spare parts TowerXchange Meetup has been requested and designed
Leasing & permitting Enclosures Site management VMI?
by the top decision makers in African towers, so you can
Installation of towers Lighting Job ticketing Refueling
be confident that the vast majority of those key contacts
Upgrades for capacity Fencing Asset lifecycle platform
O&M services Energy as a service will be at the event.
Access control
Dynamic assets Who will you meet
Energy equipment Batteries Air conditioning ESCOs TowerXchange serves the African tower community
Diesel genset Rectifiers Lightning protection Microgeneration along two intersecting axes. On a horizontal axis we
Solar Inverters Controller Community power facilitate relationships between MNOs, towercos,
Wind Line conditioning Voltage regulator investors and their advisers, aiding the structuring
Fuel cell PIUs
of deals and the transfer of assets. On a vertical axis,
we examine the impact on, and opportunities for, the
passive infrastructure supply chain, whether they
sell to MNOs, towercos or through OEMs.
Backhaul, FTTT, Core Network Active equipment

70 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com/meetups/africa/ | TowerXchange Meetup Africa | 7

TowerXchange Meetup Africa 2014 delegate list as at 10 October 2014
Towercos Business Development Assistant, Tower share CTO, Intelli Towers
General Manager. TowerCo of Madagascar CEO, Intelli Towers
CEO: Africa, American Tower Founder and Director, Tower Vision Director, Corporate Finance, Jabil
CEO, ATC Ghana Head of Africa, Technology and Communcations Practice,
CEO, ATC South Africa Operators Mott MacDonald
CEO, Atlas Tower Companies Head of Africa, Mott MacDonald
Tower Acquisition Director, Atlas Towers Tower CEO, Africa Tower Services Ltd (Airtel) Partner, Norton Rose Fulbright
Acquisition Director, Atlas Towers GM - Power and Opex Optimisation, Airtel Managing Director, Standard Bank
CEO, Digital Bridge Holdings Head of Corporate Finance, Econet Wireless Group CEO, TIA Telecom
Managing Director, Eaton Towers South Africa Chief Operations Officer, Econet Wireless Head of Research, TMT, UBS Investment Bank
Director & Co-founder, Eaton Towers Director, Econet Wireless Zimbabwe Partner, Vinson & Elkins
COO, Frontier Tower Solutions Group Head of M&A, Etisalat
General Manager, Global Tower (Turkcell) M&A Manager, Etisalat Turnkey infrastructure, managed services and OEMs
CEO, Helios Towers Africa Director, Market Development, Intelsat
COO, Helios Towers Africa Senior Procurement Manager, MTN General Manager, Al Babtain LeBLANC
CFO, Helios Towers Africa Director CME sourcing, Ooredoo Group Business Development Manager, Al Babtain LeBLANC
Director OEM, Helios Towers Africa Directeur Programme Partage d’Infrastructure, Orange CEO – Africa, Alkan CIT
Technical Manager, Helios Towers Africa CTO, Smile Group Technical Director, Amanzi Telecoms
Business Development Director, Helios Towers Africa Director Business Development, VimpelCom COO Africa, Camusat
Senior Structural Engineer, Helios Towers Africa Business Development Executive, VimpelCom Managed Services Director, Camusat
CFO, Helios Towers Nigeria Businsess Performance Partner, Vodacom Technical Director R&D, Camusat
Projects Director, Helios Towers Tanzania Manager: Network International, Vodacom CEO, Delmec Engineering
Sales & Marketing Director, Helios Towers Tanzania Manager: Passive Network Operations, Vodacom Tanzania Engagement Manager, Ericsson
Director, Marketing and Strategy, Hotspot Network Head of Network Infrastructure, Vodafone Group CEO, ESCOM
Limited Infrastructure Sharing Project Manager, HOI – MEA
Director Network Deployment, Hotspot Network Limited Investors and advisors CEO, HOI – MEA
MD/CEO, Hotspot Network Limited Sudan Country Manager, HOI – MEA
CEO, Link Development LLC Sector Head: TMT, Absa/Barclays Head of Assurance and Managed Services Solution
Sales Director, Link Development LLC Associate management advisor, African Infrastructure Development, Huawei
VP, Business Development, SBA Communications Investment Managers Director of Hybrid Power Solution Development, Huawei
MD/CEO, Secured Towers Director Asset Management, African Infrastructure TBC, Huawei
CEO, Square1 Infrastructure Investment Managers TBC, Huawei
Acting CEO, SWAP Technologies & Telecoms Senior Partner, Analysys Mason TBC, Huawei
Chief Marketing Officer, SWAP Technologies & Telecoms Technical Director, Aurecon TBC, iEngineering
Country Manager (Ghana & Ivory Coast), SWAP Senior Analyst, Business Monitor International Chief Regional Officer - East Africa, iEngineering
Technologies & Telecoms Managing Director, Citigroup CEO, Leadcom Integrated Solutions
President and CEO, Tower share Managing Partner, Hardiman Communication Business Development, Leadcom Integrated Solutions
Manager Strategy and Investment, Tower share Partner, Hardiman Communication Managing Director, Likusasa
Director, Tower share Head, Africa & Latin America, IFC CEO, Likusasa
Director, Tower share Chief Investment Officer, IFC TBC, Likusasa
Counsel, Tower share Chairman, Intelli Towers CEO, ILCLerumo

8 | TowerXchange Meetup Africa | www.towerxchange.com/meetups/africa/ www.towerxchange.com | TowerXchange Issue 10 | 71

GM - Power Division, IPT PowerTech Regional Sales Manager, Eltek Group Global Key Account Manager, HMS Industries
CEO, IPT PowerTech Managing Director, Sub Sahara Africa, Emerson Network TBC, HMS Industries
Group CFO & Business Development Officer, Maktech Power CEO, Inala
O&M Manager, Maktech Vice President of Global Sales, Emerson Network Power Group Executive: Telecoms, Inala
Business Development Director, M-P Infrastructure Sales Director, Emerson Network Power Chief Executive Officer, Infozech
Managing Director, M-P Infrastructure Sales Manager, ENATEL ENERGY Head - Africa Business, Infozech
VP Sales and Marketing, Mer Telecom CTO, DC Systems, Enatel CEO, NeXsysOne
Marketing Manager, NEWL Director Sales and Marketing Africa, ESK Telecom Director, Quintica
Business Development Manager, NEWL Business Development Manager, FIAMM S.p.A VP Global Channel, SiteOne
Managing Director, Pivotech VP Strategy, Flexenclosure TBC, SiteOne
Finance & Administration Director, Pivotech CEO, Flexenclosure CEO, Tarantula
CEO, QTE Sales Director Southern Africa, Flexenclosure Head of Product Development, Tarantula
Head of Sales and Marketing, Reime Group TBC, GS Yuasa Commercial Director, Telemisis
Managing Director, Reime Uganda TBC, GS Yuasa
Deputy Sales Director, Networks & Integration Services CEO, Heliocentris Tower manufacturers
BU, Sagemcom Director, Sub-Saharan Africa, Heliocentris
Director, Sagemcom Manager Corporate Communications, Heliocentris CEO, Batitech
Business Development Director, Sagemcom Managing Director, Mecc Alte CEO, Eki Struct
Head of Business Development, TKM Maestro Managing Director, Mecc Alte Head of Sales, Eki Struct
Director, TKM Maestro Limited Sales Manager, Mecc Alte Managing Director, Ganges Internationale
Managing Director, Pace Power Systems Head - Telecom and structures, Ganges Internationale
Community power Managing Director, PRAMAC Assistant Manager Export, Ganges Internationale
Area Sales Manager, PRAMAC TBC, GSM Telecom Products
Special Projects Director, Connect Africa Director, Trojan Battery Company TBC, GSM Telecom Products
Programme Director, GIZ Founding Partner, Wind-it Technical Commercial Department - Communication Unit,
Energy Advisor, GIZ Managing Partner, Wind-it Metalogalva
Business Unit Manager - Telecom, Railways and Special
Energy equipment and services Energy storage Projects, Metalogalva
Market Head Africa, Ramboll Denmark
CEO, Apollo Solar Chief Marketing Officer (ISBU), Amara Raja Batteries Head Projects, R.S INFRAPROJECTS PVT.LTD
President – International, Applied Solar Technologies Head Exports (ISBU), Amara Raja Batteries VP - Business Development, R.S INFRAPROJECTS PVT.LTD
CEO, Applied Solar Technologies Sales Director Middle East and Africa, Enersys Director - Telecom Tower, Ramboll India
Director, Biofuels Botswana Sales Manager Africa, Enersys Commercial Manager, SC Orion SRL
VP Marketing Development, Bladon Jets GM Middle East Africa & Asia Pacific, NorthStar
Global Accounts Manager, Caterpillar Sales Manager Africa, NorthStar Access control, health & safety
Technical Director, Clean Power Systems, a CCE company TBC, NorthStar
TBC, Clean Power Systems, a CCE company Founder & Chief Operating Officer, Acsys
Vice-President Sales, Controllis RMS and Site Management Systems Sales Director Africa, Acsys
Director, Telecom, Cummins Export Director Africa, Capital Safety
Business Director, RLC Segment International Market, Director, Wireless Strategy, Accruent General Manager (International Marketing), PN -
Cummins Market Strategy Director, Accruent International KARAM
Segment Leader, Cummins VP Sales, AIO Systems Marketing Manager, PN - International KARAM
Managing Director, DAQs Europe TBC, azeti Networks AG Assistant Manager International Marketing, PN -
Managing Director, E.ON Off Grid Solutions GmbH CTO, Galooli International KARAM
VP MEA, Eltek Group Manager, Galooli Uganda

72 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com/meetups/africa/ | TowerXchange Meetup Africa | 9

 Opportunities in African towers
84% $$$$$ towercos African
15-20,000 will own
By 2015 towercos

of Nigeria’s US$5bn+ start to deploy

DAS & IBS
more
Airtel African towers
currently being sold
African
towers owned
by towercos
by y/e 2014
invested 2015 towers
by 2014 Further 20,000+
African towers than
currently for sale MNOs
$$$$$
2011

50%+
75%
of Tanzania’s
towers are now
6,000+ readers MNO Towercos secure
first refusal on
infrastructure
owned by of the TowerXchange
procurement build-to-suit
Helios Towers
Tanzania Journal strategy
Towercos own or operate 50%
of Africa’s towers by y/e 2015 programmes
90% of the towers 2nd towerco
2 in Cameroon and
Cote d’Ivoire are
1
in
about to enter
Madagascan
owned or market, Tower transactions
operated
AMT and Eaton by IHS
2 ToM
thriving 1-2 O&M contracts,
unlockTowercos now
capex ‘KING BUYERS’
active in Uganda site upgrades, improvement
of DRC’s towers
90 % are owned by
DG and battery
replacements
Helios Towers DRC
Renewables Access control DGs
2++ major 2014: IHS
As tenancy ratios RMS ILM Batteries A/C AVR HSE
towercos announces
approach 2, towercos

3 Meet the top 250 decision

AMT, Eaton operate acquisition of
1,269 MTN accelerate investment in
and several in Ghana:
local towercos towers in site efficiency makers in African towers at
active in
South Africa
AMT, HTA
and Eaton
Rwanda and
Zambia
programmes TowerXchange!
12 | TowerXchange Meetup Africa | www.towerxchange.com/meetups/africa/ www.towerxchange.com | TowerXchange Issue 10 | 73
TowerXchange Meetup Africa floorplan
DIAMOND SPONSOR:

Acsys
Amara Raja
Leadcom Towershare GS Yuasa Enersys
Diamond Sponsor:
16
Batteries
15
14 13 12 11 Helios Towers Africa
Gold Sponsor:
Eltek Ballroom HOI-MEA Huawei
10
17
Silver Sponsors:
PRAMAC Eltek Group
Metalogalva 9
18 azeti
PN
International
ACSYS Helios Towers Africa
Ganges KARAM
Internationale
8
Bronze Sponsors:
19 HOI-MEA Helios Towers Africa (HTA) is the leading
Emerson
Mer Group Telecom Division
Network independent telecom towers company in Africa.
Telemisis Power HMS
20 7
Cummins Power Generation
INALA HTA builds and manages shared telecom
Networking area Exhibitors:
Infozech 6
21
Galooli infrastructure, delivering improved efficiency and
Ganges Internationale
Clean Power Systems
reduced costs for operators and their customers.
HMS Enatel
5 LIKUSASA
Industries
Leadcom Integrated Solutions
22
Telemisis Ltd
Helios Towers Nigeria, an affiliate of HTA that was
CPS FLEXENCLOSURE launched in 2005, was the first independent tower
Likusasa 4 Inala Technologies
23
Sagemcom company in Africa.
Mer
azeti Flexenclosure Camusat
34 Group ENATEL ENERGY
33 35 Heliocentris
Cummins
36
3 Emerson Network Power
KARAM In 2010, HTA pioneered Africa’s first sale/
24
Galooli NorthStar i engineering GSM TP Towershare leaseback transaction with the acquisition of
32 31 30 29 Mecc Alte Camusat
TowerXchange 2 Infozech Millicom’s network of tower sites in Ghana.
25 Metalogalva
Capital GS Yuasa
Safety PRAMAC HTA currently owns and manages 3,500 towers
Huawei 1
26 Heliocentris and has operations in Ghana, Tanzania, the
Amara Raja Batteries
GSM TP Democratic Republic of Congo and a sister
TKM
Enersys company in Nigeria, with new operations under
Sagemcom TKM Maestro
Maestro
27
28 NorthStar development in several other African markets.
i engineering
Mecc Alte
Capital Safety www.heliostowers.com

74 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com/meetups/africa/ | TowerXchange Meetup Africa | 13

Our sponsors
GOLD SPONSOR: SILVER SPONSOR: for optimal utilization of all energy resources. By
combining solar or wind energy input with smart
generator control and optimally dimensioned batteries,
the scene is set for dramatic OPEX reductions and a
positive environmental impact.

Eltek http://www.eltek.com/wip4/hybrid_telecom/?utm_
source=TelecomXchange&utm_medium=banner&utm_
Huawei Eltek are committed to meeting the power needs of campaign=Hybrid
our customers. For more than four decades Eltek has
SILVER SPONSOR:
Huawei is a leading global ICT solutions provider. provided power solutions for telecommunication
Through our dedication to customer-centric innovation networks globally. Our systems cover the entire range of
and strong partnerships, we have established end-to-end power requirements; from small to very large, meeting
capabilities and strengths across the carrier networks, all the power needs of the telecom industry, in both fixed
enterprise, consumer, and cloud computing fields. We and mobile networks.
are committed to creating maximum value for telecom
carriers, enterprises and consumers by providing Our broad range of rectifiers and converters comply with
competitive ICT solutions and services. Our products all international standards and requirements.  Eltek’s
and solutions have been deployed in over 170 countries high efficiency solutions and new, innovative designs help SONARPLEX by azeti Networks
and regions, serving more than one third of the world’s the industry achieve the objectives of combating climate
population. change whilst remaining competitive, by reducing energy SONARPLEX is a unique Intelligent Site Management
spend and environmental impact. Software to monitor and manage remotely distributed
Huawei’s vision is to enrich life through communication. sites. By deploying SONARPLEX along with the azeti NG
By leveraging our experience and expertise in the Eltek have offices in more than 40 countries and business at the site to be monitored/controlled, cell site operators
ICT sector, we help bridge the digital divide by in more than 100. Our presence and expertise is close can continually watch over their equipment onsite. azeti
providing opportunities to enjoy broadband services, to each individual market we serve. This enables us to Networks’ SONARPLEX can gather data either over IP or
regardless of geographic location. Contributing to the truly understand the needs of each market and provide using Modbus and Zigbee/Bluetooth in order to acquire
sustainable development of society, the economy, and solutions and services specifically adapted to local sensor values. The multiple application scenarios for
the environment, Huawei creates green solutions that requirements. SONARPLEX can be categorized into Energy, Access,
enable customers to reduce power consumption, carbon Security and Environmental. It can virtually connect to
emissions, and resource costs. Telecom Hybrid Solutions  everything onsite from gensets and batteries over fuel
tanks to the HVAC or Doors, in order to mention only a
www.huawei.com Eltek’s hybrid solutions are based on the HE technology few.

14 | TowerXchange Meetup Africa | www.towerxchange.com/meetups/africa/ www.towerxchange.com | TowerXchange Issue 10 | 75

Our sponsors
SONARPLEX uses azeti’s Intelligence@the edge in designing cutting-edge security and staff management Bronze Sponsor:
technology, which reduces the data traffic to the NOC solutions at a competitive price.  Our programmable locks
by over 90%. The evaluation of sensor data on the spot and keys have earned recognition from Africa’s leading
allows for sending only critical data to the NOC, which telecom operators, tower management companies, and
indicates the need for further action and helps to keep equipment providers.
cell sites up and running, while saving costs for data Mer Group Telecom Division
transmission. www.acsys.com
Mer Group Telecom Division  provides end-to-end
Bronze Sponsor:
azeti Networks’ SONARPLEX provides a complete view Wireless Infrastructure Turnkey Solutions – from
as well as enhanced control over all the critical elements network planning, site design and provision of
installed on the site, while allowing operators to not only towers, to site construction, equipment installation,
monitor performance but also to execute and program network optimization and maintenance. Combining
intelligent actions based on multiple scenarios. cost effectiveness, short lead times and advanced
HOI-MEA
engineering techniques, we are strongly committed to
www.azeti.net client satisfaction. With a highly developed logistics
HOI-MEA is a leading company in GSM full turn key
chain, advanced tower manufacturing facilities and
SILVER SPONSOR: industry field in Middle East, North Africa and Gulf Areas.
an extensive network of warehouses, our solutions are
Since its establishment in 2001, the company has always flexible and scalable, providing measurable benefits for
strived for the highest quality innovated products, which customers. Our strong presence in Latin America enables
contributed to several projects’ success. us to leverage the combined in-depth regional knowledge
of local partners with our industry acknowledged
HOI-MEA offers technical solutions from Antenna engineering expertise for our customers’ benefit.
Supporting Structures, Rapid deployed Mobile &
Permanent Solutions, Decorative Structures (Pine Tree, The division leverages its proven global track record,
Acsys
Palm Tree, Flag Pole…) and Passive Cooling to Hybrid comprehensive knowledge and accumulated expertise to
Acsys is one of the global leaders in cell tower access Power Solutions. seamlessly deliver technologically innovative and best-of-
control solutions. Our patented, military-grade solutions breed solutions including M2M enablement and vertical
fill the industry gap for highly secure, remote site access HOI-MEA was the first company to get the right to provide market applications, mobile financial services, cloud
management.  Acsys offers a combination of solutions that IS service in Egypt, that lead up to signing agreement billing, MVNO enablement, as well as on/off board and
are wired, wireless and/or wire-free to gain access to any with Vodafone Egypt to build-to-Suit for 150 Sites in Delta remote/contactless payment solutions for public transport
site under any circumstances. European-rooted, with an region. operators.
innovative team from around the globe, and the benefits
of China-based production, Acsys stays at the forefront
http://174.132.188.9/~hoiaste/index.php www.mer-group.com/solutions/wireless-infrastructure

76 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com/meetups/africa/ | TowerXchange Meetup Africa | 15

Our sponsors and exhibitors
Bronze Sponsor: Inc. (NYSE: CMI), is a global leader dedicated to increasing MTPA (MetricTons Per Annum) and galvanising capacity
the availability and reliability of electric power around of 52,000 MTPA.
the world. A trusted name for its market leading diesel
generators, Cummins is also a global provider of state- Expertise:
of-the-art hybrid power solution to telecom cell sites. Tower design, Manufacturing & Supply.
HMS Industrial Networks
Our wide range of products for the telecommunications 100% own manufacturing for all products.

HMS Industrial Networks is the leading independent industry serves global telecom operators with access to ISO 9001: 2000 certified.

supplier of products for industrial communication and energy efficient and reliable power solutions.

remote management. Products are marketed under the Products:

brands Anybus®, IXXAT and Netbiter®. Headquartered Cummins employs approximately 46,000 people Poles–3m to 9m / Palm tree towers,

in Halmstad, Sweden, HMS is represented by branch worldwide and serves customers in approximately 190 Roof Top Towers–9m to 30m,

offices in 10 countries plus distributors in more than 50. countries and territories through a network of more Ground Based Tower/Green Field Tower 20m to 100m,

HMS employs over 350 people and reported sales of 60+ than 600 company-owned and independent distributor Rapid Deployment Towers & Structures,

million EUR 2013. locations and approximately 6,500 dealer locations. Palisade Fences.
Cummins revenues were $17.3 billion in 2013.

Telco site support equipment has become smart, which www.gangesintl.com

www.cumminspower.com
offers the opportunity to have full remote control of all Exhibitor:
support equipment on Radio and Core sites and benefit Exhibitor:
from reducing the OPEX without major investments.
With the Netbiter® concept we have developed a vendor
independent solution that fits into all kind of systems and
takes care of all hassles with different communication Clean Power Systems, A Cambridge Clean Energy company
protocols, different sizes of diesel tanks, tampering etc. Ganges International Private Pvt Ltd
Clean Power Systems (CPS) is focused on the implementation
www.hms.se GIPL (Ganges Internationale Pvt Ltd), started of efficient, intelligent power systems for African mobile
in 1991 manufactures and supplies Towers for networks.  Our solutions provide customers with savings
Bronze Sponsor:
Telecommunications, Windmills, Power Transmission in excess of 60% on operating expenses associated with
& Distribution and Railway Electrification. GIPL has a maintaining passive networks.  In addition to supplying our
proven systems for both on-grid and off-grid (AC and DC)
reputation for timely delivery, quality and total reliability
systems, CPS also provides software solutions to optimize
of tower supplies. GIPL’s team of committed, skilled and
Cummins Power Generation the power system audit & design process, while providing
experience professionals will oversee the A-Z of your
cost-benefit analysis, allowing customers to make informed
Cummins Power Generation, a subsidiary of Cummins tower supplies. GIPL has a production capacity of 48,000

16 | TowerXchange Meetup Africa | www.towerxchange.com/meetups/africa/ www.towerxchange.com | TowerXchange Issue 10 | 77

Our exhibitors
decisions to maximize return on investment in the shortest Exhibitor: power optimisation, fuel management, electricity metering,
possible timeframe. CPS continues to develop and improve environmental management and machine/equipment control
our systems, software and methodologies to help our in harsh and demanding locations since 2000.
customers achieve their intended results.
Telemisis manufactures the industry’s smallest, most flexible
www.clean-power-systems.com Leadcom and cost-effective remote telemetry node “SiteNode®”.
SiteNode® units provide interfacing and data collection
Exhibitor:
Leadcom Integrated Solutions Ltd. is an international leading capabilities from a wide range of standard devices and
supplier of telecommunication network deployment services and sensors that may already be deployed or will be added.
solutions. We combine extensive global experience, high level of Coupled with Telemisis’ back-end server systems we offer
engineering and project management and a major Pan African standard or bespoke solutions.
Vendor with very wide footprint in over 15 African countries.

Likusasa www.telemisis.com/products
Acting as a System Integrator, Turnkey Provider and Value Added
Reseller, we provide a comprehensive service offering aimed
Exhibitor:
Focused on the Sub Saharan Africa market since 1995,
Likusasa is a specialist project service provider offering at major global and local telecom operators, towercos, vendors

innovative solutions to the telecoms, transport and resources and large enterprises. Our service offering includes design,

sectors. engineering, implementation of mobile telecommunication

infrastructure as well as vendor-independent managed services

Infrastructure solutions include turnkey site build, upgrades provider – focusing on reliability, efficiency and OPEX reduction Flexenclosure
and design&build ICT facilities such as MSC/BSC, DC and for our customers.

CLS. Likusasa deploy conventional, modular and light steel www.leadcom-is.com Flexenclosure is a designer and manufacturer of intelligent
building systems and which include HVAC, fire, BMS and power management systems and prefabricated data centre
power systems. Exhibitor: buildings for the ICT industry. The company provides
systems that are fully integrated, modular, factory tested for
Energy solutions include diesel generator, PV Solar, hybrids, reliability, adaptable to local conditions and quick to install.
DC power systems, site utility power up to 33kV and electrical eSite is a hybrid power system for off-grid and bad-grid cell
upgrades. sites that cuts diesel costs by up to 90%.  eSite is an integrated
Telemisis single cabinet system for maximum reliability and speed
Telecommunication services include radio, MW, VSAT and of installation.  eManager, an all-in-one toolbox for remote
optical networks, WiFi networks, remote monitoring, IBS, Telemisis manufactures the SitePro® system for remote management, site power optimisation and KPI reporting, is
rural communications and transmission solutions. monitoring and automation solution for all business sectors; an integral part of eSite.
our specialisation being mobile operators and tower owners.
www.likusasa.com We have delivered full site management systems, including www.flexenclosure.com

78 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com/meetups/africa/ | TowerXchange Meetup Africa | 17

Our exhibitors
Exhibitor: customized connected systems to utilities, telecom operators system efficiencies. Solutions are New Zealand made to
and services operators worldwide. guarantee design, manufacture and process integrity.

www.enatel.net
The Networks & Systems department offers highly efficient
and innovative solutions for Energy & Site Monitoring, Green Exhibitor:
Inala Technologies Energy production & optimization, Radio Site construction,
Optical fiber rollout, Telecom equipment and associated
Founded in 1996, Inala Technologies has achieved an services.
increasing level of customer satisfaction, and market share, Emerson Network Power
due to its ability to innovate and to provide trustworthy Sagemcom employs 4,200 people on five continents, with a
solution platforms for mobile networks. revenue of around 1.3 billion euros
Emerson Network Power, a business of Emerson, maximizes
reliability, deployment speed and operational efficiency for
Inala Infrastructure Intelligence is a service designed to www.sagemcom.com
communications networks and data centers. A trusted industry
effectively and efficiently optimise, maintain and manage leader in smart infrastructure technologies, Emerson Network
passive assets. The service correlates technical and financial Exhibitor:
Power provides innovative, rapidly deployable solutions that
data with performance data through the collaboration of deliver efficiency and uncompromised reliability regardless of
systems, processes and people. The resulting reports allow network demands. Emerson Network Power offers expertise in
for the efficient management of infrastructure which helps AC & DC Power, renewable energy, precision cooling systems,
to improve asset availability and utilisation while providing Enatel Energy infrastructure management, integrated racks and enclosures,
effective decision support.Inala Infrastructure Intelligence power switching and controls. Our solutions are supported
is independent of hardware or software systems that might Enatel Energy delivers an expansive portfolio of configurable globally by local Emerson Network Power service technicians.
already be in place, such as Inala’s own SAM (Site Asset systems designed to meet every telecommunication network Learn more about Emerson Network Power products and
Management) solution. power requirement. Solutions offer flexibility and scalability, services at:
by way of hot pluggable combinations of modular Rectifiers,
www.inala.co.za www.emersonnetworkpower.eu
Inverters, Converters, Solar/Wind Chargers and encompass
advanced energy management. Exhibitor:
Exhibitor:
Enatel’s SYNERGi hybrid solutions include unique patented
generator control capabilities allowing dynamic optimisation
Galooli
to accommodate off-grid site variables so ensure the highest
Sagemcom levels of network uptime, ease of deployment and OPEX
Galooli is a leading provider of OPEX savings solutions, through
savings. Renewable energy inputs can be integrated simply
its remote performance, analysis and security technology
Sagemcom is a French high-technology group with an and blended intelligently.
for remote assets. The company is well based in Africa and
international dimension. Sagemcom concentrates expertise
Latin America, with global commercial implementations in 22
in telecom and energy solutions enabling the supply of Enatel Energy offers renowned support, reliability, and

18 | TowerXchange Meetup Africa | www.towerxchange.com/meetups/africa/ www.towerxchange.com | TowerXchange Issue 10 | 79

Our exhibitors
countries, with over 2,000 business customers. www.karam.in manufacturers, tower companies, integrators as well as
Galooli’s Telecom solutions – Full NOC Solution, Power & government and local authorities. Our range of expertise has
Exhibitor:
Energy Management, Fuel Management, Generator Diagnostics, allowed us to meet the most specific needs around the world:
Site Security and Full Site Analysis.
- Construction and installation of “turnkey” sites (historical
Our approach in business is “Prevent Instead of React”. Our activity)
business perception and technology methodology are dedicated - Installation and commissioning of customers equipment
to prevent negative events from happening. Towershare - Construction and installation of fiber optic networks
- Construction and installation of energy systems (renewable
This way OPEX savings using Galooli’s solutions is significantly Towershare is a leading independent owner and operator of energy)
higher. wireless communications infrastructure, focusing primarily - Complete management of networks on behalf of our clients.
in the Middle East & North African markets. Headquartered in
www.galooli.com the UAE, Towershare’s management team comprises telecom
www.camusat.com
veterans who, between them, have built over 15,000 towers in
Exhibitor:
MENA and Asia. TS has an operational footprint in Pakistan Exhibitor:
where it has completed a few small acquisitions and is on
the cusp of completing a small carve out. It is currently in
Karam discussions in four different markets for sale and leaseback Infozech
and build-to-suit opportunities.
KARAM specializes in field of Fall Protection & manufactures Infozech is a leading provider of game-changing, technology-

the highest quality equipment, leading the way with innovative led solutions to Telecom tower passive infrastructure providers
www.towershare.com
products & solutions for safe working at height. and communication service providers (CSPs). Infozech has
Exhibitor: been delivering cost optimization and revenue management
Our complete vertically integrated manufacturing set-up is solutions to 80 customers across 25 countries for over a decade
spread over a span of around 325,000 square feet area with now. Infozech’s innovative offering iTower (Infozech’s Tower
work force of above 1500 highly skilled people. Camusat Product Suite) provides solutions for managing and reducing
operating costs through real time tower operations tracking,
KARAM provides a range of Solution to the user working at Founded in 1948, Camusat is a French group, specialist monitoring, prediction and analytics.
Height on variety of towers, masts, monopoles and lattice in deployment and management of telecommunications
structures that are used in Telecom industry. networks. The group is now present in 5 continents, over 30 Infozech’s Energy Tracking Service (iETS) manages energy

countries and owns over 1,700 employees. costs worth about 837.5 million US dollars across 150,000
Our commitment to quality is reaffirmed by our ISO 9001- towers in India. iETS was adjudged the most innovative
2008 certification. All our products are certified as per EN also product at The ET Telecom Award 2013.
Always on the cutting edge of new technologies, we have
meets American & other International standards. been able to convince many telecom operators, equipment
www.infozech.com

80 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com/meetups/africa/ | TowerXchange Meetup Africa | 19

Our exhibitors
Exhibitor: GS Yuasa manufactures a full line of technologies including Exhibitor:
lithium, lead acid, nickel metal hydride, and nickel cadmium
for the automotive, industrial, and specialty battery markets.
Especially for Telecom market, we have developed a 48V lithium
Metalogalva ion battery module that has outstanding cyclic life and charge Heliocentris
acceptance that can reduce the runtime of generators and the
TELECOM TOWERS MANUFACTURER total cost of ownership of telecom base stations. With 36 affiliates Heliocentris is a German technology company that provides
Quality products at fair prices. Company with 42 years in 16 countries, GS Yuasa has a worldwide presence operating Managed Power Solutions and Services for commercial
experience. Young and flexible team. 400 employees; 30 under the GS Yuasa, GS, and Yuasa brands. stationary applications for global Telecommunication
engineers. 100 000 tons galvanizing capacity (year). 14 welding Operators and Tower Companies. Services reach from energy
and plasma robots. 6.6M€ Investment on new equipments. www.gs-yuasa.com (GS YUASA) optimization and solution engineering to implementation of
Qualifications: www.gsbattery.com (GS Battery USA) customized turnkey power solutions and smart operations.
<QUALITY MANAGEMENT SYSTEM ISO 9001<RDI The flagship product the “Energy Manager” enables smart
Exhibitor:
MANAGEMENT SYSTEM CERTIFICATE NP 4457 connectivity between different components in hybrid energy
<ENVIRONMENTAL MANAGEMENT SYSTEM ISO 14001 supply clusters, such as batteries, solar panels, conventional
<MANAGEMENT SYSTEM CERTIFICATE diesel generators or fuel cells, thereby substantially
OCCUPATIONAL HEALTH AND SAFETY OHSAS 18001 decreasing the ecological footprint at much lower operating
<SPECIAL CERTIFICATION FOR GALVANIZATION for German PRAMAC cost. The company is headquartered in Berlin with branch
Norm DASt - GUIDELINE 022 offices in Munich, Dubai, Vancouver and representations in
Verification: PRAMAC is an Italy-based company engaged in the
Johannesburg and Yangon.
<QUALIFICATION OFMANUFACTURES TO WELD STEEL manufacturing of the power generation equipment and
STRUCTURES according to DIN 18800-7 Level “E” <EC materials handling equipment. The Company divides its www.heliocentris.com

CERTIFICATE FACTORY PRODUCTION CONTROL (FPC) EN 1090 activities into two business sectors: Power Systems e Power
Exhibitor:
- 1/2 - EXC3 Engineering, which comprises generators for electric power,
including low voltage portable generators and medium and
www.metalogalva.pt
high voltage generators and similar machineries.
Exhibitor: Amara Raja
It has six production plants: Italy, Spain, France, China, the
United States of America and Brazil. It operates worldwide Amara Raja Batteries, a JV with Johnson Controls Inc (JCI),
GS Yuasa through the distribution network of subsidiaries among USA is the largest manufacturer of VRLA Standby Batteries in
which are: Pramac Lifter Afrique Trading Sarl, Pramac Middle Indian Ocean RIM. Amara Raja is the most preferred battery
GS Yuasa is a Japanese company formed in 2004 by the merger East, PRAMAC France, PRAMAC UK Ltd., Pramac Iberica, PR in Indian Telecom with installations at close to half of the
of two large 100 year old battery manufacturers, Japan Storage Industrial among others. 400,000 towers under management of Tower companies. Our
Battery and Yuasa. At US$3.2B in sales, GS Yuasa is one of the Proven Technology and Products in 2V & 12V(26-6000AH)
worlds largest battery manufacturers. www.pramac.com batteries have been awarded as most preferred Telecom

20 | TowerXchange Meetup Africa | www.towerxchange.com/meetups/africa/ www.towerxchange.com | TowerXchange Issue 10 | 81

Our exhibitors
battery in India by Frost & Sullivan. We are the Strategic motive power, reserve power and specialty products with a
sourcing partner with more than 90% share of business with full range of integrated services and systems. With sales and Supplied to MTN Nigeria - 250 No., Airtel Gabon - 8 No. ,
worlds’ largest tower company Indus Towers. We offer proven service locations throughout the world. Headquartered in the Safaricom, -12 No, Huawei and Orange Kenya.
solutions for Tower companies to support efforts in Energy United States, with regional headquarters in Europe and Asia,
cost reduction and achieving optimal TCO in challenging EnerSys employs over nine thousand people and operates www.tkmmaestro.co.ke
environment similar to India. 32 manufacturing and assembly facilities world-wide. This
Exhibitor:
vast infrastructure and over 100 years of battery experience
www.amararaja.co.in
positions EnerSys at the forefront of both manufacturing
Exhibitor: capabilities and new product development.

www.enersys.com

NorthStar
GSM TP Exhibitor:

NorthStar is an industry leader in designing and

Founded in 2012 Gsm Telecom Products has already taken a manufacturing high performance lead-acid batteries and
strong position in the International Telecom scene. Targeting high efficiency telecom cabinets. The company has state-of-
specifically the tower companies with our new tower line; TKM Maestro the-art facilities in the USA and Sweden, and their products
“ShareTowers”, a tower series optimally designed to manage are used in more than 120 countries worldwide. NorthStar
multiple operators. The “ShareTowers” is the first part of TKM is a Telecommunication Infrastructure Firm – HQ premium thin plate AGM batteries deliver long life at elevated
the “share-site” product group, which offers a flexible, easy Nairobi - with ActiveOffices in East, West and Southern Africa, temperatures, with faster recharge and superior PSOC cyclic
upgradable tower and power designs. With the rollout (in the offering Design Build solutions for Tower Infrastructure, Fiber performance. NSB Blue Batteries are today reducing 85% of
centre of our processes), we have taken an action-oriented Networks, Data Centers and Infrastructure maintenance. diesel generator run time in offgrid telecom applications.
approach to supply. Resulting in easy to build approach A Key TKM Innovation is the Patented Compact BTS Tower Site The newly launched NorthStar Academy  program will help
designs, we try to minimize the time from signed contract to that: customers to prolong their battery life and save energy in their
a site on air. We offer tower solutions of all kind, structural telecom network.
analysis and have possibilities for vendor financing. 1. Occupies ¼ Space of a Standard Site
2. Costs 40% less www.northstarbattery.com
www.gsm-telecom-products.com
3. Stands up to 60 Meters.
Exhibitor:
Exhibitor: 4. Collocates 4 Operators.
5. Securely Enclosed - Top and Side.
6. Re-deployable.
EnerSys 7. No Wet Concrete Works–Ballast fill foundation. Capital Safety

EnerSys® is the global leader in stored energy solutions for This innovation has been Audited and approved by Helios Capital Safety are dedicated to bringing every worker at
industrial applications. We complement our extensive line of Towers, MTN, Safaricom. height home safely and committed to focusing solely on fall

82 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com/meetups/africa/ | TowerXchange Meetup Africa | 21

Our exhibitors
protection. range from 1-3000kVA.
Secure your exhibition at the
Home of the flagship DBI-SALA® and Protecta® brands, We are pleased to support TowerXchange where we will
Capital Safety engineers and manufactures an expansive range
TowerXchange Meetup Africa 2015
be introducing the new innovative Mercurio Telecom
of fall protection equipment including, harnesses, lanyards system, a cost effective simple DC power solution for
systems and anchors, self-retracting lifelines, confined space The last three expos at TowerXchange Meetups
remote telecom stations.
and rescue. have sold out. Our flagship African event sold
www.meccalte.com
out months before the show in 2014. Secure
In addition we have a number of state of the art training a prime location for your company at next
centres across Europe. Media Partner: year's event, when we will be relocating to
the prestigious Sandton Convention Centre
The company uses its industry experience and feedback clients
ballroom, one of Africa's premier exhibition
in the field to provide on-going advice and support through
onsite visits, demonstration vehicle awareness training, locations.
dedicated training centres and an extensive network of repair
centres. Hardiman Telecommunications TowerXchange Meetups continue to provide a
unique opportunity to develop relationships
www.capitalsafety.com Enda Hardiman ([email protected]) is Managing and opportunities among our highly selective
Partner of Hardiman Telecommunications Ltd. a boutique audience of Director to C-level decision makers
Media Partner:
consultancy with offices in London and Hong Kong and at towercos, MNOs, services providers and
an strong track record in emerging markets worldwide.
their partners. There is no other event which
Hardiman Telecommunications Ltd. advises operators,
focuses on passive infrastructure for telecoms,
towercos, investment banks and PE funds on strategy,
Mecc Alte operations and M&A.
so please contact our CCO Annabelle Mayhew
([email protected]) today for a
Mecc Alte is proud to be the world’s largest independent bespoke proposal to bring your company to
www.telecoms.net
producer of synchronous alternators. A specialised the TowerXchange Meetup Africa 2015, taking
manufacturer of rotating machines, within the
place at the Sandton Convention Centre on
electromechanical sector. Quite simple we manufacture Tower Xchange
October 1 and 2 next year. Discounts available
the widest range of low voltage alternators. We are a
if you also book participation in our Asia

Meetup Asia 2014

totally independent company focused on one product
(December 9 and 10, 2014, Singapore) and
sector, making us specialists within our field. We operate
in many diverse applications working closely within the
Americas Meetups (April 28 and 29, Hollywood,
independent power generation market offering a versatile
December 9-10, Singapore FL).

22 | TowerXchange Meetup Africa | www.towerxchange.com/meetups/africa/ www.towerxchange.com | TowerXchange Issue 10 | 83

Special Feature:

A snapshot of the
Kenyan tower market
Kenya is SSA’s fourth largest telecom market, boasting a rapid
rate of 3G penetration growth, indicative of burgeoning data
demand. So why has the tower market in Kenya not developed
as swiftly as in other countries?

With Safaricom dominant, with 68% market share and no

need for cash, they had little incentive to divest their towers.
Many competitors have faltered in efforts to win market share
from Safaricom; Essar Telecom are exiting, Orange may not
be far behind – their financial struggles with partner Telkom
Kenya having precipitated the recent termination of their
agreement with Eaton to manage and market Orange’s Kenyan
towers.

But the Kenyan tower market is about to be reinvigorated.

Eaton’s Kenyan team will soon have new assets to market for
co-location; the imminent acquisition from Airtel.

As the independent tower company business model finally

starts to take root in Kenya, TowerXchange and Mott
MacDonald both share our evaluations of the market.

Don’t miss:
85 Introduction to the Kenyan tower market
88 The Mott MacDonald Share Square for Kenya

84 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Introduction to the Kenyan
The fundamentals of the Kenyan mobile market
look good for the telecom tower industry. Kenya

tower market
is SSA’s fourth largest mobile market and growing
fast, with 13.4mn unique mobile subscribers
(behind Nigeria with 48.8mn subscribers, South
As Eaton replaces Telkom Kenya’s towers with Airtel’s, TowerXchange reflect on Africa with 32.9mn and Tanzania with 15.2mn –
the troubled past and look to the promising future of the tower market in Kenya data from GSMA Intelligence, Q2 2013). According
to the same source, Kenya has one of SSA’s highest
The footprint of independent tower 3G penetration rates at 14.2% compared to the
companies is extending seemingly regional average of 7.6%. However, as a legacy of
inexorably across Africa, gobbling up the years of tariff wars, ARPU has fallen below US$5.
majority of towers in countries such as
Nigeria, Ghana, Cameroon, Cote d’Ivoire, So Kenya has a lot of subscribers, more of those
Rwanda, Zambia and DRC. 75% of subscribers are on data hungry 3G than most of
Tanzania’s towers have transferred from SSA, and there is pressure on margins.
MNO-captive to independent towerco
Helios Towers Tanzania. Yet over the According to BMI’s analysis of the market in
border it was starting to seem that the TowerXchange last year “Kenya’s four mobile
independent towerco model would operators have a combined towers portfolio
not take root in Kenya. Why? And will of around 6,000 towers (of which ~3,500 have
Eaton’s acquisition of Airtel’s towers, 3G antenna). This is grossly insufficient for the
and the potential launch of Open Access country’s population of almost 45mn and land
LTE, change the market dynamics? area of around 570,000 sq km”.

Keywords: Editorial, Market Overview, Rental Rates, Tenancy Ratios, Build-to-Suit, New Market Entrant, This sounds like a good combination of drivers for
ARPU, Regulation, Infrastructure Sharing, Africa, Kenya, Eaton Towers, Airtel, Safaricom, YuMobile, the kind of asset sweating, cell site densification,
Orange, Telkom Kenya BTS programme administration and efficiency
improvements towercos can deliver, right?

Read this article to learn: So why is the jury is still out on the Kenyan tower
< Estimated tower counts and 3G antenna counts for Kenya market?
< The lack of incentive for Safaricom to part with their towers
< The implications of operator consolidation for prospective tenancy ratios The structure of the market is one reason
< The potential impact of an Open Access LTE network for Kenya Kenya lags much of SSA in infrastructure
sharing

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 85

Safaricom has participated in plenty of bi-lateral
swaps, but they seem reluctant to part with their
towers – and why should they? Safaricom’s market
share is just under 70%; they have Kenya’s largest
network, and a sticky mobile money service. They
don’t need the cash from a tower sale, and they
feel their towers remain a source of competitive
advantage.

Bob Collymore, CEO of Safaricom, shared

his perspective on the independent towerco
business model in a recent interview with
the London Financial Times (see http://video.
ft.com/3620725831001/Africas-telecoms-frontier/
markets): “It really only makes sense if you
can put other people onto that infrastructure,
otherwise you’ll only be running it as inefficiently
as we are… So they (the towercos) speculate that
when they buy someone’s towers they will be able
to get other tenants, and typically they need to
get between two and three tenants on. So whilst
there’s been a lot of talk about it, there’s been very
few real success stories on towers.”

Collymore seems skeptical that the Kenyan market is that the structure of the deal probably favors Wi-Fi, ISP and broadcast tenants for the towers.
can yield the kind of tenancy ratios Eaton Towers up front cash over maximising opex reduction,
have already achieved in South Africa, where resulting in a healthy leaseback rate. This means The financial health of third and fourth ranked
their tenancy ratio has raced beyond two with a Airtel’s towers may be EBITDA-positive for a MNOs
portfolio that is less than two years old. But do towerco even with a single tenant. There is upside
tenancy ratios need to reach between two and too for Kenyan towercos, such that we wouldn’t The outlook for co-location sales is less good
three for a towerco to prosper in Kenya? forecast a stagnant tenancy ratio for the Airtel when looking at Kenya’s third and fourth ranked
vintage of Kenyan towers. Safaricom is a tenant operators. YuMobile (Essar Telecom) is exiting
Airtel’s Kenyan towers have been sold to Eaton on plenty of other operator’s towers in Kenya, so the market, with assets and subscribers being
Towers. The reality of the Airtel tower sale, given while they may be reluctant to sell, they are not split between Safaricom and Airtel respectively.
the Indian operator’s focus on paying down debt, reluctant to co-locate. And there are no shortage of Investors in towers don’t like in-market

86 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 “
consolidation as they feel it lowers the glass ceiling would certainly have a disruptive impact on
on tenancy ratios. the Kenyan telecoms ecosystem – accelerating
new entrants time to market, while at the same
Telkom Kenya’s financial distress may culminate time placing a de facto cap on the number of
in the withdrawal of partners Orange, and has A shared wholesale 4G network prospective 4G tenancies on towers. However, the
already led to the cancellation of Eaton’s contract would certainly have a disruptive Communications Authority of Kenya’s enthusiasm
to manage and market Telkom Kenya / Orange’s for infrastructure sharing suggests that if a 4G PPP
impact on the Kenyan telecoms
1,000 towers. network were launched, it would leverage shared

However, the Kenya Communications Act

expressly forbids the existence of either a
monopoly or a duopoly in the telecommunications
sector, so while the owners may change, we
ecosystem – accelerating new
entrants time to market, while at
the same time placing a de facto
cap on the number of prospective
4G tenancies on towers
“ towers.

With Safaricom’s leadership position threatened

by an Open Access LTE venture, could the move
even prompt the Kenyan giant to divest their
still expect there to be at least three different towers, or perhaps spin them off into their own
operators’ antenna hanging on Kenya’s towers. towerco to maximise the value created by those
Open Access LTE co-locations?
Kenya rewards innovative entrepreneurs It seems that Orange may be soliciting bids for
their 70% stake in Telkom Kenya, which could Speculation about Open Access LTE in Kenya
Safaricom achieved Kenyan market leadership attract an innovative market new entrant. should be tempered by the fact that a launch
through innovation – an entrepreneurial culture Investors are increasingly bullish about some of was initially mooted by the end of 2013, yet
fostered by Michael Joseph and continued by Bob Africa’s new operators and their ability to disrupt three financial Quarters later there is no sign of
Collymore. Despite fierce tariff wars, Safaricom’s SSA’s incumbent operators, grabbing both market agreement being reached on the venture.
market share has held firm, and the firm enjoys share and margin. Success stories like Africell’s in
unparalleled brand recognition and trust. In DRC owe a lot to leveraging independently owned Conclusion
comparison, Safaricom’s competitors have been towers. The entry of a similarly innovative or
hindered by slow decision making processes and aggressive new player into Kenya, such as Viettel, The independent tower industry made ‘first
by red ink on their books. Telkom Kenya and who are rumored to be bidding for Orange’s stake contact’ with Kenya via Eaton’s relationship with
Orange were wise to explore partnering with a in Telkom Kenya, could be the stimulus needed by Telkom Kenya. That didn’t worked out, most
towerco to reduce opex, improve QoS and extend the Kenyan mobile market. would say, through no fault of the towerco. But
their network whilst deploying the minimum with the transfer of Airtel’s Kenyan towers to
capex, but the strategy was discontinued in part Open access LTE Eaton, there is a new dawn for the Kenyan telecom
due to the financial turbulence in the broader tower industry. But with operator consolidation
operation. Making efficiency improvements Kenya’s ICT ministry has championed the cause afoot and a wholesale LTE network potentially
within parastatals has proved challenging in many of a public private partnership “Open Access” imminent, Kenyan tower industry continues to
markets, and Kenya has been no exception. LTE network. A shared wholesale 4G network offer a mixed bag of potential and uncertainty

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 87

 and the poorest 10% a mere 1% (source: Pulling

Share Square: Kenya Apart, Facts and Figures on Inequality in Kenya).

Market

Mobile telephony and internet services

• Almost 31.2 million subscribers at the end of 2013 – low mobile
grew in Kenya from their establishment in
Active

penetration of 70%. 99% of the subscriptions are pre-paid

• 4 MNOs : Safaricom, Airtel (Bharti Airtel), Orange (Telkom the early 1990s, but suffered from a lack
Kenya) and YuMobile (Essar Telecom) – although YuMobile
confirmed market exit in 2014, and rumours exists around of development.  This was a result of poor
Orange’s exit. The market is dominated by Safaricom with 68%
competition, and the difficulties that the state
Current Sharing

market share
Kenya • Introduced in 2008, 3G subscrip(ons have reached 3.5 million operator, Kenya Posts and Telecommunication
Passive

by the end of 2013.

Corporation (KPTC, now Telkom Kenya/Orange),
• The government plans to implement a public-private
partnership (PPP) to create a national ‘Open Access’ LTE network. had in funding telecoms infrastructure.
It is not clear whether this will proceed.
• Infrastructure sharing is legally well defined and “required” by
the regulator. After the liberalisation of the telecommunication
• Eaton Towers became the first, and is at the moment the only, sector in 1999, the national regulator, the
tower operator in Kenya.
Communications Commission of Kenya (now
None

• While the Kenyan market is certainly one of the most attractive

markets for tower operators in Africa, the recent changes in the the Communications Authority of Kenya - CA),
market landscape add some uncertainty
granted Telekom Kenya a switched services
operator license and Safaricom Kenya Limited
3G 4G
the first GSM license.  However mobile subscriber
Technology Deployment growth didn’t really start until the entrance of the
second mobile operator in 2000, Kencell, which
Opportunity for TowerCo entry with Opportunity for Outsourcing Limited opportunity for new
later became Celtel, then Zain, then Bharti Airtel.
focus on high Lease Up Rate (LUR) by MNO to TowerCo entrant TowerCo

The Kenya Communications Act expressly forbids

Background With a population of 41.8 million people (source: the existence of either a monopoly or a duopoly
Kenya facts 2014) and a GDP of US$20.6billion, in the telecommunications sector. However the
The Republic of Kenya is an East African country, Kenya is the biggest economy in eastern Africa introduction of a second mobile operator led to
sharing borders with South Sudan and Ethiopia and one of the top ten countries driving the market competition resulting in (some) price
in the north, Somalia in the east, Uganda in economic growth in the continent. However, reductions and increased penetration % in just
the west, Tanzania in the south-west and with Kenya is also in the top 10 of the most unequal one year.
access to the Indian Ocean in the southeast of the societies in the world, with the richest 10%
country. owning more than 40% of the land and resources, In 2008, two additional mobile operators entered

88 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

the market with a third license awarded to telecommunication sector remains the third Soon after, several reports emerged hinting at
Econet Wireless Kenya (EWK), which later strongest industry with an annual growth of 6% Orange’s intention to leave the market.  The
became Yu (Essar Telecom) and a fourth awarded (as of 2013). company’s financial health, its lack of profit
to Orange (Telkom Kenya). This simultaneous in nearly seven years, as well as its recent exit
launch triggered a price war, which quickly At the end of 2013, there were 31.31 million from the Uganda market seemed to further
reduced Average Revenue Per User (ARPU), subscribers, giving a penetration of 70%, slightly support this.  However Orange’s investments
forcing operators to look for new sources of below the African continent average penetration of US$280million to support the rollout of 3G
revenue such as mobile money services. First but one of the leading countries in Eastern Africa, across the country, expand its national optic fibre
launched in Kenya in 2007, today 25% of the which averages just 40% penetration. Consumer backbone and launch a Multi-Service Access
country’s gross national product flows through subscriptions are dominated by pre-paid SIMs Node (MSAN), and the recent replacement of its
the M-Pesa mobile money service operated by representing more than 99% of the market. executive staff, make it difficult to be certain that
Safaricom. Since the introduction of the 3G by Safaricom Orange will exit the Kenyan market.
in 2008 (but now offered by all operators), 3G
Today the telecommunication sector in subscriptions have reached 3.5 million by the Infrastructure Sharing
Kenya represents 9.1% of the GDP or US$ 3.8 end of 2013. Safaricom has trialled 4G LTE, but
billion (source: Kenya facts 2014).  While GDP shortly after the government announced plans to With low ARPUs and stiff price competition,
growth has been declining since 2010, the implement a public-private partnership (PPP) to operators are facing difficulties in funding
create a national ‘Open Access’ LTE network by the modernisation and expansion of their
Kenya mobile market shares at end 2013 2013. No agreement has yet been reached on this. networks.  Consequently they have been looking
at lowering costs through independent tower
7% Safaricom dominates the market with 68% of the firms managing their tower portfolios.
market share, followed by Airtel (Bharti Airtel),
8%
Orange (Telkom Kenya) and YuMobile (Essar Since its creation the CA has actively promoted
Telecom). Despite a slow decrease in market infrastructure sharing, with clear requirements
16% share over the last 5 years, about -1% CAGR, in the Communications Regulations Act. The first
Safaricom market dominance is expected to tower sharing in Kenya was agreed in April 2009,
68% continue. providing for Airtel to share around 300 base
stations with YuMobile over the next 15 years.
Due to aggressive market pricing, YuMobile has
been struggling since its entry into the market, In June 2011, Safaricom and Orange
and in March 2014 it confirmed rumours announced their plans to form a jointly owned,
Safaricom Airtel (Bharti Airtel) regarding a market exit, with the divestment independently managed infrastructure company,
of its infrastructure to Safaricom and the but little information came out regarding this
yu (Essar Telecom) Orange acquisition of its customer base by Airtel. agreement.

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 89

In June 2013, Eaton Towers became the first
tower operator in Kenya signing a 15-year
agreement with Telecom Kenya (Orange) to DECREASE NETWORK COSTS WHILE
manage a portfolio of 1000 towers. But the INCREASING RELIABILITY AND EFFICIENCY.
contract was reportedly cancelled in mid- 2014
due to the financial uncertainties around Telkom
Kenya’s future and the recall of Orange’s Kenyan THAT’S THE
CRITICAL DIFFERENCE.
management team.

A few months later, Eaton announced the

acquisition of over 3500 telecommunications
towers in 6 countries across Africa from Airtel.
Various public sources indicate that this includes
Airtel’s portfolio in Kenya.

Conclusion

If the 4G PPP proceeds, the MNOs may make Emerson Network Power, the Emerson Network Power logo, Emerson and Consider it Solved are service

their tower sites available under a shared-

infrastructure model. This could stimulate
marks and trademarks of Emerson Electric Co. or one of its subsidiaries.

operators to sell or leaseback more towers in the

future and could offer opportunities for tower
Hybrid Energy solutions from Emerson Network Power
operators.
ensure the best operational cost … always.
The Kenyan market is certainly an attractive Hybrid Energy solutions feature innovative
active site infrastructure management that can
market for tower operators at the moment, reduce energy consumption significantly to
due to its market size, number of operators ensure your network is running at an optimal
and current economic health. But the recent level of efficiency and reliability at all times.
announcements of a YuMobile market exit
and the uncertainties around Orange’s future EmersonNetworkPower.eu/Hybrid
in Kenya could dramatically impact the
communication market leaving Safaricom and
Airtel in a duopoly-like set up. This in turn
creates a level of uncertainty

90 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Special feature:

Cameroon and Cote d’Ivoire

Case study, part two
Viettel has finally launched in Cameroon, easing their
delays by leveraging co-locations on the towers owned and
marketed by IHS.

Time to market is a critical driver for operators to choose to

lease not build, as illustrated by the experiences of YooMee
Africa, who launched in Cameroon before IHS entered the
market, then launched in Cote d’Ivoire earlier this year, when
they were able to leverage shared towers and rooftops to
reduce time to market from 4-5 to 3-4 months. YooMee’s CEO
Dov Bar-Gera also shares some forthright views, positive and
negative, on his experiences as a tenant on shared towers.

But part two of our case study opens with TowerXchange’s

regular columnist and friend, Ken Okeleke, and his verdict
on the “mixed bag of upside and downside risks” Cameroon
represents for the tower industry.

P.S. Download issue 9 of the TowerXchange Journal for part

one of this case study, including BMI’s Cote d’Ivoire analysis
and an exclusive interview with Orange, where Michel Faivre
shares his experience of working with towercos.

In part two of this case study:

92 YooMee explain how towercos make mobile broadband
more investible
97 BMI: Cameroon tower market susceptible to country
risk dynamics

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 91

How independent towercos make TowerXchange: Please introduce our readers to
YooMee.

mobile broadband more investible Dov Bar-Gera, CEO, YooMee Africa: YooMee Africa
is an operator providing fast wireless Broadband
Leveraging IHS’s towers in Cote d’Ivoire accelerates time to market for YooMee internet, using 4G LTE, in sub-Saharan Africa. The
company is a Swiss-based company founded in 2010
YooMee is a transformational high speed broadband service with a mission of closing the digital divide.
provider with a footprint in Cameroon and Cote d’Ivoire, and
a vision to help close the digital divide across sub-Saharan YooMee’s founders successfully founded telecom
Africa. YooMee’s experiences offer a direct comparison of the and internet companies in the last 15 years. I
practicalities of rolling out a high speed mobile broadband service am a serial entrepreneur and had sold all my
before and after the entry of independent towercos. YooMee businesses in 2007 and tried to retire, but I did not
launched is operations in Cameroon in 2011, before the transfer manage to do it. Some people in SSA approached
of MTN and Orange’s towers to IHS, and found its time to market me and described the lack of fast internet services
significantly accelerated as it as it utilized IHS’s shared sites when as a major obstacle for the development of
they launched more recently in Cote d’Ivoire. To learn more, e-government, e-health, e-education and other
TowerXchange spoke to YooMee Chief Executive Dov Bar-Gera. necessary services mainly in the business sector.
That attracted me to come and provide state of the
Keywords: MNOs, Towercos, Construction, Investment, 3G, 4G, art fast internet Broadband.
Rental Rates, Transfer Assets, Batteries, Co-locations, Loading,
Network Rollout, Bankability, New Market Entrant, Novation of After founding YooMee, we started searching for
Leases, Regulation, SLA, Uptime, Rooftop, C-Level Perspective, licenses, and we found a very supportive regulator
Infrastructure Sharing, Africa, Cameroon, Cote d’Ivoire, MTN,
in Cameroon who told us how to apply for spectrum
Dov Bar-Gera, CEO, YooMee Africa Orange, IHS, YooMee Africa
and permissions. Everything takes quite a while in
sub-Saharan Africa – in the case of Cameroon it took
us one year to secure a license, so in mid-2011 we
Read this article to learn:
started to establish our first network.
< How access to independent towers accelerated time to market from 4-5 to 3-4 months
< YooMee’s initial verdict on towerco’s performance against Service Level Agreements (SLAs)
TowerXchange: How did you rollout your first
< A comparison of the cost of leasing with the cost of building sites sites in Cameroon? What were YooMee’s initial
< Why YooMee rolled out TD-LTE and what it means for their requirements as a tenant experiences trying to secure tenancies on MNO-
< How affordable, high speed, high quality mobile broadband will help sub-Saharan Africa bridge captive towers?
the digital divide
Dov Bar-Gera, CEO, YooMee Africa: Back in 2011, we

92 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

had to build our own sites in Cameroon, because we
found it almost impossible to work with the owners
of the existing towers. The two market leading
operators, MTN and Orange, effectively had an
oligopoly, and their expectations from prospective
tenants were outrageous. So we built our own
rooftop sites in Yaoundé and Douala. There was a
good inventory of high rise buildings, and relatively
liberal construction laws, so construction was not
too onerous.

TowerXchange: How did your network rollout

in Cameroon compare with your more recent
rollout in Cote d’Ivoire?

Dov Bar-Gera, CEO, YooMee Africa: We entered Cote

d’Ivoire after IHS had secured the rights to market
MTN and Orange’s towers for co-location, and that
has had a huge impact in terms of shortcutting
our to time to market. Whereas previously we
needed to negotiate with landlords, secure permits
and engineer power solutions in order to get new
sites up and running, leveraging the independent
YooMee group management at the semi annual meeting in Douala Cameroon
towerco’s sites reduced our lead time significantly.
Dov Bar-Gera, CEO, YooMee Africa: We secured final TowerXchange: I read on your website that
Co-location doesn’t reduce workload significantly. regulatory approval to launch in Cote d’Ivoire at the covering a new city requires approximately
We still have to use our own engineers to evaluate end of December 2013. We signed an agreement 25 BTSs and takes 4-5 months – how has that
and make sure we can use the towers, and we still with IHS in the first week of January, and by the timescale changed working with a towerco in
have to supervise operations. But working with an beginning of April we were up and running with Cote d’Ivoire?
independent towerco gives us access to a greater 20 sites. Today we are close to 40 sites. So far all
variety and a better choice of towers. our sites are co-locations, but we may have to build Dov Bar-Gera, CEO, YooMee Africa: Using
some of our own sites as some towers are totally independent towers reduces the total amount of
TowerXchange: What is the status of your rollout full, or are inappropriate for other reasons. YooMee time to deploy a network from 4-5 to 3-4 months.
in Cote d’Ivoire at the moment? And what is the is just in Abidjan for now, but we plan to have an
vision for the future of the network? additional 50-60 sites in total in Cote d’Ivoire. Access to towerco’s independent towers reduces

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 93

the time to have the infrastructure under contract, before signing a contract with IHS. We found that
but it doesn’t reduce time it takes to connect to leasing a tower cost more than building our own
the core network, which remains independent of site after three to four years, but with today’s lease
the towerco. So using shared towers frees a lot of pricing structure, and with full power support from
engineering resources to concentrate on the core the towerco, we felt that leasing over building is
network and on backhaul. advantageous due to the value of time to market.

Backhaul is still a weak point with the towercos, and TowerXchange: How do YooMee’s requirements
one which I hope they’re going to improve. We’ve as a tenant differ from those of the anchor
encountered problems when the towercos buy the tenant mobile network operators?
towers, but the anchor tenant sits on the backhaul
assets and won’t share. Dov Bar-Gera, CEO, YooMee Africa: While we
ideally want to mount our antenna at a similar
TowerXchange: Are your Service Level height as the anchor tenants, sometimes we have
Agreements (SLAs) being met? to compromise.  Since we use the latest TD-LTE
technology, we are significantly less demanding
Dov Bar-Gera, CEO, YooMee Africa: The most towercos are acquiring thousands of towers, but tenants. The total space we require is less than
important component of the SLA is power it takes time to get all the quality control issues either a 3G or a 2G antenna, and the power
availability. For the moment, it’s ok, but not good. covered. We are paying for space and power, and requirements of our antennas are significantly
IHS are able to offer an acceptable SLA for the more modest.
Availability of new towers is excellent around 80% power. IHS is not supporting our own components,
of the time. The exceptions tend to occur in around such as switching components on and off, so we are TowerXchange: What technology has YooMee
20% of cases where landlords obstruct the process looking for an independent provider to do that. rolled out in each country?
during the change of ownership. When the rental
agreement is transferred, some landlords try to TowerXchange: How do the costs of co-locating Dov Bar-Gera, CEO, YooMee Africa: We initially
participate in the new revenue streams. compare to building your own sites? rolled out in Cameroon in 2011 an 16e WiMAX. LTE
was still in developing stage and not ready for the
In general, if I have access to eight out of ten new Dov Bar-Gera, CEO, YooMee Africa: Co-location market.
sites within the agreed timeframe, I consider that a only makes even more sense if we receive a full
good response. service from the towerco. If we need to use our We have rolled out TD-LTE in Cote d’Ivoire and will
own technicians for first and second level service, be upgrading our network in Cameroon to TD-LTE
We are still encountering quality control issues, then the cost benefit analysis comes out in favour of soon.
whether related to unreliable local grid power, building our own sites quite fast.
backup power, or the age of batteries. When I talk TowerXchange: Why leapfrog other technologies
to other tenants they all have the same issue – Of course we did a lot of calculations and modeling and go straight to LTE?

94 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 “
Dov Bar-Gera, CEO, YooMee Africa: The WiMAX in SSA. MNOs are losing the power to inhibit the
era is over now. With the exception of 3.5GHz, at development of competition; they can’t afford to
2.3-2.5GHz we find TD-LTE is more flexible, which retain their towers, they need cash, and similarly
makes hunting for spectrum easier. Having said they are going to lose their exclusivity in the
that, we have found it easy to find people interested purchase of devices.
in buying the second hand WiMAX equipment
The moment independent
which we are replacing in Cameroon! Sharing towers is a critical change, but it is only one
towercos start providing access in a long row of changes we will see in the next few
China Mobile are a good partner in TD-LTE – they to SSA’s existing infrastructure, years. SSA will open up to innovative new market
the competitive advantage of the
see smaller players like us as a way of driving
device sales volume, so we have good co-operation
and a constant flow of interesting products and
innovations.

Ultimately, all the customer cares about is stable

traditional players is diminishing
and innovative players like
YooMee become more investible
“ entrants which will accelerate the availability of
affordable, high speed broadband.

An interesting next step in improving market

competitiveness would be to look at access to
submarine cables, which is still being monopolised
and fast connectivity! by the incumbent operators, and which remains the
main obstacle to large scale broadband in Africa. If
TowerXchange: Are LTE devices affordable? the towercos could take over the submarine cable
part of an average Ivorian’s monthly income. We landing points, that would be great!
Dov Bar-Gera, CEO, YooMee Africa: Whatever price don’t subsidies devices.
devices are, it is always too expensive! TowerXchange: With a number of prospective
TowerXchange: How can the transformation new entrant service providers securing licenses
The first smart phones six or seven years ago cost from operator-captive assets to independent but ultimately failing to come to market
over €500, and had weak functionality. Now you can towerco owned assets accelerate the rollout of because of the challenges and costs of rolling
get an excellent smart phone for less than US$100. broadband in Africa? out networks in Africa, how do you think
the availability of shared towers affects the
The cost of LTE enabled devices is still relatively Dov Bar-Gera, CEO, YooMee Africa: In the telecoms investibility of prospective startups?
high compared to 3G. Half a billion 3G dongles business, you have a very short lifetime to control
have been sold compared with a few million LTE any given market. Many global telecom companies Dov Bar-Gera, CEO, YooMee Africa: As one of
dongles. But consumers are excellent evaluators, that had once looked unbeatable are now YooMee’s founders and investors, I feel that the
and they see difference between 3G and LTE service struggling. independent tower story has a profound effect on
immediately. Thanks to the volume being driven by startups like ours. A lot of prospective investors in
China Mobile and the big US operators, devices that Towercos enabling access to SSA’s towers, and new our company were excited about our proposition,
cost US$120 six months ago, cost now US$65. Still, devices enabling faster broadband, herald the end but ultimately didn’t invest because they felt the
the cost of a new modem constitutes a significant of the era of MNO oligopolies controlling telecoms established operators had a competitive edge,

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 95

particularly in terms of infrastructure. The moment businesses have registered on this innovative TowerXchange: Finally, how can broadband help
independent towercos start providing access to platform. to bridge the digital divide in Africa? Please sum
SSA’s existing infrastructure, the competitive up your vision for YooMee Africa.
advantage of the traditional players is diminishing We were surprised to see that our subscribers
and innovative players like YooMee become more were not just early adopters. Among our 24,000 Dov Bar-Gera, CEO, YooMee Africa: Acceleration
investible. subscribers in Cameroon you will find many middle of adoption of high speed broadband internet
class people who understand that Internet access adoption is critical to closing the digital divide. This
This change in the investment landscape can be is important for the family – for their children’s can be done by making available rich media content
critical for companies like ours that are for-profit, education, for connecting with the job market, but (youtube, movies, songs) and online resources
but which are also generate strong economic and most important over 3,000 business owners that (search, surfing, communication) at a competitive
social positive impact on the region. We believe in understand the importance of the internet for their price. SSA lags behind the developed world in
the benefits of bringing high speed internet and business development. scientific and economic research due to lack of
rich media platforms. Companies like YooMee access to real time information. Closing the digital
are the driver of growth for internet usage in the There is also a lack of entertainment outside of divide in SSA will enhance creation and expansion
region. According to a major study by the World working hours in Douala and Yaoundé. There might of small and medium enterprise, accelerate
Bank, every 10% increase in broadband penetration be just a dozen or so concerts per year, there are no e-commerce, create employment opportunity in
results in a 1.4% GDP increase in developing cinemas; entertainment is minimal and expensive, value added services and promote the availability
countries. so high speed Internet delivers rich media like and the level of medicine. It is critical to political
youtube clips, movies and songs is an interesting and economic development.
TowerXchange: Tell us about YooMee’s alterative.
subscribers – is it a B2B or B2C-centric service? The launch of YooMee in Cameroon and Cote
TowerXchange: Where next for YooMee? d’Ivoire was game changing in sub-Saharan
Dov Bar-Gera, CEO, YooMee Africa: We serve both African mobile broadband. We provide high
the B2C sector and at the same time we have built a Dov Bar-Gera, CEO, YooMee Africa: Our goal is to quality broadband and best of class customer care
strong B2B customer base. We have different sales extend our high quality service across sub-Saharan – a totally new customer experience. That has a
teams taking care of each sector. The same rules Africa, with an initial focus on West and Central tremendous social and commercial impact. We
apply for customer care, as the need for support Africa. approach the business sector as solution partner,
is different. Our B2C  activities have a long term not just a connectivity enabler.
view of this  business. You can’t generate sufficient We are talking with many different regulators in the
revenue in SSA without B2C. Our B2B activities are region. Our next country could be Ghana, Guinea While some companies focus on the best talent,
focused on SME, as we believe that the real growth Conakry, Sierra Leone or even Liberia, Mozambique and others focus on technology, we just focus on
will come from this part of the B2B sector. We even or Senegal. Our choices of countries are based on our customers. YooMee put the customer at the
support this business activity by introducing the GDP growth – markets where there is strong growth center of all activities, to ensure the best customer
first digital business city directory in Cameroon of the middle class, as well as size of population, experience, supported by the best customer care,
under the name www.ici.cm. More than 11,000 GDP, competition and availability of licenses. and an exciting range of products

96 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Cameroon tower market
Cameroon’s mobile market is one of the least-
developed in Africa in terms of market penetration
and deployment of advanced data networks. The

susceptible to country country had a mobile penetration of just 66.3% at

the end of 2013, according to BMI data, and is one of

risk dynamics a handful of major markets where a commercial 3G

network service is not yet available. This scenario
is expected to change over the medium term on
Opportunities created by economic growth, a new market entrant and a transition to 3G the back of ongoing potential developments in the
balanced by political and security instability and an end to fuel subsidies telecoms industry, notably the imminent launch of
commercial services by the country’s third mobile
BMI View: The macroeconomic and telecoms licensee, Viettel. In August 2014, the Vietnam-
industry environments in Cameroon offer based company announced plans to rebrand its
a mixed bag of upside and downside risks. Cameroonian unit to Nextel and launch commercial
Investors and companies in the country’s operations on the network on September 18. The
budding towers market must thoroughly move will break the MTN-Orange duopoly and drive
assess these risks to ensure long-term growth competition-based growth in the mobile market.
and the sustainability of their operations in
the country. The market is already experiencing the impact of
increased competition, as evidenced by operational
performances in during the first six months of
Keywords: Research, Market Overview,
3G, New License, Market Forecasts, New 2014. Incumbent operators MTN and Orange
Market Entrant, Densification, ARPU, Country recorded combined subscription net additions of
Risk, BMI Analysis, Infrastructure Sharing, 1.632mn in H114, or average quarterly growth of
Africa, Cameroon, IHS, MTN, Orange, Viettel, 5.4%, compared to 1.639mn in FY13, or average
Kenechi Okeleke, Senior Analyst, BMI Business Monitor International quarterly growth of 2.3%. We attribute the strong
performance in H114 to promotional activities and
price offers by MTN and Orange in a bid to shore
Read this article to learn: up their subscriber bases in anticipation of Viettel’s
< The impact of Viettel’s imminent entry into the market on subscriber growth, tariffs and ARPU arrival. This view is supported by the sharp decline
< Will Viettel’s window for 3G exclusivity be extended? 3G investments of MTN and Orange of the operators’ ARPU during the same period.
< What happens after the long, stable reign of President Biya?
< Rising security threats Increased competition in Cameroon’s mobile
< The end of Cameroon’s fuel subsidy market will accelerate subscriptions growth by
stimulating competitive service pricing and network

XX | TowerXchange Issue 9 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 9 | 97

expansion to underserved areas. This poses a
significant upside risk to our current five-year
Cameroon mobile market growth Strong growth potential

growth forecast which expects total net addition 30,000 90

of just over 7.1mn lines in the period 2014-2018,
taking the market penetration rate to 86.8%. This
outlook is arguably one of the biggest drivers of 80
tower infrastructure outsourcing services. The
operators are keen to extend network coverage 20,000
to underserved areas where nearly half of the 70

population live, but will prefer to do so in a cost

effective manner considering the increasing 60
downward pressure on mobile ARPUs. BMI
10,000
calculates that market weighted average ARPU
dropped below US$5 in H114, and will likely remain 50
subdued over our forecast period.

Viettel has not disclosed its operational strategy, but 0 40

2011 2012 2013 2014f 2015f 2016f 2017f 2018f
we expect tower sharing and co-location to feature Cellular Mobile Phone Subscribers, ‘000 (LHS) Mobile Phone Subscribers/100 Inhabitants (RHS)
prominently. The company is open about its plan to f = BMI forecast. Source: BMI
implement a low-margin strategy in order to gain a
foothold in the market. Viettel recorded remarkable unlikely that Viettel will have its request granted, Mixed country risk outlook
success with this strategy in Mozambique, where given strong opposition from incumbent operators
it launched commercial operations in May 2012 and other stakeholders including phone users. IHS Towers has monopoly of Cameroon’s
and reported a subscriber base of more than 3mn In February, MTN Cameroon announced plans to independent tower infrastructure market, having
by the end of December 2013, despite intense invest XAF600bn (US$1.25bn) in its mobile network struck deals with MTN and Orange in December
competition from state-owned mCell and South over the next three years, on the condition that the 2012 and April 2013 respectively. The firm is well
Africa’s Vodacom. Tower sharing will help Viettel government issues it with a 3G licence. Orange has placed to win business from Viettel, which will
maintain a competitive cost profile, considering that also made extensive preparations towards the roll likely opt for the services of an established player
ARPUs have fallen below US$5, as well as accelerate out of 3G services and a number of the country’s for co-location services and, perhaps, the disposal
network coverage across the country. WiMAX operators, including YooMee, are making of its tower assets as opposed to a new entrant. This
efforts to transition to 4G LTE. Competition in makes IHS and its suppliers highly susceptible to
Viettel obtained exclusive rights 3G services until the 3G market and deployment of other wireless prevailing macroeconomic and country risk factors.
the end of December 2014, although the operator is broadband technologies will require capacity Presently, there is a mixed outlook for external
requesting a two-year extension to compensate for enhancement and densification, and strengthen the factors capable of impacting on the operations of
the delayed launch of commercial services. It is case for tower sharing. firms in Cameroon’s towers market. The three most

98 | TowerXchange Issue 9 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 9 | XX

 stability, partly due to the long reign of President
Under Pressure MTN and Orange ARPUs (USD)
Paul Biya. The octogenarian has dominated
8 MTN Orange Cameroonian politics since 1982, but fewer public
appearances and uncertainty over his health are
7 sparking concern among politics watchers in the
country. Given that the ageing president is almost
6 certain to leave office sometime over the coming
decade, BMI believes that the country will face a
5 difficult transition. Three possible scenarios for this
change of government are highlighted below:
4
i. Internal power struggle - The most likely
3 outcome, in our view, is a relatively short power
struggle within the ruling party in the post-
2 Biya era. The ruling party-dominated senate
is constitutionally tasked with appointing a
1 new president in the event of the office falling
vacant. We expect that the body would succeed in
Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 appointing a consensus candidate - and that the
Source: BMI, operators
ruling party would remain together - but warn that
this could take some time.
salient factors, in BMI’s view, are the economic consumption spending of 5.5% in 2014 and 5.7% in
growth, political stability and security. 2015, driven by Cameroon’s large population and ii. Constitutional crisis - A less likely outcome
significant domestic market. Cameroon remains the would be a constitutional crisis following President
Positive economic growth outlook: The economic largest economy in the Communauté Économique Biya’s incapacitation. The country has an unclear
growth in Cameroon has been accelerating since et Monétaire de l’Afrique Centrale (CEMAC), the line of succession - the post of vice president was
2009, and we expect that annual expansion will six nation bloc with which Cameroon shares a abolished in 1972 - and the government might
stabilise at around 5.0% between 2014 and 2018. currency, but rapid economic growth in Gabon and struggle to appoint a new leader if President Biya
Although BMI’s Country Risk team recently lowered the Republic of the Congo (Congo- Brazzaville) will were to remain alive but be unable to perform his
the 2015 real GDP growth forecast from 5.2% to reduce Cameroon’s share of the bloc’s economy duties.
4.7% to reflect the likely impact of fuel subsidy and slowly erode Douala’s position as the region’s
reforms on inflation and consumer spending economic hub. iii. Orderly succession - The least likely route
power, we expect a recovery in 2016 when higher forward would be a situation in which President
oil production will boost headline growth. Threat of political instability: For decades, Biya appoints a clear successor and then moves
We also forecast real growth in private Cameroon has maintained a high level of political to reduce his own involvement in government.

XX | TowerXchange Issue 9 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 9 | 99

This gradual transition of power would allow the
new leader to establish his or her authority, thus
Headline Growth Good For Investments Cameroon Real GDP Growth

ensuring stable change following President Biya’s

8
eventual retirement or death.
7
Rising insecurity: Cameroon has traditionally been
one of the most peaceful countries in Central Africa, 6
but violence in two of its neighbours now threatens
to destabilise the state’s frontier territories. While 5

the religious crisis in the Central African Republic

4
(C.A.R) appears to be subsiding, the expansion of
Nigeria’s Boko Haram into Cameroon’s extreme 3
North region has caused a wave of violence which
has taken Yaoundé entirely off-guard. 2

We expect that Boko Haram attacks in northern 1

Cameroon will continue, and likely increase in size
and sophistication as the group recruits more local 2011 2012 2013 2014f 2015f 2016f 2017f 2018f
fighters. We doubt, however, that the key political
 Cameroon - Real G P, XAFbn 2005 prices, % y-o-y f = BMI forecast. Source: BMI
and economic centres of Yaoundé and Douala
face a significant threat, at least in the short- to expensive fuel subsidy programme, which cost the of that tactic to Cameroon would have a damaging
medium-term, and expect that the economic impact country XAF207bn (US$415mn) in 2013. We believe effect on the towers market, leaving tower
of violence in the north will be limited. However, that the government will be forced to phase out operators and their suppliers with the options of
escalation that leads to attacks in Cameroon’s two the programme over time, with spending on fuel shutting down vulnerable towers or undertake the
key cities would be highly destabilising. subsidies falling to XAF48bn in 2018. The move is cost providing extra security.
already proving controversial, with reports that
Implications for towers market players petrol prices increased by 14% and diesel prices The political transition poses the least risk as we
by 15% in some parts of the country following the expect a member of the ruling party to ultimately
Although strong economic growth and improving announcement. emerge as a successor to President Biya when he
fiscal balance bode well for foreign investments leaves office. This will, to a large extent, ensure
and infrastructure development, one key element A deterioration of the security situation would policy continuity in various sectors of the economy,
of growth - subsidy reforms - poses a downside significantly raise the cost of operating in the most including telecoms and energy
risk to the towers market on the back of a potential affected areas of the country. In Nigeria, the Boko
rise in energy costs. On June 30 2014 Cameroon’s Haram militants routinely target cellular towers to www.businessmonitor.com/bmo
government announced that it was scrapping its disrupt communications services. The extension

100 | TowerXchange Issue 9 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 9 | XX

Special feature:

Building to suit South Africa

(and Nigeria, and Myanmar!)
Eaton Towers South Africa may not have the biggest tower
portfolio in SSA, but it has one of the highest tenancy ratios,
with an average of over two tenants per tower on sites
that are barely two years old. Eaton has smartly acquired
desirable locations, often deploying microsites and lamp
posts in walled office estates, gated communities, and in less
well off areas with high population density and great growth
potential.

Meanwhile, Daniel Ryan’s Square1 Infrastructure has several

hundred rooftop locations in Class A office space in South
Africa, as well as a build to suit centric towerco about to
finish 100 sites in Nigeria. As if that weren’t enough to keep
Dan busy, he’s also launching a new towerco for Myanmar,
initially focused on DAS and IBS, but targeting 1,000 macro
sites.

Two insightful interviews for you:

102 Keith Boyd, Managing Director of Eaton Towers South
Africa explains the economics of running a successful
build to suit towerco
105 Dan Ryan, CEO of Square1 Infrastructure introduces his
towercos in South Africa, Nigeria and Myanmar

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 101

Eaton Towers’ tenancy ratios TowerXchange: Great to catchup with you again
Keith. How has the Eaton Towers South African
business been progressing since we spoke a year
surge beyond two in South Africa ago, when you had under 100 constructed sites?

Targeting gated communities and less well off areas where data demand growth is Keith Boyd, Managing Director, Eaton Towers South
Africa: Since then, Eaton Towers have more than
highest enables Eaton to double the size of their South African portfolio
doubled the size of our tower portfolio in South
Africa. In addition, we have acquired almost 850
Keith Boyd has been a leader of the African tower industry
sites, which we would plan to develop as operator
since before there was a tower industry! Over 15 years
demand grows. Our tenancy installation rate is
spanning Plessey, Venture Communications and Eaton Towers,
currently at about 20 per month, and this will
Keith has become a respected authority on South African
rise as operator demand, and our portfolio size
towers, and he’ll again be hosting a round table devoted to
increases. This growth is driven by the requirement
the country at the forthcoming TowerXchange Meetup Africa.
for cell site densification which itself is driven by
TowerXchange caught up with Keith to find out about how his
the falling cost and therefore increasing uptake of
business, and the South African tower industry at large, had
smart phones. The associated growth in demand
grown over the last twelve months.
for data, and increasing price competition requires
South Africa’s operators to leverage co-location to
Keywords: Who’s Who, Interview, Meetup Preview,
reduce time to market, and minimise costs.
Towercos, Access Control, Site Acquisition, 3G, Rental
Rates, Tenancy Ratios, Co-locations, Build-to-Suit,
Eaton Towers South Africa’s tenancy ratio is now
Densification, ARPU, Uptime, DAS, Fencing, Infrastructure
Keith Boyd, Managing Director, well north of two, which is very pleasing, given that
Eaton Towers South Africa
Sharing, Africa, South Africa, Eaton Towers
only two of our sites are more than two years  old.

The acceleration in the growth of our business

Read this article to learn:
is based on the sound property work we started
< How demand for data and the associated cell site densification is driving Eaton Towers South
three years ago. We’ve worked hard to balance our
Africa’s growth
portfolio, devoting a lot of attention to less well
< Eaton’s property priorities: high density, high demand less well off areas and gated communities off areas with high population density and high
< Demand for, and cost of, smart phones in South Africa demand. As most people in affluent areas already
< The ‘new normal’ of a 60% drop in voice revenues, and what it means for MNOs’ incentive to have smart phones, the biggest percentage increase
divest tower assets in smart phone usage is going to be in these less
< The economics of build to suit in South Africa well off areas. We are balancing that strategy with
an approach to providing aesthetically acceptable

102 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 “
coverage and capacity in gated communities in the Average voice revenues per minute have
more up market suburbs. dropped  from approximately US$0.20 to US$0.08 in
the last year in South Africa. With margins under
TowerXchange: How has South Africa’s that kind of pressure, all of South Africa’s operators
transition from 2G to 3G and now the rollout of have had to take a long look at return on capital
LTE affected demand for tenancies? deployed.
As next generation networks
Keith Boyd, Managing Director, Eaton Towers
South Africa: 2G coverage is already very extensive
in South Africa – all the new demand is coming
from data hungry 3G and LTE. Site separations are
coming down to 500m between large tower sites,
with filler sites in urban areas.
mature, towercos will likely
diversify product offerings to
include microsites and lamp
post type solutions
“ TowerXchange: Are build to suit (BTS)
programmes being largely managed in-house
by South Africa’s MNOs, or allocated to the
towercos?

Keith Boyd, Managing Director, Eaton Towers

South Africa: It’s a mix. MNOs are building their
As next generation networks mature, towercos own sites in some instances, but as they transition
will likely diversify product offerings to include from that 20 US cents to an 8 cent per minute
microsites and lamp post type solutions. Demand reality, we can expect an increased focus on cost
is also rising for coverage and capacity solutions forecasting that number to rise to 30% in the last management.  In addition, operators will find it
within South Africa’s many gated communities and quarter of the year. ever more difficult to predict with accuracy, 12
walled office estates. Eaton Towers offer products months ahead, where their data demand will be
that comply with specific building guidelines and There are some remarkably smart handsets on the the greatest, and therefore where and when they
homeowner association preferences. In many cases market for as little as US$50-60 that can do almost will need more sites. And it is impossible for the
you can’t erect a 25m tower, so you may need 10- anything an iPhone can do data-wise. This falling operators to speculatively acquire and permit sites
15m flagpole or lamp-post type structures perhaps cost of smart phones is a big driver for the uptake of in every single space where they might need one
200-300m apart to provide coverage in these estates. 3G. in the next 12 – 24 months. This makes BTS a key
element which will allow operators to reduce the
The full effect of LTE will be felt across Africa TowerXchange: How has the last year been in time it takes them to fill capacity gaps as they arise –
when handsets are available and affordable. terms of demand for tenancies? especially when there are fully permitted sites near
South Africa’s largest resellers of cellular handsets to their desired location, and they can therefore get
reported that 1% of their handsets sold in the Keith Boyd, Managing Director, Eaton Towers on air very quickly.
second half of 2013 were smart phones. That South Africa: All of South Africa’s operators are
increased to 13% in the first six months of 2014. In enthusiastic co-locating tenants. The cost to build TowerXchange: Tell us a bit more about how
one month alone – March 2014 – the smartphone sites, as well as the operator revenue on our sites, the BTS market works in South Africa, how do
contribution was at 23%, thanks to special offers dwarfs our lease rates, so if we have a site in the the economics work in terms of the timelag to
and new low-cost handsets. And they’re now right place, the MNOs will almost always co-locate. adding a second tenant?

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 103

 Keith Boyd, Managing Director, Eaton Towers South live with the long term consequences of that – no
Keith Boyd, Managing Director, Eaton Towers South Africa: I don’t think any operator can afford to prospect of driving their site costs down to a level of
Africa: As I’m always telling my team, a single sit on assets with the market having changed as “normalised” site opex.
tenant tower has a shocking IRR – they’re liabilities quickly as it has.
in many cases, not assets. Obviously we won’t break TowerXchange: Finally, how can competing
ground without an anchor tenant, but you wouldn’t The regulator has brought in asymmetric tower companies differentiate themselves from
want to build a tower anywhere where you didn’t interconnect rates, which means the larger one another?
have a strong sense that you could add a second operators pay double the fee to terminate their
tenant within a maximum of three years. calls on another operator’s network as the smaller Keith Boyd, Managing Director, Eaton Towers South
operators do. Telkom Mobile and Cell C benefit Africa: The reality is that towercos are rarely in
So a critical measure of a tower company’s ability from asymmetric interconnection rates, which competition with one another. Most of the time we
to create value is how good we are at the property has increased competition and driven down the have a unique asset in a unique location – there is
work – at selecting sites that will attract more than headline price of minutes. Price reductions may be seldom more than 20% overlap in competing tower
one tenant – and doing so two to five years before good for consumers, but they create a ‘new normal’ company’s networks. And no-one would be silly
they actually occupy the site! for business models. So, if any operator has assets enough to build a new tower within a couple of
that aren’t being maximised, that aren’t being hundred metres of an existing shared tower. So the
TowerXchange: Does that make it more difficult sweated for their full value, then they need to revisit differentiation is about service – and the ensuing
for MNOs to get towers built in more remote the strategy around those assets. So, I expect that all trust relationships between towercos and tenants.
locations where attracting a second tenant is not the South African operators will be considering how For example we’ve invested in site hardening;
as easy? best to effect a towers transaction which best suits palisade fences are often inadequate: you need
their key business challenges. electric fences, lights, sirens, code controlled keys to
Keith Boyd, Managing Director, Eaton Towers South access the site – it’s all about ensuring our sites have
Africa: Of course it depends on the pricing model. A TowerXchange: Is there a risk that towers the least break ins, combating operator equipment
low cost single tenant tower can yield an acceptable transactions structured to maximise up front theft, and thereby maximising their users’ uptime.
IRR if the lease pricing is high enough. But we strive cash, accepting a higher leaseback rate, can lead
to keep lease pricing as low as we can, and our to “sellers remorse” in later years? Ultimately Eaton Towers South Africa want to
model is predicated on cutting costs in a sustainable provide the best level of service so we’re our
manner. We think the best way we can deliver value Keith Boyd, Managing Director, Eaton Towers South customer’s first choice, and we want to maintain
to the telecoms industry is focusing on co-location. Africa: I believe that our industry could improve our excellent property work to select unique, highly
relationships with operators by simply listening desirable locations
TowerXchange: What are your views of the to what frustrates the customers whose assets we
potential for a substantial sale and leaseback bought. Conversely, operators need to remember Keith Boyd will be hosting a round table at the
TowerXchange Meetup Africa, taking place on
opportunity in South Africa in the coming twelve why they did a tower deal in the first place. It’s fine
October 20 and 21 in Johannesburg. Register now at
months? to repair your balance sheet by selling towers at
www.towerxchange.com/meetups/africa/
an inflated price, but your successors will have to

104 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

How Square1 Infrastructure TowerXchange: Please introduce yourself Dan -
how did you get into the tower business?

is building new towercos in SSA Dan Ryan, CEO, Square1 Infrastructure: I’m a
real estate-infrastructure attorney by training

and Myanmar and education. I have focused my career on

infrastructure development as a developer and
attorney since I entered law school in 1992.  With
Serial tower entrepreneur Dan Ryan finds opportunities in rooftops, BTS, DAS and
the 1996 Telecom Act I entered the booming US
IBS in emerging markets wireless industry, working initially for a network
deployment firm which my partner and I later
At TowerXchange, we’ve been intrigued by the absence of ‘middle acquired through an MBO. At our peak, we were
market’ towercos from many emerging markets. Filling the gap rolling out 1,000 sites a year across the Eastern
between a ‘Mom and Pop’ local operation and the multi-national seaboard. I became aware of the low barriers to
private equity backed towercos, smart middle market towercos a service business and decided to enter into asset
acquire attractive sites for macro towers and rooftops, fulfil build
ownership, and subsequently started a small tower
to suit (BTS) contracts that may be too small to attract larger
company in the US.
towercos, and are often first movers when the market for IBS and
DAS develops. TowerXchange spoke to serial tower entrepreneur/
With tower owners increasingly disposing of
lawyer Dan Ryan CEO of Square1 Infrastructure about his middle
assets through brokered auctions, it has become
market towercos in SSA and Myanmar.
increasingly difficult to acquire a portfolio of any
Keywords: Who’s Who, Towercos, Market Entry, Network size in the US in competition with the publicly
Rollout, Build-to-Suit, ESCOs, Greenfield, Rooftop, IBS, DAS, Sale & listed towercos, so I started focusing on emerging
Leaseback, Debt Finance, Middle Market Towercos, Infrastructure markets.
Sharing, Africa, Asia, Myanmar, South Africa, Nigeria, Myanmar
Infrastructure Group, SWORN South Africa Asset Management,
Dan Ryan, CEO, Square1 Infrastructure Global Infrastructure Investors, Square1 Infrastructure
TowerXchange: You’ve just launched a new
towerco in Myanmar. Why?

Read this article to learn: Dan Ryan, CEO, Square1 Infrastructure: After 15
< Launching a new towerco for Myanmar initially focused on DAS and IBS but targeting 1,000 macro sites years working in the US tower market, you don’t
< Marketing several hundred rooftop locations in Class A office space in South Africa see 1,000 site BTS opportunities any more! In terms
< Global Infrastructure Investors: a BTS-centric towerco that will soon finish its first 100 sites in Nigeria of new builds, you don’t find BTS opportunities
< The impact of major sale and leaseback transactions on the BTS market of the size and scale to be found in Myanmar
< Growth and exit strategies for middle market towercos anywhere else in the world, and the green field
rollout situation means you don’t have to pay a

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 105

premium for sale and leaseback. We manage rooftops, risers and ground for

“
landlords while also providing audit services. We
TowerXchange: What are your current activities were fortunate enough to secure Brian Hosking
in Myanmar? from JHI, the largest property management
company in SA. Brian has done a great job securing
Dan Ryan, CEO, Square1 Infrastructure: Our local several hundred rooftop locations, primarily Class
entity, “Myanmar Infrastructure Group”, started A office space in key areas of South Africa’s major our goal is to rollout 1,000
trading on June 1 2014. We jokingly call ourselves cities, and we’re marketing those rooftop sites now.
the “MIG fighters” because we develop so fast!
macro towers and 100 or so in-
We’ve secured funding from Singapore Windsor TowerXchange: And what’s your footprint in building solutions in Myanmar.
Holdings, and our goal is to rollout 1,000 macro Nigeria? We’re already working on
towers and 100 or so in-building solutions in
Myanmar. Dan Ryan, CEO, Square1 Infrastructure: some macro towers, but our
Our Nigerian business is known as Global market entry has started with
We’re already working on some macro towers,
but our market entry has started with multi-
tenant DAS solutions for airports and in-building
solutions, targeting an initial 25 properties,
to demonstrate our capabilities to Myanmar’s
Infrastructure Investors, and focuses on BTS
and small one-off acquisitions. We identified an
opportunity to consolidate several local service
companies who had difficulty securing capital to
put in proper power solutions and upgrade towers.
multi-tenant DAS solutions
for airports and in-building
solutions
“
MNO community. DAS and IBS are unlike macro Global Infrastructure Investors has been able
towers in that once you have secured an exclusive to secure BTS opportunities while the Big Three
agreement on a property with the landlord, then towercos have been preoccupied with sale and
you have that particular coverage opportunity leaseback auctions.
locked up, you don’t have to worry about nearby models suggest 57-60,000 towers are required. The
sites’ coverage. We’ll finish our first 100 sites in Q4 2014, and we sites formerly owned by the carriers will attract
have a pipeline of several hundred more. more co-locations, but I don’t think it will affect
TowerXchange: Tell us about your business in the BTS market – we are still experiencing strong
South Africa. TowerXchange: With Etisalat, MTN and Airtel’s demand.
Nigerian towers sold or in the process of being
Dan Ryan, CEO, Square1 Infrastructure: Our South sold to towercos, will the expanded inventory The fundamentals of build to suit are common
African operation has its roots in the co-location of leasable sites have a suppressing effect on to both large and smaller towercos; we’re still
management business. We trade as Square1 Nigeria’s BTS market? reticent to build a tower for one tenant, we still
Infrastructure LTD in South Africa, where we were need a multi-tenant structure to make math
formerly known as SWORN South Africa Asset Dan Ryan, CEO, Square1 Infrastructure: Nigeria work, and we’re still not keen to build too close to
Management. has around 25,000 towers at the moment, and our another tower with capacity for co-locations. What

106 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

differentiates Square1 is that our backers, a ten- and leasebacks is not just about raising money, in Dan Ryan, CEO, Square1 Infrastructure: Local
year fund in Luxembourg, enable us to be a little the long term it’s about the ability to deliver. Nigerian businesses struggle to attract the domestic
more patient about attracting a second tenant than finance they need to scale and, with most contracts
the larger towercos backed by less patient private TowerXchange: What constitutes scale for a in Naira, international investors are reluctant to
equity firms demanding higher returns. As a result, small to medium sized towerco in SSA? expose themselves to the currency risk.
smaller towercos like us have a slightly different
appetite for BTS. Dan Ryan, CEO, Square1 Infrastructure: You can get In the US, my general rule is you need 10% of a
rich doing just 10-20 sites a year in the US, but the contract’s value to be able to fund it, so you need
I think the transfer of towers from Nigeria’s MNOs power issues and scale of operations in SSA mean US$2mn working capital to secure a US$20mn
to towercos like IHS opens more opportunities you need to drive to 100+ sites. contract, with the rest financed through accounts
for small and mid-sized tower companies. If I receivable lending, which can be found at a
bought thousands of towers via sale and leaseback, As the African telcos increasingly utilise towercos relatively reasonable rate. In contrast the cost of
my focus wouldn’t be on BTS, it would be on to build, maintain and, in many cases, acquire their borrowing in Nigeria can be 25-26%, if it’s available
integrating all these new towers. It’s similar in the cell sites, I feel there is room for a layer of 100- at all.
US where the needle doesn’t move for the publicly 1,000 site mid-sized towercos, particularly if we can
listed towercos for BTS programmes of less than work with an energy services partner so we can TowerXchange: What’s your long term strategy
100 towers – they would rather a smaller developer focus on the pure real estate game. for Square1 Infrastructure in SSA?
does the work, and they can always buy them out
in the future. TowerXchange: What capabilities do you keep Dan Ryan, CEO, Square1 Infrastructure: Nigeria
‘on the payroll’ and what is outsourced? does and South Africa are just the beginning of our story
Africa’s private equity backed towercos are your organisational chart look like in Nigeria, in Africa – we’re interested in opportunities across
probably driving toward an IPO in the fairly near for example? SSA, particularly in ECOWAS and SADC. As well as
future, which means their focus is on growing our venture in Myanmar, we’ve also started looking
tower cash flow, and means they are less focused Dan Ryan, CEO, Square1 Infrastructure: The critical for opportunities in Central and South America.
on the negative cash flow differential of BTS. resources which we keep in-house are country
management, financial control, co-location sales I’m a firm believer that risk and reward are linked
TowerXchange: Would you ever have an and the guys who are our customers’ touchpoints. together. A country like Nigeria has the population
appetite to participate in sale and leaseback When it comes to field operations, Global size, GDP growth and natural resource wealth to
opportunities in SSA? Infrastructure Investors find quality local partners provide excellent fundamentals for a telecom real
to provide fuel and resupply, which is a very estate business, and those who are brave enough to
Dan Ryan, CEO, Square1 Infrastructure: We’re still fragmented market in Nigeria. tackle the power challenges have the opportunity
in our first year of trading in SSA, getting our feet to establish a tower business that generates a good
wet. The challenges around power, and the fact TowerXchange: What is stopping Nigeria’s margin in it’s own right. Of course most small to
that land titles often aren’t as good, means we’re O&M subcontractors and the country’s smaller medium sized towercos are destined to be acquired
happy sticking to BTS for now. Participating in sale towercos from getting to scale? eventually

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 107

Special Feature:

How to raise capital

for towers
We’ve written extensively about raising private equity for tower
transactions, so in this edition we thought we’d focus on raising
debt, contrasting bank debt with bond issuance, drawing on the
experiences of Norton Rose Fulbright and Helios Towers Nigeria
respectively.

Those perspectives are sandwiched between fascinating articles

on two external factors to which debt investors give great attention
when considering investments in emerging market telecoms; country
risk and MNO consolidation. BMI provide a high level overview of
the specific country risks which could have a material impact on the
operations and financial performance of African towercos and their
partners. I particularly recommend you peruse BMI’s short term
political, economic and security risk index infographics.

This special feature concludes with Chris Grundberg of UBS

Investment Bank’s commentary on the potential for MNO
consolidation and the implications for the tower industry.

In this special feature:

109 BMI assess key country risk elements with the potential to
affect the African tower industry
114 Introduction to debt finance for emerging market towercos
117 The thinking behind Helios Towers Nigeria’s successful bond
issuance
119 The potential for, and implications of, consolidation among
African MNOs and towercos

108 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Regional hotspots - assessing key Political - elections, Presidential succession
pose key risks in 2015

country risk elements with the potential Elections will raise political tensions in Nigeria,
Côte d’Ivoire and Tanzania in 2015 while
to affect the African tower industry succession issues plague presidents in Zambia,
the Democratic Republic of the Congo (DRC) and -
An overview of country risk in Africa from TowerXchange’s partners at BMI potentially - Zimbabwe. Ghana, Kenya, and South
Africa will face pressing political and economic
Businesses operating in Africa are exposed to a myriad challenges.
of external risks which can have a material impact on
their operations and financial performances. Tower Elections will raise tensions
companies and their suppliers are not immune to these
threats, with the physical nature of their assets and Nigerian President Goodluck Jonathan will
operations increasing their susceptibility to some risk likely win a controversial second full term
factors. Here, BMI highlights the most salient political, in polls scheduled for February 2015. His
economic and security risk elements that players in the long-ruling People’s Democratic Party runs a
towers ecosystem need to be aware of and make plans powerful electoral operation, and the benefits
of incumbency will counteract a mixed record.
to mitigate over the next one year.
Another term for Southern-born Jonathan will be
seen by many as violating the norm that power
Keywords: Research, Investment, Risk, Health & should alternate between the Muslim North and
Safety, Market Forecasts, Country Risk, BMI Analysis, Christian South. Nigerian elections are usually
Africa, Nigeria, Cote d’Ivoire, Tanzania, DRC, Zambia,
accompanied by violence, and the 2015 poll
Ghana, Kenya, South Africa, Mali, Uganda, Cameroon,
will be particularly divisive due to Jonathan’s
Niger, Chad, Sudan, Central African Republic,
controversial candidacy.
Business Monitor International

Côte d’Ivoire also faces a divisive election, with

President Alassane Ouattara seeking a second
Read this article to learn: term in October. Ouattara took office in 2011
< Political risk hotpots: Nigeria, Cote d’Ivoire, Tanzania, DRC, Zambia, Ghana, Kenya and South Africa after incumbent President Laurent Gbagbo’s
< Economic risk hotspots: Ghana, Zambia, South Africa refusal to admit electoral defeat led to widespread
< Security risk hotspots: Kenya, Mali, Uganda, Cameroon, Niger, Chad, Sudan and CAR violence. Many supporters of the former president
< Infographics summarising BMI’s latest political, economic and security risk indexes - currently awaiting a trial in The Hague - still see
Ouattara as a foreign-backed usurper. Gbagbo’s

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 109

Front Populaire Ivorien will likely boycott the 2015 Short-term political risk index Score is % of 100. 100 being best, 0 worst 8
poll, assuring an Ouattara victory but hardening
political divisions. 7
Tanzania will also go to the polls in October, but
6
we expect that election to pass smoothly. President 5
Jakaya Kikwete is ineligible for a third term, so
4
the real contest will be for the nomination of the
dominant Chama Cha Mapinduzi (CCM). The CCM 3
candidate will win the election, but the campaign 2
may force the introduction of more populist
policies.

The long goodbye

Term limits will pose less of an obstacle in the

DRC, where we expect President Joseph Kabila to 80%+
amend the constitution in order to remain in office 70-80%
after 2017. The move will be controversial, leading
60-70%
to protests in Kinshasa. The 2016 poll is unlikely
50-60%
to be free or fair, and a Kabila victory will lead to
protests and violence similar to that seen in 2011. 40-50%
30-40%
Zambia’s President Michael Sata, on the other 20-30%
hand, will likely be forced out of office early by
ill health. Vice President Guy Scott is ineligible to
replace the ailing president - who has not been Mauritius 82.7 Eritrea 67.3 Cote d’Ivoire 56.5 Guinea 43.8
Senegal 75.6 Equatorial Guinea 67.1 Mozambique 56.3 Nigeria 41.7
seen in public since June - and this will trigger Seychelles 73.8 Malawi 66.9 Sao Tome and Principe 55.8 Zimbabwe 41.5
a divisive leadership contest within the ruling Benin 72.9 Cameroon 66.3 Kenya 55.0 Mali 40.8
Botswana 72.9 Gambia 65.0 Togo 55.0 Somalia 39.0
Patriotic Front. A similar transition may occur Cape Verde 72.7 Congo-Brazzaville 63.8 Burundi 54.0 Mauritania 37.9
in neighbouring Zimbabwe; many see the rising Ghana 72.1 Zambia 63.8 Sierra Leone 53.3 Congo (DRC) 37.3
Namibia 70.8 South Africa 63.3 Uganda 51.7 Madagascar 34.0
profile of Grace Mugabe as a form of succession
Gabon 70.2 Tanzania 62.3 Niger 50.2 Guinea-Bissau 30.6
planning by her 90-year-old husband, who has Angola 69.0 Rwanda 61.5 Chad 48.1 Sudan 23.3
ruled the country since 1980. Djibouti 68.1 Burkina Faso 60.8 Ethiopia 47.5 Central African Rep. 22.1
Lesotho 68.1 Swaziland 58.3 Liberia 45.4 South Sudan 20.8

Source: BMI

110 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 9 | XX

Difficult decisions ahead Short-term economic risk index, focusing on countries where
Political risks will also be elevated in Ghana,
the tower industry is most active Score is % of 100. 100 being best, 0 worst
Kenya, and South Africa. Ghana’s fiscal crisis has 80
forced Accra to seek assistance from the IMF, Economic Growth
and implementing an austerity package will be 70
Monetary Policy
controversial. Finance Minister Seth Terkper may
be pushed out of office. Kenya President Uhuru 60 Fiscal Policy
Kenyatta has seen his ICC trial suspended, but
External Factors
faces opposition calls for another constitutional 50
referendum. Another terrorist attack in Nairobi
would rock the government and destroy the 40
struggling tourism sector. South Africa’s Jacob
Zuma has consolidated his hold on power, but the 30
strong performance of the Economic Freedom
Fighters may pull the ruling African National 20
Congress to the left.
10
Economic - policy and currency risks take
centre stage in 2015
a

re

da

RC

ia

da

ya

an

na
aw
ni

bi

ic
er
oi

en
an

ha
D

fr
Africa will retain its status as the fastest growing

m
za

al
ga

Su
ig
Iv

K
A
Rw

G
Za
M
n

N
d’

U
Ta

h
region globally in 2015, with real GDP growth

ut
te

Source: BMI

So
Co

accelerating by 5.4%. This outlook is not without

risks, however, with policy concerns and currency the IMF in August for assistance has seen these likely to be compounded by policy uncertainty,
weakness chief among them. risks subside to a degree, with IMF oversight likely with wrangling between the government and the
to see government spending subject to greater key mining sector over tax regulations, as well as
Policy pitfalls control and monitoring. fears over President Michael Sata’s failing health,
posing a potential threat to future foreign direct
Budgetary concerns will remain at the fore Budget risks in Zambia - which sought IMF investment (FDI) inflows.
in Africa over the next 12 months, with loose assistance in June - will remain salient. The
fiscal policy posing a risk to already weak fiscal authorities have pledged to tackle the deficit - we South Africa’s economic woes will continue to
positions, as well as sovereign credit profiles. predict it will be worth 7.2% of GDP in 2015 - but cause a headache for policymakers. The monetary
we are sceptical given public sector wage pressures authorities especially must perform a delicate
The Ghanaian government’s decision to approach and an election due in 2016. These pressures are balancing act: supporting a spluttering economy

XX | TowerXchange Issue 9 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 111

and weak consumer on the one hand, while in the region. With the military in many countries
anchoring inflation expectations (and the rand) on struggling to contain these threats, the risk of
the other. escalation in the coming months is significant.

Currency concerns continue Local militants gain international notoriety

Most African countries will experience mild-to- Nigeria and its neighbours to the North East,
moderate currency depreciation over the next 12 Kenya, Mali and Uganda are the most vulnerable
months. For a number of key economies we believe to the threat of Islamic militancy on the continent.
risks are weighted firmly to the downside. Violent attacks by Boko Haram militants continue
to rock northern Nigeria, with the potential for it
A combination of weak export growth, high import to escalate in the run up to the 2015 presidential
demand and negative investor sentiment will see elections. There is also a risk of the country’s
the Kenyan shilling continue to weaken gradually neighbours in the North East - Cameroon, Niger
against the dollar. However, a poor harvest and Chad - to be drawn into what is shaping up to
requiring higher food imports, or a terrorist attack be a lengthy battle with against Boko Haram.
targeting foreign tourists - a critical source of
foreign exchange - could trigger a major sell-off. In Kenya, the security situation is deteriorating
more mild than in recent years - owing to the wide rapidly. The main threat remains increasingly
The Zambian kwacha and Ugandan shilling have current account deficit. frequent attacks by al-Shabaab and its affiliates,
stabilised in recent months following significant which are able to tap into a growing well of
volatility earlier in the year but we believe risks The negative outlook for African currencies poses radicalised sentiment, driven both by the ongoing
for both currencies are weighted to the downside. a growing risk to the region’s inflation outlook crackdown against Somalis and allegations of
Investment-unfriendly policies and lower copper over the next 12 months. Moderate food prices and extra-judicial killings of Kenyan-based Muslim
prices pose the major threats to the kwacha; in prudent monetary policies have seen inflation fall clerics. Al-Shabaab has used the presence of
Uganda, renewed uncertainty over foreign aid and in 2014 and, while we expect regional price growth Kenyan soldiers in Somalia as a justification
further setbacks to oil sector development pose the to ease further in 2015 (averaging 7.5% year-on- for its attacks, but President Kenyatta remains
key risks. year compared to 7.8% in 2014), currency-induced committed to the current deployment, arguing
price pressures will pose a persistent threat. that abandoning the country would destabilise the
The Ghanaian cedi has enjoyed increased stability region.
of late amid improved sentiment (see above Security - terrorism a growing concern
section). We expect the cedi to bounce back further Internal conflicts isolated but potentially
over the coming weeks towards GHS3.30/USD. The most salient security threats in Africa relate destabilising
While this is likely to continue in the near term, to Islamic insurgency in parts of West and East
the multi-year trend will be depreciation - albeit Africa, and internal conflicts in some weak states Security is worsening across Sudan, particularly

112 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 9 | XX

in the Darfur states, South Kordofan, and Blue Short-term security risk index Score is % of 100. 100 being best, 0 worst
Nile, which are all seeing fighting between the
national military, its proxies, anti-government
forces, and a myriad of tribal militias. Rising
violence within the Arab community leads BMI
to predict that President al-Bashir’s regime will
continue to lose authority outside of Khartoum.
We believe that, despite some victories in South
Kordofan, the government will increasingly focus
on regime survival rather than regaining control
of outlying areas. Tellingly, the capital itself is now
protected by a heavy ring of RSF soldiers, who man
checkpoints in and out of the city.

Our core view is that violence in the Central

African Republic (CAR) will continue over the
coming months and that the recently-signed 80%+
Brazzaville agreement offers no lasting solution. 70-80%
On-going conflict in the CAR has destroyed the 60-70%
impoverished state’s economy, infrastructure, and 50-60%
political institutions. Sectarian massacres by both
40-50%
sides will make national reconciliation difficult;
30-40%
violence has only declined because the Muslim
minority has mostly fled Christian-dominated 20-30%
areas

Lesotho 82.0 Zimbabwe 72.5 Liberia 64.6 Chad 58.6

BMI’s Ken Okeleke will be hosting a round Namibia 80.8 Gabon 71.3 Gambia 63.9 Nigeria 57.4
table on “Country risk: How to prepare for Cape Verde 80.8 Congo-Brazzaville 70.7 Cameroon 63.8 Benin 56.9
Botswana 80.8 Madagascar 70.6 Uganda 63.4 Burundi 52.3
short term ‘flashpoints’” at the TowerXchange
South Africa 77.3 Tanzania 68.8 Angola 62.6 Guinea-Bissau 49.9
Meetup Africa, taking place on October 20 and Ghana 76.4 Rwanda 68.0 Cote d’Ivoire 62.2 Mali 42.2
21 in Johannesburg. For more information, visit Zambia 75.9 Ethiopia 68.0 Equatorial Guinea 60.9 Niger 40.4
Mauritius 75.9 Mauritania 67.4 Guinea 60.9 South Sudan 38.2
www.towerxchange.com/meetups/africa Malawi 75.8 Senegal 66.6 Burkina Faso 60.6 Sudan 36.4
Swaziland 75.0 Togo 65.2 Sierra Leone 60.4 Central African Rep. 31.9
Seychelles 73.3 Sao Tome and Principe 64.7 Kenya 59.9 Congo (DRC) 31.1
Djibouti 73.1 Mozambique 64.7 Eritrea 59.8 Somalia 25.7
www.businessmonitor.com/bmo
Source: BMI

XX | TowerXchange Issue 9 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 113

Introduction to debt finance for TowerXchange: First, please introduce Norton
Rose Fulbright and your experience in advising
on emerging market tower transactions.
emerging market towecos Oliver Stacey and Daniel Metcalfe, Partners, Norton
How established and smaller towercos can access long term debt Rose Fulbright: Norton Rose Fulbright is a global
legal practice with a full business law service. We
have a first rate telecoms and technology practice,
Norton Rose Fulbright is one of the first legal practices to observe
including both corporate and finance capabilities
the trend for the transfer of tower assets from MNOs to towercos in
across the globe. We have significant experience
emerging markets, leveraging excellent relationships with the operators
of advising on tower based transactions across the
and banks contacts to secure many of the early mandates in African
towers. More often found advising operators selling towers and lenders value chain, from advising operators on disposals
to towercos, Norton Rose Fulbright has advised on tower transactions through to advising lenders on acquisition and
involving Eaton, Helios Towers Africa, Helios Towers Nigeria and development financing arrangements for tower
IHS across Africa and advised Tower Bersama on a transaction in companies. We have particular experience in
Indonesia. They have also advised ABSA on the financing of Cell C for Africa and Asia, and our offices in South America,
their landmark acquisition deal with American Tower, advised Vodacom including Brazil, mean we are well positioned in
Tanzania on their deal with Helios Towers Africa, and advised Etisalat relation to the burgeoning South American towers
on their recent deal with IHS in Nigeria. Having recently gained offices market.
in Colombia and Venezuela, as well as opening in Rio, the firm stands
ready to advise on tower transactions in South America. Key contacts TowerXchange: With the ever-increasing
Oliver Stacey and Daniel Metcalfe, Partners, for towers include Oliver Stacey for operator disposals and Daniel appetite of private equity firms to invest
Norton Rose Fulbright Metcalfe for finance. in emerging market towers, it seems that
attracting long term debt finance remains the
Keywords: How to Guide, Lawyers & Advisors, Investment, Bankability, ROI, Private Equity, Debt Finance, more challenging element of raising capital.
Stakeholder Buy-In, Africa, Americas (South), Asia, Standard Bank, Standard Chartered Bank, IFC, Ecobank, Is there an established pool of lenders who
Norton Rose Fulbright arrange and lead debt finance?

Oliver Stacey and Daniel Metcalfe, Partners,

Read this article to learn: Norton Rose Fulbright: Provision of long term
< The established pool of lenders to African towercos, and evolution of similar pools for Asia and LatAm debt finance remains more limited across sectors
< How the expectations of private equity and debt investors are aligned, and where their interests conflict post 2008, and telecoms is no exception. However
< A comparison of the terms offered by commercial lenders compared to DFIs a robust security package underpinning strong
< Advice for less established towercos seeking to raise finance economic fundamentals of a tower operating
company can attract finance from established

114 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 “
lending institutions. Indeed the majority of the However, their interests do vary and these will
Africa towerco acquisitions over recent years have conflict during negotiations. For example a private
been financed by a combination of private equity equity investor will want to preserve an unfettered
capital and third party debt finance. Tenors will ability to exit, whereas a debt provider will want to
vary depending on the economic fundamentals restrict any change of control over the towerco for
and modelled revenue profile, however long term various reasons including regulatory, reputation,
amortization profiles have been provided. support and experience.
There is an established pool
There is an established pool of lenders for Africa of lenders for Africa finance, A debt investor will be more risk averse than a
finance, which is led by Standard Bank, Standard which is led by Standard Bank, private equity investor, so will typically require
Chartered Bank and IFC, although Ecobank a fixed repayment profile and security for the
and others are becoming more visible and
active. The tower financing model is a relatively
bespoke one in Africa, although well established
in other markets and becoming much more so
in Africa as the business model itself develops.
Standard Chartered Bank and
IFC, although Ecobank and
others are becoming more
visible and active
“ same. Their returns (fees and interest) are fixed.
An equity investor has no fixed repayment terms
(subject to the terms of any equity invested through
debt instruments) and no security, but equally
has significantly more upside potential on return
As the number of deals increases, as the tower or exit. Debt funding of a towerco is typically
companies themselves establish an effective and provided on limited recourse terms, without
proven business model, and as a track record contractual recourse to any equity investors, and
of performance in terms of existing financings a corollary of that is that lenders will typically
develops, we would expect the pool of institutions market with both local and international require any shareholder debt to be subordinated to
and available finance to expand. Certainly with institutions active. the debt facilities.
the current spate of disposals taking place across
Africa there is a need for other institutions to help TowerXchange: How do the criteria for a debt Lenders will also typically impose restrictions on
shoulder the debt burden. investor differ from those of a private equity upstreaming of cash from the operating business,
investor? by way of dividends or otherwise. This obviously
As the model gains traction in other emerging conflicts with the preference of equity investors at
economies, such as South America and Myanmar, Oliver Stacey and Daniel Metcalfe, Partners, Norton the top.
we will see specific lender pools developing for Rose Fulbright: In terms of the basis on which
these jurisdictions. Often development finance private equity investors and debt investors are An equity investor will require more management
institutions such as IFC will be at the forefront of willing to commit funds to a tower company, their control, such as board seats, consent rights and
financings in these frontier jurisdictions, but we criteria are in many respects aligned. They both ability to appoint certain executive management.
would also typically expect to see a commercial want to have their debt or investment repaid over Whilst debt providers will require certain
bank appetite and particularly in South America time, with an adequate return, and have a smooth controls and restrictions on business, they will
where there is a strong and developed finance and efficiently run compliant operating business. fall significantly short of dictating terms of the

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 115

 Oliver Stacey and Daniel Metcalfe, Partners,

“
Norton Rose Fulbright: It will inevitably be more
difficult for a less established towerco to raise
finance. Local lenders will most likely be the best
source of funds in the initial stages, but as the debt
requirements increase, competing with larger and
more established towercos in the international
It will inevitably be more difficult for a less established towerco to
raise finance. Local lenders will most likely be the best source of funds
in the initial stages, but as the debt requirements increase, competing
with larger and more established towercos in the international debt
market will prove difficult
“ debt market will prove difficult – a commercial
lender will almost invariably prefer to support a
larger more established towerco, with a proven
track record.

In order to attract international debt, a smaller

towerco will need to consider the incentive
package such as higher pricing and fees, more
security and equity support, more up front equity
and opportunities for ancillary business such as
day to day running of the business, with adverse detailed requirements in this regard, in terms of account management and hedging. They might
persuasions from a logistical perspective but more compliance and information they expect to receive. also consider approaching international lenders
paramount concerns over shadow directorship. with a lead arranger mandate but bringing their
DFIs will also have strict requirements relating local relationship lender in support for the debt,
TowerXchange: What’s the difference between to sanctions and corrupt acts, however these so as to reduce the total exposure risk on the
the terms under which debt may be provided provisions have moved very much to the forefront international lender group. DFI/IFI institutions
by a commercial lender versus a Development of commercial lender concerns and as such there is may also prove a useful source of funds.
Finance Institution? considerable alignment in the current market.
As towercos develop their portfolio and diversify
Oliver Stacey and Daniel Metcalfe, Partners, Norton A DFI may also be willing to lend on longer tenors. over time, they are able to negotiate better
Rose Fulbright: DFI and commercial lending terms borrowing terms both in relation to pricing
will largely be aligned, and indeed that will need TowerXchange: How should the debt finance but also other flexibilities on general business
to be the case in a combined financing structure. raising strategy of an established towerco, operations. The lenders may also be willing to
However, there can be variations to sensitivities seeking acquisition finance for another sale adopt more relaxed positions in terms of security,
which are then reflected in the funding terms. and leaseback deal, differ from the strategy of but equally if the towerco is willing to offer a
For example, whilst all lenders are sensitive to a newer towerco, perhaps with a few build to diversified security package then this risk mitigant
environmental and social risks, this is a particular suit towers, which had out grown the capacity of may enable them to obtain better pricing from
concern of DFIs and they have very strict and local lenders? lenders

116 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

The thinking behind Helios
TowerXchange: Congratulations on the
successful issuance of Africa’s first high yield

Towers Nigeria’s successful

bond issue - how was it received?

Abhulime Ehiagwina, Chief Financial Officer,

bond issuance Helios Towers Nigeria: Our successful Bond

issuance, which was oversubscribed, reflects
An exclusive interview with HTN CFO Abulime Ehiagwina the strength of Helios Towers Nigeria (HTN) as
a pioneer and pace setter in the African Tower
Towercos in other markets, notably Asia, have frequently industry. It underscores the confidence of investors
utilised the bond market to raise substantial capital. in the Nigerian economy and the bright prospects
of infrastructure providers in Africa’s largest
Helios Towers Nigeria (HTN) recently completed the first
economy. It was a very pleasant outcome which
bond issuance by an African towerco. The successful
was well received by HTN Stakeholders.
bond issuance was three times oversubscribed, reflecting
growing investor confidence in the application of the
TowerXchange: What is it about telecom towers
independent towerco business model to Africa, and
that makes them a good fit for the bond market?
enthusiasm for opportunities in the lucrative Nigerian
telecom sector. To learn about the thinking behind
Abhulime Ehiagwina, Chief Financial Officer,
HTN’s current capital structure, and the implications
Helios Towers Nigeria: Telecom tower companies
of the current wave of sale and leasebacks in Nigeria,
generally have long term contracts with their
TowerXchange spoke to HTN’s CFO Abulime Ehiagwina. customers and low churn. This provides stable
cash flows except where a major customer
Keywords: Towercos, Investment, Tenancy Ratios, Risk, develops severe liquidity issues or goes bust.
Bankability, Sale & Leaseback, Debt Finance, Bond Issuance,
C-Level Perspective, Infrastructure Sharing, Africa, Nigeria, A key focus area of bond subscribers is assessing
Bank of America Merrill Lynch, Helios Towers Nigeria the credit worthiness of a business clientele. Bond
holders need to be convinced your customers are
resilient enough to honour their contracts in the
Read this article to learn: long run. Risk assessment ratings by leading rating
< The criticality of the credit worthiness of tenants agencies provide a measure of comfort. Telecom
< HTN’s journey from a largely CDMA client base to an increasing focus on GSM players towers’ intrinsic value grows as tenancy ratios
< Capital structure: bond issuance versus bank debt increase, so over time the tower values appreciate
< Implications for the current round of sale and leasebacks in Nigeria based on the co-location ratios incremental cash
flows. In a market not yet at saturation point,

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 117

 “
towers will always be attractive to bond investors. advisors, banks, law and accounting firms involved
in the bond issue. Bank of America Merrill Lynch
TowerXchange: Tell us about HTN’s successful was the lead manager, sole book runner and
transition from an initial degree of focus on ratings advisor.
Nigeria’s CDMA operators, to an increasing
focus on the GSM operators as tenants - and how TowerXchange: Finally, what impact do you
important has that transition been in raising forsee the sale of Etisalat, MTN and (eventually)
capital? Our successful transition from Airtel’s Nigerian towers having on Helios
a largely CDMA based clientele Towers Nigeria, and how will this new capital
Abhulime Ehiagwina, Chief Financial Officer, reinforce your position in the Nigerian tower
to global player GSM customers
Helios Towers Nigeria: Our successful transition market?
from a largely CDMA based clientele to global showed the resilience of HTN’s
player GSM customers showed the resilience of management and shareholders. Abhulime Ehiagwina, Chief Financial Officer,
HTN’s management and shareholders. Losing
more than 50% of your revenues can be a very
challenging experience for any company. This
transition was also helped by the natural evolution
of GSM companies. In the early years, telcos see
coverage as a competitive advantage and try
Losing more than 50% of
your revenues can be a very
challenging experience for any
company
“ Helios Towers Nigeria: The tower sale and
leaseback by MNOs to towercos is timely and a
welcome development. MNOs can now focus on
their core business and allow specialist tower
companies to focus on passive infrastructure
provision. If HTN is successful, we will attain
to get first mover advantage in as many cities scale and improve the quality of service standards
as possible. Subsequent rollouts will focus on achieved by MNOs. Certainly some of the cash will
capacity rather than coverage needs. HTN’s towers get reinvested by telcos in furthering their rollout
were well positioned in urban areas to meet the of active infrastructure 2G, 3G et cetera and the
requirements of GSM companies. rate over the tenor. With loans, there is some level consumer can only be better off when towers are
of payment volatility depending on the index. sold and leased back
TowerXchange: Why did you choose to utilise LIBOR is stable today but you can never quite
the bond market as opposed to raising more predict what will happen three or four years down
capital from equity investors or debt? the line. Abhulime Ehiagwina will represent Helios
Towers Nigeria at the TowerXchange
Abhulime Ehiagwina, Chief Financial Officer, TowerXchange: Can you name-check the Meetup Africa, taking place on October 20
Helios Towers Nigeria: A lot of factors are advisors who helped HTN with this landmark
and 21 in Johannesburg. For more details,
taken into consideration before arriving at an bond issue?
please visit:
organisation’s optimum capital structure. In
raising debt for a well structured company like Abhulime Ehiagwina, Chief Financial Officer, www.towerxchange.com/meetups/africa
HTN, bonds have an advantage of a fixed interest Helios Towers Nigeria: There were quite a few

118 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

The potential for, and implications TowerXchange: Please introduce yourself and
your research at UBS.

of, consolidation among African MNOs Chris Grundberg, Head of Equity Research –
South Africa, UBS Investment Bank: My name’s

and towercos Chris Grundberg, and I’m the Telecoms Equity

Research Analyst covering African markets at UBS
UBS’s telecoms equity research analyst summarises his views of potential Investment Bank, as well as the Head of Research
for South Africa. I’m based in our Johannesburg
changes in the African telecom map in the coming five years
offices. Our research revolves around providing
our institutional clients with insights into the major
Is operator consolidation a friend or foe of the themes shaping the industry, as well as the financial
independent towerco business model? What shape implications of those themes and ultimately the
could future MNO consolidation take in Africa? share price implications (for the publically traded
Is it better to have fewer, more credit worthy equities).
counterparties? TowerXchange spoke to UBS’s
telecom equity research analyst Chris Grundberg UBS is 150-year old financial institution serving
to find out how he sees the map of African MNOs private, institutional and corporate clients
and towercos changing in the coming five years. worldwide, as well as retail clients in Switzerland.
UBS has offices in more than 50 countries,
including all major financial centres, and employs
Keywords: Meetup Preview, MNOs, Towercos,
approximately 64,000 people. UBS Investment Bank
Investment, New License, Market Entry,
provides a broad range of products and services
Consolidation, Exit Strategy, Bankability, New
Market Entrant, Sale & Leaseback, Africa, MTN, in equities, fixed income, foreign exchange and
Chris Grundberg, Head of Equity Research – UBS Investment Bank commodities to corporate and institutional clients,
South Africa, UBS Investment Bank sovereign and government bodies, financial
intermediaries, alternative asset managers and
UBS’s wealth management clients. The Investment
Read this article to learn: Bank provides financial solutions to a whole range
< The future for unprofitable #4, #5, #6 and #7 ranked MNOs of clients, and offers advisory and analytics services
< Does operator consolidation ‘lower the glass ceiling’ on potential tenancy ratios? in all major capital markets.
< The potential for consolidation within the towerco segment
< A view on MTN’s tower deals: a sensible approach to balance sheet rationalisation, with the TowerXchange: Please summarise the trends
SLB / JV structure determined by local nuances toward MNO consolidation in Africa - is there a
long term future for unprofitable #4, #5, #6 and

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 119

 “
#7 ranked MNOs in crowded markets? the towercos, and operators partnering or selling
their assets to towercos, are likely to do so on the
Chris Grundberg, Head of Equity Research – South basis of the sustainable medium to long-term
Africa, UBS Investment Bank: Our view is that number of operators in a market. Assuming that
you’ve seen a proliferation of operators across most tower deals are struck on the basis that most
Africa over the past decade, with the weighted the addition of smaller players markets will continue to have effective competition
number per market increasing from two to over has not dramatically shifted provided via two or three operators, we would
five from 2000 to 2012. Mean-time however, the broadly agree with the TowerXchange synopsis.
the true competitive balance in
‘effective’ competition across these markets has
these markets, and inevitably
not increased. That is to say that the addition of
smaller players has not dramatically shifted the
true competitive balance in these markets, and
inevitably the smaller players resort to more
aggressive pricing tactics, in turn whittling away
at returns in the market. Over time, these smaller,
the smaller players resort to
more aggressive pricing tactics,
in turn whittling away at
returns in the market
“ TowerXchange: Do you have a view on potential
consolidation within the African towerco
segment? Either among the ‘Big Four’ (HTA,
IHS, AMT and Eaton... plus HTN) or among the
growing ranks of ‘middle market’ regional
towercos (SWAP, TASC, ToM, Hotspot, Square1
unprofitable MNOs face tough choices, and etc)?
being bought is sometimes a good route out for
shareholders. Chris Grundberg, Head of Equity Research – South
players we see as more likely rolled-up as part of in- Africa, UBS Investment Bank: In this area we
TowerXchange: Who do you see as the most market consolidation. believe the trend seen in other markets globally
acquisitive MNOs and what are their targets? for a few large towercos per region, given the
TowerXchange: Investors get very nervous benefits of scale in this industry, is likely to persist.
Chris Grundberg, Head of Equity Research – South about the implications of MNO consolidation So consolidation is certainly possible amongst
Africa, UBS Investment Bank: We’ve previously for towerco business models, given that it towercos, yes – caveated by the consideration of
highlighted the relative balance sheet strength would appear to lower the glass ceiling on overlapping tower estates.
of operators like MTN, Vodacom and Etisalat potential tenancy ratios. TowerXchange see it
(especially prior to the Maroc deal), and noted that differently - the credit worthiness of prospective TowerXchange: Are MTN optimising the
strategic M&A in markets which make sense for tenants is almost as important as the number valuation of their business by divesting towers in
them, could be an option. Inevitably, the larger the of prospective tenants, so consolidation “comes some markets, retaining equity in joint venture
operator, the larger a deal would have to be to be out about even in the wash”. What do you think towercos in others, but retaining towers in
meaningful – and we believe the bigger players are are the implications of MNO consolidation for certain markets like South Africa? And what’s
more likely to focus on markets which are above a towerco valuations? your view on MTN retaining 51% equity in the
certain threshold in size. In addition, simply buying joint venture towerco with IHS in Nigeria?
a #4/#5/#6 positioned asset as an entry point into Chris Grundberg, Head of Equity Research – South
a market is unlikely to be a good route in, so these Africa, UBS Investment Bank: Our view here is that Chris Grundberg, Head of Equity Research – South

120 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Africa, UBS Investment Bank: We’ve commented
previously that MTN’s tower deals are evidence of a
sensible approach to balance sheet rationalisation,
and part of the evolution of the group. The different
strategies pursued in different markets are
indicative in our view of the local market nuances,
and assessed on a case-by-case basis, but we also
view the retention of equity stakes in towercos in
key markets as strategically very sound, especially
given the longer term opportunity for value creation
for MTN shareholders by a potential spin-off or
flotation of MTN’s combined towerco stakes.

TowerXchange: Finally, how do you see the map

of African MNOs and towercos differing in five
years time from how it appears today?

Chris Grundberg, Head of Equity Research – South

Africa, UBS Investment Bank: We’ve noted that
the likely picture is one of fewer, larger traditional
operators, with potentially a larger group of smaller
and probably asset-light operators, especially
focused on data (potentially pure LTE plays). On
the towerco side, we would not be surprised to see
consolidation, and a similar picture of fewer, larger
towercos with regional portfolios
6$05(027(0$1$*(0(17$1'+<%5,'&21752/6<67(0

2XU6$06\VWHPLQVWDOOHGLQRYHUORFDWLRQVDFURVV$IULFD
Chris Gundberg will be hosting a round LVDKLJKO\FRVWHIIHFWLYH%76PRQLWRULQJDQGFRQWUROV\VWHP
GHVLJQHGWRDVVLVWRSHUDWRUVJHWWKHPRVWIURPWKHLUKLJKO\
table on “MNO consolidation: implications H[SHQVLYH*60QHWZRUNDVVHWV7KURXJKXVHRIWKH6$0V\VWHP
ZHDUHDEOHWRGHWHFWDQGUHFWLI\HTXLSPHQWDQGLQIUDVWUXFWXUHIDLOXUHV
for the tower industry” at the TowerXchange EHIRUHWKH\EHFRPHVHUYLFHDIIHFWLQJ
Meetup Africa, taking place on October 20 7KLVUDQJHVIURPHIIHFWLYHSRZHUPDQDJHPHQWXWLOL]LQJXWLOLW\JULGJHQHUDWRUVXSSO\
K\EULGEDWWHU\F\FOLQJWRVXSSOHPHQWDU\HQHUJ\VRXUFHVVXFKDVIXHOFHOOVVRODUDQGZLQG
and 21 in Johannesburg. For details, visit LQFOXVLYHRIJHQHUDWRURUIXHOFHOOIXHOPDQDJHPHQWLQWHUPVGHOLYHULHV¿OOLQJVDQGFRQVXPSWLRQ
www.towerxchange.com/meetups/africa
,QDOD7HFKQRORJLHV3W\/WG_7HO_LQIR#LQDODFR]D

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 121

Special feature:

The evolution of the Indian

telecom tower industry
According to the Telecom Regulatory Authority of India (TRAI), the number
of mobile subscriptions in India reached an astounding 907.44mn in April
2014 and 2.10mn new rural users were connected in June 2014 alone, as
released by the Cellular Operators’ Association of India (COAI).

The independent towerco business model originated in India and towercos

own over two thirds of India’s 400,000+ towers.

Driven by strong adoption of data consumption, the Indian telecom sector

is now focused on providing capacity for surging urban data growth
through 3G and 4G while enhancing its rural coverage. The number of
sites is expected to grow to half a million in three years and the rumoured
4G auction, which could take place as early as next year, will further
increase cell site densification throughout the country.

In this special feature, we analyse how green targets are affecting the
telecom tower industry, Umang Das, Chief Mentor of Viom Networks and
DG of TAIPA, offers his unique take on the evolution and challenges faced
by Indian players and Ardom Telecom, shares views on the increasing
need for preventive maintenance and accurate energy management.

Don’t miss:
123 Editorial: Stringent green targets for the Indian telecom
tower industry
125 Viom Networks: Insights of a pioneer of the telecom tower
industry: what is the future for India and Myanmar?
130 Ardom Telecom: Success story of an Indian O&M provider

122 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Stringent green targets According to a 2012 report by GSMA, over 38% of
Indian sites were then connected to an unreliable
grid and over 17% were off-grid. Of those off-grid
for the Indian telecom tower industry sites, 73% were operating on a combination of dual
diesel generators and DG+battery hybrids and only
Can towercos and MNOs afford to shift to renewable energy?
7.4% adopted renewable or green hybrid solutions.

With over 400,000 telecom towers and forecasts of market growth to

In 2013, the Indian telecom industry consumed
half a million sites by 2017, India is host to one of the largest passive
as many as 2 billion litres of diesel to power its
infrastructure markets in the world and is reportedly consuming as
sites and AT Kearney has reported that diesel
many as 11 billion kWh per year, a figure expected to rise to 17 billion
consumption could increase almost 50% over the
by 2016.
next few years. On the other hand, the telecom
tower industry is driving energy efficiency
The Indian telecom regulator is now demanding towercos and MNOs to
programmes to reduce opex, therefore reducing
shift to renewable and hybrid sources of energy with stringent targets
its carbon footprint and diesel consumption,
to be met by 2015. But Indian telecom players and industry associations
including via infrastructure sharing and by
have objected that the cost of this shift is simply not affordable for an
utilising deep cycle batteries.
industry already near its debt capacity. As a result, only 1% of Indian
telecom sites are currently running on green power solutions.
In an attempt to rationalise energy consumption
and reduce CO2 emissions caused by telecom
Keywords: India, Southern Asia, Editorial, GSMA, Energy, towers, which reached 11 million tonnes in
MNOs, Towercos, Diesel Generators, Off-Grid, Unreliable Grid, 2013, the Telecom Regulatory Authority of
Infrastructure Sharing, Hybrid Power, Renewables, Regulation, India (TRAI) issued a recommendation back in
Batteries, Carbon Footprint, TRAI, TAIPA, Green Passport, Solar, January 2012 titled Approach towards Green
Capex, Opex, Bharti Infratel, Indus Towers, Idea Cellular, Viom Telecommunications.
Networks, GTL Infrastructure, New Energy and Industrial
Arianna Neri, Head of Asia and Americas, The much discussed document required at
Technology Development Organization, AT Kearney
TowerXchange
least 50% of all rural sites and 20% of urban
towers to be powered by hybrid solutions by
Read this article to learn: 2015, with the goal to increase percentages to
< The problem of energy consumption in the Indian telecom industry respectively 75% and 33% by 2020. Additionally,
< The cost of grid power vs diesel vs renewable solutions the recommendation required all telecom
< TRAI’s approach towards green telecommunications products, equipment and services to be energy and
< Telcos and towercos move to green options: first examples performance assessed and certified with a Green
Passport by 2015. TRAI demanded the progressive

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 123

adoption of optimised energy efficient radio
networks, and that the energy consumption of each Cost of energy per tower
site should not to exceed 500W in total by 2020.
Finally, TRAI required all service providers to Grid power Rs 7 - US$ 0.11 17%
38% unreliable 45%
regularly declare their carbon footprint, with the off grid on grid
grid
objective to reduce emission targets by 8% in 2014- Diesel Rs 15 - US$ 0.24
2015, 12% in 2016-2017 and 17% in 2018-2019.
Solar Rs 28-32 - US$ 0.45-0.52
These targets have been referred to as too rigid by
Sources: Economic Times, TAIPA, AT Kearney, COAI and
telecom operators and towercos who also objected Resco Industry Source: GSMA 2012

“
that the cost of shifting to alternate sources of of its 40,000 sites on solar and 750 of 9,500 Idea
energy is not affordable for the industry. It has Cellular’s towers use green energy sources.
been reported that the cost to run a site on diesel
is approximately Rs 15/unit (US$ 0.24) versus In a recent statement, Viom Networks and GTL
Rs 7/unit for grid sites (US$ 0.11). Considering Infrastructure have announced they’ve signed
grid power is able to meet approximately 30% of a MoU with Japan’s New Energy and Industrial
TAIPA has recently requested the industry’s needs, seeking alternative energy Technology Development Organization (NEDO)
TRAI to revise its Go Green solutions is the only option. for a demonstration project, which is aimed at
reducing the diesel consumption and introducing
targets in order to reduce the Shifting to solar energy seems like a good idea, renewable energy.
expected capital investment but there is no escaping the capital intensity of
of Rs 66,000 crore (~US$ the transformation required. On the capex side, On the lobby side, TAIPA has recently requested
the cost per site of a solar unit could reach Rs 15 TRAI to revise its Go Green targets in order to
10bn) by 2020 in light of lakh (US$24,000) with operational costs ranging reduce the expected capital investment of Rs
operational and technical between Rs 28 and 32 per unit (US$0.45-0.52) for a 66,000 crore (~US$ 10bn) by 2020 in light of the
single tenant site. operational and technical challenges companies
challenges companies are
encountering in their green
initiatives
“ In spite of the risk of shrinking margins, some
companies have started green initiatives that will
also serve as a benchmark to seek viability gap
funding (VGF) for further expansions. In fact, as
are encountering in rolling out their green
initiatives. Considering the Indian telecom and
tower industries are currently facing a debt
burden of over Rs 2 lakh crore, (~US$30 bn) key
players and associations hope that a practical
of 31st March 2013, 20,000 sites, corresponding to agreement can be reached to enable Indian
20% of Indus’ portfolio of towers, are said by the towercos and MNOs to invest in green energy
towerco to be green. Bharti Infratel powers 2,000 within a more realistic timeframe

124 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Insights of a pioneer of the telecom TowerXchange: What where the key phases
of the transformation of the telecom tower
industry from Day zero to now?
tower industry: what is the future for India
Umang Das, Chief Mentor, Viom Networks and
and Myanmar? DG, TAIPA: The Indian telecom industry with close
to 400,000 telecom towers is the critical support
Umang Das on the evolution of the Indian tower market and the creation of the Myanmar telecom sector
system for the world’s second largest base of
Mr Umang Das doesn’t need any introduction as a veteran of the telecom mobile subscriptions. A seldom highlighted fact is
industry in India, Chief Mentor of Viom Networks and Director General that the concept of ‘telecom infrastructure sharing’
of TAIPA. His involvement in the Indian telecom sector dates back to was pioneered by tower companies in India. This
1987, right after the start of the industry’s privatisation process. He has pioneering business model, coupled with the
held a variety of high level positions in several business chambers and largest base of telecom towers anywhere in the
industry associations, and, back in August 1995, he initiated the first world, gives the Indian telecom tower sector a
mobile call on the subcontinent. unique distinction that is unparalleled globally.

In this exclusive interview, Mr Das shares his priceless insights into

The extensive network of telecom towers has
the evolution and future of the Indian telecom tower sector as well as
ensured the availability of wireless telephony
perspectives on opportunities and challenges faced by operators and
service in every nook and corner of the country
towercos entering Myanmar.
and that too at unprecedented low costs. If we
chronicle the history of telecommunications in
Keywords: Viom Networks, C-Level Perspective, Interview, Towerco, TAIPA,
India, Southern Asia, Universal Service Obligation, Government of India,
India, the role played by telecom towers can be
Myanmar, Irrawaddy Green Towers, Quippo Telecom, Srei Infrastructure viewed as one of the key catalysts in the nation’s
Finance Limited, Alcazar Capital, Tower People, 3G, 4G, Market Overview, telecom revolution.
Tenancy Ratios, Urban vs Rural, Infrastructure Sharing, Market Forecasts,
Penetration Rate, Active Infrasharing, Renewables, Hybrid Power,
Umang Das, Chief Mentor, The sharing model of the Indian telecom tower
Viom Networks and DG, TAIPA
Greenfield, DAS, IBS
industry encouraged best utilisation of assets with
the backbone of the industry being provided by
Read this article to learn: telecom infrastructure providers who have made
< Indian towercos: from pure infra-sharing to multi-service specialists 70% of network rollout investments. It has resulted
< The potential for a breakthrough in the concept of single tenant sites in the world’s lowest tariff and in a ubiquitous
< Implications and opportunities created for towercos by 4G and by India’s National Optical Fiber Network and robust coverage across the country. Due to
< What proportion of new points of service in India will be provided by IBS; DAS and small cells this model, the telecom sector reaped rich benefits
< Creating cost efficiency in equipment procurement and construction services through indigenisation in Myanmar through innovations in the design of a robust
network. This is evident from the fact that India is

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 125

the second largest market in terms of number of
customers served and remains one of the fastest
growing telecom markets globally.

Now the tower industry has already started to

evolve from a mere infra-sharing proposition to
one where it is being viewed by the operators as
multi-service specialist rendering support to both
passive and active elements. Tower companies
are now focusing on managing both costs and
quality to win the mindshare of operators for
being the sole partner for managed services. With
the horizon of offerings broadening to include
managed services, customised site planning and
alternate energy, tower companies are working
toward operational excellence.

“ Now the tower industry has

already started to evolve from a
mere infra-sharing proposition
to one where it is being viewed
With innovation being the key driver behind tower
companies to achieve the next phase of growth,
we are now looking differently at structural
architecture, active equipment integration and
energy options. An innovation-led mindset for the
India Gate, New Delhi

corpus in the form of the USO Fund (Universal

Service Obligation) is already setting up NOFN
(National Optical Fiber Network) in the country.
NOFN will connect 250,000 villages with high speed
broadband connectivity. A plethora of government-
by the operators as multi-
service specialist rendering
support to both passive and
active elements
“ industry as a whole may lead to a breakthrough
in the concept of single tenant sites. Such sites
will provide flexibility of site planning for the
operators while ensuring that the capex outflow
for the tower companies and the operators provide
to-citizen services is likely to transform the lives of
the rural population. Bharat Broadband Network
Limited, a special purpose vehicle (SPV), set up
by the government for establishing, managing,
and operating NOFN has already established
optimal return on investments. connectivity in scores of villages. The tower
companies and the CSCs (Common Service Centres)
The Government of India through its US$3.2 billion will play a central role in public-private-panchayat

126 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 “
partnership model wherein public investment will Increasingly, tower companies are focusing on
create the infrastructure and private initiative will energy management. Earlier, power and fuel costs
give fillip to the ecosystem. were passed through to operators. Now, the trend
is evolving towards a fixed cost model to reduce
Recently the Government of India has proposed the power and fuel costs which will be shared with
launch of the Digital India programme to further
bridge the divide between digital “haves” and
“have-nots”. In addition, incremental allocations
have been made towards the Rural Internet and
Technology Mission, the development of ‘one
hundred Smart Cities’, and setting up virtual
Telecom penetration in rural
areas is still less than 42% and
offers tremendous headroom
for growth
“ operators to create a win-win proposition.

The Indian telecom industry as a whole is imbibing

a forward looking perspective that is green in
vision with a mix of hybrid solutions that include
enhanced battery backups and renewable sources
classrooms and a programme for promoting of energy. On the technology front - outdoor
“Good Governance”. The Department of Telecom’s BTS are going to be the key rollout strategy for
100-Days Plan charts the path for creating an operators from an economic proposition front.
‘Always Connected Society’ and envisions ‘Right to is quite low in India when compared with the
Broadband’ for all. The Telecom Commission has contribution of data revenue in other developed TowerXchange: Given the maturity of
also decided to allow Private Sector participation markets.  The primary reasons for this lag in independent towercos in India, who own around
in National Optic Fiber Network (NOFN) projects. data usage include lack of sufficient spectrum, two thirds of the country’s towers, does the
In light of these significant developments, towers affordable handsets and operator focus. However, onus for building new towers come more from
will play a critical role in last-mile connectivity. with the advent of technology such as 4G, a mobile MNOs’ network extension programmes, or from
This will be literally a convergence between the data boom is expected to usher in India in coming towercos acquiring attractive locations?
enabling of capacity (wireline) and the delivery of years.
communication services (wireless). Umang Das, Chief Mentor, Viom Networks and DG,
Disruptive solutions like ‘lite anchor sites’ shall TAIPA: In 2013-14, the Indian telecom tower sector
TowerXchange: Which trends are now shaping play another pivotal role in the growth of telecom witnessed multiple tenancy drivers as a result of
the Indian tower industry? tower companies as it will create a compelling voice and data demand driven by coverage gaps,
business propositions for the operators.  These low rural penetration, continued expansion and
Umang Das, Chief Mentor, Viom Networks and towers are economically viable even with a single investments to address urban capacity bottlenecks
DG, TAIPA: The trends clearly indicate that the tenant while meeting the requirements of the and tremendous growth in data.
growth drivers shall be voice, primarily from rural customers for their growth and efficient networks.
communities, and data for which the emerging Our lite anchor sites are modular in design which Telecom penetration in rural areas is still less than
integrated solution will hold the key focus area. allows upgrade of elements of the site as and when 42% and offers tremendous headroom for growth.
Data will be the next growth driver for urban India a new tenant comes onboard it helps reducing Urban areas are increasingly facing capacity
in the coming years as voice was in the last decade. capital expenditure significantly across all the constraints, with choking of network causing
Current contribution of data to total revenue category sites. frequent call drops and inconsistent data coverage,

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 127

thus creating demand for more towers particularly DG, TAIPA: With India being at the cusp of mobile TowerXchange: What would be your suggestion
in the form of more infill sites that need to be data growth, carrier network infrastructure will to tower companies’ executives in emerging
constructed by the telecom operators to provide witness continued investments, as operators markets such as Myanmar? What does it take to
the desired end-user experience. invest in favour of data traffic growth, and 3G/4G succeed as a tower business?
technologies gain momentum.
Going ahead, 4G rollouts by incumbent and new Umang Das, Chief Mentor, Viom Networks and DG,
operators are likely to enhance popularity of the Mobile towers in India are handling a surge in TAIPA: Tower companies are uniquely positioned
4G ecosystem and in turn benefit the tower sector. cellular traffic as operators upgrade for a new to help the Government of Myanmar to create the
Besides, the industry is likely to make network generation of bandwidth-hungry smartphones desired impact in building Myanmar’s telecom
investments comprising 2G network expansions, and tablets. Some of that anticipated growth may infrastructure and supporting the Government to
urban in-fills and accelerated 3G rollouts. come from additional users and more connected realise its target of raising telecom penetration to
devices, but most of it is predicted to come from an 80% by 2016.
The auction of telecom spectrum conducted in Q4 increase in traffic per connected device as users
FY 2013-14 with regulatory clarity is expected to be demand more and more wireless data. The new For tower companies to succeed in Myanmar,
beneficial to tower companies. We expect telecom traffic translates into soaring growth prospects for they should aim at supporting the telecom
operators to roll their networks rapidly. Besides, tower operators. industry in building a widespread shared telecom
the demand for new towers and tower sharing will infrastructure, with the objective of an accelerated
maximise the use of existing infrastructure. Reports predict wireless network traffic to grow coverage buildup, lower costs and lower consumer
another ten times over the next five years with prices. Tower companies can do so by developing
The improvement in industry fundamentals about 75% of this growth expected to be delivered local partners and enhancing their capability,
has revived investment as operators will over traditional macro sites, primarily towers. establishing a meaningful local ecosystem and
expand capacities to stay competitive. The In-Building Solutions (IBS), Distributed Antennae manufacturing base by leveraging the strength
Indian regulatory clarity augurs well for sector Systems (DAS) and other small cell installations are of the large vendor base that international tower
participants. Spectrum reframing also has a projected to support the remaining 25%. companies possess and, most importantly, bringing
significant upside potential. The momentum cost efficiency in equipment procurement and
in the Indian tower industry is undeniable and With over 70% of data consumption in urban India construction services through indigenisation.
we believe there is still meaningful upside for happening indoors, in-building Solutions (IBS) in Tower companies should adopt a long-term
the tower operators, given how economically the form of micro-cellular technologies such as commitment approach in Myanmar with the intent
compelling the sector fundamentals are. picocells and femtocells that create small-footprint of culturally integrating local talent into their
cell sites within buildings, enable more effective teams and skilling the local population in the field
TowerXchange: Please give us your views on coverage within the premises. With the growing of telecommunications.
data growth and the implications for demand demand for anywhere connectivity, IBS is gaining
for IBS and small cells. momentum. Operators use DAS and/or IBS to Tower companies must remain focused on
address issues related to poor wireless reception in improving the efficiency of tower operations and
Umang Das, Chief Mentor, Viom Networks and indoor environments. maintenance, with the objective of improving

128 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

uptime, reducing energy and operating costs, and The rolling out of the telecoms network in

“
creating additional income from sharing with Myanmar is a defining moment for the country
other operators. For the greenfield opportunity and the region. Myanmar’s telecommunications
that Myanmar presents, tower companies should sector is about to explode. Myanmar’s late entry
foster the establishment of telecom-information into the information and communications market
technology-citizen service centres at tower means it can leap directly to low-cost and high-
locations across Myanmar, with the objective of connectivity options. It also means connecting
improving Government services, education and Myanmar’s small businesses to new opportunities
healthcare and helping propel Myanmar into the and its citizens to each other, and to a world of According to analysts, the
digital age. online information.
number of new mobile
TowerXchange: With regards to Myanmar, TowerXchange: How realistic are Myanmar subscribers in Myanmar will
can you give us a brief overview of what is MNOs and towercos goals in terms of grow at a compounded annual
happening and what are your expectations for infrastructure and network rollout? rate of nearly 30 percent to
the future of the local tower industry?

Umang Das, Chief Mentor, Viom Networks and

DG, TAIPA: Through Quippo Telecom, the telecom
initiative of Viom Network’s joint-venture partner,
Umang Das, Chief Mentor, Viom Networks and
DG, TAIPA: Myanmar presents itself to us with
a once in a lifetime opportunity to be part of a
nation’s infrastructure buildup that will connect
reach 32.3 million people by
the end of 2019
“
Srei Infrastructure Finance Limited, we have over 50 million people. Not often are you in midst
established Irrawaddy Green Towers (IGT) in a of such a transformational juncture in the history
strategic partnership with Alcazar Capital.  As of a nation. Hence, both operators and tower
Viom Networks is one of the founding partners of companies are equally and yet realistically excited
IGT, we certainly have long-term strategic interest about their prospects in Myanmar. into an opportunity for themselves.  
in Myanmar. Independently, Viom Networks is
pursuing EPC rollouts as there is an urgent need According to analysts, the number of new While the goals are very much in place, there are
for the rapid capacity enhancement of telecom mobile subscribers in Myanmar will grow at a uphill challenges in the overall ecosystem and
infrastructure in Myanmar. compounded annual rate of nearly 30 percent when it comes to local skills development and
to reach 32.3 million people by the end of 2019. training challenges. However, with Myanmar being
We are currently working towards integrating Indeed, it will be a challenge for operators to regulated within a single regulatory framework,
Myanmar within the regional ICT framework at create a modern 3G network in Myanmar that licensing nationally, and spectrum allocations
the earliest.  IGT has signed a contract with Telenor reaches 90% of the population, including rural in line with this, the business environment is
in Myanmar. We envisage being a participant in villages, in five years. But that is where tower congenial for both tower operators and telecom
building 10,000 towers in next few years across companies and telecom operators will form of service operators to concentrate on their core
operators and throughout Myanmar. synergistic association to convert this challenge deliverables

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 129

Success story of an Indian
TowerXchange: Please tell us about Ardom
Telecom’s activities and footprint

O&M provider Pankaj Sharma, Director and Chief Business

Development Officer, Ardom Telecom: Ardom
Telecom offers end to end maintenance services
Ardom Telecom on the evolution towards preventive maintenance and green sites
to active and passive equipment as well as Optical
Fibre Cables (OFC). We are a team of experienced
In 2013, Ardom Telecom ranked first in the Deloitte Tech Fast professionals bonded by a set of common values
50 India in light of its outstanding growth in the TMT industry. and a passion for our job. In fact, the word Ardom
Thanks to its reliable and state of the art offering including comes from the idea of a team of ardent O&M
preventive and breakdown maintenance, Ardom has achieved professionals (hence the combination of the letters
excellent results with its wide array of top clients from the ARD and OM) and we have been striving to carve
Indian telecom industry, including Indus Towers, Bharti out a niche in a disorganised and fragmented
Infratel, American Tower and Viom Networks. market such as telecom infrastructure O&M in
India.

In this exclusive interview, Pankaj Sharma, Director and Chief

Starting from the state of Bihar, in three years we
Business Development Officer at Ardom Telecom shares his
have grown to serve nine telecom circles including
views on what it takes to become a leading O&M provider in
Bihar and Jharkhand, Delhi and NCR, Haryana, MP
Pankaj Sharma, Director and Chief Business India, the shift towards green powered sites and renewable and Chhattisgarh, Odisha, Punjab, Rajasthan, UP-
Development Officer, Ardom Telecom
energy and how to overcome challenges such as diesel theft. East and UP-West. In terms of its footprint, Ardom
covers almost 40% of India’s geographical area and
Keywords: Ardom Telecom, Bharti Infratel, Indus Towers, Viom Networks, American Tower, O&M, India, almost 50% of its population.
Southern Asia, Alcatel Lucent, Duraline, Ericsson, Reliance Jio, Samsung, TowerVision India, Interview,
Active Equipment, Passive Equipment, Fuel Security, Renewables, Site Surveys, Optical Fibre Cables TowerXchange: Can you share who your key
clients are and the type of services you offer
them?
Read this article to learn:
< Ardom Telecom expertise and footprint Pankaj Sharma, Director and Chief Business
< The Indian telecom industry: key data and trends Development Officer, Ardom Telecom: Our key
< How to maintain sites in Indian climatic conditions clients are American Tower India, Alcatel Lucent,
< The expansion of green powered sites and renewable solutions Bharti Infratel, Duraline, Ericsson, Indus Towers,
< Solutions to overcome fuel theft in India Reliance Jio, Samsung, TowerVision India and
Viom Networks. Ardom serves a combined 11,500

130 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 new companies specifically involved in O&M

“
for telecom sites powered by alternative energy
solutions.

TowerXchange: Which specific services do you

offer to your clients in light of the climatic
Telecom operators and towercos are increasingly aware of the
importance of accurate energy management as India has one of
the highest ratio of mobile subscribers and per capita electricity
consumption in the world
“ conditions of India (such as monsoons)?

Pankaj Sharma, Director and Chief Business

Development Officer, Ardom Telecom: India is a
vast country with different extremes of climatic
conditions. At Ardom, we customise site-specific
solutions taking into account all variables
including the electrical load on each site, number
of tenants, grid availability and its status, climatic
towers and approximately 18,000 Km of OFC. In Development Officer, Ardom Telecom: India is one conditions et cetera.
addition, we are also involved in laying OFC in the of the largest markets in the world for telecom
country. infrastructure O&M with 400,000 telecom sites, Ardom is able to offer state of the art solutions
expected to grow to half a million over the next in light of any climatic condition and we are well
Our business philosophy is to provide single three years. Additionally, India is host to 700,000 aware of the necessity of preventive maintenance
window managed service solutions to our BTS, with projections as high as 1 million BTS over on specific equipment depending on the season.
customers. Our service package to Indian towercos the next two years and as much as 1 million Km of For example, during pre-summer site check-ups in
includes complete site management and allows OFC which could reach 2 million Km by 2017. Delhi, we pay extra attention to air conditioning
companies to keep track of each telecom site under systems and shelter door locks while during pre-
a fixed energy consumption model, energy audit, Telecom operators and towercos are increasingly monsoon check-ups in Odisha and Bihar, we take
comprehensive and non-comprehensive O&M, the aware of the importance of accurate energy particular care of shelter health and the height of
laying of OFC and its O&M, first level maintenance management as India has one of the highest ratio various equipment.
of active components, remote monitoring through of mobile subscribers and per capita electricity
real time data, site health surveys and more. consumption in the world. The Government TowerXchange: How many green sites do you
of India has come up with guidelines for the serve? Do you see green sites expanding in the
TowerXchange: What is the current scale and implementation of renewable energy projects region?
potential growth of the Indian telecom tower which are changing the dynamics of the O&M
industry? business. In fact, renewable energy solutions Pankaj Sharma, Director and Chief Business
will increase the size of the market considerably Development Officer, Ardom Telecom: Ardom is
Pankaj Sharma, Director and Chief Business and are now contributing to the creation of involved in the conversion of traditional sites into

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 131

green ones thanks to various technical solutions
we are able to offer. Our Fixed Cost Model (FCM) is Participate in the
a much appreciated and widely adopted solution
that differentiates us from other O&M players and TowerXchange
helps our clients make considerable savings.
community
The Department of Telecom of the Government of
India is pushing operators and towercos to covert
Tower
tower sites to alternative sources of energy. This manufacture
has rightly forced players to look at various options & installation
currently available in the market.

Investors & Independent

At Ardom, we have an energy consumption advisers towercos
database of over 11,000 operational sites and we
are ideally placed to design tailor-made solutions
for any kind of site. Being technology-agnostic,
we can source the perfect solution suitable for a
Tower Xchange
particular site taking into account variables like
Decision
EB availability, sunlight duration, terrain and Regulators makers
geography by providing solutions like PV solar, & policy at
makers operators
Lithium-Ion batteries, biomass, hydrogen fuel cells
et cetera. Equipment
& managed
TowerXchange: Is fuel theft a problem in India? services
Ardom’s team at work
What kind of solutions are available in the
market? sources, therefore eliminating diesel altogether.

Pankaj Sharma, Director and Chief Business At Ardom, we have developed an in-house mobile
Development Officer, Ardom Telecom: The application called Ardom Mobile Workforce to Join the TowerXchange LinkedIn™ group at
problem of diesel pilferage does exist in remote track and analyse real-time ground activities
www.linkedin.com/groups/
and rural areas. However, a number of solutions including diesel filling tasks performed by our field
are now available in the market, ranging from staff. Additionally, our Fixed Energy Consumption TowerXchange-4536974
small tracking equipment placed at the DG sets to Methodology relieves our customers from all the
record the actual diesel level and consumption to pain points related to the calculation of exact
complete conversion of sites to alternative energy energy costs on sites as well as diesel pilferage

132 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Meetup Asia 2014 9-10 December
Singapore
One gathering, countless opportunities. Take YOUR seat at the table
with 200 leaders of the Asian tower industry

Register online at www.towerxchange.com/meetups/asia. Questions? Call Annabelle on +44 7423 512588

Diamond Silver Sponsors: Bronze Sponsors: Exhibitors:
Sponsor:

Exhibitors: Media Partners:

TowerXchange Meetup Asia 2014 Agenda
Day one, Tuesday 9 December Day two, Wednesday 10 December Confirmed speakers include:
8:00 Registration and coffee 9:00 Is it possible to create a Pan-Asian telecom
Pankaj Agrawal, Director, Capitel Partners
tower industry? David Burke, CEO, PT Komet Infra Nusantara
9:00 Welcome and opening remarks (KIN)
9:30 Third structured networking roundtable Sushil Kumar Chaturvedi, CEO, Ascend Telecom
Rajat Chitravanshi, Chief Supply Chain and Project
9:10 The status of the Southern and Southeast Officer, Ascend Telecom
Asian tower industry and forecasts for the mid- 11:00 Morning coffee and networking Lim Chuan Wei, Partner, Analysys Mason
term by TowerXchange Phil Cooper, CFO, Apollo Towers
Oliver Coughlan, CEO – Myanmar, Digicel
11:30 Strategic partners panel part II: the
Myanmar Tower Company
9:40 Mobile network operator panel  importance of partner selection for ROI Umang Das, Chief Mentor, Viom Networks
optimisation and opex reduction Dr Mahadi Harris-Murshidi, CEO, Common Tower
10:40 Morning coffee and networking Technologies
Arun Kapur, Vice-Chairman, Irrawaddy Green
11:50 Towerco keynote panel Part I Towers
11:00 First structured networking roundtable Tushar Kapadia, Vice President - Strategic
13:00 Networking lunch Initiatives, GTL Infrastructure
Carlos Katsuya, Head - Asia TMT, IFC
12:20 Networking lunch
Tharma Kunaratnam, MD - Asia TMET, Macquarie
2:00 Key executives one-to-one Group
1:40 Second structured networking roundtable Feisal Kurniadi, Site Sharing Roll-Out Manager, PT.
2:30 Strategic partners panel part III: the Hutchison 3 Indonesia
Philippe Luxcey, Chief Executive Officer, Apollo
3:00 Afternoon coffee and networking importance of partner selection for ROI Towers
optimisation and opex reduction Senior representative, Indus Towers
3:20 Strategic partners panel part I: the Mohammad Razaul Karim Rizvi, Manager, Project
Planning & Implementation, 3G Project, Teletalk
importance of partner selection for ROI 3:00 Afternoon coffee and networking
Bangladesh Limited
optimisation and opex reduction Daniel Ryan, CEO, Square1 Infrastructure
3:20 Towerco keynote panel part II Syed Safawi, CEO, Viom Networks
3:40 Investors keynote panel Amit Sharma, EVP and President APAC, American
Tower
4:15 Summary and closing remarks from day two Suresh Sidhu, CEO, edotco Group
5:00 Closing remarks from day one Geoffrey Simms, Co-Founder, Wellington Capital
Advisory
Nicholas Swierzy, Chief Strategy Officer - Myanmar,
5:20 Close of day one
Senior Director, M&A and Strategy, Ooredoo
Patrick Tangney, Chairman, Irrawaddy Green
Social evening to be announced Towers

134 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com/meetups/asia | TowerXchange Meetup Asia | 3

TowerXchange Meetup roundtable topics
How our structured networking round tables work Country-specific discussions

< Country focus: Indonesia

< Select round tables focused on your priority countries or issues
< 80-minute ‘deep dive’ structured networking session < Country focus: India
< Participants represent the whole tower ecosystem < Country focus: Malaysia
< Director to C-level participants only < Country focus: Thailand
< Subject matter expert host introduces the discussion < Country focus: Bangladesh, Bhutan and Nepal
< Participants introduce themselves, share questions AND answers < Country focus: Cambodia, Vietnam and Laos
< Held under the Chatham House Rule to protect confidentiality
< Country focus: Sri Lanka
< Sales pitches strictly prohibited
< Country focus: Pakistan
< Country focus: Philippines
Invited organisations include: < Country focus: Myanmar

< AIS < Northstar Group Tower strategy and operational challenges
< Ascend < Pan-Asia Towers
< Banglalink < Protelindo < Energy efficiency in Southeast Asia - Green sites for multiple tenants
< Bharti Airtel < Provident Capital Partners
< Bharti Infratel < Reliance Communications < How to connect rural areas: operational and logistics challenges
< BSNL < Reliance Infratel < Key tower manufacturing and design requirements for state of the art project
< Celcom < Robi development
< Dialog < SingTel Mobile
< DiGi < STP < How to survey, evaluate and upgrade towers for multiple tenants
< DTAC < Telenor  < Opportunities for towercos to expand beyond the macro network into DAS and small
< edotco < Telkomsel cells
< Golden Towers < The Carlyle Group
< Grameenphone < TOT < How to evolve from reactive to preventative maintenance
< Idea Cellular < Tower Bersama
< Indosat < Tower Vision Legal and financial know-how
< Indus Towers < Truemove-H
< Maxis < TRUGIF < The investibility of the Southeast Asia telecom tower industry
< Metfone < Viettel Mobile
< Mitratel < Vinaphone < Contractual terms that create and destroy value when negotiating S&L and BTS
< MobiFone < Vodafone  programmes
< MPT < XL Axiata < How to structure a tower transaction (legal perspective)
< How towercos achieve SLAs
Interested in moderating a roundtable? Contact Arianna Neri,
< How to raise capital for tower transactions
Head of Asia at [email protected] 
< Acquisition / exit strategies for regional towercos

4 | TowerXchange Meetup Asia | www.towerxchange.com/meetups/asia www.towerxchange.com | TowerXchange Issue 10 | 135

TowerXchange Meetup Asia floorplan
DIAMOND SPONSOR:
Diamond sponsor: edotco
Silver Sponsor:
ACSYS
Private meeting rooms Eltek
Bronze Sponsors:
1 2 3 Vinson & Elkins RLLP
Tarantula
Invendis
8 12 Exhibitors:
Telemisis Ltd
9 13 KARAM
Towershare
FLEXENCLOSURE
Infozech
Heliocentris
NorthStar
10 14 AIO Systems

11 15
edotco Coslight

edotco Group is an integrated telecommunications infrastructure services company

providing end-to-end solutions that includes towers, energy, transmission, operations and
maintenance in the region of Southeast Asia.
4 5 6 7
Today, edotco Group has a large network sites its circle of operations in Malaysia, Sri Lanka,
Bangladesh, Pakistan and Cambodia. This represents the company’s commitment to expand
possibilities with cost-efficient telecommunications infrastructure that is built around
growing competitiveness and connectivity for businesses.

Guided by practical optimism to make a difference in the business we are in, edotco is
Main Meetup room
determined to drive its aspiration – “Enabling Connectivity” by transforming businesses in a
way that make a positive impact on the society we live in. Focused on providing innovative
and environmentally conscious energy solutions, edotco continues to deliver world class
products and services in line with its vision to make a difference today for tomorrow by
enabling and empowering communications in a responsible manner in the region.

http://edotcogroup.com

136 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Meetup Asia | 11

Our sponsors and exhibitors
SILVER SPONSOR: then, the company has grown organically as well Bronze Sponsor:
as through mergers and acquisitions to become the
world leader in High-Efficiency power conversion
electronics.
Vinson & Elkins RLLP
Eltek develops and markets power systems, based
Vinson & Elkins is one of the oldest and largest
Acsys on leading proprietary technology and state-of-the-
international law firms, with approximately 700
art products. A strong range of high power-density,
Acsys is one of the global leaders in cell tower lawyers located in 16 offices around the world.
flexible and cost-effective rectifiers, converters
access control solutions. Our patented, military- and inverters are the core of their offering for
grade solutions fill the industry gap for highly Our global telecommunications team has extensive
the Telecom, Datacenter, Rail and Infrastructure,
secure, remote site access management.  Acsys experience advising on international telecoms
Power Generation and Hybrid Solar sectors.
offers a combination of solutions that are wired, and telecoms infrastructure transactions. We
Eltek also designs, builds and furnishes complex
wireless and/or wire-free to gain access to any site have extensive industry experience, advising on
turn-key power solutions, as well as developing
under any circumstances. European-rooted, with telecoms transactions in numerous countries. Our
embedded system solutions for original equipment telecommunications advice includes acquisitions and
an innovative team from around the globe, and the manufacturers.  Eltek prides itself on assisting disposals, debt and equity financing, infrastructure
benefits of China-based production, Acsys stays at customers in reduction of their overall operational development, operational arrangements, regulatory
the forefront in designing cutting-edge security and expenses with high efficiency solutions and matters and dispute resolution.
staff management solutions at a competitive price.  innovative designs through reduction of wasted
Our programmable locks and keys have earned electrical energy and environmental impact. We also have significant experience in the negotiation
recognition from leading telecom operators, tower
and drafting of sale and purchase, debt and equity
management companies, and equipment providers. Eltek’s headquarters is located in Drammen, Norway financing, master lease, build-to-suit, site management
www.acsys.com and the company has approximately 2,400 employees and service level arrangements; and have played a
in 40 countries and business activities in more prominent role in complex fibre transactions.
SILVER SPONSOR:
than 100 countries. With increasing demand and
www.velaw.com
tremendous economic growth in Asia Pacific market,
Eltek Power Pte Ltd was set up in Singapore in 1997 Bronze Sponsor:
as the Asia Pacific Regional Office and continues
Eltek today to provide key support for the region.
Tarantula
Eltek was established in Norway in 1971 as a Visit: http://www.eltek.com/energy_saved_he.epl 
specialist telecom power systems supplier. Since to see our live HE saving! Tarantula is a world leader in telecom site

12 | TowerXchange Meetup Asia | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 137

Our sponsors and exhibitors
management software and a trusted partner of leading business solutions that help Telcos & Towercos to optimisation, fuel management, electricity metering,
telecom infrastructure operators in 13 countries. offer uninterrupted services to their clients. Invendis environmental management and machine/equipment
Through its specialized site management toolset, also provides a complete range of Remote Monitoring control in harsh and demanding locations since 2000.
Tarantula is a fundamental pillar of support behind & Energy Optimization services by leveraging our Telemisis manufactures the industry’s smallest, most
the management of more than 350,000 mobile towers domain and business expertise. flexible and cost-effective remote telemetry node
and assets worth US$25 billion around the world. “SiteNode®”. SiteNode® units provide interfacing
Our offerings span front end equipments, sensors, and data collection capabilities from a wide range
Red Cube Enterprise is Tarantula’s flagship product transducers, business applications, systems of standard devices and sensors that may already be
for smart and efficient telecom site management, integration, product engineering, Installation, deployed or will be added. Coupled with Telemisis’
with modular design and configurable workflows. maintenance, 24X7 Global Monitoring & IT back-end server systems we offer standard or bespoke
The platform is the worldwide industry standard for infrastructure services. solutions.
co-location and tower lifecycle management. The tool
also offers additional capabilities such as location Invendis pioneered customizable Front End www.telemisis.com/products
management, asset and lease management, operations Monitoring & controlling equipments, which helped
Exhibitor:
and maintenance, invoice management, mobile Towercos to roll out Monitoring & Energy optimization
field-force solutions, and comprehensive dashboard solutions in shortest possible time.
reporting.
Invendis has a global footprint with over 25,000
www.tarantula.net installations spread across Asia, Africa & Europe Karam
Bronze Sponsor:
www.invendis.com KARAM specializes in field of Fall Protection &
manufactures the highest quality equipment, leading
Exhibitor:
the way with innovative products & solutions for safe
working at height.
Invendis
Our complete vertically integrated manufacturing
Invendis Technologies India Pvt. Ltd. was started Telemisis set-up is spread over a span of around 325,000 square
in 2007 by people with more than 100 man years of feet area with work force of above 1500 highly skilled
experience in Telematics. Today, we are a global leader Telemisis manufactures the SitePro® system for people.
in the business of Remote Monitoring of Telecom remote monitoring and automation solution for all KARAM provides a range of Solution to the user
Towers. business sectors; our specialisation being mobile working at Height on variety of towers, masts,
operators and tower owners. We have delivered monopoles and lattice structures that are used in
Invendis designs and delivers technology-enabled full site management systems, including power Telecom industry.

138 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Meetup Asia | 13

Our exhibitors
Our commitment to quality is reaffirmed by our ISO prefabricated data centre buildings for the ICT energy costs worth about 837.5 million US dollars
9001-2008 certification. All our products are certified industry. The company provides systems that are across 150,000 towers in India. iETS was adjudged the
as per EN also meets American & other International fully integrated, modular, factory tested for reliability, most innovative product at The ET Telecom Award
standards. adaptable to local conditions and quick to install. 2013.

www.karam.in eSite is a hybrid power system for off-grid and bad- www.infozech.com
grid cell sites that cuts diesel costs by up to 90%. eSite
Exhibitor: Exhibitor:
is an integrated single cabinet system for maximum
reliability and speed of installation. eManager, an
all-in-one toolbox for remote management, site power
Towershare optimisation and KPI reporting, is an integral part of
eSite.
Towershare is a leading independent owner and
operator of wireless communications infrastructure, www.flexenclosure.com Heliocentris
focusing primarily in the Middle East & North African
Exhibitor:
markets. Headquartered in the UAE, Towershare’s Heliocentris is a German technology company that
management team comprises telecom veterans who, provides Managed Power Solutions and Services
between them, have built over 15,000 towers in MENA for commercial stationary applications for global
and Asia. TS has an operational footprint in Pakistan Infozech Telecommunication Operators and Tower Companies.
where it has completed a few small acquisitions and Services reach from energy optimization and solution
is on the cusp of completing a small carve out. It is Infozech is a leading provider of game-changing, engineering to implementation of customized
currently in discussions in four different markets for technology-led solutions to Telecom tower passive turnkey power solutions and smart operations. The
sale and leaseback and build-to-suit opportunities. infrastructure providers and communication service flagship product the “Energy Manager” enables
providers (CSPs). Infozech has been delivering cost smart connectivity between different components
www.towershare.com optimization and revenue management solutions to in hybrid energy supply clusters, such as batteries,
80 customers across 25 countries for over a decade solar panels, conventional diesel generators or fuel
Exhibitor:
now. Infozech’s innovative offering iTower (Infozech’s cells, thereby substantially decreasing the ecological
Tower Product Suite) provides solutions for managing footprint at much lower operating cost. The company
and reducing operating costs through real time tower is headquartered in Berlin with branch offices in
Flexenclosure operations tracking, monitoring, prediction and Munich, Dubai, Vancouver and representations in
analytics. Johannesburg and Yangon.
Flexenclosure is a designer and manufacturer
of intelligent power management systems and Infozech’s Energy Tracking Service (iETS) manages www.heliocentris.com

12 | TowerXchange Meetup Asia | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 139

Our exhibitors
Exhibitor: infrastructure, power and water utilities, urban and our mission is to deliver reliable and affordable
infrastructure, and others. energy solution for the bettertomorrow. We are
  a global approved vendor for Vodafone and our
AIO’s total site efficiency solution offer 34% OPEX products comply with all international standards and
NorthStar reduction to telecom tower operators, allowing to certifications. We offer a variety of battery solutions as
manage every asset and every tenant individually. well as Hybrid Power System and Telecom Integrated
NorthStar is an industry leader in designing   Power Unit. Our energy storage solutions are reliable,
and manufacturing high performance lead-acid Capable of monitoring all infrastructure aspects – environmentally friendly and manufactured following
batteries and high efficiency telecom cabinets. The power, environment, communication, access control world-class standards.
company has state-of-the-art facilities in the USA and security - AIO Systems manages a modular
and Sweden, and their products are used in more configuration fit for the clients’ needs, in full www.cncoslight.com
than 120 countries worldwide. NorthStar premium automation, and providing timely alerts via a variety
thin plate AGM batteries deliver long life at elevated of communication channels. With powerful protocol
temperatures, with faster recharge and superior PSOC
implementation, AIO Systems ensures organizational Do you provide equipment and
cyclic performance. NSB Blue Batteries are today
reducing 85% of diesel generator run time in offgrid
business continuity and provides much more control services to the Asian tower
and monitoring power – at a far lower cost.
telecom applications. The newly launched NorthStar industry?
Academy  program will help customers to prolong
www.aiosystems.com
their battery life and save energy in their telecom
network. The TowerXchange Meetup Asia provides
Exhibitor:
a unique opportunity to develop business
www.northstarbattery.com
with a high qualified audience of the top
Exhibitor:
200 decision makers in Asian towers.
Coslight Ensure your company receives RFPs from
one of the fastest growing telecoms sectors
Since 2007, Coslight India operates via its
in the world by sponsoring or exhibiting at
AIO Systems manufacturing plants in Una, Himachal Pradesh, IMT
Manesar and Gurgaon. We are 100% subsidiary of
this event.
AIO Systems is a solution provider of next generation COSLIGHT International Group, a Hong Kong stock
of remote management, monitoring and control exchange listed company. COSLIGHT India covers Contact Annabelle Mayhew at +44 7423
systems for critical unmanned sites. Offering EMEA, India and Asia Pacific. 512588 or at [email protected]
customized infrastructure management solutions,
AIO’s products are designed for telecom, We serve key telecom infrastructure projects globally

140 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Meetup Asia | 13

TowerXchange Meetup Asia benefits and packages

Bronze Silver Gold Platinum Diamond

Benefits Delegate pass Exhibitor
Sponsor Sponsor Sponsor Sponsor Sponsor
Access to TowerXchange Meetup 1 pass 1 pass 1 pass 2 passes 3 passes 4 passes 5 passes
Daytime Catering
TowerXchange after hours networking receptions & catering
Access toTowerXchange VIP lounge
TowerXchange Round table interactions
10ft x10ft Turnkey booth
Profile and ad in journal & TowerXchange Meetup Special edition
Video on TowerXchange TV
One time dedicated post event emailshot to all TowerXchange attendees
Strategic Partner panel session *
Roundtable host *
Logo on backdrop, podium, signage, fliers & invites for TowerXchange
Meetup
Private meeting room
Your choice of bronze sponsorship benefit
Your choice of silver sponsorship quality benefit
Your choice of gold sponsorship premium benefit
Your choice of platinum business-class benefit
Your choice of diamond first-class benefit
* Limited availablity

Bronze, Silver, Gold and Platinum Sponsorship Benefit Options Target Attendee Breakdown
Bronze Sponsorship Gold Sponsorship Attendees Pass discount
Stationary sponsor (provided by client) Sponsorship of breakfast (Open) day 1
Gift drop (provided by client) Sponsorship of breakfast (Open) day 2 MNOs 25 **100%
USB sponsor (provided by client) Sponsorship of Lunch Day 1 Towercos 50 *50%
Sponsorship of Lunch Day 2 Managed Service providers 25 0%
Silver Sponsorship
Sponsorship of icebreaker drinks
Totes Bags (provided by client) Investors advisors lawyers and 25 0%
Lanyards (provided by client) Platinum Sponsor consultants
Business card wallet (provided by client) Host of private Lunch Day 1
Sponsorship of coffee break day 2 pm Host of private Lunch Day 2 Equipment providers 50 0%
Sponsorship of coffee break day 2 am Host of private breakfast day 2 Other 25 0%
Sponsorship of coffee break day 1 am
Diamond Sponsor * Discounted rate available to TowerCos and Government representatives only
Sponsorship of coffee break day 1 pm
Sponsorship of Drinks Reception / Opening reception ** 100% discounts for qualifying Director to C-level execs from Carriers
Special feature:

Malaysia case study

Malaysia is host to a vibrant and mature telecom sector with
three highly competitive operators, Maxis, Celcom and DiGi, a
newly formed cross-country towerco, edotco, and a wide array
of State-backed tower companies such as Sacofa, Common Tower
and Touch Matrix.

National MNOs are heavily involved in the deployment of 4G

LTE and are planning considerable investments to upgrade
their networks. edotco has just carved out 3,500 towers from
parent company Celcom - both owned by the Axiata Group -
while State-backed companies are contributing to the evolution
of the industry thanks to their local build-to-suit expertise.
Early efforts by the regulator to create a balanced and yet
dynamic tower market have paid off and Malaysia now boasts
an extensive network of over 20,000 towers, increasingly being
supplemented by IBS and ‘Special Structures’ such as lamp posts.

In the following pages, we offer priceless insights into the

historic evolution and future potential of the industry, and an
exclusive interview with Instacom’s CEO, Anne Kung Soo Ching.
Coming in the next edition of TowerXchange: edotco 360 –
behind the scenes interviews with the c-suite at the first pan-
Asian towerco!

Don’t miss:
143 Editorial: Introduction to the Malaysian tower market
147 Instacom: From State-backed to cross-country towercos

Petronas Towers, Kuala Lumpur

142 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Introduction to the Malaysian The size of the independent tower industry in
Malaysia

tower market Malaysia has around 20,000 telecom towers, of

which 3,500 have so far been carved out and
Around a third of Malaysia’s 20,000 towers are owned and operated by independent
transferred from Axiata to edotco. edotco has been
towercos, the largest of which is edotco, plus several State-backed regional towercos trading for one year and is the newest and largest
of several independent towercos operating in
Figure 1: Mobile market share 1H 2014 There are a number different combinations of Malaysia. Many of Malaysia’s towercos are State-
market dynamics that make a country a ‘perfect backed, regional players, some of which have been
fit’ for independent towercos. Malaysia is one such operating since the millennium.
‘perfect fit’: three strong, competitive operators
each with substantial market share; a wave of new Towercos own around a third of Malaysia’s towers,
32.9% 37.6% Maxis LTE license holders seeking to co-locate rather than a similar proportion to Indonesia, but lagging the
deploy their own sites; a data hungry subscriber mature Indian market where towercos own two
Celcom
base fuelled by growing disposable incomes; and thirds of the towers, and trailing Myanmar, which
DiGi an established culture of tower sharing. Malaysia is stands as a unique case with 15,500 new towers all
home to edotco’s headquarters and first live opco, being rolled out by towercos by 2017 (according to
and home to a multitude of smaller, regionally- GSMA GPM forecasts).
focused State-backed and independent towercos.
29.5% Let’s take a closer look at the structure of Malaysia’s MNOs still own the majority of tower assets in
Source: Digital News Asia tower market. Malaysia, although there is substantial bi-lateral
sharing, with around half of each MNO’s towers
Keywords: Meetup Preview, Editorial, Towercos, Market Overview, 3G, 4G, New License, Capex, Co-locations, having a single tenant, with the other half shared
Densification, Regulation, Off-Grid, IBS, DAS, RANsharing, Infrastructure Sharing, Asia, Malaysia, Celcom, Maxis, with their competitors or co-located on the third
DiGi, edotco, BPIT, Sacofa, Touch Matrix, D’harmoni, KJS, Common Tower, Infra Quest, Yikedbina, Perak Integrated party sites.
Networks, Asia Space, Desabina, Melaka ICT Holdings, Rangkaian Minang, PDC Telecommunications, Perlis Comm

While DiGi and Maxis both currently retain their

Read this article to learn: towers, both have been rumored to be considering
< Tower ownership and estimated tower counts for Malaysia launching their own carve-out towercos.
< The license regime, lease pricing and contractual terms established by the CMA and BPIT
< Organic and inorganic growth opportunities in Malaysian towers An established culture and regulatory
< Opportunities in FTTT, IBS and small cells framework supporting infrastructure sharing
< Time to market pressures for new LTE licensees creates demand for co-locations and RANsharing
Malaysia’s independent tower industry was

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 143

Comparing the penetration of the independent Figure 3: Estimated tower count for Malaysia
tower industry in each Southern and Southeast State-backed and other independent
towercos
Asia’s top four tower markets
Sacofa 765
Touch Matrix 460

90% y/e 2017 D’harmoni 346

KJS 309
13,300 Common Tower 260
Remaining
Infra Quest 201
75% forecast y/e 2014 MNO-captive 3,200
Yikedbina 200
Perak Integrated Networks 150
66% 33% 33% Asia Space 137
Desabina 118
edotco Melaka ICT Holdings 95
3,500
Rangkaian Minang 90
PDC Telecommunications 43
Myanmar India Malaysia Indonesia
Perlis Comm 23
Source: TowerXchange
Source: TowerXchange

effectively inaugurated by the Communications and The State-backed towercos have an association There are a handful of completely independent
Multimedia Act (CMA) of 1998, which recognised an known as BPIT which creates a framework within tower developers in Malaysia, some of which offer
infrastructure class license for “Network Facilities which the towercos abide by standard lease pricing disruptive pricing options significantly lower
Providers”. and contractual terms. One of the noteworthy than the norms established by BPIT. While such
consequences of this market structure is that State- companies seem to be targeting specific, attractive
Some State-backed infrastructure companies have backed tower companies’ lease prices are believed locations, the profitability of such an approach
near-monopoly status within their State, other to be discounted by 25% after 7-10 years. Therefore remains questionable.
regional markets are more open. Many of the lease pricing on macro towers is well established
important granular decisions in the regulation and widely confirmed with in Malaysia, although Organic and inorganic growth opportunities in
of the Malaysian telecom tower industry, such as there is more flexibility for the increasing number Malaysia
matters concerning land title and infrastructure of Malaysia’s towercos that have ventured into
access permits, are typically in are taken at State provision of ‘Special Structures’ (such as lamp posts The maturity of network rollouts, combined with
rather than Federal level. which have modular, upgradable designs). aforementioned State-led regulation of new site

144 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

permitting, and the dominance of local State- rumored to be considering launching their own fiberization may prompt collaboration and fibre
backed towercos in some parts of the country, mean carve-out towercos). However, as TowerXchange sharing.
opportunities to build new towers are limited in has seen in several other tower markets, it’s
the Malaysian market. It seems that independent amazing how quickly MNO’s stance on tower Malaysia already has some active fibrecos offering
towercos can secure permits to build new towers divestitures can change when a towerco of scale bandwidth to operators, but their reach is limited
in around half of Malaysia’s States, with the State- enters their market! and more are needed. There is less of a shortage in
backed towerco having exclusive rights in the the trunk as at the costly metro access and last mile
other half. However, Malaysia boasts more or less Cell site energy in Malaysia / fibre to the tower.
umbrella 3G coverage (with 2G EDGE); the MNO’s
coverage varies between the high 80’s and low 90’s Less than 5% of Malaysia’s cell sites are off-grid, Potential for IBS, small cells and Wi-Fi offload
percent. for example only 140 of edotco’s 3,500 Malaysian
sites are off-grid. Malaysia’s grid power is generally The majority of cell sites in Malaysia are still
There are still opportunities for organic growth for reliable. More challenging transport infrastructure conventional macro sites. IBS remains a premium
towercos in Malaysia. Malaysia’s three incumbent conditions in the East of Malaysia mean cell site solution, with multi-tenant DAS representing
MNOs announced 2014 capex budgets totaling RM autonomy is a greater priority here than in the West around 10% of edotco’s portfolio for example, but
3bn (just under US$1bn). Cell site densification, of the country. with a pipeline for perhaps 3-4 times as many IBS.
driven by growing data demand and the technical
specifications of LTE, mean infill sites are needed in However, this doesn’t mean energy efficiency is not Malaysia needs improved indoor coverage,
Malaysia’s dense urban areas, but the demands of important in Malaysia – burgeoning data demand especially in dense urban areas, prompting the
regulators and aesthetics mean smaller lamppost- is driving the energy load on some sites to and usual debate about the relative merits of small cells
style structures (often still sharable) will generally beyond capacity, and Malaysia’s high availability and Wi-Fi.
be preferred to macro towers. expectations means many high traffic connector
sites have backup power sources and battery banks. LTE rides a wave of collaboration and
The fragmentation of Malaysia’s tower market may RANsharing
offer edotco, or prospective new market entrants, Fibre to the tower
an opportunity to grow inorganically through the Malaysia recently issued eight LTE licenses, subject
acquisition of one of the better performing, larger A surprising proportion of Malaysia’s cell sites still to a condition that 10% of the population be covered
State-backed towercos operating in the more rely on microwave backhaul but, with LTE coming, within the first year. With such time to market
demographically attractive states, obviously subject fibre to the tower is becoming a priority. As more pressures, the majority of new LTE entrants are co-
to the consent of regulators. urban sites are connected with fibre, the removal of locating on towers and a lot of RANsharing is taking
heavy microwave dishes frees up valuable space for place.
At time of writing, it did not seem likely that either co-location sales.
of the remaining MNO’s towers were likely to There seem to be minimal restrictions upon
become available under sale and leaseback in the With data traffic rising and the price per MB of RANsharing within Malaysian towerco’s contracts,
near term (although DiGi and Maxis have both been data falling amid price competition, the cost of with the view prevailing that with the MVNOs piggy

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 145

backing on the radio area networks of Malaysia’s
three incumbent MNOs, there will come a time
when growing capacity demands will prompt
‘tenants’ sharing RAN to seek their own fully fledged
networks. The three established MNOs simply can’t
give capacity to everyone indefinitely.

Incumbent operators Celcom and Maxxis are felt

to offer the best 4G coverage, with the initial focus
being on Malaysia’s biggest cities, beyond which 4G
coverage is spotty rather than continuous.

Conclusion

The unique structure of the Malaysian telecom

market means there are no benchmarks for
international comparison. While 3G coverage is
mature and there are plenty of macro towers, FTTT,
special structures and IBS are needed to provide
capacity as LTE takes root. With the permission of
regulators, there seems an obvious opportunity to
create economies of scale through the consolidation
of some of the country’s more profitable state
backed and independent tower companies. With
Visit the TowerXchange.com website
eight new LTE licenses creating a race to market,
< Access to the “Internet of People” in emerging market < A comprehensive archive of TowerXchange’s
there remains the possibility that DiGi and/or
towers – a trust web of over 7,500 decision makers in interviews and analyses, searchable by topic, country,
Maxis’s tower assets may follow Celcom’s in being
passive infrastructure company or grouped by category (e.g. interviews or
made commercially available for co-location how to guides)
< Independent analysis and commentaries on the
Several of the key stakeholders in Malaysian prospects for tower transactions in selected countries < The latest news and registration information about
towers will be represented at the TowerXchange TowerXchange’s Meetups.
Meetup Asia, taking place on December 9 and 10 < The latest industry emerging market tower industry
in Singapore. For more details, visit
www.towerxchange.com/meetups/asia
news – BEFORE it’s published in the TowerXchange
Journal, accessible 24/7 from desktop, tablet or mobile Tower Xchange

146 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Malaysia: From State-backed
TowerXchange: Please tell us about Instacom, its
activities and footprint

to cross-country towercos Anne Kung Soo Ching, CEO, Instacom Engineering:

Instacom Engineering started operating in East
Anne Kung Soo Ching of Instacom on towercos, regulations and fibre for LTE Malaysia and then expanded into the West as an
end to end contractor for the telcos who were at
Anne Kung Soo Ching is one of the pioneers of the Asian tower that time building their own towers. Our services
industry. A pioneer Director of Indonesian STP, she is also the include site acquisition, permitting and tower
CEO of one of the most respected managed service providers of construction. We work with OEMs to install
Malaysia, Instacom Engineering Group Berhad, a company listed equipment and also offer O&M services. More
on the Kuala Lumpur Stock Exchange. recently, in light of 4G LTE rollout, we started laying
fibre for operators.
A passionate believer in the independent towerco model, Anne
kindly shared with us her views on the potential for further In 2005, Instacom partnered with Desabina, the
expansion of the Malaysian tower industry as well as perspectives State-Backed Company then operating in the state
on the regulatory environment and operational challenges faced of Terengganu, to build towers. Desabina had the
by key players. rights to build sites but lacked capital. Therefore,
Instacom successfully raised a MYR200 million
Keywords: Instacom Engineering, Managed Services, Islamic Murabahah Bond. It was the first Sukuk
Malaysia, Southeast Asia, Interview, Construction, Market of this kind in the Malaysian bond market, which
Overview, 4G, LTE, OEM, MNO, Celcom, Axiata, DiGi, Maxis, contributed to strengthening our position and
edotco, Viom Networks, Capex, Urban vs Rural, Co-locations, credibility in the local market.
Infrastructure Sharing, Build-to-Suit, State-backed Companies,
OSA, Malaysian Communications and Multimedia Commission,
Regulation, First Mover Advantage, Densification, Small Cells, As a contractor, Instacom doesn’t have any
Permits, C-Level Perspective geographical restriction and can build nationwide.
Anne Kung Soo Ching, CEO, Instacom Engineering
State-Backed Companies receive an NFP (Network
Facility Provider) license with specific geographical
Read this article to learn: limitations. In addition to the many State-Backed
< Instacom Engineering’s footprint and activities Companies throughout the country there are also
< The nature and role of state-backed companies in Malaysia other companies with NFP licenses that allow them
< The supportive telecom regulatory environment in Malaysia to own infrastructure nationwide.
< 4G LTE deployment: fiberization is key – the need for sharing
< Is it possible to create a pan-Asian tower company? Malaysians are very sensitive towards the possible
consequences of cell site densification and we often

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 147

face residents’ protests when new sites are being
built. One way to overcome this challenge is to be
very creative in the way we present our sites; we
are now adopting a variety of aesthetic solutions
to prevent towers from disrupting the landscape.
For example, we sometimes use existing minarets
or  build new ones to accommodate equipment.

Instacom is now offering in-building solutions

(IBS) for operators. Operators have embraced the
towerco model. They now prefer to pay a monthly
fee rather than having to come up with the capital
to build their own infrastructure.

“ State-Backed Companies such

as Sacofa, Common Tower
Technologies and KJS were
introduced in Malaysia about ten
years ago and serve the country
We serve mobile network operators, OEMs and
state-backed companies. State-backed companies
such as Sacofa, Common Tower Technologies
and KJS were introduced in Malaysia about ten
years ago and serve the country as build-to-suit
contractors. Each of them has been given monopoly
Kuala Lumpur by night

very poor and sometimes, we need to manually

carry equipment to sites. We don’t have a sky-lift
higher than 40 meters anywhere in the country and
towers above that height need to be lifted manually.
Sometimes we build in areas where every single
piece of equipment has to be delivered via boat, by
rights in a specific state and works as the sole foot or even helicopter.
as build-to-suit contractors.
provider of towers to be offered for co-location to
Each of them has been given
monopoly rights in a specific state
and works as the sole provider
of towers to be offered for co-
location to operators
“ operators.

TowerXchange: What kind of technical

challenges do you face in Malaysia when
installing new sites?
Power is another issue in Malaysia. Diesel gensets
are the typical solution to overcome power
shortages but they are extremely expensive and we
then have to deal with the problem of transporting
diesel to the sites. Although renewable options are
now being taken into consideration, we still cannot
Anne Kung Soo Ching, CEO, Instacom Engineering: rely entirely on them.
In Malaysia, we face more logistics challenges
rather than technical ones. Road infrastructure is These issues are worst in East Malaysia than West.

148 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

In fact, I’d say that 90% of existing infrastructure - money and we are very excited about it! deployment in Malaysia?
telecommunication, roads et cetera - are in the west
side of the nation whereas the east still presents TowerXchange: And on the regulatory front: Anne Kung Soo Ching, CEO, Instacom Engineering:
plenty of logistics challenges and many isolated How is the legal framework for telecom tower With the development of 4G LTE, we are now facing
areas in terms of mobile connectivity. erection, new permitting et cetera? different and more challenging requirements in
terms of cell site densification. In-building and
One way to fund rural coverage has been the Anne Kung Soo Ching, CEO, Instacom Engineering: small cell solutions are becoming very popular in
creation of the Universal Service Provision With the creation of state-backed companies, the metropolitan areas and in very congested cities
Fund (USP Fund). The Fund was created about government solved the issue of site permitting and such as Kuala Lumpur.
ten years ago by then Minister in charge of the overall procedure to establish greenfield sites.
telecommunication who realised that the In fact, state-backed companies are mandated by LTE is in progress but to be honest, the rollout is
economics of investing capital to cover remote the State and have the right to issue permits. We not advancing as fast as we would like. The reality
areas didn’t always add up for mobile operators. refer to them as the One-Stop Agency (OSA)  and is that laying fibre is a more complicated challenge
Therefore, the government made it compulsory they handle the relationship with key authorities that putting up a stand-alone site, like a tower, as
for each company receiving an NFP license to such as local councils and the fire and aviation we need to deal with underground utilities, local
contribute 6% of its annual turnover to the USP authorities. councils and construction permits at a federal and
Fund with the purpose to fund infrastructure local level.
projects in areas where they aren’t commercially The national regulator, the Malaysian
viable. Communications and Multimedia Commission Fiberization for LTE is not progressing to keep
(MCMC), is in charge of regulating the overall up with the demand and access isn’t really good
To date, the USP Fund stands at a healthy MYR5 development of the telco infrastructure and their even in cities like Kuala Lumpur where we’d
billion (approx. US$ 1.5 billion) and the Prime approval is also required whenever a tower site expect seamless connectivity. One of the viable
Minister has recently announced that 1,500 new is proposed but in reality, the process is fairly solutions would be for the government to push for
towers will be built over the next 3 years with straight-forward. We face more challenges in urban consolidation and force operators to share fibre.
MYR1.5 billion from the Fund. areas because of their density but overall, there are In comparison, ten years ago operators were forced
very defined guidelines for the telecom industry. by law to share towers by renting from state-
We believe the Fund is a great way to push for rural backed tower companies. When it first happened,
coverage as operators don’t have to pay for these I believe that MCMC has done a splendid regulatory the government faced huge resistance but to date,
capex-intensive projects but have funded them work which could be taken as an example by this system is a given and operators aren’t even
throughout the years. Mobile network operators emerging countries. The key feature is that MCMC thinking about building their own towers anymore.
in Malaysia are financially healthy companies isn’t an impediment to the development of the Thanks to that, operators have been able to
and are contributing to the development of their telecom sector; quite the contrary, it has been a expand their network much faster as they weren’t
own industry via the Fund. This will give rural great supporter. constrained by capex.
communities an opportunity to access education,
e-commerce and generally evolve with industry TowerXchange: What is the status of 4G LTE Now we are facing similar issues with fibre.

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 149

 “
Each operator is laying its own fibre which
makes it extremely expensive (MYR billions) and
technically challenging. The challenge is not so
much about fibre itself, whose prices have dropped
considerably, but about the construction workload.
Fibre can be shared, which would mean easing
the process enormously as only one project would
need to be developed, including all the permits and
We are proposing to the government to take a look at what has successfully
been done with state-backed (tower) companies, and to adopt a similar
approach to fibre. I think the change needs to be regulator-driven as it
“
technical analyses required. happened ten years ago

We are proposing to the government to take a look

at what has successfully been done with state-
backed companies, and to adopt a similar approach edotco has the potential to be a game changer as detached from the reality of the telecom industry.
to fibre. I think the change needs to be regulator- the first cross-country towerco in the region. It You see, some state-backed companies change
driven as it happened ten years ago. MCMC has might face some challenges as its link to the Axiata hands as the political situation varies. Tower
proven to be able to drive these changes and, Group doesn’t create the perception of it being companies need a more stable operational
although we know operators won’t like it at first, truly independent, especially in the eyes of its environment to succeed and shouldn’t be affected
we believe sharing fibre would be the only solution competitors such as Maxis and DiGi. or determined by politics. As Malaysia is going
to speed up the process and improve LTE services. through changing times, we wonder if there’s room
TowerXchange: How do you compare the for some shifts in the industry too.
Operators do like to have first mover advantage in evolution of the Malaysian towerco industry
the market - I understand that. But it just doesn’t with the rest of the region (eg. Indonesia, India)? edotco could maybe be the catalyst of this change.
make sense to lay fibre for each of them separately. Imagine if all towers were combined under one
Anne Kung Soo Ching, CEO, Instacom Engineering: roof! We estimate that Celcom and Maxis are
TowerXchange: Do you think the region is ready Malaysia is a mature tower industry and I think comparable in size with 7,000-9,000 towers each,
for a pan-Asian towerco? And would there be the best opportunities are behind us. We are prior to the carve out of edotco’s towers from
space for more than one, now that edotco has now entering a new phase which could still be Celcom. DiGi is the third player with about 4,000-
been created? quite interesting though. State-backed companies 5,000 towers and all the other operators combined
own small to medium portfolios of assets and we should have a portfolio of approximately 5,000-
Anne Kung Soo Ching, CEO, Instacom Engineering: wonder if the best move wouldn’t be to actually 6,000.
I believe that Viom Networks has been trying to put consolidate them all into one larger state-backed
together a pan-Asian towerco for some time now. company. We believe that a lot of value could be I believe that the Malaysian telecom industry could
They have contacted us to see if we could be their created as towers are still income-generating assets still evolve. Not so much in terms of new sites but
local partner in Malaysia and we have been in talks but not every state-backed company is aware of it, with consolidations and deals between operators
but haven’t gone too far yet. also because of their “political nature”, sometimes and towercos

150 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Special feature:

The Myanmar tower

dossier, part three
TowerXchange continues our extensive coverage of the world’s
largest current tower rollout as Ooredoo and Telenor launch and
scale up their operations in Myanmar.

Two stops in Myanmar in this edition. First, we checkin with

Oliver Coughlan, CEO of Digicel’s Myanmar Tower Company, or
MTC. MTC is partnering with Ooredoo to roll out a significant
portion of their network. Oliver’s words, together with those
of some of our other contacts in Myanmar, suggest that the
tower count forecasts produced by the GSMA and shared by
TowerXchange may have been too conservative - is seems that
over 20,000 towers may be erected in Myanmar by the 2017,
including the largest number of green power sites anywhere
outside of China.

Our second stop is with TowerXchange’s old friend Ofer

Ahiraz, CEO of Leadcom. Leadcom’s initial build of 300 sites for
Apollo Towers, Telenor’s partners, includes building 83 sites
concurrently! As you can imagine this is an awesome permitting,
logistical and power challenge, and it’s interesting to hear from
the front lines of the rollout.

In this edition of the Myanmar Tower Dossier:

152 How Digicel excelled in its first towerco venture
155 Leadcom’s experience in building 83 sites
(concurrently!) in Myanmar for Apollo

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 151

How Digicel excelled in its
TowerXchange: How did Myanmar Tower
Company (MTC) evolve from Digicel’s bid for
a license in Myanmar? What attracted you

first towerco venture personally to Myanmar?

MTC’s CEO on the company’s successes in Myanmar Oliver Coughlan, CEO, Digicel Myanmar Tower
Company: As we all know, Digicel unsuccessfully
Oliver Coughlan didn’t plan to accept a challenging opportunity bid for the telecom license in Myanmar and when
in Asia, let alone Myanmar. But when Digicel approached him that happened, the Group decided not to give up
with such an ambitious idea, he couldn’t resist and went on to but to offer our expertise to successful applicants
become the CEO of Digicel Myanmar Tower Company. To date, such as Ooredoo. In fact, Digicel went through a
MTC has built the vast majority of Ooredoo’s infrastructure and very detailed phase of groundwork and preparation
is successfully operating in one of the toughest markets in Asia ahead of the bid which created the foundations for
and worldwide. our current venture.

In this exclusive interview, Oliver shared with us his insights Thanks to its incredible entrepreneurial spirit,
on MTC’s successes to date, the challenges of operating in a Digicel Group was able to create MTC and I am
frontier market, and the key characteristics of the company’s proud to say, we are now the most successful
business model. towerco in Myanmar.

Personally, a number of factors pushed me to accept

Keywords: Digicel Myanmar Tower Company, MTC, Digicel this professional challenge. I had the pleasure to
Group, Asia, Myanmar, Asia Pacific, Caribbean, Towerco, work with the Digicel Chairman Mr. Denis O’Brien
Interview, Tower People, Hybrid Power, Unreliable Grid, around sixteen years ago, back in Ireland, and
C-Level Perspective, Regulation, Ooredoo, Network Rollout, even though we then parted ways, I always looked
Business Model, GSMA, Market Forecasts, Health & Safety, Co-
at the Group with interest and respect. Digicel
Oliver Coughlan, CEO, Digicel locations, Infrastructure Sharing
Myanmar Tower Company Group is a strong company with great vision and
entrepreneurial spirit.

Read this article to learn: At my age, I never thought I’d work in Asia and the
< Digicel’s journey from an operator to a towerco day I received the call from Digicel, I just remained
< How MTC has successfully contributed to the Ooredoo network launch on the line a few seconds longer than I normally
< MTC’s business model in Myanmar: from power to partnerships would as I had an interesting and rewarding
< Myanmar’s PTD: keeping the pace at times of change position in Ireland. I listened to what sounded like
a very challenging, therefore enticing, proposal. I

152 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

recall going back home and discussing it with my partner in Yoma Strategic Holdings which allowed
family… My kids and wife all pushed me to take intensive capital expenditure and supported us in
this challenge and here I am, developing one of the the Ooredoo launch.
hardest and most exciting rollouts ever and I have
never looked back. We are very  proud to play such a significant part
in Ooredoo’s successful network launch and we are
TowerXchange: Congratulations on MTC’s critical fully committed to Ooredoo’s expansion plans. The
role in Ooredoo’s rapid greenfield rollout and partnership between Ooredoo and MTC is a good
launch in Myanmar. How did you get so many match and the journey has been both challenging
sites on air so quickly? and rewarding.

Oliver Coughlan, CEO, Digicel Myanmar Tower This has been a successful venture for MTC and
Company: The rollout didn’t happen without a now we are keen to discuss co-location options with
great deal of energy, perseverance, financial and potential clients whilst we continue working to
One of MTC’s sites in Myanmar
human capital. As we all know, Myanmar presents expand our infrastructure in Myanmar.
some very tough conditions in terms of logistics infrastructure, provide a secure environment for
and infrastructure and delays are quite common in TowerXchange: Now that MTC has successfully our customers and make sure we do so within the
project development. proven itself in Asia, is Digicel looking beyond planned timeline.
Myanmar?
To be honest, we are a bit behind where we expected Our customers provide their equipment as well as
and wanted to be, according to our plans. However Oliver Coughlan, CEO, Digicel Myanmar Tower power to the site. I believe that so far, they have
that said, we all agree it’s been quite a journey and Company: With thirty-two business units across the adopted a variety of energy solutions depending
we are proud of the results we’ve achieved to date. Caribbean, Asia Pacific and Europe, Digicel is a very on the specific site conditions. In light of grid
A key factor of our success is represented by the forward thinking entrepreneurial organisation, power availability challenges, hybrid is the more
amazingly skilled teams we brought in from Digicel open to new opportunities under the right economical choice in the long run, and is now
Group around the globe. conditions. With the addition of MTC in Myanmar to widely adopted here in Myanmar. However, we see
its successful global operation, I have no doubt that standard dual diesel generator sites as well.
Digicel Group has a successful track record of the company is looking for new opportunities.
developing networks in remote areas of the TowerXchange: How has Ooredoo’s power
Caribbean and Asia Pacific and, with 9,500 sites TowerXchange: What is your business model? strategy evolved as they’ve moved from the
around the world, our team is experienced and Steel and grass or power too? initial phases of the rollout where time was of the
ready to face each challenge posed by a frontier essence, to later phases when they perhaps have
market like Myanmar. Additionally, we have the Oliver Coughlan, CEO, Digicel Myanmar Tower more time to focus on site efficiency?
backing of a strong Board of Directors which Company: We adopted a pure steel and grass
includes a very knowledgable and supportive local business model. We build the towers and Oliver Coughlan, CEO, Digicel Myanmar Tower

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 153

 “
can also be a challenge. The key for us was to TowerXchange: How has the principal of shared
engage with the right people, with a sound Health towers played out in practice so far, are the
and Safety track record and culture, a proven cost towercos generally building sites at least 500m
effective model and simply willingness to work hard. apart?

We are now working with some of the best and Oliver Coughlan, CEO, Digicel Myanmar Tower
The demand for infrastructure is most capable companies in Asia with successful Company: MTC work to industry best practices and
driven by the continuous growth track records in India, Sri Lanka, Malaysia, Vietnam, standards and have built the most robust tower
of the national user base and I Philippines and beyond. We are proud to say that infrastructure in Myanmar, with a view to sharing
we are also partnering with a number companies with other operators.   
believe the GSMA figures are at
the lower end of the scale, when
you consider the phenomenal
growth in the subscriber base
“ in Myanmar, which are keen to learn best practices
and adopt our model. We’ve so far partnered with
highly experience companies while also up-skilling
national companies and individuals. I am delighted
to say the vast majority of MTC’s Staff are Myanmar
nationals, the current and future success of the
TowerXchange: How is the regulatory
environment in Myanmar?

Oliver Coughlan, CEO, Digicel Myanmar Tower

Company: We have a very good relationship with
company is built around these great people. PTD (Myanmar’s Post and Telecommunications
Department) and they have been very approachable
TowerXchange: Do you agree with the GSMA’s throughout these past few months.
Company: Every successful business, ours included, forecast that Myanmar will have around 5,000
looks continuously at streamlining operations and towers by y/e 2014 and 17,300 by y/e 2017? We always have to keep in mind that Myanmar
reducing opex. I think as MTC evolves and improves, and its National Authorities and Regulatory bodies
it is no surprise that our clients do the same. Oliver Coughlan, CEO, Digicel Myanmar Tower have been literally hit by a storm of requests and
Myanmar has been a learning process for everyone Company: To be honest, these past few months have information in a very short period of time. I believe
involved in the market so there are opportunities to been so hectic that we haven’t had much time to any country, even the most advanced, would
improve for us all. future-gaze. That said, I believe that GSMA forecasts struggle to cope with this tremendous evolution we
have been issued prior to Ooredoo launch and if are experiencing here.
TowerXchange: Are you able to find good they had to re-look at them now, they might find
partners locally or are international experts them quite conservative. That said, I have dealt with very smart people within
playing a big role initially? PTD who know their business and are willing to run
The demand for infrastructure is driven by the the extra mile for the sake of the development of
Oliver Coughlan, CEO, Digicel Myanmar Tower continuous growth of the national user base and I the national telecom sector. These are challenging
Company: Myanmar is definitely a frontier market believe the GSMA figures are at the lower end of the and yet very exciting times and everyone is
which is undergoing a cultural and industrial scale, when you consider the phenomenal growth in overwhelmed by the scale of business growth within
revolution, therefore finding the right partnership the subscriber base. this beautiful country

154 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Leadcom’s experience in
TowerXchange: Please reintroduce us to
Leadcom for new readers not familiar with the
company.

building 83 sites (concurrently!) Ofer Ahiraz, CEO, Leadcom: Leadcom Integrated

in Myanmar for Apollo Solutions (Leadcom) is a market leader in the

provision, management, and implementation of
telecommunication network deployment services
Telecom turnkey provider and project management firm proven in Africa and
and solutions for pan-regional operators, towercos,
LatAm opens office in Myanmar vendors, and major enterprises. Leadcom has
over 20 years of experience and an extensive
Ofer Ahiraz knows telecom towers. Having moved over from leading
track record of successfully completing numerous
Motorola’s early participation in Africa’s first cellular networks, Ofer,
telecommunication infrastructure projects,
one of the founders of Leadcom has been in leadership positions at
worldwide.
Leadcom Integrated Solutions since 1998, taking a hiatus to work with
BeeLine on their rollout in Cambodia. Ofer’s experiences in Southeast
In July 2014 Leadcom was acquired by Lightbridge
Asia contributed to his enthusiasm to engage in ‘the last greenfield
rollout’ in Myanmar, where Leadcom is a key strategic partner of Apollo
Communications Corporation (LCC), the largest
Towers, for whom they are building 300 sites in the initial rollout phase. independent telecom services company in the
world. LCC have assembled a suite of network
planning and network performance optimization
Keywords: Interview, Managed Services, Construction, Installation,
capabilities, tools and software that constitute a
Capacity Enhancements, Network Rollout, Permits, Off-Grid, ESCOs,
Logistics, Multi-Country Partner, Rooftop, DAS, Vendor Finance, high end offering to clients. Adding Leadcom to
Masts & Towers, Shelters, Customs, Infrastructure Sharing, Asia, LCC’s portfolio expands the combined entity’s
Ofer Ahiraz, CEO, Leadcom Myanmar, Apollo Towers, Leadcom geographical footprint, and adds Leadcom’s
renowned and proven capabilities in tower supply
and build.  In FY2014, the combined companies
Read this article to learn: will generate US$420mn in revenues with 5,200
< Who Apollo Towers Myanmar’s subcontractors are, where, what and how many sites they are building employees across 51 countries.
< Views on vendor finance and ESCO opportunities in Myanmar
< Experiences with YCDC’s build permitting process TowerXchange: What does Leadcom’s project in
< Right-sizing towers and power solutions as Myanmar evolves from a single tenant rollout to a multi- Myanmar consist of?
tenant future
< Comparing opportunities in Myanmar and Africa, where Leadcom is upgrading sites for IHS and Ofer Ahiraz, CEO, Leadcom: Leadcom is one of
installing multi-tenant DAS for Ghana’s three towercos four strategic partners of Apollo Towers Myanmar
(editor: the others being Camusat, GTL and

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 155

iEngineering). We are supplying and building 300
cell sites in the current initial phase of the Apollo’s
rollout for Telenor Myanmar, consisting initially of
sites in Mandalay, Yangon and Naypyidaw. We’re
building 83 towers and rooftops concurrently, so it’s
a very intensive project!

At the same time we will be implementing

Flexenclosure eSites where appropriate, and
installing BTS for Ericsson.

TowerXchange: What is Leadcom’s footprint on

the ground in Myanmar?

Ofer Ahiraz, CEO, Leadcom: We have around

50 staff on the payroll in Myanmar, around half
of whom are locals. We brought in a head of
engineering and logistics manager from companies
we had worked with in the past in Cambodia.

TowerXchange: Has Leadcom provided vendor

finance?

Ofer Ahiraz, CEO, Leadcom: We felt the opportunity

in Myanmar was so exciting that we made an
exception to our usual rule to merely supply towers
and construction services, and provided a degree of
vendor financing. business and that sanctions had been lifted, so they necessary license, so they lead the import activity.
removed the country from the blacklist, not just for Clearing customs can sometimes be a smooth
One of the leading European banks is Leadcom’s Leadcom but for all their clients! process, but can also take weeks. It’s getting better
major bank, and when we initially approached as we get used to the process.
them about doing business in the country, they TowerXchange: What has been your exposure to
had Myanmar blacklisted. But Apollo Towers and importing equipment and permitting new sites? Leadcom focuses on our core business of supplying
Leadcom were able to produce documentation to and building towers – Apollo does the site
demonstrate that Myanmar was indeed open for Ofer Ahiraz, CEO, Leadcom: Apollo Towers have the acquisition and permitting work but we have direct

156 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 upgrading post-installation. They may also install
power solutions that are ready for a second tenant,
but it’s easy enough for a managed service provider
like Leadcom to later swap diesel gensets to ensure
energy efficiency with right-sized power solutions.

TowerXchange: How has the rainy season

impacted the rollout?

Ofer Ahiraz, CEO, Leadcom: Myanmar’s prodigious

rainy season has created additional challenges, but
they can be overcome by using our experience and
techniques.

experience of dealing with the YCDC who supervise

build permitting. They approve towers and analyse
The challenge is not corruption, but rather the slow
pace at which things get done in Myanmar.
“Myanmar’s tower companies
are smart – they know it’s
only slightly more expensive
to install a tower with spare
rooftop installations to ensure safety. They have to
capacity for extra tenants
send their own appointed local engineer to approve TowerXchange: Are the towercos going to
sites, which can sometimes result in delays.

TowerXchange: Forgive the direct question,

but have you encountered any problems with
corruption in Myanmar?
default to building multi-tenant towers in most
instances, even though they start out as single
tenant towers?

Ofer Ahiraz, CEO, Leadcom: Myanmar’s tower

compared to a single tenant
tower, and it’s certainly
cheaper than upgrading post-
installation
“
companies are smart – they know it’s only slightly
Ofer Ahiraz, CEO, Leadcom: We haven’t encountered more expensive to install a tower with spare
any instances of corruption. No-one has had their capacity for extra tenants compared to a single
hand out. tenant tower, and it’s certainly cheaper than

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 157

 “
is a significant project by today’s standards. Back
in 2006-8 we were regularly securing POs for 50,
75 and even 100 towers at a time from Tigo, Celtel
et cetera. But there aren’t rollouts of that scale
currently in Africa. It’s true that Myanmar may be
the last green field rollout, worldwide.
The majority of the funding for the Myanmar rollout is being
deployed by the towercos and their vendor finance partners; it might TowerXchange: What would be your view of a
potential ESCO opportunity in Myanmar?
cost more them US$100,000 to build a green field cell site, and the
towerco has to buy and will own everything – all the MNOs have to
provide are the BTS’s, and they in turn can secure vendor financing
from the manufacturers
“ Ofer Ahiraz, CEO, Leadcom: It’s too soon for an
ESCO in Myanmar. No-one has enough experience
of operating sites outside the big cities, so there
would be too many unknowns. As such, a Myanmar
ESCO is an opportunity only for those with deep
pockets and considerable risk tolerance.

TowerXchange: Finally, what’s new at Leadcom

For example, when we return to sites surveyed in of steel and construction materials across a weak in Africa?
March, April and May, some are now under a meter bridge!
of water! This wasn’t a surprise because our surveys Ofer Ahiraz, CEO, Leadcom: Having worked
had indicated the sites were prone to flooding, and The majority of the funding for the Myanmar successfully with IHS in Cote d’Ivoire, we’ve just
we will be installing many elevated sites, but it’s rollout is being deployed by the towercos and their opened an office in Cameroon and have commenced
difficult to commence civil works when the soil is vendor finance partners; it might cost more them our first site audits and tower upgrades for them.
sodden! US$100,000 to build a green field cell site, and the We’re undertaking a substantial program across
towerco has to buy and will own everything – all IHS’s sites in Cameroon and Cote d’Ivoire to replace
TowerXchange: How do you see the rollout the MNOs have to provide are the BTS’s, and they power cabinets, making sites more efficient and
evolving in Myanmar? in turn can secure vendor financing from the autonomous to improve SLAs.
manufacturers.
Ofer Ahiraz, CEO, Leadcom: As naturally in phase Meanwhile, we are supporting Helios, Eaton
one and two of the rollout the MNOs are looking to TowerXchange: How does Leadcom’s Myanmar and ATC opcos in Ghana and Uganda in tower
cover the main cities and roads, the real logistical project compare with its typical African maintenance and strengthening and the
challenges will come in phase three when the projects? engineering and turnkey implantation of their
rollout extends deeper into rural areas. That’s when first multi-tenant DAS solutions in a dozen or so
we’ll have to work out how to get tens of tonnes Ofer Ahiraz, CEO, Leadcom: The Myanmar rollout shopping centers, hotels and office blocks

158 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Special feature:

Case study: Costa Rica

Costa Rica is host to a bustling telecom sector since
the end of the state monopoly back in 2010. Thanks to
its stable business environment and overall positive
outlook, the country has welcomed investments by
leading organisations in the sector such as Claro,
Movistar, SBA Communications and American Tower
among others. In addition to large international
towercos, middle-market towercos such as Continental
Towers Corp., TOCSA and Catalina Inc. have started
operating in the country and contributing to the
expansion of the independent towerco model.

In this special feature, we have the pleasure to share

our findings on the evolution of the Costa Rican telecom
sector and on the growth of international MNOs in the
country, insights from Catalina Inc. on opportunities
and challenges faced by towercos and MottMac’s
analysis of the telecom and tower market.

Don’t miss:
160 Editorial: from 69% to 151% penetration rate in
less than four years
162 Mott Macdonald: Costa Rica Share Square
165 Catalina Inc.: A new tower market with a first
class business environment

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 159

Costa Rica: from 69% to 151% The Costa Rican telecom sector opened up in mid
2010 and was the last Central American country to
do so when SUTEL, the national telecommunications
penetration rate in less than four years regulatory body, granted licenses for three
frequency groups with concessions for twenty-five
A sound regulatory environment, openness to foreign investors and universal access promotion
years. At the time, two companies placed successful
bids and were granted one frequency group each,
The Financial Times Intelligence Unit awarded Costa Rica with the Caribbean
América Móvil’s Claro for US$ 75 million and
and Central American Country of the Future 2011/12 for its successful record
Telefónica’s Movistar for US$ 95 million, with a
in attracting foreign direct investment (FDI) into the country, and being the
third frequency group left unassigned.
number one destination in the region in terms of FDI project numbers since
2003. Additionally, the country ranked third in LatAm in the Networked
The price paid by Claro and Movistar for their
Readiness Index (2010-2011) by the World Economic Forum, which measures
licenses aligned with the average of other regional
the propensity for countries to exploit the opportunities offered by information
auctions such as those in Panama and Honduras,
and communications technology (ICT).
however other regional players including Digicel
A small and yet prosperous country, Costa Rica has placed itself as a key player and Millicom were reportedly considering bidding
in the LatAm telecom arena, attracting investments by the likes of América but eventually didn’t. It’s been speculated by
Móvil, Telefónica, American Tower and SBA Communications. Still far from news sources that the presence of a state-owned
reaching its full potential and affected by a general lack of infrastructure, incumbent, Kölbi, might have discouraged players
Costa Rica is being eyed by international companies seizing tax exemptions from bidding, along with delays in the auction
Arianna Neri, Head of Asia and and benefits offered to foreign investors. Over the next few pages, we offer an process.
Americas, TowerXchange
insight on the country’s telecom sector and its development from 2010 onwards.
Once ready to open up to international carriers, the
Keywords: Costa Rica, Financial Times Intelligence Unit, Foreign Direct Investment, World Economic government issued the General Telecommunications
Forum, América Móvil, Telefónica, American Tower, SBA Communications, Penetration rate, SUTEL, New Law which established rules with regards to
license, Digicel, Millicom, Panama, Honduras, FONATEL, QoS, Towercos, MNOs, Editorial, Central America, permitting, competition and universal access.
Market Overview, 4G, Universal Access, Market Entry, Country Risk As part of this legislative effort, the government
created the National Telecommunications Fund
(FONATEL) to support licensed players in their plans
Read this article to learn: to extend coverage and capacity in rural areas. In
< From 69% to 151% penetration rate: keys to the country’s success recent news, it’s been reported that US$14mn were
< The General Telecommunications Law, its characteristics and the National Telecommunications Fund currently being utilised from the Fund to provide
< A generally satisfied customer base and intrigued foreign investors services to least connected areas in the north of the
< Movistar and Claro: two international players successfully breaking the telecom monopoly country including villages in the San Carlos, Los
Chiles, Guatuso and Upala municipalities.

160 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 Mobile operators’ market share
2011-2013
3%
3%
2%
2011 2%

90%

15%

8%
2%
2012
3%

This new set of rules and regulations didn’t affect evolution of the market is the overall mobile user
72%
the openness of the market to foreign players and satisfaction in the country, ranging between 71 and
investors. In fact, the telecom sector doesn’t present 82% as recently gathered by SUTEL in a national
particular limitations in terms of foreign ownership, survey. These levels are comparable to UK’s 75%
18%
allowing international players to invest and operate rate reported in a 2013 Ofcom’s satisfaction survey
in the country. among mobile users. 18%

1%
Thanks to its relatively modern regulatory In a continuous effort to improve QoS, Claro and 2%
2013
environment and adaptability to international Movistar recently launched their 4G networks and
investments, the Costa Rican telecom sector has BMI has forecast that 3G and 4G connections will
been thriving over the past three years and moved account for almost 62% by the end of 2018. The
61%
from a monopoly to a competitive market filled with companies’ efforts to upgrade their services have
opportunities and potential. At the conclusion of the so far paid off. In fact, as published in a recent
monopoly phase, Costa Rica’s average penetration official report by SUTEL on the status of the telecom Claro Telefónica ICE
rate was just above 69% and less than four years industry for the period 2010-2013, 36% of all new Fullmóvil Tuyo Móvil
later it’s now among the highest in the region subscriptions registered in 2013 were Claro’s and
Source: SUTEL and Dirección General de Mercados
at over 150%. Another clear sign of the positive Movistar’s

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 161

 Key Mobile Developments

Share Square: Costa Rica Costa Rica is one of the last countries in Latin
America to sanction the liberalisation of the
telecoms market, in 2008. This marked the
end of the national operator Grupo ICE’s 46
year monopoly and led to the creation of a
• 3 MNOs : Kolbi (ICE), Movistar (Telefonica), Claro (America
Movil) and 2 MVNO (Tuyo Mobile and Fullmóvil) new regulatory body, the Superintendencia de
Active

• 6.9 million mobile subscriptions by the end of 2013, giving a Telecomunicaciones (SUTEL), a move intended to
penetration rate of 150%
promote and stimulate market competition.
• One of the last countries in Central America to sanction the
liberalisation of the telecoms market
Current Sharing

• As of April 2014, all three MNOs in Costa Rica are providing 3G After market liberalisation, the number of
and 4G LTE services.
subscriptions started to increase dramatically.
Passive

• 81% of the 750 MHz of spectrum spread over 6 bands dedicated

to International Mobile Telecommunications is owned by ICE. Rapid subscription growth continued until 2010
• Internet access in Costa Rica is dominated by mobile services and has since slowly tapered off.
which account for 88% of all access
Costa • Sutel announced a new spectrum aucton of 40MHz in the
Rica 1800MHz, and 30MHz in the 1900MHz/2100MHz bands. In 2010 a spectrum auction took place, and in
• 3 TowerCos : American Towers - 498 towers , SBA
Communications - 417 towers , Centennial Towers -140 towers
Q4 2011 two new players – Movistar and Claro –
None

• Costa Rica telecommunications market is very dynamic and launched services. While three concessions were
market’s future potenial for TowerCos could lie in the path taken
by ICE
available, only Movistar and Claro made bids for
spectrum - with Movistar offering US$95m for
3G 4G 60MHz of spectrum in the 850, 1800 and 2100
bands, and Claro offering US$75m for 60MHz
Technology Deployment
spectrum in the 1800 and 2100 bands.
Opportunity for TowerCo entry with Opportunity for Outsourcing Limited opportunity for new
focus on high Lease Up Rate (LUR) by MNO to TowerCo entrant TowerCo Kölbi has also since signed agreements with the 2
mobile virtual network operators (MVNOs), Tuyo
Mobile and Fullmóvil, which together account for
Mobile Market Overview 2% of subscriptions.
There are three Mobile Network Operators
Costa Rica had a population of 4.9 million people (MNOs) serving the Costa Rica market, of which As of April 2014, all three MNOs in Costa Rica
and 6.9 million mobile subscriptions by the end of Kölbi (ICE) was the clear market leader with 4.3m are providing 3G and 4G LTE services. Kölbi is
2013, giving a penetration rate of 150% - one of the subscriptions– 63% market share, significantly providing GSM on the 900 MHz/1800 MHz band,
highest in Central America, alongside Panama and ahead of Claro (América Móvil) which had 1.31m 3G on the 850 MHz band and the 4G at 2.6 GHz.
El Salvador. Around 83% of subscribers had a pre- subscriptions and Movistar (Telefónica) with As for the other operators, Movistar and Claro are
paid account. 1.27m. providing 3G services respectively on 850/2100 MHz

162 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

bands and at 2100 MHz and 4G services on the 1800 declared it has no intention of bidding, but the In 2011, Global Tower Partners purchased 250
MHz band. Costa Rica has 750 MHz of spectrum previous calls to auction more spectrum by Movistar towers from Centennial Towers in Costa Rica. GTP
spread over 6 bands dedicated to International and Claro could indicate their interest in increasing was later acquired by American Towers - which
Mobile Telecommunications with 81% of which is their spectrum. It is also important to note that this owns a total of 498 towers in Costa Rica at present.
owned by ICE. auction is not restricted to existing local market
players and the potential entry of a fourth player is Alongside AMT, two other TowerCos are present in
Internet access in Costa Rica is dominated by mobile possible. the market: SBA Communications, which manages a
services which account for 88% of all access. This is portfolio of 417 towers, and Centennial Towers with
principally due to ICE having focused investments The Tower Sharing market a portfolio of 140 towers.
on mobile network infrastructure at the expense While law 8660 article 77 clearly describes Sutel’s
of fixed line development (indeed fixed line competences to promote infrastructure sharing or Conclusions
penetration has been in steady decline). act ex officio to resolve differences or disputes, there Since its liberalisation, the Costa Rica
is currently little sign of regulatory activity to drive telecommunication market has been very dynamic,
To stimulate the development of data services, sharing. driven by the entrance of key new players which are
the government has recently announced a new part of groups with extensive experience in Latin
spectrum auction of 40MHz in the 1800MHz, and Operators have heavily invested in infrastructure American markets – Movistar and Claro. The pace
30MHz in the 1900MHz/2100MHz bands. Kölbi to expand their coverage and have been expressing of technological development has also been rapid in
their frustration at the difficulty of building new the last 2-3 years, with an LTE service launched in
Costa Rica mobile market share infrastructure when faced with current legal 2013 – putting Costa Rica close to the 4G forefront in
structures - which give local communities the legal Latin America. Mobile penetration is high as well as
autonomy to establish their own conditions when the number of post-paid subscribers, which could
companies request permits to install telecom towers. help to drive the take-up of mobile data services and
19%
the infrastructure required to enable them.
Spectrum band allocation represents another issue
for Claro and Movistar, regarding the expansion of Such market conditions help to explain why
their footprint, as the spectrum allotted requires several leading TowerCos are already active in
63%
18% more towers to achieve an equivalent coverage to this market. However, a key to the market’s future
networks operating on lower frequencies - which potential for TowerCos lies in the path taken by ICE
provide better cellular penetration and coverage – given it dominates the market with 63% market
with fewer cell sites. share. Any moves by the regulator to address its
dominance, including requirements to release or
Nevertheless, in order to sustain their development share infrastructure, or any strategic moves in that
while being competitive, Claro and Movistar have direction by ICE itself, will significantly boost the
already been using the services of TowerCos to build potential for existing TowerCos as well as providing
kolbi Movistar Claro and manage towers in Costa Rica. opportunities for others to enter the space

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 163

 Guest columnist Alexandre Dole Have you missed one of the past nine editions of
TowerXchange?

Standard Bank: aggressive bids likely to continue

Tower Xchange Helios take you inside the due diligence process

Who’s who: turnkey infrastructure and law firms

Africa’s New telecoms infrastructure journal
TowerPower: reducing Africa’s reliance on diesel
ISSUE 2 | FEBRUARY 2013 | www.towerxchange.com
Why IHS invested in Cameroon and Cote d’Ivoire

Tower Xchange Eaton CTO Thomas Jonell’s procurement priorities

Egypt’s 4 companies licensed to lease infrastructure

Africa’s New telecoms infrastructure journal
Growth stock ATC vs the PE-backed towercos
ISSUE 3 | April 2013 | www.towerxchange.com

Tower Xchange
The front lines of the African Tower Industry
Africa’s New telecoms infrastructure journal
Who’s who in the telecoms infrastructure supply chain
ISSUE 4 | June 2013 | www.towerxchange.com

< Vodacom and Etisalat’s tower strategy

Tower
< HTN, SWAP and BMI on the Nigerian tower market Xchange < MTN’s tower strategy in Rwanda and Zambia
< Tower deal news from Egypt, Mali, Senegal & Rwanda
< Tanzania case study with exclusive HTA interview
The journal for the emerging market telecom tower industry
< Who’s whos in Managed Services, RMS & TowerPower < TowerCo of Madagascar, FTS and Eaton interviews

Marc Rennard: Why Orange Tower

is sharing towers
ISSUE 5 | September 2013 | www.towerxchange.com
< A closer look at Telkom Kenya’s deal with Eaton
Don’t miss TowerXchange’s checklist of the data you need to buy and sell towers
Xchange

Structuring deals to meet the requirements of each affiliate Tower Xchange

African tower market heats up
The journal for the emerging market telecom tower industry

Top 200 decision makers in African

TowerXchange towers
maps past,invited
currentto TowerXchange
and Meetup
future tower transactions Tower Xchange ISSUE 6 | December 2013 | www.towerxchange.com

The drivers of SBA

Communications’ expansion
Join 200 African tower decision makers at the TowerXchange Meetup Exclusive
Tower interview
Xchange with Kurt Bagwell,
President - International, SBA Communications
Let’s meet up!
TowerXchange Africa:
Top 200 decision makers in African Towers <converge at TowerXchange Meetup
Airtel’s 15,000 African towers may be sold country by country
< The risks and rewards of operating towers in DRC
< Rural infraco pioneers Connect Africa and AMN
< Insights and images from the TowerXchange Meetup Africa

TowerXchange forecasts the growth of African towercos from 23k towers today to 54k by the end of 2014 Tower Xchange
TowerXchange Americas:
< Brazil case study: 9,000 new towers needed for World Cup
Tower Xchange
< Accelerating new tower construction - the Lei das Antennas
< Brazil’s Ministry of Communications’ view of the tower industry
The journal for the emerging market telecom tower industry
< LatAm transactions to date, plus new deals by AMT and SBAC
ISSUE 9 | August 2014 | www.towerxchange.com

The TowerXchange
TowerXchange extends our coverage to include Africa and the Americas! Tower Who’s Who:
Xchange
18 advisory firms with experience
of emerging market tower deals

TowerXchange Africa:

Alexandre is a Consultant within < Cameroon and Cote d’Ivoire case study
< IHS acquires 2,136 Etisalat Nigeria towers
< Towershare on opportunities in MENASA

Mott MacDonald’s Technology and TowerXchange Americas:

< CEO Olivier Puech on AMT’s BR Towers deal
< Maria Scotti on Central America and Mexico

Communications practice and has a

< Torres Andinas: BTS in Colombia and Peru

TowerXchange Asia: “With our latest acquisition from Airtel, HTA

considerable experience in mobile, terrestrial

< Myanmar: 17,300 towers by 2017, Telenor interview
< Asian tower report, India and Indonesia tower counts
now owns over 7,800 towers in Africa”
< Commentary on the new towerco for China – Chuck Green, CEO, Helios Towers Africa

and satellite telecommunications. In the Towerco or powerco? Views from a major vendor, an ESCO and a community power venture Tower Xchange

last 4 years, Alexandre has worked on

several telecommunications infrastructure For a limited period, you can download back issues FREE at:
developments around the world. Most
www.towerxchange.com/publications
recently, Alexandre has been part of a Mott
MacDonald team commissioned to execute an Ensure you have the entire back catalogue of TowerXchange, which provides a record of emerging
advisory study for a towerco looking to invest market tower industry evolution, and a comprehensive index of proven solution and service
in developing markets providers in Africa, LatAm and Asia.

164 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Costa Rica: a new tower market TowerXchange: José, please tell us about your
background and experience in the telecom
tower industry
with a first class business environment José Escobar, President, Catalina Inc.: I am the
The evolution from a monopoly to an open and thriving market as seen by a President of Catalina Incorporada, a company
born in 1992 and involved in the telecom space
local towerco
since 2007.

José Escobar is an expert in the Costa Rican telecom market

In 2008, I participated in the campaign to open
thanks to twenty years of business ventures and achievements.
up the telecom market in Costa Rica. At the time,
Now fully involved in the development of his own company,
ICE, the Costa Rican Electricity Institute, had a
Catalina Incorporada, he has witnessed the evolution of the
national industry from day zero and actually contributed to the monopoly on wireless communications. Interested
shift from a monopoly to a modern telecom industry. parties such as consumers, international carriers
and towercos worked together to push for an
We had the pleasure to speak to José about his experience, open market. Claro and Movistar started offering
background and perception of the Costa Rican telecom tower services along with two MVNOs back in 2011.
industry and what follows is a detailed and insightful overview of
the status of its small and yet thriving market. From day one I worked with Global Tower
Partners in Costa Rica which quickly became the
country leading towerco and was later sold to
Keywords: Catalina Incorporada, Towerco, Costa Rica, Central
America, Global Tower Partners, TOCSA, American Tower, SBA American Tower. After that, I led TOCSA where in
Communications, Instituto Costarricense de Electricidad, Kölbi, less than a year we manage to create a portfolio
América Móvil, Claro, Telefónica, Movistar, Interview, 4G, New of 26 towers and achieved BTS orders for over
License, Capex, Opex, Opex Reduction, Urban vs Rural, Build-to-Suit, 120 more sites currently under development. This
Business Model, Renewables, Hydropower made TOCSA the fastest growing company in Costa
José Escobar, President, Catalina Inc.
Rica.

Read this article to learn: Having been personally involved in about 50% of
< The evolution and current status of the Costa Rican telecom tower industry the sites developed by towercos in the country,
< Key industry players and market characteristics I am now fully involved in my own company,
< The regulatory environment for towercos and carriers Catalina Inc., to actively manage, develop and
< An efficient electricity grid / renewable energy targets market telecom infrastructure in the country.
< The average tenancy ratio in Costa Rica
TowerXchange: Please tell us about the Costa

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 165

Rican telecom market and its key players. factor and a growing trend in the global telecom
industry.
José Escobar, President, Catalina Inc.: Costa Rica
is a small and yet very active market in spite of its TowerXchange: What are the key regulatory
young age. There are a little over 2,500 telecom challenges for carriers and towercos operating
towers in the country of which approximately in the country? And what are the local laws
1,000 are owned by Kölbi, the state-owned carrier, governing land ownership – can international
500 by Claro, a similar number by American companies acquire the land under towers?
Tower (AMT), and SBA Communications (SBA)
and the rest by Continental Towers and TOCSA. José Escobar, President, Catalina Inc.: Costa Rica
There is still potential for growth as I’d say about is a small country but is divided into eighty-one
2,000 new sites are needed in the country to meet separate counties. Therefore, environmental
coverage and capacity requirements as set by the permits have to be obtained at a national and
government. county level; a process that requires a lot of
specifications, and investment of time and travel.
The Costa Rican telecom industry is half way The government is very active in protecting the
there in terms of reaching its full potential and we environment and severe guidelines have been
expect about 800-1,000 new sites to be built over issued with regards to zoning and in general, to
the next two years and the rest within five years. ensure landscape preservation.

In spite of the entrance of towercos in the country, In terms of land ownership, with the exception
carriers still retain most of their telecom towers. of border areas, anyone can own land and build
However, with the exception of a handful of sites on it in Costa Rica. Currently SBA and AMT are
built by Claro, carriers entirely rely on towercos to reportedly trying to purchase some land under
develop build-to-suit projects. their towers. Personally I prefer to buy the land
whenever possible. In general, this is easier in
San José, Costa Rica
Kölbi is the incumbent operator owned by ICE and rural rather than metropolitan areas.
still retains its towers. América Móvil’s Claro and Generally carriers are very open to the
Telefónica’s Movistar entered the market in 2011 independent towerco model also thanks to a TowerXchange: What is the degree of urban
and adopted different strategies. In fact, Claro strong regulatory environment. In fact, as the and rural electrification and how reliable is the
owns a good share of its telecom towers, I’d say permitting procedure for greenfield projects is a grid?
around 50%, and leases the rest of them, whereas very demanding and time consuming operation,
Movistar embraced the initial offer we made when carriers are enticed by the towerco model as José Escobar, President, Catalina Inc.: The
they entered the market for a full-package turnkey it releases them from this task. The shift from electricity grid is generally reliable and 99.2%
that didn’t require them to own any towers. a capex to opex model is another appealing of Costa Rican homes are currently connected

166 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

through the grid. The same can be said about developed countries. With a growing middle class, Continental Towers and TOCSA both hit 2.0 on
telecom sites, in fact most towers use the grid and the population craves data whereas voice traffic currently built sites.
are equipped with back-up batteries to counteract is actually decreasing. As data traffic grows, we
occasional blackouts. Very few sites require diesel need to provide more services, more capacity and TowerXchange: How do you foresee the market
generators and overall, diesel isn’t an issue in obviously more towers. evolving over the next few months?
Costa Rica, even in rural areas.
With two large scale towercos, a couple of José Escobar, President, Catalina Inc.: Costa Rica
As ICE is a state-owned organisation, they are very middle-market towercos and approximately 2,000 is a young market with lots of developments
involved in granting connectivity to rural as well towers to be built, I would say there are enough going on. 4G has just been launched a couple of
as urban sites. In fact, I recall working on a rural opportunities for all of us, especially as AMT is months ago and the regulator is currently looking
project and as we were building sites, ICE started mostly involved in sales and leaseback and not as at amending the pricing structure for post-paid
working to ensure we could connect them as soon active in build-to-suit activities. services.
as possible, which definitely sped up the process.
TowerXchange: What business model has been On the investment side, the country has already
In spite of its reliable electricity system, Costa adopted by towercos? Steel and grass or tower attracted quite a lot of interest from foreign
Rica is environmentally conscious and we have and power? investors thanks to its safe political and social
just signed an agreement that pushes companies background, low country risk and lack of currency
and the government to adopt more renewable José Escobar, President, Catalina Inc.: Towercos in risk as contracts are all in US dollars. We expect
solutions with the goal to have as much as 100% Costa Rica follow a pure steel and grass business new players to take an interest in the evolution of
energy produced by renewable sources by 2025. model with the exception of the power we provide the national telecom industry.
The country already produces 96% of its energy before sites get connected to the grid.
through renewables, mainly hydropower at As previously mentioned, we expect quite a few
around US$0.20 per kWh. In fact, it takes us about six weeks to build a towers to be built over the next 24 months and
site but approximately three months to actually this will further improve the level of service
TowerXchange: How would you compare the connect it to the grid. In the interim, towercos tend carriers are able to offer to subscribers and new
Costa Rican telecom industry to its neighbours’? to offer power to carriers to then switch to grass opportunities for towercos and suppliers.
and steel only.
José Escobar, President, Catalina Inc.: When we On a side note, during the licensing round back in
compare Costa Rica to neighbouring countries, TowerXchange: Do you have any detail with 2011, no bids were received for the fourth license
it’s easy to realise its amazing growth pattern, regards to the average tenancy ratio so far the government was ready to grant and I believe
considering it opened up in 2011. To date, Costa achieved by towercos? this will be offered again over the course of the
Rica has one of the highest penetration rates in next couple of years. A new market entrant would
the region at 151% (compared to Nicaragua at José Escobar, President, Catalina Inc.: In terms definitely create an even more interesting business
116%, Guatemala 140% and Panama at 153%) and of tenancy ratio, American Tower and SBA environment for subscribers, towercos, investors
the demand for data is comparable to the level of Communications are both around 1.7, whereas and service providers alike

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 167

Special Feature:

The implications of tower

transactions for managed
services
The business case for MNOs to outsource the management of active and
passive infrastructure management to their OEM partners is proven,
and the strategy has been widely adopted. Managed services thus
represent a significant portion of Huawei, Ericsson, Nokia and ZTE’s
revenues in emerging markets.

Is the trend for the transfer of passive infrastructure assets from

MNOs to independent towercos disruptive to this mature managed
services ecosystem? While in the early days of the independent tower
industry, the towercos have tended to disintermediate the OEMs and
subcontract managed services directly to local turnkey infrastructure
and refuelling firms, now towercos are becoming the largest telecoms
infrastructure owners and operators in Africa, operating in some of
the most attractive markets. The OEMs are repositioning themselves as
project managers, marshalling and monitoring a fragmented ecosystem
of local suppliers, and tapping into their unique knowledge of radio
network planning and management to propose synergies between the
management of active and passive infrastructure.

Featuring exclusive interviews with:

169 Lu Yuming, Director, Assurance & Managed Services, Eastern
and Southern Africa, Huawei
172 Karl-Johan Nybell, Vice President and Head of Managed
Services RSSA, Ericsson

168 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Linking Managed Services
TowerXchange: Please introduce yourself, your
role and Huawei’s managed services business in
East and Southern Africa.

with network quality assurance Lu Yuming, Director, Assurance & Manage

Why MNOs and towercos should consider outsourcing Managed Services to Services, Eastern and Southern Africa, Huawei:
I’m responsible for Huawei AMS business unit
Huawei to ensure efficient network operation in the ESA (Eastern and Southern Africa) Region.
ESA means we are not only covering the South
TowerXchange wanted to understand the Africa region, but also the booming business in
impact of tower transactions on the Managed all countries in East and Southern Africa such as
Services (MS) business in Africa, so we spoke Tanzania, Congo K and Uganda, in total we cover 26
to market leaders Huawei. In this exclusive countries in ESA. Defining Assurance and Managed
interview, we examine the operation of Services, or AMS, in Huawei we combine the
Huawei’s MS business in Africa; how they Managed Services business with Customer Support
partner with MNOs, what capabilities they business to further address the customer concerns
consider core and keep in-house, and what is about network quality assurance, that’s the reason
outsourced, and we ask the value proposition why we call it the AMS Business Unit.
they present to towercos.
Managed Services is an important business and
plays a very important role in Huawei Global
Keywords: Who’s Who, Meetup Preview,
Technical Services. In ESA, it’s even more
Managed Services, O&M, Construction,
important considering the typical challenges within
Opex Reduction, QoS, Build-to-Suit, ARPU,
this region. In the ESA region, most operators are
Dimensioning, Skilled Workforces, NOC, Multi-
Lu Yuming, Director, Assurance & Manage Services, facing the same pain point of how to improve the
Eastern and Southern Africa, Huawei Country Partner, Shelters, Africa, Huawei
network quality while keeping the same, or even
lower, opex. While you could say this is a general
pain point for any operation, but actually it’s much
Read this article to learn:
more crucial to operators in ESA region. I can give
< Why low ARPUs, scarcity of telent resoucres and QoS concerns make ESA a priority region for MS
< Huawei’s operational footprint in ESA – what is kept in-house, what is outsourced you three reasons why:
< The continuing importance of network optimization
< Potential synergies in the management of passive and active infrastructure, particularly in < One, most markets in the ESA region present
multi-operator passive and active infrastructure management a very low ARPU, that means the operator’s TCO
< How Huawei can assist with towerco’s network design should be very competitive to adapt to the market.
< Second, the talent resources are very limited in

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 169

 “
our region. Keeping high competency resources is Now, in ESA, we have more than 80 staff working
very costly if the operator doesn’t seek advantage covering 11 projects now in five countries, in which
from cost efficient solutions. more than 50% are staff transferred from the
< Third, the most important: network quality. The operator. At same time we are forecasting to have
telecom business is booming from Uganda to South another 50% in volume increased before the end of
Africa, from Congo to Mozambique. The operator 2014, more amazing is that the MS at that time will
needs to provide very good network quality to not only cover CT (Telecoms), but also the ITO area. Huawei defines some
attract data users, and also maximise profitability competence areas as key areas
by providing stable data connections to high ARPU While Huawei defines some competence areas as
which we deliver ourselves, still
data subscribers. key areas which we deliver ourselves, still there
there are areas which we decide
To combine all these three operational pain points,
outsourcing to Managed Services (MS) definitely
will be the only choice to improve operators’
business with an aligned and efficient network
operation.
are areas which we decide to outsource to our
partners, such as site maintenance, drive testing,
site build, refuelling, site security and civil works.
On the ITO space, an example would be be desktop
management.
to outsource to our partners,
such as site maintenance, drive “
testing, site build, refuelling, site
security and civil works
TowerXchange: How are projects and workflows
TowerXchange: What is the operational co-ordinated across the fragmented ecosystem
footprint of Huawei’s managed services business of Huawei’s own local field operations and
in East and Southern Africa? For example, subcontracted refueling and O&M partners?
how many staff do you employ in your field synergies between the management of active and
maintenance workforce? Which capabilities are Lu Yuming, Director, Assurance & Manage Services, passive infrastructure, but also potential synergies
subcontracted to selected partners? Eastern and Southern Africa, Huawei: As a global between different partners which might, for
company, Huawei always seek any chance to example, allow one partner to focus on more sites
Lu Yuming, Director, Assurance & Manage Services, localise a business, finding strategic partners to run in a smaller geographical area, enabling them to
Eastern and Southern Africa, Huawei: Huawei field operations. In 2013, the outsourcing volume invest in warehousing at therefore to improve
setup our MS business unit in ESA back in 2008, for MS has already been the second biggest in response and lead times.
when our first MS contract was awarded in 2009 Huawei, and its forecast to increase a further 30%
with the number one operator in Zambia. That was by the end of 2015. TowerXchange: What will be the impact on
also the first MS deal in for that telecom group. the managed services business of independent
After three years, the model proved to be a great Our ‘fragmented ecosystem’ of partners typically towerco’s acquisition of an increasing
success and it became the best operation model covers a broad geographical area, unlocking proportion of Africa’s towers? (According
within that Group, making them decide to launch many potential synergies. For example in Nigeria, to TowerXchange’s statistics, towercos have
a massive network operation outsourcing plan Huawei has many MS contracts. Once we have one increased their market share from 4.7% in 2010
including Nigeria and South Africa. MS relationship in a market, there are potential to 25% today).

170 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 “
Lu Yuming, Director, Assurance & Manage Services,
Eastern and Southern Africa, Huawei: I would
like to mention another advantage that Huawei
can bring to the tower companies. That’s network
design. Huawei’s professional network design
Huawei’s professional network design capability will help tower
companies to plan networks in very precise way in terms of where to
build a new tower, how to design the site, which antennas to put where,
how to design the shelter, and from a network design point of view,
how to sell towers to operator
“ capability will help tower companies to plan
networks in very precise way in terms of where to
build a new tower, how to design the site, which
antennas to put where, how to design the shelter,
and from a network design point of view, how to
sell towers to operator.

We can help optimise capex deployed for build-to-

suit and organic build programmes, reducing costs
Lu Yuming, Director, Assurance & Manage Services, managed services for both active and passive and explaining how to make the plan more efficient
Eastern and Southern Africa, Huawei: I don’t infrastructure? and professional.
think towercos are a threat, I see the increasing
importance of new business models such as Lu Yuming, Director, Assurance & Manage Services, TowerXchange: What can Huawei do that other
independent towercos as an opportunity. Eastern and Southern Africa, Huawei: In the area managed services and partners cannot do?
of field maintenance, it’s Huawei’s strategy to use
Whether MS or another business model, like the local partners for service delivery, which means Lu Yuming, Director, Assurance & Manage Services,
sale and leaseback of towers, network optimisation Huawei will need companies like towercos to Eastern and Southern Africa, Huawei: In Huawei,
is still all about meeting customer need, whether provide services in certain areas. we have two Global Network Operation Centers
it’s replacing a rectifier or even the oldest drive (GNOCs) and three Global Technical Centers
tests. In either case, as long as the service provides When we talk about synergy, it’s not only the (GTECs) which provide customers with follow-
the value that customers need, I think the MS synergy between active and passive infrastructure the-sun services and globalisation leverage on
business will always be there. Considering the management, but also the synergy between the competence and cost
operational excellence or the global competence operators. In the future, when more operators
advantage, our business analyses suggest the MS adopt MS and outsource their towers, we think Huawei are hosting a round table on “How to
market will keep growing in the coming five years. synergies will be transformed, shifting from manage a broad diversity of managed services,
active+passive to multi-operator active + multi- O&M and EPC partners” at the TowerXchange
TowerXchange: With the separation of active operator passive. Meetup Africa, coming up on October 20 and 21
and passive infrastructure into different 2014 in Johannesburg. For further details, visit
companies, are there still opportunities to TowerXchange: How can Huawei help towercos www.towerxchange.com/meetups/africa
create synergies through the integration of optimise their build-to-suit programmes?

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 171

The implications of the Nigerian TowerXchange: Please introduce Ericsson’s
Managed Services footprint and capabilities in
Nigeria.
tower deals for managed service providers
Karl-Johan Nybell, Vice President and Head of
Opportunities for collaboration between MNOs, towercos and Ericsson to create Managed Services RSSA, Ericsson: Ericsson’s first
efficiencies in the management of active and passive infrastructure activities in Nigeria were in 1960 via a registered
office. The company was formally established in
Ericsson is the leading provider of managed services 1978, and we now employ over 1500 people in the
in Nigeria, with over 1500 staff on the ground and country. Nigeria is a very important market for
Ericsson - we are the leading provider of managed
managed services contracts with MTN, Airtel and
services in the country.
Smile. What is the impact on their business of
towercos acquiring 65% of Nigeria’s towers (forecast
Ericsson have  been building and operating mobile
to rise to 85% when the Airtel Nigeria transaction
networks in Nigeria since the liberalisation of the
closes)? What are the synergies between active and telecoms industry in 2001 for all major operator’s
passive infrastructure management? with clients such as MTN, Zain, Airtel, Smile and so
on. We managing active and passive infrastructure
Keywords: Managed Services, Passive Equipment, as well as providing capacity management, front
Active Equipment, O&M, Opex Reduction, Batteries, Fuel office and back office functions through our
Security, Business Model, Hybrid Power, Solar, Wind, service centers and expert hubs established to
Logistics, Site Visits, RMS, Site Management System, support regional operators. Ericsson provides
Job Ticketing, Africa, India, Nigeria, IHS, MTN, Airtel, turnkey capabilities for building communications
Karl-Johan Nybell, Vice President and Head of
Ericsson infrastructure as well as services. Ericsson’s
Managed Services RSSA, Ericsson
software and infrastructure are enabling the
telecom industry and other sectors to improve
customer satisfaction and improve business,
Read this article to learn:
increase efficiency and user experience, and
< Ericsson’s experience, footprint and capabilities in Nigeria; what is in house, what is
capture new opportunities.
subcontracted
< Minimising site visits and creating efficiencies by unifying managed services for active and TowerXchange: TowerXchange forecast that 85%
passive infrastructure of Nigeria’s towers will be owned or operated
< Leveraging logistical systems to track and steer Nigeria’s fragmented ecosystem of local O&M by independent towercos by y/e 2014. How will
refueling subcontractors the transfer of towers from operator-captive to
independent towercos affect your business?

172 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Karl-Johan Nybell, Vice President and Head of Indus Towers and Bharti Infratel, efficiency is place to mitigate the risk, and ensure that we act
Managed Services RSSA, Ericsson: We have a optimised when we manage both the active and in accordance with international standards and
strong position in Nigeria. Today Ericsson services passive infrastructure. Africa is of course a different national laws.
around 50% of Nigeria’s towers, with the remaining continent with a different culture, but the big
50% split between other OEMs and in-house picture on the front lines of managed services is not TowerXchange: IHS now own 56% of Nigeria’s
management by MNOs. Due to the scale as well as so different. towers. What kind of opportunities for
logistical tools and processes of Ericsson in Nigeria, economies of scale could that open up, and how
we provide the lowest possible cost base for passive TowerXchange: Which O&M and refueling could Ericsson help?
infrastructure maintenance. capabilities sit ‘on the payroll’ at Ericsson, and
what is subcontracted? Karl-Johan Nybell, Vice President and Head of
The transfer of passive infrastructure from MNOs to Managed Services RSSA, Ericsson: With coverage
towercos is an opportunity to explore new business Karl-Johan Nybell, Vice President and Head of in Nigeria at 90%, significant efficiencies can be
models and partnership opportunities. Of course Managed Services RSSA, Ericsson: We create achieved. Of course exactly what we can do depends
different towercos have different strategies; some the right mix of in house and carefully chosen on the strategies adopted by the MNO’s, towerco’s
prefer to be landlords, while others want to do subcontractors according to the complexity and and ourselves. However, it is evident that there will
everything themselves. We are currently engaged volume of tasks. Some services are better delivered be some kind of collaboration between towercos
in exploratory discussions with the towercos by firms with local knowledge; refueling, for and infrastructure vendors, but it will become more
evaluating potential partnership models to improve example, isn’t particularly complicated so we apparent how consolidation will transform the
end customer satisfaction. subcontract it to local firms, but we add value Nigerian market in the coming 3-6 months.
by coordinating deliveries, which is particularly
Power is the biggest cost factor when running the important in Nigeria given the vast number of TowerXchange: How can MNOs and towercos
network, and there are many savings that can be different local refueling subcontractors.  This is all create the efficiencies they are seeking given
achieved if power is managed effectively. Ericsson enabled by our integrated by work efficient work the fragmentation of the O&M subcontractor
is able to offer battery, solar and wind hybrids as force management, dispatching and NOC tools. ecosystem in Nigeria?
well as offering combinations of these solutions, we
also have the field workforce as well as state of the TowerXchange: We understand as much as Karl-Johan Nybell, Vice President and Head of
art logistical tools and processes to efficiently install 30% of diesel is stolen in Nigeria – can this be Managed Services RSSA, Ericsson: The passive
and maintain our own and third party solutions. stopped? infrastructure O&M team need to have field staff
to maintain DGs, solar panels et cetera, meanwhile
There are potential synergies even in cases where Karl-Johan Nybell, Vice President and Head of Ericsson also has field staff to handle active
Ericsson manage just the active infrastructure and Managed Services RSSA, Ericsson: Security is equipment – we need to visit sites anyway, and
the towerco manages the passive infrastructure. a well-known challenge of doing business in getting to the site is a substantial part of the cost.
However, as we found in other countries such as Nigeria, it affects almost every business, as well So there’s an obvious inefficiency we can address
India, where Ericsson managed the asset transfer as private residences.  As a company, Ericsson has by unifying passive and active infrastructure
and maintenance of over 100,000 cell sites for proven processes and controls mechanisms in management under one service provider.

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 173

 “ We feel that collaboration between towercos and managed service
providers like Ericsson is beneficial in both small and large markets
but for markets as large as Nigeria the savings are of course greater,
due to sheer size
“ Please feel free to contact the TowerXchange team

Kieron Osmotherly
Founder & CEO
E: [email protected]
M: +44 7771 148001

For editorial & speaking enquiries regarding Americas or Asia:

Arianna Neri
Head of Americas & Asia
E: [email protected]
M: +39 338 111 2103

For editorial & speaking enquiries regarding Africa or Europe:

The key to success is knowing how to steer these Managed Services RSSA, Ericsson: We feel that Frances Rose
Head of EMEA
resources – tracking that the right person is collaboration between towercos and managed E: [email protected]
on the right site at the right time by leveraging service providers like Ericsson is beneficial in both M: +44 7793 045718

sophisticated monitoring software. There are a small and large markets but for markets as large For advertising opportunities & event participation:
Annabelle mayhew
lot of managed service providers that can build as Nigeria the savings are of course greater, due to Chief Commercial Officer
and maintain towers, but it’s our workforce sheer size. E: [email protected]
M: +44 7423 512588
management techniques and technologies that give
Ericsson competitive advantage and help us keep The size and scale required in countries like Toya Smith
Business Development Manager
costs down. Ericsson as well has well developed Nigeria make it very challenging for towercos to E: [email protected]
M: +44 7967 441110
training and assessing centers across Africa to manage installation and maintenance resources
train own and hired workforce for all kind of field directly. Ericsson has proven logistical systems, For media partnerships & to request additional subscriptions:
Harpreet Sohanpal
activities. and experienced staff familiar with the local Head of Marketing
E: [email protected]
subcontractors and the terrain. In addition, we have
TowerXchange: Finally, of all the African to visit the sites for active equipment maintenance For the designers of the TowerXchange Journal & brand:
Jon Whitty
countries where towers have been transferred in the course of our operations allowing for further Senior Designer & Brand Development
from MNOs to towercos, why is Nigeria optimization. E: [email protected]

particularly suited to deeper collaboration The TowerXchange Journal is published by Site Seven Media Ltd.

between towercos and managed service Exactly how we will utilise the synergies and © 2014 Site Seven Media Ltd. All rights reserved. Neither the whole nor any
substantial part of this publication may be re-produced, stored in a retrieval
providers? scale advantages will become apparent next year, system, or transmitted by any means without the prior permission of Site
Seven Media Ltd. Short extracts may be quoted if TowerXchange is cited as the
depending on both parties’ willingness and interest source. TowerXchange is a trading name of Site Seven Media Ltd, registered in
the UK. Company number 8293930.
Karl-Johan Nybell, Vice President and Head of in collaboration

174 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Special Feature:

Who’s who in tower design,

manufacture, installation and
managed services, part four
TowerXchange have resurrected our much-referenced who’s who
series, profiling the real heroes of the African tower industry – the
frontline turnkey infrastructure and managed services firms who build
and maintain most of Africa’s ~165,000 cell sites, marshalling highly
trained teams possessing scarce field engineering skills and invaluable
local knowledge.

We kick off by reconnecting with one of Africa’s largest and most

trusted TI firms, Mer Group’s Telecom Division, who break describe the
turnkey infrastructure toolkit for the “infrastructure sharing era”.

Our next stop is with TKM Maestro, who tell us about a their rapid
deployment (but permanent) concrete-free foundations, proven at
almost 300 African cell sites. Next we caught up with i engineering
Group at their new office in Myanmar to learn about their capabilities
and footprint in twelve countries. Finally, we revisited our old friends
Camusat at their G-NOC in Romania, where we spoke to their COO for
Africa, Sebastien Martin.

In this edition we introduce, or re-introduce:

176 Mer’s low capex, low opex solution to improve rural
connectivity
180 TKM Maestro’s innovative concrete-free foundation
184 Introducing i engineering Group
187 Camusat: the global, local service provider
190 TowerXchange’s updated Who’s who matrix

Image courtesy of Camusat

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 175

Low cost sites: how to reduce TowerXchange: Good to speak to you again Arie.
How have Mer’s customers’ priorities changed
since Africa entered what might be described as
capex and opex the ‘infrastructure sharing era’?

Leading TI firm Mer Group on the business models, site and power systems Arie Bendayan, VP Sales Africa-Asia, Mer Group,
Telecom Division: As part of an on-going strategy
designs necessary to improve the economics of rural connectivity
to respond to recent telecom market trends, we are
continually adapting our services and products to
Mer Group is a global telecom infrastructure solution provider
meet these changes.  
and tower manufacturer with active offices and operations on four
continents, and with over 60 years of experience.
In our day to day discussion with our customers, we
find ourselves frequently offering solutions such as:
Mer Group provides end-to-end cutting edge wireless infrastructure
turnkey solutions with  services covering network planning, site
< Multi-tenant infrastructure migration. A
design, manufacture and erection of towers, site construction,
complete offering for towercos with a variety of
equipment installation, network optimisation and maintenance.
solutions including products and services to enable
Mer has successfully delivered over 30,000 telecom sites.
a swift and cost- efficient migration from a single
tenant to a multi-tenant infrastructure
Keywords: Who’s Who, How to Guide, Meetup Preview, Managed < End to end solutions for In-Building coverage for
Services, O&M, Construction, Installation, Capex, Universal
both towercos and MNOs
Access, Opex Reduction, Batteries, Urban vs Rural,, Capacity
< Turnkey low cost site solutions to enable MNOs
Enhancements, Loading, Outdoor Equipment, Foundations,
Business Model, Site Level Profitability, Tender, ARPU, Off-Grid,
and towercos to penetrate areas with lower ARPU
Hybrid Power, Renewables, Solar, Wind, Dimensioning, Site and/or smaller expected revenue generation than
Visits, Next Billion, IBS, Infrastructure Sharing, Africa, Mer Group traditional sites
Arie Bendayan, VP Sales Africa-Asia,
Telecom Division
Mer Group, Telecom Division
TowerXchange: How can MNOs and towercos
improve the economics of site deployment
Read this article to learn: in areas that might not generate the ARPU
< New turnkey infrastructure services for the ‘infrastructure sharing era’ necessary to meet MNO’s investment criteria, or
< Proven solutions for providing connectivity in low ARPU areas: hybrid energy systems, micro BTS, towerco’s preference to build sites where they
low cost towers can sell co-location?
< A pragmatic approach to site and power design
< Opportunities for rural network companies offering revenue sharing business models Arie Bendayan, VP Sales Africa-Asia, Mer
Group, Telecom Division: First and foremost by

176 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

approaching and working hand in hand with
companies such as Mer, companies which specialise
in the design and implementation of efficient and
cost effective turnkey (both passive and active) low
cost solutions specifically designed for on and off
grid rural areas.

Today innovative passive and active infrastructure

solutions such as hybrid energy systems, micro
BTS, low cost towers et cetera are freely available
and their performance is proven. These solutions
significantly lower capex and opex compared to
conventional cell-sites. This enables the redefinition
of traditional site deployment criteria.

Of course this model is certainly relevant for remote

and rural areas where coverage is needed but it
is also relevant in urban areas where sometimes
additional capacity is needed and co-location is
more relevant.

TowerXchange: Talk us through the details of

how you can design towers to minimise capital
outlay and installation costs?

Arie Bendayan, VP Sales Africa-Asia, Mer Group,

Telecom Division: In my opinion one should invest with the customer, and by such build tailor made in an alternative location
time in the planning stage, which should be done solutions. 3. Decrease to a minimum the tower loading by
in full co-operation with the customer.  More often advising the customer to use innovative small
than not, we find MNOs putting out general tenders, 1. Wind and load information in order to come up antennas and fiber optic feeders
and by doing so locking themselves into generic with the most efficient and cost effective solution, 4. Fine tune the design taking into account possible
solutions which do not necessarily meet the needs avoiding over design tower upgrades in the future     
of specific sites. 2. Consider with the customer the possibility of
applying a temporary tower foundation solution TowerXchange: Similarly, talk us through
As an example I would discuss the following points that will enable reuse of the foundation and tower the detail of the power solutions MER Group

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 177

 most efficient hybrid power system, based generally
on solar energy and using deep cycle batteries
(and possibly wind turbines) and where applicable
optional “worse case” backup generator.

Of-course our primary goal is to reduce capex and

minimise opex compared to traditional sites where
high energy costs make them not economically
viable for low-cost rural implementations.

TowerXchange: Is there a gap in the market

between MNOs and the major towercos for a
new class of rural network company, perhaps
focusing on a revenue sharing business model?

Arie Bendayan, VP Sales Africa-Asia, Mer Group,

Telecom Division: Typically a towerco’s business
model is focused on sharing the infrastructure
between several tenants, and of course having

Telecom Division advocate using at remote, low

cost sites?

Arie Bendayan, VP Sales Africa-Asia, Mer Group,

Telecom Division: I would say that there is not an
off-the-shelf solution.
< The geographic locale, helping us to take into
consideration the local climate parameters. For
example average number of hours of sun per day,
and average number of rainy days
< The electricity grid availability is also critical and
will have an impact on the energy system design
“ our primary goal is to reduce
capex and minimise opex
compared to traditional sites
where high energy costs
make them not economically
“
< The specific site power loads and back-up viable for low-cost rural
An efficient energy solution must be calibrated per autonomy requirements implementations
specific site and customer requirements. < The space available on site
Therefore there are a few critical parameters which
have to be considered, such as: These basic parameters will enable us to design the

178 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

preferably a high tenancy ratio in excess of two.

There are obvious obstacles in sharing the rural

kind of infrastructure such as:
< In rural areas, the ARPU is often half of
the average ARPU and potential subscribers
significantly lower, therefore I am not sure that
more than one tenant would be viable
< Adding additional tenants to the rural site
will have a severe impact on the cost of the site.
Exceeding a certain power load will entail the
installation of a generator and therefore substantial
opex which will kill the business model for both
towercos and MNO.

Therefore yes, we can see today few initiatives

where MNOs have partnered with “rural network
companies” on a revenue share business model.
But it is too early to see a clear outcome of those
initiatives as models and countries are different.

I suggest another possibility by encouraging

government entities to take the lead in developing
rural telecommunication by imposing a modest
“development levy” on the operators and using the
funds for initial financing of rural sites as is already
being done in a number of African countries

Arie Bendayan will be leading a round table

breakout session on “Low cost sites” how to
reduce capex and opex” at the TowerXchange
Meetup Africa, taking place on October 20 and
21, 2014 in Johannesburg. For details visit
www.towerxchange.com/meetups/africa.

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 179

Concrete no longer necessary TowerXchange: Please introduce TKM Maestro
- what role do you play in the telecoms
infrastructure ecosystem?
for tower foundations, even for Tony Monda, Director, TKM Maestro: TKM Maestro

multiple tenant sites started life as a design engineering company,

but developed into an end to end turnkey
TKM Maestro’s unique compact tower design provides a cheaper and quicker infrastructure company at the request of our
clients. We have our head office in Nairobi, Kenya
alternative to conventional towers, proven at almost 300 sites in SSA and also have fully fledged offices in Tanzania,
Uganda, Rwanda, Nigeria and Ghana, and will be
A structural engineer by training, Dr. Tony Monda returned to Kenya
in 2001 and started consulting to make the heavy tower designs being
opening in Mozambique at the end of September
rolled out across East Africa more efficient. As Tony’s clients increasingly 2014. We also have representative offices in South
wanted supervision from tower design and manufacture to installation Sudan and the DRC.
and maintenance, his business TKM Maestro was transformed from a
focus on structural design to end to end turnkey infrastructure service The scope of our business includes any telecoms
provision. Now TKM has come up with a revolutionary compact tower infrastructure, from the design and build of
design, installed at nearly 300 sites in Nigeria, Kenya and Gabon, on the towers, data centres and fibre networks, to
MTN, Airtel, Safaricom and Orange Networks, which promise to reduce maintenance.
the cost and installation time of a multi-tenant tower by 30%.
TowerXchange: How can MNOs and towercos
Keywords: Who’s Who, Managed Services, Steelwork, Passive reduce cost and time to market for multi-tenant
Equipment, O&M, Construction, Installation, Co-locations, Capacity towers?
Enhancements, Loading, Foundations, Build-to-Suit, Reverse
Engineering, Masts & Towers, Infrastructure Sharing, Africa, Kenya,
Tony Monda, Director, TKM Maestro: TKM Maestro
Tanzania, Uganda, Rwanda, Nigeria, Gabon, Ghana, Mozambique,
Dr Tony Monda, Director, TKM Maestro South Sudan, DRC, Ganges Internationale, TKM Maestro have patented a compact tower design that uses
less than half the space of a standard tower, and is
30% cheaper.
Read this article to learn:
< The capabilities and footprint of turnkey infrastructure company TKM Maestro The solution is already working in the field and
< Why you should no longer be pouring concrete foundations, even for multi-tenant towers saving clients a lot of money. We’ve already
< A revolutionary compact site design which saves 30% in cost and 10 days’ installation time supplied 250 of these compact towers to MTN
< Initial deployment scenarios with MTN Nigeria and Airtel Gabon in Nigeria, and a further 20 to other countries
< TKM Maestro’s plans to launch a BTS-focused middle market towerco in Kenya – mainly Kenya. We’re currently shipping eight
to Airtel in Gabon, an order which came from

180 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

someone I met at the TowerXchange Meetup
Africa last year!

What makes our tower design unique, and

what saves 30% of our clients’ budgets, is the
elimination of the use of reinforced concrete in
the foundation. We use a design similar to big
lunchbox which we fill with ballast – any gravel or
stone found near the site. Carrying cement and the
equipment for casting concrete is a real challenge,
especially for remote sites, while the reduced
space requirement of our compact site can be
critical in dense urban areas where real estate is
expensive and scarce.

Erecting one of our compact sites requires just

seven tower riggers. From breaking ground to
a new site being on air typically takes 25 days,
which is a saving of 10 days compared to a
conventional site. It’s an all-bolted solution, with
a bolted strut system, bolted equipment room on
the clean floor level provided by our innovative
foundation, and the tower is all bolted.

Ours is a robust, permanent solution but, unlike a

conventional tower where the steelwork is literally
stuck in concrete, our design is easily recoverable Steel foundation backfilled later with on site granite. Column erection for roof support beams
and relocatable, simply by dismantling the tower,
equipment room, and foundation. TowerXchange: Do you have a variation of this TXM Maestro is coming to TowerXchange to tell
compact tower design suitable for co-location? towercos and MNOs about a new way of building
We manufacture the entire compact site in sites – we have the ability to build a co-locatable
factory controlled conditions – it’s a TKM Maestro Tony Monda, Director, TKM Maestro: Yes we site that is quicker, easier and cheaper to build
product, designed and supervised by TKM, and recently released a co-location model with a than a conventional tower.
manufactured under license by our partners stronger design suitable for the co-location of
Ganges Internationale in India. three to five tenants, with variants up to 60m high. With TKM Maestro’s compact site design now

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 181

 design for a tower on a remote mountain top in
a Kenyan National Park for Orange. It seemed to
Huawei that the only way to install a tower on
the site was to build an access road at a cost of
US$400,000.

So the TKM Maestro engineering design team

innovated to come up with a tower site design that
could be airlifted by helicopter. We figured out the
lifting capacity of the largest helicopter we could
lease in Kenya, and reverse-engineered a modular
design whereby all the tower site components
could be airlifted to the site by the helicopter.
We used the ballast system for a counterweight,
instead of pouring concrete, and the site was
executed in 45 days.

Roof support beam with equipment room floor installation

“ With TKM Maestro’s compact
site design now available,
pouring concrete doesn’t make
sense if you want to save space
available, pouring concrete doesn’t make sense
if you want to save space and money, even if you
need wind load capacity for three to five tenants.

TowerXchange: What assurances can you give

comply with British and Eurocode standards for
tower manufacturing, and we offer a 50 year
warrantee guarantee.

TowerXchange: How did this revolutionary new

and money, even if you need
wind load capacity for three to
five tenants
“
MNOs and towercos about the quality of your compact site design evolve?
towers?
Tony Monda, Director, TKM Maestro: Three years
Tony Monda, Director, TKM Maestro: Our towers ago we were working with Huawei on the site

182 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 After an internal review we realised the site tenants.
design could be adopted at other remote sites and
at conventional sites where space, time and cost TowerXchange: Given that the towercos tend
were important factors. Soon we had Safaricom to focus on build to suit opportunities with
and MTN’s independent engineers certifying the high probability of a second tenant, is there an
design, and we secured the aforementioned order opportunity for new tower developers to focus
for 250 sites with MTN Nigeria. on these single tenant sites?

TowerXchange: Tell us about your current Tony Monda, Director, TKM Maestro: TKM Maestro
project with Airtel Gabon. is interested in developing our own ‘middle market
towerco’, adopting our low cost compact site design
Tony Monda, Director, TKM Maestro: Airtel Gabon to build towers at locations that are less obviously
had to put up eight sites at short notice after attractive to additional tenants, which the towercos
the national regulator insisted on provision of are often reluctant to build.
coverage within a short deadline. We had some
stock of our compact towers in Nigeria, so we We’re in the process of establishing a small, build
airlifted the entire sites from Lagos to Gabon in a to suit focused towerco targeting 10-15 sites in
manner which would not have been possible with Kenya by year end 2014 and 100 sites by Q3 2015
conventional sites. The project is now complete. that will complement traditional towerco’s.

TowerXchange: Are the majority of sites being TowerXchange: Finally, please sum up how you
rolled out in SSA now suitable for multiple would differentiate TKM Maestro from other
tenants? turnkey infrastructure companies in SSA.

Tony Monda, Director, TKM Maestro: With a couple Tony Monda, Director, TKM Maestro: TKM
of isolated exceptions, all the African MNOs tend Maestro’s key strength is our engineering design
to build towers with capacity for three to four unit, a critical pillar that many other turnkey
tenants, as the potential future sale of towers to a infrastructure companies outsource. With
towerco is at the back of everyone’s mind. engineering design at the core of our business, we
truly provide end to end services even including
Taking this into consideration, even version 3.0 of R&D, and ownership of design. Our more thorough
our smallest compact tower model has capacity to understanding of the product – whether applying
add a second or even, in some cases, a third tenant. to maintenance, tower design, or rollout of fibre –
So if the MNO wants to sell the tower in future they is built on the strong support of our engineering
TKM Maestro’s compact tower design
can legitimately say it has capacity for multiple department

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 183

Surveying, building and TowerXchange: Please introduce i engineering
Group – what role do you play in the telecoms
infrastructure ecosystem?
strengthening towers for the era of Kadri Hakim, COO, i engineering group:

infrastructure sharing i engineering Group is one of Africa’s leading

turnkey infrastructure solution providers. We are
i engineering Group is a proven partner to towercos in eleven African established in twelve countries: Algeria, Burkina
Faso, Cameroon, Congo B, DRC, Ethiopia, Ghana,
countries and in Myanmar Rwanda, Uganda and Zambia. Our newest and
Multi-country turnkey infrastructure solution provider soon to be biggest operation is Myanmar. Our
i engineering has seen their business transform from an initial headquarters are in Lebanon. We’re a cash flow
focus on site build and upgrade, to focusing on longer term funded, Lebanese-Canadian company, co-founded
O&M contracts. i engineering increasingly see Africa’s ‘Big Four’ by myself and CFO Rami Shibley.
towercos as their primary clients for managed services, tower
surveys and strengthening, and for build-to-suit programmes. TowerXchange: What are i engineering’s
i engineering has also recently opened an office in Myanmar. capabilities, and can you tell us who some of
your key clients are?

Keywords: Who’s Who, Managed Services, O&M, Construction,

Kadri Hakim, COO, i engineering group: We
Installation, Batteries, Capacity Enhancements, Build-to-Suit,
SLA, Hybrid Power, Greenfield, DG Runtime, Site Surveys, plan, procure, build, optimise and maintain
Skilled Workforces, Multi-Country Partner, Infrastructure telecom infrastructure. We also provide tower
Sharing, Asia, Myanmar, Africa, Algeria, Burkina Faso, manufacturing through our partner Eki-Struct.
Cameroon, Congo Brazzaville, DRC, Ethiopia, Ghana, Rwanda,
Uganda, Zambia, Eki-Struct, i engineering Group Most of our business now comes from the Big Four
Kadri Hakim, COO, i engineering group
African towercos, although we also work with MTN,
Airtel, Orascom and Ooredoo.
Read this article to learn:
< i engineering’s capabilities, footprint and credentials as one of Africa and Myanmar’s leading TowerXchange: Did you win your managed
TI firms services contracts after the towercos acquired
< The impact of tower transactions on the managed services ecosystem the towers, or was the relationship with
< Balancing the business between recurring, stable O&M contracts and higher margin, less i engineering transferred from MNO to towerco
predictable EPC contracts with the tower transaction?
< Contrasting the approaches to energy efficiency programmes of towercos in Myanmar and Africa
Kadri Hakim, COO, i engineering group: We were

184 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 “
already providing managed services to the MNOs active infrastructure.
– after the acquisitions our contracts eventually
became with the towercos. TowerXchange: What is the balance of your
business between EPC contracts and O&M?
Towers are the core business of the towercos –
they know exactly what they want, and they know Kadri Hakim, COO, i engineering group: When we O&M provides good recurring,
exactly what it costs. They want the same services started the company in 2007, all our business was
we are currently providing to MNOs, but with a EPC – site build and refurbishment. When the EPC
stable business; we know the
higher service quality – reflected in the SLAs. business started slowing down from 2009-10, we work is coming. We try to
went into O&M. We now have more than 3,000 sites stabilise our operations on
TowerXchange: When towercos enter a new under management. O&M revenue, such that any
market, how do managed services providers like
EPC business is the cherry
i engineering position yourselves to secure new
contracts?

Kadri Hakim, COO, i engineering group: We find out

about the tower transactions after the deals close,
O&M provides good recurring, stable business; we
know the work is coming. We try to stabilise our
operations on O&M revenue, such that any EPC
revenue is the cherry on the cake.
on the cake. i engineering
provides managed services
for both passive and active
infrastructure
“
not before. We use the experiences and credentials i engineering provides managed services for both
we have from our existing relationships with the passive and active infrastructure.
towerco to enter new markets.
TowerXchange: What are the implications for
TowerXchange: Do you forsee there still being your business of the current wave of tower stabilise the networks they just acquired, and to
a role for the tier one OEMs, Ericsson, Huawei, transactions in Africa, with towercos acquiring understand the quality of sites – based on which
Nokia and ZTE, in managed services for passive 17,877 new towers in the last quarter alone? they will determine which towers they have to
infrastructure in Africa? refurbish or upgrade. Then they will tackle co-
Kadri Hakim, COO, i engineering group: We believe location sales and building new sites for their
Kadri Hakim, COO, i engineering group: When all the managed service providers will see a surge anchor tenants – the framework agreements often
they were maintaining both the active and passive in their businesses. Towers are the core business of include a build to suit programme.
infrastructure for the MNOs, it made sense. But the towercos, they are well financed and will invest
towercos don’t own active equipment, so they have in new site builds, refurbishment programmes, TowerXchange: What do you anticipate being
no need to use a vendor like that for managed strengthening for co-locations and energy the impact of the increasingly important role of
services. We believe the towercos will work more efficiency programmes. towercos on the build to suit market?
and more directly with companies like us to
manage their passive infrastructure, leaving MNOs With the recent wave of tower transactions, Kadri Hakim, COO, i engineering group: Whenever
still working with vendors for the management of towerco’s short term focus is to understand and we’ve been asked to execute build-to-suit

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 185

 build to suit program rather than acquiring existing
networks which involves refurbishment, upgrades
and tower strengthening services. Myanmar is
witnessing for the first time a substantial telecom
site deployment, so the priorities and challenges
are very different. Because it’s new network being
deployed, all the towercos have the possibility to
utilise the most recent technologies in telecom
passive infrastructure, for example they are putting
in place the most recent hybrid power systems;
energy efficiency programmes and security locking
systems.

TowerXchange: Finally, please sum up how

you would differentiate i engineering from
other turnkey infrastructure firms in SSA and
Myanmar.

Kadri Hakim, COO, i engineering group:

The i engineering team in Myanmar
i engineering has an edge thanks to our well-
programmes for the towercos, they’ve built towers tower structure. We have been providing tower structured, flexible management system which
with capacity for at least three tenants. strengthening services to a lot of towercos. We do allows us to adapt to the local culture with our
a structural analysis of tower to see if it is suitable global experience. We understand what’s required
We’re not seeing a lot of single tenant towers being to take another operator. If it isn’t suitable, we locally to adapt our structure and be the most
installed any more – EPC contracts from MNOs provide and implement a strengthening solution. efficient turnkey infrastructure firm in each
have decreased significantly. Occasionally we find there is no solution and the country. We are also fortunate to have a young,
tower has to be replaced – or we might find that the experienced, motivated, smart management team
TowerXchange: What factors influence the cost cost of strengthening is so great that it’s preferable that excels in their work.
of upgrading a single tenant tower and power to build a new tower.
solution to be suitable for multiple tenants? i engineering is happy to follow its clients into new
TowerXchange: How do the priorities of the countries – we typically start two new operations
Kadri Hakim, COO, i engineering group: The power Myanmar towercos differ from those in Africa? every year. This includes following the Big Four
system has to be upgraded or replaced to suit the towercos as they enter new markets in Africa.
new power requirements. The tower part is more Kadri Hakim, COO, i engineering group: The We know how they work, and they know what to
complicated and depends on the load of the existing towercos in Myanmar are undertaking a massive expect from us

186 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Camusat: the global, local
TowerXchange: Please reintroduce the
capabilities and footprint of Camusat for readers
not familiar with your company.

managed service provider Sebastien Martin, COO, Africa, Camusat: Camusat

With offices in 35 countries and over 2,000 staff, Camusat is one of the world’s largest is an established provider specialised of Turnkey
Infrastructure and Managed Services with offices
turnkey infrastructure providers – yet local knowledge is critical to their success
on five continents and 35 countries including
Benin, Botswana, Cameroon, Central African
Camusat is an established and trusted partner of towercos and
Republic, DRC, Guinea Conakry, Ivory Coast, Kenya,
MNOs and towercos on five continents. Able to leverage scale
Madagascar, Mali, Mauritius, Morocco, Niger,
to selectively provide project finance and to secure volume
Senegal, Tanzania, Togo and Uganda. We currently
discounts on procurement, Camusat deploys managed services
have 2,109 staff, of whom 1,069 are in Africa, where
for passive and active infrastructure, power, fiber and microwave
we are building around 500 towers per year. We
transmission. Camusat offers the perfect balance of global scale
also recently secured a contract to rollout 500
and local expertise, enabling to carry out projects on time and
towers for Apollo Towers in Myanmar.
on budget in some of the most logistically challenging developing
markets.
Our group is focused on five business lines.

Keywords: Who’s Who, Managed Services, O&M, Construction,

The first one is on telecom site and infrastructure
Installation, Capacity Enhancements, Hybrid Power, Solar,
construction, from site acquisition, to civil
Procurement, Logistics, Site Surveys, Skilled Workforces, NOC,
Multi-Country Partner, Project Finance, Masts & Towers, RMS, works, tower construction, camouflage and rapid
Africa, Asia, Americas, Middle East, Eastern Europe, Benin, deployment sites.
Botswana, Cameroon, Central African Republic, DRC, Guinea
Conakry, Ivory Coast, Kenya, Madagascar, Mali, Mauritius, Morocco, We also offer power and renewable energy
Niger, Senegal, Tanzania, Togo, Uganda, Myanmar, Camusat solutions – we provide pure photovoltaic power
Sebastien Martin, COO, Africa, Camusat
supply systems, batteries and a new genset hybrid
solution, called e.power by Camusat.
Read this article to learn:
< Camusat’s capabilities and global footprint Our third business line is the installation and
< Employing and leveraging local expertise to executive logistically challenging projects commissioning of active equipment – drive testing
< Leveraging group level sourcing to secure high quality materials and the best prices RF, microwave transmission, radio network
< How Camusat secures long term maintenance contracts with towercos planning and optimisation, indoor planning and
< The importance of volume and economies of scale in managed services contracts optimisation but also network performance analysis
and audits and benchmarking.

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 187

Our fourth business line is fiber optics. This is
almost new for Camusat in Africa but we’re already
delivering a lot of big contracts for FTTH – we
provide design, deployment engineering, right of
way management, supply of materials and build
of physical infrastructure for outside plant, FTTH,
FTTB access networks and fiber optics backbones
routes.

Our fifth business line is managed services and

maintenance – one of our biggest activities since
the telecom industry has increasingly favored
outsourcing. We provide an innovative package of
tools and platforms for network management, site
control and supervision, preventive and corrective
maintenance, and have also developed a monitoring
system to manage passive infrastructure.

We recently established a global NOC in Romania

from which we complete the full end to end
managed services from field maintenance to
monitoring.
Camusat’s e-power solution

Camusat remains technology agnostic – we will has many years of experience in building and is most important when you have a new site build.
offer to implement our own solutions, but if the maintaining towers in critical areas lacking Preparation of logistics is the most important thing
customer wants third party technology we can transportation capabilities. you need to handle; it doesn’t matter if it takes ten
integrate it. minutes or ten hours to reach the tower, what is
Working in logistically challenging markets important is co-ordinating the project so all the
TowerXchange: Camusat are renowned for your requires good project management and relationship components come together at once, which means
ability to build and maintain towers in remote management. Our capabilities in the field come managing importation, lead times, inland logistics
areas - what are the critical success factors from working with and employing local people – and the workforce to ensure sites can be delivered
in managing cell sites in markets with poor they know how to handle logistical problems in on time and safely.
transport infrastructure? their own country.
TowerXchange: How do you balance the
Sebastien Martin, COO, Africa, Camusat: Camusat The impact of challenging transport infrastructure operational capability and capacity of Camusat

188 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 maintain relationships with towercos at group
level. We work with the towercos on pre-sale
site audits before the transaction is completed,
so we already know the assets when we bid for
the upgrade and maintenance contracts, and
the towerco management team already knows
Camusat.

As we are able to offer towercos a solution in many

countries, we can also leverage group level prices.
While we have local expertise, Camusat is not just a
local subcontractor, but also a group subcontractor.
Working with us, the towercos know we can give
Camusat’s G-NOC
them all the power to succeed – not only a focus
with the need to deliver lean, efficient services but to maintain 300-400 sites you don’t have to on one or few countries, but across their entire
in price sensitive markets? treble your resources so you can be more efficient footprint.
and build sustainable business.
Sebastien Martin, COO, Africa, Camusat: Our TowerXchange: Finally, please sum up what
project department work hard on material supply TowerXchange: What are the implications differentiates Camusat from other managed
and sourcing at group level to get better solutions and opportunities for managed service service providers.
at better prices worldwide. Recently we decided providers arising from the recent wave of tower
to manufacture our towers outside Europe to get transactions in SSA? Sebastien Martin, COO, Africa, Camusat: Camusat
prices, but we still use the same standards and is becoming an international group with a very
manage quality. Sebastien Martin, COO, Africa, Camusat: The entry efficient finance solution and organisational
of independent towercos into developing markets structure. This gives us the ability to develop major
It is also critical that we deliver our services by is a very important change for Camusat because projects in existing or new countries in a very short
working with local people. For example of 1,000 they have become our main customers. Tower time.
Camusat people in Africa, just 25 are expats. transactions represent important opportunities for
us to secure long term field maintenance contracts Our global scale means Camusat also has the
One of the important factors when working with with towercos, and secure the business. capability to selectively provide project finance.
the towerco business is to be able to provide
quantity of service. The prices towercos will pay TowerXchange: How do Camusat win contracts And from a technical point of view, we provide end
are very low, so you need volume. For example, if with towercos? to end solutions for towercos and MNOs, from site
you get only get a field maintenance contract for acquisition to managed services and our global
100 sites, you often will find that you lose money, Sebastien Martin, COO, Africa, Camusat: We NOC

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 189

Matrix of African tower design, manufacture, installation and managed service providers
(In alphabetical order. This is not yet a complete matrix - further companies will follow in parts 4 and 5 of this special feature)
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease

ADNA 1,500+ 1999 in Egypt 270

Footprint: Currently only operate in Egypt and supply products for Africa and Middle East. Before ADNA had been in Algeria and Sudan

Sample clients: Vodafone Egypt, Mobinil, Etisalat, Huawei, Orange, Omnia and Omantel

Company profile: TowerXchange issue four, pages 83-86 or visit www.towerxchange.com/african-towerco-investor-may-be-required-as-tower-sharing-moves-to-phase-two-in-egypt/

Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease

Alkan CIT TP Interested 12,000 1998 2,500

Footprint: Algeria, Burkina Faso, Chad, Egypt, Ghana, Kenya, Libya, Mali, Niger, Senegal, Sierra Leone, Tanzania (plus Bahrain, Iraq, Oman, Qatar, Saudi Arabia and UAE in the Middle East)
Sample clients: Airtel, Comium, Etisalat, Expresso, FT-Orange, Libyana, MobiNil, MTN, Safaricom, Sotelma, Sudatel, Vodacom, Vodafone, Wataniya, Yu, Zain and Zantel, Telecom Egypt,
Vodafone Egypt, Etisalat Misr
Company profile: TowerXchange issue four, pages 79-82 or visit www.towerxchange.com/alkans-end-to-end-services-leveraging-tower-sharing-plans-in-egypt
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease
2,109, of which
Camusat 5,000 1940s
1,069 in Africa
African Footprint: Benin, Botswana, Cameroon, Central African Republic, DRC, Guinea Conakry, Ivory Coast, Kenya, Madagascar, Mali, Mauritius, Morocco, Niger, Senegal,
Tanzania, Togo and Uganda (also in Myanmar)
Sample clients: France Telecom/Orange, Digicell, Eaton Towers, Bulgaria Telecom, ZTE, Telma, TowerCo of Madagascar, Inwi, Meditel, Moov, Helios, IHS, Wananchi, Alcatel, Ericsson, NSN
Company profile: In this special feature or visit www.towerxchange.com/camusat-the-global-local-managed-service-provider/
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease

EEC Group 20,000 1977 1,500

Footprint: Algeria, Egypt, Mali, Senegal, South Sudan, Ethiopia and Chad
Sample clients: Vodafone Egypt, MobiNil, Etisalat, Comium, Djezzy, Sudatel, Sotelma MaliTel, Alcatel, Ericsson, Huawei, ZTE
Company profile: TowerXchange issue three, pages 60-62 or visit www.towerxchange.com/eec-group-positioning-itself-to-partner-towercos-in-egypt
TP = Through Partners

190 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease
Ganges India India 1991, in towers 500 perminant,
TP 4,000
Internationale TP Africa TP Africa since 2004 1,000 contractors
Footprint: “Many countries in Africa”
Sample clients: Airtel, Vodafone, Huawei (MTN), Orange, Helios, Eaton, Ramboll and Safaricom directly and through partners
Company profile: TowerXchange issue one, pages 32-33 or visit www.towerxchange.com/driving-down-the-cost-of-multi-tenant-towers
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease

GSM TP TP TP 100 2012 8

Footprint: Burkina Faso, Uganda

Sample clients: Telecel, Benin Telecom, STE
Company profile: TowerXchange issue three, pages 85-89 or visit www.towerxchange.com/how-to-design-towers-for-easy-installation
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease
Hayat
TP 1997 1,200-1,500
Communications

Footprint:

Sample clients: Etisalat, Qtel, Vodafone, Bharti, Wataniya, Ericsson, NSN, Alcatel-Lucent and Huawei
Company profile: TowerXchange issue two, pages 22-23 or visit www.towerxchange.com/are-there-opportunities-for-new-market-entrant-towercos-in-africa
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease

HOI-MEA TP Interested 5,600 1997 1,364

Footprint: Full turnkey services in Egypt (HQ), Sudan, KSA, UAE and Qatar, also supplying products to Algeria, Bangladesh, Ethiopia, Kuwait, Oman, Lebanon, Iraq, Libya and more

Sample clients: Vodafone Egypt & Qatar, Orascom, Mobinil, MTN Sudan, Zain KSA, Iraq & Sudan, du, NSN, Motorola, Ericsson, ZTE, Huawei, Alcatel-Lucent
Company profile: TowerXchange issue four, pages 75-77 or visit www.towerxchange.com/hoi-mea-reinvents-itself-as-a-towerco
TP = Through Partners

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 191

 Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease
i engineering Built 700, manage 700 FTEs plus project
TP TP 2007
Group 3,000 based EPC work

Footprint (Africa): Algeria, Burkina Faso, Cameroon, Congo B, DRC, Ethiopia, Ghana, Rwanda, Uganda and Zambia. Plus Myanmar and Lebanon

Sample clients (Africa): Airtel, American Tower, Eaton Towers, Helios Towers Africa, IHS, MTN, Ooredoo, Orascom
Company profile: In this special feature or www.towerxchange.com/surveying-building-and-strengthening-towers-for-the-era-of-infrastructure-sharing/
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease

Leadcom TP TP 3-5,000 1982 950

Footprint (Africa): Benin, Burkina Faso, Cameroon, Chad, DRC, Gabon, Ghana, Ivory Coast, Kenya, Niger, Rwanda, Tanzania, Togo, Uganda (also in Myanmar)

Sample clients (Africa): Alcatel-Lucent, Ericsson, Huawei, Airtel, Atlantique Telecom, MTN, Orange, Tigo, Vodafone, Helios TA, EatonTowers, ATC, IHS
Company profile: TowerXchange issue two, pages 100-102 or visit www.towerxchange.com/the-marriage-of-passive-and-active-infrastructure-management
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease

Likusasa TP TP 3,000 1995 750

Footprint: Mauritius HQ, Mozambique, Zimbabwe, Zambia, Malawi, South Africa, Lesotho, Angola, Cameroon, Nigeria, Ghana, Liberia, SDR Guinea, Sierra Leone, Kenya, Tanzania

Sample clients: MTN, Econet, Cell C, Vodacom, Huawei, Ericsson, NSN, American Tower, Helios
Company profile: TowerXchange issue two, pages 86-89 or visit www.towerxchange.com/the-future-is-now
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease
1,400 total, 800 in
Mer Telecom TP 3-4,000 1948
telecoms
Footprint: Angola, DRC, Ghana, Guinea-Conakry, Mozambique, Niger, Rwanda, Senegal, Tanzania – able to perform and supply anywhere in SSA (also active in LatAm, Russia
and CIS countries)
Sample clients: Vodacom, Vodafone, Airtel, Tigo,  FT-Orange, Celcom, American Tower, Huawei, ZTE
Company profile: TowerXchange issue three, pages 71-75 or visit www.towerxchange.com/one-stop-shop-turnkey-wireless-infrastructure-provider
TP = Through Partners

192 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease
18,000 in MENA
Mobiserve Interested 1999 5,000
& Asia

Footprint: Algeria, Egypt, Morocco, Tunisia. Also Saudi Arabia, UAE, Pakistan and Bangladesh

Sample clients: Mobinil, Vodafone, Etisalat, Djezzy, Mobilink, Banglalink, Inwi, Meditel, Orange , Zain, Mobily, Huawei, Ericsson
Company profile: TowerXchange issue three, pages 57-59 or visit www.towerxchange.com/tower-deal-imminent-in-egypt
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease

NETIS 3,000 2009 500

Footprint (Africa): Burkina Faso, Cote D’Ivoire, Ghana, Uganda, Kenya (opening soon in Niger)

Sample clients: Eaton, Helios, ATC, IHS, Ericsson, Alcatel-Lucent, MTN, Orange, Comium, Vodafone, Onatel, Airtel
Company profile: TowerXchange issue three, pages 76-79 or visit www.towerxchange.com/end-to-end-services
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease

NEWL 2,385 1987 350

Footprint: Tanzania, Malawi. Kenya, Rwanda, Uganda and Zambia offices opening soon

Sample clients: Airtel Malawi, Airtel Tanzania, NSN, Vodacom Tanzania, Zantel
Company profile: TowerXchange issue five, pages 46-50 or visit www.towerxchange.com/a-view-of-tanzania-from-the-front-lines-of-the-markets-leading-managed-service-provider
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease
600 full time,
Plessey TP TP 12,000+ Over 50 years ago
2,000+ contractors

Footprint: South Africa(HQ), Kenya, Mozambique, Nigeria, Tanzania, Uganda and Zambia

Sample clients: Airtel, Helios, ATC, MTN Nigeria, MTN South Africa, Vodacom Mozambique, Vodacom Tanzania
Company profile: TowerXchange issue four, pages 93-95 or visit www.towerxchange.com/blue-chip-turnkey-infrastructure-provider-moves-into-managed-services
TP = Through Partners

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 193

 Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease

Ramboll TP TP Software TP 7,000 1945 11,000

Footprint: Pan African, continental HQ in South Africa

Sample clients: (In Africa) Huawei, NSN, ZTE, Ericsson, American Tower, IHS Africa, Helios, Airtel, Vodafone, MTN
Company profile: TowerXchange issue one, pages 34-36 or visit www.towerxchange.com/design-for-shareability
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease

Reime Group 3-4,000 1912 360

Footprint: DRC, Ghana, Cote d’Ivoire, Kenya, Madagascar, Malawi, Nigeria, Republic of the Congo, Tanzania, Uganda, Zambia plus satellite operations in Burkina Faso, Rwanda and Sierra Leone

Sample clients: Airtel, Alcatel-Lucent, Eaton, Helios TA, Helios TN, Huawei, IHS, MTN, NSN, Safaricom, SWAP, Tigo, Vodacom, ZTE
Company profile: TowerXchange issue two, pages 91-94 or visit www.towerxchange.com/what-gets-measured-gets-done-at-reime-group
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease

TKM Maestro TP 600 2002 85

Footprint: Full offices in Kenya, Tanzania, Uganda, Rwanda, Nigeria, Mozambique and Ghana with representative offices in South Sudan and the DRC

Sample clients: Ericsson, ZTE, NSN, MTN, Cell C, Likusasa, Plessey, QTE, Radio Network Solutions
Company profile: Company profile: In this special feature or visit www.towerxchange.com/concrete-no-longer-necessary-for-tower-foundations-even-for-multiple-tenant-sites/
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease
1500 project
VNTower TP TP 2007 60
managed

Footprint: Currently seeking African partner

Sample clients: America Tower, Ericsson, Huawei, Liquid Telecom, MTN, Orange, Safaricom, Tigo, Uganda Telecom, ZTE
Company profile: TowerXchange issue three, pages 81-84 or visit www.towerxchange.com/time-to-market-a-critical-differentiator-within-the-tower-industry-supply-chain”
TP = Through Partners

194 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Special feature:

Energy storage tradeoffs,

part two
Choosing the right battery for a particular grid availability situation, to achieve
a desired level of autonomy, to fit a certain budget … There’s a multitude of
factors influencing energy storage solution selection, and a multitude of different
vendors offering different chemistries at different price points and with different
replacement cycles.

TowerXchange have interviewed some of the most proven and innovative energy
storage solution providers. In this edition we feature NorthStar Battery and Amara
Raja Batteries, but here’s an index of past energy storage interviews.

Index of energy storage solutions for emerging market cell sites:

< Amara Raja Batteries, issue 10 (this < NorthStar Battery, issue 10 (this edition!),
edition!), pages 201-203 pages 196-200
< EnerSys, issue 6, pages 114-118 < Saft, issue 5, pages 130-133
< GE Energy Storage, issue 5, pages 124-129 < Trojan Batteries, issue 9, pages 209-212
< Gildemeister, issue 5, pages 117-123
< Imergy Power Systems, issue 9, pages
204-208

There are a few other companies who TowerXchange have not yet interviewed
but who should also be considered for your RFPs, including China Shoto Battery,
Fluidic Energy, GS Yuasa and Narada.

If you’d like introductions to any of these vendors, or if you represent an energy

storage solution that you think should be featured in TowerXchange, drop me an
email: [email protected].
Image courtesy of GILDEMEISTER

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 195

NorthStar: more than just
TowerXchange: Please introduce NorthStar
to our readers - what role do you play in the

a battery company
telecoms infrastructure ecosystem?

Thierry Tardivent, Head of MEA and APAC,

Market leaders in premium lead acid batteries committed to understanding NorthStar Battery: Since 2000 NorthStar’s telecom
and resolving their customers’ energy storage problems batteries and site solutions have been delivered
in more than 150 countries. NorthStar helps its
NorthStar is more than just a battery company. They’ve customers globally to extend battery life and save
made a commitment to really supporting their customers. A energy by providing High Performance AGM
commitment to help customers select the right batteries. A Batteries specially designed for different grids and
commitment to identify and resolve power system problems, telecom applications – I believe today NorthStar
even if they aren’t caused by batteries. And a commitment Batteries makes the best AGM batteries in the
to manufacture, and dispose of, lead-acid batteries in an industry.
environmentally aware manner. Of course, NorthStar also
manufactures premium lead acid batteries which they say But NorthStar Battery is more than just a battery
represent the best compromise between capex and opex, company. We also have a unique expertise in power
which is why they are one of the market leaders in energy systems for emerging markets which is key to
storage for emerging market cell sites. optimise battery life and energy saving.

Keywords: Who’s Who, How to Guide, Meetup Preview, TowerXchange: We usually ask how many cell
Energy, Installation, Opex Reduction, Batteries, Fuel sites in Africa, LatAm and Asia the interviewee’s
Security, Air Conditioning, Off-Grid, Unreliable Grid, ROI, solutions are installed - I guess that may be
Hybrid Power, DG Runtime, Dimensioning, Procurement,
difficult to specify given the scale of NorthStar’s
Warehousing, Shelters, Rectifiers, Africa, Asia, Pakistan,
Thierry Tardivent, Head of MEA and APAC, business! However, can you give us a sense of
NorthStar Battery NorthStar Battery
the size of your telecoms business in those three
regions.

Read this article to learn:

Thierry Tardivent, Head of MEA and APAC,
< Why premium lead-acid batteries remain the best compromise between capex and opex
NorthStar Battery: Tens of thousands sites in MEA
< How to choose the right battery for the grid profile and application
are equipped with NorthStar products. In Pakistan
< How to overcome common problems in the installation and setting of batteries alone, Northstar has equipped over 5,000 sites
< How to cool batteries with just 40W, even at 30-40°C ambient with a pure fuel saving application delivering
< How to protect batteries from theft and vandalism outstanding results. Many thousands of hybrid
sites in Africa have been equipped with NorthStar

196 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

technology since 2000. should deploy on a stable grid in USA, compared of supplier – so simply switching to a different
with the unpredictability of the grid in Pakistan, supplier won’t fix the problem. Energy storage
TowerXchange: Why are lead acid batteries and pure off grid applications in Myanmar for solutions need to be redesigned to provide reliable,
standing up to the challenge of alternate energy example. sustainable power to cell sites in emerging markets,
storage chemistries in a telecom context? providing faster recharge, high cyclic, high
NorthStar differentiates ourselves by offering temperature, high efficiency operation.
Thierry Tardivent, Head of MEA and APAC, different chemistry depending on the application
NorthStar Battery: Frank Fleming, our renowned and grid profile. Whereas with other vendors the You need to deploy the right power system, on the
CTO, has a strong belief that lead acid can remain battery is a standard, commoditized component, right settings and ensure it’s installed properly. This
the technology of choice for telecom energy storage forcing site designers to solve their problems is why we are lauching the NorthStar Academy – to
for the next 50 years, as long as we push the limits through the modification of other power systems, help to extend battery life by two to three times and
of the design. NorthStar have been able to customise the design save energy.
of our batteries for different grid availability and
We also want to push back against the bad telecom applications. While some battery vendors may prefer their
environmental image of lead acid batteries, which batteries die sooner to accelerate replacement
is why we invested massively in environmental For example, one of the most unstable grids we cycles and sales volumes, NorthStar want to make
controls when we built our new factory. Many have experienced was in Bangladesh. No matter sure our batteries last a long time and deliver the
of our key customers select NorthStar as their what power system we used, there were so many opex savings targeted. Our success comes from
preferred / strategic supplier partly because of our repeated power outages that it seemed we were our people in the field, people with a background
strong environmental control. Corporate Social never able to fully recharge our batteries. That from the power industry, who can address power
Responsibility policies make environmental control presents a problem for traditional lead acid energy system problems holistically and who can help our
a key target for companies like Ericsson, with whom storage technology, but we were able to modify our customers fix those problems.  If it’s not a battery
we’ve been a key strategic partner since 2002. We’re electro chemistry to be fully partial state of charge problem, we don’t just say “talk to the power system
also strategic suppliers to NSN, Huawei and ZTE. (PSOC) compatible. vendor”, we help the customer to change controller
settings, cabling et cetera – training their people to
TowerXchange: How much tailoring to the TowerXchange: Why is the replacement cycle so avoid repeating mistakes.
specific requirements of individual sites can much shorter for batteries on developing market
really be achieved through the selection of cell sites, and what can be done to deliver TowerXchange: I understand NorthStar initially,
batteries? reliable, sustainable power? and to a certain extent still do, sell a significant
proportion of batteries via OEMs – how does the
Thierry Tardivent, Head of MEA and APAC, Thierry Tardivent, Head of MEA and APAC, entry of the independent towercos affect the
NorthStar Battery: One battery cannot fit all NorthStar Battery: We think there is too little criteria against which energy storage solutions
applications. You need different chemistry understanding of why batteries are failing. While are acquired?
depending on the grid profile and energy situation. the right choice of battery is crucial, it’s as much
There’s a huge difference between the battery you about the electrochemistry as it is the choice Thierry Tardivent, Head of MEA and APAC,

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 197

 cost, difference when using premium lead acid
100 100
batteries versus lower cost alternatives at cell
90 90 sites in harsh conditions?

80 80
Thierry Tardivent, Head of MEA and APAC,
70 70 NorthStar Battery: A premium AGM (thin plate
technology) would normally cost 30% more than
60 60
a Standard AGM battery with three to four times
50 50 greater storage life and up to five times longer
Capex
operating life in real harsh conditions (typically 2.5
Opex
40 40
X the life).
30 30
A lot of our customers are migrating from dual
20 20 DG to DG plus battery hybrids to cut DG runtime
10 10
by 50% or more. If you want to optimise energy
efficiency programmes, you have to think about
0 0 total efficiency; about DG efficiency, the efficiency
Genset Only Genset + Power + Genset + NorthStar Genset + Power + Genset Power Pure Renewable Energy
Controler + OPZV Hybrid Power controller + Solar or &controller + Solar & Mix of rectifiers, and the efficiency of batteries. A
Batteries Wind Wind
Source: NorthStar Battery standard battery can suffer two to three times
more loss than a premium battery, which can
NorthStar Battery: We have always had a strong performance improvements that are sustainable in make a huge difference for some applications.
strategic relationship with OEMs and we will the medium and long term, particularly at unstable A premium, fast charge battery can take a lot of
Delivering
always will. reliable
But we and
alsosustainable
realised wepower
needto
tothe world and off grid sites. energy to recharge the battery in short time, which
accelerate the battery technology and solutions enables the customer to run the DG faster and more
awareness at the end customer level such as with There are only three or four factories worldwide efficiently, for a shorter time.
towercos as they are more and more driving the that can manufacture premium AGM batteries. But
battery selection process. the good thing about premium AGM is that they For example, when we rolled out NorthStar Blue
have a two year shelf life thus we can then easily Technology in Pakistan, we found that most of the
Our technology has been approved already by maintain inventories in hubs all around the world operators were buying low cost batteries because
two major emerging market towercos this year. and provide a short lead time to our customers; of their focus on capex. When they saw that at off
We still see a few examples where energy storage we adapt to the logistical challenges to ensure grid sites we were cutting DG runtime by up to 85%,
solution selection is driven by short term capex our products are available as close as possible to we helped them realise that it doesn’t even matter
savings, resulting in a temporary improvement in market. if you replace in your batteries every two to three
the P&L. However, making the wrong decisions years if you payback the investment in three to four
in the selection of energy storage is does not yield TowerXchange: What is the performance, and months.

198 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

NorthStar Blue Technology is ideal for unstable Why are telecom batteries failing so early?
and off grid sites; it’s a fast charge, high
efficiency battery with Partial State of Charge
(PSOC) compatibility. If used in a hybrid genset 5%
combination, it offers the best capex and opex 10%
compromise. Other technology such as sodium and
lithium batteries are two to three times the price
35% Wrong setting or installation
and are not so easy to implement in large scale
projects. Incorrect battery selection
Temperature
TowerXchange: Why are telecom batteries 20%
failing so early? And what are the key steps Theft and vandalism
towercos and MNOs can take to extend battery Others
life?

Thierry Tardivent, Head of MEA and APAC,

NorthStar Battery: We need to increase customer
awareness of the root cause of batteries problems. 30% Source: NorthStar Battery
What NorthStar have done, and what all the
battery manufacturers should have done, is make
an assessment on over 60 countries where our low voltage disconnect; temperature sensor cooling technology, added a unique cabinet
batteries had been installed, to find out what were configuration and cooling systems. Too many site structure and made the world’s most efficient
the key challenges were with using batteries, and to installers don’t even know how many rectifiers telecom battery cooler called SiteStar. We can
and try to find a solution for each: they need to recharge the batteries – spending an now cool batteries with just 40W even at 30-40°C
extra US$200 on a rectifier can save a US$5,000 ambient. Over 30,000 sites have been equipped
1 Make sure to select the right battery based on battery bank. with our SiteStar technology to date with very
grid and application including sizing/dimensioning; positive feedback from the field.
in too many cases there is not enough power to 3 Temperature: a 10°C change in temperature
recharge the batteries. Our recommendation is that can reduce battery performance by as much as 4 Protect batteries from theft and vandalism: One
customers need to use different chemistries for 30-50%. But air conditioning just to cool energy approach we’re trying is to protect batteries in a
different locations. storage elements costs a lot of money. A few years safe-like structure. We’ve co-operated with a safe
ago we partnered with one of the most famous manufacturer to come up with a cabinet which
2 Solve installation and setting issues: everything fridge manufacturers to leverage proven consumer used to be a safe box; made of robust, very thick
from cabling the battery properly to controller product technology into the telecom fields. We took metal. Another area we’re starting to explore is
settings (charging voltage, boost timing et cetera); the high efficiency, high reliability DC compressor advanced locking systems.

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 199

In some countries theft is related to the parallel considerations from manufacture to disposal? and corrective actions. You won’t get an “it’s not
market; at one point batteries were even being a battery problem – talk to power system vendor”
resold to the operators from which they were Thierry Tardivent, Head of MEA and APAC, attitude with NorthStar – we have a strong
stolen! This was resolved with a relatively easy to NorthStar Battery: NorthStar has invested heavily competence on the whole power solution, not just
fix – an engraving that cannot be removed. In other in building the most environmentally advanced the batteries.
cases the parallel market is home usage, but I feel battery plant in the world. But our environmental
that’s minimal. policies actually start from the design of the We’ve changed the focus of our business to help
product; making sure the battery is designed to our customers understand how to select the
No single approach to combating theft can be last longer and also not to deteriorate beyond the right batteries. One best electro-chemistry and
successful everywhere as there are different end of its life. We are also developing an advanced battery technology isn’t right for all grid profiles
causes of theft, from theft by large organisation’s solution to operate batteries with the minimum and applications. For example, low technology
to pilferage within the fuel supply chain. energy consumption – our SiteStar battery cooler batteries could be good enough for some developed
Ultimately combating theft requires working designed in Sweden is still the most energy efficient market applications. But battery performance is
with the operators and towercos to develop an Battery cooler in the industry. more problematic in developing markets, so we’ve
understanding of the nature of their theft problem developed energy storage solutions for unreliable
and what budget they can afford to resolve it. Theft TowerXchange: Finally, please sum up how you and off grid applications which we think represent
is a problem, and we want to address it. would differentiate NorthStar’s batteries from the best compromise between capex and opex.
other energy storage solutions for remote cell
NorthStar can help MNOs and towercos overcome sites. Lastly we are developing solutions which have a
all four of these challenges. I’m particularly very quick payback. Payback after five to ten years
concerned when people talk about minimising Thierry Tardivent, Head of MEA and APAC, won’t work in telecom industry – everything needs
the competence required of people in the field. NorthStar Battery: Most battery companies are to pay for itself in less than two years. NorthStar
While the solution needs to be as simple as possible focusing only on selling their own components. But are focused on developing the best opex solutions,
to be installed and operated, the competence of NorthStar are more than just a battery company. with affordable capex and quick payback – making
the average field engineer is not necessarily the We take a different approach – we really want to our energy storage solutions a ‘no brainer’!
same in Southern Asia and Africa as it might be help our customers (as well as help ourselves).
in Europe. We see a lot of mistakes in installation, How we support our customers is a tangible, core
NorthStar Battery are exhibiting at the
and we’re happy to the deliver first training at the value for NorthStar Batteries. In the past few years
2014 TowerXchange Meetups for Africa
NorthStar Academy on the basic principles – we we’ve assessed the typical problems faced by our
(October 20 and 21, Johannesburg) and Asia
can put all the installers in one room, identify customers, and come up with solutions for what
(December 9 and 10, Singapore). For more
common problems and misconceptions, and make can we do to extend battery life and save energy.
corrective actions. information, visit:
We seek to understand our customers’ problems. www.towerxchange.com/meetups/africa
TowerXchange: How do NorthStar ensure We’ll audit your site for you and we won’t leave www.towerxchange.com/meetups/asia
you remain sensitive to environmental without giving you an analysis of the problem

200 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Energy storage solutions TowerXchange: Please introduce your company
and your solutions for telecoms.

proven in the world’s most challenging Srinivasa Rao Ganga, CMO, Amara Raja
Batteries: Amara Raja Batteries is a joint venture
tower markets company with Johnson Controls Inc., USA with
manufacturing facilities located in the Southern
Amara Raja’s joint venture with Johnson Controls provides batteries for part of India. We are a publicly held company
over 200,000 Indian and African cell sites manufacturing Industrial and Automotive Batteries
for more than two decades now. We have one of
Selecting the right batteries is critical to minimising energy the world’s largest manufacturing facilities for
opex in emerging markets, particularly in the context of 2V AGM VRLA batteries and the world’s largest
limited grid power availability, operating temperature integrated plant for manufacturing 12V AGM VRLA
variations and diesel logistics challenges. Amara Raja and Monoblocks backed by sound financials and the
Johnson Controls have come together to build some of the most modern facilities.
largest and most modern battery manufacturing facilities in
the world, from where they ship hundreds of thousands of We are the preferred energy storage battery in the
telecom and UPS segments in India with a dominant
lead-acid batteries for use at MNO and towerco’s cell sites.
market share. In the automotive space we are the
TowerXchange spoke to CMO Srinivasa Rao Ganga.
preferred supplier to all major auto OEMs including
Keywords: Who’s Who, Meetup Preview, Energy, Opex Ford Motors, Hyundai, Suzuki, Mercedes Benz et
Reduction, Batteries, Outdoor Equipment, Uptime, Off- cetera.
Grid, Unreliable Grid, ROI, Hybrid Power, DG Runtime,
Dimensioning, Logistics, Multi-Country Partner, Africa, Asia, As most of us know, India is the second largest
Srinivasa Rao Ganga, CMO, Johnson Controls, Amara Raja Batteries and possibly the most competitive global telecom
Amara Raja Batteries
market with more than 400,000 Towers. Our
solutions today work in more than half of those
Read this article to learn: installations. It is the market which has seen the
< Amara Raja’s proven track record over 20 years and at over 200,000 cell sites in India and Africa transition of passive infrastructure, changing hands
< Redefining battery deliverables: high temperature operations, higher cyclic life, deep cycling capability, from MNO to towercos on a mass scale like we are
PSOC working and high and faster recharge time and efficiency seeing in emerging markets now. This has given us
< The importance of matching battery size and correct variant based on specific site conditions opportunities as well as an edge in designing and
< How an effective preventive maintenance programme optimises service life from batteries even in offering solutions matching changing needs.
harsh conditions
Tower companies typically face stringent challenges

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 201

of grid power availability, operating temperature largest tower company involved conversion of relationship we work collaboratively on number of
variations and diesel logistics demanding different many thousand sites to green sites (without DGs), product and process design projects on an ongoing
solutions for energy storage for different sites. for which our quick recharge variant played a basis so that there is a continuous exchange of
vital role in achieving the towerco’s objectives. knowledge and information between the two
Our telecom solutions are mostly built around 2V The project received a GSMA Green Mobile Award companies. This gives us an edge to keep at the
offerings suitable for power deficient emerging in 2013 and features the installation of more than forefront of all latest developments in design and
markets. They offer the most reliable solution and 20,000 of our Quick Recharge Batteries (48V battery manufacturing of Lead Acid storage technologies
at competitive total cost of ownership (TCO). Our banks). which we deploy in our Energy Storage solutions.
offerings today meet the application demands of
outdoor operation, deep cycling, quick recharge, Similarly we have supplied close to 10,000 of our JCI also is globally recognised for their operational
partial state of charge (PSOC) operations and float High Life-Deep Cycle Batteries (48V battery banks) efficiency and best business practices across their
applications with optimal life in these conditions. for use in the network of an MNO in 17 countries locations and we also follow the same practices
across Africa and the oldest installation today has thus delivering more value for our customers.
TowerXchange: The first question our readers been working for more than three years in the
always ask is “how proven is the solution in the environment and power conditions prevalent in TowerXchange: Why are CDC batteries one of the
field?” I understand Amara Raja’s batteries are Africa. We have worked on many such projects with first investments towercos make after acquiring
widely used at cell sites in Asia and Africa – various MNOs and tower companies in India. towers from MNOs?
can you tell us about your worldwide footprint
and give us a sense of the size of the telecoms Frost & Sullivan selected our batteries as the most Srinivasa Rao Ganga, CMO, Amara Raja Batteries:
component of your business. preferred battery in telecom sector in India in 2013 In our opinion, whether it is a MNO or a towerco,
and today leading towercos and MNOs operating the management of energy costs and energy
Srinivasa Rao Ganga, CMO, Amara Raja Batteries: in these markets prefer us as a single source and efficiency are critical success factors. The need for
Yes as I have mentioned above our solutions are strategic partner for their battery requirements energy efficiency drives the tower companies to
working today in Asia and Africa at more than migrate to outdoor equipment including batteries.
200,000 locations and have been used for more Telecom sector revenues today contribute This coupled with the poor grid power situation
than two decades, which speaks of the proven track approximately 50% of our annual Industrial battery in emerging markets led to batteries becoming a
record of our offerings. revenues. primary source of Energy. If you observe over past
few years this resulted in battery deliverables being
With tower companies focusing more and more TowerXchange: What does Amara Raja’s joint redefined like high temperature operations, higher
on energy costs and efficiency, battery selection venture with Johnson Controls mean for your cyclic life, deep cycling capability, PSOC working
based on opex considerations and TCO has created manufacturing and R&D capabilities? and high and faster recharge efficiency.
a distinct preference for our solutions over these
years. Srinivasa Rao Ganga, CMO, Amara Raja Batteries: Today among top sustainability issues for towercos
Johnson Controls Inc. (JCI) became an equal joint are GHG emissions, energy cost and renewable
One of the prestigious projects driven by world’s venture partner with us in 1998. As part of this energy deployment. Typically for tower companies

202 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

in most of the emerging markets energy costs are like India, an effective programme on preventive As far as after sales service is concerned, we have
almost 50% of the total site opex, largely driven maintenance has significantly helped achieve a regional network of our representatives who can
by diesel costs. This makes it necessary for them optimal cyclic life from batteries even in harsh be the first point of contact in case of a customer
to quickly adopt CDC batteries as the most critical conditions.  We ourselves were involved with complaint. However our experience from these
building block in achieving these objectives. a large tower company in this programme and markets over last few years has seen minimal
brought our battery expertise at close to half of the issues owing to superior design of our products
This reduction of energy cost is more relevant towers owned by them. and tighter quality control in manufacturing. We
for a towerco because in their efforts at targeting have also devised and implemented an innovative
multiple tenancies from various MNOs means this We believe that the key here is in selection of the solution by working closely with our customers
can be a game changer. right make and manufacturer of battery beyond for providing after sales service which is quicker,
selecting the right variant and correct sizing. We economical and more efficient.
TowerXchange: How can owners of towers in from our side can certainly bring that expertise
remote areas achieve a balance between the for a towerco, having worked in similar conditions TowerXchange: Finally, please sum up how you
best practices that maximise battery life cycles, as Africa and successful deployment of various would differentiate Amara Raja’s energy storage
and the realities of the harsh charge, discharge solutions. solutions from competitors?
/ partial state of charge requirements of
distributed energy storage? TowerXchange: Tell us about your distribution Srinivasa Rao Ganga, CMO, Amara Raja Batteries: I
and after sales service network in Africa, LatAm would like to sum it up by saying that what we have
Srinivasa Rao Ganga, CMO, Amara Raja Batteries: and Southern and Southeast Asia. on offer for the tower companies in Africa and all
The most critical aspect to answer above question emerging countries are our proven solutions from
is the correct sizing of battery and choosing the Srinivasa Rao Ganga, CMO, Amara Raja Batteries: the world’s largest and most challenging tower
correct variant based on the objective of the energy We look at business from two different models in market. Indian telecom represents all possible
management solution. One solution or rating terms of our reach, distribution and after sales scenarios of temperature zones, power availability,
cannot be used as run of the mill solution for all service to serve the global markets. While some diesel logistics challenges and remoteness of sites
sites within the same region and hence to that of our business with UPS and Solar or Home UPS that you can possibly find all across the world. We
extent knowledge about the site conditions is very requiring 12V Monoblocks necessitates stock have our proven installations at half of the locations
important. availability in each of the target markets, we feel in India and our solutions have been deployed for
that replicating the same for telecom requirements over two decades now.
While gathering knowledge about all the sites in may not be correct.
consideration and designing customised solutions We can say that we have possibly the highest
for each site is not physically possible, tower Currently in the markets where we operate in the experience among all energy storage solution
companies can certainly categorise them into telecom business, be it closer home in Sri Lanka providers in working with tower companies
groups and deploy battery based solutions. or Myanmar, or markets in Africa we maintain the because of being in India and hence can understand
direct contact with customers and make supplies their challenges better than anyone to offer suitable
We have seen that in a diverse and large market directly shipping out from India. solutions

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 203

Special feature:

TowerPower - reducing energy opex

for emerging market telecom tower
operators, part nine

Huawei is the “ICT Energy Efficiency Management Specialist”, dedicated

to providing high reliability, high efficiency, and low carbon emission
solutions for telecom operators and towercos. Huawei’s complete set
of green power solutions includes efficient DGs, solar and battery
hybrids, controllers, the world’s most efficient rectifiers, and OSS NetEco,
enabling the unified management of energy.

We also hear from Andy Bell of Mecc Alte, who’s Mercurio power
converter provides an integrated step between DG and hybrid power,
enabling MNOs and towercos to refine rather than replace oversized DGs
until they have run their lifespan.

It’s not often TowerXchange comes across a TowerPower solution that

is genuinely unique, but Bladon Jets’ jet powered micro turbine gensets
burn just about any liquid or gas fuel, offer a more efficient alternative
to DGs and, crucially, are one third the size of a traditional DG, freeing
up valuable space at shared sites.

In this edition of TowerPower:

205 How Huawei’s unique insights into network evolution
enable the optimisation of energy efficiency
209 Mecc Alte’s innovative solution to extracting maximum
value from standard DGs
214 Bladon Jets’s MTGs offer a more efficient alternative to
traditional DGs

204 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

How Huawei’s unique insights TowerXchange: How do you foresee telecoms
networks in Africa evolving, and what are the
implications for energy efficiency programmes?
into network evolution enable the Dr. Fang Liangzhou, Vice President of Network

optimisation of energy efficiency Energy Business Unit, Head of Solution &

Marketing, Huawei: According to Huawei’s
A vision for high reliability, high efficiency network energy solutions with low carbon emissions statistics, the total number of sites in Africa has
now reached 180,000. We think the main GSM
and UMTS operators will add more sites to extend
Dr Fang joined Huawei in 1999 initially as an R&D
voice coverage for more subscribers, but also add
Engineer of GSM products before in 2003 moving to work
more small cell sites to infill capacity in high end
in sub-Saharan Africa (SSA) as marketing manager for
markets for data services – we anticipate 100,000
six years, during which time Huawei’s market share in
new sites will be required in the next several
SSA climbed from 5% to 30%. When Dr Fang returned to
years.
China in 2009, he took over as Vice President for Huawei’s
Network Energy department, drawing upon his familiarity
Last year, most African operator’s ECR (Energy
with the challenges of providing power to cell sites in
Costs as a proportion of Revenue) was over 6%. In
SSA to achieve Huawei’s vision of being the “ICT Energy
comparison, ECR averages just 2-3% for operators
Efficiency Management Specialist”, dedicated to provide
outside of Africa. So African operators face a
Dr. Fang Liangzhou, Vice President of Network Energy high reliability, high efficiency, and low carbon emission
big challenge and pressure from energy costs,
Business Unit, Head of Solution & Marketing, Huawei solutions for telecom operators and towercos.
while there is also a greater opportunity to save
energy costs for African operators compared with
Keywords: Energy, Monitoring & Management, Active Equipment, Opex Reduction, Batteries, Loading, Outdoor
Equipment, Market Forecasts, Network Rollout, QoS, Densification, Air Conditioning, Uptime, Off-Grid, Unreliable anywhere else in the world.
Grid, Hybrid Power, Renewables, Solar, DG Runtime, Multi-Country Partner, Shelters, Rectifiers, RMS, Site
Management System, Infrastructure Sharing, Africa, Huawei Huawei has just launched the New Generation
Telecom Power Solution, MTS (Migrate Towards
Simplicity) at the 2014 Intelec exhibition in
Read this article to learn: Canada. The MTS, with innovative site-level high
< Huawei’s forecasts for the growth of African telecom networks
efficiency features, will no longer stay at the stage
< Future proofing cell sites by leveraging Huawei’s knowledge of changing network technologies,
of improving the efficiency of a single module, but
and by using modular network energy solution designs
increasingly improve the efficiency of the entire
< Leveraging the world’s most efficient rectifiers to improve conversion efficiency
system, the entire site and the entire network. The
< How to reduce air conditioning runtime or eliminate air conditioning all together
MTS will not only improve energy efficiency but
< Huawei’s intelligent site management system
also simplify the power system. For example, the

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 205

 “
MIMO (Multi Energy Input, Multi Mode Output)
makes energy available at anytime and anywhere,
which indicates the input mode of grid, solar,
DG, battery and output mode of 220V AC, 48V DC,
HVDC, and 24V DC.

TowerXchange: To what extent is the drive

toward energy efficiency in cell site design
caused not just by rising energy opex, but
also caused by growing data demand driving
the energy load on some sites to and beyond
Huawei manufactures the world’s most efficient rectifier...
At 98% conversion efficiency, Huawei’s rectifier can reduce
conversion power loss by 66% more than a mainstream rectifier
with 94% conversion efficiency
“
capacity?

Dr. Fang Liangzhou, Vice President of Network

Energy Business Unit, Head of Solution &
Marketing, Huawei: For power systems, reliability However, this will not be a problem since our suggestions for the evolution of network energy
is the top priority. How to improve reliability is an rectifier has a modular design, supporting systems to meet the requirements of future
important factor we consider at first in product smooth expansion in the future. Huawei can services – Huawei know how much power should
design. We have dual source designs and an OSS provide capacity-related suggestions for future be provided to meet growing customer needs. This
(operation support system) to insure reliability. energy requirements since Huawei has abundant is one of Huawei’s key differentiators from pure
experience in the field of telecom energy. energy equipment providers.
For dual source design, there are at least two
power sources for each power system. Usually, the TowerXchange: How do the philosophies of Huawei is committed to the ‘era of infrastructure
battery is the basic backup for the power system network energy planning need to evolve in an sharing’. For example, sometimes our customers
and either DG or solar is an optional choice. era of infrastructure sharing? How can power want Huawei propose an appropriate location to
systems be designed to maximise efficiency build a new site. Where possible, we will always
In addition, the OSS can gather the real time as the load increases as more tenants are co- suggest sharing existing sites to minimise capex.
running status of the site. Once there’s any located?
abnormal issues happening, an alarm will be sent TowerXchange: For our less technical readers,
out automatically so that the problem can be fixed Dr. Fang Liangzhou, Vice President of Network please explain the role rectifiers play in cell site
in time. Energy Business Unit, Head of Solution & efficiency, and therefore the importance of the
Marketing, Huawei: Thanks to Huawei’s focus on efficiency of Huawei’s rectifiers.
According to our statistics the load for sites in SSA telecom equipment solutions for our customers,
is normally at around 30-40%, but if the site is a we are uniquely positioned to forecast service Dr. Fang Liangzhou, Vice President of Network
shared site it will become more of a challenge. development, so we are able to provide informed Energy Business Unit, Head of Solution &

206 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Marketing, Huawei: The rectifier’s function is to conditioning runtime. @60%DOD at 45°C.
change the current from Alternating Current (AC)
to Direct Current (DC) as most telecom equipment Most of the telecom equipment, such as the BTS, TowerXchange: Where should the ‘intelligence’
needs DC not AC. Higher efficiency rectifiers, such transmission box et cetera, can work normally be gathered from a cell site, from third party
as Huawei’s market leading solutions, reduce at 55°C. But the battery is quite sensitive to RMS sensors, or from sensors integrated into
energy consumption and heat dissipation, which temperature. This suggests two solutions: first, equipment? And how can the data gathered
in turn reduces air conditioning runtime, even we can divide the cabinet into two compartments, from cell sites be translated into actionable
removing the need for air conditioning altogether. one for telecom equipment in which we use heat intelligence?
exchange, the other compartment just for batteries,
Huawei manufactures the world’s most efficient where we use more efficient air conditioning just Dr. Fang Liangzhou, Vice President of Network
rectifier, which can now achieve a peak for the batteries. The second solution is to apply Energy Business Unit, Head of Solution &
conversion efficiency of 98%, which is a significant high temperature batteries which can even work Marketing, Huawei: Huawei OSS NetEco focuses
improvement upon the previous 94% conversion at 45°C, reducing or eliminating the need for air on the unified management of site energy,
efficiency. At 98% conversion efficiency, Huawei’s conditioning runtime and associated parasitic load. environment, and security components.
rectifier can reduce conversion power loss by The battery’s cycle life can be up to 1,200 cycles By monitoring the performance and alarm
66% more than a mainstream rectifier with 94%
conversion efficiency. Our rectifier also improves
power density and reduces power failure rates
and noise levels. Critical for towercos, the rectifier
also saves 50% user space in comparison with
traditional rectifier module.

TowerXchange: You mentioned the potential

for reducing or eliminating the need for air
conditioning. Are the next generation of cell
sites going to be designed primarily with
outdoor equipment, thus negating the need
for the parasitic load of air conditioning? How
can existing sites’ air condition be made more
efficient in the meantime?
Dr. Fang Liangzhou, Vice President of Network
Energy Business Unit, Head of Solution &
Marketing, Huawei: First, outdoor is a trend. Most
new build sites will use outdoor equipment, but for
existing sites we have several ways to reduce air

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 207

information of related devices in real time, NetEco

“
enables maintenance personnel to remotely
manage sites. Maintenance personnel can access
the NetEco through a web browser or mobile
app. Besides, our OSS can also provide a standard
interface with third party sensors and equipment.

By collecting and analysing statistics on site power Because Huawei is the market leading provider of telecom
consumption, NetEco provides data support
for energy conservation suggestions. NetEco
provides refined management of electricity,
fuel consumption, assets, and maintenance
services. It supports intelligent analysis and
statistics collection, and provides asset inventory
equipment, we know how network technologies are evolving in
the future, so we know how to improve the efficiency of power
generation from remote cell sites to heavy traffic sites in dense
metropolitan areas
“
management and maintenance notification
functions.

Furthermore, if the telecom equipment and energy

solution are provided by Huawei, then both of
them can share the transmission device, which will can support and measure the energy consumption improve the efficiency of power generation from
help customers to save more opex. of several operators, and build their business remote cell sites to heavy traffic sites in dense
models for power services accordingly. metropolitan areas. For example, we can build
TowerXchange: Are Huawei providing energy in intelligent redundancy, so that when traffic
solutions to any emerging market towercos? If TowerXchange: What can Huawei offer that reduces in the evening, we can shut down some
so, how do their monitoring requirements differ other network energy equipment and service rectifier modules to reduce power consumption.
from those of MNOs? providers cannot?
Huawei is the leading ICT supplier with a
Dr. Fang Liangzhou, Vice President of Network Dr. Fang Liangzhou, Vice President of Network commitment to the green agenda. Huawei
Energy Business Unit, Head of Solution & Energy Business Unit, Head of Solution & provides a complete set of green power solutions,
Marketing, Huawei: Huawei are already providing Marketing, Huawei: Huawei provide solutions from efficient DG to solar and battery hybrids,
energy solutions to several towercos in for the evaluation and reduction of energy controllers, rectifiers and energy OSS. We provide
Africa and Myanmar. consumption across the whole network. Because network energy solutions not only to help our
Huawei is the market leading provider of telecom customers reduce energy opex, but also to support
Our solution can monitor and manage the power equipment, we know how network technologies their corporate social responsibility objectives,
consumption for each tower tenant, so towercos are evolving in the future, so we know how to such as reducing CO2 emissions

208 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

From AC to DC power, from indoor to TowerXchange: Why is there a trend toward DC
power in emerging market telecoms?

outdoor solutions – an innovative solution to Andy Bell, Managing Director, Mecc Alte: Most
telecom tower networks in emerging markets were
extract maximum value from standard DGs rolled out under extreme time to market pressures,
and rolled out before renewables were a realistic
The Mercurio power converter from Mecc Alte provides an integrated alternative. So as networks extended beyond the
step between DG and hybrid power grid and required independent power solutions,
tens of thousands of diesel gensets (DGs) were
African towercos have invested over US$4bn acquiring 41,000 distributed installed. Given the climate variations found in
cell sites, and the associated distributed independent power network. emerging markets, the energy storage, electronics
The reality is that the standard DGs used at the majority of the off grid and rectification equipment needed cooling, so air
sites are not likely to be replaced until those DGs reach the end of their conditioning units were required, needing an AC
service life. With the increasing use of outdoor equipment, many sites generator and placing a parasitic load on the site.
don’t need oversized DGs to start air conditioning units any more, so how
can you ensure those oversized DGs run more efficiently until the end of Starting an air conditioning unit might require
their lifespan? How can you implement a solution that does not need to be 15-20kW, whereas the site may need just 4kW
replaced when alternate energy solutions start being installed into your once started, so the DG has to be oversized. And to
network? The answer may lie in the innovative Mercurio power converter maximise uptime, many sites needed redundancy,
from leading alternator manufacturers Mecc Alte. which means dual gensets. As a result of DGs
running below capacity, engines build up carbon or
Keywords: Who’s Who, Energy, Passive Equipment, O&M, Opex smooth cylinder bores, and alternators die because
Reduction, Batteries, Outdoor Equipment, Uptime, Off-Grid, Unreliable they’re not getting hot, and can’t dissipate moisture
Grid, Hybrid Power, Renewables, Retrofitting, DG Runtime, Dimensioning, (condensate) from their windings – it all adds up to
Site Visits, Decommissioning, Air Conditioning, Shelters, Rectifiers, increased maintenance costs and reduced lifecycles.
Andy Bell, Managing Director,
Microgeneration, Community Power, RMS, Spare Parts, Africa, Mecc Alte
Mecc Alte
Technology has matured, with the next generation
of antenna now able to function outdoors, so many
Read this article to learn: sites no longer need air conditioning. Without
< The case to refine rather than replace oversized DGs for the new era of outdoor equipment needing to start the air conditioning motor, most
< Futureproofing the solution for renewables equipment at a cell site is now DC powered. The
< What results can be achieved using the Mercurio power converter, and what it costs DC unit provides power to the antenna and charge
< Why copper wound standard alternators are preferable to permanent magnet alternators to the battery pack, it’s all one load, so you can
refine the engine, alternator and other components

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 209

 “
to effectively and efficiently deliver the required
energy load.

TowerXchange: If many sites no longer need air

conditioning, are the DGs installed on these sites
still the best solution?
with Mercurio we’ve been able to improve fuel economy by 35%-
Andy Bell, Managing Director, Mecc Alte: With
Mercurio, you can extend the lifespan of existing
DGs.

I see a conflict between consultants who love

40%. With no air conditioning to start anymore, the engine size can
be reduced. Instead of throwing out the oversized generator, we
advocate installing a governor with distinct speed settings such that
two speeds can be used
“
to dream up new technologies, and who would
advocate the replacement of perfectly good
standard DGs with bespoke variable speed gensets
with permanent magnet alternators to provide DC
generation, or who would advocate leapfrogging with Mercurio we’ve been able to improve fuel sites where once the DG ran 24/7 can now run from
directly to bespoke hybrid systems. What this fails economy by 35%-40%. With no air conditioning the battery bank where possible. And if you add in
to take into account is that MNOs and towercos don’t to start anymore, the engine size can be reduced. renewables; Mercurio understands (with external
want to throw out perfectly good standard DGs that Instead of throwing out the oversized generator, we switch) when to use PV resources too at no extra
may have months if not years of service life left in advocate installing a governor with distinct speed cost on power converter.
them. What this also fails to take into account is that settings such that two speeds can be used. This is
when you use a bespoke product it doesn’t work at made possible because of the Mecc Alte digital AVR TowerXchange: What is the impact on battery
every site, it doesn’t offer economies of scale, there technology, and the hybrid on and off modality. life?
may be no redundancy, no local support, and the
average field maintenance engineer doesn’t know Mecc Alte’s Mercurio system provides power Andy Bell, Managing Director, Mecc Alte: You
how to fix it. conditioning. It connects to the alternator (including can leverage Mercurio to charge any battery
other manufacturer’s alternators, not just ours!) bank, whether lead acid, lithium-ion or any other
In my opinion, variable speed permanent magnet It talks directly to the engine and batteries, and is alternate chemistry, and in the process to condition
generators are too expensive for today. They do the able to accept feeds in from the alternator, grid and the lifecycle of batteries to make them last as
job – with little efficiency advantage. I’d advocate any renewables (wind or PV). It checks the charge long as possible, controlling the voltage and the
a more cost effective and practical approach. Our state of the battery, and switches the genset on and temperature. It is supervising the number of cycles
solution for the same problem is to retain existing off to deliver power as you need it. It can also drive charge as well, and can insulate galvanically the
equipment yet still deliver the fuel economy which the speed as well as a function of the real load, if output for the total safety of the site. It also has
energy efficiency programmes are targeting – this full variable speed control scheme is chosen. So an emergency mode, where the batteries can be

210 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 “
Andy Bell, Managing Director, Mecc Alte: The costs
for Mercurio, inclusive of our alternator, come in
at around €2,000 for the 5kW device, €3,000 for the
10kW, and €5,000 for the 15kW. In comparison, a
conventional 5kW alternator costs around €600,
With Mercurio you can retain the conventional engines and €800 for the 10kW, and €1,000 for 15kW -  but it is
alternators that are on cell sites todays. Keeping everything the payback on opex costs which is  the real driver.
conventional is easier as the field engineers will still understand the
equipment they are servicing. And when the existing DG has run it’s
lifecycle and a new package of power systems optimised for the site
is ready, Mercurio can be adapted to manage the new systems too
“ TowerXchange: Please put this in context and
explain where Mecc Alte fit in the telecoms
infrastructure ecosystem?

Andy Bell, Managing Director, Mecc Alte: Mecc Alte

is an indirect component supplier to the telecom
industries around the world. We are the largest
independent alternator manufacturer in the world,
with solutions ranging from 1-3000 KVA.
disconnected during maintenance but still powering Self contained/packaged hybrid power systems
the load, to keep the station operating. work, but are generally expensive, and the cost of For the AC fixed speed power generation, many of
replacing conventional equipment with remaining the most well known genset OEM’s use Mecc Alte
TowerXchange: How do you ensure cell sites’ service life – the depreciation costs – means alternators which have low sub-transient reactance
independent power systems designed for today an intermediate solution is needed.  Mercurio (x”d) properties, suitable for rectifier loads, and also
are still optimised for tomorrow? provides an intermediate step between existing a competitively high efficiency for improved fuel
DGs and hybrid energy; Mercurio works with any consumption.
Andy Bell, Managing Director, Mecc Alte: With renewables so you can retain it beyond the lifecycle
Mercurio you can retain the conventional engines of your conventional engines and alternators. TowerXchange: Forgive the simplistic question,
and alternators that are on cell sites todays. Keeping but for the benefit of our non-engineer readers,
everything conventional is easier as the field Reconditioned standard gensets can be sold on to what role does the alternator play in optimising
engineers will still understand the equipment they the village to provide community power, whereas if the efficiency of cell sites?
are servicing. And when the existing DG has run you replace the standard DG with a custom made,
it’s lifecycle and a new package of power systems self contained hybrid variable speed genset, you Andy Bell, Managing Director, Mecc Alte: That’s not
optimised for the site is ready, Mercurio can be can’t resell it as it won’t work anywhere else. a simple question, and the answer has to be quite
adapted to manage the new systems too. detailed. For the AC alternators, the x”d must be
TowerXchange: What does Mercurio cost? low to have better responses to the rectifier loads.

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 211

It is proportional to the load applied, so oversizing machine, and the not easy to obtain in large components to ensure longevity.
is an option if the x”d is too high. If you start low numbers. Many telecom projects talk of large
then no oversizing is necessary. The higher nominal volumes required either for new tower builds or TowerXchange: How do Mecc Alte products
efficiency also helps. The peak efficiency of the planned re-powering. Using the existing plant, integrate and optimise power from sources other
Mecc Alte alternators is at around 80% load, so the Mecc Alte has the ability to satisfy the large demand than the DG, such as grid and renewables?
modest oversizing most consultants build in help to from existing production lines producing over 350
keep this at peak. machines each day. Mecc Alte does offer permanent Andy Bell, Managing Director, Mecc Alte: The
magnet alternator solutions as well although the Mercurio will accept AC input, either 3ph genset
The market is moving to further efficiency savings financials are clear that the use of conventional or grid, or 1ph grid (with power derate). It will
in both capital cost and running costs. The alternators makes more sense in the real world. also accept AC input with frequencies up to 400Hz
generation of DC at the machine eliminates the need so multi-pole wind turbine alternators can input
for the BTS rectifier, which is quite an expensive TowerXchange: The first question our readers power. When the batteries are fully charged and
item to acquire, maintain and replace. The Mecc usually want to know is “how proven is the the AC input (genset) is stopped, the Mercurio in
Alte Mercurio ‘system’ comprises a standard copper solution in the field?” standby, there can be PV connected to two of the AC
wound alternator (not permanent magnet), with input terminals. An external switch (not supplied
special AVR software to allow fixed speed, two speed Andy Bell, Managing Director, Mecc Alte: There by Mecc Alte but controlled by the Mercurio) would
or full variable speed operation. The latter two are many of the Mercurio ‘systems’ with OEM’s for disconnect the AC and connect the PV, making the
options help to maximise efficiency for the complete their development and promotion to the transmitter MPPT and the impedance matching between the
generation system and to lengthen the life of the operators. Large numbers in projects are discussed solar panel and the load. The same switch would
engines. Part load operation of engines is typical widely although as yet I do not believe anyone close a relay within the Mercurio so it knows
in BTS applications, and engine life expectancy is has pressed the green button to go ahead. There that PV DC power is coming through. There is an
relatively short. We were told once that in some are exhaustive tests which focus on the genset internal MPPT to accept the PV’s DC input and this
countries, it costs three litres of diesel to deliver operation rather than the Mercurio itself. The fine will act to trickle charge the batteries to lengthen
one litre of diesel to site! Of course the longer the tuning of the engine speed/power curve to the the period between charge cycles, without further
interval between times to ‘fill up’, the better it is. load profile to maximise the system efficiency, for costs to the PV array.
each site characteristic is necessary and these will
The Mercurio also controls the speed function vary. The data we have from the OEM’s are very TowerXchange: How do your products save
of the engine so the costs of the engine/genset encouraging and will have real world benefits to the fuel, and can you share some examples of what
controller can be minimised. I have mentioned operators. savings can be achieved?
that we promote the use of copper wound standard
alternators with the Mercurio. There are others who The Mercurio’s power electronics are housed Andy Bell, Managing Director, Mecc Alte: We have
promote the use of permanent magnet alternators within a totally enclosed IP65 box which can be wall explained why the Mercurio ‘system’ has savings
with their DC charging systems. The permanent mounted or built onto the genset, but in any case both in capital cost and operation. Extending the
magnet machine using rare earth magnets maybe are in close proximity to the batteries. Components speed of operation upwards, with a range of say
2-2.5 times the cost of the copper wound standard are rated to +55˚C, and use established durable 1000rpm to 1800rpm, the engine size can also

212 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

potentially be reduced. The fuel consumption in with all of these but also helping to market the

“
hybrid mode depends heavily on settings (VDC concept with the tower operators.
level to start and Amps drawn to stop) and battery
condition/temperature, along with the direct As a component supplier, it’s been difficult for us to
transmitter loads applied. get across our message and change the way people
think. Having sold alternators to the OEMs who put
With a 600W transmitter load and 650A battery together the genset packages subsequently sold to
pack, in light, rather than deep cycle charging MNOs, towercos or their maintenance partners, we Everyone is seeking to
(likely light charging at say 60% battery capacity, were several steps removed from the site designers reduce fuel consumption
will be the most common with deep cycle on and equipment specifiers. So we have started
and maintenance costs, but
monthly basis), and 1000-1500rpm speed range, two
speed operation, we have a 4.8 hour charge period
at an average of 0.67 litres per hour. Taken across
the full hybrid period this of course reduces.

Compared to fixed speed AC power generation, the

to talk to battery people, MNOs and towercos.
Everyone is seeking to reduce fuel consumption and
maintenance costs, but no-one knows exactly how
to achieve the best results with what they’ve got.

TowerXchange: Tell us about your after sales

no-one knows exactly how to
achieve the best results with
what they’ve got
“
fuel cost savings maybe up to 35-40% depending on service
engine and load characteristics.
Andy Bell, Managing Director, Mecc Alte: Unlike
It’s also important to note that the Mercurio power the companies entering the market with new
converter can be fitted to existing tower supplies technology, Mecc Alte has been working with the AC other manufacturers of similar equipment.
with minor modifications to the engine and OEM’s and operators for many years. Mecc Alte is
alternator the third largest in production of alternators and is TowerXchange: Finally, please sum up how you
one of the global leaders in its field. would differentiate Mecc Alte from competitive
TowerXchange: How do you bring Mecc alternator manufacturers.
Alte products to market - who is your target Our service and support infrastructure is in
customer? place now with subsidiaries and regional agents/ Andy Bell, Managing Director, Mecc Alte: We’re
distributors approved/trained in the support of independent – we have no division competing with
Andy Bell, Managing Director, Mecc Alte: We the products. Mecc Alte are strongest in Europe, our alternator customers. We are dedicated to
have our AC genset OEM partners who know the Africa and the Middle East, where customers should high performing competitive products, produced
general intent of the market to move to DC power not have any concerns over our support, both at for a global market from Italy, UK, China and
generation and we are working closely with them. consulting stage, during supply, commissioning and India. We’re focused on the simplicity of products
There are also the more specialised companies aftersales. and ease of maintenance. We are one of few
drawn to the market by the move in technology and manufacturers able to satisfy volume demands with
bringing with them fresh ideas. We are working Our standard warranty is two years, exceeding most solid, reliable products

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 213

Jet powered micro turbine gensets TowerXchange: Where do Bladon Jets fit in the
telecoms infrastructure ecosystem?

offer a more efficient alternative to Stuart Kelly, VP Market Development, Bladon

Jets: We have perfected and patented the design
traditional DGs and manufacture of low cost jet powered micro
turbine gensets (MTGs). Our MTGs are positioned to
Innovative solution is lighter, smaller, burns just about any liquid or gas fuel replace diesel generators as the primary or backup
and breaks even compared with DGs after approximately 15 months power solution at cell sites, thanks to our superior
performance and reliability. Bladon’s MTGs are
It’s not often TowerXchange comes across a genuinely ultra quiet, clean and green, small and light, which
innovative alternative to a traditional diesel genset that is critical at shared cell sites.
provides primary or backup power to many emerging
market cell towers, but when we heard about Bladon Jet’s Jet engines aren’t new. This is a 70 year old
micro turbine gensets (MTG), we had to find out more! While technology, and is the power of choice at 40,000ft.
the MTG is cleaner and quieter than a traditional DG, with Our secret sauce is not so much a new technology
almost no maintenance requirements, what makes the MTG as a manufacturing methodology that enables
us to produce micro turbines economically in
particularly interesting to towercos is the fact that they are
volume. One of our most important manufacturing
more efficient and are one third the size of a DG, freeing up
techniques is a process to cut turbine blades from a
valuable space at shared cell sites.
single piece of material.

Keywords: Who’s Who, Energy, Opex Reduction, Off-Grid, Our units are about the size of a domestic fridge
Unreliable Grid, Solar, DG Runtime, Site Visits, Skilled freezer; much smaller than a diesel generator, yet
Stuart Kelly, Bladon Jets
Workforces, Rooftop, Shelters, RMS, Spare Parts, Bladon Jets they generate the same power. We’ve been able to
manufacture to a price point such that our MTGs
are commercially viable compared to reciprocating
Read this article to learn: diesel gensets.
< How Bladon Jets harnessed the power of choice at 40,000ft for static power solutions
< The size and weight advantages of MTGs over traditional DGs TowerXchange: How did your micro jet engines
< A low maintenance solution: no oil, no water, only one big moving part evolve as a solution for cell sites?
< The importance of an energy efficient solution that compliments your existing supply chain –
MTGs can run on almost any liquid or gas fuel Stuart Kelly, VP Market Development, Bladon Jets:
< Months to breakeven/crossover in different scenarios, compared with traditional DGs Tata became excited about our micro turbines
and invested via Jaguar Land Rover in 2010. The

214 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

first incarnation was actually in the Jaguar CX75
concept supercar, but the ancilliary application of
the technology was for static power solutions for
telecoms.

We are finalising our market entry strategy to sell

12kW MTGs into telecom. For us the towercos,
managed service providers and MNOs themselves
are all prospective clients.

TowerXchange: Which telecom markets are you

targeting and why?

Stuart Kelly, VP Market Development, Bladon Jets:

Given the Tata connection, an early market will be
India. The continent of Africa is also a key market
for Bladon’s products.

We’re going to the TowerXchange Meetup Africa

in Johannesburg to share Bladon’s vision with
African MNOs and towercos. With so many assets
changing ownership in Africa, there is a new focus
and financial drive to leverage tower assets harder.
When towers are bought, or being prepared for
sale, audits often reveal the assets aren’t operating
The small size of the MTG frees valuable space at cell sites
as efficiently as the owner might have thought.
But the new owners don’t want to create too much Our MTGs are a direct replacement for 2,000kg more of our MTG’s on the site as additional tenants
turbulence in the supply chain, so it’s important diesel gensets, which typically sit in a big cube at the are added.
that our solution compliments the existing energy bottom of the tower. Instead we use a cabinet that is
supply chain in developing markets. one third the size and a quarter the weight. Bladon’s TowerXchange: Tell us about your solution’s
MTG is cleaner, greener, quieter, and generates maintenance requirements.
TowerXchange: How small is “micro”? What are little or no vibration (which can be a particular
your size advantages over diesel gensets? advantage on rooftops where noise can be an issue). Stuart Kelly, VP Market Development, Bladon Jets:
Our size advantages mean there is more room for Micro jet engines are a low or no maintenance
Stuart Kelly, VP Market Development, Bladon Jets: the towerco or MNO to put additional kit or two or solution. Unlike a diesel reciprocating engine, there

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 215

 “
rebuild onsite. For lesser maintenance issues, Stuart Kelly, VP Market Development, Bladon Jets:
such as filter changes, the O&M subcontractor can There is no reliable or sustainable supply chain
readily maintain a stock of fuel and air filters – to support hydrogen or methane fuel in Africa
the technician simply shows up with an orange yet. As a technology that is hostile to the current
wrench, unscrews an orange bolt, and the process supply chain, the practical challenges of keeping
is like changing an ink cartridge on a printer. fuel cells running are prohibitive to embracing that
particular alternative energy solution in more than
in the highly unlikely event As well as reducing fuel and maintenance costs, perhaps 20% of the estate.
thieves are less inclined to steal our MTGs as there
of a turbine failure, our are few if any parts they can recycle. Let’s be honest, green power is not widely used
strategy is remove and replace, on cell sites. In India for example, eco-friendly
not rebuild onsite. For lesser Aspiring ESCOs that are currently in the business cell sites account for less than 1% of the estate,
of maintaining traditional diesel gensets have an but tower owners still want to migrate away from
maintenance issues, such as
filter changes... the process is
like changing an ink cartridge
on a printer
“ opportunity to profit handsomely by deploying
a more reliable solution like ours – their goal of
selling at a price per kWh rate becomes more
compelling.

Our MTG unit has robust telemetry built in, so you

the reciprocating diesel genset because of the
substantial energy and maintenance opex it incurs.
We don’t see our solution as an alternative to a
200sqm PV array; our solution is so much more
compact that the use cases differ significantly. Solar
isn’t the optimum alternate energy solution for all
need fewer field engineers as many settings can cell sites; even in Africa, sites don’t get good quality
be changed remotely. From the NOC you can see sunshine all the time, especially in high rise areas
if units are operating outside of their tolerances, with shadows. You can install solar panels on an
enabling preventive maintenance rather than urban rooftop, and find that six months later the
is no oil and no water in our solution. We have waiting for it to break. neighboring building has had five floors added! Our
just one big moving part, the turbine itself, which solution doesn’t succumb to such vagaries.
runs on air bearings with no liquid lubrication. Also, and not insignificant for the tower operator,
Maintenance is a key issue at remote sites that is the use of telemetry to know where the unit is Solar has to be a part of the future, but in the
might be a double digit hour drive on a lousy as well as having the inbuilt electronics to stop the context of telecom towers it’s not a killer app, it’s
road – the cost to get there can kill the TCO – so unit operating if moved without permission – the a point solution. Our MTGs can be used to smooth
a technology with the potential to dramatically same technology as a tracker system on a car. power from solar as well as replacing a chugging
reduce site visits can be very compelling. tractor engine based generator. When renewables
TowerXchange: Okay, so what are the work the MTG can become a part core part backup,
There is a very low skill requirement to maintain advantages of micro jet engines over other there are no startup issues even if it’s left idle for
our MTGs – in the highly unlikely event of a turbine alternate energy solutions such as fuel cells or some considerable time between use. The fuel will
failure, our strategy is remove and replace, not solar? contaminate before the genset has a problem!

216 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

But the important thing is that this is an evolution
Comparing the Bladon Jets MTG (using diesel fuel) to a traditional DG
not a revolution – the MTG can be adapted to any
local fuel supply resource. Bladon gensets, in
keeping with all turbine based solutions, run on a
wide range of fuels, including green alternatives
such as natural gas and biofuels as well as diesel
and kerosene. Bladon MTGs will also tolerate poor
quality or contaminated fuels including fuel with
relatively high water content.

months to payback
TowerXchange: How does the capital outlay for
your MTGs compare to traditional DGs, and
when does the Total Cost of Onwership (TCO)
crossover?

Stuart Kelly, VP Market Development, Bladon Jets:

The capital outlay for an MTG is currently slightly
higher than a quality diesel genset solution, but
the price difference is a double not triple digit
percentage.

“ this is an evolution, not a

revolution – the MTG can
be adapted to any local fuel
supply resource
“ Running for 12 hours a day in SSA in 30° heat then
within 15-19 months the TCO will crossover having
recovered the difference in capital outlay through
fuel and maintenance cost savings.

TowerXchange: How near are your MTGs for

telecom to being a market-ready solution?
we’re selecting forward thinking partners for a field
test of the first “off the line” production units later
this year.

We’ll be manufacturing in the UK, in Asia soon too,

and from the US in due course.

TowerXchange: What is the sweet spot in terms

Stuart Kelly, VP Market Development, Bladon Jets: of the load your solutions can support? How do
We go into production at the end of 2014. The first your product configurations differ for prime or
batch of MTGs have already been ordered, and standby power?

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 217

 “
MNOs need the credibility of boots on the ground
to provide after sales service, even with a low
maintenance solution such as ours.

The fact that it’s an exciting jet engine is only so interesting – what
matters is reducing fuel bills, and the ability to deploy it into the
field easier and cheaper than a regular diesel genset
“ We are targeting key managed service providers
on the front lines of tower builds, upgrades and
maintenance, with the objective of creating a
pipeline for thousands of unit sales.

TowerXchange: Finally, please sum up how you

would differentiate Bladon Jets from other cell
site energy solution providers.

Stuart Kelly, VP Market Development, Bladon Jets: Because our unit doesn’t de-rate over time, its Stuart Kelly, VP Market Development, Bladon
Both our prime and standby configurations deliver ability to deliver continuous power is stronger. Jets: We’ve taken a well known form of power
12kW or 15 KVA, with output options 230V AC or The MTG is a more reliable means of delivery of generation in the reciprocating engine, turned it on
120V. We also have a 48V DC output variant that consistent power than a conventional DG for a its head and married it with another established
telecom clients tend to like. We’re keen to keep multi-tenant site. technology in jet engines, then developed a
the costs of our standby units lower because they manufacturing process to bring to market an
run for less time, so they don’t need to be quite as If additional tenants are added beyond what one innovative solution with a lower TCO business case
efficient. For example, we don’t recuperate exhaust MTG can provide, the answer is to add a second for telecom tower operators.
heat, which also makes our standby solution even unit in a daisy chain. And if the power requirement
more compact. reduces again, our units are relatively easy to Micro jet engines are ultra reliable, super durable,
relocate to another tower. low maintenance, and generally have a TCO runway
TowerXchange: How do you ensure modularity in Africa and India from 9 to 19 months.
as power requirements increase with the Another critical consideration is that the MTG
addition of multiple tenants? can be in the order of twice as efficient as a The MTG is designed to support the current supply
reciprocating engine when running at part load. chain, which means our solutions can be easily
Stuart Kelly, VP Market Development, Bladon Jets: introduced with an expectation of a short term
Given that operators are trying to drive power TowerXchange: How do you bring Bladon Jets to payback.
consumption down, a new BTS might need 1kW market – do you sell direct or through channel
when the last model needed 2kW. At the moment partners? The fact that it’s an exciting jet engine is only so
the applications we see don’t consume more the interesting – what matters is reducing fuel bills,
2kW in total, so it should be possible to add a second Stuart Kelly, VP Market Development, Bladon Jets: and the ability to deploy it into the field easier and
tenant without upgrading the MTG. Our model is to sell through partners. Towercos and cheaper than a regular diesel genset

218 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Special Feature:

Rooftops, masts and

towers, part 5
TowerXchange spoke to former MTN GM of Network
Planning Lance Dickerson, who is now CEO of TIA
Telecom, for a rare insight into the quality control and
verification processes behind site audits, and where
the most common, and value destructive, deviations
are found between the asset register and physical
reality.

We also hear from our old friend Bhaskar Babu of

Ganges Internationale, who helps readers understand
how to strike a balance between the cost and volume
benefits of standardisation versus the need to
customise structures for different locations; how to
minimise the weight of rooftop structures; and the
benefits of tubular over angular towers.

Don’t miss:
220 TIA Telecom on how to audit your asset register to
improve the accuracy of valuations
226 Ganges Internationale on best practices in tower
design, manufacture and delivery logistics

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 219

How to audit your asset register TowerXchange: Please introduce yourself and
TIA Telecom – where do you fit in the telecoms
infrastructure ecosystem?
to improve the accuracy of valuations Lance Dickerson, CEO, TIA Telecom: TIA
How to ensure what you see in the asset register and what you see in the field originated, and we still play a big role in, the RF
optimisation business – this is where the core
are exactly the same
skills of our shareholders come from, and we
all have substantial experience with the major
TIA Telecom have audited over 15,000 cell sites in Africa, the operators and vendors. Personally, I have over 17
US and UK, and have recently been engaged by the leading years of experience at MTN, ten in South Africa,
cellular operator in Africa to conduct a group wide site, five in Nigeria and two years in Ghana. Whilst I
switch and facilities audit. TowerXchange spoke to TIA’S CEO was in Ghana I was instrumental in the tower deal
Lance Dickerson for a rare insight into the quality control between MTN Ghana and American Tower, where
and verification processes behind these audits, and where the I started to see the importance of robust asset
most common, and value destructive, deviations are found auditing to support tower transactions.
between the asset register and physical reality.
How TIA Telecom got into the business of auditing
Keywords: How to Guide, Lawyers & Advisors, Passive
passive infrastructure was through our background
Equipment, Active Equipment, Strategic Consultancy,
in RF optimisation. Until recently, we seemed to be
Valuation, Due Diligence, Fuel Security, Risk, Loading,
the only company that believed it was impossible
Foundations, Data Room, Bankability, Tax, Procurement,
to optimise a network without knowing what the
Site Visits, Site Surveys, Warehousing, Asset Register,
configuration of the infrastructure was. Accuracy
Masts & Towers, Asset Lifecycle Platform, Africa, TIA
is critical in RF optimisation, which has given rise
Lance Dickerson, CEO, TIA Telecom Telecom
to processes which ensure our data is correct, and
which can be easily expanded to audit the rest
of the equipment at a site using the same quality
Read this article to learn:
control process, ensuring that what you see in the
< What is the average level of deviation between an asset register and what you see in the field? asset register and what you see in the field are
And what are the implications for valuation? exactly the same.
< How inaccurate location information and leaving disused equipment on sites destroys value
< How TIA’s data fields are tailored to the requirements of buyer, seller and evaluator TIA Telecom still offer RF optimisation services,
< How the digitisation and geolocation of data at source enables a constant stream of data instead but now also offer asset audits all the way up to the
of one big block depth required for pre- and post tower transaction
site audits. Most operators have no verification or

220 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

quality control process, and the auditor is often
a semi-skilled worker, yet their word is taken as Client
gospel, and significant errors can creep into the
database. TIA Telecom are willing to guarantee
accuracy of our audit data, to the extent that in the
highly unlikely event of there being errors, we’ll
revisit the site at our expense. That reflects our
confidence in our processes to support the audit,
and our operator and towerco clients are welcome
to verify our data via third parties – it doesn’t take
them long to realise that they can trust our data to
be correct.

By eliminating the gap between the financial

representation of the network, the asset register,
and the physical reality of what is actually on
sites, TIA Telecom can enable new efficiencies,
effect change and drive accuracy in financial
and operational processes, providing sound
information on which to base customer service
improvements.

TowerXchange: What are your credentials in RFID or

barcode
auditing asset registers – can you tell us about
some example projects? TIA asset verification overview

Lance Dickerson, CEO, TIA Telecom: My team and and over 50 switching centres to audit the entire and relevance of the data we gather, which we
I have been auditing RF infrastructure, updating asset base. We are updating fixed asset registers, can give to the client to check and build their
planning databases and asset registers for 20 years, planning databases and O&M databases. We’re just confidence in what we do.
as TIA Telecom for the past five years. To date, TIA about to complete the first of 19 countries.
have audited more than 15,000 sites across Africa, TIA Telecom has established procedures to
and have also audited RF assets in the US and UK. We understand the history and reputation of data guarantee the accuracy of our information,
We recently secured a contract for a group wide in this industry is not good in terms of credibility including the digitisation and geolocation of
audit for the largest cellular operator in Africa. This and reliability, so we are happy to conduct a 20-40 information at the source, updating data from site
project will involve visiting over 20,000 BTS sites site proof of concept to show the speed, accuracy on a real time basis.

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 221

 “
on population density and spread are difficult to
come by.

We also conduct a visual analysis of the tower

and foundation, illustrated with photos. We also
provide information on the condition of assets,
critical for both financial reasons (depreciation
All data captured is subject to a rigorous verification process wherein and amoritisation) and for operational reasons, for
we capture the barcode/ serial number by scanning, take a picture, example we will record runtime on generator, and
and add user captured data, which is all fed into our verification
process in Johannesburg... We also conduct a visual analysis of the
tower and foundation, illustrated with photos. We also provide
information on the condition of assets
“ provide a condition assessment on each asset. Our
observations can also provide useful intel on the
security situation, for example it’s not unusual to
show up at a remote cell site to find a line of buckets
outside the perimeter fence, where diesel thieves
have used an A-frame ladder to climb over the
fence, passed buckets over, and sold stolen diesel
right outside the compound!

The RF part of the survey is of interest to both

TowerXchange: How do you audit a network to Our passive infrastructure audits provide a 100% MNOs and towercos, who want to know where
improve the accuracy of fixed asset registers? walk down of all the assets of most interest to equipment is on the tower, the load on the tower,
towercos, and our tablet app geolocates every and the space available. We’ll record all of the RF
Lance Dickerson, CEO, TIA Telecom: There are three asset in the field. We use a three pillar approach to configuration information, using antenna alignment
components of our auditing services, active assets, ensure data quality: All data captured is subject to tools to measure azimuth and tilt, recording the
passive assets and RF information. a rigorous verification process wherein we capture antenna types and models, and height above
the barcode/ serial number by scanning, take a ground. To give an example of the importance of
When we’re auditing active equipment, we’re picture, and add user captured data, which is all the verification process, if the tower climber has
looking at all equipment attached to network; fed into our verification process in Johannesburg taken a tilt reading with the meter upside down,
BTS, BTS cards, RNCs, BSCs et cetera. Once we’ve where the data fields are confirmed using the three the verifier can see from the photo of that reading,
determined which licenses and hardware are different sources of data. and the accompanying antenna photographs, that
activated in each site, that data can go back to the the meter is upside down and correct -3° to +3°.
operator and reveal insights such as “you’ve paid Photographs are a key component of allowing Because all the information is geolocated, digitised
for 10,000 EDGE licenses but are only using a little the client to visualise the site layout, surrounding and uploaded for each asset in real time (providing
over 5,000,” which can obviously yield considerable areas and potential coverage area of the site, there is coverage), disaster can be averted if the
savings. particularly in areas where up to date information tablet is dropped from the top of the tower!

222 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 “
Information is uploaded to our centralised be buying something that soon could be creating an
verification team and verified on the fly. If the impairment on their books, or that will cost them
contract allows us time, we’ll ask the auditing team significant amounts of money to “clean” the site up
to wait half an hour whilst we verify in case any and make it suitable for additional tenants.
data needs to be re-inputed, thus avoiding another
costly visit to the same site. The differences between the asset register and
an average 80% deviation physical reality are massive, and nobody should be
TowerXchange: What level of deviation have you between asset register and reality fooled into thinking that third world networks are
encountered between the asset register and what any different from first world networks. The level
doesn’t mean an 80% difference
was actually on sites?

Lance Dickerson, CEO, TIA Telecom: Within our RF

audits the lowest level of discrepancy we found was
80% (in South Africa), and the highest was 100% on
another network in Africa where the data on every
in valuation. The difference
between the asset register and the
audited value might be 30-40%
“ of deviation we found in the US and UK was very
similar to Africa.

TowerXchange: Given that TIA Telecom believes

the asset register can and should be 100%
accurate, yet most tower transactions take a
one of 256 sites was incorrect! sample of only 10% of sites, what is the cost and
time required to bridge the gap?
From an asset count point of view, errors over 80%
are not uncommon, but the average is lower, if point of view, is location. I’ve seen too many Lance Dickerson, CEO, TIA Telecom: The time taken
for no other reason than that in many cases there sites not in the same location as recorded in the to complete an audit is a function of the size of
would be records of an asset leaving a warehouse database, sometimes 1-1.5km from where they the project. For example, in West Africa we have
and, as long as the serial number matches and the thought they were! This obviously creates a big 30 teams auditing BTS sites, five more auditing
asset was dispatched to a site number, the asset issue from the point of view of the attractability switches, and we’re currently auditing upwards of
register is often more complete. of additional tenants, which is critical to towerco 50 sites per day, verifying at the same speed.
valuations.
I should emphasise that an average 80% deviation The size of a tower transaction audit should only be
between asset register and reality doesn’t mean We encounter a lot of old equipment, which limited by financial considerations, not by time. TIA
an 80% difference in valuation. The difference should’ve been written off, but which might have Telecom charge per site, so the quicker we can do it
between the asset register and the audited value is several years left on the books, still left on the site. the better for us.
often 30-40%, but when you get down to the level of We’ve found disused, heavy microwave dishes and
the serial number on the equipment, the deviation complete SDH transmission racks left onsite to In my opinion, extrapolating from a survey of
can be up to 80% or more. avoid writing them off, taking up valuable space. 10% of sites is an estimate and is not accurate,
We have even found whole dissembled towers, given the huge number of variables that exist from
One of the most important differences between and multiple disused generators on site! This is telecoms site to telecoms site, and any subsequent
asset register and physical reality, from a valuation critical for a tower transaction as towercos could deviation can have a significant impact on the

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 223

 “
so I think there’s a case for MNO’s to do it all up towerco, not necessarily representing either. As
front so investors can be more comfortable about such it helps to have people like EY who are often
what they’re getting for their money. While many called in to be the valuator.
of the audits TIA Telecom are undertaking for
MNOs are for their own planning and optimisation TIA Telecom are quite unique in that we drip-feed
I know of one example where, purposes, many are thinking about potential future our audit of the asset register on a daily basis,
following the initial pre-sale towerco deals, so it can be invaluable to get a good in to the new FAR, whereas usually the financial
audit and the first closing, feel for the potential future sale price of assets. auditors have to wait for the audit of several
the differential found was so The cost of an audit for a tower transaction is thousand sites to arrive at once, before they start
calculated in a similar way to an RF optimisation building the new FAR. This allows for earlier
substantial that US$20mn of
project. A significant amount of the cost is in getting activation of resources for the financial firm – less
potential revenue was lost. Once to the site. We can populate 100 fields of client- resources working for longer on a constant stream
this was picked up, the purchase defined information in around 30 minutes. There of data instead of a big block. This also reduces the
price was adjusted, but it made is a small premium to be paid for the accuracy of time from the first audit to finalisation significantly.
everything clumsy; it adversely the information we provide, but we justify that cost And at any time there is credibility of having so-
affected the revenue generated by
the MNO, the revenue generation
potential for the towerco, and it
cost considerable time and trust
“ in reduced time and risk. The speed of our process
allows us to audit quickly and efficiently – typically
1.8-2 sites per day per team, climbing and auditing
every site. We’re up to 2.5 sites per day in West
Africa. Our process is quicker and more efficient
than our competitors, which makes the valuation
many hundred sites audited and valued.

Data fields and types are agreed up front with

MNO, towerco and the financial firm, so our app
is customised to gather exactly what they expect,
in the format they want, from the field. Data is
process run of the mill – it doesn’t take months delivered digitally day to day with no import issues,
of pushing and pulling, and it frees MNOs and formatted and hooked up to fit Oracle or whichever
towercos to get on with the operational transition, database the client uses, enabling analysts to build
valuation and business case. I know of one example and creating shareholder value, instead of trying to their valuation on a daily basis. And it’s easy to
where, following the initial pre-sale audit and bed down infrastructure valuation. make corrections and adjustments on the fly,
the first closing, the differential found was so rather than waiting for the whole survey to be
substantial that US$20mn of potential revenue was TowerXchange: Talk to us about the handover complete before realising that you needed to add or
lost. Once this was picked up, the purchase price from your audit to the financial due diligence adjust a field.
was adjusted, but it made everything clumsy; it undertaken by companies such as your partners
adversely affected the revenue generated by the EY. From the outset we’ll also compare with the
MNO, the revenue generation potential for the existing fixed asset register so, for example, if
towerco, and it cost considerable time and trust. Lance Dickerson, CEO, TIA Telecom: In tower the operator’s asset register has very accurate
transactions, TIA are best suited to being an information on active equipment, that enables us
Eventually you’re going to need to audit everything, independent third party between the MNO and the to reduce attention to those areas, making efficient

224 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

delivery of numbers quicker. RFID. RFID becomes quite expensive, so you have to
be selective about what you track.
TowerXchange: How does TIA Telecom offer
these specialised services on an international TowerXchange: Finally, what differentiates TIA
basis – what capabilities sit ‘on the payroll’ and Telecom from other potential partners in asset
what is outsourced to partners? auditing?

Lance Dickerson, CEO, TIA Telecom: The Lance Dickerson, CEO, TIA Telecom: I believe we
verification work is done by TIA. We use our have seven points of differentiation:
specialist resources to audit switches and 1. The accuracy, and ability to guarantee the
warehouses, where equipment identification is accuracy, of our data
critical, and we’ll do the field work for proofs of 2. The digitisation and geolocation stamping of all
concept, but in general we outsource field work at data, photos and comments collected on site
BTS sites. 3. Our centralised verification, data storage
and processes: we have a dedicated team with
We partner with local rigging and construction the ability to verify 150 sites per day, from any
Visit the
companies who carry out the field work under operator or country
the management supervision of our project 4. Speed is on our side – we can achieve accuracy TowerXchange.com website
management resources. When inducting a at a speed of 2-2.5 sites per day in West Africa. In
new partner, we accompany them until we’re South Africa we audited 880 sites in 4 weeks < Access to the “Internet of People” in emerging
comfortable that the data they are providing is up 5. The completeness of our information; because market towers – a trust web of over 7,500 decision
to our standards. The three partners we use now, we structure our app up front, we can capture all makers in passive infrastructure
who allow us to cover SSA, are able to carry out relevant information for the MNO, towerco and < Independent analysis and commentaries on the

a range of work for us from asset audits and RF auditor prospects for tower transactions in selected
countries
optimisation to changing configurations onsite. 6. The data we collect improves the budgeting
< The latest industry emerging market tower industry
These are not the average auditors; they work on ability of the MNO or towerco, whether it be
news – BEFORE it’s published in the TowerXchange
networks all day every day, for example one of our network design or optimisation, and empowers
Journal, accessible 24/7 from desktop, tablet or
partners does all the network O&M for an MNO in decision makers to optimise purchasing, funding
mobile
Ghana. and distribution of equipment across Africa
< A comprehensive archive of TowerXchange’s
7. Verification for tax and regulatory purposes;
interviews and analyses, searchable by topic,
We’re pushing to get into the maintenance of fixed often during rollout, too much focus is placed on
country, company or grouped by category (e.g.
asset registers; offering an opportunity for MNOs to speed, and zero ratings on import duties may not
interviews or how to guides)
maintain their fixed asset registers through sample have been taken advantage of. While it’s not easy
< The latest news and registration information about
auditing, active asset audits which we can run to get value back in tax reconciliation processes, we TowerXchange’s Meetups.
daily to monthly, and the tracking of assets through give our clients the data to start!

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 225

Best practices in tower design, TowerXchange: How should MNOs and towercos
strike a balance between the cost and volume
benefits of standardisation versus the needs to
manufacture and delivery logistics customise structures for different environments
and wind loading?
How Ganges Internationale gets their high quality rooftops, masts and towers to
market quickly Bhaskar Babu, Head – Telecom and Structures,
Ganges Internationale: For larger towercos
standardised towers are the best option so that
Ganges Internationale is one of the largest tower
they can keep minimum records and have a back
manufacturers in India with 4000MT/month capacity,
up plan to move towers or strengthen the towers or
which equates to approximately 600 towers per month.
foundation whenever additional capacity is needed
They provide both tubular and angular towers for
in future. Also the standard towers produced in
telecom, as well as power transmission, substation and
bulk by manufacturers are available off the shelf
solar structures. Ganges has already supplied more
and can be offered at very attractive prices due to
than 45,000 towers in more than 30 countries in Asia,
bulk manufacturing.
Africa and the Middle East. Ganges products range
from 3mtr poles to 120mtr heavy duty MSC towers, site
Customised solution towers are good for cities
fencing, earthing materials, aviation lights, cable and
where aesthetics play a major role like palm trees et
paint materials.
cetera. However the cost of each customised tower
will be almost two to three times the cost of the
Keywords: Who’s Who, Passive Equipment, standard tower.
Construction, Capacity Enhancements, Loading,
Logistics, Rooftops, Masts & Towers, Shelters, Rollouts will be much faster using standard towers
Fencing, Asia, Africa, Myanmar, Ganges as the foundation design bank is provided by the
Bhaskar Babu, Head – Telecom and Structures,
Internationale tower designer for various soil conditions with clear
Ganges Internationale
foundation volumes which can be benchmarked
for cost control across the network. Customised
Read this article to learn: solutions need site specific estimations and can
< How to strike a balance between the cost and volume benefits of standardisation versus the need to be prone to local manipulations of foundation
customise structures for different locations volumes.
< How Ganges minimise lead time – an example from their support of MTC’s Myanmar rollout
< The benefits of tubular over angular towers Finally, logistics can be cheaper for standardised
< How to minimise the weight of rooftop structures towers which can be truncated to any height as
per RF requirements. Most towerscos and MNOs

226 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

like Bharti Airtel, MTN, America Tower and Indus
all have standardised towers across their network.
After we introduced Ramboll standard towers in
India, 80% of the rollout is using our standard tower
series.

Ganges has tied up with world’s best tower design

companies to provide the most cost effective
solutions using tubular and angular profiles as
per American, European and British codes. The
optimisation involves the best weight for the given
antenna loading, best sizes to fit in containers, best
foundation volumes to reduce the overall installed
tower cost. Future upgrades are also kept in mind
while designing the towers and foundations,
particularly for tower companies.

“ We are an ‘Export Star House’

so we can load containers in the
plant, seal them and send them
directly to a vessel in Chennai
which is a major port and has
TowerXchange: How do you minimise the lead
time between order and delivery? Can you
give an example based on your experiences in
Myanmar, where time to market is vital, yet
where import logistics can be challenging?
600 tower per month with backward integration of
tube manufacturing and two in house galvanising
plants. This enables us to achieve a two week
production lead time.

We are an ‘Export Star House’ so we can load

connections to all over the world.

We shipped 200 towers in four
weeks to Myanmar and delivered
them in two weeks
“ Bhaskar Babu, Head – Telecom and Structures,
Ganges Internationale: Since most of the countries
we export to operate in the wind speed range of
130 to 200kmph, and use common heights of 35
to 60mtrs (typically used in 80% of the network)
containers in the plant, seal them and send them
directly to a vessel in Chennai which is a major
port and has connections to all over the world. We
shipped 200 towers in four weeks to Myanmar and
delivered them in two weeks. We have been in the
we keep producing these standard tower series export business for the last 25 years so we give lot
which meet most towercos requirements with three of importance to making the documents clear so
tenants. Lots of our tower models are common for that the customer can clear the cargo without any
India, Africa and Myanmar and we keep producing problems.

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 227

 We deputise our engineers to the customer’s emerging markets?
warehouse to offload the containers and properly
handover all the materials to erection teams and Bhaskar Babu, Head – Telecom and Structures,
train them in civil and erection of towers. We did Ganges Internationale: We have developed roof
not face a single problem in installation of all our top towers with less wind forces using circular
supplied towers to Myanmar Tower Company hollow sections. This means they weigh less and are
(MTC). suitable to be mounted on weaker buildings.

TowerXchange: In terms of tower design, what We have also designed roof top poles in sizes 3,
are the advantages of tubular over angular 4, 6, 9 or 12 mtrs which can be distributed to all
towers? corners of the building instead of one location. For
a country like Myanmar, where most of the roofs
Bhaskar Babu, Head – Telecom and Structures, are slanting, we developed special poles which are
Ganges Internationale: Most steel lattice towers are connected to the truss members of the building.
produced with a tubular or angular profile. This is a common practice in Europe.

Due to their circular profile, tubular towers produce TowerXchange: Finally, please sum up how you
50% less drag for the wind compared to flat surface would differentiate Ganges from competitive
of 4 leg 90deg Angular towers. Tubular towers also tower manufacturers.
have improve buckling capacity. Hence the weight
of tubular towers can be drastically reduced. Apart Bhaskar Babu, Head – Telecom and Structures,
from this, foundation volumes are significantly Ganges Internationale: The basic differences
reduced as tubular towers generate much lower are Ganges’ high quality design with the best
foundation forces as wind resistance is lower. Due optimisation, our state of the art plant with CNC and
to developments in raw materials we can use high MIG welding machines and in house tube rolling
tensile tubes and high quality MIG welding, so we and galvanising plants with a high capacity. All this
can achieve much higher strength for the tower for will lead to a lower cost of towers to customers.
the given amount of steel used. Also our tubular
tower consists of 80% less parts compared to any Since Ganges are in port city with connections
4 Leg Angle bar towers, while the logistics and to all over the world, we can deliver at a much
erection of the tower is 40% faster. faster speed. With our professional management
and vast experience in building sites in the most
TowerXchange: How do you minimise the weight difficult environments, we provide lot of valued
of rooftop structures in the context of the limited added services to our customers which continues to
load-bearing capacity of many buildings in improve our customer satisfaction

228 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Special feature:

From RMS to ILM and Site

Management platforms, part nine

TowerXchange’s worldwide search for proven RMS and integrated

intelligence platforms fbrings us to the Cell Tower Manager
application from WebNMS, which integrates with their award-
winning M2M platform to create an holistic view of towers’
operating condition. We also revisit our friends at Infozech whose
CEO Ankur Lal proposes progressing beyond receiving a pile of
RMS data to getting real-time, integrated intelligence to enable the
right decision making for tower operations.

Over the 10 editions of TowerXchange, we’ve profiled 21 different

RMS, ILM, access control and Site Management System solution
providers. Here’s an index for your reference:

Accruent in issue 7 InfraSTAT in issue 6

Acsys in issue 4 Invendis in issue 4
AIO in issue 8 NAAP in issue 7
AKCP in issue 6 NeXsysOne issue 9
azeti in issue 8 Qowisio in issue 4
Broadnet in issue 3 Quintica in issue 4
Caryon in issue 8 Tarantula in issue 5
Galooli in issue 4 Telemisis in issue 3
HMS in issue 5 WebNMS in this issue
Inala in issue 3 Westell in issue 7
Infozech in issue 7

Download FREE back issues of the TowerXchange Journal

at www.towerxchange.com/publications

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 229

Leveraging M2M technology to TowerXchange: Please introduce Zohocorp and
WebMNS – what role do you play in the telecoms
infrastructure ecosystem?
get a complete picture of your Prabhu Ramachandran, Director, WebNMS:

operational condition ZOHO Corporation, founded in 1996, is the

company behind three great brands: Zoho.com,
A profile of Cell Tower Manager from WebNMS, a ready-to-implement ManageEngine, and WebNMS. WebNMS, the
RMS for telecoms Internet of Things (IoT) and the Telecom Network
Management Software (NMS) division of ZOHO
Introducing the award-winning WebNMS IoT/M2M platform Corp is a market leader in the Telecom Network
and the Cell Tower Manager application, which enables Management and IoT/M2M solutions space.  Our
MNOs and towercos to create an holistic view of their strong focus on research and innovation helps our
operating condition by tracking mains, generator and clients to stay ahead of technology curve.
battery power together with access control. Clear and simple
user interfaces powered by big data analytics provide a With over 15 years of experience in the network
comprehensive overview of performance, alarm monitoring management space, WebNMS offers an award-
winning IoT/M2M Platform and ready-to-deploy
and energy usage. To find out more, TowerXchange spoke to
IoT applications. The tailor-made IoT applications
Prabhu Ramachandran of WebNMS.
developed by WebNMS IoT Innovation Lab
Keywords: Who’s Who, Meetup Preview, Access Control, includes:
Monitoring & Management, Opex Reduction, Batteries, Fuel < ATM Site Manager
Security, Off-Grid, Unreliable Grid, DG Runtime KPIs, Site < Cell Tower Manager
Visits, NOC, RMS, Site Management System, Job Ticketing, Spare < Power Grid Monitoring
Parts, ZOHO Corporation, Web NMS < DCIM
Prabhu Ramachandran, Director, WebNMS
< Windmill Manager
< Solar Farm Manager
Read this article to learn: < Smart Home
< How the WebNMS platform has been proven at 25,000 deployments for 450 companies < Road Infrastructure Manager
< Developing Cell Tower Manager to address tower owners’ operational pain points
< Cutting opex by more than 50%, the carbon footprint by 35%, while improving asset utilisation by 98% The IoT/ M2M solutions are built over WebNMS
< Tracking and optimising the use of mains power, generator power, and battery power Framework, which is a highly scalable Telecom
< Leveraging the WebNMS Big Data module to mine complex real-time data for faster and better decision Network Management product deployed more
making capabilities than 25,000 times by telecom service providers
worldwide.

230 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

 “
The WebNMS M2M Platform has been declared status, video feeds, and access control events,
‘Best Application of  IOT’ at IOT & WSN Europe giving operators a complete picture of their
2014, ‘Best M2M Platform for Service Providers current operational condition.
2013’ at the M2M Evolution Conference, and also
recognised as an ‘Innovation in M2M’ at Aegis The easy to use client interface coupled with big
Graham Bell Awards 2013. WebNMS CTM is designed data analytics capabilities provide a clear picture
of the remote assets, their performance, alarm
to specifically address the
TowerXchange: For any readers who might be status, and energy usage of the telecom tower site,
unfamiliar with WebNMS, please tell us about
your existing customer base and how proven
the solution is with carriers and towercos
worldwide.
operators like fuel and power
pilferage, escalating operating
costs, and environmental
concerns
“
operational pain points of telecom along with maintaining a continuous watch on the
power input sources at the site, which is the major
concern at any cell tower.

WebNMS RMS keeps track of the three power

Prabhu Ramachandran, Director, WebNMS: In input sources: mains power, generator power, and
Telecom Network Management market, WebNMS battery power. It gives a comprehensive picture
has an impressive clientele base of more than 450 of the energy usage pattern, power availability,
customers, which includes leading telecom service power outages, duration of backup power level,
providers, network equipment providers, and Prabhu Ramachandran, Director, WebNMS: With top N power hungry devices, and generator fuel
other large enterprises worldwide. A selected list fading revenues and plateauing growth in the level.  Operators can even remotely switch the
of WebNMS customers includes Alcatel-Lucent, telecom industry, driving efficiencies in order to power source from generator to battery backup.
IBM, Nokia, Vodafone, Qualcomm, Cisco systems, save on operational costs seems to be the order of
AT&T, and more. the day for telcos globally. WebNMS RMS brings in transparency within
the supply chain. On many occasions inaccurate
Pertaining to the IoT market, we have a diverse WebNMS CTM is designed to specifically address alarms results in notifying the wrong vendor
portfolio of IoT applications and our customers the operational pain points of telecom operators and dispatching a field technician without prior
span across different industries like Banking, like fuel and power pilferage, escalating operating information on potential failure. WebNMS RMS
Telecom, Retail, Logistics, and more with costs, and environmental concerns. WebNMS Cell identifies the issue and notifies the right technician
deployments in India, the Middle East, Israel, Tower Manager (CTM) comprises of a RTU (Remote with the precise problem, so that he is equipped
Turkey, Australia, and Indonesia. Terminal Unit) and central monitoring software, with right repair parts. Operators are informed
which is built on a highly scalable WebNMS IoT when the fuel level of the generator needs to be
We are running Cell Tower Manager proof-of- Platform.  It is a centralised remote management refilled. This saves time, avoids expensive cell site
concept (POC) in three projects. solution that can monitor and control all installed visits, and SLA penalties.
base units at telecom tower sites. Clusters of
TowerXchange: What are the capabilities of sensors mounted on the devices feed back vital On an average WebNMS powered telecom site it is
your cell tower monitoring solution? statistics on sensor parameters, fuel level, battery possible to slash operating costs by more than 50%,

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 231

 “
carbon footprint by 35%, and we can improve asset intelligence in real-time and anticipate potential
utilisation by 98%. issues and can respond to them swiftly.

TowerXchange: Is your cell tower monitoring TowerXchange: What is the balance of

solution offered as a cloud based, hosted WebNMS’s business between sales to equipment
service or as an installed solution within the manufacturers to embed remote monitoring
WebNMS Cell Tower
customer’s NOC?

Prabhu Ramachandran, Director, WebNMS:

WebNMS Cell Tower Manager(CTM) is built over a
highly flexible platform that can support any type
of infrastructure. We address the specific needs
capabilities into their equipment, and direct
sales to operators and towercos?

Prabhu Ramachandran, Director, WebNMS: We

are trying to adopt a twofold approach. Primarily,
we will continue to endeavor and extend our
Manager is a distinctive,
ready-to-implement RMS for
the telecom operator built on
an API-rich platform
“
of our customers, whether it is a cloud, hosted relationship with telecom operators and help
service, or within their NOC, it is our customer’s them expand their services to enable additional
vote! revenue. This relieves the operators, helping to
overcome the challenges of escalating operating
TowerXchange: How can MNOs and tower costs, diminishing margins, and growing carbon WebNMS is already a cutting edge market leader
companies translate remote monitoring data footprint in maintaining the remote cell tower in the telecom network management solution
into actionable intelligence? sites. space with more than 25,000 global deployments.
It is plain sailing for us to provision unparalleled
Prabhu Ramachandran, Director, WebNMS: We Secondly, our focus will also be on providing scalability and seamless integration with tens of
live in a world where massive amount of data WebNMS remote monitoring solution (RMS) to thousands of cell tower sites.
is being generated at the speed of thought. The equipment manufacturers and telecom companies.
WebNMS Big Data module helps MNOs and Many telecom equipment manufacturers are WebNMS Cell Tower Manager is a distinctive,
telecom companies to mine complex real-time turning to embedding IoT applications into ready-to-implement RMS for the telecom operator
data and capitalise on hitherto-untapped business their hardware as a means to cost-effectively built on an API-rich platform. WebNMS IoT
opportunities. differentiate their product offerings in a highly Platform’s powerful development tools speed IoT
competitive marketplace. application development by facilitating developers
The Hadoop-based Big data module decodes the to effortlessly configure dozens of sensors,
structured and unstructured data flooding in from TowerXchange: Please sum up how you gateways, and RTUs via multiple communication
sensors, RTUs, and other gateways for faster and differentiate WebNMS and Cell Tower Manager protocols.   
better decision making capabilities. from other remote monitoring and network
management solutions. Adding to this, WebNMS also holds strong
With WebNMS business intelligence and analytics developer base across the globe with expertise on
tools, telecom operators can gain predictive Prabhu Ramachandran, Director, WebNMS: WebNMS IoT Platform and other solutions

232 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Improving Profitability
TowerXchange: Why have many RMS
deployments failed?

Go beyond receiving a pile of RMS data to getting real-time, integrated Ankur Lal, CEO, Infozech: Globally customers have
thought of Remote Monitoring Systems (RMS), as a
intelligence to enable the right decision making for tower operations
magic wand to solve these tracking challenges, and
have deployed them widely. However, the results
The telecom tower have left a lot to be desired. In the worst cases, RMS
industry has grown to has not even delivered consistent and complete
keep pace with the ever data to the server room. In the best cases, it has
delivered data that is too detailed to go beyond the
increasing customer
server room. At times this data provides minute-
base of operators across to-minute data on performance in relation to
the world. The absence operational parameters, and alarms on exceptions.
of real-time tracking of This can be effective for day to day tracking of the
equipment and site. However this data needs to be
passive infrastructure,
synchronised with other related data such as people,
including people, visits, fuel and grid supply, and viewed in a holistic
assets and energy, has manner to bring about financial gains. This is what
created a demand for a iTower provides.

comprehensive tower
TowerXchange: How can we ensure this valuable
Infozech CEO Ankur Lal (Centre) receiving an Economic Times award management tool. data makes it from the server room to the CFO’s
balance sheet?
Keywords: Who’s Who, Meetup Preview, Access Control, Monitoring & Management, O&M, Opex Reduction,
Batteries, Fuel Security, Uptime, ROI, DG Runtime, KPIs, Change Management, Site Visits, NOC, Asset Register, Ankur Lal, CEO, Infozech: In all the implementations
RMS, Site Management System, Asset Lifecycle Platform, Job Ticketing, Africa, Asia, India, Infozech we have seen in the last five years, the action-ability
of the data left scope for improvement. And this
is what we need to address. We not only capture
and analyse the data but also ensure the actions
Read this article to learn: are taken by field staff at site. It is also used for
< Why the deployment of RMS has been unsuccessful on many past occasions enhancing operational effectiveness.  
< The need to deliver complete, consistent data to the server room
< The criticality of analysis and integration to make data actionable Infozech brings in field expertise of implementing
the “Discipline of Action” at over 150,000 tower sites

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 233

over the last five years. We have experts who have
brought about a change in Field Operations and
Energy Management. The iTower suite is a complete
offering which takes the data from the server room
and translates it to actionability on a ground level.
This enhances the bottom line of tower operators on
their balance sheet.

TowerXchange: What are the change

management implications of this increased level
of visibility and accountability?

Ankur Lal, CEO, Infozech: Infozech understands

that there is no single magic wand that brings about
sustainable change – it is a continuous journey of Maintaining 99.9% uptime of telecom towers plays supply and usage. Tower companies can further
automation, higher rigor of field processes and an a very important role in tower operations. iTower enhance their portfolio of carbon footprints with the
integrated analytics solution. Keeping this in view, has a comprehensive module to remotely monitor help of iETS.
it also provides a holistic picture to MNOs and the tower operations, called iROC. iROC provides an
towercos for a hybrid data collection, analysis and end-to-end solution, from data fetching, tracking, iAnalytics – Energy: Passive infrastructure providers
an action-ability path. monitoring to controlling and reporting. With the can now address their specific questions and
help of iROC, tower operators can manage day-to- improve their operational performance by taking
Infozech has been a leader in energy management day activities from a remote location and control the the right decisions enabled by online analytical
and collects energy data worth US$830 million critical events through real-time dashboards and processing. The data captured across various
annually. While we believe RMS and other systems reporting tools. iROC can integrate, aggregate and automated modes can be easily correlated and
are an important and necessary part to build correlate different vendor alarms or data on a single aggregated into the Infozech’s Analytics platform
integrated intelligence, they are not sufficient to platform. where is can be further processed for real-time
bring profitability. action and delivery.
iETS (Infozech’s Energy Tracking Service): The
TowerXchange: What does the iTower suite majority — about 30-40% — of running a tower’s iBill (Infozech’s Billing module): To run a tower
consist of? operations is its energy costs. iETS helps passive optimally, there are a high number of consumable
infrastructure providers to get access to real- items such as electricity, diesel and other elements.
Ankur Lal, CEO, Infozech: iTower has nine core time information about electricity usage and the iTower has a module called  iBill to ensure that all
modules. movement of fuel  Our iETS offering is closely the consumption related data can be integrated
supported by experts that train and encourage the for reliable billing. iBill helps tower operators to
iROC (Infozech’s Remote Operating Centre): field staff to adhere to the company’s rules of fuel automate their billing process by integrating all

234 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

vendors/ telecom companies thereby reducing module. iAccess provides a platform for tower
billing conflicts. Tower operators can easily access operators to securely access their sites and monitor
the power and fuel consumption data from a the site accessibility as well as the performance
centralised location along with the recovery of of guards and field personnel. This contributes to
energy usage. enhancing the life of different equipments located at
the tower sites.
iFIFO (Infozech’s Field Force): A critical part of
managing the telecom tower operations is the iAnalytics – Battery: helps in improving performance
field force. With iFIFO, tower operators can easily and life of a battery through continuous tracking,
monitor, track and schedule the field force, site monitoring and control. It includes reporting and
behavior, job-specific and routing data, which helps analysing various battery parameters which are
to improve field force and site operational efficiency. crucial for the functioning of a battery.

iAsset (Infozech’s Asset Management): iAsset enables TowerXchange: Finally, please sum up the role Are you looking for a new member
tower companies to understand the location and of Infozech in improving the profitability of the
type of asset present at the site. With the integration international tower industry. of staff with relevant experience
of site assets into a master database, iAsset allows in the emerging market telecom
users to keep a check and audit the site. Asset Ankur Lal, CEO, Infozech: Infozech has played a
tower industry?
movement activity can also be captured to keep major role in developing products and applications
a real-time tracking of assets. Health reports are that are helping to shape the Indian and
Get your job noticed by the best potential
generated to monitor the utilisation of remote assets. international tower industry. The industry faces
huge challenges such as inefficient tracking of candidates by advertising in TowerXchange
iMaintain (Infozech’s Maintenance Management): assets and resources, unavailability of relevant and journal and on our website and reach out to
iTower always keeps a check on maintenance integrated data, and inability to make sense of the over 5,500 of the most skilled individuals in
activities happening on the site through. iMaintain data coming in to make the right business decisions. the tower industry - TowerXchange is read by
helps operators to address the asset maintenance iTower addresses all these challenges with its suite CEOs, CTOs, CFOs, commercial, engineering,
issues effectively and efficiently by scheduling of products thus helping tower operators find the
operations and investment experts.
different maintenance (Preventive/Corrective/ right ways to improve their bottom lines
Predictive) activities and resolving critical events
through the incidence and theft management To see your advert here, contact Annabelle
Infozech can be found at booth 21 at the
feature. Mayhew on +44 (0)7423 512588 or email
TowerXchange Meetup Africa, taking place
on October 20 and 21 in Johannesburg. For [email protected]
iAccess (Infozech’s Access Management): Infozech’s more details, visit
belief in providing secure solutions for this industry
has resulted in the development of the iAccess
www.towerxchange.com/meetups/africa Tower Xchange

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 235

Special feature:

Health, safety and

security, part two
We welcome Todd Schlekeway, Executive Director of
the National Association of Tower Erectors (NATE), for
his annual update to the TowerXchange community.
Todd calls attention to NATE’s Wireless Industry Safety
Task Force; their Manufacturing and Engineering
Solutions Working Group; their 100% Tie-Off
Awareness Campaign; and a National Wireless Training
Standard that is currently under development. Todd
also invites TowerXchange readers to attend the 20th
annual NATE UNITE Conference & Exposition on
February 23-26 in Florida.

Meanwhile, TowerXchange also caught up with fall

protection leaders Capital Safety discuss the Health
and Safety culture in Africa, the key components of
PPE and the inadequacy of cage ladders compared to
permanently installed vertical life lines (which are
not only much safer, but which are a cheaper, lighter
alternative).

In this special feature:

237 NATE is the Industry Leader in Safety, Standards
and Education
240 Capital Safety on improving Health & Safety
practices for people working at height

Image courtesy of EMSS Consulting

236 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

NATE is the Industry Leader in Wireless Industry Safety Task Force

One of NATE’s top priorities is leading the

Safety, Standards and Education Wireless Industry Safety Task Force initiative. The
Wireless Industry Safety Task Force consists of
Latest on NATE’s Task Forces, Working Groups, 2015 event, and the 100% top safety and operations executives representing
Tie-Off 24/7 Awareness Campaign wireless carriers, tower owners, OEM’s, turnkey/
construction management firms and National
Italy, Jamaica, Puerto Rico, Romania, Saudi Arabia, Association of Tower Erectors (NATE). The mission
South Africa, Sweden, Trinidad and the United statement of the Task Force is to collaborate on
Arab Emirates. NATE member companies consist best practice solutions to achieve sustainable safety
of tower construction firms, general contractors, improvements in the industry.
tower owners, wireless carriers, manufacturers,
distributors and training companies. The Wireless Industry Safety Task Force consists
of the following participating companies and
NATE and TowerXchange are currently in organizations:
our second year of a collaborative marketing
agreement that has been beneficial to both Alcatel-Lucent, American Tower, AT&T, Bechtel,
organizations during this current cycle of rapid Black & Veatch, Crown Castle, Ericsson, General
expansion of wireless infrastructure deployments Dynamics, Goodman Networks, Jacobs, MasTec
around the world.  In May of 2014, NATE Network Solutions, Motorola Solutions, National
Chairwoman Pat Cipov and I had the opportunity Association of Tower Erectors, Nexius, Nokia
to participate in the TowerXchange Meetup Solutions and Networks, SAI  Communications,
Americas 2014 event in Orlando, Florida. During Samsung, SBA Communications Inc., Sprint,
this event, we had the unique experience of T-Mobile, U.S. Cellular, Velocitel, Verizon Wireless
engaging in several roundtable discussions with and WesTower Communications.
By Todd Schlekeway, Executive Director, NATE
top decision makers and stakeholders in the Latin
The National Association of Tower Erectors (NATE), American tower industry. The TowerXchange 100% Tie-Off 24/7 Awareness Campaign
a non-profit trade association in the wireless Meetup Americas 2014 event afforded us the
infrastructure industry, is the global leader in opportunity to learn about the unique challenges A major early initiative of the Wireless Industry
promoting safety, standards and education across associated with the tower industry in these Safety Task Force is the 100% Tie-Off 24/7
the diverse landscape of the tower industry. Today, international markets, as well as inform our Awareness Campaign. One of the primary
the Association boasts over 740 member companies friends about the professional resources and best issues identified as a result of the Task Force’s
from the United States, Australia, Bahamas, practice materials that is associated with a NATE collaborative efforts is the fact that many of the
Canada, Cayman Islands, China, Ghana, India, membership. tower-site accidents that compromise safety

XX | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 237

involve situations where the tower technician was not properly tied-off to the
structure. In order to educate industry stakeholders, the 100% Tie-Off 24/7
Awareness Campaign  involves a comprehensive grassroots approach that
involves the unveiling of public service announcements, paid advertising in
industry and mainstream publications, earned media efforts, a social media
component and collaboration with other industry organizations.

NATE has created a special section on our website devoted specifically to the
100% Tie-Off 24/7 Awareness Campaign. I would encourage TowerXchange
readers to visit http://natehome.com/100-tie-off-24-7 to watch the public
service announcements and access information designed to make tower
industry personnel and stakeholders aware of the standards and compliance
directives that govern fall protection.

National Wireless Training Standard

The growth in the industry has stimulated safety and quality issues resulting
in accidents, and tragically, some fatalities during the construction of wireless
sites. The Wireless Industry Safety Task Force is currently making significant
progress on establishing an industry-embraced National Wireless Training
Standard that will ultimately create a more qualified, skilled and safe tower
technician.  The training certifications for each worker will be reviewed
and verified with documentation and updated accordingly as the technician
goes through each level of certification outlined in the National Wireless
Training Standard. Our vision is that ALL of the wireless tower workforce will
eventually be trained to this new National Wireless Training Standard that is
currently under development.

Manufacturing and Engineering Solutions Working Group

As part of the Wireless Industry Safety Task Force, a Manufacturing

and Engineering Solutions Working Group was established to explore
manufacturing and engineering solutions to some of the safety hazards of
which the workforce currently is confronted. This working group is engaging A Wireless Industry Safety Task Force Initiative
with industry manufacturers and engineers to discuss what advancements

238 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | XX

Accelerate your sales cycle
and close your next major deal in emerging market towers
Advertise in the TowerXchange Journal, circulated to a highly targeted community of the 9,000+
most influential tower decision makers

1.4% 2.5%
5% 100 In which region are
4.4% Operator
Towerco
readers interested?
5.7% Energy equipment & ESCO
14.8% 80 SSA
33.7% Managed service/ C-level
6% turnkey infrastructure
CALA
39.8% VP, SVP or Dept Head 60
Static asset manufacturer MENA
Director-level
6.9% Strategic or legal advisor
19.7% Senior manager 40 North America
Active equipment or IBS 76%
7.2% Investor Middle management 59% Asia
RMS, ILM & access control 48%
20 40% Europe
11.7% Regulator or government 32%
8.8% 22%
Other 23.1%
9.1% 0

To book your advertisement, contact: Annabelle Mayhew | [email protected] | M. +44 (0) 7423 512588
can be made to fall protection equipment and
tower structures to help make the industry safer
for the challenges elevated workers are confronted
with on a daily basis.

One example of this effort includes the goal of

working with manufacturers to develop a “smart-
lanyard device” which would incorporate new
“smart” technology in order to ensure that if one
carabineer hook is disconnected, the other hook is
in “manual lock” so that the technician is tied-off at
all times when working at elevated heights.

NATE UNITE 2015 Invitation Conclusion

I would like to personally invite all international NATE values our partnership with TowerXchange
tower industry stakeholders to attend the 20th and appreciates the vital role the TowerXchange
Annual NATE UNITE 2015 Conference & Exposition community plays in providing a forum for
which will be held February 23-26, 2015 in Lake thought leaders in the emerging market tower
Buena Vista, Florida. This is the place to be if industry.  NATE is excited about the potential the
you are involved in our diverse industry as a future holds to continue enhance the awareness of
tower owner, carrier, general contractor, tower the Association across borders in the international
construction firm, tower climber, manufacturer, tower market
training company, media member or an industry
enthusiast! Visit NATE’s website at www.natehome. To contact a NATE representative, call
com to download the NATE UNITE 2015 Sponsor & (888) 882-5865 (U.S.), 605-882-5865, e-mail
Exhibitor Prospectus; view the Pre Show Planner; [email protected] or visit the NATE website
or to register to attend. at www.natehome.com

240 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 239

Improving Health & Safety TowerXchange: Please introduce yourself and
Capital Safety - what role do you play in the
telecoms infrastructure ecosystem?
practices for people working at height Denis Perotti, Export Director for Africa, Capital
A snapshot of fall protection leaders Capital Safety Safety: Capital Safety Group (CSG) as a worldwide
fall protection leader has been very active in
the Telecom market in Africa for more than a
Worldwide fall protection leaders
decade.  Providing expertise, site surveys, product
Capital Safety introduce us to the recommendations, training for working at height
key elements of a fall protection and incessantly improving the Health & Safety
plan, and the personal protective practices are the daily work of our team.
equipment necessary to ensure
tower climbers return home safely TowerXchange: How would you describe the
current culture and attitudes toward health
from every job.
and safety in Africa?

Denis Perotti, Export Director for Africa, Capital

Keywords: Who’s Who, How Safety: Health & Safety in Africa is improving,
to Guide, Steelwork, Passive but a lot has to be done in the future. The culture
Equipment, Construction, of Health & Safety is driven by international
companies (such as telecom operators) who are
Health & Safety, Skilled
pushing all contractors and partners to improve
Workforces, Masts & Towers, their safety consciousness.  Most of the time
Africa, Capital Safety Group local regulations and standards are quite poor
Denis Perotti, Export Director for Africa, Capital Safety but Capital Safety is a key actor in education and
mindset change of local players.

Read this article to learn: TowerXchange: How do you train individuals

/ how do you change cultural attitudes toward
< The Health & Safety culture in Africa
tower climbing and fall protection?
< The key components of a fall protection plan and PPE
< The inadequacy of cage ladders compared to permanently installed vertical life lines Denis Perotti, Export Director for Africa, Capital
< Global Health & Safety standards Safety: In the field, CSG is able to improve the
practices of Working at Height through:

240 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 241

< Fall protection awareness leaflets
< Working at height Seminars
< On site demonstration
< Risk analysis assessment
< Wide offer of training programs for both
professional trainers and people working at
height

TowerXchange: What are the key

components of a fall protection plan in
telecommunications?

Denis Perotti, Export Director for Africa, Capital

Safety: The fall protection plan consists of
evaluating the risk and to proposing the adequate
equipment (Personal Protective Equipment
commonly called PPE).

TowerXchange: What does comprehensive

Personal Protective Equipment include, and
what does it cost?

Denis Perotti, Export Director for Africa, Capital

Safety: An anchorage point, a full body harness,
connectors and a deceleration device are the key
components of a fall protection system in order to
bring every worker safe at home every day.

Most of the tower climbers are using a full body

harness and a twin shock absorbing lanyard but
a temporary or permanently installed Vertical
Lifeline offers the best protection against a fall. TowerXchange: What safety considerations Denis Perotti, Export Director for Africa, Capital
should ideally be factored into the design of Safety: Until today we see new towers equipped
The cost of such a solution depends on the quality telecom towers? How can these features be with a cage ladder configuration. We have to say
of the materials and the lengths of the system. “retrofitted” at legacy towers? that the cage ladder was created in the 1950’s and

242 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 241

 does not offer any safety in case of fall. Moreover including training.
the cage ladder does not allow the set up of a
rescue plan after a fall. TowerXchange: Finally, please sum up how you
would differentiate Capital Safety’s products
In addition a cage ladder costs twice as much and services from competitive fall protection
as a permanently installed vertical life line and manufacturers?
reduces the weight of the tower, offering a 100%
safe solution for the worker. Denis Perotti, Export Director for Africa,
Capital Safety: Innovation, reliability, expertise,
Any towers can be equipped with a fall protection experience (more than 50 years of existence) and
system. dedication to fall protection makes CSG unique in
the fall protection world.
TowerXchange: What are the global standards
applicable to fall protection, and could you In addition, all Capital Safety employees are
summarise the obligations they set out for committed with two words: passion and trust.
employers?
Passion because our engineers are able to
Denis Perotti, Export Director for Africa, Capital create new solutions, to work with end users, to
Safety: First of all each country or group of understand their requirements and to deliver the
countries follows its own standards (Osha-Ansi best in class product.  And all CSG employees are
in USA, CSA in Canada…). When we speak about dedicated to provide the best assistance on a daily
Africa we commonly refer to European Standards. basis in order to save lives.
If we refer to the European standard and
particularly to the European Directive 89/656/EEC Trust because today CSG is the only international
we can say in brief that : company specialised in fall protection all over
the world. With more than 20,000 references
< The employer has to provide adequate PPE to complying with all the international standards
the worker free of charge (OSHA – ANSI, CE - EN, …).
< The worker has to participate in the PPE
selection By the way CSG is offering a lot of unrivaled and
< The employer must provide to the worker unique solutions all over the world.
information about the risk and the conditions of
use of the PPE Finally, CSG is offering through its extensive
< The employer must provide adequate network of training centers access to education,
instructions concerning the use of the PPE, training and knowledge

242 | TowerXchange Issue 10 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 10 | 243

 Tower Xchange

© 2014 Site Seven Media Ltd Design by BLACKLIGHT Design Agency