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| TowerXchange Meetup MENA 2020 report | www.towerxchange.com/meetups/meetup-mena1

TowerXchange Meetup MENA 2020 Post Event Report

Key market insights and write-ups, attendee profiles and 2021 preview

www.towerchange.com


(Chairman) Charles GreenCEO, International DigitalInfrastructure Alliance

Zhiyong ZhangChairman & PresidentMiteno

Akhil GuptaChairmanBharti Infratel

Nat-sy MissamouSharing New Business Program Director, Orange

Terry RhodesFormer CEOEaton Towers

Arun KapurCo-FounderIrrawaddy Green Towers

Dagan KasavanaCEOPhoenix Tower International

Daniel Lee Managing DirectorIntrepid Advisory Partners

Suresh SidhuFormer CEOedotco Group Sdn Bhd

Rhys PhillipChief ExecutiveCornerstone

Ted ZhongFounder & CEO,Astro Tower

Nobel TanihahaPresident DirectorPT SOLUSI TUNAS PRATAMA (STP)

Umang DasChief MentorAmerican Tower

Gilles KuntzCEOTowerCo of Madagascar

Maria ScottiCEOTorrecom

Tilak Raj DuaDirector GeneralTAIPA

Dimitris LiouliasGM of StrategySaudi Telecom Company

Kurt BagwellPresident InternationalSBA Communications

Jim EisensteinChairman & CEOGrupo TorreSur

Bimal DayalCEOIndus Towers

Mohammed AlhakbaniCEOTAWAL

Marc GanziManaging Partner & InvestmentCommittee Member, Digital ColonyCEO, Digital Bridge Holdings

Peter BendallSenior Vice PresidentMacquarie Infrastructure & Real Assets

Jeffrey EldredgePartnerVinson & Elkins RLLP

Enda HardimanManaging PartnerHardiman Telecommunications Ltd.

Adeel BajwaCEODhabi Group

Scott CoatesCEOWireless Infrastructure Group

Carlo RamellaCOO, EI Towersand Chairman, Towertel

Steve WeissCFOProtelindo

Toni BrunetCorporate & Public Affairs Director,Cellnex Telecom

Manish KasliwalVP and Chief Business Development Officer, C&SE Asia, American Tower

Kash PandyaCEOHelios Towers

Carlos KatsuyaChief Investment Officer & Head TMT Asia, Europe and MENA, International Finance Corporation (IFC)

Inder BajajAdvisor, Helios Investment Partners & former CEOHTN Towers

Alessandro RavagnoloPrincipalAnalysys Mason

Our informal network of advisors

About TowerXchange

Founded in 2012, TowerXchange is your independent community for operators, towercos, investors and suppliers interested in EMEA, CALA and Asian towers. We’re a community of practitioners formed to promote and accelerate infrastructure sharing. TowerXchange don’t build, operate or invest in towers; we’re a neutral community host and commentator on telecoms infrastructure.

TowerXchange produces a monthly newsletter and quarterly journal, both available to subscribers, which cover industry news and provide deep insights into telecoms infrastructure worldwide. We also host annual Meetups on each of five continents to bring together the leading tower industry stakeholders.

TowerXchange was founded by Kieron Osmotherly, a TMT community host and events organiser with 21 years’ experience, and is governed with the support and advice of the TowerXchange “Inner Circle” – an informal network of advisors. TowerXchange was acquired by Euromoney Institutional Investor PLC on December 1, 2017<

TowerXchange’s “Inner Circle”

© 2020 TowerXchange, a division of Euromoney Global Limited. 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.


Foreword

Dear colleagues,

Thank you once again for attending the second annual TowerXchange Meetup MENA.

As the tower market in MENA opens for business, key global and regional players including TAWAL, IHS Towers, Helios Towers, American Tower, edotco, Oman Tower Company, Enfrashare, Etisalat, Turkcell and many more, joined the exclusive opportunity to meet, network and discuss prominent topics in the development of the Middle East and North Africa tower landscape.

Discussions were wide-ranging across the two days of panels and interactive roundtables. This year we heard more from MNOs and towercos on the

development of 5G and smart cities; the interest in rural connectivity as towercos and MNOs seek out new markets to serve; the growth potential of key North African markets Egypt and Morocco. The Meetup also explored longer-term opportunities and goals including fibre investment, active management, the establishment of ESCOs as major players in the sector and new innovations. We also hosted a number of closed-door sessions in pursuit of TowerXchange’s mission of bringing greater coordination and information sharing to this great industry.

Within days of the Meetup the region witnessed a critical turning point with the first sale and leaseback deal of Zain’s Kuwaiti towers to IHS Towers. With growing ambitions of international

towercos to invest in this fresh territory, it is highly likely that the region will see more SLB, M&A and carve-out activity in the months and years ahead. Luckily the region does not need to re-invent the wheel and lessons learned elsewhere in the world are now being applied and adapted to the unique challenges of the Middle East and North Africa.

I hope you had a productive meeting and that these excerpts and highlights will be helpful to you.

Aninder KheraHead of Research, Middle East & North Africa TowerXchange


Contents TowerXchange Meetup MENA 20205 Attending Companies

6 At a glance

7 Post-event summary

50 Sponsor profiles

TowerXchange’s analysis of the MENA tower industry12 Exclusive TAWAL interview

16 IHS Towers/Zain deal analysis

20 MENA tower investments

24 North Africa

28 5G in MENA

33 Smart cities

37 Rural connectivity

41 ESCO market update

48 Network efficiencies

TowerXchange Meetup MENA 2021 exhibition preview58 Bladon

63 EnerSys

66 Enetek Power

69 Himoinsa

72 IPT PowerTech

75 Polar Power Inc

80 SerEnergy

57-82

12-52

5-11


Who attended TowerXchange Meetup MENA? Restricted to Director-level or higher executives, TowerXchange Meetups assemble the most influential stakeholders in the Middle East and North African tower industry. Here are the companies that attended in 2020:

MNOs and towercosAmerican TowerAsia Consultancy GroupAWAL TelecomedotcoEnfrashareEtisalatHelios TowersHOI-MEAIHS Holding LimitediSON TowerJazzOman Tower CompanyParadigm InfrastructureRussian TowersService-Telecom LLCSmart East AfricaTASC TowersTAWALTurk TelekomTurkcell

ESCOs and managed service providersAbbott TechnologiesACESAl-BABTAIN LeBLANC GroupAssociated Technologies Pvt Ltdieng GroupIPT PowerTech Group

Salasar Techno Engineering LtdShabakkat

AdvisorsAnalysys Mason Pte LimitedDelmecDelta PartnersHardiman TelecommunicationsInternational Digital Infrastructure AllianceNorconsult TelematicsRambollStrategy&uirtus.oneVinson & Elkins RLLP

Data Collection & Utilisation Acsys International LtdAsentriaTarantulaRed Mountain ScientificSitetrackerNEXSYS-ONEInfozechITD / ClickOnSiteInvendis Technologies India Pvt. LtdSera4Zinier

Energy equipment providers

Al Sharif Group

Ascot Industrial

AuBren DAQS Europe

AUSONIA

Bladon Micro Turbine

Byrne Equipment Rental

Caterpillar

Clear Blue Technologies

EnerSys

Enetek Power

GRIDSERVE

HIMOINSA

Intelux

Jubaili Bros

Narada Power Source

NorthStar Battery

Polar Power Inc

SerEnergy

Teksan Generator

TSS

Vertiv

Investors

Citigroup Global Markets

Dawood Hercules

International Finance Corporation

Engro Corporation Limited

Mitsui

Wendel

OEM

Ericsson

Huawei Technologies Co. Ltd

Satellite and active equipment

Intelsat

Radio Evolution Sweden AB

Vihaan Networks Limited

Static assets and accessories

Advanced Metal Structures

Anu Structurals

Cepas Gonvarri Industries

Jag Rattan Daan Singh & Co

Metalogalva

Mitas Telecom Systems Inc

Primegate

HB Fuller Middle East FZE

Regulators

Bahrain Telecommunications Regulatory

Authority

LASMIRA


TowerXchange Meetup MENA 2020 at a glance

A packed out agenda and interactive sessions including:

Sponsors and exhibitors benefitted from:

Towercos 31%Energy equipment providers 18%Advisory and investors 15%ESCOs and MSPs 9%MNOs 8%

Data collection and utilisation 8%Static assets and accessories 6%OEM, satellite and active equipment 3%Regulator 2%

Interviews & exposure in 200 printed special

edition books

4 invitation-only closed-door

sessions

1:2buy-side:

sell-side ratio

Exclusivepre-event briefings

and access

Branding to 210 attendees over

two days

23Interactive roundtable

discussions

4Closed-door

sessions

47Speakers

8Panel

discussions

1Networking

dinner

Industry breakdown Seniority breakdown

C-level - 30%

VP/SVP - 8%

Director - 26%

Manager - 14%

Associate, other - 5%

Head - 17%


Keywords: 5G rollout, Afghanistan, Active Infrasharing, Build-to-Suit, Camouflage, Egypt, ESCOs, Hybrid Power, MENA, Morocco, MNOs, Meetup, Middle East, News, North Africa, Oman, Pakistan, Research, Saudi Arabia, Towercos, Carve-out, Regulation

TowerXchange MeetupMENA 2020 post-event summaryInsights from the region’s only event focussed on telecom infrastructure

If TowerXchange Meetup MENA 2019 helped lay the groundwork for the tower industry to take root in the Middle East and North Africa, then the 2020 edition of the event saw seedlings breaking the surface as the professionalisation of infrastructure sharing had begun.

It is almost axiomatic to note that MENA is a diverse region, home to MNOs that are among the most financially robust in the world, pioneering the rollout of 5G to a relatively wealthy subscriber base, but also including some emerging markets with sub US$3 ARPUs, where 3G rollout is not yet complete.

Historically it has proved difficult to close tower transactions in MENA, with several processes abandoned for financial or regulatory reasons. A year ago, towercos owned and operated less than 1% of MENA’s 275,000+ towers. While that figure remains modest at 6% today, several towercos are poised to play a critical role in the consolidation and expansion of MENA communications infrastructure.

The separation of TAWAL from stc continues apace. While wave one of the project will focus ingesting assets, capturing pent up demand for co-location, and build-to-suit, TAWAL is already acutely attentive to opportunities to provide connectivity in Mega Projects, and hinting at an appetite for opportunities outside the Kingdom of Saudi Arabia (KSA). The impression this commentator was left of TAWAL is that their impressive management team is keen to listen and learn from both their peers

Read this article to learn:< Key emerging themes from TowerXchange Meetup MENA 2020

< Developments in key MENA regions

< Timeline of MENA tower transactions

< The future of the MENA tower market

Senior executives from the MENA telecoms industry gathered earlier this year on the 28 - 29 January in Dubai for the second annual TowerXchange Meetup MENA 2020. Key discussions ranged from the role of towercos and MNOS in the evolution of 5G to the viability and attractiveness of the towerco model in the North African region, with industry experts sharing their know-how and insight on key challenges facing this evolving region. The Meetup included representatives from the regions first carve-out towerco TAWAL as well as key significant players, IHS Towers, Oman Tower Company, Helios Towers, American Tower, Etisalat, Turkcell and many more. We share a summary of the main topics, themes and market developments from this exclusive meetup.


at other tower companies, and particularly keen to earn the trust of the MNOs in the region as a truly independent, non-discriminate business partner.

One of the world’s fastest growing and most respected towercos, IHS retains appetite and enthusiasm for opportunities in the Middle East and North Africa and, as one of the founding members of the International Digital Infrastructure Alliance, is focusing on dialogues to navigate the challenging regulatory landscape. There was a buzz in the corridors anticipating that IHS’s first buy and leaseback transaction in MENA would be confirmed shortly after the event. And to that effect, on 12 February 2020, further to receiving regulatory

approval from the Communication and Information Technology Regulatory Authority (CITRA) and support from Kuwait Direct Investment Promotion Authority (KDIPA), global leading international towerco IHS Towers completed the sale and lease back deal of 1,620 telecommunication towers from mobile network operator Zain in Kuwait.

The transaction marks the first large scale sale and leaseback (SLB) tower transaction in the Middle East by a mobile network operator to a pureplay independent towerco.

Oman Tower Company impressed participants with a combination of humility – it remains early

days for the joint venture towerco – but also their potential, with MSAs secured with both Oman’s existing MNOs and with soon-to-launch Vodafone Oman in Q2 of this year. OTC are expecting to be heavily involved in the deployment of ~4,400 5G base stations, some on existing sites, many on new sites. OTC is currently in talks to take further sites from Omantel and Ooredoo. It was evidently clear that the new towerco has big ambitions for organic growth and we can expect OTC to acquire more portfolios in the next three to six years.

Much of the discussion focused on 5G as a driver for the professionalisation of infrastructure sharing. From 5G forcing the upgrade of tower structures

A history of tower transactions, joint ventures and towerco activity in MENA

2010

2016

2011

2017 2017 2017 2017 2019 2020

2014 2016 2016 2016

Bahrain & Jordan: Batelco explore the sale

of tower portfolios

Saudi Arabia: Zain and TASC

agree tower sale

Saudi Arabia: Saudi Telecom Company and

Mobily explore tower JV

Saudi Arabia: STC acquire GO’s

towers

Pakistan: edotco acquire

Tanzanite

2015

Egypt: Mobinil and Orange agree

tower sale

Pakistan: Jazz and edotco agree

tower sale

Kuwait: Zain and IHS Towers agree

tower sale

Oman:Oman Tower

Company established

Saudi Arabia: Zain and IHS Towers

agree tower sale

Iran: Fanasia commence commercial

operations

Saudi Arabia: Zain and Mobily commence tower

sale processes

Algeria: Djezzy explore tower sale

options

Saudi Arabia: Saudi Telecom Company and Mobily re-

open tower JV discussions

Cancelled Cancelled

Cancelled Cancelled

Mobily process cancelledAbandoned Active

Deal closed Active

2019

Saudi Arabia:STC establish

TAWAL

ActiveDeal closed Pending

Abandoned Abandoned

Cancelled


and power systems, providing a natural window for the emergence of towercos, to the role of towercos in smart cities and Mega Projects, the next generation mobile network is giving the MENA tower industry an injection of momentum. Towercos’ focus on macro sites will diminish, with large macro sites becoming one part of a broader suite of products, including street furniture and an increased emphasis on small cells and DAS/DIS, and which may expand so far as to see towercos exploring opportunities in fibre – particularly last mile fibre to the tower. Helios Towers revealed that they already had edge data centres up and running.

By country, headlines included:

KSA< While nothing was said with a microphone, don’t preclude the possibility of the Zain and Mobily towers coming to market either through another crack at a sale and leaseback, or in partnership with TAWAL.< TAWAL have ambitions to increasing their scalability both organically and inorganically with regional aspirations outside of Saudi. < KSA is spearheading 5G rollout with the largest deployment of 5G operationally in the region. More than 2,000-3,000 5G sites are active and rollout is predicted to accelerate in 2020. < There is significant momentum in gaining alignment between municipalities and telcos, mostly driven by the regulator CITC.


Egypt< stc’s acquisition of Vodafone Egypt may further alter a landscape that looks increasingly attractive to build-to-suit.< In terms of inorganic growth opportunities, where once towercos perhaps had reservations about tackling the rooftop-rich site portfolio in the country (~40% rooftops compared to ~15% in the rest of Africa), now there is appetite for all site typologies.< Resolution of the subsidy of diesel prices remains the number one challenge to closing ESCO agreements in Egypt, with RFQs coming out of Etisalat Misr and Orange Egypt

Morocco< Interest from IHS and other international towercos in this country, which is regarded as one of the most business friendly in the North African countries.< No regulatory hurdles as such presented in the region, more so the need to break into the market with support from local partners. < Orange and Vodafone will be the key drivers of change in this market.< Morocco has significantly more available capital than SSA markets, which will play a key factor in terms of potential pricing of SLBs, or BTS rollouts.

Pakistan< The tower industry in Pakistan continues to flourish, with edotco and Enfrashare each building several hundred sites per year, joined by some impressive independent developers


including Associated Technologies, AWAL and other independent developers.< Stakeholders seem increasingly bullish that 10,000 Jazz towers will finally trade this year, while rumours persist that Ufone will bring their towers to market.< Expect an announcement soon of Pakistan’s first substantial ESCO proof of concept.

Oman< Oman Tower Company set to change the competitive landscape with ambitions growth plans. < Oman Satellite Company is launching in the next 2/3 years will provide new opportunities for existing and new players. < Plenty of tender opportunities for new and existing vendors to build relationships with OTC in areas of O&M, site security, tower strengthening and hybrid solutions. < OTC is involved in an ESCO tender with Omantel and Ooredoo for 200 sites.

Afghanistan< Country risk and sub US$3 ARPUs continue to hinder investment in communications infrastructure.< Active sharing is mooted between the country’s MNOs< Towerco Asia Consultancy Group are focusing efforts to become a national fibre provider. Their strategy is to provide internet to the country, delivering real 3G and real 4G. In connection with digital TV station and fibre to the home (FTTH), within next two years ACG is seeking to deploy a datacentre for cloud services.

Conversations about Kuwait were largely confined to corridors in anticipation of a landmark deal closing imminently, which as expected has come to fruition. We eagerly await the transformation IHS Kuwait will bring to this region.

Much interest and discussion sided on the topic of carve-outs and whether TAWAL is a blueprint for other MNO carve-outs? This begs the question; are we going to see more carve-outs in the region? Will MNOs geo-clone their European carve-out strategy into other regions in which they operate? This remains yet to be seen. The signs are notable that MNOs are eager to find value creation strategies and are moving on from being a service-oriented technology-based business to one of creating value.

With discussions still centred on the challenges still prevalent to doing business in MENA. These varied from macro topics on good governance, having clear and defined regulation to political stability, to micro topics on developing solid relationships with MENA’s MNOs and towercos and developing win-win partnerships with municipalities.

Transformation of the MENA tower market to date should be celebrated with modesty as a lot of work remains in order for the market to fully embrace the international towerco model. With ambitious BTS growth plans set out for both towercos and MNOs, as well as new entrant IHS in Kuwait, we expect to see promising development in the coming twelve months in this new emerging market<

An Company

Thanks to returning sponsors that have already committed to our 2021 event

Interested in participating in TowerXchange Meetup MENA 2021? To discuss your attendance and opportunities available contact Sarah Kerr, Global Commercial Director at

[email protected] phone: +44 (0) 7714 775 700

mailto:skerr%40towerxchange.com


Keywords: 5G, Carve-out, C-Level Perspective, FTTH, In-building, Infrasharing, MNOs, Middle East, O&M, Regulation, On-Grid, Renewables, Small Cells, Saudi Arabia, stc, TAWAL, Towercos

Saudi’s leading towerco putsbest foot forward with a vision for efficiency and sustainability Exclusive interview with TAWAL’s CEO as newly formed towerco achieves operational independence

TowerXchange: How has the business model, operations and culture of TAWAL changed as you worked towards your April 2020 deadline for operational independence from stc?

Mohammad Alhakbani, CEO, TAWAL: First of all, thank you for the opportunity to share TAWAL’s journey towards becoming a leading regional towerco. While we discuss the future, I am glad to share that during the last 12 months, we have been able to achieve breakthrough milestones ahead of schedule to prepare for operational independence from stc.

We developed a detailed plan which identified all needed activities for TAWAL to achieve 100% self-sufficiency. I am proud to share that we have successfully launched fully autonomous TAWAL in April 2020, exiting all transitional services that stc was extending to TAWAL over the past year. By autonomous TAWAL, we mean that TAWAL is now 100% self-sufficient with its own independent board and governance structure, processes, operations, strategy and management team. Our relationship with our parent company stc remains strong from a pure client-service provider relationship, based on the signed Master Service Agreement (MSA).

In terms of organisational structure, we are now a team of 230 employees, all with very broad experience and backgrounds, coming from all three major local telecom operators, vendors, consultants, and towercos. Our culture remains that of a start-up with a very dynamic and fast-paced environment.

Read this article to learn:< Details on TAWAL’s independence from stc

< Towercos response to Covid-19 and its impact on business

< The introduction of iSupplier module in developing key supplier relationships

< Innovations and initiatives on green energy solutions

< Supporting project NEOM and the rollout of 5G

< TAWAL’s future vision, strategy and objectives

TAWAL inherited over 14,000 towercos from parent company stc in early 2019 - the largest transfer of tower assets to date in the MENA region. The primary focus began on assembling a quality team with their attention fast turning to increasing tenancy ratios, infrashing, 5G investment and green energy. TowerXchange speaks with Mohammad Alhakbani, CEO of TAWAL, to discuss how this newly formed business has successfully established itself as an independent towerco and to understand its strategic vision and ambitions for future growth.

Mohammad Alhakbani, CEO, TAWAL


TowerXchange: In 2019 you reported that just 10% of your sites had a second or third tenant. How successful have you been in meeting TAWAL’s aggressive targets to accelerate the adoption of infrastructure sharing?

Mohammad Alhakbani, CEO, TAWAL: The introduction of a neutral host towerco is relatively new to the KSA market, especially where the coverage of 4G networks exceeds 92% of the population. The market shift from the traditional approach of building single tenant networks to rendering services of an efficient neutral host provider is gaining momentum. As such, we have started adding new co-locations over the last few months and our tenancy ratio is in line with our target of 1.15 at this stage. We are already serving all the MNOs and other licensed operators that previously used to deal with stc. We have also signed a landmark agreement with ITC in November 2019 and have started delivering sites to our newest client.

A. How has your portfolio developed in terms of ground-based and rooftops since January 2020 to date? The majority of our new sites are ground-based/coverage sites.

B. Has the government supported any initiatives? The government through its regulatory body i.e. CITC has been extremely supportive in putting in place necessary tower related regulations and encouraging investments in such business.

C. How many companies are now tenants? All key licensed operators in KSA are our clients with more to come.

D. What is your current tenancy ratio? Our current tenancy ratio is 1.15

TowerXchange: How have you been able to use local partners to manufacture, install and maintain your towers? Has there been an opportunity for international suppliers to participate? Which areas are well served domestically, and which areas do you need more foreign involvement?

Mohammad Alhakbani, CEO, TAWAL: Since inception to date, TAWAL’s vendor partner policy is based on a healthy mix of both local and international partners. We are engaging with international partners for high-end solutions that will make our operations more robust and efficient. A good example is our ongoing partnership with Vertex to implement our tower management system, and Ericsson for operating our network. We are fully aligned with Saudi Vision 2030 to promote local content for services and products available in KSA, for example we are working with local partners to build and upgrade towers.

We have recently launched the iSupplier module and most of the leading domestic and international suppliers have already registered. All future RFPs will be routed through this module. Any potential

domestic or international supplier should in turn register for future opportunities of working together.

TowerXchange: What challenges or opportunities has Covid-19 presented for your business and how have you had to adapt? What do you think will be the long-term effect?

Mohammad Alhakbani, CEO, TAWAL: Without any doubt, the Covid-19 pandemic has impacted the way we operate. But as an agile organisation, we quickly reorganised and adapted. Whilst it has thrown many challenges, it has also opened the door for new opportunities. We can analyse the impact of the pandemic from two perspectives.

1. Market Impact: The pandemic has impacted almost all economies and most sectors. We are fortunate that the impact on the telecom sector has been relatively limited so far. Amid this pandemic, the telecom sector has emerged as a clear enabler which kept economies and people connected and ticking. The demand for more data and higher speeds is growing and we believe that the medium-long term outlook is bullish for the telecom sector. The pandemic has accelerated the need for high-speed 5G networks and once the situation stabilises, the MNOs may go for an aggressive roll-out of their 5G networks.

2. Business Operations Impact: Since we are a start-up, most of our processes and systems


are digital for the most part, and our migration from “work from office” to “work from home” was relatively seamless. One key challenge was to ensure our 24*7 TOC operations, which we were able to manage without any downtime. One quick action we undertook was establishing TOC at multiple locations to ensure continuous and uninterrupted monitoring of our network. Today, we are proud to announce that TAWAL during these times of crisis has been able to improve its PIN availability and has been enabling people to stay connected to their dear ones and work from home.

There were some key achievements in our process of automation and digitisation:< We quickly automated several of our manual processes.< We are adopting innovative technologies for better monitoring of our network.< We decentralised our processes to enable support field crews to operate with more autonomy.< We introduced digital signature as a means to legalise contract with landlords and site owners.

TowerXchange: What is TAWAL doing in terms of energy innovation and how much do you plan on investing in green energy in the short and long-term?

Mohammad Alhakbani, CEO, TAWAL: We have identified two main initiatives on diesel reduction and green energy solutions. Firstly, we have identified sites where the grid is not very far and

in turn, we are exerting our efforts and increasing our investment to connect these sites to the grid. Secondly, for sites which are far from the grid, we are looking for hybrid solutions (mix of solar/ DG/ Battery Banks) to reduce diesel consumption without compromising the PIN availability of these sites. We are already stress-testing the different combination of hybrid solutions and based on the outcome of this phase, it will be replicated across the off-grid sites. Apart from reducing diesel consumption by up to 30%, hybrid solutions will improve the lifetime of power generators as well. We believe that with the successful implementation of these two initiatives, we can reduce our diesel consumption substantially over the next 12-18 months.

TowerXchange: You are one of the first towercos born in the 5G-era, what lessons would you offer other towercos looking to support the rollout of 5G? For example, have you had to build capabilities in small cells or inbuilding solutions?

Mohammad Alhakbani, CEO, TAWAL: One key lesson for all telecom infrastructure providers is to understand “what business they are in”. Historically, it has been interpreted as building new towers, tower sharing and maintenance. However, we at TAWAL interpret it differently. We are in the business of “enabling our clients to roll-out their network at cheaper costs, at a faster pace and with higher availability”. This view has been actively

appreciated and resonated well with our clients. In the 5G era, clients increasingly expect towercos to augment their product portfolio and become more of a one-stop-shop for all services related to infrastructure. The key adjacent services which towercos are expected to offer are IBS, small cells, FTTT et cetera. TAWAL is already working towards building capabilities for these solutions.

< We recently obtained a IBS license and have started building our own capabilities to serve our customers.< On small cells and street furniture, we are working with clients and real estate developers to conduct a proof of concept (POC) and test the market. Since the technology is relatively new, we will use a pragmatic approach and build capabilities once the future needs for small cells becomes apparent.

TowerXchange: How do you envisage TAWAL will support project NEOM? What will be the role of towercos for street furniture, small cells and inbuilding solutions in helping develop smart cities?

Mohammad Alhakbani, CEO, TAWAL: Let me first explain how the newly developed cities, i.e. smart cities are changing the way network planning is done. Typically, the already developed cities had the inhabitants and the network planning done to serve these population clusters. However, in newly developed areas, network planning is embedded in the city masterplan with earmarked spots for


towers and network infrastructure. TAWAL is working with its MNO clients and newly developed smart cities like NEOM to build their network and make these cities investment ready and liveable.

The role of towercos in the development of smart cities will be to lead the building of a seamless network of towers, street furniture and small cells, next to IBS which can make way for investments in new-age businesses.

TowerXchange: As MENA’s largest towerco, can you tell us about your plans to expand into other Middle East and North Africa markets and how you assess which market is appropriate?

Mohammad Alhakbani, CEO, TAWAL: TAWAL celebrated recently its first year anniversary and there are strategic milestones yet to be achieved before expanding beyond the Kingdom. However, in the medium-term, TAWAL has an ambitious plan to grow both in scale (beyond KSA) and scope (beyond towers). In due time, we will be assessing different expansion strategies and identifying accordingly the markets that represent a strong opportunity and fit for TAWAL.

TowerXchange: Can you share your vision for how TAWAL will work with other towercos and MNOs as it matures into a major new player in the industry?

Mohammad Alhakbani, CEO, TAWAL: Our vision is to “become the leading regional ICT infrastructure

service provider”. To realise this vision, we have set ourselves three objectives:

1. Enable operators to enrich the communication needs of customers by accelerating the roll-out of future technologies (e.g. 5G, IoT) and the Vision 2030 Digital transformation.

2. Drive MNOs, the government and businesses to operate more effectively and cost-efficiently by enhancing co-location and realising operational efficiencies.

3. Make a positive impact on the local community and ensure environmental sustainability by contributing to community development and promoting renewable energies.

Our vision and objectives are the guiding stars for us. We will work with MNOs to roll out their network faster, more efficiently and with higher availability. With other towercos, we wish to partner to understand the common pain points of the industry and find joint solutions to eventually make this industry efficient and sustainable. Some of the common themes where we will try to work with other towercos and regulators will be:

< Sharing of technical knowledge in areas of mutual interest.< Providing inputs on strengthening the regulatory environment to improve infrastructure sharing, network roll-outs, et cetera.< Partnering on different sustainability initiatives

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Keywords: 5G, ARPU, Build-to-Suit, Capex, EBITDA, IHS Towers, Infrastructure Sharing, Kuwait, MENA,

MNOs, Middle East, Regulation, Sale & Leaseback, Saudi Arabia, TAWAL, Zain Group

Zain Kuwait signs US$130mn saleand leaseback deal with IHS TowersInternational towerco expands geographical footprint with new MENA region

Deal details

Zain began studying the potential to sell its tower portfolios back in 2015 and on 10 October 2017, Zain Kuwait announced that it had reached a deal with IHS Towers for the sale and leaseback of its tower portfolio in the country. Zain reportedly received 15 bids for their Kuwaiti portfolio. The operator undertook a rigorous processes to narrow this down to five shortlisted bidders before finally settling on the deal with IHS Towers.

In Q3 of 2019 IHS Towers announced a successful refinancing deal of its 2021 bond raising a record US$1.3bn, the largest issuance ever by an African corporate. The SLB deal with Zain is reported to have cost IHS US$130mn which roughly equates to $80,000 per site. When first announced, the deal was expected to be for US$165mn. When compared with previous SLB deals globally, price per tower is relatively low. However, the deal structure hints at a rational, sustainable leaseback rate which bodes well for mutual satisfaction and the potential for more deals in the region.

For Kuwait market leaders Zain, the tower sale has been motivated by the need to reduce opex and maximise operational efficiency in future lease terms, and the need to restructure balance sheets in the face of declining ARPU and the cost to rollout of 5G across the region. Zain has retained >100 sites and has sold only its passive physical infrastructure to IHS Kuwait, who will be responsible for owning, maintaining, managing, marketing and expanding the passive telecommunication infrastructure previously owned by the mobile network operator.

Read this article to learn:< Details of the deal between Zain and IHS

< Deal in the content of former failed transactions

< What the deal means for Kuwaiti market

< IHS’s ambitions for the MENA region

On 12 February 2020, further to receiving regulatory approval from the Communication and Information Technology Regulatory Authority (CITRA) and support from Kuwait Direct Investment Promotion Authority (KDIPA), global leading international towerco IHS Towers completed the sale and lease back deal of 1,620 telecommunication towers from mobile network operator Zain in Kuwait. The transaction marks the first large scale sale and leaseback (SLB) tower transaction in the Middle East by a mobile network operator to a pureplay independent towerco. A new operating company, called IHS Kuwait WLL (IHS Kuwait) has been formed by both parties, however IHS will own the majority of IHS Kuwait and will have operational control of the entity, while Zain will retain a minority interest.

Aninder Khera, Head of Research,Middle East & North Africa, TowerXchange


Zain Group revenues increased by 26% in 2019 to US$5.5bn, with net profit increasing by 10% to US$715mn, while EBITDA has increased by 40% to US$2.4bn. The commercial rollout of 5G commenced in 2019 in both Kuwait and Saudi Arabia by the operator and throughout 2019, Zain Group invested over $1bn in capex, predominantly in expansion of Fiber-to-the-Home (FTTH) infrastructure, spectrum fees, 4G upgrades and additional sites across its markets and 5G rollout investment. Zain’s Digital Strategy is driving both need for capital, and an increasing preference for a lean operating model.

Deal in context of prior failed transactions

Historically there have been a number of different factors which have held back the proliferation of sale and leaseback transactions and towerco activity across the MENA region. There has been no overriding financial pressure to monetise tower portfolios and many of MENA’s MNOs have focussed more heavily on improving and growing top line revenues than reducing costs. As such, the efficiencies generated by infrastructure sharing and outsourcing to towercos had not taken centre stage on board room tables. This may all be about to change, both due to declining ARPUs and the cost of 5G, and also because we have seen both the first landmark SLB, and the formation of the first carve-out towerco (stc’s TAWAL) in the region. Several MNOs in the region are also understood to be studying tower sales or carve outs closely, attracting the interest of towercos and investors in this hitherto untapped market.

Figure 1: IHS Towers’ tower MEA portfolio

Source: IHS Towers

Nigeria:16,466

Côte d’Ivoire:2,720

Kuwait:1,620

Cameroon:2,220

Zambia:1,728

Rwanda:868

We expect build-to-suit to play a significant role in IHS’

business model in the country


However a fundamental challenge remains the lack of clear regulatory frameworks for towercos and infrastructure sharing across many regions in the Middle East and North Africa. Kuwait may have become a benchmark for other countries in having a clear structure and the support of the regulator – which is critical to the success of further SLB and tower transactions in the region.

IHS setting up operations in MENA

It is evident that Zain choose IHS due to their operational experience in a range of diverse markets. Sam Darwish, Chairman and Group CEO at IHS recently told TowerXchange “Investing in the Middle East is another important step in our growth

Figure two: A timeline of tower transactions, joint ventures and towerco activity in MENA Source: TowerXchange

2010

2016

2011

2017 2017 2017 2017 2019 2020

2014 2016 2016 2016


of tower portfolios


agree tower sale




towers


Tanzanite

2015


tower sale


tower sale


tower sale

Oman:Oman Tower

Company established


agree tower sale


operations


sale processes


options



Cancelled Cancelled

Cancelled Cancelled


Deal closed Deal closedActive

2019


TAWAL

ActiveDeal closed

2020

Kuwait:Zain and IHS Towers

agree tower sale

Pending

Abandoned Abandoned

Cancelled

strategy to apply the expertise and capabilities that we have developed over the past 18 years to additional global markets.”

Given the success and expertise of IHS Towers on a global scale, the towerco is well position to share know-how and best practice with MNOs in the region. Replicating their success achieved in other markets in the MENA region will be key for the towerco. Sam Darwish, Chairman and Group CEO explained IHS will be introducing “Network Operating Centres to optimise solutions, radio-frequency planning teamwork with specific operators, as well as innovative tower solutions e.g. in-building solutions, street furniture antenna and camouflage towers in urban areas, the roll-out of

fibre to support MNO customers’ digital solutions and a myriad of green energy solutions”.

What does the deal mean for Kuwait?

There are three MNOs in the Kuwaiti market where intense price competition has driven data costs down drastically, putting pressure on the country’s operators. Decreasing ARPU has made justifying investment in rolling out new sites tough, with each MNO focussing on implementing cost optimisation initiatives to enable 5G roll-outs where mobile 5G-networks are imminent.

The entrance of a towerco will provide a more cost effective means to expand networks in a


market where infrastructure sharing has been limited to date. There are approximately 4,020 towers in the Kuwaiti market with significant parallel infrastructure existing. We expect build- to-suit (BTS) to play a significant role in IHS’ business model in the country. Sam Darwish Chairman and Group CEO, IHS recently told TowerXchange “the lessons we are bringing to this market first and foremost include helping MNOs become comfortable with the tower sharing model”.

Conclusion

Having reached and failed to overcome regulatory hurdles in Saudi Arabia, it would seem the wind has turned for IHS who look set to be a key player in the emerging MENA tower market. The independent towerco has worked hard to enter the Middle East region for some time and needless to say has invested a considerable amount of human resource and capital to get to this point.

As the roll-out of 5G services continues across

the MENA region, IHS are poised to help MNOs achieve their objectives. In a previous interview Sam Darwish informed TowerXchange “we are well-placed to serve the increasing demands of a tech-savvy, data hungry population.” This deal is not only a landmark moment for Kuwait and the MENA region but also for IHS in demonstrating their commitment to the region and solid growth in their global portfolio.

For Zain Group one can expect their tower divestment strategy to spread to other markets. The operator retains an appetite to monetise its Saudi sites and remains focused on its digital growth strategy. Vice-Chairman and Group CEO, Bader Al-Kharafi, Zain commented “Zain is mobilising resources to capitalise on the enormous opportunity that 5G technology provides, creating vast opportunities in the value chain proposition in numerous industries, especially with regard to Enterprise (B2B) services to government and businesses of all sizes. We believe 5G will push the telecom sector to a new and exciting phase of growth.”<

We are well-placed to serve the increasing demands of a

tech-savvy, data hungry population






Finding value in MENA tower investments Redefining the value proposition for tower investors across MENA and addressing the outlook for growth opportunities

Assessing potential tower transactions

With the MENA region being so diverse, opportunities for towercos naturally vary from country to country. Some countries enjoy a stable currency which make them attractive to long-term investors, while others are less economically and politically stable, which present exciting growth opportunities to investors who are more risk tolerant. Needless to say, different markets are attractive to different investors, with varying levels of interest from towercos.

As stated by Eric Crabtree from the International Finance Corporation (IFC), in larger MENA markets investors will begin by firstly assessing the macro environment such as currency stability and convertibility, secondly, explore and understand the management team and their ambitions for growth and thirdly, examine specific market factors, like how many healthy MNOs exist and will divestiture be approved by the regulator.

Expanding on this, our panel discussed the levels through which investors move to assess the opportunities for tower transactions in a particular market; how many mobile operators exist, how healthy are their balance sheets, what are their future growth plans and what does the management team look like? There are also the macro factors to take into account, including the current stability of the country, the regulatory environment and the scale of likely investment, given that build-to-suit is the most logical entry point in some markets for towerco investment.

Read this article to learn:< Opportunities in different markets

< The key value drivers for MENA investors

< Inhibitors to towerco investment and the lack of tower transactions

< The role of governments and regulators as drivers of change

< The future for growth in MENA towers

Keywords: Acquisition, Anchor Tenant, BTS, Carve-out, Citi, Co-location, Fibre, IFC, Investors, IDIA, iSON Towers, Infrastructure Sharing, MNOs, O&M, Opex Reduction, Passive Equipment, Regulation, SLA, Sale and Leaseback, Saudi Arabia, Tenancy Ratios, Towercos, TASC Towers, TAWAL, Valuation

It has proved difficult to close tower transactions in MENA, with several processes abandoned for financial or regulatory reasons. A year ago, towercos owned and operated less than 1% of MENA’s 275,000+ towers. While that figure remains modest at 6% today, several towercos are poised to play a critical role in the investment landscape of this developing region. TowerXchange examines what is driving the value proposition for towerco opportunities in MENA and examines the common threads for the lack of transaction closes in the region to date.


Finding value for MNOs

Persuading MNOs to pass a key component of their business into towerco hands remains a challenge across the entirety of the region, and a different approach to tower transactions is needed to facilitate transactions.

Richard Ltaif from TAWAL, Saudi Arabia’s newly formed carve-out from operator stc, explained that the value proposition for operators is three-fold. < Firstly, towercos must recognise that MNOs are struggling to sustain and increase market share

and fear losing touch with their customers, and that is what is driving decisions around passive infrastructure. < Secondly, MNOs recognise that low tenancy ratios represent a missed opportunity to consolidate parallel infrastructure and decommission sites to lower costs instead of rolling out dual or triple infrastructure in countries such as Kuwait and Saudi Arabia. < Thirdly, operators face balance sheets which are not as healthy as they once were in a period where 5G investments are required by regulators and expected by customers.

With MNOs looking at lowering their costs and freeing up capital for 5G investment, the opportunity of an acquisition may prove attractive to generate capital.

Why haven’t we seen more transactions?

Many common reasons underlie the lack of transactions within MENA, however in many cases the causes remain country-specific. In the region, MNOs are often either government-backed or cash rich. And even outside telecoms, the idea of a handing over assets on a sale and leaseback

Figure two: A timeline of tower transactions, joint ventures and towerco activity in MENA

Source: TowerXchange

2010

2016

2011

2017 2017 2017 2017 2019 2020

2014 2016 2016 2016


of tower portfolios


agree tower sale




towers


Tanzanite

2015


tower sale


tower sale


tower sale

Oman:Oman Tower

Company established


agree tower sale


operations


sale processes


options



Cancelled Cancelled

Cancelled Cancelled



2019


TAWAL

ActiveDeal closed

2020


agree tower sale

Pending

Abandoned Abandoned

Cancelled

2010

2016

2011

2017 2017 2017 2017 2019 2020

2014 2016 2016 2016


of tower portfolios


agree tower sale




towers


Tanzanite

2015


tower sale


tower sale


tower sale

Oman:Oman Tower

Company established


agree tower sale


operations


sale processes


options



Cancelled Cancelled

Cancelled Cancelled



2019


TAWAL

ActiveDeal closed

2020


agree tower sale

Pending

Abandoned Abandoned

Cancelled


basis is uncommon. These issues are passing, as governments move to make mobile operators more arm’s length. At the same time balance sheets are worsening and ARPUs are coming under pressure, and so the need to reduce opex means operators are being forced to look at divesting their assets.

MNOs are still moving slowly, even if some carve-outs are coming to fruition and sale and leasebacks are completing. Iyad Mazhar of TASC Towers said that the emergence of local champions like TAWAL or the entry of independent towercos like IHS Towers wouldn’t lead MNOs to completely exit the passive telecom space. This has been the case even in Kuwait, where Zain has retained a small portfolio of towers even while signing a SLB deal with IHS

Towers for US$130mn earlier this year. In Saudi Arabia thousands of strategic towers are retained by stc. MNOs may be more likely to seal the deal if they can retain some key strategic tower assets or hold a stake in a joint venture or independent towerco.

Whilst governments in many countries are publicly opening up to outside investors and companies, one could claim that it is the regulators that are slowing things down. Regulators in several markets have lacked clarity on whether passive infrastructure should be licenced and what the licence conditions should be. It is this uncertainty that some believe is the primary cause of deals within the region falling through.

Richard Ltaif of TAWAL explained that engaging with the regulators and being transparent from the outset is key to successful entry in any market. For TAWAL, a towerco less than a year in existence, they have achieved significant developments to date including helping create efficiencies on maintenance and in particular on land rent. As Richard Ltaif stated it’s about and educating the MNO and regulator on the value that can be unlocked. Yet whilst towercos can bring huge tangible operational efficiency and uptime, how does one convince an MNO or regulator that the savings of a towerco are real?

Rather than focusing on how much capital can be released, towercos and MNOs are to be better served by focusing on agreeing the right service level agreement (SLA). Providing a high level of availability and reducing opex creates the

initial incentives for a sale and leaseback. SLA improvements can also include helping reduce the cost of power, even where there is good power availability across MENA countries. Towercos have proven that SLAs drive performance improvements, and this is winning round regulators and MNOs to SLB deals.

While 5G demand is driving MNOs to consider monetising their towers, 5G is also becoming a reason for delayed transactions. MNOs now need greater visibility on their portfolio before deciding whether to own or lease 5G macro and micro sites. However, once a strategy is settled, increased levels of infrastructure sharing will allow risk and cost sharing for further 5G rollouts.

“ “

“ “

engaging with the regulators and being transparent from the outset is key to successful entry in any market

it’s about and educating the MNO on the value that can be unlocked


Monetisation MENA-style

With the emergence of carve-outs like TAWAL and edotco, we consider the question; how do independent towercos now compare as a monetisation model?

As discussed by Akshay Grover from iSON Tower, 100% SLB deals remain an option, however they are unlikely to be the most common structure in the short-term.

Grover said there are varying models that may work to increase towerco investment. One viable option is that one MNO within the country leads a towerco formation, like TAWAL. A second option would entail competing MNOs sharing rollout plans with a shared captive towerco. Whilst this model could create real independence, the misuse of shared information would be an issue holding back most operators. A third option is a consortium involving MNOs backed by sovereign wealth funds, government-backed pension funds or international investors. Although this is not a structure we have seen yet, it was viewed as a possible future monetisation model for towers outside the independent towerco mainstream.

Allowing an international towerco to purchase 100% of an operator’s assets seems to be an unlikely outcome even if it we believe it would be the most desirable one. However, the transactions realised so far, and the dynamism of discussion on alternative structures for deals at this year’s TowerXchange Meetup MENA means we expect the pace of transactions in MENA to pick up.

Regulation

When it comes to investment, towercos need to have an alignment with local regulators. The Zain/IHS Towers deal in Saudi Arabia is a clear example of a failed transaction primarily due to regulatory challenges.

In many parts of the world where the tower industry has emerged, governments have played a role in regulating and driving infrastructure sharing. Broadly speaking MENA’s MNOs have not been good at sharing infrastructure (outside notable sharing hotspots like Egypt). Governments, with digital economy and economic development policies, are increasingly turning to their regulators to encourage or mandate infrastructure sharing to facilitate those plans.

The International Digital Infrastructure Alliance (IDIA) is working hard to pull together an industry framework and help create investible tower regulatory regimes in MENA. One of its primary goals is to educate government stakeholders about the benefits of infrastructure sharing.

In a recent interview with the CEO of the IDIA Chuck Green, TowerXchange asked about the regulatory and taxation “red flags” that would represent inhibitors to towerco investment, which have sadly previously been too common in MENA. According to Chuck Green the principle inhibitors to investment in towers included; high total licencing and permitting fees and taxes; non-existence of import duty or income tax incentives; inefficient, time-consuming permitting approval

processes; differing agendas of local authorities and national regulators or telecoms ministry, resulting in inconsistency and exaggerated regulatory intervention, cost and delay; and restrictions on foreign ownership, particularly if capped at 49.9%.

The future of the MENA towers

Now towercos are honing in on the key value case for tower transactions in MENA, and if MNOs and towercos are seeking outside investors, is capital readily available in the MENA region?

In some countries, like the GCC states, the availability of local debt remains good, with banks becoming more familiar with the towerco model. As elaborated on by Gulfraz Qayyum from Citi the towerco model is one that is set and proven, allowing MNOs to attract capital from capital markets and banks, however this comes with issues around foreign exchange risk and repatriation.

MNOs may not be crying out for cash investments in MENA, however they are increasingly interested in carve-out models like edotco and TAWAL.

The ambitions of international investors combined with towerco and operator growth plans will see the MENA tower market move forward in the coming twelve months. Furthermore, once more towercos are carved-out and regulatory and security issues are addressed, long-term investors will be more confident and ready to take a share of these developing markets, it is now simply a matter of time<


North Africa piques interest from international towercos The growth potential and investability of the North African tower market

Appetite for investment

From a scale perspective Morocco and Egypt are proving to be seen as the most suitable countries for the first phase of inbound investment.

Tom Greenwood of Helios Towers stated that greenfield opportunities exist across North Africa, which the towerco are keen to prioritise, however doing business in certain jurisdictions will prove more challenging than others in this untapped tower market. From a foreign investment perspective it would seem that Tunisia and Morocco are proving to be the business friendliest followed by Egypt and Algeria, although the latter presents some challenging laws and regulations.

International towerco IHS Towers explained the company has looked into investment in Egypt, Tunisia, and Morocco and whilst they are attractive and investable locations they contain more unknowns than the rest of sub-Saharan Africa.

Keith Boyd of American Tower stated that the towerco is “dipping its toes in the water” and have an interest in crossing the Sahara. American Tower have 681 sites in Niger and 667 sites in Burkina Faso along the Sahara’s south side through their acquisition of Eaton Towers. Whilst many of the large international towercos are vying for a stake in the North African tower market there are some basic criteria that would need to be considered when investing. Such considerations include working with mobile network operators as strong anchor tenants that are able to pay on time, given

Read this article to learn:< Factors that will drive demand for international investment

< New build opportunities in Egypt

< Economic and regulatory challenges in key North African markets

< Future market conditions and investment growth drivers

Keywords: 4G, 5G, ARPU, American Tower, Build-to-Suit, Capex, Co-locations, Decommissioning, Digital Bridge, Eaton Tower, Egypt, Energy, Etisalat, Helios Towers, IHS Towers, MNOs, Morocco, New Market Entrant, North Africa, Orange, Telecom Egypt, Tunisia, Vodafone

North Africa is a sizeable market which boasts a number of leading international and local players and such as Orange, Etisalat, Ooredoo, Maroc Telecomm Telecom Egypt and Vodafone (stc also plans to enter the region). As an untapped market North Africa presents tower companies with huge opportunities where strong and attractive mobile markets exist. TowerXchange gathered leading international towercos IHS Towers, Helios Towers and American Tower as well as MENA energy experts Mitsui to examine the merits of investing in this region.


the initial outlay costs of upgrading sites power and control systems that comes with the territory of new market entry.

Regulatory Challenges

What is evidently clear is that each country within the North African market comes with its own regulatory challenges and is at different stages in opening its doors to international investment. Whilst potential revisions to regulatory reform are underway, Egypt is making the right noises and showing positive signs in moving forward with refining its laws. Morocco paints a slightly different challenge in that the MNOs are set up and controlled by the royal family making it harder for any newcomer to break into the market. Getting approvals will involve local partners and forming

rock-solid relationships – an added factor when entering these markets. But the same applied in the GCC, where there is a need to build relationships locally and understand the dynamics of the market and country well, including the regulatory environment, and there are now active towercos in those markets.

Demand from MNOs, 5G and smart cities

Fundamentally, it is the desire of the North African MNOs that will initiate tower activity in the first instance. Whether the demand is for new build

or release of capital, it is this want or desire from the MNOs that drives the economic rationale for infrastructure sharing. With grid reliability generally good across the region (certainly relative to SSA) there remains less operational urgency for MNOs to get rid of their towers. To date, international towercos are not seeing much interest in disposes of towers unless there is an underlying need to raise capital to invest in 5G.

With the competitive and economic environment satisfying MNOs currently, could it be that governments drive for digital infrastructure will

Egypt & Morocco headlines from TowerXchange Meetup MENA 2020

Egypt< stc’s acquisition of Vodafone Egypt may further alter a landscape that looks increasingly attractive to build-to-suit.< In terms of inorganic growth opportunities, where once towercos perhaps had reservations about tackling the rooftop-rich site portfolio in the country (~40% rooftops compared to ~15% in the rest of Africa), now there is appetite for all site typologies.< Resolution of the subsidy of diesel prices remains the number one challenge to closing ESCO agreements in Egypt, with RFQs coming out of Etisalat Misr and Orange Egypt

Morocco< Interest from IHS towers and other international towercos in this country, which is regarded as one of the most business friendly in the North African countries.< Regulatory hurdles are not the main barrier here, but there is little support from local partners so far to divest their towers.< Orange and Vodafone will be the key drivers of change in this market.< Morocco has significantly more available capital than SSA markets, which will play a key factor in terms of potential pricing of SLBs, or BTS rollouts.“ “

Whilst potential revisions to regulatory reform are underway, Egypt is making the right noises and showing positive signs in moving forward with refining its laws


force some operators across the North African region to increase capacity and coverage, reduce prices – precipitating the pressure on MNO balance sheets?

For example, tens of billions of dollars are needed to drive the infrastructure for 5G in Egypt new capital city from the country’s existing MNOs. The new capital city is an initiative of Egypt’s Ministry of Communications and Information Technology (MCIT) at an estimated cost of EGP40bn (US$2.44bn). The question for operators remains who is going to fund this capital expenditure? Will the technology onset be the push factor that is required for a towerco entrance, in so far as new build is concerned? Egypt has a huge amount of roof top sites (40%), more than any other African market, which brings with it many difficulties from a physical network planning perspective. This has the potential to drive the need for operators to divest away from real estate management and allow towercos the opportunity to deal with operational complexity and assess different financial models for rooftops.

Towerco Opportunities

To date, there have been no tower transactions of scale in the market. However, the region has attracted international interest for some time and a number of towercos have invested considerable time and resource getting to know the market, its players, and its potential opportunities.

High requirements for new build and co-locations has attracted the interest from American Tower, IHS

Towers, Digital Bridge and Eaton Towers; all being linked to potential opportunities in the market. In a bid to enter the market, licences have been applied for and it is understood that the regulator (NTRA) is due to issue two new licences, with one being awarded to a major international towerco in 2020.

Egypt boasts one of the highest number of SIMs per tower in the world, a growing subscriber base, rollout of 4G ongoing and operators in need of establishing their network, the potential for new build in the market is high. In order to increase 4G capability and capacity, all four of the countries MNOs are planning new site build. In a bid to raise its profile and market share, Orange is looking to add 700 new sites starting with an estimated 200-300 sites in 2020. Whilst Telecom Egypt currently has around 2,000 towers it has recently entered its second phase of network rollout with a deployment of an additional 1,500 sites. The operator is also

projecting 1,000 new build sites to be rolled out starting with 200-300 this year. Similarly, Etisalat and Vodafone are expected to be planning to add 300-500 new towers per year.

With the need to invest in 4G and 5G infrastructure and potentially buy additional spectrum to keep up with 4G demand, Egypt’s MNOs are looking at how to best manage their capex – giving towercos build-to-suit contracts instead of investing in new site build themselves represents one such strategy.

For a towerco, this presents an exciting investment proposition; a potential of 1,500-2,000 new BTS sites with ample opportunity for lease up with each of the four MNOs.

An interesting aspect to take into consideration is the availability of local financing. Morocco has much more availability of capital than SSA markets,

“ “For a towerco, this presents an exciting investment

proposition; a potential of 1500-2000 new BTS sites with each

of the four MNOs


the same applies for Egypt. This in turn plays a factor in terms of potential pricing of sale and leaseback’s or build-to-suit rollouts for towercos.

Yoshinori Utaka, CEO of Mitsui & Co drew attention to the cost reduction of solar energy in the North African countries. Given that 50% of opex of a towerco is energy supply this presents an incentive for towercos to transition from diesel to hybrid when considering investing.

Potential for carve-outs?

Recent carve-out announcements from both Orange and Vodafone on their European sites has been met with enthusiasm by the global tower industry. As Greenwood from Helios Towers pointed out, a change of mindset towards tower companies and the value that can be created in infrastructure, is starting to become present at group level within these companies, where historically they have wanted to own all of their real estate.

In an effort to monetise their European towers and group level interest in the use of capital, the question remains will Vodafone and Orange drive change in the North African market. Will we see the European carve-out strategy replicated in other markets in which they operate, namely their African subsidiaries? As Keith Boyd of American Tower said, it’s not just what if happening in-country that will drive change in the use of capital and tower strategy, for Vodafone and Orange it’s their behaviour in other markets and the need to generate cash.

In February 2020, with an interest to expand in the MENA region, mobile network operator Saudi Telecom Company (stc) entered into a memorandum of understanding (MoU) with Vodafone Group to acquire its 55% stake in Vodafone Egypt for US$2.bn. After a process of due diligence, both parties plan on entering into definitive agreements with the deal set to close by the summer of 2020, subject to regulatory approval. Would a stc acquisition of Vodafone Egypt be followed by a sale and leaseback or a carve-out?

Conclusion

As with the credit crunch of 2008, when mobile network operators were forced to refocus their minds in view of financial difficulty and explore ways to refinance the business, similar pressures are forcing changes in attitude today. In 2008 challenging and tough market conditions opened the doors in sub-Saharan Africa to international investment. As stated by Keith Boyd of American Tower “it made the tower industry in SSA.”

A crisis is not the only way to sharpen minds, requirements for 5G investment are densifying networks are also driving MNOs towards towercos, but our panel thought that a crisis would only help to shake the industry into new ways of working. Of course, it is needless to say that capital inflow into a country follows expected returns and risk appetite and this remains to be seen from international towercos. As investment runs in cycles, this is not a static picture after all<






Accelerating digitaltransformation with the rollout of 5GAs the commercial application of 5G progresses in MENA, towercos and MNOs are poised to become global leaders in 5G deployment

The story so far

With some governments advocating their digital transformation and smart city ambitions and operators competing for deployment leadership, 5G has fast become a reality in the MENA region. As of Q4 2019 according to GSMA, as many as ten operators had launched commercial 5G services in six states in the Gulf. It is expected that 5G activities will become more widespread across the region with more trials taking place and the increase of commercial launches. The GSMA predict that by 2025, there will be 45 million 5G connections across the region, accounting for 6% of total mobile connections.

Across MENA, MNOs are focussing on demand hotspots for 5G, where the technology can help eliminate data bottlenecks and also create the most opportunities for boosting ARPUs. Progress in 5G is not only being driven by commercial pressures, but by regulators that have set conditions on operators to rollout. There are however many other markets which are 1-3 years behind in developing a 5G rollout.

5G business cases for towercos

5G brings with it new business opportunities for towercos in the form of small cells, fibre and edge data centres, but ascertaining the scale of these opportunities remains difficult at present. The degree to which traditional towerco business models, i.e. monetising macro sites, will be eclipsed by new sources of revenue remains unclear,

Read this article to learn:< Rollout plans from MNOs and towercos in MENA

< How business models are evolving for 5G: is there really a case for 5G rollout?

< The fundamental challenges for towercos and MNOs in 5G delivery

< How far away is the commercial application for 5G?

< How towercos are rethinking their solutions to effectively assist 5G rollout

Keywords: 4G, 5G, American Tower Company, Analysys Mason, Active Infrasharing, ARPU, Business Case, Build-to-Suit, C-Level Perspective, Co-location, DAS, Small Cells, Data Centres, Delta Partners, edotco, Etisalat, Fibre, Fiberisation, Helios Towers, ieng Group, IHS Towers, Macro-sites, Middle East, MNOs, Towercos, North Africa, Oman Tower Company, Regulation, Small Cells, Smart Cities, Street Furniture, TAWAL

The second Annual TowerXchange Meetup MENA brought together some of the most senior and influential players from Middle Eastern MNOs and towercos in Dubai for discussions on the future of 5G in the region. Heavy hitters commented on 5G throughout the two days. We share some of their views on 5G trials, live networks and the future vision of 5G rollout. Comments below are drawn from contributions from Abdulrahman AlMoaiqel, Chief Commercial Officer, TAWAL, Steve Howden, Senior VP and Deputy CFO, IHS Towers, Majid Al-Kharoosi, CEO, Oman Tower Company, Kash Pandya, CEO, Helios Towers, Salah Medawar, Chief Commercial Officer, ieng Group, Wiktor Barcicki, Group Senior Director Technology Economics, Etisalat and Gayan Koralage, Director Group Strategy, edotco.


although Helios Tower have discussed non-traditional revenues reaching 10% of total revenues in ten years’ time. Steve Howden from IHS Towers expressed that macro sites are going to become one of a suite of options that towercos will provide in future. Kuwait aside, IHS Towers are not upgrading macro sites for 5G in their existing markets, but they are ready to offer additional space for 5G antennas and equipment when needed. IHS Towers already has a DAS offering as part of their service and are expecting to see increased demand for DAS and small cell installations as the need for indoor connectivity grows.

Macro sites will of course help with densification of 5G and existing macro sites will continue to be leveraged to provide densification. There could be an opportunity for tower/fibre bundling in the future with microwave backhaul replacement and fibre backhaul increased. IHS Towers are currently assessing markets where they can offer fiberisation to help manage increasing volumes of data. But it is a major decision and change in strategy to invest in horizontal as well as vertical infrastructure.

Abdulrahman ALMoaiqel of TAWAL, stated that in Saudi Arabia they did not expect build-to-suit 5G requirements to be large. Instead they expect to

be providing in-fill and filling the coverage gaps by turning single tenant sites into multi-operator sites. The co-location and upgrading of every possible site is the number one priority for the newly established towerco, allowing all operators to depend on their reliable infrastructure.

Saudi operators are testing the waters, focusing on 5G hot spots and where the demand is likely to be, including smart cities and new industrial cities and determining which areas need investment. Thus far the country has the largest deployment of operational 5G. Three of its operators are launching 5G networks on existing spectrum and new ready-allocated spectrum with more than 2,000-3,000

Heatmap of 5G activity in MENA

Source: TowerXchangeCommercial launch of 5G services 5G trials announced or underway No 5G activity or trials underway


UAE< 80% of the country’s populated areas and main cities are now covered by 5G networks < Etisalat have 1,000 5G sites and completed first 5G call in MENA < du deployed more than 700 5G sites

Saudi Arabia< 2018, Saudi government established the National 5G Task Force to support the development of 5G< stc deployed 450 5G sites under first phase of rollout < Zain KSA expanded coverage of its 5G network to 27 cities with a total of 2,600 sites. The operator launched 5G roaming between its networks in Saudi & Kuwait

Egypt< Telecom Egypt and Nokia sign MoU to rollout 5G network < Etisalat Misr completes 5G test trials with Ericsson

Bahrain < Viva Bahrain (stc) 5G mobile and home broadband services are now available in more than 50% of the country < Batelco signed deal with Ericsson and became the first MNO to launch a commercial 5G network in the country < Zain Bahrain selected Ericsson to deploy 5G service

Qatar < Ooredoo partnered with Ericsson to launch 5G services and deployed Ericsson’s spectrum sharing technology as a first in the Middle East. 100,000 mobile customers have signed up for Ooredoo’s 5G packages < Vodafone selected Huawei to roll-out its 5G which covers 70% of the capital Doha. The operator also launched the Gulf region’s first 5G MiFi mobile hotspot device

Kuwait < Ooredoo launched 5G services and devices in collaboration with Huawei< Viva Kuwait (stc) has more than 1,000 sites covered by the 5G services launches enterprise ‘5G Connectivity’ service. It has signed an MoU with Huawei Technologies to develop 5G IoT solutions< Zain Group launched first MENA intra-region commercial 5G roaming between its networks in Kuwait and Saudi Arabia < All three mobile network operators Viva, Zain and Ooredoo have launched 5G smartphone packages

Oman < TRA revealed 5G roadmap as part of Oman Vision 2040 strategy < Omantel deployed over 100 5G sites and plans to increase total to 2,226 by 2024< Ooredoo Group selects Huawei Technologies to enable 5G networks and has launched its 5G home internet < 1,000 new BTS will be deployed in 2019-2020 between Omantel and Ooredoo illustrating the countries readiness for 5G mobile services

5G headlines from key markets in Middle East and North Africa


5G sites already active. This figure is expected to accelerate in 2020.

In Oman, Oman Tower Company has already begun constructing fiberised towers, ready for 5G. Wholly government-owned Oman Broadband Company will begin in 2020 to rollout fibre for the country’s MNOs, with OTC already having a signed agreement in place to build new sites, as shared by Majid Al-Kharoosi, CEO of Oman Tower Company. Due to the geography of Oman, with desert, mountains, and widely spread oilfields which would otherwise not be populated, it is difficult to fiberise all towers. However because fiberised towers enable an uplift in ARPUs there is robust demand to fiberise.

Kash Pandya of Helios Towers said 5G and last mile connectivity presents an opportunity for towercos to partner with MNOs and fibrecos, helping to create extra revenues and enhance end-user experience. It is the hope that regulators will facilitate the rollout of 5G by allocating spectrum, at affordable prices making it amenable to invest and rollout. Macro sites will facilitate the initial launch of 5G but street furniture will come quickly, providing an opportunity for towercos to invest in this area.

In Malaysia the Government has shown a link between broadband penetration and economic growth, indicating that a 10% increase in broadband leads to 1.8% increase in GDP. Despite the wider benefits, according to Gayan Koralage, Director Group Strategy at edotco it is the operators that are slowing 5G investment as they are not able to yet monetise those benefits themselves. 5G has

been ready for a few years however the pushback is coming from the MNOs who have been slow in the rollout of 5G indicating that the business case is not quite ready.

Gayan expressed that we need a mass market 5G product in order for towercos to be ensured of new sites. With a third of the global population categorised as “Gen Z” born after 1994, these are the biggest consumers of data. Therefore offering high speed data through 5G efficiency to this percentage of the world’s population is essential for telecoms businesses to succeed.

Economics of 5G

The economics of 5G are very difficult – there’s no single business case to map returns. As expressed by Wiktor Barcicki from Etisalat, 5G business cases also cannot be isolated. It is impossible to treat 5G as another value-added-service (VAS) and expect to make a decent return. With 5G being interlinked with existing technologies on both cost and revenue, it is impossible to show a pure return on 5G investment. Whist MNOs can identify costs such as network and spectrum how do MNOs allocate costs to 5G rollout when it uses existing infrastructure, such as existing dark fibre? These present challenging questions for the 5G business case coupled with the challenge of defining and allocating revenues when you have continuous migration from 4G to 5G.

Steve Howden from IHS Towers commented that towercos need to stick resolutely to what is in place from a contractual point of view. Given that this is

the basis of how infrastructure companies operate – the contracts matter and play a significant part of the business model. Of course new solutions such as DAS or small cells, or shorter/lighter towers will inevitably evolve the business model in future years and IHS Towers anticipate a consolidation of infra-service provision to mobile network operators.

As discussed by Abdulrahman from TAWAL there will be an evolving product line for towercos. Alongside street furniture evolving requirements will depend on a reliable fibre backhaul. Bundling will take place more with 5G, which will help create some value-added services from an infrastructure company perspective. Bundling with fibre could help with additional revenues and protect margins.

With towercos having their own structure and rate card for existing customers, it is expected that the returns on investment will remain unchanged.

Seeking partners for 5G

There are regulatory challenges aligned to the rollout of 5G and these vary from country to country. It is clear that both municipalities and regulators can help with 5G rollout and allowing companies’ access to street furniture and facilitating investment in 5G spectrum.

A good example is Oman, where towerco Oman Tower Company and operators Omantel and Ooredoo are collaborating with government entities and the support of the regulator to rollout 5G. In Saudi Arabia there is huge momentum for the alignment between municipalities and telcos driven


largely by the regulator with initiatives towards fibre sharing in the country.

In order for the telecom towers industry to progress with 5G and smart city projects, collaboration between governments, regulators, MNOs, towercos, fibrecos and other service providers is key to successful rollout. Government support for access street furniture and assistance with permits are mandatory to speeding up the implementation of these new technologies.

With the proliferation of 5G, the telecoms value chain as we know it will change and towercos, infracos or new players taking ownership of different elements of the chain. As we think about

DAS, small cells, shorter and lighter towers, the business model will inevitably change taking into account new offerings, together with evolving economics and funding structures thus making the 5G world an exciting one – for telecoms, towercos and investors alike.

Conclusion

Summarising the challenges and opportunities Salah Medawar Chief Commercial Officer, ieng Group said network architecture upgrades are needed to support 5G. Firstly towers need to be shareable and used by several operators. This process is now underway in earnest. Secondly towers need to be fiberised. In places that is a

massive challenge, for example in Pakistan only 6% of towers are fiberised. And thirdly the unlocking of street furniture including advertising billboard, traffic lights, lampposts, et cetera is essential for MNOs and towercos to utilise these existing assets to deploy 5G equipment.

As MENA progresses with the rapid rollout of 5G services, we can expect the early adoption of 5G technology by the mass market to follow a familiar pattern. According to Huawei the adoption of 2G took ten years to reach 500mn subscribers, nine years for 3G, five years for 4G and three years are expected for 5G from 2019-2022, suggesting a rapid 500mn uptake.

Whilst some countries including Saudi Arabia and the UAE have spearheaded the rollout of 5G, we can expect to see 5G activities become more widespread across the region, with trials and commercial launches expected in non-GCC countries. GSMA stated that by 2025, there will be 45 million 5G connections across the region, accounting for 6% of total mobile connections. And it is envisaged that 5G will contribute US$52bn to the MENA economy over the next 15 years.

It is clear that the digital ecosystem in MENA is evolving rapidly, with the emergence of new digital services and increasing interconnectivity through digital infrastructure. Whilst 4G may be the dominant technology for the foreseeable future, the underpinning challenge for MNOs and towercos is deciding not if but when to invest in 5G, as we move into an era of smart cities and automation<

The majority of 5G launches in MENA are still a few years away, though 5G coverage will rise steadily in the period to 2025 Source: GSMA Intelligence

The majority of 5G launches in MENA are still a few years away, though 5G coverage will rise steadily in the period to 2025

Source: GSMA IntelligenceFigure 5

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The mobile market in numbers 11

The Mobile Economy Middle East & North Africa 2019


Towercos and MNOs drive forward smart cities Towercos and MNOs are looking at smart cities; putting capex into city projects could open new revenue streams and bolster 5G investments

What is a smart city?

A smart city is an urban area that integrates information and communication technology and various physical devices connected to an IoT network. This enables the municipality to optimise the efficiency of city operations and services using sensors to collect data and then use that data to manage assets, resources and services efficiently.

If you break it down, smart cities are a group of use cases, some of which can be satisfied with 4G infrastructure, while others require shorter latency, more bandwidth and more connections – for those we might need 5G to power massive IoT. Many basic smart city applications are already in operation on existing infrastructure. However, a better and denser digital infrastructure is still required to enable greater capacity and/or latency use cases on a large scale, such as smart transport, and city-wide surveillance.

The requirements for providing connectivity presents significant opportunities for both mobile operators and towercos. Partnerships with municipalities and landowners will be crucial to enable the rollout of critical infrastructure.

A step change for towercos and MNOs

Participating in the creation and maintenance of smart cities will require a new way of working for towercos and MNOs. They may consider either forming new relationships i.e. with fibre companies or may opt to provide fibre themselves, consider managing active equipment in small cells and inbuilding solutions, providing data centre services

Read this article to learn:< What can towercos and MNOs do to assist in the rollout of smart cities

< Changing business models and offering smart city as a service

< Strategies for reducing capex deployment for 5G and smart city initiatives

< The challenges and strategies for monetisation of smart city services

Keywords: 5G, Business Models, Build-to-Suit, Capex, Data Centre, Digital Colony, edotco, Etisalat,

Fibre, IBS, Investment, IoT, MENA, Saudi Arabia, Small Cells, Smart Cities, UAE

At this year’s 2nd Annual TowerXchange Meetup MENA the role of smart cities and 5G in enabling connectivity remained a major topic of discussion. Executives from edotco, Etisalat, DXB Entertainments and former COO of Digital Colony shared insights into the innovative smart city services being rolled-out in the region and addressed some of the key challenges and opportunities involved.


or building data centre partnerships. There are a varying degree of considerations that towercos and MNOs will be undertaking.

Ultimately both towercos and MNOs are entering a new world, with new business models and transforming to new ways of working in the smart city landscape. But fundamentally the same models will hold; MNOs will look for new services to provide to consumers, enterprises and cities, and towercos will look for new digital infrastructure they can own and lease.

Growth of smart cities and 5G

MENA is such a diverse region, so discussion of smart cities at TowerXchange Meetup MENA focused on what happened in the gulf, although smart city projects are live in less developed markets in North Africa and West Asia. Several countries within the region including the UAE and Saudi Arabia have commenced commercial application of 5G with smart city rollout of application and services.

According to a KPMG study the digital market is expected to double in size for the MENA region over the next two years. Many governments have issued digital strategies for their countries and significant investment is expected in infrastructure. With ambitions to become digital economies, there is a great impetus for towercos and MNOs to capture a share of the activity.

New smart cities within MENA are being built from scratch through the strategic long-term

vision and leadership of the governments and regulators in certain municipalities. It is this vision and endorsement that is allowing investment in the right technologies to enable the smart cites to progress. It is envisaged that in the next twenty four months the UAE will follow a leap-frog approach to smart cities with further enhanced connectivity. This will inevitably see a change in the social engagement of citizens. An example shared by Satyan Abraham of DXB Entertainments included the use of sensors detecting emergency vehicles within a certain vicinity, and the changing of traffic lights from red to green to allow free movement of traffic.

5G will play a pivotal role in the enablement of smart cities. As increased data throughput becomes possible, operators need to explore ways to monetise the data and position themselves well to take advantage.

Business models

The towerco business model is tried and tested, but towercos have almost reached scale through purchase and leasebacks with mobile network operators. The model for smart cities will more closely resemble build-to-suit opportunities where towercos can provide the capex for new smart city and network infrastructure in return for lease payments. Whilst new opportunities are increasingly exciting in terms of the innovative services that can be provided by both towercos and MNOs, their business models set to look to change as smart cities develops, including inbuilding solutions, small cells and IoT. New technologies require that we adapt existing models.

Business models can vary from large public-private partnership contracts like in Saudi Arabia, UAE and Egypt in which capital is deployed according to an existing masterplan to other more bespoke

“ “The digital market is expected to double in size for the MENA region over the next two years


arrangements. For example, Etisalat in the UAE offer some smart city services to a small population by monetising those services directly, such as parking and digital signage. The MNO formed a new division five years ago called "Etisalat Digital", comprising of more than 500 employees focused on introducing digital and smart services through end-to-end connectivity.

Challenges of capex and coordination

With big projects such as Saudi Arabia’s mega city project – NEOM – comes big investment. One of the biggest challenges to the development of smart cities is the cost of capex, with infrastructure being the biggest outlay. Government projects are largely driven by huge investments, however there remains an increasing number of small size local communities and enterprise zones that are looking to offer smart services to their citizens.

Financing the capex required to create smart cities is a major blocker to creating the smart city and IoT-enabled world we expect. Besides the challenge of the capital required for investment, another barrier to entry is finding the right way to coordinate all the different elements of the smart city project, so it can go forward into its implementation stage. The major cost to run smart services, albeit small or large, require cities, operators and infrastructure owners to build and operate all the varying layers of infrastructure, including sensors, connectivity, hosting and processing data, building the interface for services et cetera. All this requires huge capex, with ROI relying on other infrastructure coming

online at the same time, which is where most projects inevitably get stuck.

Smart city as a service

As stated by Fadi Shanaah of Etisalat, the role of operators is not just to provide the connectivity. Operators need to orchestrate the whole framework across the ecosystem including contractors, banks and citizens.

Etisalat have rolled out something they call “smart city as a service” which has proven to be an attractive model for the operator. They not only provide the connectivity and infrastructure for the client but also include the initial capex outlay, which is converted into a complete managed service approach. Services include deploying sensors, managing data and connectivity and providing a dashboard with relevant information that is collected and passed on to the client. It is by taking

this approach that the operator has enabled many companies to enter the digital transformation space due to capex availability from the very beginning.

Creating an off the shelf smart city model is difficult, but it is one way to drive scale and coordinate the mass uptake required to make smart cities work. It is a chicken and egg scenario in that the more people adopt smart services, the more sustainably services can be provided; the more services are provided, the more people will adopt. This is key to scaling up and achieving a return on investment.

What do MNOs and towercos decide to do and not do?

In the past decade MNOs have divested some of their tower assets and towercos have focused on managing sites and providing power, a relatively limited service. Moving beyond steel and grass and power, how does a towerco decide what capabilities

“ “Business models set to look to change as the growth of smart cities develops, including inbuilding solutions, small cells and IOT


to provide in the future? For example should a towerco become a fibre provider or offer fibre last mile connectivity? edocto have taken the decision to partner with solution providers including small cells and inbuilding solutions rather than doing it themselves. By partnering edotco are able to offer the base layer of infrastructure which enables urban connectivity and smart city initiatives in their markets.

On the other hand, Etisalat decided that digital would play a big part of their strategy. Relying on telecom services alone is no longer a sustainable model with declining year-on-year like for like sales. Therefore digitalisation became a natural growth area for the operator who invested heavily in creating “Etisalat Digital” which now contributes a big part of overall revenue. Fadi Shanaah explained that the operator is expanding “Etisalat Digital” regionally into Saudi Arabia and Egypt, and is currently engaged in many strategic projects in these countries.

Smart cities require someone to play the role of master system integrator, as Etisalat has done. They must lead and bring together other partners in the ecosystem that are required to help deliver the different types of services. The role is not simply a project management one but looking at the services and creating stories can be replicated across multiple clients across different verticals. The operator deploys cloud-based services and offers them as a managed service through a monthly subscription model to clients, enabling for mass adoption of the services.

ROI of smart cities and 5G

Thinking through the business case and justifying the investment for smart cities and 5G is a challenging process for all.

In the UAE, most of the country has 5G coverage with 1,000 5G sites installed by Etisalat. For the operator, their ROI will not come from the consumer, whilst they will pay a part of the contribution, it is regarded that the main ROI will recovered from B2B use cases.

5G offers operators the opportunity to engage in multiple verticals including industrial, healthcare, education, entertainment et cetera to enable

them to generate new revenue streams through 5G services. Leveraging 5G investment to enable live traffic control, security services or IoT opens up new streams of revenue with government and commercial partners.

In the coming year when adoption of 5G devices increases in the mass market, there will be many smart city applications and services ready for consumers to enjoy which will drive demand for sites, and as a result a new way of doing business will be introduced. The panel agreed that 5G opens up new dimensions for companies allowing them do more with consumer engagement.

Monetisation of 5G

With the rollout of smart city programmes across the MENA region, the fundamental question of how to monetise the investment occupies board-room discussions.

Towercos and MNOs have to have an open mind on how smart cities present new opportunities for profitable investment in communications infrastructure, as it is an evolution of the standard towerco and MNO business models. Europe provides an example of monetising inbuilding solutions, whereby the connectivity provided indoors is charged to the landlord. Operators do not incur the cost, it is passed on to the tenants, owners or property developers, and in essence the real estate community becomes the customer. Therefore, monetisation strategies will differ depending on what the service is and who pays for it<

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Creating an off the shelf smart city model is difficult, but it is one way to drive scale and coordinate the mass uptake required to make smart cities work


Redefining the economics to enhance rural connectivity How unserved and unconnected areas could become major opportunities for towercos

Market conditions

Market conditions for rural connectivity vary from country to country within the MENA region. In some cases, for example in Pakistan, 70% of population is concentrated in urban areas, which represents less than 30% of the land, with 30% of the population spread across 70% of the vast country. Within urban areas, penetration is high and competition is driving down operator margins. In rural areas, where mobile connectivity is relatively low, there is an opportunity for both towercos and MNOs to gain market share in an untapped market.

This was certainly the case for Pakistani towerco AWAL Telecom, who in 2015 launched a build-to-suit concept where minimal or no infrastructure existed. AWAL’s focus has remained on building sites in unserved areas without anchor tenants, but where they predict serious market potential for mobile operators. Today, their infrastructure of 55 sites allows operators to cover 8mn people, which is 4% of the population in Pakistan. The towerco provides a full turnkey solution which gives AWAL Telecom the maturity and edge over the competition. Their focus to date remains on developing and enhancing infrastructure in rural areas, with the towerco having secured commercial contracts with most of the operators in the country.

In Afghanistan, Hussein Abdulkader at ACG explained that conditions there meant that they had to take a multi-faceted approach to connect the unconnected. Surprisingly fibre was a key strategy for the towerco in order to providing capacity for

Read this article to learn:< Developments in rural connectivity in the MENA region

< Key initiatives in OpenRAN and active sharing

< Energy challenges and innovation for rural sites

< The importance of building relationships with regulators and the local community

< The economics of making rural sites investable

Keywords: AGC, AWAL Telecom, Active Equipment, Active Sharing, Capex, Co-location, Community,

Energy, Facebook, Fairwaves, Infrastructure Sharing, MENA, MNOs, Next Billion, NuRAN, Opex-

Sharing, Smart East Africa, Towercos

Rural areas tend be underserved by operators and towercos because of low ARPUs and high opex. The trend has been for towercos and MNOs to prioritise urban areas, however rural connectivity represents a huge opportunity however the challenges differ from country to country. TowerXchange’s Meetup MENA 2020 panel on rural connectivity featured Akbar Shaukat, CEO, AWAL Telecom, Hussein Abdulkader, COO, Asia Consultancy Group (ACG) and Akbar Ladak, CEO, Smart East Africa, who addressed some the key developments and challenges in this untapped market.


MNOs seeking to launch 4G in the country – as well as fulfil a longer-term objective to provide data centres and FTTH. Providing backbones for the top three mobile operators in the region, where they were not willing to go and could not operate is also a key part of the ACG strategy. They have also partnered with a mobile network operator to provide rural coverage and active sharing of equipment in the southern part of the country.

By being enablers of internet connectivity to the entire country and supporting operators to deliver high-quality 3G and 4G, they hope to stimulate subscribers to use data and to make their tenancies more secure. Of a 34mn population in Afghanistan, approximately 7.5mn form an active subscriber base of which 6mn are already Facebook users. Therefore the quicker the adoption of data, the greater the increase in demand and internet usage.

In sub-Saharan Africa, the overall cost of deployment is double for rural areas with ARPUs achieving only 10% of those achieved in the urban areas. This becomes a significant challenge for operators on what can be achieved on their return on investment. For Burundi-based mobile network operator Smart East Africa, the decision to move away from the model of deploying a generic 40m tower suitable for hosting two or more tenants to a complete standalone site, without a diesel genset, relying on solar and battery back up to provide rural coverage was key. This drove down site deployment cost as well as reducing opex, making low ARPU areas serviceable.

OpenRAN and active sharing

For rural sites the capex investment is almost double that required in establishing infrastructure in urban areas, but there are still opportunities for “lease up” of sites once they are built were active sharing to become more common. If a towerco deploys a site in rural area that has no competing infrastructure, there is a chance of finding further tenants – once a site is there, why not take advantage on an opex-basis? However the cost of deploying additional base stations may make additional tenancies uneconomical. Sharing base stations, antennas and backhaul through active sharing could be one way to improve “lease up” on rural sites.

Additionally, active sharing will present an opportunity for towercos to host a multi-RAN solution on new and existing infrastructure that can be shared amongst the operators, saving capex and opex for both the towercos and MNOs even in non-rural settings. The need for legislation to approve active sharing and acceptance from the MNO is fundamental for towercos to leverage the full economics of rural connectivity.

In Afghanistan where ARPUS are below US$4 on a good day and significantly lower in rural areas, ACG struck a commercial agreement with a mobile network operator allowing them to bring in their own RAN equipment while allowing core processing to remain with the operator. This set-up meant that they overcame regulatory hurdles to running the radio side of the network and enabling roll-out into very rural sites. AGC are currently running more than 350 rural sites on this model with a 1.5x tenancy ratio. With the majority of their rural sites covered via VSAT, AGC are trying to fill the gaps by achieving connectivity through the existing microwave backbone. Over the last three years under this operation, AGC has seen traffic grow as the market becomes engaged in mobile applications. A growth in Facebook users has helped stimulate other incoming traffic into the region, all of which will builds over a longer period.

The overall challenge of rural is unpredictability. Different regions experience different levels of this, clearly what happens in one country is not typical of another. As Ladak stated in Burundi ARPUs in rural areas are below US$1 and therefore

“ “Active sharing will present an opportunity for towercos to host a multi-RAN solution on new and existing infrastructure


it is extremely difficult to build a business case combining a low ARPU with uncertainty about the arrival of a competitor who could squeeze out any existing margin. A towerco taking the capital risk and “leasing” a share of an active network, like ACG has done would be welcomed.

Smart East Africa are trialling out two OpenRAN solutions, one with Fairwaves and another with NuRAN, both of which proved successful in their pilot stage which is now being expanded across another 50 sites in Burundi. For the operator it’s not only about bringing connectivity but also allowing customers access to mobile financial services – this is a big market opportunity in SSA.

Rural site design innovation

Innovation has pushed down site costs making rural sites an increasingly viable option for towercos and MNOs alike. For AWAL Telecom the ability to allow MNOs to operate seamlessly and without significant challenges was key. Their entire BTS portfolio of sites are interconnectable with the last mile site of the operator, allowing anyone to join their existing rural area portfolio without the challenge of microwave connectivity or line of site or VSAT backhaul. Umbrella sites are built with a bigger footprint with a coverage of ten-twelve kilometres of internet connectivity. The towerco implements various energy solutions including, solar, wind and diesel, however what works is different for each terrain, each site and each usage. For example on a single operator site, a lower capacity battery bank is installed for backup.

Solar solutions have also been installed. Deploying green energy solution has enabled the towerco to provision some of the electricity generated to be accessed by the local community, enabling people to charge their mobile phones. As stated by Shaukat, in terms of future rural innovation AWAL are looking to pursue active sharing once it is approved by the government, as it presents an opportunity to manage and control the power consumption as well managing antennas effectively.

One of the many business models adopted by ACG is to own the active equipment. By owning the active equipment companies are able to control the levels of consumption. Even a highly utilised ACG site with three tenancies does not exceed 3000 watts – traditional single tenant sites are usually at least half this, and sometimes even more. Abdulkader stated that if you control active equipment it is easier to assess ways to manage costs. Another way to reduce costs is looking at transmission and allocating the VSAT capacity to minimise using too much backhaul on any one site. Whilst solar can be implemented in Afghanistan, the winter months make certain site visits difficult to access therefore making solar not the most viable of power options.

MNO Smart East Africa has implemented seven to ten sites that are independent of commercial power and diesel and run on two solar panels and one small wind turbine which powers the site for 24 hours covering four to five square kilometres. The results seen by the operator through these solutions have significantly lowered opex relative to traditional vendor equipment.

Working with regulators

To progress the development of rural connectivity, towercos and MNOs are working hard to engage regulators and municipalities who responsible for awarding the universal service fund, which is often used for the establishment of rural sites.

AWAL Telecom are working closely and advising regulators on a number of areas. Firstly, if a fund becomes available towercos should be the preferred infrastructure provider for a specific area and the regulator should allow the towerco to use this universal fund to build sites. Secondly, microwave connectivity may one day not be enough, therefore they argue that regulators should encourage greater investment in fibre infrastructure. Thirdly, they are lobbying for the approval of active sharing, which is one of the most important and fundamental developments for rural connectivity.

Ladak agreed that lobbying with the regulator is crucial to the success of any operator with ambitions to bring the next billion users online, especially with a big proportion of those being in sub-Saharan Africa. With 35% of the population in Burundi lacking connectivity, helping manage the allocation of the universal service fund is important. The USF fee is equivalent to one percent of gross revenues paid to the government each year and if properly administered could pay for coverage for the entire country in three years. After this time the money could then be used to deploy 4G services, bring in fibre or any technology developments for regions that remain unconnected.


An initiative by the Burundi regulator saw the implementation of a tower tax of around $500 per tower per year. Within eighteen months of the rollout of the tax operators started to engage with one another and discuss ways to share infrastructure and avoid build additional towers. Such a success was the initiative that forced the operators to request that the regulator made infrasharing an obligation and a part of the law. It is expected that the country is soon moving to this new law with infrastructure sharing becoming a mandatory requirement for operators in Burundi.

Working out the economics

The challenge of working out the economics is by far the biggest barrier to rural connectivity. Rural sites have lacked investment not only because total revenues generated can be low and somewhat unpredictable but because it has been difficult

to divide the tower revenues so that everyone who invests in a rural site can earn a return on their investment. Moving away from capex-led investments to opex-based is shifting the spectrum for more MNOs to invest where there are decent revenue sharing models in place.

Nonetheless many questions remain when breaking down the economics including, how cheaply can sites be installed, and how cheaply can they be operated? How many subscribers will they serve in the immediate and long term, how much can those subscribers afford to spend, and how will revenues be shared over the life of a site? Innovations in site design, cheaper radio-side technologies, and innovations in infrastructure sharing business models are all positive factors that will enable investment in rural connectivity within the MENA region.

When it comes down to the economics of infrastructure investment in a rural area, one should not forget the power of the local community itself in generating its own economic growth. If towercos and MNOs can engage rural communities by offering employment, creating stakeholders who will protect sites and encouraging them to become adopters of technology that will make it viable. In return there will be many benefits, like lobbying the regulator for increased access to connectivity. The faster issuing of permits will in turn enhance the business case of MENA’s MNOs and towercos making it a win-win scenario for all in this relatively untapped market with huge economic potential for everyone<

“ “Moving away from capex-led investments to opex-based is shifting the spectrum for more MNOs to invest






Keywords: Camusat, ESCOs, Energy, i-eng, IPT PowerTech, MNOs, MTN, Orange, Towercos

ESCOs Go Mainstream Following the ESCO Roundtable Borderless read TowerXchange’s market update and excerpts from our speakers

What is an ESCO?

TowerXchange define an ESCO simply: An energy services company, sometimes known as a TESCO (Telecom Energy Services Company) or RESCO (Renewable Energy Services Company) is a company that deploys its own capital to acquire energy equipment for telecom cell sites, then sells that energy back to the site owner, whether they are an MNO or a towerco.

Sometimes those ESCOs charge a fixed monthly fee or charge by the kWh consumed. An alternate model is the ‘guaranteed savings’ model, under which the towerco or MNO continues to deploy their own capex, but their ESCO partners takes a risk in guaranteeing the performance of their systems.

As you can see from the accompanying graphic ESCOs do not act alone. ESCOs predominantly rely on development finance, which likes their combination of emerging market telecom and energy investments, their steady cashflows and their quality counterparties. While some of the most successful ESCOs produce their own energy equipment, all of them rely on the wider passive telecom infrastructure supply chain to complete their offering. And while today ESCOs predominantly supply towercos and MNOs, there are ESCOs which have already moved into community power and other opportunities beyond the tower.

How successful is the ESCO model?

When we began covering ESCOs in 2015 they were a niche segment of the industry. When we published

Read this article to learn:< Reasons to read:< ESCO site counts< Projections for future ESCO growth< A map of the ESCO ecosystem< Cost estimate of hybridising a telecom tower site< How ESCOs are achieving success for their partners

The ESCO model was another topic of conversation at Meetup MENA 2020. Following the event on Wednesday May 27th Towerxchange ran the ESCO Roundtable Borderless, and in the following pages we will include the latest Towerxchange research on the industry so that our readers in the MENA region have access to the latest research. This report includes exclusive market data and insights from TowerXchange’s opening presentation at the event as well as excerpts of the comments of speakers at the ESCO Roundtable Borderless. ESCOs are thus far predominantly active in South Asia and Africa, but there are many sites in the MENA region which would benefit from the services of an ESCO, and we hope that we are able to support the region in this region as we have in Africa and India.

Matthew Edwards, Head of Research, EMEA, TowerXchange


ESCO Pioneers by site count

Source: TowerXchange, Q2 2020*Unverified site count

IPT PowerTech 10,050inc 4,900 Nigeria,

3,250 Lebanon,

1,900 Guinea

Mahindra Powerol, India 3,500

Sagemcom 1,000across DRC, Liberia, Sierra Leone

Environ Solar / Bhaskar Solar, India 800

ieng’s CREI 736inc 400 Guinea, 200 Liberia, 126 CAR, 10 Afghanistan

Applied Solar Technologies,India 9,700

Camusat’s Aktivco 2,500across Burkina Faso, Chad,

Cote d’Ivoire, Niger

Energy Vision 9,800including 500 Gabon, 700 Nigeria,

8,600 India via Tower Vision

Distributed Power Africa2,000

Ardom, India 500 Ascot 780

inc 400 Saudi Arabia,320 Sudan, 60 Greece

Cambridge Energy Resources, India 970

*Pace Power, India 300 *Acme, India 100 *Caban Systems, undisclosed

*Enertika, CALA, 3,500

Biswal, Nigeria, 2,800

Mantrac, Nigeria, 1,987

Yoma Micro Power, Myanmar 250

Voltalia, Myanmar 160

OMC Power, India 200

MediPower, Italy 150 Undisclosed, Pakistan 70

HYBRICO, CALA 50


The ESCO whole supply chain

ESCOSIn-house O&M

MNOs TowercosB2B and B2C

EAAS

Community power

Solar lanterns

Retail outlets

Phone charging

Schools

Data centresFibre PoPs

Commercial & industrial off-

takers

Agricultural off-takers

Feed-in-tariff to grid?

Investors

Cleantech

Utilities, O&G

Infrastructurefunds

Private equity

Development

Bank debt

Export credit agencies

Installation& service

Data collection and utilisation

EAAS

EA

AS

EA

AS

EAAS

Technologyagnostic ESCOs

AggregatorESCOs

PowercubesPowercubes

3rdpartyO&M

Energy system componentsBatteriesFuel cells

CapacitorsControllers

InvertersAir

conditioning

GensetsSolarWind

Biomass

Engaging the entire ESCO ecosystem

Source: TowerXchange

IPPs

Micro grids

Solar farms

Wind farms

Small biomass

and hydro plants

Source: TowerXchange, Q2 2020


our 2018 ESCO Market Report, they were still only just reaching launch velocity. Today ESCOs are well-established industry players with scale to rival the largest towercos. In 2015 telecom ESCOs had contracts to manage 8,664 cell sites, and since then the number of sites under ESCO management has grown at a 43% compound annual growth rate.

TowerXchange has identified over 20 active telecom ESCOs, who between them now own and operate the energy equipment at 51,433 cell sites. 45% of contracted ESCO cell sites are in the fastest growing geographical market: Africa and the Middle East. 48% of sites are in the oldest ESCO market, India, where growth has begun to accelerate once again. Despite the popular assumption that grid power is too widely available and reliable for the ESCO model to work in developed markets, 7% of the world’s ESCO sites are in the Americas or Europe. The remainder are in other developing markets like Myanmar.

Of the sites where ESCOs own and operate the power systems, a little under two thirds of those sites are owned by towercos, predominantly in India. A little over a third are owned by MNOs.

MNOs and towercos alike increasingly recognise ESCOs as proven business partners, able to deploy capex into long-term payback hybrid and renewable energy solutions, reducing energy opex and carbon footprints, while improving uptime and quality of service (QoS).

ESCOs deploy anything from US$10,000-$40,000 of up front ‘improvement capex’ to hybridise the

power systems at a cell site, with India generally at the lower end of that range, and Africa at the upper end (see chart).

Where will ESCOs go next?

We can compare the ESCO trajectory to that of towercos. The accompanying chart compares ESCO and towerco growth in Africa and the Middle East from 2009-2025. Today ESCOs have 22,993 sites under management in MEA. In 2015 there were zero. Towercos managed zero sites in MEA in 2009 and today control over 80,000. We think there is similar sized addressable market for ESCOs, and that they will enjoy steady growth to around 60,000 sites in MEA by 2025.

Globally, we forecast an addressable market for ESCOs of around 400,000 sites, although that could be an undercount. Today ESCOs have reached around 12.5% of their potential. By 2024 TowerXchange forecasts ESCOs will operate the power systems at 108,566 cell sites, or around 27% of their addressable market. In 2018, TowerXchange forecasted that the ESCO industry would celebrate contracting its 50,000th site during 2021, but that threshold has been crossed early.

Our estimate is based on the assumption that most of the future addressable market for ESCOs lie with MNOs, but towercos could become significant customers in time too. Towercos own the energy equipment at over 50% of the world’s cell sites, and

Comparing towerco growth in MEA from 2009 with ESCO growth six years later

Source: TowerXchange Q2 2020

Towerco sites

ESCO sites

20092015

20102016

20112017

20122018

20132019

20142020

20152021

20162022

20172023

20182024

20192025

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000


many of those towercos can access capital at a low single digit cost. ESCOs are generally less mature businesses, with the majority dependent on debt and equity which mean their cost of capital can be five times that of a towerco. As the ESCO model matures we may see towercos turning to them to manage power on their sites, so that towercos can focus on lease-up and network roll-out, not power management.

Because site acquisition has been faster and we are seeing increased interest from towercos, we think

there is significant upside to the ESCO model over the medium and long-term.

MNO attitude to ESCOs

Herve Suquet, Orange MEA’s CTIO explained that MNOs need to upgrade and expand their networks, whether that means expanding the network geographically, densifying existing networks or upgrading core networks and site technology for LTE or 5G. For that they need capital, and they need to spend less time worrying about non-

core competencies like energy. Towercos are one potential power-as-a-service partner, but ESCOs can also deploy their capital into cell site energy assets.

Orange has looked at working with towercos to release capital for some time, but think that towercos can be rigid and store up concerns for the future. This was a sentiment shared by Siphile Sibaya of MTN, who spoke later during the session. However, both MTN and Orange want a partner to invest in energy assets and manage power at their sites. MNOs are not energy experts, and so in 2017 Orange turned to ESCOs as their key partner to modernise their site energy management. Following the 2019 TowerXchange Meetup Africa, MTN decided to follow suit and issue some preliminary ESCO RFPs.

Both Orange and MTN emphasised the importance of following local conditions and devolving decision making to local opcos, while supporting from the centre with resources. There can be resistance to change from parts of the organisation or long-term partners, but both emphasised the importance of education and central leadership in resolving any difficulties.

The Renewable Energy Ratio is one of three key KPIs for Orange. Orange has committed to renewables making up more than 50% of its energy mix by 2025. So long-term CSR strategies are affecting energy decisions made now. MTN don’t have as stark a target as Orange, but they do have major challenges in managing energy in some of their more emerging markets, and in South Africa they are facing a

TowerXchange forecasts ESCOs will operate the power systems at 108,566 cell sites by 2024

ESCO sites in Asia

ESCO sites in MEA

ESCO sites in RoW

Source: TowerXchange Q2 2020120,000

100,000

80,000

60,000

40,000

20,000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024


India vs SSA: Where does the capex go to hybridise a cell site for the ESCO model?

India example: 6kW solar, 750AH battery capacity: total capex $11,179

SSA example: 4.5kW solar, 1,000AH battery capacity: total capex $38,650

Source: Industry sources, TowerXchange presentation

Battery bank

Foundation + OD Pad

OD Rack, pole and fabrications

MPPT

Electrical works

Warehousing, freight and survey

RMS

Supervisory manpower

Battery, cabinet and accessories

Solar system

Hybrid cabinet (core, controllers, solar

chargers, rectifiers, AC&DC dist.)

Genset, controller and fuel tank

Installation materials

In-country logistics and installation

$3,251

$1,091

$2,482

$1,443

$1,046

$681

$800$385

$14,800

$3,700$7,900

$8,500

$3,000$750


carbon tax which will require them to invest in renewables.

Besides outsourcing energy capital spending, and shifting to renewables, site availability is a key concern for MNOs. Orange have a target site availability of 99.6%, which its ESCO partners are currently fulfilling. In emerging markets, a significant share of network outages are caused by site power failures, and both Orange and MTN were looking to ESCOs to eliminate this perennial headache.

How ESCOs are solving their partners’ power problems

Here we will excerpt from the comments of our Lead Sponsors Camusat, i-eng and IPT PowerTech. Further comments from each ESCO are available in the following pages.

Thibaut de Rodellec, Deputy CEO of Camusat emphasised the key competencies needed for ESCO success. Top of the list was operational excellence. Without boots on the ground and a capacity for field operations and maintenance you will be unable to fulfil the promise of the ESCO model.

As well as protecting ESCO financial performance, and eliminating unpleasant surprises for MNO partners, operational excellence brings more flexibility to energy management and makes necessary changes to sites easy to fulfil. This flexibility is a key requirement for MNOs and has helped Camusat drive a 15% annual organic growth in its markets.

Kadri Hakim, Co-CEO of i-eng discussed the short-term and long-term improvements in availability ESCOs can generate. i-eng have three key strategies in place to improve availability. The first is designing and manufacturing their own hybrid power systems in India. They have deployed over 2,000 so far and have used their expertise in the field to ensure their model works well.

In addition to smart technology, their IT Service Management (ITSM) and Global NOC (Network Operations Centre) allow them to coordinate and monitor systems globally to identify problems and resolve them before they affect local KPIs. Lastly they too emphasised their O&M and field work

experience. They have 10 years’ experience and now manage over 20,000 sites.

IPT PowerTech are one of the longest running ESCOs in the world and have already started diversifying the model. Gabriel Bou Gebrael, their head of ESCO discussed how in one market, IPT PowerTech now operates as an ESCO to two MNOs, this allows for significant cost savings and improvements in operations. Power can now be co-located which reduces overall cost and site complexity, which improves reliability. They can also eliminate duplicated management, warehousing et cetera. They can achieve 25-40% improvement in efficiency through a single ESCO deal, a dual deal is even better.

Screenshot of the ESCO Roundtable Borderless


Because site acquisition

has been faster and we

are seeing increased

interest from towercos,

we think there is

significant upside to the

ESCO model over the

medium and long-term

IPT PowerTech also operate a guaranteed saving model with a towerco, in which the towerco uses its lower cost of capital to invest in energy equipment, but IPT PowerTech takes over operational control and the energy risk. This means savings are realised up front by the towerco which can enjoy a 50% reduction in opex.

What’s next?

TowerXchange will be holding a series of energy focused digital events over the year, Greening the Network. The next of these is due to take place on July 15th and if you are interested in participating please contact me at:[email protected].

Why Greening the Network?< Before investing in telecom infrastructure, investors are demanding green action plans< Telecom ESG strategies are requiring emissions reductions from their supply chain< 5G and changing site typologies are increasing power complexity in developed markets< Carbon taxes are pushing up the cost of carbon- based energy< Operational excellence demands improved site autonomy, cleaner energy and more efficient network equipment ESCOs will be major players in the new greener network, and I hope you will be too. See you in July<

Thank you again to our lead sponsors: Camusat, i-eng, IPT Powertech and co-sponsor Caban Systems. And thank you to Herve at Orange and Siphile at MTN for speaking too and sharing their thoughts.




mailto:matthew.edwards%40towerxchange.com


Opportunities for site optimisation in MENAThe Middle East and North Africa has the lowest towerco penetration, and therefore the greatest opportunity to optimise sites and learn lessons from abroad

The essential asset registry

Creating and keeping an up-to-date asset registry was the number one priority for our panel, a sentiment echoed by our roundtable participants later. TAWAL has inherited over 14,000 towers, and while their focus began on assembling a quality team, their attention has now naturally turned to auditing and surveying their towers. With ARPUs declining in Saudi Arabia, sorting out the country’s passive infrastructure is TAWAL’s raison d'etre, and the asset register is the place to start, said Saeed Alshehri, Chief Operating Officer of TAWAL.

At IHS Towers, they have seen success and failure for towercos come down to the quality of the asset register. VP for Operations, Gordon Porter said it would be impossible to overstate how important the asset register is. When you inherit a tower portfolio you have to remember that nobody at the MNO had the job of maintaining an accurate register. The radio team monitored some assets, some responsibly lay with the enterprise team, other assets were with the transmission tea, and so on. There is no single owner of the data until a towerco takes ownership of the towers. This means you rarely inherit a comprehensive, reliable database.

Auditing sites is essential for buy and leasebacks because those assets which were on the tower on purchase will be grandfathered in, on your original lease rates. This means that accurately auditing sites will enable you to properly charge for amendments and additional loading on your sites. Plus, if you have a good asset registry you can say yes to new

Read this article to learn:< The importance of an asset register

< Actions which reduce opex and enable tenancy growth

< How innovations in security can reduce opex

< How poor decision making is holding back modular designs

< The importance of sizing sites properly

Keywords: Access Control, Capacity Enhancements, Energy, Global Tower, IHS Towers, MENA, Masts & Towers, Monitoring & Management, Oman, Oman Tower Company, Opex Reduction, Procurement, Research, Saudi Arabia, Site Surveys, Site Visits, TAWAL, Towercos

TowerXchange was pleased to be able to bring together towerco expertise from around the world to MENA to discuss how the region’s turn towards towercos will affect site design and optimisation. At the TowerXchange Meetup MENA, we discussed site optimisation at length, from strengthening sites to using data to improve uptime. This write-up brings together comments from our panel and roundtable on site optimisation, and what lessons will be applied in MENA. On our panel were Saeed Alshehri, Chief Operating Officer of TAWAL, Gordon Porter, VP, Operations of IHS Towers, Samuel Tanon, Operations Director of Oman Tower Company and Yildiray Ornekli, Network Infrastructure Manager of Turkcell. The panel was moderated by Darragh Stokes, Managing Partner, Hardiman Telecommunications.


tenancy requests without visiting the site, in fact, you can say yes without even leaving your desk.

Asset registries can be expensive and time consuming to create and keep up to date, but a good register is cheaper than the alternative. There are new ways to reduce the cost of asset registers, for example drone technology is now able to identify equipment which has moved or been added, while reducing the labour required to audit a site. At our roundtable, Anders Smedberg of Tarantula emphasised the role of IT in enabling towercos to monetise their assets through visualising them remotely. You can also provide O&M teams with cheap handheld devices which can identify objects which are out of place to aid revenue protection by preventing people from adding antennas without paying.

Making your towers work for you

Gordon Porter of IHS Towers highlighted that overloaded towers are not just dangerous, they will also cap potential tenancies, amendments and revenues. Towercos must develop a strategy to ensure when towers risk overloading that equipment is safely removed, and the tower replaced. This will involve identifying existing customer demand and also pent-up demand from operators not having access to previously MNO-captive towers. If you identify these sites you can become a delivery partner to your customer, proactively solving their network issues and helping them get to sites quickly and therefore get lease revenues more quickly too.

At our roundtable, Helios Towers’ reiterated that one of the core aims of site design and optimisation for a towerco is moving from a single tenant to a multiple tenant site as quickly as possible. The move from two to three tenants on a site is huge from a balance sheet and EBITDA perspective. Therefore site optimisation has to enable that move, by accurately predicting where the site optimisation work will best enable multiple tenancies. This means you must work with MNOs to understand their needs. If a site is likely to have six tenancies and a 9kW load that tower will need to be spec’ed differently to a two tenant tower.

In Turkey, at Global Tower they began not only sharing towers but sharing inbuilding solutions and sharing system rooms too, showing that site optimisation can go far beyond just correctly sizing a macro site. Global Tower went on to establish site designs standards for three operators, and in doing so was able to improve site choice for its operators and roll-out together. If you begin with joint

rollouts you can create capex efficiency and opex efficiency from day one.

In Oman, Samuel Tanon told us that in the past, operators were designing towers for their own use. A big challenge for Oman Towerco will be to convince MNOs to abandon their currently preferred site and move onto sites which have been optimised for multiple tenancies. Many new towers will be for new areas and new developments not already covered like new highways, new development zones, or oil and gas sites. The only way to deploy passive telecom capex into these areas efficiently is through the adoption of new site designs, something Oman Towerco has to convince its future tenants is in their interest.

For TAWAL, Saeed Alshehri discussed how they were prioritising site upgrades and optimisation across their 14,000 towers: not every site can be upgraded at once. They are working to understand their assets first through their due diligence process.

“ “Asset registries can be expensive and time consuming to create and keep up to date, but a good register is cheaper than the alternative


Once their assets are well understood and the status of sites is live in their tower management tool, they will be able to combine this with information on what their clients want to prioritise their work.

Power problems

Power efficiency needs to be driven by both MNOs and towercos. In urban areas, TAWAL offers power as a pass through on its sites which incentivises the MNO to use power efficiently, but there are other options. In the past, with site efficiency less of a priority, MNOs have not prioritised power efficiency, but with 5G there will be initiatives to optimise power utilisation because of its high power demand.

For TAWAL’s off-grid sites, the incentives are larger for TAWAL to improve power efficiency. The maintenance of an off-grid power supply is a headache for any towerco and power usage on rural sites in Saudi Arabia is much higher than on off-grid sites in Africa, the other region where power-as-a-service is more common. This makes it difficult to directly apply lessons from Africa for 2G/3G rural sites to Saudi sites which may be 3G/4G/5G. 5G base stations are much more power-hungry and so optimising off-grid sites in MENA is completely vital.

In Africa, where power-as-a-service is expected, they are investing heavily in hybrid technology, especially in solar. Anything which can drive down reliance on diesel and fossil fuels will be worth it; even with big decreases in the headline cost of crude oil you still spend 70% of management time dealing with power and fuel. It is a major

management focus and reducing site visits and genset maintenance would help address that.

Sizing sites accurately also helps to protect the value of your energy assets. Generators don’t like being moved around from one site to another, so while you can move a generator from one site to another as site demands change, it is inadvisable. Similarly, while you can install the most technologically advanced hybrid systems on any site you like, complex systems can require complex maintenance, and your sites will only be as effective as the guy on the ground performing maintenance.

Luckily, in Oman, grid power is very reliable, and sites only require a backup generator. Each operator has its own power meter and they get

their bill directly because Oman Towerco is not into power at the moment. Because there are off grid sites in Oman, Omen Towerco is looking at partnering with an ESCO to manage power. Coordinating site design and power with an ESCO will create additional complexities, but by keeping power off Oman Towerco’s books, it will also remove headaches: an innovative business model, and one which may inspire imitators.

The towerco difference

It can be tempting to cut corners, to neglect capex but pay for it in opex, in fact, MNO corner-cutting and consequent underperformance is one reason towercos are so important, so you cannot stress enough about the importance of doing a good

“

“

Sizing sites accurately also helps to protect the value of your energy assets. Generators don’t like being moved around from one site to another, so while you can move a generator from one site to another as site demands change, it is inadvisable


job properly. That includes helping vendors to do maintenance with the correct training, with the correct materials and to the correct standards, but it also includes innovation. Innovation in site design is another area where towercos have realised efficiencies and improvements which eluded the mobile operators.

One area which towercos have embraced is access control, something which was previously out of the tower owner’s hands. The old system of lock with uncontrolled keys floating amongst an untracked staff is over. Access control is now related to the individual, and requires people to call for an access code for a virtual key which will only work on that site, for the period of time that access is required. This enables competency to be audited so only qualified people get on site. And it allows you to measure how long people are on site and whether they’re doing the job you’ve sent them to do.

In Africa, security is a major issue, but because there is no correlation between manned security and theft prevention, towercos have turned to technology. Access control allows you to identify people entering a site through their keys, and cameras allow for monitoring of unauthorised entry. Combining that with roving security teams and cooperation with local law enforcement is more effective than an armed guard.

Modular towers and cost pressures

Standardisation can help push down costs, but there are many tower suppliers and everyone has slightly different products and most MNOs have different

expectations. Modular designs are therefore becoming more popular as they allow towercos to bolt together a structure which is appropriate now, and easily modifiable later. However, despite modular construction’s advantages there are still additional up-front costs associated with modular designs which can lead to towercos purchasing designs on a less costly basis.

According to suppliers at our roundtable, there is still some gap between what is preached and what is practiced. Often procurement divisions drive procurement decisions, but then these decisions are made without an eye on the cost of future strengthening or the advantages of modular design, this is especially common at MNOs, but not uncommon with some towercos.

Conclusion

As towercos become embedded in the MENA passive infrastructure industry, our panellists and roundtable participants agreed that the industry would improve site management. Auditing sites and maintaining asset registries are at the heart of site optimisation and enabling towercos to operate efficiently. Luckily towercos enjoy a lucky coincidence that what is good for keeping their costs down is also good for enabling lease-up and maximising revenues. Through innovations, like access control and modular design, towercos are finding ways to become more efficient and maximise revenues. MNOs and towercos in MENA will be embarking on a long journey of site optimisation, but they have proven lessons, people and companies from around the world to help<






Our sponsors

EnerSys

EnerSys®, the global leader in stored energy solutions for industrial applications, manufactures and distributes energy system solutions, motive power batteries, battery chargers, power equipment, battery accessories and outdoor equipment enclosure solutions to customers worldwide. Motive power batteries and chargers are utilised in electric forklift trucks and other commercial electric-powered vehicles. Energy Systems provide highly integrated power solutions and services to broadband, telecommunication, utility, uninterruptible power supplies, renewable, medical, aerospace and defence, premium starting, lighting and ignition applications. Outdoor equipment enclosure products are utilised in the telecommunication, cable, utility, transportation industries and by government and defence customers. The company also provides aftermarket and customer support services to its customers in over 100 countries through its sales and manufacturing locations around the world.

With operating costs becoming a key issue for tower owners and telecom operators, choosing the right backup power solution is growing in importance. With variables in location, climate, budget, maintenance and deployment, choosing the right battery and cooling options to keep the total cost of ownership (TCO) to a minimum can be difficult. EnerSys® - as the world leader in this product sector – offers an extensive portfolio of energy storage solutions to serve the industry effectively, efficiently, and repeatedly.

www.enersys.com/GlobalLanding.aspx

Gold sponsor Silver sponsor

Bladon

Bladon is a pioneer in the design, development and manufacture of Micro Turbine Gensets (MTGs) – using high-speed, ultra reliable, low noise and clean-burning microturbines together with patented air-bearing and heat exchanger technologies that will transform distributed power generation.

Bladon is the world’s first manufacturer of microturbine gensets for the telecom market. Providing 12kW of power the Bladon MTG has upto 8,000 hour service intervals, fuel flexibility to use diesel, kerosene or mixture, secure packaging and reduced environmental impact. The Bladon MTG is the world’s only EURO V emission standard compliant 12kW diesel genset and uses no engine oils or liquid coolants thanks to its one moving part and air bearings technologies.

www.bladonmt.com

Exhibitor

Asentria

Asentria provides solutions for mobile network and tower operators to manage power, security, and environmental issues at remote cell sites from their network operations


Our sponsorsmodularity, flexibility and scalability through utilization of rack-mounted, hot-pluggable power conversion modules, smart monitoring and effective customization.

www.enetek-power.com

Exhibitor

HIMOINSA

HIMOINSA is a global corporation that designs, manufactures and distributes power generation equipment worldwide. It has extensive experience in the telecommunications market, having supplied equipment with power outputs ranging from 8 to 45KVA in the international market to well-known companies in the sector. Our telecom range gensets can work remotely, providing efficient and reliable power and incorporate functionalities such as: GPS system, making it possible to locate the machine at any time, fuel level alarm, remote management and remote control for gathering and recording data in real time. HIMOINSA has develops a variable speed hybrid generator sets that reduces fuel consumption by 40% and extend maintenance periods up to 1000 hours.

www.himoinsa.com/ Exhibitor

Exhibitor

IPT PowerTech

IPT PowerTech Group delivers specialized solutions to the power, industrial and telecom sectors in Africa, Middle East and South-East Asia. Combining power expertise

center. Telecom sites are evolving to include many new intelligent subsystem controllers for DC rectifiers, generators, cameras, access controllers, and HVAC.Asentria securely integrates these sub-systems into our hardware based site controller to present a single interface for management of power, security and environment at remote sites. Beyond simple alarming, Asentria generates data for comparative site analysis and provides remote access to the underlying systems for OPEX reducing cell site optimization.

http://www.asentria.com

Exhibitor

Enetek Power, An Eltek Holding Company

Enetek, a AC and DC power specialist, methodically tailors solutions to cater to the needs of users in various industries for their critical mission applications. We aim to continuously develop technologies that encompass smart power flexibility to provide clean, cost-effective and high quality, reliable energy solutions. We engineer innovative & customized power solutions to meet stringent industry standards.

Through creative engineering, smart sourcing, targeted manufacturing, efficient logistics management and services with human touch, we aim to satisfy our customers’ business interests and enhance their growth in a sustainable way. Enetek’s power solutions offer

An Company

with telecom infrastructure specialization, we are market leaders in providing energy solutions, telecom services, and managed maintenance services. The group is recognized as the global Leader of the Guaranteed Savings and T-ESCO models. Our self-manufactured enclosures allow us to create customized energy efficient/hybrid and renewable energy solutions, and to implement new concepts in site renovation. With offices in 11 countries, our solutions are delivered to more than 60 operators, tower companies and vendors in more than 50 countries.

http://www.iptpowertech.com

Exhibitor

JRDC

JRDC is one of the world’s leading solution providers of mobile telecommunication towers. Established in 2002, it has a solid backing of quality infrastructure and brigade of proficient manufacturing team and management professionals who have an unflinching commitment to customer satisfaction. Each one of our structure at JRDC is meticulously designed and manufactured with superior quality control for challenging applications and geographical conditions. The top tier detailing customized solutions and supremely fabrication-engineering specificities has helped us to be identified as a nonpareil manufacturer of telecommunication towers.

www.jrdcup.com/


Our exhibitorsSerEnergy provides a very compact power generation system that does not generate harmful emissions, noise or vibrations. The methanol fuel cell power system is a front-runner in terms of low maintenance requirements while being environmentally friendly. SerEnergy provides premium-quality methanol fuel cell solutions with an electrical efficiency of 40-50% and with highly skilled staff in and outside Denmark, we strive to provide all our customers with high-quality service and support.

http://serenergy.com

Hardiman Telecommunications

Hardiman Telecommunications Ltd. was established in 1994. We are a boutique consultancy specialised in strategy development, due diligence assessment and valuation support. Our clients include major TowerCos, private equity funds, corporate finance / advisory and investment functions of leading banks, and telecommunications carriers. We are particularly active in end-to-end support of mergers, acquisitions and divestitures. All of our staff have held profit-accountable positions with global telecommunications carriers, manufacturers and systems integration houses prior to joining us. This allows full support of clients across the continuum from technology through to market effectiveness, spanning engineering, commercial strategy, financial structuring and proven operating methodologies.

http://www.telecoms.net

Exhibitor

Polar Power Inc Polar Power, Inc. (POLA), designs, manufactures and sells direct current, or DC, power systems, lithium battery powered hybrid solar systems for applications primarily in the telecommunications market. Polar’s systems provide reliable and low-cost energy for applications for off-grid and bad-grid applications with critical power needs that cannot be without power in the event of utility grid failure.

Our systems integrate DC Generators, Solar PV, DC Air-conditioning, and batteries. Our Hybrid Solar Systems provide reliable power with very low maintenance and operational costs. Our Prime Power DC Generators provide very low fuel consumption, low maintenance with 3,000-hour oil change interval and long generator life.

Our Backup DC Generators provide compact, lightweight, minimum fuel storage providing long reserve.

www.polarpower.com

Exhibitor

SerEnergy

SerEnergy is a world-leading developer and manufacturer of power systems providing primary, supplementary and backup power for telecom and utility applications. With a system based on reformed methanol fuel cell technology,

MeetupMENA 202116-17 March, Dubai

www.towerxchange.com/meetups/meetup-mena

http://www.polarpower.com


MENA’s largest gathering of tower owners in one room:How can you make the most of the opportunity?

The TowerXchange Meetup MENA enables you to condense months of travelling, client visits and business development calls into just two action packed days. Yet with such a large number of clients in one place, planning your time efficiently and finding a way to stand out from the crowd is a must.

As a sponsor or exhibitor you have access to premium opportunities unavailable to delegates. Such opportunities have proven so valuable that each year we see 50% of sponsors and exhibitors rebooking their packages and we expect an over 80% rate of return for 2021!

Can you afford not to join them?

To discuss the opportunities available contact Sarah Kerr, Global Commercial Director on +44 (0) 7714 775 700 or email [email protected]

TowerXchange’s top five tips to meet your goals on site

1. Position yourself as a thought leader and let clients approach you

2. Secure access to invitation-only buyer briefings

3. Create a meeting point and bring in reinforcements to cover a large client base

4. Strengthen brand awareness, reputation and likeability

5. Arrive prepared: Pre-event briefing to focus your business development goals


TowerXchange Meetup MENA 2021 exhibition preview

58 Bladon

63 EnerSys

66 Enetek Power

69 Himoinsa

72 IPT PowerTech

75 Polar Power Inc

80 SerEnergy

TowerXchange is not only about the views of towerco

and MNO strategists. One of our top priorities is to

provide a platform for proven passive infrastructure

equipment and service providers to introduce

themselves and their activity.

From static asset manufacturers to access control

systems, site management systems, RMS and backup

power solutions, these companies play a critical role

in ensuring the efficiency and safety of towercos,

MNOs and their employees.

In addition to interviews and articles featured

elsewhere in the report, this section gathers further

interviews with a selection of the top service,

solution and equipment providers that will be joining

TowerXchange Meetup MENA 2021.


Micro Turbine technologymakes once a year site maintenance visits a realityCost effective innovative solution has up to 8,000 hour service intervals, is cleaner, quieter and can use multiple fuels including diesel, kerosene or paraffin or a mixture to reduce costs and deter fuel theft by up to 70%

TowerXchange: Where does Bladon Micro Turbine fit in the telecoms infrastructure ecosystem?

Stuart Kelly, VP Market Development, Bladon Micro Turbine: 2019 has been a breakthrough year for Bladon. After 10 years of heavy investment in R&D and 2 years of field trials we have deployed our microturbine technology on telecom sites in Africa, Australia and Europe, more specifically South Africa, Uganda and in the UK where our factory is based. A Micro Turbine Genset (MTG) is an evolutionary step in replacing conventional diesel gensets that are deployed in thousands of off grid and bad grid sites. Without making any drastic changes in business process, supply chain or taking a risk on new technologies towercos can drastically reduce their daily fuel and maintenance costs and see those reductions immediately. The MTG’s superior reliability and performance along with its multi-fuel capabilities nicely positions it to be the ideal replacement of noisy, inflexible and high maintenance diesel generators. Bladon’s MTGs are ultra-quiet, cleaner and greener, which is critical for towercos and mobile network operators alike that have strong corporate social responsibility and environment friendly agendas.

Gas turbines aren’t new. This is a 70 year old technology, and is the method of choice for providing ultra-reliable power as a utility to millions of people and businesses globally. Bladon has innovated the application of turbines to telecom tower power by making a microturbine fit into the space where normally diesel gensets are situated.

Read this article to learn:< How Bladon harnessed the power of microturbines for telecom power solutions< The advantages of Micro Turbine Gensets (MTGs) over conventional DGs< How the product addresses the weakness in all hybrid genset solutions – reinventing the diesel genset< More about the ultra-low maintenance solution: no engine oil, no water, only one moving part< The importance of an energy efficient solution that compliments your existing supply chain – MTGs can run on almost any liquid or gas fuel< Time to breakeven/crossover in different scenarios, compared with traditional DGs< Details of the World’s first Stage V emissions standard compliant diesel genset (12kW)

It’s not often TowerXchange comes across a genuinely innovative alternative to a traditional diesel genset that provides primary or backup power to many emerging market cell towers, but when we heard about Bladon’s Micro Turbine gensets (MTG), we had to find out more! While the MTG is cleaner and quieter than a traditional DG what makes the MTG particularly interesting to towercos is the fact that they require as little as once a year maintenance. A key business requirement we continuously see from mobile operators and towercos is to reduce site visits to once a month or less.

Keywords: Africa, Bladon, Bladon Jets, Bladon Micro Turbine, Energy, Vendor Directory, Who’s Who, South Africa, Uganda, UK


Our secret sauce is not so much a new technology as a manufacturing methodology that enables us to produce microturbines economically in volume. One of our most important manufacturing techniques is a process to cut turbine blades from a single piece of material. We’ve been able to manufacture to a price point such that our MTGs are commercially viable compared to reciprocating diesel gensets.

TowerXchange: Which telecom markets are you targeting and why?

Stuart Kelly, VP Market Development, Bladon Micro Turbine: The amount of activity in rejuvenation, investment and growth in the telecom tower market is most impressive in Africa, especially sub-Saharan Africa. We have conducted field trials in Africa over the last 2 years and learned valuable feedback working with our distribution partner Abbott Technologies. Some of our MTGs have been running nonstop for over a year now without ANY filter changes or servicing. Whether an MTG is deployed as a primary power or hybrid installation servicing the MTG will be maximum once a year. That’s a really compelling proposition to towercos that are crippled with genset maintenance costs.

We have attended TowerXchange Meetups around the world to share Bladon’s vision with 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 as efficiently as

the owner might have thought. But the new owners don’t want to create too much turbulence in the supply chain, so it’s important that our solution complements the existing energy supply chain in developing markets. The Bladon MTG allows MNOs, ESCOs and towercos to evolve their energy strategy, take advantage of unique opex savings methods without drastically changing the business model or increasing their energy capex budgets.

TowerXchange: Tell us about your solution’s maintenance requirements.

Stuart Kelly, VP Market Development, Bladon Micro Turbine: Microturbine engines are an ultra-low maintenance solution. Unlike a diesel reciprocating engine, there is no engine oil and no liquid coolant. The turbine itself consists of just one moving part, which runs on air bearings. Maintenance


is a key issue at remote sites that might be many hours’ drive on a bumpy road – the cost to get there can increase the TCO – so a technology with the potential to dramatically reduce site visits can be very compelling. There is a very low skill requirement to maintain our MTGs – in the highly unlikely event of a turbine failure, our strategy is remove and replace, not rebuild onsite. For lesser maintenance issues, such as filter changes, the O&M subcontractor can readily maintain a stock of fuel and air filters.

As well as reducing fuel and maintenance costs, thieves are less inclined to steal our MTGs as there are few, if any parts, they can recycle. Aspiring ESCOs that are currently in the business of maintaining traditional diesel gensets have an opportunity to profit handsomely by deploying a more reliable solution like ours – their goal of selling at a price per kWh rate becomes more achievable. Our MTG unit has robust telemetry built in, so you need fewer field engineers as many of the MTG settings can be changed remotely. From the NOC you can see if units are operating outside of their tolerances, enabling preventive maintenance rather than waiting for it to break. Also, and not insignificant for the tower operator, is the use of telemetry to know where the unit is, as well as having the inbuilt electronics to stop the unit operating if moved without permission – the same technology as a tracker system on a car. We have standardised also on the DeepSea Controller 7320 MKII to make it even easier for towercos and MNOs to fold the MTG into their estate and manage it through their NOC will minimal disruption.

TowerXchange: Okay, so what are the advantages of microturbines over other alternate energy solutions such as fuel cells or solar?

Stuart Kelly, VP Market Development, Bladon Micro Turbine: There is no reliable or sustainable supply chain to support hydrogen or methane fuel in Africa yet. As a technology that is hostile to the current supply chain, the practical challenges of keeping fuel cells running are prohibitive

to embracing that particular alternative energy solution in more than perhaps 20% of the estate. We don’t see our solution as an alternative to a 200sqm PV array but complementary to configurations using renewable technologies; our solution is so much more compact that the use cases differ significantly. Solar has to be a part of the future, but in the context of telecom towers it’s not a killer app, it’s a point solution. Our MTGs can be used to smooth power from solar as well as replacing a chugging tractor engine based generator.

We don’t see our solution as an alternative to a 200sqm PV array but complementary to configurations using renewable technologies; our solution is so much more compact that the use cases differ significantly. Solar has to be a part of the future, but in the context of telecom towers it’s not a killer app, it’s a point solution


But the important thing is that this is an evolution 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 a blend of fuels like diesel mixed with kerosene thus making the mix useless for thieves planning on using it for other diesel engines.

TowerXchange: How does the capital outlay for your MTGs compare to traditional DGs, and

when does the Total Cost of Ownership (TCO) crossover?

Stuart Kelly, VP Market Development, Bladon Micro Turbine: 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. 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?

Stuart Kelly, VP Market Development, Bladon Micro Turbine: Bladon deployed its first commercial MTG’s in Africa in 2019. More specifically in South Africa with one of the largest TowerCo’s and MNO’s there. We have also expanded into Uganda, and soon into Nigeria, Kenya, Egypt. We’ve signed distribution agreements already with partners in Africa and now Australia. Our production factory headquarters is also where our R&D team is based; in Coventry, UK.

TowerXchange: What is the sweet spot in terms of the load your solutions can support?

Stuart Kelly, VP Market Development, Bladon Micro Turbine: Our Bladon MTG12 MTG delivers up to 12kW, with 230V AC output. Most telecom sites need somewhere between 3kW and 6kW for constant power, maybe 9kW if there is air-

conditioning units too. Hybrid solutions have been deployed to address avoiding DG maintenance intervals. This is not an issue with the MTG, therefore the application varies somewhat and doesn’t need large banks of batteries (that can be open to theft). The MTG runs at variable speed to match the load, our efficiencies are much better at partial loads compared to conventional DGs.

TowerXchange: How do you ensure modularity and futureproof your solution as power requirements increase with the addition of multiple tenants?

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


Stuart Kelly, VP Market Development, Bladon Micro Turbine: The MTG works more efficiently at very low powers that you see with single tenant sites (and can cope with temporary zero loads) than regular DGs. Given that telecom radio manufacturers are trying to drive power consumption down, e.g. a new BTS might need 1kW when the last model needed 2kW many sites start off at low powers then increase with additional tenants or technologies like 5G. But rather than specify massive DG’s that run inefficiently at first it’s important to ensure CAPEX expenditure and opex is matched closely to operator revenues. At the moment the applications, especially for new sites or offgrid sites we see don’t consume more the 3kW in total, so it’s possible to add a second tenant without upgrading the MTG. The MTG is a more reliable means of delivery of consistent power than a conventional DG for a multi-tenant site. If additional tenants are added beyond what one MTG can provide, the answer is to add a second unit in a daisy chain. And if the power requirement reduces again, our units are relatively easy to relocate to another tower.

TowerXchange: How do you bring Bladon Micro Turbine to market – do you sell direct or through channel partners?

Stuart Kelly, VP Market Development, Bladon Micro Turbine: Our model is to sell through partners. Towercos, ESCOs and MNOs need the reliability and credibility of boots on the ground to provide dedicated in country support, even with a low

maintenance solution such as ours. 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 Micro Turbine from other cell site energy solution providers.

Stuart Kelly, VP Market Development, Bladon Micro Turbine: We’ve taken a well-known form of power generation in the reciprocating engine, turned it on its head and married it with another established

technology in gas turbines, then developed a manufacturing process to bring to market an innovative solution with a lower TCO business case for telecom tower operators. Microturbine engines are ultra-reliable, super durable, low maintenance, and generally have a ROI runway in Africa from 9 to 19 months. The MTG is designed to support the current supply chain, which means our solutions can be easily introduced with an expectation of a short term payback. The fact that it’s an exciting new engine technology is only so interesting – what matters is reducing fuel bills and theft, and the ability to operate it into the field easier and cheaper than a regular diesel genset<

Sample – Telecom tower 3 year OPEX savings

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

DG MTG - diesel

Fuel costsMaintenance costs

MTG - kerosene


Keywords: 5G, Asia,Batteries, DG, DG Runtime, EnerSys®, Energy, Energy Efficiency, Fuel Cell, Hybrid Power, Interview, Meetup Preview, Off-Grid, On-grid, Operational Excellence, Opex Reduction, Renewables, SLA, Solar, Unreliable Grid, Uptime, Who’s Who, Wind

Backing up towers in the MiddleEast and North Africa: EnerSys®’ sophisticated battery solutionsSupporting the rapidly evolving tower industry with bespoke backup solutions

TowerXchange: Please introduce EnerSys®, your footprint and your offering to the Middle East and African markets.

Yamen Saleh, Business Development Manager, EnerSys®: We are the global leader in stored energy solutions for industrial applications. We manufacture and distribute energy systems and motive power batteries, battery chargers, power equipment, battery accessories and outdoor equipment enclosure solutions to customers worldwide.

EnerSys® offers an extensive portfolio of premium flooded and sealed batteries to serve the telecom industry. This portfolio of batteries offers design features such as exceptional performance, long life, compact footprint, high energy density, and ease of installation. Our batteries are ideally suited for a wide range of wireline and wireless telecom applications, including central office and outside plant. We also offer outdoor equipment enclosure solutions.

EnerSys® maintains its position by providing customers with world-class products and services from over 100 countries through its sales and manufacturing locations around the World, and has a comprehensive local infrastructure with a regional head office in Dubai for sales, applications and logistic support.

TowerXchange: How does your experience in Middle East and North Africa differ from the other markets you operate in?

Read this article to learn:< EnerSys®’ offerings for global and MENA tower owners

< How the MENA backup power market differs from the rest of the world

< Backup power considerations for on-grid, unreliable grid and off-grid

< Case study demonstrating TCO savings up to 55%

With operating costs becoming a key issue for tower owners, choosing the right backup power solution is an increasingly important task. With variables in location, climate, budget, maintenance and deployment, choosing the right battery and cooling options to keep the total cost of ownership (TCO) to a minimum can be tricky. EnerSys® talk us through their experiences in the Middle East and North African markets and how they work with customers to choose the most efficient solutions to meet their requirements.


Yamen Saleh, Business Development Manager, EnerSys®: The European and North American markets are very established and have relatively reliable power. In the Middle East and North Africa, of course it is very different and we see a wide variation in the operating conditions and power reliability across the region. This in turn means we have to develop customised solutions that are uniquely suited to the conditions and requirements of particular customers and geographies.

TowerXchange: What are the considerations that tower owners need to keep in mind when choosing a backup solution in on-grid, unreliable grid or off-grid environments?

Yamen Saleh, Business Development Manager, EnerSys®: Each of the scenarios listed presents their own unique challenges to the backup power system as well as opportunities for cost savings and minimising TCO.

For on-grid systems, the main consideration is typically how to maximise battery life whilst also minimising the power usage on the tower. For this we would typically propose reducing or completing disabling the cooling system and using a backup battery specifically designed for operations at high temperatures. The new EnerSys® PowerSafe® SBS® XL battery range is ideally suited for stable grid conditions (typically one outage per month) and using our Thin Plate Pure Lead (TPPL) technology has a life expectancy of ten years at a temperature of 35°C.

On the other hand, off-grid systems have been successfully powered for some time now by a hybrid mix of batteries, diesel generators and increasingly some kind of renewable energy source (solar, wind et cetera). This kind of system brings unique challenges to the battery system and our research has shown that the lowest operating costs can only be achieved by using the full capacity of the batteries on a daily basis to minimise diesel genset runtime. This means the batteries need to have the capability to cycle deeply and recharged quickly – something that our tried and tested PowerSafe® SBS® EON Technology® range of batteries has been specifically designed for. In addition, with EnerSys® PowerSafe® SBS® XC+

technology, which incorporates carbon chemistry with our proven TPPL technology, further benefits in TCO can be obtained with longer service life, due to increased cycle capability, while reducing OPEX with Partial State of Charge (PSoC) operation.

Finally, in unreliable grid environments towers are typically supported by a combination of batteries and diesel gensets with renewable energy solutions often incorporated. The random reliability of the main system means batteries have little time to recharge from the power grid and that generators need to run every day to either support the tower once the batteries are discharged and/or recharge the batteries themselves.

“

“

Off-grid systems have been successfully powered for some time now by a hybrid mix of batteries, diesel generators and increasingly some kind of renewable energy source (solar, wind et cetera). This kind of system brings unique challenges to the battery system and our research has shown that the lowest operating costs can only be achieved by using the full capacity of the batteries on a daily basis to minimise diesel genset runtime


The key challenge here is therefore how to minimise the runtime of the diesel gensets that are one of the biggest contributors to the tower operating costs – typically far more than the cost of batteries. For this kind of application our new PowerSafe® SBS® XC battery range is ideal as it combines an outstanding fast charge capability with the ability to achieve an exceptional number of cycles; the modelling work we have done shows it can give tower owners TCO savings in the range of 30 to 50%.

The most effective TCO savings will depend very much on the site operating conditions and power reliability. However, choosing a battery that is designed for the site conditions can definitely deliver TCO savings to tower owners. The highest savings typically come from reducing the cooling load on the tower or from reducing or even eliminating the runtime on costly diesel generators – and the key enabler to this can be choosing the optimum battery solution.

The highest savings typically come from reducing the cooling load on the tower or from reducing or even eliminating the runtime on costly diesel generators – and the key enabler to this can be choosing the optimum battery solution.

TowerXchange: Can you share a case study illustrating how you helped your clients achieve desired outcomes?

Yamen Saleh, Business Development Manager, EnerSys®: A recent project has been looking at

potential TCO savings for a tower owner in an extremely unreliable grid environment. In this instance, each tower is usually equipped with at least 600Ah of battery back-up, but even that is not enough to cover for the many power outages in an average 24-hour period.

Typically, the batteries are completely discharged within eight to ten hours a day, meaning the diesel generator needs to be run for the remaining 14 to 16 hours of every day. This is obviously bad from an environmental perspective, noisy for the community nearby and of course it involves significant costs related to the fuel, maintenance and service of the genset.

After assessing the application, we realised that the perfect solution would be a battery that has both an outstanding fast charge capability and excellent cycling. We already knew that our TPPL technology had the potential for industry leading charge acceptance, so we decided to optimise its design even further.

Our target was to design a product able to maximise its recharge while the power is on, enabling the battery to be ready for the next outage. If enough recharge current is available, it’s even possible to design a system that relies totally on battery backup on a standard day. The result of this work is our brand new PowerSafe® SBS® XC battery range that we have just launched.

Based on the load details that were provided to us by the tower owner, we estimate that TCO savings of

up to 55% can be achieved compared to traditional lead acid batteries.

TowerXchange: Looking forward, what do you think will be the power priorities for MENA tower owners as 5G and network densification requirements increase?

Yamen Saleh, Business Development Manager, EnerSys®: While 5G standards are not yet fully defined, increases in power demand have been highlighted. The evolving infrastructure needs seem to be trending towards a larger number of smaller, but denser tower sites. We expect this to drive demand for new, innovative power solutions.

TowerXchange: Can you give us some insight into EnerSys®’ vision for the future and how you will fit into this evolving market?

Yamen Saleh, Business Development Manager, EnerSys®: We believe experience in providing power backup in mobile communications is very important. The mobile network has a critical dependence on available power and backup regardless of the reliability of the local grid. EnerSys® is a powerful solution provider and a trusted partner in backup power solutions. Hence, we are in a unique position to use our experience and unique technology solutions to help and continually support tower companies to back-up their mission critical equipment in the most cost-effective way


Keywords: 5G, Energy, Energy Efficiency, Enetek Power, Hybrid Power, On-Grid, Passive Equipment, Rectifiers, Who’s Who

Safe and reliable power for telecoms towersEnetek, an AC and DC power specialist, tailors solutions to the increasingly demanding requirements of telecom sites

TowerXchange: Please introduce yourself – how did you get involved in the telecoms infrastructure industry?

Jan Rønsen, Vice President, Enetek Power: I entered telecoms in 2000 with Eltek, just while the TMT bubble burst. Luckily at that time Eltek was not involved in the datacentre space so we were not that badly hurt at the time, unlike others. Eltek was focused on core telecoms at that period.

My background was in the manufacturing industry, not telecoms, but in 2002 I was asked by the CEO to take up the Middle East and Africa market for Eltek and I moved to Dubai, where I have stayed.

TowerXchange: Please introduce Enetek – can you tell us more about the history of the firm?

Jan Rønsen, Vice President, Enetek Power: In 2015 Eltek was acquired by Delta and Enetek was formed to continue our work under another brand. This means that for a young company Enetek has a long history. The owner of Enetek is Eltek Holdings, which is managed by the family who started the original Eltek in1973.

Enetek is a company under Eltek Holding AS, Norway. Enetek has a long legacy in the telecom power industry. Our staff, from CEO, CFO and CTO to Sales, Admin and R&D engineers are recognised as some of the best and most successful names in the business.

The operational HQ of Enetek is located in Singapore. However, the corporate HQ is in Oslo,

Read this article to learn:< The long experience embodied in Enetek’s staff

< Enetek’s origins and unique selling point

< The range of energy equipment supplied by Enetek

< The growing importance of rectifiers in a 5G world

Enetek is a supplier of AC and DC power equipment. Enetek’s power solutions offer modularity, flexibility, and scalability through rack-mounted, hot-pluggable power conversion modules, smart monitoring and effective customisation. With Gulf states increasingly installing large numbers of power-hungry 5G base stations, good quality rectifiers and upgraded power set-ups at site will become more important. But without secure, efficient and reliable power it is impossible to consistently fulfil SLAs and keep sites online. TowerXchange discussed Enetek and what differentiates them from their competitors with the VP, Jan Rønsen.

Jan Rønsen, Vice President, Enetek Power


Norway, from where we are also supporting the EMEA market through our network of certified partners.

TowerXchange: Please tell us how many Enetek Power telecom systems have been deployed across the world, where and with who?

Jan Rønsen, Vice President, Enetek Power: We don’t give current numbers, but our staff has deployed more than 10,000 hybrid sites, from past experience. Around 99% of our staff comes from Eltek which means that all of that experience is embedded in how Enetek work.

Our staff has successfully completed power projects all over the globe for the past 25 years. We strongly believe we can serve our customers with the best products and support. Together with our partners, we will train technical staff across the country to ensure a smooth and trouble-free network operation.

TowerXchange: Tell us about the range of products you provide for the telecoms sector.

Jan Rønsen, Vice President, Enetek Power: Our power solutions are capable of safeguarding telecom assets for numerous different applications with flexible, modular and scalable system building blocks.

Typical applications include the main switching centers, core network power, wireless/wireline, macro/micro BTS, LTE/Wimax, broadband access, FTTX, optical fibre transmission system as well

as remote power sites. Enetek also has a range of hybrid/solar solutions for off- and on-grid, significantly reducing the runtime of generators.

A power system solution comprises of essential component that includes the rectifiers, batteries, system controller, inverters as well as uninterruptible power supplies (UPS), and they are designed for easy connectivity with renewable energy sources.

TowerXchange: Why are rectifiers so important for keeping sites active and hitting towerco SLAs?

Jan Rønsen, Vice President, Enetek Power: In a basic DC power system, the rectifier converts AC to DC to provide power necessary to sustain the output load and charge the batteries. Where AC power is required, the inverters will be used to convert the DC into uninterruptible AC.

The system controller provides the relevant control, monitoring and management of the system solution and site infrastructure to maximize ROI, minimise TCO and secure near 100% uptime.

Our products have been successfully tested in extreme environmental conditions; heat, frost, dust and humidity. All to make sure that our customers will receive exceptional reliability wherever our systems may be deployed.

With continued advancement of technologies and through strategic collaborations with industries’ stakeholders, we aim to achieve the goal of delivering one-stop solutions.

TowerXchange: 5G will increase power demand and change requirements at site, how can Enetek help?

We are well prepared for 5G, but the demand for these solutions is currently weak. Outside of China the demand for new rectifiers and reconfigured sites for 5G is limited. At the moment MNOs are mostly relying on their existing power set-ups, but that will change. From 2021 onwards increased use of Massive MIMO and densification of networks will see a boom in demand for rectifiers which are ready for 5G


Jan Rønsen, Vice President, Enetek Power: We have developed our own rectifiers for 5G, a small one based on working with lithium-ion batteries with a range of 1kW-3kW. But they can be serialled if our customer has larger power requirements for high capacity sites.

We are well prepared for 5G, but the demand for these solutions is currently weak. Outside of China the demand for new rectifiers and reconfigured sites for 5G is limited. At the moment MNOs are mostly relying on their existing power set-ups, but that will change. From 2021 onwards increased use of Massive MIMO and densification of networks will see a boom in demand for rectifiers which are ready for 5G.

TowerXchange: Please sum up how you would differentiate your solution from your competitors’?

Jan Rønsen, Vice President, Enetek Power: In some markets it is difficult to differentiate, power supply equipment is seen as basically a commodity. But we are small enough to be flexible, and big enough to deliver.

Most of the large companies provide standardised solutions, which is great for a commoditised product, but means it is very hard to get customised solutions from Enetek’s competitors. And if you need something non-standard then lead time goes dramatically up.

But because we are somewhat smaller, we can provide flexibility, which is a differentiator. But because we still have scale and expertise our lead times remain short, just 6-8 weeks. So lead times are a key differentiator, but without sacrificing on the high efficiency necessary for rectifiers and other power supply equipment

Because we are somewhat smaller, we can provide flexibility, which is a differentiator. But because we still have scale and expertise our lead times remain short, just 6-8 weeks. So lead times are a key differentiator, but without sacrificing on the high efficiency necessary for rectifiers and other power supply equipment






HIMOINSA: power solutionsfor the global telecom industryThe benefits of selecting a vertically integrated manufacturer and distributor

TowerXchange: Please introduce yourself, HIMOINSA and its offering.

Guillermo Elum, Sales & Marketing Director, HIMOINSA: I am in charge of sales and marketing for HIMOINSA, a global corporation and member of Yanmar group, that designs, manufactures and distributes power generation equipment worldwide.

At HIMOINSA, we are acutely aware of the specific needs of the telecom sector and we have developed generator sets and hybrid power solutions specially designed for them, providing efficient and reliable power.

The company has nine production plants located in China, India, Spain, France, Brazil, the United States and Argentina. These highly productive facilities are robotised and utilise the latest manufacturing techniques. HIMOINSA also has eleven subsidiaries around the world located in Germany, United Kingdom, Portugal, Poland, Singapore, Panama, Dominican Republic, Argentina, Angola, South Africa and the United Arab Emirates.

TowerXchange: Which clients do you typically serve?

Guillermo Elum, Sales & Marketing Director, HIMOINSA: We have extensive experience in the telecommunications sector, having supplied thousands of generator sets on the international market to well-known telecom companies and we are ranking among the top six vendors in the global generator market for this sector, according to Technavio Research’s recent studies.

Read this article to learn:< HIMOINSA’s footprint, customers and range of power solutions< The benefits of selecting power gensets designed to reduce site visits< Some recent field applications of HIMOINSA’s products in Spain, Asia and South America< Why should telecom operators select vertically integrated solution providers

HIMOINSA was founded in 1982 since when it has grown to become one of the leading manufacturers and distributors of power generation solutions. To date, it serves mobile network operators in Europe, Africa and the Americas with its diesel and hybrid gensets. In this interview, TowerXchange discusses with HIMOINSA’s Sales & Marketing Director, Guillermo Elum, some of their most recent field applications and range of products.

Keywords: Asia, Batteries, Central America, DG Runtime, Energy, Energy Efficiency, Europe, Fuel Security, HIMOINSA, Hybrid Power, Multi-Region, Renewables, Site Visits, South America, Uptime, Who’s Who

Guillermo Elum, Sales & Marketing Director, HIMOINSA


International telecom operators believe in the reliability of HIMOINSA generator sets and, since it was founded, the company has supplied equipment to leading companies such as Vodacom, Ericsson, Orange, Tunisiana, Maroc Telecom, France Telecom, Movistar, Telefónica, Viva, Claro and Entel. We are providing our customers not only high quality generators but also our deep technical know-how to adapt our products to their projects and needs.

TowerXchange: How proven are your solutions in the field? Can you give us some practical examples of the performance of your products?

Guillermo Elum, Sales & Marketing Director, HIMOINSA: Our company is constantly working on the manufacturing of generator sets for telecom operators all over the world.

Recently, we have delivered a 2MW genset for a Telefónica’s data center based in Barcelona, Spain. We supplied also twenty-four generators to the first Tier IV-certified data center in South America and 24MW for the data center of the largest e-commerce company in the Asia-Pacific region, the Alibaba Group.

TowerXchange: How has your solution been designed to maximise autonomy and minimise the number of site visits required?

Guillermo Elum, Sales & Marketing Director, HIMOINSA: We are highly focused on the development of user-friendly control units and geolocation devices. We have just released our new

Fleet Manager that can locate the generator sets and control fuel consumption levels, as well as any malfunction or breakdown in the equipment at remote locations where access is complicated.

We have developed generator sets equipped with state-of-the-art technology for the telecom sector. Our generator sets require maintenance every 1,000 hours and could be equipped with 1,000-litre fuel tanks, which allow our customers to considerably reduce fuelling and maintenance visits to the site.

These generator sets have a longer running time, thereby guaranteeing lower operating costs and making them among the most competitive solutions on the market. In addition to the standard fuel tank, which can be connected to remote bulk tanks, we can provide a range of large capacity, double wall fuel tanks, which offer high integrated running.

TowerXchange: What magnitude of fuel consumption savings can your solar-hybrid gensets deliver?

One of HIMOINSA’s HPS hybrid generator sets


Guillermo Elum, Sales & Marketing Director, HIMOINSA: HIMOINSA has developed the HPS 1500DCV and HPS 3000DCV hybrid generator sets with a variable speed engine which guarantees 40% fuel consumption savings when compared to a standard generator set and 20% when compared with other fixed-speed hybrid gensets currently available on the market. They can operate efficiently without any kind of maintenance for four months. Whereas a standard genset with the same

1000h maintenance kit requires maintenance every month, our Hybrid Power Solution only requires maintenance every four months.

TowerXchange: Please sum up how you would differentiate your solutions from your competitors’?

Guillermo Elum, Sales & Marketing Director, HIMOINSA: I find our ability to offer an integral service a great added value to companies that operate in the telecom sector. Most of the time, telecom projects are developed by engineering companies specialised in IT, which are unaware of the idiosyncrasy of the power generation field.

I believe that our technical capacity and availability to support and advise our customers from the very beginning to the completion of the project does make a difference. Moreover, being a vertically integrated company manufacturing all the genset components in-house, HIMOINSA not only delivers the highest quality product but is also able to guarantee the shortest delivery times in the market.

We offer a complete telecom range from 8 kVA to 45 kVA, providing hybrid solutions that include batteries and reduce the environmental impact as they can be connected to renewable technologies. All our models are equipped with Yanmar engines, which currently boast the lowest fuel consumption on the market, as well as very low level of noise emissions. Having Yanmar as a partner in this project is one of HIMOINSA's strongest points

“ “We source our steel mainly from ArcelorMittal, the world’s leading steel producer - we don’t use second rate steel. It’s important to confirm that your tower manufacturer uses raw material from a reputable company

““

HIMOINSA has developed the HPS 1500DCV and HPS 3000DCV hybrid generator sets with a variable speed engine which guarantees 40% fuel consumption savings when compared to a standard generator set and 20% when compared with other fixed-speed hybrid gensets currently available on the market






IPT PowerTech add Guinea Conakry and Lebanon to their ESCO portfolioHow the world’s largest T-ESCO is going from strength to strength

TowerXchange: Please can you re-introduce IPT PowerTech to TowerXchange readers.

Khaled Habbal, VP & COO, IPT Powertech: IPT PowerTech was founded back in the 1990s, initially focused on the provision of starter and specialty batteries. When the telecom sector started to pick up in the mid-90s we started offering battery systems to the sector before expanding into the sale of power systems, being one of the first companies to first launch the battery hybrid concept. We spotted the need to integrate power equipment into outdoor cabinets and began manufacturing our own cabinets independently. Innovation has always been at the heart of our business.

In parallel, we built our telecom services division, providing site construction services (of both towers and fibre), telecom installation and network services and field managed services and maintenance.

Whilst the product and managed services divisions remain key parts of our business, our focus has increasingly turned to our telecom-ESCO business where we see huge potential.

TowerXchange: Please tell us more about your T-ESCO business.

Khaled Habbal, VP & COO, IPT Powertech: IPT PowerTech currently manages power under T-ESCO contracts in Myanmar, Guinea Conakry and Lebanon and is enrolled in a Guaranteed Savings contract in Nigeria. The large number of

Read this article to learn:< Who IPT PowerTech are< Details of their recently signed ESCO projects in Guinea Conakry and Lebanon< How their guaranteed savings contracts have evolved in Nigeria< IPT PowerTech’s attitude to working with third party equipment providers< How IPT PowerTech envisage the ESCO investment landscape evolving

IPT PowerTech, the world’s largest T-ESCO, operates the energy equipment across four countries with the largest number of ESCO sites worldwide. Established in the 1990s, IPT is also a managed service and energy equipment provider with a presence in 11 countries in Africa, South East Asia and the Middle East. TowerXchange speak to IPT PowerTech’s VP and COO, Khaled Habbal to find out more about how their ESCO business is developing.

Keywords: Africa, Africa & ME, Asia, Energy, ESCOs, Guinea Conakry, IHS Towers, IPT PowerTech, Lebanon, Middle East, Myanmar, Nigeria, Off-Grid, On-Grid, Ooredoo, Orange, Renewables, RMS, Solar, Unreliable Grid, Uptime, Who’s WhoKhaled Habbal, VP & COO, IPT Powertech


IPT worldwide ESCO sites and our extensive know-how makes IPT PowerTech the leading T-ESCO globally. Our current pipeline sits around a total of approximately 10,000 sites under Guaranteed Savings and T-ESCO and we remain very ambitious in our growth plan beyond this.

Recognised as a Telecom Energy Service Company (T-ESCO), we offer various models to MNOs and towercos reflecting the appetite for CAPEX savings and CAPEX leasing, while ensuring the deliverables of power availability and reliability to the network respecting all SLAs related are met.

TowerXchange: What do you think is driving the adoption of the ESCO model by the telecom sector?

Khaled Habbal, VP & COO, IPT Powertech: Operators across the globe are coming under increased financial pressure with competition from OTT players and ARPU continuing to decline. They are searching for ways to decrease OPEX whilst minimising capex and the ESCO model offers an ideal solution.

TowerXchange: Please can you share further details on the new ESCO projects that you have signed in Guinea Conakry and Lebanon?

Khaled Habbal, VP & COO, IPT Powertech: In Guinea Conakry we have signed an ESCO agreement with Orange, with high probability of extending to new sites within the upcoming 3 -5 years.

Initially we will take over management of the existing power equipment on sites, but over time we will upgrade this to make the system more efficient, a process which we have begun already. Of the total number of sites, around a third are off-grid entirely with the quality and availability of on-grid sites varying significantly. In the worst grid areas, availability can range between 6-12 hours per day, but as you get closer to urban centres this improves. All on-grid sites however require significant backup and alternative generation and so our plan is that most sites in the country will have solar in place.

In Lebanon, we are enrolled on an ESCO contract with one of the two operators in Lebanon, where the majority of sites are on unreliable grid connections: typically, 18-21 hours of usable grid in Beirut, falling to 6-12 hours in rural areas.

The grid quality in Lebanon is better than the grid quality in Guinea Conakry but grid availability can still be quite low; in Beirut, grid availability is around 18-21 hours per day but in rural areas this drops to around 6-12 hours. There is however a power schedule in Lebanon meaning that you know when power will be on or off. This predictability makes the design and management of an optimal power system a much more scientific process.

As with Guinea Conakry, we have inherited legacy power equipment with plans to upgrade this over time, in Lebanon however, most of the power equipment is IPT PowerTech equipment and so we are very comfortable with managing it.

TowerXchange: Can you tell us more about developments in IPT PowerTech’s involvement in IHS Towers’ “big five” project in Nigeria; and for those less familiar with the model, please can you explain the difference between the Guaranteed Savings model you have in place in Nigeria and the ESCO model you have in place in other markets.

Khaled Habbal, VP & COO, IPT Powertech: IPT Powertech Group is engaged in Nigeria with the largest towerco on a major project of Guaranteed Savings across the African continent under the “Big Five Initiative”, supplying energy efficient power solutions—including management and long-term maintenance — and OPEX optimisation under a long-term contract.

The guaranteed savings model is something which IPT PowerTech have been promoting for a long time, having introduced the model at TowerXchange’s Meetup in Africa about five years ago. Historically, when an MNO or towerco has purchased energy equipment, they have used contractors to deploy, operate and maintain it. When the equipment isn’t performing as hoped, a blame game can ensue with the contractors complaining that the equipment isn’t delivering on expectations, whereas in reality it may have been incorrectly deployed or maintained by the contractor.

Our approach in eliminating the blame game is simple: combine energy equipment provider, system integration, and O&M service contracting services to create a single point of accountability.


By being the energy system integrator and the contractor at the same time, we are able to manage key points in the value chain, thus leaving no room for performance failure—or for the ‘blame game.’ In fact, we believe that our group is one the few solution providers globally offering and merging hybrid and renewable energy solutions with telecom infrastructure services and offering field managed services and maintenance all at the same time.

Under a guaranteed savings model, we sell the equipment to the MNO or the towerco who then pays a fixed rate for us to install and maintain the equipment. We guarantee that we will deliver the savings promised, any deviation from this will be absorbed by IPT PowerTech. This gives the MNO or towerco not only clarity on the capex to install the system but also provides predictability in opex. With IPT PowerTech providing, deploying and maintaining the equipment, it avoids the blame game between equipment vendor and contractor that can so often occur in the management of power on cell sites.

The guaranteed savings model offers an alternative to the ESCO model, whereby the MNO or towerco still deploys the capex (whereas in an ESCO agreement the ESCO would invest the capex).

TowerXchange: What technologies does IPT PowerTech manufacture and supply and what equipment does it source from third parties? How does it select these third parties?

Khaled Habbal, VP & COO, IPT Powertech: The dedication of our professional team exceeding 4500 specialists, impelled the group into serving more than 60 operators in 50 countries and becoming one of the few companies in the region to combine product R&D to our assembly facilities in Romania and Lebanon. Our modernised factory in Romania is a leading ODM enclosures manufacturer of outdoor cabinets, and an integration facility for advanced energy solutions, allowing us to combine high quality in-house products of enclosures and cabinets coupled with our own services proposition.

IPT has also incorporated the controllers for all our gensets, and lately IPT RMS, a complementary tool to all our solutions guaranteeing optimal performance, and allowing mobile operators better surveillance of their sites globally in terms of energy availability and efficiency. IPT Digital Platform features advanced machine learning along with existing energy equipment compatibility, ensuring smart and centralised monitoring across the network

On the other hand, IPT Powertech is an integrator of top-notch products, developing and identifying best technologies to create products, optimising the output of the solution. Our D&D team always makes sure to choose top international brands from trusted suppliers ensuring optimal performance of the products. We know our suppliers well; how reliable their products are and the level of service that they provide. Whilst we do consider new suppliers from time to time, we are very cautious as

our reputation is also dependent on the quality of suppliers that we use

TowerXchange: At present does IPT PowerTech provide all the financing for ESCO projects and do you envisage using outside investment in the future? What kind of investors do you see as being interested in the ESCO space?

Khaled Habbal, VP & COO, IPT Powertech: We have relied on our own funds this far but do envisage that we will look at outside financing. We are receiving a large amount of interest from investors on both the debt and equity side from banks and funds and could foresee that many investors which have played in the towerco space will start to look at investment opportunities in ESCOs.

The challenge however is that the T-ESCO model is still very new and investors are still trying to understand it; there is a lot of ambiguity in the term ESCO, people don’t understand what type of contracts or MLAs are in place. There’s also a lack of sizeable ESCOs in the market which investors can compare; after IPT PowerTech, the next biggest sized ESCO is way behind.

Ultimately however, there are a lot of parallels between ESCOs and towercos; it is still in the telecom infrastructure space involving long term (10 year) contracts with creditworthy MNOs and towercos. There is a lot of commonality in the two business models and the fact that towercos often view ESCOs as the competition only goes to support this view<


Keywords: Africa & ME, C-Level Perspective, Community Power, DG Runtime, Energy, Hybrid Power, LPG, Managed Services, Market Entry, Masts & Towers, Microgeneration, Namibia, Network Rollout, Off-Grid, Passive Equipment, Polar Power, TowerXchange Research, Unreliable Grid, Urban vs Rural, Who’s Who

Why Polar Power is movingup the value chainWhy Polar Power have started offering new engineering, design and construction services for towers and how it could help enhance rural connectivity

This isn’t the first time we’ve interviewed you about Polar Power, so please give us a short introduction to yourself and the company.

Arthur D. Sams, President and Chief Executive Office, Polar Power: In 1979, I co-founded Polar Power and started delivering solar photovoltaic power systems to remote locations worldwide. Polar Power has become a leading end-to-end designer, manufacturer and distributor of DC generators for the telecom, marine, oil and gas, military and automotive industries.

Today, starting in Namibia, we have moved up the value chain and now provide engineering, design and construction services for towers so that we can put out technology to work in the most efficient and effective way possible. We intend to spread through Southern Africa once we are established in Namibia, but in time we may be building towers across the world, including our home market, the US.

Polar Power is publically traded on Nasdaq under the symbol POLA. This gives our customers transparency on Polar’s financial strength along with the confidence that we will be around for long into the future to service their needs. Polar directly employs 165 employees comprising of manufacturing, engineering R&D, customer service, and administration. Most of the company’s management is made of highly experience engineers. We are a very hands-on team and we do understand the real technical challenges of our

Read this article to learn:< Polar Powers ambitious plans in Southern Africa< How supply chain rationalisation is pushing Polar Power to enter new markets< The potential of alternative fuel sources to reduce genset total cost of ownership < Strategies for enhancing rural connectivity and development


customers. One of my favourite pastimes is to visit rural communities to explore (and put into practice) ways to improve the lives of people by providing power and cooling.

In the 1990s we pioneered Hybrid Solar Systems using DC generators and this enabled us to lower both the capex and opex while improving upon the system reliability. In 1995, Polar was the first company in the telecom industry to introduce DC generators as a prime power replacement to AC generators. Polar was also the first to incorporate DC generators into Solar Hybrid systems. Actually, our first product in 1979 was a solar powered vaccine refrigerator for use in remote areas worldwide, developed in cooperation with the World Health Organization, NASA, and the U.S. Agency for International Development. Since 1995 and continuing, our focus has been improving every component within the system through engineering innovation, new production tooling and raw material sourcing. A few very simple components can cause a functional problem that requires one or two expensive maintenance trips to the site for corrective action.

Within our Los Angeles headquarters, we manufacture in volume our own alternators, controls, engine accessories and enclosures. We have also developed, alongside Bosch and Toyota our own LPG engines, with a 15-25% fuel efficiency advantage over its predecessors.

TowerXchange: What has prompted the shift from being a manufacturer and provider

of energy solutions to engineering and construction?

Arthur D. Sams, President and Chief Executive Office, Polar Power: Recently there has been a trend towards simplifying supply chains. That means cutting down on the number of suppliers

and reducing the variety of installed components and service providers. This allows for easier supply chain monitoring, and the building of longer relationships between buyers and sellers, but it also involves some compromise in cost and quality. If you reduce the number of suppliers you work with it reduces your capacity to bid down prices to the


most competitive level, and it reduces your ability to explore more suppliers to find the highest quality product.

At the moment only around 10% of African cell sites are using DC gensets, and that means 90% of cell sites are missing out on a cleaner, cheaper, easier to use alternative to their AC gensets. Part of our strategy will be to bring our expertise and DC genset products to market through our construction business.

We have always offered a quality product and worked well with sophisticated buyers, but many of those constructing towers are not sophisticated buyers of energy solutions. The traditional energy

solution is a standby or temporary diesel generator but these are not designed to be long-lived when used autonomously, or to have the flexibility and finesse required of modern telecoms infrastructure. A genset which works when someone is always there to check the oil is not appropriate near the Namib Desert. So to get the right energy solution installed at site we have had to move up the chain and start constructing the towers.

Today, if you point to a site we will put a tower there, and if you’re not sure what type of tower would work best on the site we can help you with the engineering services to decide what tower would be optimum. For example, at some sites wouldn’t require an elaborate foundation and so we

could save you money and time. Right now, we are helping to install the radios and helping to calibrate the antennae, but we don’t do site acquisition. We are engineers, so there are some things we are comfortable with, and some things which belong to someone else’s skill set.

TowerXchange: There are more mature and larger markets around the world, why are you entering Namibia first with your tower construction business?

Arthur D. Sams, President and Chief Executive Office, Polar Power: Namibia is a wonderful market to work in. And a beautiful country as well. First of all, for a small market, there is already an existing tower industry that has done a lot to professionalise the tower industry in Namibia.

Overall, Namibia is an easy country to do business in, with reliable payments and banking infrastructure and is part of a Southern African Customs Union. That zone includes Botswana, Lesotho, Namibia, South Africa and Eswatini. It also has close regional ties with Angola, Zimbabwe and the other 14 members of the Southern African Development Community. Namibia is also just a pleasant place to live, safer than many other countries and a good place to base a regional team.

We are working for a major telco in Namibia to help them in their roll out. They have ambitious plans to add hundreds of towers to bring universal coverage to Namibia’s populated areas. Many regions of Namibia have very limited wireless broadband,

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We have always offered a quality product and worked well with sophisticated buyers, but many of those constructing towers are not sophisticated buyers of energy solutions. The traditional energy solution is a standby or temporary diesel generator but these are not designed to be long-lived when used autonomously, or to have the flexibility and finesse required of modern telecoms infrastructure


especially in rural areas. That’s a big problem in a country with such potential as a tourist destination. Namibia has some of the most amazing wildlife, but without the reassurance of quality telecoms infrastructure they will be unable to maximise the potential of Namibia as a tourism destination.

We want to make an impact here. We are setting a precedent for our way of doing construction and engineering. We want other countries and companies to see how we are incorporating power systems into our build and design and our innovative way of running and servicing the sites.

TowerXchange: Tell us more about your approach to solar and hybrid systems, and what role alternative fuels can play in improving the operational efficiency of towers.

Arthur D. Sams, President and Chief Executive Office, Polar Power: There have been some amazing advances in photovoltaic cells, but now they have reached a level of efficiency where you can buy them as a commodity, the real value add comes from taking a systems approach to your energy set-up. There’s very little cost you can pull out of a solar module, but there is often a lot of cost you can pull out of your overall energy system by making it work smarter. For example, a fuel-based back up can save you a lot of money relative to a battery back-up system. A system which is powered 80-90% solar and 10-20% fuel can have lower overall cost, especially when opex costs like ground rent and battery maintenance are included. Although the land used by extra solar panels is usually relatively

minor, because the tenant is a large corporate, and the need for power is usually acute, rental costs can inflate.

Often people’s default picture of a genset is a diesel generator, but there are alternative fuels which we are really excited about. There are big advantages to diesel in terms of familiarity and ease of transport,

but that doesn’t mean towercos, telcos and their managed service providers shouldn’t be leading the way in exploring alternatives. For all its benefits, diesel can be dirty, smelly, polluting and also cause vibrations and noise which disturb neighbours.

Alternative fuels like liquid natural gas (LNG), compressed natural gas (CNG) or propane can fuel engines engineered for long life, but the modified petrol engines operating on gas have given this application a bad reputation.. We have worked with the propane council and they have been telling us about 80 years old tanks they’ve discovered, still sealed and the fuel was still good. Unlike diesel you don’t need to treat them to stop algae or use additives to stop them gelling in cold temperatures. We have found that these alternative fuel engines have three of four times the life expectancy of diesel engines. We worked with Toyota and Bosch to design and build the ideal gas (LPG and natural gas) engine, and includes our own alternator. We plan to start to deploy this engine into the field at the end of Q2 2019.

There are some key ways that we are reducing the total cost of the energy system. First of all we reduce the maintenance on your starter battery by eliminating it, we use a capacitor instead which is more reliable. Because we’re not using diesel we’re also not using a fuel injector. If water gets into your diesel and that passes through your injector it will seriously reduce its lifespan which again pushes up maintenance costs and site visits. The alternative fuels also work well at a lower rate of compression so your bearings, crankshaft, pistons, et cetera all


take less punishment and last longer. All across the engine we’re reducing the wear and tear it will suffer in normal operation and taking out components which can go wrong. To also reduce maintenance and greatly improve fuel economy we removed the parasitic load of the engine including all V-belts, belt driven alternator, belt driven water pump, and the charging battery alternator.

TowerXchange: What is holding back the greater adoption of alternative fuels? Are the distribution networks there for it?

Arthur D. Sams, President and Chief Executive Office, Polar Power: We’ve been deploying alternative fuel generators for nearly 20 years. For example, in the US, if a tower is on federal land you cannot burn diesel without a special permit. Even on military sites, natural gas and propane is used. So there’s a market for them and the technology is proven. At the moment there is an infrastructure deficit, but with the potential efficiency gains, it will be worth investing to fill that gap.

Towers and telcos wouldn’t be the only market for these fuels. Deforestation is a major issue in many places in Africa, and many hours a day are spent just collecting wood to burn. A propane distribution network displaces that and gives every family that uses propane a couple of extra hours a day to do more valuable work. Fuelling telecoms sites creates the sort of throughput that a distribution system needs to get started, but once the market for cooking fuel is live it doesn’t require any subsidies. What we can do with alternative fuels we can do

with other aspects of the telecoms value chain to push rural development. It is a big opportunity.

TowerXchange: As something of an outsider to tower construction, how do you want to see site development change?

Arthur D. Sams, President and Chief Executive Office, Polar Power: There’s a big opportunity for rural development, which in my view, we are missing out on because we as an industry aren’t involving the whole value chain created by telecom site development. On current lines, the business case for connecting rural sites is lacking, but of course, without connectivity it will take even longer for those reason to develop strong business cases for investment.

But for the last 25 years, we have seen banks enter rural areas and put in a power system for a remote ATM. Today, you don’t need an ATM to access banking services, but you do need wireless broadband. The development also supports safety and security services which are essential for attracting tourists. Bringing it back to our roots, it also enables the storage of vaccines and for medical treatment which supports the development of future generations of producers and consumers.

So the whole pie grows, it helps commerce, health, tourism, finance, security, education. But the issue is we’re not collaborating. It’s not an easy problem to solve, to coordinate all the different parties who would benefit and crystallise it into a viable

investment plan, but it is what is needed. Sadly we cannot rely on government programmes to connect rural areas because they move to slowly.

In developing areas the two most important areas are power and broadband and that is what the tower industry provides. A power system alone in many areas would be great, but it needs to be maintained and telcos can provide, or contract for, maintenance. Broadband and low-cost power go hand-in-hand. How you monetise that power generation and justify that maintenance cost is another question, whether you can give access to your generation for charging batteries or use excess energy to power a school, and your independent systems, fuel service and maintenance personnel are shared. Or perhaps the schools or local business enterprises generate power and sell to the tower company, these are some of the options.

Once upon a time, a major beverage company investigated using solar generators in remote locations so people could enjoy cold beverage in rural areas. Years later when people moved to the cities they still enjoyed that cold beverage and kept buying it because they remembered it had been there when they were young. Viettel are using this strategy in Tanzania, going to rural areas, winning customers, and then keeping them and banking a lifetime of income far in excess of the cost of the capex required to reach that rural community. There’s so much more value add possible in the telecoms industry, but it requires even more coordination


Keywords: Americas, Business Case, Energy, Energy Efficiency, Energy Storage, Fuel Cell, Fuel Security, Hybrid Power, Meetup preview, Microgeneration, O&M, Off-Grid, On-Grid, Opex Reduction, Outdoor Equipment, Renewables, ROI, SerEnergy, Site Level Profitability, Unreliable Grid, Who’s Who

Methanol fuel cells making inroads into the telecoms sectorAn interview with SerEnergy, provider of silent and emission free power solutions for telecoms

TowerXchange: Please introduce SerEnergy, its activities and footprint.

John Lindegaard Kjær, Sales & Marketing Director, SerEnergy: SerEnergy has been in the market since 2006, developing and manufacturing power systems. We focus on the stationary market for backup, supplementary and primary or hybrid power sources. We distribute our systems globally.

SerEnergy’s products are based on High Temperature PEM fuel cell technology that improves our clients efficiencies around 40-45%, while reducing cost and replacing conventional, pollutant technologies such as diesel generators.

With a green mindset SerEnergy aims to contribute to the world’s transition from fossil fuels to renewable energy, as well as overcoming some of the obstacles within the renewable sector such as flexibility and availability.

Headquartered in Aalborg Denmark, SerEnergy is a leading fuel cell manufacturer. Owned by German company (Fischer Group) we have 2,500 employees, strong financial capabilities and the ability to support our customers globally.

TowerXchange: Fuel cells have not been spoken about much in the TowerXchange Journal, can you explain what grid situations they are most suited to and how extensively they have been deployed?

John Lindegaard Kjær, Sales & Marketing Director, SerEnergy: There are various types of methanol

Read this article to learn:< SerEnergy’s footprint, activities and production capacity< The different use cases of fuel cells and comparison with other sources of power generation< Serenergy’s fuel cell efficiencies and space requirements for indoor and outdoor scenarios< How to install and maintain fuel cells< The positive impact of fuel cells on emission reduction

John Lindegaard Kjær, Sales & Marketing Director, SerEnergy

SerEnergy is one of the largest methanol fuel cell manufacturers in the world and a pioneer in powering telecoms infrastructure with this kind of solution. TowerXchange speaks to the company’s Sales & Marketing Director, John Lindegaard Kjær to understand where fuel cells can bring real benefits to telecom sites regardless of the grid conditions.


fuel cell systems, but in general they can be used for backup power, supplementary power or primary power.

Backup powerA lot of customers around the world need to be able to run communications systems at all times, which puts more stress on the reliability of the systems and on grid availability. This means that even if you are based in areas where loss of grid (down time) only happens every second year or less, you still need a backup system that is always able to provide power so that your systems keep running. If you need longer than six or eight hours of backup time, batteries typically become too heavy, space demanding and expensive.

Traditional diesel generators offer longer backup time, but for systems that are not running very often they still need to be maintained, and you need to make several startups per year to make sure they can run in a backup situation. Our fuel cells offer great advantages in those cases, since they are able to be used for both short and long backup time. At the same time, they are more or less self-maintaining and even if they are not in use, the systems are able to be kept in optimal conditions through self-test programs and automatic start-up cycles.

Core telecom sites and security networks are some good examples, and we could also highlight systems located in regions where you often see extreme environmental conditions such us earthquakes or typhoons that cause long grid blackouts.

Supplementary powerIn many situations and regions, you need a supplementary power system which is able to take over when the primary power source is not running. The system could run several hours per day or per week. This could be for regions with unreliable grid, but it could also be part of a green installation with solar panels, wind turbines or other energy sources where the fuel cells can ensure that the system is running 24/7. In many parts of the world, especially Asia and Africa, the grid is highly unreliable and in order to keep telecom sites up and running you need either an alternative to grid power or a system that can run several hours a day or per week due to outages. Methanol fuel cells offer an ideal solution to conventional power sources like diesel generators due to low fuel cost and less maintenance requirements.

Primary powerMethanol fuel cell systems are also a great alternative to traditional diesel generators when it comes to providing power for off-grid sites.There are large investments involved in connecting remote sites to the grid, so together with the low operation cost and the relative little investment, the fuel cell system can offer large cost benefits for the customers. Both maintenance and fuel cost are in most cases much lower when operating a methanol fuel cell system if you compare them with diesel generators.

TowerXchange: What advantages do fuel cells offer above other sources of generation?

John Lindegaard Kjær, Sales & Marketing Director, SerEnergy: The fuel cell technology has a number of advantages compared to batteries and diesel generators. First of all, the fuel cell system is a technology that offers up to 70% reduction of CO2-emissions. Besides that, the fuel cell technology offers several clear advantages compared to diesel generators. Especially in densely populated areas where the surroundings are quite sensitive to noise, vibrations and harmful emissions. Diesel generators will give you all three at the same time, while the fuel cell system can offer you low noise, no vibrations and no harmful emissions due to the nature of the technology. This allow customers to set up the base-stations where the coverage is best, and it also makes it easier to get the required approvals from the owner of the property as well as the authorities.

Fuel cell solutions offers a very compact design per kW. It can be installed in either an outdoor cabinet next to the actual telecom equipment or it can be integrated into an existing indoor solution. In an outdoor solution, the footprint for up to 15 kW is typically not bigger than 1×1 metre including cabinet, modules and tank while in an indoor installation offers an even smaller footprint integrated into e.g. a 19’’ rack system. Not only is it convenient on existing sites but it also saves money on rental cost and installation.

Our fuel cell system is fully monitorable, not only when it comes to power output but you are also able to monitor the state of the inside of the system e.g. fuel cell stack, reformer et cetera. At the same time


the system is running fully automatically and will be more or less self-maintaining and conditioning. The monitoring system also allows you to monitor fuel levels, state of the grid and alarms making it possible for the customers to respond faster to alarms, service requests etc.

The efficiency of the fuel cell system is another area where it outperforms existing technologies. The fuel cell system is dimensioned according to the exact needs of the customers and it runs at a very high efficiency no matter if it is delivering 30% of its capacity or 100%. The electrical efficiency rate is typically between 40-50%.

Methanol fuel cell offers a cheap fuel source. Methanol fuel cells runs on a blend of water and methanol which is easily accessible in most parts of the world and at low rates. At the same time the use of methanol offers a CO2-neutral alternative to traditional fuels, depending on the source of the methanol.

TowerXchange: How robust is the system and how simple is it to install and maintain?

John Lindegaard Kjær, Sales & Marketing Director, SerEnergy: Fuel cells offers a robust design, meaning that the technology is equipped for the most extreme conditions. The installation of the fuel cell system is quite easy and in most cases, offers more flexible and faster installation options than traditional power sources – like the options for integration into existing enclosure solutions. The fuel cell system is a compact and lightweight design which is a big advantage for base stations

with limited space and also for installations in city areas on rooftop sites, in buildings et cetera.

TowerXchange: What kind of opex reductions can fuel cells provide and how does TCO compare to other sources?

John Lindegaard Kjær, Sales & Marketing Director, SerEnergy: Our methanol fuel cell systems offer low maintenance because they are self-conditioning and maintaining, and the systems can be monitored remotely, resulting in large savings in terms of service cost, unplanned site visits et cetera. As mentioned, previously methanol is a cheap fuel source and, in most cases, and in most parts of the world methanol is cheaper than traditional fuel sources.

TowerXchange: How do SerEnergy differentiate themselves from other fuel cell providers in the market?

John Lindegaard Kjær, Sales & Marketing Director, SerEnergy: SerEnergy was established back in 2006 and has since then worked intensively with the implementation of the technology into stationary applications like telecommunication. That also means that the SerEnergy fuel cell systems have been tested and deployed in many markets and with many customers giving a proof of concept which not many competing companies can match. SerEnergy is committed to serving our customers commercially and technically meaning that we support our customers remotely and locally in a way that not many of our competitors are able to offer






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