division of Exide Technologies GRIDSERVE GS Yuasa Halo Energy HIMOINSA INCELL International iQron Leoch Mantrac Ltd. NorthStar Battery Okaya Power Pvt. Ltd. Polar Power Inc PowerX

| TowerXchange Africa 2019 report | www.towerxchange.com1

TowerXchange Meetup Africa 2019 Post Event Report

Key market insights and write-ups, attendee profiles and 2020 preview

www.towerchange.com


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

(Chairman) Charles GreenCEO, International DigitalInfrastructure Alliance

Zhiyong ZhangChairman & PresidentMiteno

Akhil GuptaChairmanBharti Infratel

Nat-sy MissamouSharing New Business Program Director, Orange

Nina TriantisManaging Director, Global, Head of Telecoms & MediaStandard Bank

Terry RhodesCEOEaton Towers

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

Arun KapurCo-FounderIrrawaddy Green Towers

Pat CoxenManaging DirectorMBNL

Dagan KasavanaCEOPhoenix Tower International

Daniel Lee Managing DirectorIntrepid Advisory Partners

Suresh SidhuCEOedotco Group Sdn Bhd

Rhys PhillipChief ExecutiveCornerstone

Ted ZhongFounder & CEO,Astro Tower

Hal HessExecutive Vice President & Chairmanof Latin America and EMEAAmerican 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

Inder BajajAdvisor, Helios Investment Partners & former CEOHTN Towers

Tunde TitilayoVice ChairmanSWAP International

Peter BendallSenior Vice PresidentMacquarie Infrastructure and Real Assets

Jeffrey EldredgePartnerVinson & Elkins RLLP

Enda HardimanManaging PartnerHardiman Telecommunications Ltd.

Adeel BajwaCEODhabi Group

Scott CoatesCEOWireless Infrastructure Group

Carlo RamellaCOO, EI Towersand Chairman, Towertel

Alexander ChubPresidentRussian Towers

Steve WeissCFOProtelindo

Toni BrunetCorporate & Public Affairs Director,Cellnex Telecom

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

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


Foreword

Dear colleagues,

Thank you once again for attending the seventh TowerXchange Meetup Africa.

TowerXchange has been charting the history of African towers for over seven years, and the industry has passed through many phases in that period. We started with a land grab. That was followed by a period of operational optimisation. Now the market has reached a maturity marked by new challenges and new opportunities. This evolution was on show in Johannesburg in October.

This year we heard more from MNOs on what they want from towercos as essential partners in African telecoms. We saw booming interest in rural connectivity as towercos and MNOs seek out new markets to serve. 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 ran our working groups focusing on new markets, like Ethiopia, and old problems, like energy, and hosted a number of buyer briefings

in pursuit of TowerXchange’s mission of bringing greater coordination and information sharing to this great industry. I hope you had a productive meeting and that these excerpts and highlights will be helpful to you.

Matthew EdwardsHead of Research, EMEATowerXchange


83 Abloy Oy85 Asentria88 Bladon93 Caterpillar97 HIMOINSA100 ieng Group103 IPT PowerTech106 NANHUA Electronics Co. Ltd.108 NorthStar Battery113 Polar Power Inc118 STULZ GmbH120 Tarantula

Contents77-81

82-123

5-7

16-76

Sponsorship

TowerXchange Meetup Africa 2020 exhibition preview

TowerXchange Meetup Africa

TowerXchange’s analysis of SSA tower industry

77 Sponsor profiles 81 Why sponsor a Meetup?

5 Attending companies6 At a glance7 Testimonials

16 Towerco leaders speak20 Helios Towers’ IPO24 American Tower in Africa28 Atlas Towers acquired by SBA Communications32 Atlas Towers expands across Africa35 ESCOs come of age41 MNOs challenge towercos45 Airtel’s 4G plans54 MTN’s rural plans58 Rural connectivity63 4G and 5G in Africa67 Landlords and leases70 Ethiopia Focus Group

123456


Who attended TowerXchange Meetup Africa?

MNOs and towercosAfricellAirtelANTOSCAtlas TowerBlue Sky TowersDesarrollos TerrestresEaton TowersEconet Wirelessedotco Group Sdn BhdGreenfieldsGyro TowersIHS TowersMTNOrangePan African TowersPowercomRain South AfricaSBA CommunicationsTangerineVodacomVodafone Procurement CompanyWIRUlink Pty Ltd

ESCOs and managed service providersAbbott TechnologiesAktivcoCamusatEngieieng Group

IPT PowerTechMaktechMCS EnergyNETISVOLTALIA

InfracosAvanti plcAligned EnergyDark Fibre AfricaSEACOMSmallcellOpenserve, Telkom

Access ControlAbloy OyAcsys International Ltd.Sera4

AdvisorsAnalysys Mason Pte LimitedDigital ThingsDelmecDelta PartnersHardiman TelecommunicationsNetEquity NetworksRambollStandard Advisory London LimitedVinson & Elkins RLLP

Data Collection & UtilisationAsentriaInfozechInvendis Technologies India Pvt LtdITD / ClickOnSiteTarantulaDucont SystemsSitetrackerTeamViewerNew Sun Road P.B.CIntertekComAp

Energy equipment providersAscot IndustrialAubren LimitedAUSONIABarloworld PowerBladonCaterpillarCHEM ENERGYContinuous Power AfricaComAp a.s.Crossflow EnergyEnatel EnergyEnetek PowerFlexenclosureGenCellGNB® Industrial Power – A division of Exide Technologies

GRIDSERVEGS YuasaHalo EnergyHIMOINSAINCELL InternationaliQronLeochMantrac Ltd.NorthStar BatteryOkaya Power Pvt. Ltd.Polar Power IncPowerX Technology LimitedPRAMACPRECISION INDUSTRIESReon Energy LimitedSerEnergyTSSZhuhai CosMX Battery Co., Ltd

InvestorsInternational Finance CorporationMitsubishi CorporationCerberus Capital ManagementRBC Capital MarketsStandard Bank Group

OEMHuawei Technologies Co. LtdZTE Corporation

EricssonNEC-XON

Structures and accessoriesNANHUA Electronics Co., Ltd.Ganges Internationale Pvt LtdMitas Industry IncCoolsure LtdValmont StructuresComsol ZA

PressBloomberg

GovernmentCity of JohannesburgCity of EkurhuleniSouth African Department of Trade and Industry

OthersFacebookRadio Evolution Sweden ABConnect AfricaNuRan Wireless IncFairwaves IncInternational Digital Infrastructure AllianceZerotel

Restricted to Director-level or higher executives, TowerXchange Meetups assemble the most influential stakeholders in the African tower industry. Here are the companies that attended in 2019:


TowerXchange Meetup Africa 2019 at a glance

A packed out agenda and interactive sessions including:

Sponsors and exhibitors benefitted from:

Towercos 15%MNOs 17%ESCOs and MSPs 10%Energy equipment providers 25%Active equipment 8%

Advisory, consultants and investors 10%Monitoring and management 10%Tower designers, manufacture and builders 3%Regulator or Government 1%

Interviews & exposure in 250 printed special

edition books

8 invitation-only Working Groups &

Buyer Briefings

1:2buy-side:

sell-side ratio

Exclusivepre-event briefings

and access

Branding to 257 attendees over

two days

37Roundtable and

closed-door sessions

8Working Groups and

Buyer Briefings

50Speakers

7Panels and

debates

1Unmissable

networking dinner

Industry breakdown Seniority breakdown

C-level - 31%

VP/SVP - 13%

Director - 16%

Manager - 27%

Associate, other - 9%

Head - 5%


Select testimonials from TowerXchange Meetup Africa 2019

“The work done by the TowerXchange team, bringing quality information through their digital platform, has added value to the industry. ANTOSC has been participating in their events for a few years and we will continue to participate, as we believe it is an important vehicle for our companies and our business, congratulations to the whole TowerXchange team”- Marcos Chaves, CEO, ANTOSC

“I always find each TowerXchange Meetup I attend beneficial. It's a great way to catch up on that region and meet so many existing and potential contacts in a 48 hour period. The format is well suited for true information exchange and learning. On key and very time efficient”- Kurt Bagwell, President, International, SBA Communications

“The TowerXchange Meetup fully met my expectations with a variety of topics covered during the panels and the roundtables. The breaks and the exhibition provided ample opportunities to network and update yourself with the latest technologies and industry trends”- Lars Stuber, CEO, Smallcell

“Polar Power attends most TowerXchange Meetups and all are very useful for identifying at least one very strong new potential client. The team behind the scenes is most helpful in facilitating one-to-one engagements outside of the roundtables”- Michael Mullen, Key Account Manager, Polar Power Inc


ESCO Roundtable24-25 March, Hyatt Regency Casablanca, Morocco

Cultivating operationally effective partnerships to positively impact efficiency, service quality, environment and community

Cover image courtesy of Camusat

To discuss your participation, contact Sarah on +44 7714 775700 or email [email protected]

Organised by:

Foundingsponsors:

Associate sponsors:

Co-host:Tower Xchange


The Energy Services Company (ESCO) business model achieves launch velocity

ESCOs operate power systems at >20% of Africa’s unreliable grid and off-grid cell sites, rising >50% by 2021, while a next generation of ESCOs can ease financial pressure on Asian MNOs and towercos

IPT pioneers guaranteed savings model for IHS Nigeria

Ethio Telecom RFP for an initial 1,200 sitesnears conclusion

Energy Vision operates Africa’s first ESCOfor Airtel Gabon AST scales to 10,000 sites, Ardom improves

margins through Indian market turbulence

Millicom Chad partners with Aktivco ESCO opportunities in Pakistan, Philippinesand LatAm

Orange activates 10 year ESCO partnerships in six countries, three more imminent Sagemcom adds ESCO contracts with Orange

Sierra Leone and Liberia to DRC

Yoma Micro Power, Voltalia and Yoma Mandalay power hundreds of cell sites in Myanmar

Safaricom preparing ESCO RFP

IPT provides ESCO for Alfa and touch in Lebanon

Etisalat to launch 1,000 site RFP in Egypt

Orange reports uptime ratio improvementsof 30-40%

MTN has 13,000 potential ESCO sites

DPA powers 1,800 Econet sites, expands into C&I

Vodacom South Africa launches ESCO RFPfor 1,400 sites

ieng contracts over 700 ESCO sites across CAR, Guinea C, Liberia and Afghanistan


What is the ESCO Roundtable?

A by-invitation-only executive retreat for the pioneers of the ESCO business model. Our goals:

< Increase understanding of the ESCO business model, accelerate adoption by MNOs and towercos, with the goal of scaling ESCOs faster

< Optimise the operational delivery performance of ESCOs by sharing direction and best practices with both the leaders of the ESCOs themselves, and with MNOs’ and towercos’ Partner Managers

< Evangelise the ESCO model to prospective investors, thereby attracting more funding at lower cost, with a view to deepening the pool of viable prospective ESCO partners

< Refine stakeholders’ understanding of the scenarios where ESCOs are the best partners, and those where towercos remain critical – exploring how ESCOs and towercos can co-operate

< Showcase proven green energy innovations, with the goal to continue to further reduce reliance on fossil fuels, while at the same time reducing costs

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

What’s in it for you to attend?

Meet prospective partners

Reduce energy opex

Improve uptime

Unlock new capital

Reduce carbon footprint

Attract/deploy investment

Understand ESCO contracts

Refine business models

Achieve ROI in ESCOs

Optimise green power

Operational delivery

Investible counterparts


ESCO Roundtable agendaDay one | Tuesday 24 March

From 8:30 Registration and coffee 9:00 Keynote: Why Orange chose to partner with ESCOs, experiences to

date < Why Orange partnered with ESCOs: < Improve efficiency and quality of service < Accelerate our transition from diesel to green energy < Recognising that fuel logistics are not an MNOs’ core competency < ESCOs as a viable alternative to towercos < Initial successes: increasing site availability by 30-40% < Orange experiences from live ESCOs in six countries (Burkina Faso, Cote d’Ivoire, DRC, Guinea Conakry, Niger and Sierra Leone), managing 3,000 cell sites < Adding several hundred additional sites per year through ESCOs Hervé Suquet, CTIO, Orange

9:30 The current, and fast growing, market for telecom ESCOs < Orange completing their ESCO transition with a further 3,000+ sites with imminent ESCO launches in CAR, Mali, Liberia, Cameroon and eventually Egypt < Proofs of concept in Sudan and Congo for MTN, and the potential for 13,000 ESCO sites in the medium term < Beyond Orange and MTN: ESCO RFPs coming out of Vodacom, Safaricom, Etisalat Misr and Ethio Telecom < Why some towercos do, and other towercos don’t, partner with ESCOs < Lessons learned from the first telecom ESCOs in India, plus emerging ESCO opportunities in Myanmar, Pakistan, Afghanistan and the Philippines < Forecasts for the continuing growth of ESCOs Kieron Osmotherly, CEO, TowerXchange 9:50 Keynote: How ESCOs have emerged in response to customer demand < How Camusat’s Aktivco has become the fastest growing ESCO in Africa < Drivers for the emergence of ESCOs: energy opex, availability,

community and environmental considerations < Camusat’s long term engagements and investments, and our evolution

from service provider to service partner < The critical difference between energy provision and energy services – it’s all about operational delivery < The deepening pool of capital available to finance ESCOs Thibaut de Rodellec, Deputy CEO, Camusat 10:10 Keynote: Unlocking efficiencies through scale - two unique case

studies < How IPT PowerTech became the world’s first ESCO to manage more

than 10,000 sites: our footprint < Our four year journey with IHS: from originating the guaranteed

savings model to delivering operationally – site modernisation and successes to date

One of TowerXchange’s 24 successful past communications infrastructure events



< How partnering with all the MNOs in a market, in this example Lebanon, unlocks incremental efficiencies in terms of procurement, resourcing and results

< Where we see the industry going in terms of new customers and new capital

Gabriel Bou Gebrael, GM – ESCO Division, IPT PowerTech 10:30 Morning coffee 10:50 Case study: Five years of experience operating an ESCO in Gabon < The context of the mobile market in Gabon, challenges we are facing,

and the roadmap for the future < What has been achieved? Improving uptime (99.99%!) and reducing

CO2 emissions by two thirds < The importance of forming a genuine partnership to ensure fast,

successful implementation and sustainable results < Expanding in Gabon, and a landmark new contract in Nigeria Ofer Ahiraz, CEO, Energy Vision 11:10 How ieng’s ESCO CREI provides a one-stop service, reducing

execution risk for MNOs and towercos < Our footprint: 18 offices across Africa and Asia, 13,800 O&M sites,

ESCOs in 3 countries < How our CREI ESCO investment vehicle evolved combining EPC and

O&M from ieng, hybrid system design and manufacture from Greenpole, and steel structure design and manufacture from EKI.STRUCT

< Overcoming unique challenges in Afghanistan to improve from 98- 100% uptime, delivering up to 70% fuel and CO2 emissions reduction

< Experiences from our initial ESCO deployment in CAR < The potential extension of telecom ESCOs into social and community

power projects Kadri Hakim, Co-CEO, ieng Group

11:30 Panel: Best practices in operational delivery and site modernisation < Where and when does the customer’s responsibility for legacy equipment end? < And when is it reasonable to expect site modernisation to begin? < How to audit sites to create an up to date asset register, visibility of available space, equipment lifecycles, current and future load < Selecting, standardising (where possible) and correctly deploying hybrid and renewable power systems < Monitoring and optimising performance < Aligning power to new active equipment requirements and what

evolving site design will look like in 3-5 years < Aligning with the opco in terms of responsibilities, people, process and culture Moderator: Dulip Tillekeratne, Senior Manager, CleanTech, M4D,

GSMA Sachin Nijhawan, Vice President, Mahindra Powerol Gabriel Bou Gebrael, GM – ESCO Division, IPT PowerTech Ivan Nazarski, VP Business Operations & Technology, Camusat Damien Kelly, Regional Business Manager, Delmec 12:10 The next wave of prospective ESCO customers < What Etisalat is looking for from their 1,000 site RFP in Egypt < Why declining grid availability has prompted Vodacom to explore partnering with an ESCO at 1,400 sites in South Africa < Why Safaricom is considering partnering with ESCOs for around 20% of their sites < Ethio Telecom’s ESCO RFP: 1,200 sites South and East of Addis Ababa < Where MTN is considering partnering with ESCOs and the progress of pilots Johan Ayres, Managing Executive, Network Programme Management,

Vodacom Francis Murabula, Executive Head, Procurement and Logistics,

Safaricom



Ernest Paul, GM, Network Operations, MTN Khalid Murshed, CTO, Etisalat Misr Senior representative, Ethio Telecom (Participantssubjecttoconfirmation)

13:00 Networking lunch

14:00 Fireside chat: How towercos, ESCOs and MNOs can all work together < Power business models 101: power-as-a-service vs power pass through vs ESCO vs guaranteed savings < How and why has IHS created ESCO-like partnerships in Nigeria? < How Helios thinks partnerships with ESCOs could work, and why they haven’t partnered to date < How Tower Vision and the other towercos in India work with ESCOs < How ESCOs and towercos can co-operate to create efficiencies and optimise service provided to MNOs and ultimately subscribers < Under what circumstances would a power-as-a-service towerco partner with an ESCO? Interviewer: Kieron Osmotherly, CEO, TowerXchange Emmanuel Leonard, Director of Business Development, Helios

Towers PLC Moshe Shushan, Director, Tower Vision Gordon Porter, VP Operations, IHS Nigeria(tbc)

14:40 Panel session: How to maximise the investibility of ESCO contracts < Areas investors focus on when evaluating ESCO contracts: < Price and tenor < Cash flow versus capital deployed, and the impact of penalties < Counterparties: recourse to a sizable service company, MNO parent company guarantees < Political risk, currency and payment mechanics < Provisions governing change of control < Flexibility to move equipment between sites in the event of changing load or electrification

< What can be done to drive down the cost of capital, as a function of contract, market, technology, counterpart and currency risk? < What it will take for ESCOs to attract capital beyond DFIs and specialist lenders; opening the door to commercial debt and corporate finance Moderator: Emine Topal, Project Manager, Green Giraffe Pål Helgesen, Investment Director, Norfund Ariana Batori, Investment Officer, IFC Andreas Cremer, Director for Infrastructure in Eastern Europe,

Middle East and Asia, DEG David De Villiers, Vice President Renewables to Telecom Operators,

Engie Antonin Calzarossa, Investment Officer for SSA, Asia, LatAm, EIB 15:25 A risk matrix for ESCO contract review < What to look for when reviewing an ESCO contract and associated subcontracts < Is the transfer of risk commensurate with the fees? < Are there variable components to the fee structure to mitigate risks associated with FX or diesel prices? < What is the allocation of risk associated with the capital deployment into new equipment, and the risk of vandalism or theft of that equipment? < Are SLAs achievable, and are penalties fair? < What are the termination clauses, how is the equipment procurement

amortised, and is the cure period realistic? Kerim Uster, Attorney at Law with experience of reviewing ESCO

contracts 15:45 Afternoon coffee



16:00 Fireside chat: Navigating ESCOs through market restructuring and cell site electrification

< How AST has continued to scale their ESCO business to almost 10,000 towers, despite the restructuring of the Indian mobile market < How Ardom streamlined processes to improve their bottom line whilst under top line pressure < Where the pressure to renegotiate ESCO contracts comes from distressed counterparties, and how we found win-win solutions < How we’ve adapted as our portfolio has evolved the majority being off-grid to a majority on grid < Why MNOs and towercos need the ESCO model now more than ever < Adapting our solution to new site typologies, < Expanding beyond telecom to serve C&I customers Interviewer: Kieron Osmotherly, CEO, TowerXchange Kapil Kathpalia, CEO, Applied Solar Technologies Ajit Shankar, Managing Director and CEO, Ardom 16:30 Case study: How Yoma Micro Power has built 250 power plants to

serve towerco anchor tenants and communities in Myanmar < Deploying our own capital into solar hybrid power plants designed to meet the load today, with modularity for scalability < What 99.95% uptime SLAs mean in practice < How we have reduced energy opex by 15-20% whilst drastically improving carbon footprints < Why the telecom, community power and C&I businesses must each stand on their own legs < Challenges to overcome to drive to 2,000 sites: site acquisition < The future of mini-grids, ESCOs and telecom energy in Myanmar Alakesh Chetia, CEO, Yoma Micro Power 16:50 Case study: Beyond towers to power switching centres, Fibre PoPs

and C&I < How DPA evolved from managing 1,800 Econet sites to serving Liquid

Telecom PoPs and C&I off-takers – from 5KW to 5MW – in five countries < Why the power requirements for towers, different comms infrastructure, and C&I off-takers are not as different as one might think – leveraging the same resources < How we adapt to achieve data centre 99.999% uptime SLAs < How agreements are pre-negotiated to evolve as the load increases < Extending to 20MW mining projects – DPA’s joint venture with EDF Norman Moyo, Group CEO, Distributed Power Africa 17:10 Expanding the remit of ESCOs: community power, C&I off takers, and

rural network expansion < Can a renewable energy cell site become a community hub for power and water? < How does extending the ESCO business model from telecom towers to community power affect profitability? < Is installation rooftop solar for C&I off takers a good fit with telecom ESCOs? < How does MNOs and towercos transferring a growing number of cell sites to ESCOs translate into connecting more people to a faster Internet? < How do we catalyse investments in ESCO, site design and network- as-a-service innovations, and how can they combine to unlock rural connectivity? < What are the implications of expanding the remit for your team and for your investors? Alakesh Chetia, CEO, Yoma Micro Power Nat-Sy Missamou, Energy Director, Orange Norman Moyo, Group CEO, Distributed Power Africa Kapil Kathpalia, CEO, Applied Solar Technologies 18:00 Close of day one, followed by drinks reception and networking dinner


ESCO Roundtable agendaDay two | Wednesday 25 March

Bi-lateral meetings

TowerXchange will co-ordinate a full day of bi-lateral meetings, such as:< MNOs reconnecting with existing ESCO partners< MNOs and towercos meeting prospective future ESCO partners< ESCOs meeting current and prospective investors< Green energy component suppliers meeting current and prospective ESCO customers< Managed service providers meeting current and prospective ESCO partners< MNOs jointly meeting towercos and ESCOs to co-ordinate activities

Our meeting booking service is free to MNOs, towercos, investors and for our sponsors. For non-sponsoring vendors and ESCOs, access to our new bi-lateral meetings systems and to our inventory of half hour meeting room slots is an extra £500. Light refreshments will be provided.

Image courtesy of Energy Vision Branded lounge


CXO-perspectives fromAfrica’s leading towercosAs African towercos enter a new phase of life, what comes next for investment, diversification and new markets?

Winds of change?

With Helios Towers to IPO a week after TowerXchange Meetup Africa, American Tower in the midst of purchasing Eaton Towers, IHS Towers raising US$1.3bn of new debt, and SBA taking control of Atlas Tower SA, the panel naturally began by asking: how will these transactions affect Africa’s towerco market? “It will affect things less than you might think” came the reply from Eaton Towers CEO Terry Rhodes, and industry and regulators should be reassured by that.

The terms managing towerco contracts survive changes of ownership, so any agreements to rent space on a tower survive MNO consolidation, or in-market towerco acquisitions. That means that for those renting space on towers very little will change on the assumption of Eaton’s reins by American Tower. Similarly, Eaton’s SLB deals included the right to first refusal on new build in their markets, and that means the process of building new towers will remain largely the same. Consolidation can be worrying to regulators, so the long-term contractual protections for both parties in towerco contracts will be key in allowing American Tower to secure all necessary approvals to complete the purchase.

Some towerco markets are easier than others, in Burkina Faso the transfer of the towerco licence from Eaton Towers to American Tower is very straightforward. In other markets a change in control has been signalled as an opportunity to look

Read this article to learn:< What to expect in the next phase of life of African towercos

< Towerco resilience to MNO consolidation

< Appetites for diversification into other digital infrastructure

< Opportunities in frontier markets

Keywords: Africa, Africa Research, Angola, Atlas Tower, Botswana, C-Level Perspective, Data Centre, Eaton Towers, Egypt, Ethiopia, IBS, IDIA, IHS Towers, Kenya, Market Entry, Market Forecasts, Nigeria, RANsharing, Rooftop, Small Cells, South Africa, Towercos, Zimbabwe

Our opening towerco panel at the TowerXchange Meetup Africa 2019 was chaired by Chuck Green, late of Crown Castle, formerly CEO of Helios Towers Africa and now CEO of the International Digital Infrastructure Alliance (IDIA). He was joined by Terry Rhodes, CEO of Eaton Towers, Nate Foster, CEO of Atlas Tower and Steve Howden, Deputy CFO of IHS Towers. Our Meetup proved timely, taking place a week before Helios Towers’ IPO. Even as the industry enters a new phase, our panellists foresee continued investment in macro towers dominating, with space to diversify and new opportunities in new markets ahead.Panelists on stage


again at how towercos operate. So the message that these long-term contracts are here to stay and remain as fair as they were the day they were signed is an important one. Regulators can look at pricing in markets like India and feel towercos leases are too high, even while ignoring that costs can be 4x higher in Africa than India.

For Africa’s remaining towercos, Steve Howden of IHS Towers didn’t see the liquidity events as marking key changes in strategy or outlook, more as natural phases of the lifecycle of towercos. The land grab up to 2016 is over and investors are right to either seek consolidation or raise more capital to seek new opportunities. Those new opportunities might be buy and leasebacks, or they might be found in fibre or data centres, or they might be outside of Africa altogether.

One area where the towerco dynamic may change is at the smaller end of the sector. Nate Foster of Atlas Tower says that they have shown the viability of the build-to-suit model in South Africa, and they are taking it to Botswana, Kenya and beyond. SBA Communications aren’t going to acquire towercos in the most frontier of markets in Africa, but there are opportunities for smaller towercos to stake out on their own. Atlas Tower certainly aren’t going to change strategies. The SBA Communications transaction has repaid some of their initial investment, and that means Atlas Tower are able to reinvest and expand into other African and international markets.The breakeven scale for a towerco has come

down substantially over the last few years; the barriers to entry for an infrastructure company are low; and the headcount required to start a towerco is also small. The question is: why aren’t there more entrepreneurial towercos replicating what Atlas Tower have done? Mobile operators are looking for more alternatives for tower management besides the big four (soon to be three) towercos. ESCOs are finding new opportunities - middle market towercos could also benefit from this desire to diversify.

MNO consolidation

MNO consolidation is continuing in many markets and our panel agree that four healthy customers

are better than three. Although, three healthy customers – or even two healthy customers – were seen as better than an anaemic market of low ARPUs, low margins and low investment. Long-term contracts protect towercos from consolidation wiping out future revenue, but rigidly sticking to contracts can damage long-term towerco/MNO relationships so some negotiation and flexibility often results in some contracts being swapped or changed.

Towercos want to see mobile operators in a healthy condition, but even mobile operator exits can lead to positive outcomes because of Africa’s significant growth potential. Etisalat exited Nigeria in 2017 due to financial difficulty, but its successor brand

“

“

The breakeven scale for a towerco has come down substantially over the last few years; the barriers to entry for an infrastructure company are low; and the headcount required to start a towerco is also small. The question is: why aren’t there more entrepreneurial towercos replicating what Atlas Tower have done?


9mobile continues to raise money and slowly invest and will likely return to health again – it has 16mn customers, small by Nigerian standards, but equivalent to the population of Zambia.

Eaton Towers have sold for US$1.85bn and operate in markets which have seen substantial consolidation. The short-term disruption makes life uncomfortable for towercos, but healthy counterparties invest more, and that means more building and more technology upgrades. For Atlas Tower, their build-to-suit model leaves them with less exposure to consolidation, their towers are built in locations ideal for sharing, and they are

able to pull back from taking new contracts with mobile operators likely to exit the market.

Holistic digital infracos?

As Africa firmly enters the 4G-era, fibre connections are being requested more and more often with new build-to-suit contracts. However, while it is now difficult and expensive to permit and build a second tower next to an existing sharable site, it remains easy and cheap to run a second or third or fourth fibre cable to a tower site. So the revenue for fibre-to-the-tower and margin potential are modest compared to towerco

norms. There was a muted reception to entering the enterprise fibre market, but with denser networks and small cell roll-outs requiring fibre connections, there remained an appetite to see where the market leads them.

While fibre is an important adjacent market for towercos, rooftops and in-building solutions are already firmly established in the towerco playbook in Africa, and will consume more and more capex in the future as African cities develop. Macro towers will continue to receive the bulk of capex in the industry for some years to come, although the average height of towers has decreased, as has the distance between sites. This pushes up opex too, but this is more than compensated for by tenancy growth and increased revenues.

Other options for diversification in Africa received a cooler reception. While towercos are power experts in Africa, the uptime requirements of a data centre remains an order of magnitude or more higher than a cell site, as well as being a very different business to operate in other ways. Towercos are faced with four major customers and can enjoy face-to-face meetings and deep relationships with people based in the same commercial centre; datacentre operators have an enormous number of potential customers based across the world, so the models differ significantly.

Our panel was lukewarm about moving into active network management, or becoming a NetCo, although towercos in Africa have been approached

“

“

While fibre is an important adjacent market for towercos, rooftops

and in-building solutions are already firmly established in the

towerco playbook in Africa, and will consume more and more capex

in the future as African cities develop


about taking over active management. Radio planning and other aspects of active management are very different from tower leasing and power-as-a-service, and so they have yet to make the leap.

Towercos do not currently own spectrum because taking ownership of spectrum would lead to increased regulation and reduced flexibility, but this would be a crucial step to becoming a NetCo, or taking over more active duties. As networks densify and become more capital-intensive (for both active and passive network infrastructure), we expect to see more and more opportunities arising for towercos to move into active management, whether opportunities are taken up is another question.

Next frontier markets

The appetite for new African frontier markets like Angola, Ethiopia, or Zimbabwe was varied on our panel. Atlas Tower would prefer to find the “next South Africa” rather than be one of the first entrants into a market like Zimbabwe or Angola. The stable legal system, strong contract law and stable operational environment still makes South Africa the most investable market in Africa. But while some panellists preferred more stable and mature markets, other panellists relished the opportunity to go where others fear to tread.

There will be a lack of cautious money going into Africa’s newest potential towerco markets, but there are big opportunities for investors with more risk appetite. Terry Rhodes ran a cellular

business in Sierra Leone, and it was sold to Zain as a profitable business, despite the operational challenges. The same is possible in all of Africa’s markets, even the more developed ones. He discussed Eaton Towers’ experience of agreeing then losing a tower purchase and leaseback in Egypt. The change in Vodafone’s philosophy at group level may once again open up Egypt as a potential tower market for Africa’s towercos.

Ethiopia’s 100mn people and 8,000 towers were seen as a major prize in Africa. A sale and leaseback by Ethio Telecom is seen as a medium- or long-term opportunity, compared to the build-to-suit opportunity in the country. Last year, a liberalisation programme was announced which would see two new international mobile operators licenced and a boom in new sites required. All of Africa’s major towercos are interested in assisting mobile operators in capital deployment in telecom towers, and our panel would be surprised if some other smaller towerco entrepreneurs didn’t join them.

Angola currently only has two active mobile operators with nearly 3,000 sites and one independent towerco, with 18 sites. A new licence is due to be issued this year, and a state-owned operator is due to be privatised, creating ideal situations for a sale and leaseback, and extensive build-to-suit opportunities. Zimbabwe’s current economic difficulties have led to sharing agreements being agreed between the country’s three mobile operators and a squeeze on capex. Towercos can help ease investment constraints in

the country as it recovers. Markets in North Africa are also attracting attention as mobile operators look to monetise their assets and governments look to ease investment restrictions which have so far prevented sale and leasebacks by operators.

Diversity, growth

The diversity of opportunities and approaches in the industry is one of the towerco model’s strengths; a proliferation of smaller towerco operations will allow capital to find the correct balance of risk and return, vertical diversification will help close Africa’s digital divide and expansion into new markets in Africa and beyond will allow mobile operators and subscribers to take advantage of the lessons learned elsewhere.

Those opportunities have to fit the investment criteria and investment thesis of whoever is going in. For IHS Towers they are diversifying into the Philippines and the Middle East, Atlas Tower have moved into more mature markets like Kenya and Botswana, Terry Rhodes is focused on closing the Eaton Towers acquisition. But the towercos retain an interest in other untested markets and new verticals.

Our panels concluded that towercos’ long-term investments and non-extractive nature make them natural partners for African development. With understanding regulators and governments and ongoing investment demand from mobile operators, towercos are happy to be raising new capital and investing in Africa


Keywords: Africa, C-Level Perspective, Congo Brazzaville, DRC, Edge, Exit Strategy, Ghana, Helios Towers, Small Cells, South Africa, Tanzania, Towercos

Helios Towers enters a new phase post-IPOWhy has Helios Towers gone public? And what does it mean for the future of African telecom towers?

TowerXchange: Why has Helios Towers taken the step now to IPO? What made the time right?

Kash Pandya, CEO, Helios Towers: We have been ready to IPO for some time, but the time was right because we wanted access to further investment equity, and have now raised well over US$100mn through the IPO ready to invest in new acquisitions. We also have debt capacity too, and with our targeted EBIDTA to debt ratio of 3.5x-4.5x we have around US$300mn of ammunition. At historical purchase prices that translates to 2-3,000 towers and we think there are opportunities out there.

Listing also allows us to raise further capital more easily, as we require it. Across Africa we are seeing a renewed vigour for MNOs to sell their towers. Of the 225,000 towers in Africa, only 27% of towers are owned by towercos (editor: note this figure differs from TowerXchange’s own estimates as Helios include markets in North Africa which are counted in our MENA figures). There are 164,000 towers owned by MNOs which could pass to towerco ownership. There are also vast geographies in Africa without coverage, and many countries without independent tower companies at all.

We listed our shares at 115p, and reached 123p on the first day, but I do not want to be fixated on the share price. The share price can be impacted by a number of things outside the control of the business, so as CEO and as management we aren’t focusing on those factors, we want to focus on our quarter-on-quarter growth; we have had 18

Read this article to learn:< Details of Helios Towers IPO< Implications of the IPO for the African telecom tower market< Helios Towers appetite for further sale and leaseback < Organic growth opportunities in Africa < Revenue potential for adjacent telecoms sectors for Helios Towers

Kash Pandya, CEO, Helios Towers

On Tuesday 15th October Helios Towers went public. Helios Towers is active in Ghana, Congo Brazzaville, the DRC, Tanzania and South Africa. After reviewing but not pursuing an IPO in 2018, Helios Towers took the plunge in late 2019. The towerco went public with a market capitalisation of US$1.45bn against a Q2 2019 adjusted EBITDA of US$201mn. TowerXchange discuss the transaction with CEO Kash Pandya as the company and African industry enter a new phase.


consecutive quarters of EBITDA and margin growth. Our Q3 results will be out in mid-November and we are keen to make sure those are positive.

TowerXchange: You are one of the first non-extractive industry companies to list on the LSE with exposure to frontier markets in SSA, does your market cap at around US$1.5bn reflect fair value? Are investors getting more comfortable with firms exposed to DRC and Tanzania?

Kash Pandya, CEO, Helios Towers: We put a range out, and priced at the bottom of that range. There was a lot of share price volatility while Tom (Greenwood, Helios Towers CFO) and I were on the road. But once we went public it was clear we priced well. When a new listing comes into a market, like Helios Towers, there’s a couple of discounts that create a different value from say that which a trade buyer would pay for the outright acquisition of a towerco. There is a control premium which institutions don’t pay because they are only buying into the free-float of 25% and there is a normal IPO discount. So we think our shares are trading at the right place now.

What is important is that we have gained blue chip, long-term investors. 75% of our equity remains with our old investors and they still support our investment thesis. When a business like ours successfully lists that has operations in Ghana, South Africa, Tanzania, Congo Brazzaville and the DRC it validates the whole continent as a great place to invest. We have a track record of successfully

producing top line and EBITDA growth and the market has recognised the way we execute in those markets.

Compared to Africa’s other towercos, you could say we have had a similar journey to Eaton Towers, but I started in 2015 to create something great, and I do not think we’re there yet. I want to add more volume to the business, invest in more towers and the listing provides the resource to do even more.

I am not sure our IPO has any lessons for IHS Towers, it is a great business too, but you know as

much as I do about how and when they will come to market. They have raised US$1.3bn in the bond market recently and I congratulate them on that, it shows a confidence in investing in Africa too.

TowerXchange: What organic growth opportunities are out there for Helios Towers? Which markets besides South Africa could you enter at a small size and scale?

Kash Pandya, CEO, Helios Towers: There are lots of markets looking to liberalise their telecoms sector which Helios Towers could enter. Angola and

Helios Towers’ African portfolio

DRC1,773

Tanzania3,701

Congo B380

Ghana891

South Africa 100

Source: TowerXchange, reported at time of IPO


Ethiopia being two examples. Both have major state owned telecoms companies and many state owned towers. We were at a conference a few months ago in Ethiopia and know of many large African MNOs that are already active there. And in time it could be interesting for towercos. There are over 100mn people in Ethiopia, with only around half the population on 2G or 3G, and just 8,000 towers. South Africa with nearly 60mn people has 30,000 towers, so Ethiopia has a big potential.

Time will tell on what happens in Ethiopia. But with the capital pressures on MNOs, I believe they will look at towercos to come in and support their capital investment. Any business that operates successfully in Africa has done so through hard graft, such that we can see similarities in a frontier market like Ethiopia. Ethiopia may end up very similar to our journey in DRC or Tanzania. People

could have argued with our 2010 entrance into the DRC, but we have been able to expand, grow, profit, and offer an amazing service in DRC. We can leverage that experience elsewhere.

TowerXchange: Turning to South Africa, what comes next for Jeff Schumacher and the team?

Kash Pandya, CEO, Helios Towers: We entered South Africa this year at the end of Q1, and we spoke with TowerXchange at the time in your interview with Jeff Schumacher. We entered a joint venture with local fibreco Vulatel, and acquired local towerco SA Towers with their 100 sites, pipeline of work and team of circa 25 employees who really know the market.

We have a plan over the next 3-5 years to become a substantial towerco in South Africa. Only 10%

of towers are towerco owned in South Africa. We are deploying significant capex in South Africa, in the rest of our markets we are planning to spend US$100mn in 2019, and in South Africa we will be spending US$30mn.

We think that with our solution-orientated service we can achieve good growth in the country. From independent research, we think close to 7,000 new points of service will be required in South Africa over the next five years, driven by 4G growth and 4mn new 5G connections, and we want to be part of that.

TowerXchange: Is there risk of consolidation or wholesale exit in South Africa with Cell C’s weak financial health?

Kash Pandya, CEO, Helios Towers: We looked at the MNO market before we entered, it is always a key focus before entering a new market. We look for three or more MNOs in a country. In South Africa there are four large ones, MTN, Vodacom, Telkom and Cell C, but there are also smaller ISPs or 5G specialists. We have seen consolidation in other markets and we do not worry about it too much.

Cell C has a good customer base, good revenues, solid EBITDA, but they have a debt structure challenge and we wish them luck in resolving that. But if there is consolidation then we will have three strong players and that’s enough for a towerco. When there’s consolidation or a new entrant acquires an existing operator, they tend to come

There are over 100mn people in Ethiopia with only around half the

population on 2G or 3G and just 8,000 towers. South Africa with

60mn people has 30,000 towers, so Ethiopia has a big potential


in and invest and expand and that then drives a competitive dynamic that leads to other investments too. So the final outcome could be positive for us.

TowerXchange: How do you anticipate your edge data centre business evolving in the future?

Kash Pandya, CEO, Helios Towers: Part of our South African strategy is to develop adjacent technology offerings. South Africa is an incubator for us. We are looking at edge data centres, fibre last-mile connectivity from tower to fibre rings, and also small cell technology. This is our first foray into edge data centres and we are learning and enjoying the potential. We are also running an exploratory small cell roll-out in Ghana.

Adjacent technology revenue is likely to be 5-10% of total revenue in 5-10 years’ time. It will not become our core business but will still be a large source of revenue. We want to leverage our infrastructure and our power management. Our thesis on edge data centres is that our expertise in managing passive infrastructure will help keep these sites up. We can sell the space but without providing the technology directly, enabling us to focus on our core competences.

TowerXchange: Power remains a big challenge in Africa, more sites are getting grid connections in Tanzania, but how would you characterise your energy strategy more broadly?

Kash Pandya, CEO, Helios Towers: Our primary desire is to use the grid in countries where we

operate – but it can be unreliable. Across our markets on average we spend twelve hours a day on grid power. We enjoy that 12 hours and hope that increases, but because of that they have deployed solar on 8% of our sites (and this will increase as cost of solar improves). We have deployed hybrid solutions on even more sites. And ultimately, every one of our close to 7,000 sites has a diesel generator. We run loads of small power stations. So we are not just a property business but a power business too.

As more reliable technologies come along, we will evaluate and deploy them. Companies like Helios focus on power to create a USP. From back in late 2015, we had a programme of business excellence based on Lean Six Sigma, raising the calibre of our staff and contractors. Four years down the road we are seeing huge benefits. And we are training people effectively. We operate almost entirely with local staff: In Ghana we employ zero expats, and the same in Tanzania, in the DRC we employ two, soon to drop to one and in Congo Brazzaville and South Africa we only employ one expat apiece. So it is Africans on the ground executing locally, to a high standard, which is leading to service improvements.

TowerXchange: An IPO is an important step for a company, but it is not the end, how would you summarise the trajectory of the company over the next year.

Kash Pandya, CEO, Helios Towers: This is our third chapter as a company, after the phases of acquisition and then operational excellence, we are now a mature public company looking to continue our journey. Over the next five years I want to expand into new markets. We have done nine buy and leasebacks so far, and we are looking to do more and enter new markets too. That means tower growth both organically and inorganically. We have US$300mn now to deploy on inorganic growth, and we wouldn’t have generated that if we weren’t serious. These are very exciting times<

This is our third chapter

as a company, after the

phases of acquisition and

then operational excellence,

we are now a mature

public company looking to

continue our journey


Keywords: Acquisition, Africa, Africa & ME Research, American Tower, Burkina Faso, Consolidation, Deal Structure, EBITDA, Eaton Towers, Exit Strategy, Ghana, Kenya, MTN, Market Overview, Masts & Towers, Niger, Nigeria, South Africa, TowerXchange Research, Uganda, Valuation

American Tower consolidates its position in Africa Big Four become Big Three, with Eaton Towers acquisition completed by American Tower

The deal

American Tower reports that the value of the acquisition, subject to certain post-closing adjustments, and including the assumption of Eaton Towers’ debt, was approximately US$1.85bn, the same as announced in May 2019. However, the total number of towers acquired grew from 5,510 sites in May 2019, to approximately 5,700.

The US$1.85bn price tag for Eaton Towers gives it a per tower valuation of US$324,561. As announced in May, the assets are expected to generate approximately US$260mn in property revenue, approximately US$165mn in gross margin, and US$150mn in EBITDA in their first full year in American Tower’s portfolio. Eaton Towers’ tenancy ratio at the time of the deal was announced was 1.5x, which we believe is still accurate.

Although reported widely as a 12x EBITDA multiple for Eaton, TowerXchange understands the American Tower offer was structured against a ‘locked box’ using Eaton’s 2018 December 31st EBITDA, with an EBITDA closer to US$140mn, suggesting an EBITDA multiple of approximately 13.2x. Although the EBITDA multiple at close is likely lower as Eaton Towers has been profitably growing all year. Over 80% of the revenue American Tower is buying comes from tier one MNOs Airtel, MTN, Orange and Vodafone – indeed, more than 50% is derived from Airtel, American Tower EMEA’s largest customer.

At the time of the deal Terry Rhodes, CEO of Eaton Towers told TowerXchange “Of course it’s always easier to attract investment in than achieve an

Read this article to learn:< Deal details on American Tower’s acquisition of Eaton Towers

< Financials behind the deal

< The impact in Kenya, Uganda and Ghana and ATC and Eaton’s other markets

< Deal context and the new tower landscape in Africa

Happy New Year to the team at American Tower Africa, which begins the year with the completion of its acquisition of Eaton Towers, and its sites in Ghana, Kenya, Uganda, Niger and Burkina Faso. First announced in May 2019, the transaction closed as predicted at the end of Q4, adding approximately 5,700 sites to American Tower’s African portfolio, bringing American Tower’s global portfolio to approximately 177,000 sites.


123456

2,659sites

4,772sites

661sites

691 sites

3,820sites

3,090sites 2,056

sites

exit, but the key to securing a good valuation for our shareholders has really been the growth we’re delivered – profitable growth! When you have profitable growth, it attracts a higher multiple. Eaton Towers is a natural fit for American Tower given the overlap between the two portfolios, and they were very pleased with the South African business they acquired from us in 2016.” Between the deal announcement in May 2019 and the deal closing at the end of 2019, Eaton Towers added 200 sites across its five markets.

In other news

Covered elsewhere in TowerXchange, American Tower has also reached an agreement with MTN to acquire MTN’s minority stakes in each of the Company’s joint ventures in Ghana and Uganda for total consideration of approximately US$523mn. The transaction is expected to close in the first quarter of 2020, subject to regulatory approval.

As shown in the accompanying table. American Tower’s acquisition of Eaton Towers is the third largest towerco-on-towerco deal in the last six years. American Tower has been the buyer in the top five such deals. Closing such deals is often as hard as agreeing them, with regulatory consent much easier to secure in some markets than others. American Tower’s history of closing towerco on towerco deals clearly helped expedite the closure of the deal on schedule.

Eaton Towers acquired the majority of their sites in sale and leaseback deals from 2010 to 2014. Eaton’s 2014 Airtel buy and leaseback valued its towers at

American Tower’s 17,992 African sites as it begins 2020



Year Seller Buyer Country Deal value $ Towers Cost per tower $

2013 GTP American Tower USA, Panama & Costa Rica $4.8bn 15,700 $305,732

2016 Viom Networks American Tower India $1.18bn 42,200 N/A due to deal structure

2019 Eaton Towers American Tower 6 SSA countries $1.85bn 5,700 $324,561

2014 BR Towers American Tower Brazil $978mn 4,630 $211,231

2016 FPS Towers American Tower France €697mn 2,482 $280,282

2016 Shere Group Cellnex UK & Netherlands €393mn 1,004 $391,434

2018 Teletorres Phoenix Tower Int Dominican Republic $170mn 1,049 $162,059

2019 Cignal Cellnex Ireland $230mn 546 $421,245

2019 Arqiva Cellnex UK $2.52bn 7,400 $340,540

2020 OMTEL Cellnex Portugal $876mn 3,000 $292,000

2020 Eaton Towers American Tower Burkina Faso, Ghana, Kenya, Niger, Uganda $1.85bn 5,700 $325,000

Year Seller Buyer Country Deal value $ Towers Cost per tower $

2018 KIN Protelindo Indonesia Undisclosed 1,400 Undisclosed

2018 PAMEL TPG Myanmar Undisclosed 1,300 Undisclosed

2016 HTN Towers IHS Towers Nigeria Undisclosed 1,211 Undisclosed

2017 Highline do Brasil

SBA Communications Brazil Undisclosed 1,200 Undisclosed

Towerco-on-towerco M&A deals >$100mn in the last six years

Towerco-on-towerco M&A for undisclosed sums, which TowerXchange suspect exceeded US$100mn, in the last six years




US$201k, its deal with American Tower has earned a valuation of nearly US$325k per tower, attracting a ~62% premium on the price paid in 2014.

What has American Tower bought?

American Tower has acquired approximately 5,700 sites from Eaton Towers. Given what we know about growth plans prior to acquisition TowerXchange estimates American Tower has acquired 1,473 sites in Ghana, 1,534 in Uganda, 1,341 in Kenya, 661 in Niger and 691 in Burkina Faso. American Tower will enter Niger and Burkina Faso for the first time, but the deal will lead to consolidation in Ghana, Kenya and Uganda where both American Tower and Eaton are already active. Accurate site counts in each country will be available on publication of American Tower’s updated accounts after a full quarter of integrated operations.

Organic growth opportunities

The purchase of Eaton Towers was not just a purchase of an existing portfolio of towers, but also an investment in an anticipated pipeline of build-to-suit. Eaton Towers has right of first refusal with Airtel in all five of its markets and the American Tower acquisition, coupled with Airtel Africa’s return to profitability and projected post-IPO improvements in financial health, mean a healthy new build pipeline of approximately 3,000 towers is anticipated in the next decade.

Impact on the African tower market

This deal may herald a period of consolidation in the African tower market, reducing the number

of major towercos active from four to three. The 17,992 towers of the combined American Tower/Eaton Towers portfolio puts it behind IHS Towers’ 24,002, but American Tower Africa’s expanded seven country portfolio is now larger than the 16,466 sites IHS Towers own in Nigeria. And it is now over 10,000 sites ahead of Helios Towers’ 6,903.

2019 saw major liquidity events or significant fundraising at all of Africa’s big towercos, American Tower has bought Eaton Towers, IHS Towers raised a US$1.3bn bond and simplified its capital structure, and Helios Towers went ahead with its IPO. This activity has placed all three major African independent towercos on a firm footing for activity in 2020. All three are looking at entering Ethiopia, should its liberalisation continue as expected. And

IHS Towers has already used some of its dry power to move out of the continent to acquire Cell Site Solutions in Brazil and its 2,290 sites.

The two year period from the beginning of 2018 saw different exit strategies tested by Africa’s towercos’ major investors. IPOs were explored by all three non-listed towercos but only Helios Towers proceeded last year. As a public company, Helios retains an appetite to enlarge and find new opportunities. IHS Towers is also exploring new opportunities, following a strategy diversifying its portfolio away from Nigeria before approaching public markets again, and Eaton Towers’ investors have now found a satisfactory exit through acquisition by American Tower<

Tower ownership by Africa’s three largest independent towercos


IHS Towers

5000 10000 15000 20000 25000 30000 35000

American Tower

2220

3820 2679 2056 3090

2720 172816466

4995 691661

Helios Towers

950

3637

385

1101821

868

Nigeria

Ghana

Burkina Faso

DRC

Cote d’Ivoire

Cameroon

Niger

Rwanda

Zambia

Congo B

Uganda

Tanzania

Kenya

South Africa


Keywords: Africa, Atlas Towers, Build-to-Suit, C-Level Perspective, Consolidation, Deal Structure, Exit Strategy, Masts & Towers, Meetup Preview, New Market Entrant, SBA Communications, South Africa, Towercos

SBA Communications toenter South Africa with planned Atlas Towers SA acquisitionLong only active in the Americas, SBA Communications enters Africa by acquiring the continent’s fastest growing towerco

TowerXchange: First of all, congratulations on the deal, SBA has been a minority investor in Atlas Towers for four years, can you tell us a little bit about the nature of the partnership over the last four years?

Nate Foster, CEO, Atlas Towers: We did a roadshow, talked to several potential partners seriously in late-2014 into early-2015. SBA had the most attractive benefits for us. We needed money and debt secured for the future, and they offered that. We offered them an option to enter a new market sometime in the future. They were able to participate in the operational education we both gained over the years, and we had the ability to make and implement decisions that allowed us to become the fastest developer of new tower infrastructure in the country.

TowerXchange: What can you tell our readers about how the US$140mn total invested by SBA Communications over the last four years and in the acquisition of 94% of Atlas Towers SA reflects the culmination of the partnership and value for both sides?

Nate Foster, CEO, Atlas Towers: Well, I can’t comment on their money invested, but I can on ours. Randi and I not only brought our model and methodology from the U.S. to Africa, but also spent more of our capital in South Africa than I ever imagined. We funded the business in its early days all by ourselves; up rooted the family and really took a giant leap into an unknown market. The help we received from SBA allowed for some necessary breathing room. We could focus on growth

Read this article to learn:< Details of SBA’s relationship with and acquisition of Atlas Towers SA< What makes South Africa different to other African markets< Expectations for densification for 4G and 5G in South Africa < Why South African towercos are moving towards a “power-as-a-service” model< Predictions for the long-tail of middle-market towercos in South Africa

In August 2019, SBA Communications announced it intended to exercise and close its option to acquire all but 6% of Atlas Towers SA, co-founded by Nate Foster and Randi Clendennen. SBA Communication has made a total investment of US$140mn to acquire 94% of the South African towerco. Atlas SA is expected to generate annual revenues of US$31mn and adjusted EBITDA of US$21mn during its first full year of operation after closing. Through this investment, SBA Communications take control of approximately 900 sites throughout South Africa and a substantial new tower development backlog that should take the total beyond 1,000 by the start of 2020. TowerXchange speaks to Nate Foster and Kurt Bagwell about the deal.

Nate Foster, CEO,Atlas Towers

Kurt Bagwell, President, International, SBA Communications


strategies, proper geographic resource allocation, and most importantly hustling over the competition with the best contracts in the country.

TowerXchange: Nate, you have had a 20+ year relationship with SBA Communications, can you tell us a bit more about how that relationship has developed and contributed to the deal announced this quarter?

Nate Foster, CEO, Atlas Towers: I worked with SBA from 1995 for almost nine years. I helped them in the early days of their new tower business. Since then the relationship has been primarily as buyer and seller of our U.S. tower assets since Atlas Tower was founded in 2007. I have known Jeff Stoops for a while and that may have helped their risk calculation a bit, but at the end of the day, they are probably the towerco that is as rigid with respect to the fundamentals that drive value as Atlas Tower is. Therefore, the key drivers of the business, and how you nourish them, never needed alignment between our two companies.

TowerXchange: For our readers more familiar with SBA’s Western Hemisphere footprint, can you give us some context of the South African market and what makes it an attractive investment?

Nate Foster, CEO, Atlas Towers: Anyone researching the continent like we started doing in 2012 will quickly see why South Africa grades well against the others. I think the word attractive investment has a lifespan. What is true yesterday is not necessarily true today. Thus timing is the critical challenge of

making any Africa based investment. The reason why Randi and I invested so aggressively in South Africa in the beginning was the ability to protect your assets and contracts with a rule of law. It’s not a very litigious country, but there are many remedies if your property or your contracts on property are being challenged or threatened. If you do not have good land use or property law back-up by precedent or regulatory policing it’s very difficult to growth new wireless infrastructure that has value.

TowerXchange: American Tower is the currently the largest independent towerco in South Africa, how have Atlas carved out a competitive proposition?

Nate Foster, CEO, Atlas Towers: Since I have been attending TowerXchange there was a concern that South Africa was too mature a market, but I said at the time that the Atlas model never has a

bad time to start…it just might take a long time. Turns out we have been able to put enough capital together at the right time to build a skyrocketing portfolio. American Tower bought into the market, we built into the market. We have different skills to American Tower.

TowerXchange: TowerXchange has recognised Atlas Towers as Africa’s fastest growing towerco, without giving away any secret sauce, can you tell us how you have managed to achieve these build volumes and reach near 900 sites?

Nate Foster, CEO, Atlas Towers: We have a catch-phrase in our offices….Cheetah Speed! Not just speed, but lightning fast speed at efficiently timed intervals. When your model doesn’t include big M&A transactions but instead leasing, permitting and construction management you must hone that skill. All our operational staff and our vendors are picked because of the ability to go fast and hard

“ “We have a catch-phrase in our offices….Cheetah Speed! Not just speed, but lightning fast speed at efficiently timed intervals. When your model doesn’t include big M&A transactions but instead leasing, permitting and construction management you must hone that skill - Nate Foster, CEO, Atlas Towers


to develop the site. Our speed skills have really been our moniker since Atlas started in the US and we were able to bring that theme into our South African staff. We are very proud that our clients speak about our speed, our quality and our professionalism.

TowerXchange: SBA reports Atlas will approximately generate EBITDA of US$21mn on US$31mn of revenue, good for an EBITDA margin close to 68%, and tenancy ratio of 2.2, to what do you attribute these great results?

Nate Foster, CEO, Atlas Towers: EBITDA is always higher on a build as you go model than a sale and leaseback. We spend less capital and look at every tower as its own business unit. That kind of microscopic effort on margin means you not only have great success, but you are able to plan accordingly for the future.

TowerXchange: Now that Atlas Tower’s partnership with SBA is out in the open, what can you say about your appetite for buy and leasebacks, should any of the remaining operator-captive tower portfolios come to market in South Africa?

Nate Foster, CEO, Atlas Towers: We have had and will continue to have a good appetite for sale and leasebacks, but of course as the continent has already seen, sometimes the portfolio value post-closing is lower than the hype suggested. The right kind of revenue, good contract protections and proper term length will always be value-adds.

TowerXchange: There is a long tail of some 25+ small towercos in South Africa and Atlas Tower has consolidated some of these small portfolios in the past. Do you see yourself continuing in this role as a consolidator in the market?

Nate Foster, CEO, Atlas Towers: In the U.S. in the early 2000s small towercos were squashed by the pressure of debt, overpromising, and generating the wrong revenue type – I think the same will occur in South Africa. The wireless ecosystem will be a bit constrained and that will mean those who have been getting easy lease-up will see more costly obstacles to overcome.

TowerXchange: How do you see the opportunities for 5G adding to the potential market in South Africa? South Africa’s ICASA recently reaffirmed its plans to create a Wholesale Open

Access Network, how does this play into SBA Communications plans in the country?

Nate Foster, CEO, Atlas Towers: Towers are getting smaller and providing network value in a smaller geographic area. Whether 5G or no 5G, this trend will continue. We have for years been investing in smaller assets that fit into smaller, confined spaces. This trend will continue but there is still a large portion of South Africa which does not have good quality 2G service. This is also our focus.

The Wholesale Open Access Network proposed by the government to create a wholesale 5G network is an unfortunate design that I think moves a valuable resource, spectrum, from the private to the public sphere. Generally this is not a good idea. In South Africa, with major financial bailouts of PRASA (South Africa’s railway), SSA (South Africa’s

Keeping the lights on?

ESKOM is the South African integrated power utility, responsible for generation, transmission and distribution of power in South Africa. Established in 1923, it generates 45% of the electricity generated in Africa and since 2007 has been unable to consistently meet the power requirements of South African consumers and businesses, including at cell sites. Aging power stations, poorly maintained networks, outdated working practices and an internal resistance to change has meant occasional rolling blackouts (referred to as load-shedding) which have made maintaining cell site power much harder, in a market where back-up requirements were typically measured in hours and only occasional used. Having not been exposed to the challenges of managing power in a complex operational environment more typical of the rest of Africa, mobile operators in South Africa are looking to towercos and ESCOs to take these headaches off their hands. Hence the rumoured RFPs from MTN and Vodacom for ESCOs, and both Helios Towers South Africa and now Atlas Towers moving beyond a grass and steel model to offer power-as-a-service


airline), ESKOM (South Africa’s integrated power utility) and other State Owner Enterprises its seems like a strange time to be suggesting more major enterprises could be state owned and effective.

TowerXchange: In South Africa, as in Latin America, the norm is for towercos to offer a “grass and steel” service, will Atlas Towers continue with this model under SBA Communications ownership or will you begin to offer power-as-a-service?

Nate Foster, CEO, Atlas Towers: We will be entering into power service agreements in South Africa, it is part of the future. ESKOM can’t do it effectively so others will have to. We are already providing power solutions in urban Kenya and will be using some of what we learned to help us develop in South Africa. SBA is committed to this change and we look forward to rolling it out in South Africa next year.

TowerXchange: Kurt, for the last decade SBA Communications has held back from investing in Africa, what about South Africa and Atlas Towers caused the change of heart? Why is now the right time to go from minority to majority shareholder?

Kurt Bagwell, President, International, SBA Communications: That’s correct, we have been researching the African markets for some time now. We have looked at sale and leaseback opportunities, purchasing existing towercos, and entering through build to suit.

Our goal at SBA has always been to make good, long

term decisions for our shareholders. Not to just be the biggest, or in more and more places, but to make good investments that grow over time. We were in the U.S. market for our first 20 years of existence, then expanded into Canada and LatAm ten years ago, adding twelve countries and over 13,000 sites to our portfolio. We did not enter some markets in LatAm for very specific reasons. So as we researched the African opportunities, we reviewed each with the same lens, looking for good countries with good opportunities where we think there will be growth and stability for the long term.

In all of our research, South Africa always stood out as the gold standard compared to others based on a variety of factors – political, economic, carrier mix, wireless infrastructure maturity level, currency and several other factors. That’s when we also hooked up with Nate and Randi to help and learn from their venture. We have known them for many years, we have similar styles and goals for quality, and everything has worked out well. Their teams have really performed well. We are thrilled to exercise our option and join with them full time. We think there is much runway left in the country.

TowerXchange: With regard to investing in the rest of Africa Jeff Stoops told analysts that SBA had “nothing on the horizon today, but stay tuned.” What would whet SBA’s appetite for expansion into other African markets?

Kurt Bagwell, President, International, SBA Communications: As a public company focused on continued growth, both inorganic and especially organic, we are always looking at what is next. We have a lot left to do in the fourteen markets we serve worldwide. But there could be others in our future. But only if they meet our criteria. The South African investment through Atlas can stand on its own given its size and scale. We don’t have to be in any other African markets to gain efficiencies here. But as we continue to look at other markets and the opportunities available or possible, we will continue to consider them. We have always been very selective, and have turned down many opportunities to grow for the sake of growth, and plan in the future to do the same – only grow where we see good, long term prospects

“

“

In all of our research, South Africa always stood out as the gold standard compared to others based on a variety of factors – political, economic, carrier mix, wireless infrastructure maturity level, currency and several other factors - Kurt Bagwell, President, International, SBA Communications


Keywords: Africa & ME Research, Atlas T Fund, Atlas Towers, Botswana, C-Level Perspective, Country Risk, Kenya, New Market Entrant, Operational Excellence, SBA, SBA Communications, South Africa, Towercos

Atlas Tower Group targetsthe rest of Africa After building over 900 sites in South Africa, Atlas Tower Group are searching for the best opportunities on the rest of the continent

TowerXchange: Atlas Tower are best known to our readers for your activities in South Africa, tell us how you have gone about evaluating opportunities in the rest of Africa?

Nate Foster, Chief Executive Officer, Atlas Tower Group: In Africa, culture and custom can be as important to a deal as good business plans or operational synergies. We only really need two things: MNOs interested in in investing in active rather than passive infrastructure, and a rule of law that protects our investment for the long-term.

We are focusing on Kenya and Southern Africa because their situation is better for power, rule of law, strength of judiciary, literacy rates, et cetera. Of course, there are also many points against these markets and they are not the only ones we have seeded our business in, but they are only the ones we wish to discuss at this time.

TowerXchange: American Tower is consolidating Eaton Towers’ operations in East Africa, to what extent has this opened up space for a new towerco to enter those markets?

Nate Foster, Chief Executive Officer, Atlas Tower Group: The fundamentals of the business aren’t really based on the competitive environment as much as it is the MNOs’ willingness to take advantage of the towerco business case. Some markets can have 20+ towercos and be healthy for us, whereas those with only one towerco or no towerco have proven to be risky. There is no correlation.

Read this article to learn:< Atlas Towers’ future post SBA’s acquisition in South Africa

< Atlas Towers’ appetite for investment in the rest of Africa

< The towerco’s energy strategy for new markets

< Atlas Towers’ global ambitions

Before the announcement of the acquisition of Atlas Tower South Africa by SBA Communications, covered elsewhere in this journal, Atlas Tower Group was expanding into new markets in Africa. Expanding out of South Africa will require changes in approach to fit local dynamics and cultures and offering power-as-a-service, but the core Atlas Tower strategy will not change. TowerXchange discussed the change in direction and entry into new markets with CEO Nate Foster.

Nate Foster, Chief Executive Officer, Atlas Tower Group


TowerXchange: Kenya is heading for a duopoly, with Safaricom facing off against Airtel-Telkom, does that level of concentration put a dampener on opportunities there?

Nate Foster, Chief Executive Officer, Atlas Tower Group: Yes – no one likes a two MNO market. It’s not diverse enough for a fair market to shape the winners and losers. It is no secret we are struggling in that market. I believe the entire economic ecosystem in Kenya suffers as a result of the duopoly.

TowerXchange: What is the balance of build-to-suit opportunities between urban infill and network extension?

Nate Foster, Chief Executive Officer, Atlas Tower Group: Each market goes through its cycles of urban infill and network coverage. We seem to always float between 65% infilled and 35% coverage in the aggregate over the last 6 years of development in Africa.

TowerXchange: You are well known in South Africa, but a relatively new face in the rest of the African region, how have you found site selection and landlord negotiations differ where you are a new entrant?

Nate Foster, Chief Executive Officer, Atlas Tower Group: All African markets seem to differ slightly from one to the other on land and contract negotiation. Frankly I find it fascinating how from an outsider’s view, in two seemingly similar

markets, they are actually very different in the law, the customs and enforcement of agreements. The same quality of service the same integrity we apply to the MNOs, we apply to the landlords.

TowerXchange: Are there other towers that can be bought, e.g. the rollup of smaller towercos, ‘Onesies and Twosies’ or unconventional sites in East Africa?

Nate Foster, Chief Executive Officer, Atlas Tower Group: No. We apply very thorough Foreign Corrupt Practices Act (FCPA) principles to all our deals. It’s been difficult finding the high quality of contracts and assets in other towercos as in ours. I think the market will change slowly over time, but even in South Africa we are finding smaller towercos who continue to miss out on critical steps that ensure long-term value, or push sale price up.

TowerXchange: Moving outside of South Africa means offering power-as-a-service, which is a new challenge for you. Will you be building this capability internally or working with a partner?

Nate Foster, Chief Executive Officer, Atlas Tower Group: We are working with key partners, but you still need to absorb critical elements of power-as-a-service into the mechanics of your business. It has not been a difficult convergence for us. It is an important part of the cash flow equation, but I find there are numerous ways to help straight-line it.

TowerXchange: What is your appetite to deploy your own capex into energy efficiency programmes versus partner with ESCOs?

Nate Foster, Chief Executive Officer, Atlas Tower Group: We want to deploy capex. That’s the name of

Who are Atlas Tower Group?

Atlas Tower is an independent global Wireless Infrastructure company. Atlas Tower built its first towers in 2007 in Alaska, USA. Following eight years of tower development in nine other US states, the company expanded to South Africa in 2014, and in 2018 moved into Kenya and Botswana. The company was founded by husband and wife pair Nate Foster and Randi Clendennen.

As of Q3 2019, Atlas’ South African portfolio totalled 901 sites, which is expected to reach 1,000 by the start of 2020. In 2019 SBA Communications announced plans to exercise options to acquire 94% of Atlas Towers SA.

The company has focussed its business model around organic rather than inorganic growth. Atlas Tower outside South Africa remains independent of SBA and has invested in Kenya and Botswana and plans to follow a similar strategy of build-to-suit growth to that which was followed in South Africa


the game. Our value is the capital we can invest in a market. However, we are doing various pure short-term opex based models (leasing) before we achieve some scale.

Start-ups work form the centre out, meaning urban core first, where power is usually the best. So we can usually fill power gaps with batteries and rectifiers and don’t need more complicated systems than that. We have had no problem finding suitable and experience suppliers of equipment, RMS, or ESCO.

TowerXchange: What is your procurement model and process for those interested in working with you? Who are the key stakeholders?

Nate Foster, Chief Executive Officer, Atlas Tower Group: Helmundt Strumpler, Director of Ops for SSA is in charge of all operational RFPs including for power.

TowerXchange: How is the business financed and what does this mean about your ‘digestive capacity’ to acquire or build more towers? Are you recycling SBA Communication’s investment into expanding the group?

Nate Foster, Chief Executive Officer, Atlas Tower Group: We have a much larger appetite today. We will continue on the trajectory of mostly building new infrastructure. We are using our family operation and funding, historic Limited Partners and identifying new Limited Partners to partner with. Our SBA relationship is limited only to South Africa.

TowerXchange: You have also established an investment vehicle to look at opportunities further afield, can you tell us more about these projects?

Nate Foster, Chief Executive Officer, Atlas Tower Group: We have discussions ranging from pre-tower seed capital to late stage funding rounds with seasoned towers. We prefer the early stage opportunities where some of our operational tools can be applied to the right team. It’s a challenge to

find the right team that hold the correct blend of skills, relationships and regulatory commitment that we believe are essential.

TowerXchange: Mobile operators have encouraged the establishment of smaller towercos to increase competition, reduce lease-rates and boost flexibility by towercos. What do you think is a healthy balance for operators and towercos?

Nate Foster, Chief Executive Officer, Atlas Tower Group: I am strong supporter of entrepreneurial towercos. I have no problem with having many in a market – maybe 5-10 is rational number in a 3-4 MNO market.

The larger concern we have is the funding shops who take advantage of a founder or management team and lock them into a scheme were they have little real chance to make money. They play into the ego of the founders and by the time they learn how little they get to keep it’s too late to make a change.

TowerXchange: Please summarise your vision for the future of your company.

Nate Foster, Chief Executive Officer, Atlas Tower Group: Atlas Tower Group is now a mix of the Atlas Tower operating company that is continuing to develop, acquire, and own assets in Southern and East African markets and the US. Our Atlas T Fund is set-up to contribute capital in a wide range of structures to the right companies with a similar mind-set to us

“

“

I am strong supporter of entrepreneurial towercos. I have no problem with having many in a market – maybe 5-10 is rational number in a 3-4 MNO market


Keywords: Aktivco, Asset Register, Bankability, Batteries, Best of TowerXchange, Burkina Faso, Cameroon, Central African Republic, Congo Brazzaville, Cote d’Ivoire, DRC, Dimensioning, ESCOs, Egypt, Energy, Energy Efficiency, Ethio Telecom, Ethiopia, Guinea Conakry, Hybrid Power, IPT PowerTech, Liberia, Logistics, MNOs, MTN, Mali, Niger, Off-Grid, On-Grid, Operational Excellence, Opex Reduction, Orange, Procurement, ROI, Renewables, SSA, Safaricom, Site Surveys, Site Visits, Skilled Workforces, Solar, Sudan, Unreliable Grid, Uptime, Vodacom

ESCOs emerging as critical newbuyers of telecom energy equipmentMTN, Ethio Telecom and Vodacom poised to follow Orange in partnering with ESCOs to drive operational efficiency and green energy

At the TowerXchange Meetup Africa 2019, in the Energy working group and ESCO round table, it was clear that ESCOs were emerging as critical stakeholders in telecom energy in SSA. Why? In Africa’s unforgiving operating environment, the gensets and batteries on which most cell sites rely do not last long. Ageing power systems result in increased instances of downtime. Diesel gensets often run 24/7, making fuel logistics critical to continuity of service, yet diesel refuelling is not the core competency of any MNO. Even though the cost of green energy has never been lower, only a single digit percentage of Africa’s cell sites run on green energy. Africa’s MNOs are among the largest power generators on the continent – they don’t want to be! All these factors are driving a growing number of Africa’s MNOs to partner with ESCOs. Towercos have made tremendous progress in improving uptime and efficiency in African telecoms. But the towerco business model breaks down in rural, single tenant environments. Towercos cannot achieve the necessary scale in smaller countries, especially where the operating environment in those countries is challenging. Finally, the towerco business model is not calibrated to emphasise green energy – most hybridisation entails renewing and upgrading battery banks, rather than progressing to full hybrid renewables. ESCOs hold the key to unlocking the capital investment in renewable energy solutions that can address the MNOs’ challenges, and fill a gap in the market left by towercos.

Read this article to learn:< Orange’s successes as ESCO pioneers in six, soon nine, African countries< MTN’s appetite for ESCO partnerships< The requirements of Africa’s two largest ESCOs: Aktivco and IPT PowerTech< The answers to ten frequently asked questions about ESCOs

By the end of 2020, Orange will be working with ESCOs in nine Sub-Saharan African countries – outside of their partnerships with towercos, almost all Orange’s power systems in Africa will be operated by ESCOs. MTN plans to transition the majority of their 13,000 retained towers in bad grid markets to ESCOs. Safaricom are exploring an ESCO in Kenya, Ethio Telecom has issued a substantial ESCO RFP in Ethiopia, and Vodacom is exploring ESCOs in DRC and South Africa. ESCOs will operate the power systems at more than half of Africa’s off-grid cell sites, or cell sites on unreliable grid connections, by the end of 2021.

By Kieron Osmotherly, CEO, TowerXchange


Orange pioneers the ESCO model Orange has activated ten year ESCO contracts in six countries (DRC, Niger, Guinea Conakry, Cote d’Ivoire, Liberia and Burkina Faso), with live RFPs for ESCOs in three more countries (Cameroon, Central African Republic and Mali). Since partnering with ESCOs, Orange reports network uptime ratio improvements of 30-40% in Burkina Faso and Niger. Even when sites go down, mean time to repair (MTTR) has been significantly improved. “It’s a partnership, not a supplier relationship,” explained Orange Deputy CTIO Jocelyn Karakula at the ESCO round table at the 7th Annual TowerXchange Meetup Africa. “We’re structuring deals such that ESCOs should be profitable from day one,” added Karakula, before concluding: “at this relatively early stage, our ESCO partnerships have been a success from an economics perspective, in some cases surpassing what was expected in the business plan.” MTN has 13,000 potential ESCO sites MTN retains around 40,000 towers outside their partnerships with towercos. The power systems at around 13,000 MTN sites could be handed over to ESCOs in the medium term. At the TowerXchange Meetup Africa 2019 Energy Working Group, MTN revealed that they have issued a non-binding proof

of concept (PoC) for an ESCO to assume an initial 100 of their 2,000 sites in Sudan. Diesel prices have recently trebled in Sudan, driving up opex in a market where 90-95% of cell sites run on diesel gensets 24/7. Under the Sudanese ESCO PoC, MTN is not proposing to sell their existing power assets, but is looking for a partner to replace those assets with renewable energy solutions. MTN are open to solar, wind, LPG – any alternative to diesel. Another ESCO PoC is in the pipeline for MTN Congo Brazzaville, with an RFP expected in Q120. MTN sees ESCO partnerships as a logical next step for their smaller opcos, including the aforementioned Sudan and Congo Brazzaville, plus Liberia, Guinea, South Sudan, Yemen, Syria and Afghanistan. MTN is less keen to partner with ESCOs where they already have a towerco partner:

in Nigeria, Cote d’Ivoire, Cameroon, Ghana and Uganda. Sites in MTN’s relatively good grid markets of Iran (~15,000 sites) and South Africa (~12,000 sites) are also unlikely to be handed over to ESCOs. MTN explained that their principle energy challenge in South Africa was not so much one of grid availability, which remained high, but more one of battery theft, which affected ~3,000 sites per year. MTN has not deployed much lithium-ion yet, and where it has, has not seen much dampening of theft. MTN currently sources most of their hybrid energy solutions from the big four OEMs: Huawei, ZTE, Nokia and Ericsson. Asked about their appetite for green energy going forward, MTN said they were acutely aware of their carbon emission reduction targets and taxes, and suggested they foresee using ESCOs as the primary vehicle to extend their rollout of green energy solutions.

The cherry on the cake: multi-tenant ESCO sites MNOs, Orange in particular, would like to see the ESCOs’ perimeter expanded to include maintenance of both passive and active equipment, site security and, ultimately, co-location of sites to multiple tenants, enabling the mutualisation of power systems and a full range of services to multiple MNOs. We are already seeing ESCOs building new sites for MNOs, deploying networks deeper into rural areas and accelerating digital inclusion. Another goal is for every operator in a given country to partner with an ESCO. Imagine the efficiencies ESCOs could enable if they were able to consolidate the primary or backup power systems on every site in a country, and share those resources with every MNO! We could see dramatic reductions in both capex and opex, as site visits would be dramatically reduced. And the impact in terms of carbon emissions reduction could be tremendous!


The requirements of Africa’s two largest ESCOs: Aktivco Aktivco is Camusat’s ESCO play, managing 2,000 sites in Chad, Burkina Faso, Cote d’Ivoire and Niger. Aktivco expect to build 250-280 additional sites per year across these countries. They anticipate closing two more ESCO contracts in new countries imminently, adding a further 1,000 sites. Around 40% of Aktivco’s sites are on grid, albeit those grid connections are of variable quality. For example, grid uptime is ~98% in Cote d’Ivoire, but still suffers short outages; the grid is also quite reliable in Burkina Faso, but connections are expensive; while in Chad, grid availability is closer to 60%, and there is an energy crisis in Niger.

Aktivco deploys their own powercube, ePower, but they aggregate best-of-breed components.

New technologies must be certified by Aktivco, which undertakes proof of concept tests in Romania. The requirements of Africa’s two largest ESCOs: IPT PowerTech IPT PowerTech is also an ESCO, operating 10,000 sites in SSA. Half are in Nigeria, where they operate the “guaranteed savings model” under which their client, IHS Towers, deploys the capital, but IPT takes the risk (and reward) from diesel savings. IPT operates a conventional ESCO model for Alfa and touch, the two MNOs in Lebanon, representing around 30% of IPT’s ESCO sites. The balance of IPT’s ESCO sites are in Guinea in a partnership with Orange. IPT is adding around 500 sites per year. Capacity shortages mean even in Lagos, the grid is online for only around five hours per day, so

all of IPT’s Nigerian sites are effectively off-grid. IPT is the largest of what was originally dubbed IHS’s “Big Five” partners, of which Biswal and M-P Infrastructure also remain active. Around 60% of IHS Nigeria’s sites have been hybridised, including the majority of those operated by IPT, although around 6,000 IHS Nigeria sites still run primarily on diesel. IPT has some sites on good grid connections outside Nigeria. IPT are open to exploring innovative energy solutions, which they test in their facilities in Lebanon. Ten frequently asked questions about ESCOs ESCOs already own or operate the power systems on more than 25% of SSA’s cell sites on unreliable grid connections or off-grid, and TowerXchange foresee that proportion approaching 50% in the next two years. As such, it is important to understand a few fundamentals about the ESCOs. What kind of energy equipment do ESCOs buy? While there are a couple of ‘technology agnostic’ ESCOs, Africa’s largest ESCOs deploy their own hybrid energy solutions. As such, manufacturers of containerised, plug and play hybrid energy systems will find it difficult to sell to ESCOs – so they may need to compete to win ESCO contracts directly. However, most ESCOs are aggregators of third party components, of which they ESCOs emerging as the fastest growing, and soon the largest, category of buyers in SSA.

Orange’s Jocelyn Karakula leads the ESCO round table


ESCOs standardise where possible, and are inclined to use proven solutions with which their field maintenance teams are familiar. Some ESCO partnerships include explicit targets to increase utilisation of renewables: “our green energy ratio was 3% - modernisation driven by ESCOs should drive this over 50%,” said one MNO. Most ESCOs continue to primarily use lead-acid batteries – “we’re open to lithium-ion,” said one ESCO “but not convinced”.

All equipment must integrate with the ESCO’s monitoring and management platform. Most ESCOs are at a relatively early stage in their evolution, such that vendor financing can be attractive to them, although operational delivery and the ability to achieve SLAs will always be their greatest priorities.

ESCOs consider total cost of ownership (TCO), not just the capital cost of solutions, and with ten year contracts, ESCOs’ TCO horizon may be longer than an MNO’s or even a towerco’s. How long does it take an ESCO to modernise its sites? It can take up to a year to negotiate the SLAs and KPIs, and to finalise an ESCO contract, but the process can be expedited when subsequent contracts are iterations of an initial agreement. Even when a contract is signed, ESCOs don’t start upgrading sites right away – they start with a comprehensive audit of sites to determine the ideal solutions. While ESCOs typically modernise the energy equipment at 2-4% of their portfolio per month, one their biggest challenges is the lag between the order and installation of equipment, which typically takes two to three months.

ESCOs aim to upgrade the energy equipment at the majority of their sites, typically over a 24 month period. Most ESCOs are prepared to run down any remaining lifecycle of legacy power systems before modernising sites. What savings are MNOs looking for when working with ESCOs? And how profitable are ESCOs? For Orange, targeted savings are based on a total cost of ownership (TCO) analysis, against a baseline based on the cost of passive infrastructure, energy opex and security.

“As many of the MNO’s costs are transferred to the ESCO, and Camusat was already providing managed services for many of these sites, we already know how much fuel goes into the existing sites, so we know inherited fuel and security costs,” said Orange’s partner ESCO Aktivco. “This is why the strongest ESCOs are already operational companies – we have a good understanding of the cost of a maintenance site visit. Sometimes we also absorb the MNO’s operational team, so we need to know the overhead costs too. We prefer the MNO to be as transparent as possible about their existing costs, otherwise we’d have to inflate our quote to be safe.” Of course ESCOs deploy substantial capex into site modernisation, the effect of which on opex is not always clear at the outset of the agreement. So it may be a couple of years before the full TCO can be compared before and after the portfolio has been fully modernised. Only then will we be able to make a final judgement about how profitable ESOs are.

Towercos’ appetite to partner with ESCOs Many emerging market towercos are rightly proud of their achievements in developing and providing power-as-a-service. Many of those towercos have invested substantial financial and human capital to develop the operational excellence necessary to achieve and surpass challenging uptime SLAs. “I like spending capex to reduce opex,” summarised the CEO of one African towerco. It will be a challenge to convince towercos with mature, accomplished energy services teams to relinquish that responsibility to ESCOs. But towercos entering a virgin market, such as Ethiopia, or towercos making their first forays into managed power services, would be well advised to seriously consider partnering with ESCOs


Orange proudly proclaim that their ESCO projects enable their partners to be profitable from year one, a suggestion not disputed by their biggest partners. With the ESCO’s fees fixed from the outset of the contract, achieving profitability is contingent upon reducing energy opex, which first means reducing diesel consumption. This in turn is dependent on operational performance and site modernisation. So just because an ESCO can be profitable in year one, doesn’t mean to say it will be. Some aspiring ESCOs have questioned whether that near term profitability is achievable without the ESCO bundling passive and active maintenance, together with site security. What is clear is that all stakeholders agree that the ESCO business model is significantly enhanced when additional MNOs from the same country partner with the same ESCO. How do MNOs evaluate respondents to an ESCO RFP – is price the primary factor? Of course price is a significant factor, but the financial strength of the ESCO company is critical – it is important for the ESCO to demonstrate their capability in the long term. There is also a growing feeling that it would be healthy to have more than the two to three ESCOs that are currently securing the majority of contracts in Africa, to mitigate counterparty risk. “Some MNOs are less focused on site modernisation, they just have price and performance targets,” said one ESCO. “Other MNOs want to understand how you will reach those performance targets, for

example in terms of the number of sites modernised per month, and the impact on their green energy ratio.” How are ESCOs paid, in what currency, and is there indexation? While there are variants on the model, most ESCOs agree a fixed fee per site per month. There are typically a number of different rates for different site typologies. One ESCO revealed that they were paid in three parts:< The fee related to energy is paid in whatever currency they buy the fuel in<The O&M fee is typically paid in local currency< Fees related to capex are typically paid in Euros or U.S. dollars so as to minimise FX risk Indexation tends to be calibrated according to the energy mix. Where energy primarily comes from the grid, indexation is primarily linked to CPI. Where energy primarily comes from diesel, indexation is primarily linked to the price of diesel. How do ESCO agreements accommodate changes in power load, as next generation networks are rolled out or as co-locations are added? Orange explained that they undertake an audit of every site prior to opening an ESCO RFP, assessing the current and future configuration – so there’s visibility of site configuration changes anticipated, for example with 4G overlays increasing power requirements. Orange’s terms are described as

“flexible enough to accommodate change over the ten year term of the ESCO contract.” One of Orange’s partner ESCOs added “We are aligned to our MNO partners’ changing power load. We know that if a site starts with a 3kW load, it probably won’t stay at 3kW over the ten year term of the contract. The load, the site typology, even the location of the site may change. Flexibility is key, but yes our pricing changes based on load and as the site typology changes over the years.” Do ESCOs acquire the existing power systems at cell sites when they assume control? Some ESCO contracts transfer ownership of legacy power assets from MNO to ESCO, but more often, the ESCO receives an indefinite right of use for free. In either case, the ESCO will deploy its own capex to modernise, after which the ESCO will own the power equipment. What happens at the end of the ESCO contract? In the unlikely event that an ESCO contract is not extended, the MNO typically has a reversibility clause giving them the right to buy the power equipment. What is the addressable market for ESCOs? There are a range of opinions on this matter, but most commentators agree that cell sites in countries with a significant number of sites off-grid on unreliable electricity grid connections, where grid


is usable on average for less than 16 hours per day, are the most obvious targets. Where emerging market towercos remain reluctant to partner with ESCOs, towerco sites might be medium term rather than near term targets for ESCOs. ESCOs can still partner with MNOs alongside a towerco, as exemplified by Orange Cote d’Ivoire, which is working with both IHS Towers and Aktivco. We have already seen ESCOs take over 100% of the sites for MNOs in countries without towercos present – a fact which illustrates that the addressable market for ESCOs includes on-grid as well as bad grid and off-grid sites. The near term pipeline of ESCO opportunities consists of ~3,000 Orange sites in Mali, Cameroon,

the Central African Republic and Egypt, the opportunity in the latter country being subject to resolution of issues related to diesel subsidies. Orange has identified a total of 15,000 sites, in 13 countries, which could be transferred to ESCOs. A substantial ESCO RFP is in progress from Ethio Telecom, while another large ESCO opportunity is imminent in Kenya with Safaricom. MTN has 13,000 cell sites in bad grid markets, and is keen to explore ESCO partnerships – MTN has an ESCO proof of concept live in Sudan and another imminent in Congo Brazzavilla. Vodacom has long been considering partnering with an ESCO in DRC and, potentially, in South Africa. Once an ESCO is active in a country, convincing the other MNOs to partner with the same ESCOs would

unlock significant economies of scale, so this is also a priority. The “TowerXchange ESCO Market Report 2018” identified a total addressable market for ESCOs of 125,280 cell sites in SSA and MENA, of which around 20,000 (16%) are already contracted. How will the role of the ESCO expand in the future? The scope of ESCOs is expanding all the time, from power-as-a-service to full passive and active infrastructure maintenance and security. ESCOs are already starting to expand beyond cell sites to manage the power systems at data centres, technical sites and MNOs’ retail outlets. ESCOs are also starting to explore community power and, potentially in the future, co-location sales and the mutualisation of power systems to all operators in a market. We are already seeing ESCOs build several hundred new sites per year. Special thanks to Jocelyn Karakula, Deputy CTIO of Orange, for moderating the ESCO round table, and to the energy equipment buyers who attended this year’s energy working group, including Aktivco, IPT PowerTech and MTN. TowerXchange are partnering with Orange to host an “ESCO Roundtable” for the pioneers of this transformational model. Checkout www.towerxchange.com/meetups for more information

The energy working group at the TowerXchange Meetup Africa

https://www.towerxchange.com/meetups/


MNOs seek alternativesto towercosTowercos remain important partners for towercos in Africa, but unless they respond to MNO concerns they will miss out on opportunities

The good, the bad and the ugly

Our panel of mobile operators had some tough home truths for their towercos, as well as some kind words too. Despite being part of the same value chain there was frustration on show from mobile operators at their towercos’ lack of flexibility and focus on what their customers want. Ian Paterson of Africell, described it as “sharing in the value creation in an equitable manner.”

ARPUs in Africa are US$2-3 per month, but everyone expects the same quality of service they receive in the US where consumers happily pay US$50 per month. Whoever can achieve that, our panel agreed, would succeed, and whoever fails will disappear; whether they are MNOs, towercos, ESCOs or vendors.

For all the industry’s success in improving performance, African cell sites do not enjoy availability or autonomy close to that in North America, and that remains a source of frustration. A hesitance to invest in the latest energy innovations, to maintain sites effectively and to do just enough to hit SLAs is not enough. Razvan Urungeanu of Airtel said that 98% availability is not good enough, it might be seen as “normal” or “acceptable” in Africa, but it is not good enough; people already expect 100% uptime. And whether the problem is a power failure at a cell site or a problem with backhaul or Airtel’s own core network, it isn’t good enough. By the end of 2020 80% of Airtel’s network will be 4G, and that level of

Read this article to learn:< Mobile operators’ frustrations with towercos

< Proposals for new arrangements for towerco-MNO relations

< Alternatives to towercos being explored by MNOs

< Worries about preparations by towercos for LTE and 5G

< Overcoming limitations on rural roll-outs

Keywords: 4G, 5G, Africa, Africell, Airtel Africa, C-Level Perspective, Deal Structure, Deal Structure, ESCOs, Fibre, Lease Rates, MNOs, MTN, Next Billion, ROI, Tenant’s Perspective, Urban vs Rural

TowerXchange Meetup Africa opened with a mobile network operator-led panel on the 8th October 2019. Our panellists discussed their aims and goals for improving towerco-MNO relations, and also the alternatives which mobile operators were exploring for helping them build networks faster and reach customers more quickly. We welcomed Airtel Africa’s CTO Razvan Urugeanu, Navi Naidoo, CTO of MTN Group and head of their rural connectivity programme and Ian Paterson, Chief Investment Officer of Africell – a tier 2 operator with operations in Gambia, Sierra Leone, DRC and Uganda.Panelists on stage


technology shouldn’t go hand-in-hand with regular service outages.

Towerco inflexibility was another complaint shared by all our panellists. Navi Naidoo of MTN highlighted the frustration felt by mobile operators relying on towerco contracts signed during the 2G era, but being applied as they installed 4G equipment. The additional loading of 2G, 3G and 4G equipment on a tower, and the associated amendment revenues for towercos, have pushed up the opex of mobile operators, and he argues, reduced the scale and speed of their 4G roll-outs.

Similarly, towercos have been reluctant to roll-out where MTN wants them to roll-out, when it comes to rural sites. Having outsourced their tower construction and maintenance some years ago, MTN is beginning to be frustrated with towercos that won’t build towers where there is limited opportunities for a second tenant. In fact, in Cameroon and Cote d’Ivoire MTN are restarting tower building on their own account. Airtel also have ambitious tower build programmes which may result in towers being built in-house or with another partner outside of the big four (soon to be three).

Mobile operators have released a lot of capital from their towers over the last decade, and have enjoyed leaner operations and less operational headaches as a result, but there is concern about the towerco-MNO relationship going into the future. Whether it is rural roll-out or moving to 5G in a few years times there is a sense that towercos may not be

the partner of choice for mobile operators in the future; ESCOs offer power management expertise without the divesture of towers and rural network innovators are building networks where towercos are not. Openness and adaptation are the values mobile operators are looking for as the industry in Africa enters its next phase.

Growing pains

Mobile networks are driving increased demand in cities by connecting villages 200km away. Sites which look uneconomical on outgoing calls alone can induce demand for people who want to stay in touch with mum or send remittances home. MNOs see that benefit, but pricing by towercos doesn’t reflect that. Airtel’s Razvan Urungeanu suggests

a quid pro quo of cheaper leases in rural areas that would be made up for by inducing increased demand in urban areas. Viewing a network business through the returns of individual sites is short-sighted.

Africell’s Ian Paterson tells a similar story of the DRC. Africell currently cover three provinces in the DRC and want to go into a fourth but their expansion is delayed while the costs and revenue potential of new sites are assessed. Enormous swathes of the country are uncovered, and he sees it as an open goal for the industry to leave these people unconnected.

Our panel expects to see more self-build by operators, but still have a preference for working

“

“

Having outsourced their tower construction and maintenance some years ago, MTN is beginning to be frustrated with towercos that won’t build towers where there is limited opportunities for a second tenant. In fact, in Cameroon and Cote d’Ivoire MTN are restarting tower building on their own account


with towercos. Rather than using their own capex to build towers, they would prefer to see more build-to-suit entrepreneurs enter the market, or set-up joint ventures which would enable further build out of towers.

Energy challenges

As well as working with towercos in Uganda and DRC, Africell manage their towers in Gambia and Sierra Leone. They are aggressively exploring investment in power and have a technical department that examines potential solutions in energy storage and renewables. They are at a relatively early stage of their innovation journey. There’s an economic rationale and environmental case too. Major outside investors are prioritising emissions reduction and so they are planning on

focusing on renewable solutions for their new sites and then slowly retrofitting their old sites. However, old sites pose a problem as they often lack the space required for solar panels, the renewable energy of choice for cell sites.

For Airtel, power availability is going from worse to worse in their 14 markets, with grid stability a problem in all their markets. To counter that, towercos and MNOs have become the biggest fuel distributor in whatever country they operate; and that’s a big negative. MNOs are telecoms firms, not distributors. The efficiency towercos have brought to diesel distribution is welcome. While distribution networks have improved, in some of MTN markets there are still problems of actual access to fuel. Although MTN are a major fuel buyer, in some markets there isn’t enough fuel.

This is driving demand for solar as much as any green agenda.

As energy requirements on African sites multiply with the addition of LTE and soon 5G base stations, compact, renewable power solutions will become essential. But the perennial issue, rife across all operations is theft. Diesel theft is a major issue, but batteries and solar panels are also targets for theft.

Echoing earlier comments, our panellists said they were augmenting their own efforts by looking for new partners for managing their power. The ESCO model in which operators retain towers but outsource power management is looking ever more attractive.

Rural sites

Everyone at the meeting was united in wanting to advance rural connectivity, although the ambition of those plans varied widely. Our panellists are all advocates of faster and deeper investment into rural areas, but are all also aware of the challenges inherent in doing so.

In Nigeria, there are still 30mn people in the North East who are without coverage. The potential even in a big market like Nigeria remain huge. But site costs need to come down, many areas remain uncoverable while towers cost over US$100k to put up, base stations are energy intensive, VSAT expensive and opex onerous. In the DRC, Airtel Africa built 200+ rural sites which then sucked up more resources keeping them running that the rest of the Airtel estate in the country combined.

“ “Everyone at the meeting was united in wanting to advance rural connectivity, although the ambition of those plans varied widely. Our panellists are all advocates of faster and deeper investment into rural areas, but are all also aware of the challenges inherent in doing so


Ian Paterson was optimistic that solar-only sites paired with battery backup could reliably deliver 22+ hours of connectivity a day for lower income communities. Mobile operators need to be looking for innovative solutions to unlock the final areas of the country through energy innovation.

Navi Naidoo reiterated MTN’s belief that “everyone deserves the benefit of a modern, connected life” and to that effect they have recently closed RFPs for turnkey partners for their Rapid Rural Roll-Out Programme. They are aiming for 5,000 rural, ultra rural and ultra-ultra rural sites over the next few years. They are targeting very rural areas, and very scattered settlements. And they want sites to stay up, they can’t bring people the benefits of connectivity then tear them away through negligible uptime. Their ultra-ultra rural solutions are targeting towers at a tenth of their normal price, aiming for structures that cost no more than US$10,000.

As well as being cheap, they are making their roll-out very community involved. They are keeping it focused through their CHASE programme; Coverage, Handsets, Affordable, Service Bundling and Education. People need access to charging and SIM cards, they need handsets they can afford and services that they understand and benefit from.

4G and 5G

MTN Group still considers South Africa far from commercial 5G services, and its other markets even further behind. Outside South Africa the power

availability is not there and the density 5G would require would tax their ability to power all their sites. More so than power, regulators pose a major stumbling block. In South Africa, mobile operators don’t have enough spectrum to offer full 4G- services, let alone 5G. Regulators in other markets are more progressive than in South Africa, but spectrum for 5G is still not available.

Razvan Urungeanu is passionate about 5G, but he is not interest in having “the first 5G network in X country” for its own sake. He has fended off calls from several vendors with offers to help him launch a token 5G network, but he lacks the capacity to build a real 5G network in his markets, and a business plan to effectively monetise it. There is a lack of fibre to the site, and Africa’s towercos are just not ready to transfer what they know in other markets into an African context for the denser networks and alternative typologies required for 5G, a sentiment echoed by Africell’s Ian Paterson.

A Massive MIMO is 125kg today and the towers on which he leases space are not ready for such substantial antennae. On the other end of the chain, Africa lacks 5G handsets. Razvan suggests 30% of handsets are 3G, around 15-20% 4G, with the remainder 2G. Without handsets significantly reducing in cost and increasing in number, 5G will not come to Africa.

On the other hand, Paterson thought that Africa’s long-term future will feature 5G extensively. Much like Africa has leapfrogged fixed-line telephony, 5G

offers the chance for Africa to leapfrog some of the other elements of current digital infrastructure. This should be a source of optimism for 5G in Africa.

Beyond towercos

Hyperscalers like Facebook, Google and Alibaba are moving into Africa to take advantage of improvements in connectivity and are investing to further improve digital infrastructure themselves. They are investing in fibre and datacentres to enable them to deliver more content and services to African consumers, and MNOs are happy to piggyback on this infrastructure investment.

ESCOs are offering MNOs an alternative for tower power management that is more service-orientated than towercos, with less commitment. Smaller towercos are springing up to fulfil build-to-suit contracts that have been refused by larger towercos. And rural connectivity specialists are offering ultra-cheap towers with flexible financing and revenue shares which are proving appealing to MNOs that want to expand their network even further.

Towercos were a vital partner in African telecoms as the number of subscribers in Sub-Saharan Africa grew from 400mn at the start of the decade to 600mn today, but there are now a number of new partners mobile operators can choose between, and towercos will have to think about how to respond to the increased competition


Keywords: 4G, Airtel, Africa, American Tower, Best of TowerXchange, Chad, Congo Brazzaville, DRC, Eaton Towers, Energy, Energy Vision, ESCOs, Gabon, Ghana, Hybrid Power, Interview, Kenya, Madagascar, Malawi, MNOs, Niger, Nigeria, Rwanda, Sale & Leaseback, Seychelles, Solar, SLA, Tanzania, TowerCo of Madagascar, Uganda, Uptime, Zambia

Airtel Africa’s challenge for Africa’s towercosCTO Razvan Ungureanu calls for improved customer-centricity and 5G readiness from Africa’s towercos

TowerXchange: Please introduce yourself – what is your background, how did get into telecoms and what is your current role and responsibilities?

Razvan Ungureanu, Chief Technical Officer, Airtel Africa: I am 51, born in Romania and I am married with four kids. I started working in telecoms in 1992 in Romania. I spent five years doing design work in telecoms but since 1997 I have worked continuously for mobile network operators. I began working with Orange in Romania where I helped launch their network. Afterwards I moved to the Netherlands, still with Orange, and stayed 14 years there improving and optimising their network.

I was promoted within Orange to CTIO, and moved to the Caribbean to take care of the Dominican Republic. In 2014 Orange sold out to Altice, it was a profitable operation, but geographically wrong for Orange at the time. I took the chance to move to Digicel and stayed in the Caribbean. I covered 29 countries and 14mn customers as CTO.

After two years at Digicel I got a call from a headhunter for a challenge in Africa. They showed me the Airtel Africa project, I met with Sunil Mittal (founder and chair of Bharti Enterprises) and Christian de Faria (then Airtel Africa CEO), and I thought yes, what an opportunity: 20,000+ sites, 100mn customers. And here I am in Africa now, three years in.

TowerXchange: Could you describe Airtel’s footprint in Africa, where its 100mn customers live and summarise your history of tower

Read this article to learn:< The scale, history and priorities for Airtel Africa’s 14 country, 20,000+ site network< How Airtel plans to “Win with network” and “Win with cost optimisation”< The prospects for Airtel Africa to sell and leaseback in the six countries where they retain

their towers< Airtel’s priorities for investing in DG replacement and hybridisation< Airtel’s plans to launch 5G in all their markets in three years’ time< How towercos need to change to be more customer-centric and to be ready for the 5G-era

Airtel Africa works with all four major African towercos, operates in 14 countries and recently passed 100mn customers. Ahead of his participation at Meetup Africa on the 8th October, TowerXchange sat down with Razvan Ungureanu, Chief Technical Officer at Airtel Africa, to discuss the future of Airtel Africa’s towers, and for Razvan to challenge towercos to become more customer-focused and get ready for the demands of the 5G-era in Africa.

Razvan Ungureanu, Chief Technical Officer,Airtel Africa


transactions and relationships with towercos across the continent?

Razvan Ungureanu, Chief Technical Officer, Airtel Africa: Airtel is now number two worldwide based on number of customers, considering India and Africa together, after China Mobile. Airtel Africa is active in 14 countries across sub-Saharan Africa, on over 20,000 sites. Last month we reached 100mn customers. One reason I took this role was the size and span of the network. We have the Seychelles where we have 75 sites, and we have Nigeria were we have over 10,000 sites.

We work with all four major African towercos in different markets. The relationship differs depending on the contract and historical relationship in each market. In some areas we have historical lease agreements from when we sold our towers, and in others we lease space where we need it. We are an asset-light company and we want to stay that way. Our focus is to put together the pieces of the puzzle and focus on delivering for the customer. So that includes the right marketing, the right pricing, competing in different environments, and working with the right towercos who have assets where we need them for our network.

And towercos are the experts on tower management. The difference in asset management between towerco-owned towers and MNO-owned towers is enormous. An MNO might have one or two people who are experts in cell site power management, but at a towerco everyone cares

about power. You should give the job to the one who knows best.

TowerXchange: So you would say you were generally pleased with the service you receive from your towercos?

Razvan Ungureanu, Chief Technical Officer, Airtel Africa: Of course, but there is another side of the coin, where I wish towercos were more customer-focused. There can be a tendency for towercos to only care about a site being down inasmuch as it affects their SLA commitments. I worry there is an element of “box ticking” rather than a real customer-focused dedication to keeping the lights on.

In one market, there was a period of security issues which caused sites in affected areas to go down. Our towerco pointed to our Master Lease Agreement

and said they were not responsible if a tower went down due to security issues, that it was outside the scope of the agreement and we would have to wait. But if you decide to operate in Africa you can’t act like this.

Sure there was a clause in the contract, but that doesn’t mean you are doing the right thing and it doesn’t mean you are hitting your SLA if you are excluding long periods of downtime. You can introduce specific security measures, you can refuel the site, you can work outside of the box to help your customer.

So there is a tendency to hide behind the contractual clauses rather than delivering what the customer needs. Contracts cannot specify everything, so the towercos need to show more flexibility. SLAs are generally measured by power availability but at some sites I receive 44V where I

Total base station locations

Nigeria

East Africa (Kenya, Uganda, Rwanda, Tanzania,

Malawi, Zambia)

Rest of Africa (Niger, Gabon, Chad, Congo

Brazzaville, DRC, Madagascar, Seychelles)

11,729

15,551

5,221


* announced, not yet closed ** Deal included 368 SWAP sites under MLL; agreement since cancelled *** MTN’s equity since restructured for additional shareholding at IHS group level + Vodacom acquired a 24.5% stake in HTT, which Helios has since purchased for $58.5mn ++ Deal structure not disclosed, but involved exercising options to increase ownership from a minority stake to 94%.

Airtel’s tower transactions in context Source: TowerXchange

Year Country Seller Buyer Tower count Deal value US$

Cost per tower US$

Deal structure

2019 South Africa Atlas Towers SASBA

Communications~900 140,000,000 155,556 Portfolio Acquisition++

2019Burkina Faso, Ghana, Kenya, Niger, Uganda

Eaton Towers American Tower 5,510 1,850,000,000 335,753 Company acquisition

2018 Kenya Telkom Kenya American Tower 715 SLB

2016 Tanzania Zantel HTA 185 6,700,000 36,216 SLB

2016 Senegal Expresso Telecom

Al Karama Towers 450 SLB*

2016 South Africa Eaton Towers American Tower 300 Portfolio Acquisition2016 DRC Airtel HTA 967 165,000,000 170,631 SLB

2016 Nigeria Hotspot Network IHS 85 Portfolio Acquisition

2016 Nigeria HTN Towers IHS 1,211 Company Acquisition**2015 Nigeria Etisalat IHS 555 SLB 2014 Rwanda Airtel IHS 164 SLB2014 Zambia Airtel IHS 949 150,000,000 158,061 SLB

2014 Nigeria Airtel American Tower 4,717 1,060,000,000 224,719 SLB

2014 Niger Airtel Eaton 600 SLB

2014Ghana, Burkina Faso, Kenya &

UgandaAirtel Eaton 2,681 540,000,000 201,417 SLB

2014 Nigeria MTN IHS 8,850 984,000,000 226,911 Joint venture (IHS 49%, MTN 51%)***

2014 Nigeria Etisalat IHS 2,136 485,000,000 227,060 SLB

2014 Congo B Airtel HTA 393 50,000,000 127,226 SLB

2014 Rwanda MTN IHS 550 48,000,000 87,273 SLB

2014 Zambia MTN IHS 748 57,000,000 76,203 SLB


need 48V. Should that site count as up or down? At 47V my equipment can go down, so what exactly counts as uptime needs addressing too.

Overall I am pleased to work with towercos in Africa, but similar to working with managed services providers you have to manage your relationship and ensure the correct governance is in place.

TowerXchange: Congratulations on raising US$750mn in Airtel Africa’ IPO in June. What was the rationale for the Airtel Africa IPO at a group level, how does it support your strategy in Airtel Africa’s 14 markets?

Razvan Ungureanu, Chief Technical Officer, Airtel Africa: Since 2010 Airtel Africa has been making a huge investment into Africa, and we have cumulatively invested more than US$1bn. So with that investment we have accumulated a large stock of debt. Mobile network operators need to be able to raise debt to invest in their networks, it is a capex-intensive industry and the IPO was important to allow the company to create leverage in the future. If you can’t raise debt then you can’t invest in your network, you lose coverage and you can’t compete, so an IPO was always a key milestone for us.

TowerXchange: A key part of Airtel Africa’s strategy is to “Win with network” by expanding your network footprint and the total number of 3G and 4G sites – what can you tell us about new 3G sites and 4G overlays for the rest of 2019 and into the future?

Razvan Ungureanu, Chief Technical Officer, Airtel Africa: Actually you would be surprised by the degree we are already running a 3G and 4G-ready network. Across all our markets, 80% of our sites are 3G capable and 50% of our network is 4G-ready. By the end of 2020 98% of our sites will be 3G and 80% 4G.

Airtel is putting 4G at the centre of our business development strategy. There is huge potential and you need the network in place to capture that potential. As soon as you launch 4G you see data usage grow, ARPUs improving and improvement in local economic performance.

We have 4G live in all 14 countries. In Uganda we have reached 100% network for 4G. We are being aggressive in Nigeria also, with 6,000 sites LTE giving us the biggest LTE network there. We are really fighting it out with MTN. But it isn’t just the flagship markets, we also have 4G live in Niger and Chad. At the moment we are just covering the capitals, but 60-70% of mobile traffic is in the capital, so even a limited 4G roll-out there is servicing most of the current demand for it. And we will go into rural areas later on as well.

The “Win with network” element of our strategy isn’t just about towers, or even the radio side and

Airtel Africa in Nigeria

Source: Airtel Africa Quarterly report on the results for the fourth quarter and year ended March 31, 2019

8,108 6,810

1,558

260

Leased towers

Owned towers

Mobile broadband

Non-Mobile broadband


transmission. Some of our African markets still face considerable difficulties in connecting to the outside world, international connectivity can still be very expensive. We need a sustainable way to connect to the outside world before it makes sense to go for 4G. Africa is a large continent, without the fibre backbones we take for granted in North America, Europe or Asia.

Fibre in the ground is very important and by 2020 we will have 40,000km of fibre in Africa. We co-invest in a lot of fibre around Africa but it remains a work in progress. But we believe that the potential of Africa is still not fully developed and fibre will be an essential ingredient in realising that potential. The big difference versus Europe or Asia is that people only use their mobile phone, it isn’t just home internet or landline phone, but a replacement for radio, TV and news too. We need the unlimited capacity provided by fibre.

TowerXchange: Another areas of focus for Airtel Africa is “Win with cost optimisation” something towercos have been working towards for many years, what is your cost optimisation strategy for your passive telecoms infrastructure?

Razvan Ungureanu, Chief Technical Officer, Airtel Africa: I have two types of contracts, one for towers we sold and another for towers we rent as required and we have more power to negotiate. If we’re in a contract to stay on a particular tower there isn’t much I can do to optimise those costs.

In fact, because of Airtel’s modernisation and investment in combined 2G/3G/4G sites we can

see existing sites become more expensive as we add to tower loading and add to power demand. On the other hand, modern base stations and new equipment can be more energy efficient, so overlaying new technology can actually have a positive effect on our power usage.

Where we can control costs, I have a couple of key approaches to controlling cost. Firstly we need to control our systems and tighten up any financial leakages by monitoring and controlling costs and inputs. Secondly, once we have the basic controls in place, we will look into investing in solar, hybrid

power, batteries or experimenting with other types of fuel. But for the moment we want to focus on the basics.

TowerXchange: When American Tower completes its proposed acquisition of Eaton Towers, Airtel Africa will be responsible for 52% of ATC EMEA’s revenues, do you see your relationship with your main towerco changing? What can you tell us about Kenya and Uganda where there will be country towercos merging?

Razvan Ungureanu, Chief Technical Officer, Airtel

Airtel Africa in East Africa (Kenya, Uganda, Rwanda, Tanzania, Malawi, Zambia)


Leased towers

Owned towers

Mobile broadband


6,048

2,401

6,644

1,805


Africa: In smaller markets like Kenya and Uganda we are pleased to see some consolidation. In Nigeria, with around 30,000 total towers, you can see how the country can support more than one towerco, but not in smaller countries. In Kenya, for example, Safaricom has a large portfolio and their network is dominant. With the merger of Airtel and Telkom it wouldn’t make sense to have two towercos offering us towers, so I see the consolidation as good news. A healthy ecosystem where everyone can make money is better for everyone.

In terms of next steps, being a major customer for American Tower will give us leverage, but it also gives American Tower leverage over us. What happens next depends on how the acquisition and new relationship plays out. What I hope is we end up in a collaborative partnership and continue engagement in that manner.

TowerXchange: Appreciating you can’t divulge specifics, what are the factors you will evaluate when looking at potential tower sales in the six markets where you retain your towers (Chad,

Gabon, Madagascar, Malawi, Seychelles and Tanzania)?

Razvan Ungureanu, Chief Technical Officer, Airtel Africa: In some countries regulatory rules do not make a sale and leaseback possible, and we have to respect the laws of the country. But there is no asset which is not for sale, depending on the price being offered. Given the regulatory context, if our towers are not sold it will be because we haven’t been offered the right price yet.

Towercos needs to be separate from MNOs to work effectively, otherwise there is a conflict. You find “stability issues” preventing sharing or towers are simply “unshareable” because of “power issues.” An independent towerco is looking for reasons to say “yes” not “no.”

If we were to divest our towers we would handle that internally, we have a special department called Merger & Acquisitions that can take care of any tower sale. We worked with banks on our IPO of course, but we have the capabilities internally to handle a tower sale.

TowerXchange: The end of May saw a request for expressions of interest in a sale and leaseback of your 1,400 towers in Tanzania. What can you tell us about the rationale for the potential sale and how its completion would help your operations in Tanzania?

Razvan Ungureanu, Chief Technical Officer, Airtel Africa: The tower sale is part of our strategy, and it is something we would very much like to go ahead

Airtel Africa in Rest of Africa (Niger, Gabon, Chad, Congo Brazzaville, DRC, Madagascar, Seychelles)


Leased towers

Owned towers

Mobile broadband


2,481

1,761

2,972

1,270


if the price is right. I cannot go into details, as you understand, but we have very good reasons for proceeding with the sale and leaseback in Tanzania now. The situation of Airtel Tanzania has been clarified following the last transaction with the government taking a 49% stake. Our situation has become much clearer.

TowerXchange: What plans does Airtel have for increased energy investment? How widely deployed are hybrid and renewable energy systems?

Razvan Ungureanu, Chief Technical Officer, Airtel Africa: We are beginning to invest in

hybrid solutions more seriously when gensets need replacing. Renewables are not a major area of spending at the moment, solar is the only technology we are experimenting with.

Solar works well on 2G sites, but now we are deploying 2G/3G/4G on sites and we need a new solar solution with more power. A 2G site will consume 1kW but with new technology overlays the sites pull 2kW and above which requires a lot of space. We are also worried about maintenance of solar sites, often they are isolated and there is nobody there to wash them and so their efficiency is decreasing all the time. Then you have the theft of the panels and the need to protect them.

We still have a lot of diesel gensets and it makes no sense to replace them. In a number of countries we are still managing our power and as a need arises we are replacing our old gensets with new technology, but we have no specific replacement programme for our diesel assets. Remember, our main investment is still in the active part of the network and not the passive part.

We are looking at hybrid systems that combine diesel gensets with batteries and automatic systems that switch intelligently. We are also doing lots of active monitoring of the systems, monitoring the batteries, fuel levels and all that.

Airtel Africa timeline

2015 20162014201320122010 2016

2017 2018 2018 2019 2019 2019

Airtel enters Kenya

Opcos in Sierra Leone and Burkina

Faso sold

Sale and leasebacks agreed with Helios Towers, IHS Towers, Eaton

Towers and American Tower

Acquires Warid in Congo Brazzaville

and Rwanda

Enters Rwanda

Acquires opcos in 15 countries

from Zain

Airtel Africa becomes operationally free cash flow positive

Joint venture with Tigo established in

Ghana

Acquires Tigo opco in Rwanda

US$1.45bn raised from private

investors

Merger with Telkom Kenya

planned

Net income becomes positive post-tax and

other expenses

US$750mn raised in an IPO



TowerXchange: Has Airtel’s ESCO partnership in Gabon met your expectations? Do you continue to see ESCOs as a viable complementary partner to towercos in markets where you have yet to divest your towers (Chad, Gabon, Madagascar, Malawi, Seychelles and Tanzania)?

Razvan Ungureanu, Chief Technical Officer, Airtel Africa: We started working with Energy Vision in Gabon because we wanted to keep our options open for a future sale of the towers, but didn’t want to continue managing the energy. We currently have no plans to extend this model to other markets because typically towercos don’t like to acquire towers without also taking over control of the energy assets.

My hope for ESCOs is that they begin to go beyond servicing just MNOs. ESCOs need to think about minigrids and about selling energy to other customers. We would benefit from better pricing and a more stable supply if we were one of many customers. There is a huge need for energy in Africa, MNOs are served, but there’s a much bigger demand ESCOs can fulfil.

TowerXchange: Please summarise your vision for the future of Airtel Africa and the tower industry.

Razvan Ungureanu, Chief Technical Officer, Airtel Africa: Airtel Africa’s future is as a 5G operator across all of Africa. In three years’ time 5G will be live across all of our network and I am not sure towercos are ready for that. But Airtel Africa needs them to be ready.

Airtel’s tower ownership and transactions across its 14African markets

123456

Sold to Eaton Towers, since acquired by

American Tower

Sold to American Tower

Sold to Helios Towers

Sold to IHS

Retains towers, ESCO contract signed with

Energy Vision

Currently retains towers

No opco present

Sold to Eaton Towers; opco subsequently

acquired by Orange

Sold to Eaton, opco subsequently merged

with Tigo Source: TowerXchange



Airtel Africa in numbers

Total customer base

100mn*

*Airtel Africa passed 100mn subscribers in Q3 2019


US$1,332mn

US$3,077mn

US$412mn

Total revenues

EBITDA

EBIT

Net income

ARPUUS$2.7

Network Towers

21,059

Airtel Africa revenues and profits

US$796mnIn millions of US$, as of March 31st 2019

Simply put, the ecosystem readiness is not there. The towers are not ready for the extra power consumption, wind load increases, weight, and the pressure of connecting the towers to fibre. 5G will require a big programme of investment in fibre backhaul as well as tower upgrades, and African towercos are still lagging in provision of fibre to the tower.

In my view tower stability and structures are not ready for all the extra equipment which will be installed in mass 5G roll-outs. Antennae will be larger when we start using Massive MIMOs, wind load will increase and power demand will jump. For energy production, there are still too many failures, fuel delivery is still too irregular and theft remains a problem. The industry is improving, but behind the curve required to deliver the revolution in connectivity Africa needs.

Towercos are still operating as if we remain in a 2G world, but the fundamentals of the business need rethinking. If the tower industry doesn’t deliver then we will have to develop our own strategy. I don’t want to be back in the macro tower game, but if I need a 20 meter pole in a city to connect a hotspot then maybe it is possible to do that without a towerco. Towercos have to move towards offering IBS, DAS and small cells, as in the United States, but all of this is still too limited in Africa. And it may be that 5G will see RANsharing becoming more widespread, and they have to be ready for that too. Airtel Africa has ambitious plans for network investment in Africa, and I hope the tower industry can support us in achieving them

Revenue per site per month (US$)

Nigeria

East Africa

Rest of Africa

US$12,288

US$11,365

US$17,352

20,00015,00010,0005,000


How MTN is energising Africawith 5,000 new rural sites by 2020MTN’s ambitious three-tiered rural roll-out programme will accelerate the adoption of a modern, connected life across Africa

TowerXchange: Can you briefly describe how MTN’s approach to rural connectivity will change through this new programme?

Navindran Naidoo, Group Executive, Network Design & Planning, MTN Group: MTN Group intends to roll-out 5,000 new rural sites by the end of 2020, with an even greater roll-out expected after this initial mandate. As we are looking to increase the number of our rural sites, the way in which we are managing the build is different too. We have issued an RFP, covering the three different classifications for the sites we plan to build. These sites are classified as: rural, ultra-rural and ultra-ultra rural.

We are looking for turnkey partners to help us serve these markets with innovative solutions that enable us to bring connectivity to previously underserved locations. This programme spans across all of MTN’s operations.

TowerXchange: What has brought on the decision to change MTN’s approach to rural site build out?

Navindran Naidoo, Group Executive, Network Design & Planning, MTN Group: We are looking to address the infrastructure issues that inhibit Africans from gaining access to the benefits of a modern connected life.

We have a vision of leading the delivery of a bold new digital world to our customers and our rural

Read this article to learn:< Why MTN are targeting 5,000 new rural sites by end of 2020

< Details of MTN’s RFP for turnkey partners to delivery rural connectivity

< What sorts of structures and power are expected to be deployed

< The importance of low-maintenance sites for ultra-ultra rural sites

< How MTN Group plan to inspire other MNOs

Keywords: 3G, ARPU, Africa Research, Benin, Botswana, Cameroon, Congo Brazzaville, Cote d’Ivoire, Eswatini, Ghana, Guinea, Guinea Bissau, Liberia, MNOs, MTN Group, Masts & Towers, Multi-Country Partner, Next Billion, Nigeria, Off-Grid, ROI, Rwanda, Solar, South Africa, South Sudan, Sudan, Tenant’s Perspective, Towercos, Uganda, Urban vs Rural, Zambia

Africa is the world’s youngest and fastest growing continent. These demographics converge to make it a fantastic telecoms investment destination, as the continent’s cities are seeing a boom in telecoms towers – delivering voice and data to millions of people.

However, the continent is still characterised by large populations who exist outside of urban areas, often very far away from cell sites. Driven by the belief that everyone deserves the benefits of a modern and connected life, MTN Group issued a Request for Proposal (RFP) for turnkey partners to assist in building 5,000 new rural, ultra-rural, and ultra-ultra rural sites across all MTN operations. These new rural sites will extend MTN’s network and bring the benefits of voice, data, SMS, and digital services to more people.

TowerXchange sat down with Navindran Naidoo, MTN Group Executive, Network Design & Planning at MTN’s offices in Johannesburg to discuss the programme.


build programme demonstrates that leadership. This isn’t driven only by commercial principals. We do not anticipate that most of our ultra-ultra rural sites will become significant sources of revenue, however MTN sees a social responsibility to connect these areas of the continent.

TowerXchange: There is an RFP out at the moment to support your rural build out programme, can you outline the key partners you’re looking for?

Navindran Naidoo, Group Executive, Network Design & Planning, MTN Group: The RFP is an attempt to source full turnkey vendors for our different categories: rural, ultra-rural and ultra-ultra rural. The RFP should close in September.

We are interested in the role that independent telecom tower companies (towercos) can play in enhancing rural connectivity. Leasing space on towers could be an important enabler of investment in rural and ultra-rural areas. However, the leasing model is unlikely to be operable in ultra-ultra rural areas where low ARPUs will be unable to support more than one operator. Sharing infrastructure is an option for reducing the cost of roll-out and opex too.

I cannot comment on how the pricing structure and economics of the sites will work, as we are waiting to see what is proposed in the responses to our RFP.

MTN’s history of tower sales

[GREEN] - Sold to IHS[GREEN STRIPED WITH YELLOW] - JV with IHS[RED STRIPED WITH YELLOW] - JV with American Tower[PURPLE] - Cancelled transaction looking likely to return[YELLOW] - MTN retains towers[GREY] - No opco present

Sold to IHS

JV with American Tower*

MTN retains towers

No opco presentSource: TowerXchange

*American Tower in process of acquiring full ownership


Description Rural Ultra Rural Ultra-ultra Rural

GeographyVillages situated 50-100km from urban

areas. Several villages in close proximity of planned site.

Very low population densities with widely distributed villages with little or no inhabitants in between.

Population density per sqkm >1,000 <1,000 <500

Subscriber capacity 10,000 1,000 200

Subscriber voice MOU (outgoing)

50mins per month 50mins per month 50mins per month

Site voice traffic (max of outgoing, incoming)

500,000mins per month 50,000mins per month 10,000mins per month

Mandatory radio technologies GU900 GU900 G900

Radio output power 10-15W 10W 10W

Coverage radius 15km 3km 1-3km

Coverage areas 707sqkm 28sqkm 3-28sqkm

Site capacity 2G/3G2 TRX O2 upgradable to S222 and 2x U900

Carrier2 TRX O2 upgradable to S222 and 1x U900

Carrier1 TRX O2 upgradable to 2 TRX

Optional radio technologies L800, GL1800, UL2100 L800, GL1800 Vendor to propose

Site availability > =98% > =95% Best effort, vendor to propose

Dropped call rate <1% <5% <5%

Data throughput 2G/3G/4G Up to 1Mbps/3Mbps Up to 1Mbps/3Mbps EDGE, vendor to propose

Tower height 10-36m 10-20m Vendor to propose

Wind loading capacity 150km/h 150km/h 150km/h

Backhaul technology MW links MW or optimised VSAT Optimised VSAT

Site power Solar power with battery backup Solar power with battery backup Solar power with battery backup

Site autonomy 12-24 hours 12-24 hours Vendor to propose

MTN’s rural RFP technical requirements


TowerXchange: How do you define rural, ultra-rural and ultra-ultra-rural sites? How will your site design and service level differ in each category?

Navindran Naidoo, Group Executive, Network Design & Planning, MTN Group: There are a few ways we identify and categorise sites, such as determining the distance from the urban areas we already serve. We can use satellite imagery to complement that and identify the best areas to serve, as we cannot rely on census information in these areas.

For backhaul we expect to use a variety of technologies. In rural sites we have specified microwave backhaul as these sites should not be too far away from our existing network. For ultra-ultra-rural sites, we have specified optimised Very Small Aperture Terminal (VSAT) backhaul. Ultra-rural sites will see a mixture of the two solutions.

The towers will also differ from site to site. At normal rural sites, shareable macro towers will be used; at ultra-rural sites we expect shorter towers of between 10m and 20m. While at ultra-ultra rural sites, we are leaving the details of the structure to our vendors to propose depending on what they think will work best.

We don’t only need sites which have a low-cost bill of materials, but we need structures with minimal maintenance and a quick implementation timeline.

It should take up to a week to erect a rural site, but our ultra-ultra rural sites should be complete in a day or two.

Site availability will differ to what we expect for our core sites. At rural sites we are proposing > 98% availability; at ultra-rural sites > 95%; and we will wait to see what our vendors propose for ultra-ultra rural sites. At these most rural sites we need to keep maintenance and repair visits to a minimum, so while we expect to use solar power and battery back-ups at our rural and ultra-rural sites, we may opt for solar-only sites at our most remote sites. Eliminating diesel generators cuts maintenance and refuelling, cutting batteries from our most remote sites further simplifies the maintenance of the sites and eliminates sites going down due to battery theft. Most rural sites, with their larger towers and more demanding initial specification could be upgraded, but ultra rural and ultra-ultra rural would require complete rebuilds. But that would be an excellent problem to have.

TowerXchange: You’re rolling out both 2G and 3G at these sites, how important is offering internet in addition to voice and text?

Navindran Naidoo, Group Executive, Network Design & Planning, MTN Group: We think offering data and internet connectivity is essential. Even at our ultra-ultra rural sites we want to be able to offer at least 3G levels of connectivity.

Our CHASE programme helps us focus on what

matters for our users: Coverage, Handsets, Affordability, Services and Education. We have to ensure sufficient data coverage in low-income areas; affordability of handsets and data services; bundle together the correct services for our customers; and enhance digital literacy and awareness so that people can make the most of the services we deliver.

TowerXchange: 5,000 sites a year is a massive programme. What are the KPIs you’ll be measuring to see if the first sites are effective?

Navindran Naidoo, Group Executive, Network Design & Planning, MTN Group: I wouldn’t want to put a specific KPI to these sites, but we are not going in blind. We have a number of existing rural sites from previous programmes of rural investment and they are exceeding expectations. They aren’t generating a huge amount of traffic or revenue, but they are doing well. They are not high capacity sites like a metro area, but they are clearly servicing a need. We foresee people in rural areas taking up all the other services MTN offers in the future.

TowerXchange: Do you think other MNOs will follow your example? What advice would you have for them?

Navindran Naidoo, Group Executive, Network Design & Planning, MTN Group: I hope other MNOs will follow our example. There are big parts of Africa which have absolutely no connectivity and MTN believes that it is our duty to bring everyone in Africa the benefits of a connected life


Keywords: Active Equipment, Active Infrasharing, Africa,Community Power, Connect Earth, Construction, Decommissioning, Energy, Facebook, Fairwaves, Infrastructure Sharing, Installation, MNOs, Masts & Towers, Network Rollout, Next Billion, Opex Sharing, Orange, Passive Equipment, Towercos, Universal Access

Rural sites top the agenda at TowerXchange Meetup Africa 2019Rural sites are an attractive investment opportunity for MNOs and innovative towercos now that site costs have come down and urban investment slows

The challenge

Africa’s population is growing at 2.7% per year, and is projected to hit 2.4bn by 2050 and 4.1bn by 2100. At the moment only half a billion are online, with most of the easiest to connect already connected. To achieve 100% SIM penetration by the end of the century would require more than 3bn net new connections and a significant increase in geographic coverage.

That lack of coverage is now the key barrier to getting more Africans online – the networks are just not available where many people need them. We need a new approach to bring connectivity to these areas, and at the 7th Annual TowerXchange Meetup Africa, MTN Group’s rapid rural roll-out RFP was highlighted as a positive example of innovation. Other MNOs are also exploring new technologies, and importantly, new business models to find a way to make the economics of rural connectivity work. But the economics will remain challenging at sites serving subscribers with monthly ARPUs around or below US$2.

Many African countries are landlocked, and even those with an undersea cable landing point can be large enough that their interior regions are effectively cut-off from the outside world, especially during rainy seasons. Another barrier is the cost of sites. A useful rule of thumb is that installing a typical cell tower costs US$100k, with amplified construction and maintenance costs in areas lacking good transport infrastructure, so you cannot deliver a return on that investment

Read this article to learn:< The size of the rural opportunity in Africa < Africa’s movers and shakers in rural connectivity < Energy challenges and solutions for rural sites< Matching site design and location < Economic models enabling greater rural investment

Innovation has pushed down site costs and increased site autonomy to make ultra-ultra rural sites increasingly viable. Historically, sparse populations and low ARPUs in rural areas have meant mobile coverage in rural Africa lagged behind urban Africa, but the gap appears to be narrowing. TowerXchange’s rural roundtable, hosted by Jocelyn Karakula, Deputy CTIO of Orange, was packed, while our closing panel focused on the challenges of providing commercial connectivity in unserved and underserved regions of Africa. The panel was chaired by our own Head of Research, Matthew Edwards and featured Neil Bartlett, Access Network Program Manager at Facebook, Dion Jerling, the Co-Founder of Connect Earth and Albert Gardiner, CEO of Fairwaves.


in conventional cell sites in Africa’s most remote, often poorest, neighbourhoods. Areas which lack a robust business case for mobile coverage also lack reliable energy and sometimes also lack even the distribution networks necessary to run a remote genset.

The energy challenge

As at all African cell sites, energy was seen as a primary challenge for rural connectivity, and just like the rest of Africa, there is no single answer. Rural connectivity is a broad category, taking in settlements of 1,000 which can only just support a 2G connection to 10,000 person settlements. Each site requires its own solution, even if some level of standardisation is necessary to achieve scale. The main priority in our discussions was the importance of minimising base station energy demand and correctly sizing generating assets. Demand can be anything from as low as 100W up to a few kW, depending on the density and size of the population being served by the cell site.

While one strategy for rural cell site power is to strip things back for maximum simplicity, another approach was also proposed at the Meetup, one which suggested a much more complex approach. Instead of stripping back energy generation to the minimum necessary, cell sites could instead become the power source for the local community; either acting as the generating site for a local minigrid, including connecting and billing other customers and maintaining a wider grid, or acting as the anchor tenant for another company that wants

to offer distributed generation. These proposals remain largely untested, but point to a route to potential scale for ESCOs or towerco entrepreneurs.

Backhaul options

Where one lacks line of site microwave backhaul, a satellite connection remains the only real game in town. Our panel discussed some of VSAT backhaul’s real and perceived drawbacks. At remote sites

with low ARPU the cost of a VSAT link can be prohibitive. For 2G and 2.5G sites VSAT’s bandwidth is more than sufficient, but for 3G and 4G sites the bandwidth can be too low. Huawei’s RuralStar’s non line-of-site wireless backhaul can help link up rural sites which are not too far from an operators main network, but this limits the solution’s range and still creates bottlenecks on existing backhaul. Other alternatives like Google’s Loon balloons have been cleared for launch in Uganda and ambitious

Internet para todos

In Latin America, more than 100 million people in rural areas don’t have internet access. Facebook, Telefónica, IDB Invest and CAF have joined forces to bring them connectivity through Internet Para Todos (internet for everyone). IPT is a rural telecoms infrastructure operator that will offer internet to six million people in Peru while trying to create a new deployment model that can be replicated in other rural areas across Latin America.

Using 2,750 small stations received from Telefónica that offer reduced radio coverage, and 380 bigger stations Internet Para Todos is already able to offer 2G technology. Their focus is now to deploy 4G technology on those 3,130 sites, which will guarantee internet access to 3.2mn Peruvians. Most of those sites transport signal through satellite, so another priority is to deploy fibre or microwave backhaul, depending on the needs of each area, in order to improve services and reduce satellite dependence. Furthermore, between 2020 and 2021, they will deploy 1,000 new sites that will allow them to reach the goal of offering connectivity to six million people.

IPT is based on the Rural Mobile Infrastructure Operator (OIMR) concept, a unique business model defined by a law published in 2013 by the Peruvian Government that allows Internet Para Todos to offer infrastructure and connectivity services to the MNOs as a wholesale business despite not having any spectrum. Currently, Telefónica is IPT’s only client but their plan is to close deals with other operators by offering strong QoS and maintenance capabilities. This model allows operators to notably reduce their capex as they don’t need any up front capex, nor do they have to pay maintenance fees – they only pay for carried traffic


low earth orbit satellite constellations are planned by the likes of SpaceX. However, major disruptions to traditional satellite backhaul remain 3-5 years away, so current backhaul solutions will remain a core element of any rural connectivity programme for at least half the lifespan of any site built in the next year.

OpenRAN and active sharing

Active infrastructure sharing has generally been resisted by MNOs and towercos: MNOs because they view their network as a source of competitive advantage and a new cell site as an opportunity to acquire long-term customers; and towercos because a shared tower is more valuable to them than a shared tenancy. However, our panel agreed that these old resistances will melt in the context of the push into rural areas and the desire to push down costs.

Sharing the radio side of a network allows for capex and opex to be shared on marginal cell sites, at the cost of exclusivity in a local market. One technology

which will enable active sharing is OpenRAN. Encouraged by Facebook’s Telecom Infrastructure Programmme, OpenRAN solutions are based on general purpose vendor-neutral hardware and software-defined technology, which enable the cost of a base station to be reduced. Reducing the cost of active equipment on a cell site is not normally a concern of towercos, which have historically managed only passive infrastructure assets, but activie infrastructure will have to become more important if towercos want to be significant players in rural connectivity.

Quality of service

Rural sites need to be cheaper to deliver. If they are to be commercially sustainable, that comes with trade-offs. Those trade-offs are inevitable when bringing 3G to a site which will have only hundreds of subscribers at ARPUs of US$2 or less. Quality of service will have to be sacrificed at some rural sites to enhance the economics. However, MNO attendees at our rural connectivity roundtable were wary of building rural sites in some areas, knowing that

regulators would penalise them for sites which fell below certain quality of service indicators. This meant some areas which could be served were not served because fines would make individually feasible sites uneconomic at a network level. Regulatory KPIs need to change if rural connectivity is to be able to expand as rapidly and as far as is technically and economically possible.

Where sites are needed

Finding the right location for a rural site is difficult. Urban sites are generally areas of current or future high traffic, but by definition the rural sites we are targeting will not be serving large amounts of voice or data traffic, but they still need to be near a critical mass of potential subscribers. Censuses in many African countries are now very out of date. For example, data from some regions of the DRC was reportedly being last reliably collected in the 1930s. Therefore, alternative methods for initial site surveys are needed.

We heard that in the early days of network building, rural sites would often be built near the local chief’s house, but because the chief often lives kilometers from the main population centre the site would be largely useless. If rural connectivity is going to be a success then site selection needs to improve so that the maximum number of people are covered at the lowest cost.

Facebook has had success combining satellite imagery of housing with nightlight imagery and census data to find appropriate locations to

MTN Group’s rapid rural roll-out RFP

At the end of 2020 MTN Group closed an RFP for its rapid rural roll-out programme. MTN Group would like to roll out up to 5,000 new rural sites by the end of 2020 through a network of new turnkey partners offering innovative low-cost solutions and new business models. These new rural sites will extend MTN’s network and bring the benefits of voice, data, SMS, and digital services to more people in all their African markets. Big winners in the RFP were Nigerian firms Raeanna and Hotspot Networks, and rural connectivity specialists Vihaan Networks Limited (VNL), Vanu and Africa Mobile Networks


survey. Site visits are then necessary to review conditions on the ground to check local support and community engagement, access for commissioning and maintenance, and local vendors to support development locally.

Site design

40m towers can of course cover a wide area with a level of service, especially 2G, but are relatively expensive to build, maintain, and require a lot of power to transmit power across their service area. Even 20m towers may be excessive for some areas where a lower antenna, with a lower power requirement can cover a wide enough area to cover most people in a rural settlement.

Some rural sites will one day be less rural and can support the installation of a higher tower ahead of simple current commercial viability, but at many rural sites a 12m monopole will be sufficient to provide the necessary initial coverage. A short tower with simple foundations is easier to erect, and a quicker erection will be cheaper. Using guyed-masts also makes for more rapid and lower cost site build, a strategy which has been deployed by Helios Towers in Tanzania.

MTN Group have been asking for sites which cost no more than US$10,000. Cost reductions of this magnitude are elusive, but reducing steel content, simplifying foundations, accelerating erection and matching brackets to equipment needs will all play a role in cutting costs.

Huawei’s RuralStar rural solution

The industry’s OEMs are also responding to demands for solutions which work in low ARPU areas. Huawei’s RuralStar solution was developed to overcome the high cost of providing 2G, 3G and 4G mobile connectivity in rural locations. The solution combines a number of different elements to achieve a low total cost of ownership. For backhaul, RuralStar eschews VSAT and uses a non line-of-site wireless solution to link rural sites to a site on the main network which shares its spare backhaul capacity. It uses a simple pole tower to reduce component cost and to make erection cheaper and easier, and it combines a small solar PV array with a battery back-up to reduce refuelling and maintenance requirements. For example, the RuralStar Lite, launched at Mobile World Congress in 2019 features power consumption as low as 200 watts, a tenth of a traditional base station. The low cost solution economises on power usage and therefore covers a lower population and smaller area than a traditional site, but still enables enough people to be covered cheaply enough for operators to earn a return on their investment in around three years


Making it pay

Rural sites have lacked investment not only because total revenues are low, but because it has been difficult to divide up the lower revenues so that everyone investing in a site can earn a return on their time and money invested. Business model innovation and a shift from capex-led investment by MNOs to opex-based or revenue sharing models led by network experts is enabling more rural sites to receive investment.

Africa Mobile Networks (AMN) was pointed to by our panelists as a key rural connectivity enabler (see infobox). AMN deploys its own capex to build a cell site at locations it thinks are commercial viable and connects them to a mobile network’s core network via VSAT on a revenue share basis. At sites it does not want to own it will still build sites for MNOs on but on a fixed priced opex-basis. 500 sites have been built and AMN is targeting 20,000 sites by 2030.

This model allows MNOs to retain use of their core systems and extend access to value-added services, while improving network efficiency. It also allows AMN to share in value generation and earn a return on its investment. Other firms offer similar models in rural areas. Alternative revenue streams can also support connectivity. In rural areas ISPs could support a Wi-Fi connection by supplementing it with “Freemium” access upgrades, or through selling advertising space online or on billboards.

There may also be other combinations of capex

sharing, opex sharing or revenue attribution which could open up more sites to investment. Experimentation will be essential and each panelist at the TowerXchange Meetup Africa 2019 was experimenting in their own way to try to advance this cause.

How to move forward

The ultimate challenge is economic. 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? Sparsely populated and very poor areas will remain hard to cover, but innovations in site design, cheaper radio-side technologies, and innovations in infrastructure sharing business models means that the other challenges are beginning to melt away.

Africa’s connectivity revolution has already proven a bright spot in the last two decades of global development, and advances to rural connectivity will see millions more people brought online over the next decade. Our panel and roundtable were excited by the opportunities, but changes will be necessary: to support this investment we will need to see a change in the regulatory environment, specifically more flexibility from regulators on quality of service so that network operators can innovate. New business models need to be supported by MNOs and towercos, active sharing must be allowed, indeed encouraged, in a rural context, and investors need to recognise the huge opportunity that still exists in African telecoms even at sites with subscribers who can only support an ARPU of US$2 or less per month. Those people need connectivity, and we can now bring it to them with economic models that make sense for everyone

Africa Mobile Networks

Africa Mobile Networks (AMN) is a rural infraco. AMN now owns and operates 500 sites through a commercial model based on a revenue share with operators. AMN offer mobile operators the chance to expand their networks without capex or opex risk because AMN builds, operates and maintains the sites and connects them to the operator’s core network. AMN is now also offering an opex-model which shares risks for sites more evenly. AMN operate in ten countries in Africa. To remain economical, AMN keep a tight control over the equipment they deploy, importing all their equipment from China and assembling in Africa to their own specifications. This combination of site design and business model innovation is what will enable greater rural connectivity in Africa. AMN has so far achieved 99.8% uptime. While it predominantly deploys single-tenant monopoles, AMN also builds 20m lattice structures which will be capable of supporting multiple tenancies at its most profitable sites. AMN is already operating profitably, and plans to reach 20,000 sites by 2030


Keywords: 4G, 5G, Fibre, IBS, Infill, Johannesburg, LTE, Leasing & Permitting, Masts & Towers, Research, SSA, Small Cells, Smallcell, Smart Cities, South Africa, Tangerine, Vodacom

Africa cannot leapfrog to 5G without first making cities fit for 4GUrban African telecoms is still full of challenges and opportunities, but discussion of leapfrogging to 5G is short-sighted when so many challenges remain in Africa’s cities

Urban connectivity in Africa

For the last ten years, towercos have played a crucial and growing role in connecting Africa’s swelling urban population through macro sites, leveraging backup diesel generators and microwave backhaul. All three will continue to play a major role, but street furniture, hybrid power and fibreisation must all grow in importance, and each new element will involve changes by MNOs, towercos and their partners in the telecom sector, local government and other landowners. The technologies and stakeholders involved will expand and the ecosystem will get more complicated.

Almost every country in SSA is now seeing 4G investment, even SSA’s poorer countries like Niger are seeing investment in 4G in the capital, Niamey. However, there is still limited support at the central or local level for investment in telecoms networks, in fact licence fees, taxes and slow permitting at a local level are among the principle inhibitors of telecom development. Engaging at a local level with municipalities and landowners will be essential to enable denser 4G networks to be rolled out widely and cheaply, and for 5G to become a reality in Africa.

Urban cooperation

Lawrence Boya, chief of Johannesburg’s Smart City programme sees both 4G and 5G as enormous opportunities for the city, and emphasised that the city needed to actively welcome the technology and get ready for investment. The City of Johannesburg

Read this article to learn:< How are cell sites evolving in urban areas? < What supporting investment is still required for 4G?< Options for municipality/towerco collaboration < How in building solutions might evolve in Africa < How 5G will change life for towercos in Africa

Sub-Saharan Africa is the world’s fastest urbanising region. Urban areas currently contain 472mn people, a figure which will double over the next 25 years (Centre for Strategic & International Studies, 2019). TowerXchange Meetup Africa featured a panel discussion and a number of roundtables looking at how urban infrastructure would evolve in Africa with the introduction of 4G and preparations for 5G. Lars Stuber, Founder of Smallcell moderated our panel with Nic Naidu of Vodacom, Marco Xu of Huawei, Lawrence Boya of Johannesburg City Municipality and Vinay Chaudhry of Tangerine, a Ugandan ISP.


Metropolitan Municipality will not be providing 4G or even 5G, but they have to help create the platform for the technology out of existing infrastructure.

Johannesburg has street poles, tall buildings and access to land, all of which are essential for telcos. Where street poles exist in Africa, they often have access to power, but not of the reliability and wattage required for a cell site, so they are not straightforward to adapt as cell sites, even if municipalities are cooperative. When the will is there, what is needed is more conversations between MNOs, towercos and the city about how infrastructure can be leveraged.

Other panellists were pleased by the reaction from Johannesburg to telecoms investment, as often municipal governments can see telecom investment as something to be regulated or taxed and not supported. For example, in Uganda and Tanzania where Tangerine’s Vinay Chaudhry has experience, many cities do not act like partners. For example, in one city in Tanzania the roads belong to two different organisations so wayleaves are complicated to acquire. Similarly, licences for telecom activities are expensive, and are treated as primarily sources of government revenue, not enablers of development.

Vandalism

Our South African panellists agreed that vandalism and theft were major issues for urban infrastructure in South Africa, and the issue is

widespread in other African markets too. In Johannesburg, infrastructure which benefits the community, including cell sites, are targeted by vandals, and increased security can only go so far in addressing this.

Theft and vandalism are high up Vodacom’s risk register, ranking alongside energy stability and energy supply in seriousness. Vodacom can spend 200mn Rand (US$14mn) a year replacing stolen batteries. Without a sense of common ownership, Lawrence argued, the vandalism would continue. Where the infrastructure is seen as belonging to someone else, people feel they can vandalise it.

Education and community engagement is crucial to keeping infrastructure safe; communities have to buy-in and see the value of the infrastructure.

When urban furniture is shared in the future, communities will need to be educated about the benefits and the system of sharing will need to be seen as fair and beneficial.

Investment in urban connectivity

In contrast to what has happened in Africa, Huawei’s Marco Xu informed us that in China, they introduced a policy dictating that fibre needed to reach 99% of cell sites, and a similar policy dictating mass tower fibreisation was introduced in Malaysia where fibre to sites and to buildings must reach more than 90%. With the introduction of 5G licences in June 2019 in China, landlords in China must now provide fibre to the enterprise and, for example, if an airport is publicly owned, it is now their responsibility to provide 5G for their tenants

“ “Theft and vandalism are high up Vodacom’s risk register,

ranking alongside energy stability and energy supply in

seriousness. Vodacom can spend 200mn Rand (US$14mn) a

year replacing stolen batteries


through agreements with a MNOs or a towerco. Even a local Mayor’s KPIs include how many 5G sites must be built and targets for coverage levels to be reached in next one to three years.

For example, Shanghai’s municipal government added 40,000 5G base stations within two years. For the Shanghai Mayor to report that he has hit his goal, he must make life easier for towercos and MNOs. In Africa there are no city level commitments, let alone country or continental plans to support 4G in this way, let alone 5G. This severely retards in building connectivity investments and prolongs bottlenecks in connectivity.

Vodacom’s Nic Naidu remarked that African mobile operators simply lack the budget to invest in fibre, 5G or indoor solutions on this scale. There are many offices and malls which could use improved indoor connectivity, in fact, the opportunity in South Africa is overwhelming, but a lack of capital means that China is not the best comparator for African telecoms investment.

In building solutions on the rise

In building solutions have not been widespread in Africa. African Towers has built a portfolio of 150 IBS in Ghana, and malls and office buildings in

South Africa are now seeing good quality indoor solutions, but where malls have needed coverage in Ghana, Eaton Towers found it easier to put up a tower next to the car park, rather than negotiate with the landlord.

Some landlords now understand that good connectivity increases the value of their property, supporting rental income and making their mall or office more attractive. However, some do not, and there has been conflict between MNOs and towercos seeking a sustainable model for in building solutions across Africa. In South Africa, MNOs have taken to working with landlords in order to own the connectivity in a location and resell it to South Africa’s other MNOs. Towercos have struggled to gain a foothold in the market in South Africa as the MNOs retain a strong position in the country.

Towercos are keen to enter the in building market in South Africa and are exploring options in other countries too. Deploying capital into large developments and then providing connectivity to MNOs on an opex-basis fits the towerco model well, and a single large landowner incentivised to enable connectivity might prove easier to work with than some municipalities. When 5G begins to come to Africa it will find an early home in major property developments.

5G in Africa

“What is 5G?” was the first question posed to our African 5G roundtable at TowerXchange Meetup Africa 2020. For a towerco, 5G will mean a spike

“

“

In building solutions have not been widespread in Africa. African Towers has built a portfolio of 150 IBS in Ghana, and malls and office buildings in South Africa are now seeing good quality indoor solutions, but where malls have needed coverage in Ghana, Eaton Towers found it easier to put up a tower next to the carpark, rather than negotiate with the landlord.


in weight, increased wind load, higher power consumption and additional amendments. Small cells are unlikely to be involved in the earlier stages of 5G rollout in Africa because macro sites are more likely to be used with Massive MIMO antennas.

Massive MIMO antennas are far heavier than traditional antennas, but can be affixed to traditional macro towers once upgraded. Moving to the 10x denser networks for 5G that have been suggested in the U.S. would be ruinously expensive in Africa, especially as it would require a substantial densification of distributed energy infrastructure as well as multiplying site counts, so the use of Massive MIMO antennas on existing infrastructure will be essential.

When it comes to power, Telstar in Australia has reported a doubling in power consumption at their 5G sites, from a baseline already much higher than at most African cell sites. The increase in wind load is harder to quantify as a lot depends on how high up on towers the heavier Massive MIMO antennas are installed, as stress on the tower doesn’t scale linearly.

Even if installed at low heights, new 5G antenna – some of which measure 50x300cm – will require strengthening of towers and perhaps even wholesale replacement if foundations need strengthening too. 5G also means fibreisation of sites, without which 5G’s famed uplink and downlink speeds will not materialise.

Our panel agreed that if towercos only look at 5G in only operational terms, they will be unable to

become the partners in digitalisation they seek to be. Towercos need to help create the right environment for 5G and support infrastructure development across the telecoms value chain.

Are African cities ready for 5G?

Africa is still a long way from 5G becoming a commonplace reality, not only because ARPUs are low, but because much of the cell site, backhaul and power infrastructure necessary is lacking. However, 5G is live, just, in Africa, with Vodacom launching some commercial 5G sites in Lesotho, where higher ARPUs, a cooperative regulator and good existing infrastructure made a launch relatively straightforward. While Vodacom’s Nic Naidu was pleased to discuss Vodacom’s success there, he

did not argue it would be possible to transfer this success cross-continent, although he did suggest that it Lesotho offered some interesting transferrable insights for South Africa, such as more available spectrum and a cooperative regulator.

The challenges of densifying networks for 5G is largely overstated. Because 5G has been rolled out in places like the U.S. first using mmWave, there is a widespread belief that 5G signal propagation is low, but that is not the case. In the 3.6GHz band propagation is low, but 5G can also use lower frequencies with familiar propagation distances through Massive MIMO antennas, as discussed at length at our roundtable on 5G.

Fibre backhaul is rapidly improving in South Africa, but outside South Africa fibre backbones are lacking and fibre to the tower is extremely limited. Huawei’s Marco Xu saw improvements in fibre as a key precursor for 4G, let alone 5G. But once fibre is in place for 4G sites it will be reusable for 5G. Municipalities will be key partners to making 4G and 5G a reality, if fibreisation is supported and rights of way made available then a more connected Africa can be a reality, but progress among municipalities to support telecoms investment is patchy at best.

There is much to be optimistic about for investing further in urban African telecom towers, but there is still much improvement necessary before 5G becomes a reality. So before asking if African cities ready for 5G, the question should be have they even made the most of 4G yet?

“

“

For a towerco, 5G will

mean a spike in weight,

increased wind load, higher

power consumption and

additional amendments


Keywords: Africa, Lease Rates, Leasing & Permitting, Logistics, Site Level Profitability, Site Surveys, Site Visits

Managing landlords andground leasesGetting leases right and engaging with landlords effectively can both create value, and avoid significant value destruction

Education, education, education

Every interaction between a towerco and a landlord is an opportunity for education. Education is what will prevent expectations diverging from reality and relationships breaking down. Towercos and MNOs spend all day thinking about telecom towers but almost always landlords think about their towers only when prompted, and that means responsibility for education lies with the towerco or MNO; you cannot expect landlords to find accurate and useful advice alone. Luckily that responsibility is also a major opportunity to make life easier for both parties, and something roundtable participants embraced.

From first contact when initially exploring sites to lease, to during site visits and when signing head leases, it is important to explain the long-term benefits of leasing land to the telecom industry. There can be a number of misconceptions around radiation and disruption from contractors which can usually be dealt with relatively simply, but if your landlord doesn’t understand the need for a stable long-term lease and access rights, then you are storing up trouble for the future. For example, if your landlord is concerned you are not in it for the long-haul, you can demonstrate the relative rarity of site decommissioning. Education and repeating simple messages is what our roundtable participants thought was most important.

Sadly of course, landlord-towerco relationships do not always go smoothly. Often negative experiences

Read this article to learn:< Opportunities to educate landlords< How to use time to your advantage < Relationship management tips for towercos and landlords < When to walk away

Get towercos and MNOs together to talk about their towers and one topic will always unite them: landlords and ground leases. Our roundtable at the TowerXchange Meetup Africa 2019 discussed the benefits of getting ground leases right and how cultivating long-term, positive relationships with landlords can prevent headaches. The most important ingredients are time and education. Aligning landlord expectations with towerco realities and MNO demands can produce win-win-win situations, but ignorance, rushing and greed on behalf of any party can scupper a potentially profitable multi-decade relationship. The roundtable was led by Simon Nyadzani, Site Acquisition Supervisor - Network Deployment and Chief Technology Officer - Property Management at MTN Group.


and counterproductive encounters are caused by misconceptions, misunderstandings and confusion. Taking a long-term view and engaging regularly and clearly will help you to explain in which areas you can and cannot negotiate and why. For example, an uneducated landlord might hear about 5G and expect an increase in lease rates, but a landlord who understands the business will know that 5G will have essentially no impact on his property. A landlord might see an additional tenancy as an opportunity to try and renegotiate a lease, or might see it as securing the deal he has for the long-term.

Taking your time

Education is a core element of lease negotiations. Time is another.

Rushing a lease negotiation has a number of downsides. You will have less time to educate your counterparty, you will have less time to discuss the details of the contract and identify likely areas of future trouble, and you will probably lack outside options. Your future landlord is also likely to realise you are in a rush and hold out for higher lease payments, or a shorter term expecting to renegotiate a higher lease later. Time also means you can talk to a number of different potential landlords and find the best option for you.

For towercos, it is best to find sites and start negotiating leases well ahead of a mobile network operator asking for sites (or demanding a site urgently). The extra lead time means you can get

your head lease right first time, without a head lease signed and a landlord who understands what is in that lease, you will make your life a lot harder.

Lease rates and terms

While it can be tempting to push down leases as low as you can in negotiations, towercos and MNOs present at the TowerXchange Meetup Africa advised against it. Landlords are counterparties you will need to work with for a decade, or longer, and ensuring they feel fairly treated is the only foundation to ensuring you are fairly treated too.

If you push down leases too far in negotiations, landlords will respond by requesting shorter leases which will prove more disruptive and expensive in

the long-run. Of course, sometimes landlords will want short leases regardless of the rate negotiated, and in those circumstances it is usually best to walk away. Similarly, a landlord who seeks to be overly involved in management of the site can be a sign of future trouble.

Real estate values are up globally, and land has performed better than equity in MNOs. That can cause a mismatch at the other end with MNOs not incorporating rental inflation into their expectations.

Relationship versus contract

As well as a financial relationship, the towerco-landlord relationship is operational. Gaining access to sites can be easy or it can be made difficult, and a source of long-term happiness or long-term stress. Some sites are easy to access, while one towerco suggested ensuring that whenever possible a separate access gate should be added, enabling access without passing through the landlord’s own right of way, thereby reducing friction.

But at times friction is inevitable. Usually this will have been anticipated and will be covered in your lease agreement, but whenever possible it was recommended to avoid referring explicitly to the lease. You want cooperation between towerco and landlord in the spirit of the lease, not always to the letter. Although a towerco should have all the access rights it needs, it is usually easier in the short-term and long-term to gain access without referring to a contract. A contractual relationship gives you

“ “Education is a core element

of lease negotiations.

Time is another


a steady foundation, but you also need to build a non-legal relationship so you can discuss things naturally and efficiently.

The personal relationship also gives you better visibility than a contractual one. Your people will know which landlords are helpful, who will turn-up with a tray of tea and cookies, who might try to deny access, and who might be awkward or rude. Being forewarned is forearmed. Likewise a landlord who knows you well can keep an eye on your site for you.

Depending on the market you might even want to go above and beyond. In Atlas Tower’s early years they

sent holiday cards to their landlords. Although the consensus at our roundtable was that a holiday card might just remind a landlord that it was time for a lease renegotiation!

You cannot always rely on landlords and leases being straightforward, but that difficulty can be turned into an advantage. MNOs are digital companies, not real estate firms, so the expertise and focus which towercos can bring to lease management is an opportunity to add value for MNOs. While it is one of the least glamorous elements of the towerco business, lease management is also one of the most critical, our roundtable concluded

“

“Friction is sometimes inevitable. Usually this will be covered

in your lease agreement, but whenever possible it was

recommended to avoid referring explicitly to the lease

www.towerxchange.com

ESCO Roundtable 202024-25 March, Casablanca

Meetup Europe 202019-20 May, Barcelona

Meetup Americas 202023-24 June, Boca Raton

Meetup Africa 202013-14 October, Johannesburg

Meetup Asia 20208-9 December, Singapore

Meetup MENA 202126-27 January, Dubai


Keywords: Africa, Africa & ME Research, Best of TowerXchange, Build-to-Suit, Carve Out, ESCOs, Editorials, Ethio Telecom, Ethiopia,Etisalat, Investors, MNOs, MTN, Market Entry, Market Forecasts, Masts & Towers, Network Rollout, New license, Orange, Safaricom, Sale & Leaseback, Towercos, Vodacom

Ethiopia Focus Group report:what we know about opportunities in the liberalising market so farBy the end of Q2 2020, three MNOs should be active and towercos will be on their way to adding 5,800 towers over the next three years

Why now?

Ethiopia has averaged over 10% annual GDP growth over the last decade. Thanks to a more stable government and a series of relatively successful Five Year Plans that have been aimed to improve agriculture, infrastructure, logistics and global connectivity, Ethiopia’s economic growth has outperformed almost every other economy in Africa, and much of the rest of the world.

Now home to over 100mn people and Africa’s last major telecoms monopoly, the stage is set for telecoms liberalisation and a resultant surge in network investment. In April 2018 Abiy Ahmed became Prime Minister on a reform ticket and rapidly set about transforming society, freeing journalists and opening up the economy to outside investment. These efforts have seen Abiy Ahmed awarded the Nobel Peace Prize.

Worried Ethiopia’s growth would fade, Ahmed has moved to reinforce Ethiopia’s economy by privatising major state owned enterprises, beginning with Ethio Telecom. Ethio Telecom’s privatisation is not only a test case, which gives it more credibility than other privatisations which have failed in Africa, it is also a key enabler of Ethiopia’s plan to boost its ICT sector, which gives it additional political support.

Despite some political instability and currency depreciation (the Birr has lost over 60% of its value versus the U.S. dollar in the last decade), Ethiopia remains the largest unliberalised telecoms market in the world, a sure sign of pent up demand for network investment that is on the brink of being unlocked.

Read this article to learn:< The reform context in Ethiopia < A potential timeline of events < Major players looking to get involved < Projections for net new sites < Energy requirements in Ethiopia < Risks and downsides to mitigate

Is Ethiopia about to host the next ‘land grab’ for the tower industry? That was the view at the TowerXchange Meetup Africa’s Focus Group on Ethiopia. After considerable growth from 2013 to 2016, telecoms network investment slowed, leading to a new push by the government to part-privatise the incumbent telecoms operator and issue two new licences to kick start a telecoms boom.

Investment by towercos is likely to be central to enabling rapid network expansion and densification in the country, and thousands of new sites will be built over the next few years. Updating our last editorial on Ethiopia with insights from our Focus Group, TowerXchange examines the opportunity.

By Matthew Edwards, Managing Director EMEA, TowerXchange


What Myanmar can teach you about Ethiopia

Parallels There are obvious parallels between Ethiopia and Myanmar, which was the last monopolistic telecom market to be liberalised, enabling two international MNOs to leverage towerco partnerships to deploy networks and transform the economy. Phil Cooper, ex-CFO of Apollo Towers in Myanmar shared his thoughts in Johannesburg on what lessons Myanmar has for those seeking to enter Ethiopia.

Liberalising Myanmar’s telecom liberalisation story began in 2012 when a foreign investment law eliminated many restrictions and paved the way for international companies to enter the country. A new Telecommunications Act followed in 2013, heralding a fiercely competitive process where 91 companies bid for two MNO licenses, Telenor and Ooredoo emerging victorious, with their licenses awarded in 2014. In the subsequent five years, the number of mobile subscribers increased by 743% (from a notably lower base than Ethiopia), and teledensity rose from 13% to 102.6%. The number of towers in Myanmar increased from ~1,500 in 2014 to 17,144 today, 11,244 (65.6%) of which have been built by towercos, with deployed fibre increasing from 7,600km to 68,000km.

Timings Ethiopia is almost twice the size, and the population is almost double that of Myanmar, but the similarities in process mean it is a worthwhile comparator. For example, advisory firm Roland Berger are fulfilling the same role in Ethiopia advising on the licence process as they did in Myanmar. Similarly, as in Myanmar, timetables have slipped. A licence process which was originally mooted to be complete by September 2019, will likely be complete by July 2020. Phil Cooper suggested taking all anticipated deadlines, and adding 50% to them.

Education Although Ethiopia’s telecoms sector is much more advanced than Myanmar’s was, education will remain key. Establishing a trade association for the towercos should be an early priority. Just because the liberalisation will be big news to the industry and is important to the Prime Minister, it does not follow that information or processes will cascade down to ground level. A trade association can help smooth the permitting process and educate local bureaucrats – turning them into enablers, not blockers.

Partnerships At TowerXchange’s Focus Group, Phil Cooper also emphasised the need to be selective with vendors, and to work closely with those you do select. You are going to be in this together facing a number of challenges which will require quick thinking, flexibility and follow through. Similarly, working with multi-lateral agencies like the IFC, the World Bank or regional development bodies helped manage political risk in Myanmar as it was keen to burnish its global reputation, and the same will be true in Ethiopia. Finding contacts in central government that have bought in to the project will also help.Land Site acquisition in cities and later in rural areas will also be an essential part of the process and difficult. Land ownership and permitting processes were murky in Myanmar, and will be little clearer in Ethiopia where the government retains final ownership of the land even if leases will be signed with local landlords.

Locals Engaging local talent was a huge help in Myanmar, as was engaging with expats returning home, well trained and educated from their time in the West. A similar, if larger, expatriate community is available to draw on for Ethiopia. Unlike Myanmar though, Ethiopia has a domestic manufacturing base, which can supply steel structures, some quality civil engineering and domestic universities providing engineering graduates to work with – all of which will make Ethiopian telecom pioneers’ lives easier than it was in Myanmar


Famous for the ancient empire of Aksum, Emperor and King of Kings Haile Selassie, long distance running and a series of disastrous 1980s famines, Ethiopia has a long history of being in the news, often for the wrong reason. So it is nice to write about the positive changes taking place, and they are positive changes to be built on a solid foundation of infrastructure – starting with telecommunications.

On the ground in Ethiopia

The most reliable information we have on the level of coverage in Ethiopia comes from Ethio Telecom’s own reports. As of July 23rd 2019 Ethio Telecom had 41.9mn mobile subscribers – 19.6mn 2G only, fewer than half a million 4G subscribers, and the remainder on 3G – totalling 38.8% of the 108mn population. 2G coverage has reached 85% geographic coverage, while Ethio has achieved 66% 3G population coverage. There are 332 4G sites, all in Addis Ababa. It is clear there is substantial room for further investment to expand 2G coverage, overlay 3G and rollout 4G beyond the capital.

We are yet to find a precise and reliable count for towers in Ethiopia, but the range of credible counts range between 7,500 and 8,500. In fact, we believe one of the delays in the privatisation process of Ethio Telecom is the conducting of a proper count and audit of their existing sites and business through KPMG.

Many of these sites, particularly the rooftops sites common in Addis and other major cities, are often unshareable. The questionable structural capacity for sharing of Ethio Telecom’s existing towers is one of the major unknowns facing future telecoms

rollouts and network design. Few of the existing sites can take upgrades, and most of those that have space for extra antennae cannot accommodate three operators as currently configured.

Another source of uncertainty, revealed at TowerXchange’s Ethiopia Focus Group, is around ground leases, especially on rooftop sites. At the moment, Ethio Telecom has a soft form of eminent domain, defined as the right of a state owned entity to expropriate private property for public use, which gives them access to most sites they want. This is not a viable long-term process for international mobile operators and towercos who dislike expropriating land and prefer legally sound leases for their cell sites.

While Ethio Telecom does pay rent on some sites, on others it does not. These sites do have signed leases but landlords have not thought to – or have not been able to – monetise many leases. Landlords are not thinking about site acquisition or lease negotiations at the moment, but they will start to once international operators and towercos enter the market. For example, as revealed at TowerXchange’s Ethiopia Focus Group, in Myanmar towercos asked the country’s MNOs to not come on site visits because “their logos look like dollar signs to locals”!

The network of Ethio Telecom has been divided into 12 regions for network development. ZTE provide the network equipment in two regions, Ericsson in two more, and Huawei takes the lion’s share of the

Ethiopia – TowerXchange central projections for cell site and power, year end


3,000 6,000 9,000 12,000 15,000

2019

2020

2021

2022

Ethio Tel ESCOs Towercos

6,500

7,000

7,250

7,300

1,750

2,000

3,000

4,500

1,500

1,500 1,000


business, supplying equipment in eight regions. Each region saw considerable growth, from a total of around 3,000 towers in 2013 booming to around 8,000 in 2019. Over a thousand towers a year were added in the key years of 2013-2016, with a decelerating pace of build ever since.

To reach comparable number of subscribers per tower as Nigeria currently, Ethiopia would require an additional 7,000 towers. However, because towers in Nigeria are better suited to sharing than towers in Ethiopia, that figure of 7,000 may have to be augmented by the strengthening or rebuilding of many existing towers, so the total number of new site builds could be over 10,000.

To provide effective 3G and 4G coverage, Ethiopia will require a total inventory of over 30,000 towers by 2029, it was suggested at TowerXchange’s Ethiopia Focus Group.

More conservatively, TowerXchange still predicts 5,800 new sites will be built by 2023, based on each of the three licence holders adding 500-1,000 towers per year, inclusive of Ethio Telecom undertaking a substantial programme of rebuilding and strengthening. This is a conservative forecast as Ethiopia added over 1,000 towers in several years between 2013-16, and that was without outside capital, towerco and international mobile operator expertise.

Backhaul

Ethio Telecom has over 20,000km of fibre in the country and three fibre links to the rest of the world through Kenya, Djibouti and Sudan, including a new link along the Dijbouti Railway to the Djibouti landing point. Once again, substantial new build is required, and Dark Fibre Africa and Liquid Telecom are both rumoured to be interested in investing following liberalisation.

In 2010, Ethio Telecom selected Gilat to provide satellite backhaul on remote sites, and other satellite backhaul providers are keen to enter the market to support rollout of network extension programmes and achieve whatever coverage targets the regulator sets.

Power in Ethiopia

It is not clear what proportion of Ethiopia’s cell sites are on good grid, on unreliable grid connections and off-grid, but grid stability is no better than in much of Sub-Saharan Africa. According to the CIA World Factbook, only 85% of the country’s urban population has access to electricity, and that dips to 27% in rural areas. Poor access to power in rural areas suggests that the initial, urban-centric phases of new tower rollout could to some extent rely on grid connections, but later stages will require many sites which are off-grid.

A number of large renewables projects are underway, including solar farms and The Grand Ethiopian Renaissance Dam. This megadam will more than double Ethiopia’s annual generation from

A very short history of Ethio Telecom

Ethio Telecom was formed in 2010, and was previously known as the Ethiopian Telecommunications Corporation, a division of the Ministry of Post, Telephone and Telegraph. It is one of the last monopoly telecoms providers in the world, and the largest. It is one of the ‘Big Five’ group of state owned corporations in Ethiopia, along with Ethiopian Airlines, the Commercial Bank of Ethiopia, Ethio-Insurance, and Ethiopian Shipping Lines.

The proposed privatisation and removal of barriers to entry in telecoms is the spearhead of a reform effort which will open up the whole Ethiopian economy. Its position in the broader strategy of the Prime Minister, H.E Abiy Ahmed (PhD), which lends credibility to the proposed privatisation. From 2010 until 2013, Ethio Telecom was managed by France Télécom, Orange’s predecessor. This was the beginning of a professionalisation of the company. Local control was reintroduced in January 2013. From 2013 onwards, Ethio Telecom embarked on a large-scale state-backed expansion programme of investment which saw coverage expand to around 85% of the population and 41.9mn mobile customers. In its July release of its annual results, the company announced it made 36.3bn Ethiopian Birr (US$1.27bn) in revenue and a 67% EBITDA margin of 24.5bn Ethiopian Birr (US$860mn). However a national shortage of hard currency, required for modern telephone network technology, means the state-backed strategy has likely achieved all it can, and Ethiopia requires outside investment


11 GWh to 27 GWh, however political wrangling by Nile states, a delayed completion date, and an unreliable transmission network will mean telcos will be unable to rely on this new power source for many years to come.

Power outages began to increase in length and frequency in 2019, but the two state run companies that generate and distribute energy have not explained the cause, nor any remedial action plans.

To manage its power issues, Ethio Telecom issued a 1,300-2,500 site ESCO RFP in 2019. From TowerXchange’s understanding it is not only management of power that is the problem, but the financing of new energy equipment and professionalisation of site management which is required. Firstly, due to exchange rate controls, Ethio Telecom has difficulty accessing hard currency, and is actively seeking ESCO partners that can help it finance its energy capex. Secondly, sites have been erected and maintained to extremely variable standards, with old generators and air-conditioning units simply disconnected and left on site. It was also suggested that past dangerous power installs would require remedial work.

We also learned that availability is very low in Ethiopia, with Ethio Telecom’s RFP for an ESCO partner proposing a Service Level Agreement (SLA) availability of just 96%, which would be a significant improvement on current standards. Some sources suggested uptime was as low as 82% on many Ethiopian sites. At the moment, in-house teams at Ethio Telecom manage its cell site power, but that will soon change. It is likely more than one ESCO

partner will be selected to work with Ethio Telecom due to the size of the contract.

Forex risk

The risk of the continued devaluation of Ethiopia’s currency is the elephant in the room in terms of investment in Ethiopian communications infrastructure. The Ethiopian Central Banks runs the Ethiopian Birr on a managed float, gradually devaluing it. Although Ethiopia’s broader economy has grown strongly over the past decade, exports have not been as strong, causing a gradual devaluation and a depletion of foreign currency reserves.

However, thanks to improved infrastructure, a booming agricultural sector, and strategic investments in the garment and automotive industries, the situation may improve in the medium term. But to start with it will be easier to put money into Ethiopia than get it out, and only those with a long-term perspective will reap the rewards of their patience.

Local partners

Key local partners in the banking system will be required to access hard currency. Those requiring to move money into and out of Ethiopia will be required to find a local bank to manage their

Ethiopia Birr versus the US Dollar

2015

0.050

0.055

0.045

0.040

0.035

0.0302016 2017 2018 2019


account, and apply for access to foreign currency. Telecoms is a privileged sector, but there is no free convertibility as in developed markets.

Similarly there are restrictions on shipping to Ethiopia, which has to be managed by the Ethiopian Shipping Line and paid for by a local customer. This reduces the flexibility of importing power equipment and other passive infrastructure. Internal logistics can be managed in a more conventional manner, but importation will require some changes to business as usual for towercos and MNOs seeking to invest in Ethiopia.

There are also advantages to operating in Ethiopia. The country hosts two established tower manufacturers, one factory which is brand new and capable of producing 1,000s of towers a year at full

capacity. Similarly, Ethiopia is producing a large number of engineering graduates and has a sizeable existing civil engineering industry developed over the last decade of infrastructure development.

What is the liberalisation timeline?

Announced in drip-fed statements that revealed the gradual formation of policy, a firmer view of the timeline for the liberalisation of the Ethiopian telecom market has now formed. While Prime Minister Abiy Ahmed hoped to have the liberalisation of telecommunications complete by the end of 2019, reality dictates it will take longer. But one step at a time the government has moved towards a market opening, and the initiative has now achieved ‘launch velocity’ such that it is unlikely to be reversed.

At the start of July 2019, the government proclamation on telecoms regulation became law. In September, we learned that regulator-designate Belcha Reba had been officially appointed as Director General of the Ethiopian Communications Authority. This is a crucial step towards issuing new licences in a country which previously lacked an independent telecoms regulator to issue such licences.

It was originally mooted that just one licence would be issued, but it has now been confirmed that two greenfield unified licences for mobile network operators will be issued. The final timeline remains unclear, with the regulator preferring a more rapid timeline, and the Prime Minister recently suggesting timelines may be pushed back until July. With elections due in May, it is possible that the

2014 20162013201320102010 2018 2018 2019

2019 2019 20202019 2019 2020 2020

Coverage expands to

50%

Coverage expansion slows due to lack of

funds

Coverage only 28%

Ethio Telecom reverts to local management

France Télécom take over

management

Ethio Telecom formed

Abiy Ahmed becomes Prime

Minister

Telecom liberalisation

process begins

January: 85% 2G coverage

achieved

July: Independent

regulator formed

September: Balcha Reba appointed DG of the

Ethiopian Communications Authority

Q1: Two new international

licences expected to be issued

October: Stakeholder consultation

process beings

November: Consultation

ends and licence process to begin

Q1-Q2: Ethio Telecom predicted

to be 49% privatised

Q3: New phase of network

construction begins



competition will be complete by the end of March, or be subject to a longer delay.

A consultation on the liberalisation was launched in October to conclude in November, which should resolve timings. Roland Berger, an advisory firm which ran the licence process in Myanmar, is doing the same in Ethiopia, and so a similar two part process is likely. TowerXchange understands that Nicholas Teisseyre who ran the process for Myanmar is running the project for Ethiopia. This again points towards the licence process finding a consensus on the need to reach an advanced stage by March or April next year.

Likewise, the privatisation of Ethio Telecom has been agreed, although we learned in our Focus Group that the final form of the privatisation remains unclear. We still expect to see 49% of Ethio Telecom sold to an international mobile operator, but a complete sale or majority sale can no longer be ruled out. Ethio Telecom remains a major employer and conduit for development policy, it employs 22,000 Ethiopians and enjoys privileged access to hard currency, so the final privatisation plan will only emerge after much wrangling.

Following advice taken from the World Bank and some industry insiders, it is likely that Ethio Telelcom will be split into a Serviceco and an Infraco to encourage the sharing of towers and other infrastructure. Were this to take place international towercos would show considerable interest in acquiring Ethio Telecom’s assets. However, final plans for the assets remain unclear, as does to what degree all of Ethio Telecoms infrastructure will be

rendered shareable. TowerXchange understands that draft regulations have marked Ethio Telecom as a “dominant player” with duties to share its passive and active infrastructure, but a final determination has yet to be made.

Who are the major players?The names of those mobile network operators most interested in Ethiopia is well known. Who takes the licences and who wins the ownership of Ethio Telecom remains to be seen.

MTN would be on anyone’s list for prospective Ethiopia licence holder; active in Sudan and South Sudan across the border already, proficient in both large and operationally challenging markets and well established across Africa.

A Vodacom/Safaricom Special Purpose Vehicle is also in the running. Abiy Ahmed is said to be particularly enamoured with Safaricom’s M-Pesa and the two have had an SPV established for such joint bids.

Other bidders could include Orange, which is the only international MNO to have experience in Ethiopia thanks to France Télécom helping establish Ethio Telecom from 2010 to 2013; and Etisalat, whose Emirati owners have had a long economic interest in Ethiopia and other states of the Horn of Africa. STC, NTT Docomo and China Mobile have all also been rumoured.

Both MTN and Vodacom have made it clear they would prefer to work with towercos to rollout their networks rather than deploy their own capital into passive infrastructure, while Ethio Telecom’s ESCO

RFP shows their appetite for outsource some or all of their network operations management, perhaps extending to towers. TowerXchange also understands that Helios Towers, IHS Towers and American Tower have all expressed interest in Ethiopia. CREI, an ESCO owned by managed service provider i-eng, has responded to Ethio Telecoms ESCO RFP, alongside IPT PowerTech, Voltalia and Energy Vision.

Conclusion

While predictions are always dangerous, TowerXchange feels confident Ethiopia represents the most compelling greenfield opportunity for the tower industry (rivalled only by the Philippines). Every African country has unique culture and so there will be no “cut and paste” from an existing market, but participants at the TowerXchange Ethiopia Focus Group felt confident that the lessons learned elsewhere in Africa meant that the supply chain would be able to deliver in Ethiopia too.

There is always the chance of political unrest or upheaval upending the table in the developing world, but the direction of travel is clear. Ethiopia may well be the best thing to happen to the tower industry since Myanmar’s liberalisation five years ago.

TowerXchange would conservatively estimate the opportunity for passive telecom infrastructure investment in Ethiopia in 2020 at a quarter of a billion dollars. With ongoing investment at a similar level for a number of years


Sponsors and exhibitors for TowerXchange Meetup Africa 2020

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

STULZ offers a full line of precision air conditioners, air handlers, ultrasonic humidifiers, desiccant dehumidifiers and custom solutions following our philosophy of “User Driven – Custom Designed – Purpose Built’.

Data centers, clean rooms, Edge , Telecom and Tower applications and Industry 4.0, no matter your application, STULZ has a solution. STULZ has developed fully loaded Micro and Modualr Data Centers specifically for the Telcom and Tower Application.

Please visit our website for more information or email us [email protected]

www.stulz-usa.com

Bronze Sponsor

Tarantula

Tarantula is a proven market leader of telecom site management solutions and a trusted advisor and long-term partner for tower site owners worldwide. With extensive industry knowledge and customer understanding, Tarantula supports and empowers its customers to build profitable and sustainable businesses. Through an end-to-end, purpose-built telecom site portfolio management solution and knowledge-driven services, Tarantula helps telecom site owners to monetize their towers. Tarantula is a vital part of the daily management of more than 300,000 towers and US$25 billion worth of assets across the world. Tarantula is owned by Volaris Group, an operating arm of Toronto-based software and services provider, Constellation Software Inc. Tarantula´s offices are situated in

Bronze Sponsor

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 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.

www.iptpowertech.com

Bronze sponsor

STULZ USA

STULZ is a leading global high energy efficiency solutions provider for all telecom and mission critical applications. Our expertise is in designing and manufacturing the precision temperature and humidity control solutions.

Gold sponsor:


Singapore, Stockholm, London, and Hyderabad. For further information, please visit: www.tarantula.net.

http://www.tarantula.net

Exhibitor

Abloy Oy

Abloy Oy is one of the leading manufacturers of high quality locks, locking systems and architectural hardware and the world’s leading developer of high security electromechanical locking technology. For decades Abloy has delivered security solutions to protect telecommunications sites and assets. At its simplest level, the CLIQ® system eliminates the risks and expense caused by lost or stolen keys. The web managed system also facilitates financial savings, reduces CO2 emissions and provides significant time saving with ‘smart’ infrastructure integration, generating a fast pay-back and high ROI. Abloy operates in all continents and several major companies have chosen ABLOY as their trusted advisor and the solution provider in the rapidly developing and changing telecom industry.

www.abloy.co.uk/en/abloy/abloy-co-uk/solutions1/telecommunications

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 center.

Sponsors and exhibitors for TowerXchange Meetup Africa 2020Exhibitor

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

ieng Group

I engineering Group provides end-to-end engineering infrastructure solutions to the telecommunications and power industries across Africa, the Middle East and Southeast Asia. Employing a dynamic and personal approach, we have grown rapidly since our inception in 2007 and are now operational in 18 countries: Afghanistan, Algeria, Cameroon, Chad, Congo, DR Congo, Ethiopia, Ghana, Guinea, Kenya, KSA, Lebanon, Liberia, Myanmar, Nigeria, Pakistan and Uganda. We offer O&M

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.

www.asentria.com

Exhibitor

Caterpillar

When it comes to unmanned operations in remote locations you need a system you can rely on and easily access. Cat® power generation equipment is manufactured for non-stop power and customized to meet specific site requirements. We can configure and install a solution that delivers the right power for your operation.

Our modular sound attenuated enclosures keep you in compliance with noise level regulations, deter fuel theft, offer protection from the elements, and still allow for easy repair and installation. All Cat generator sets come backed by our global team. Get parts, preventive maintenance, diagnostics, and emergency service specific to telecom applications. It’s our job to provide power that does its job.

www.caterpillar.com/


services on one hand (Active and Passive) as well as Full Turnkey Site Builds and Fiber Optic. Today, we maintain over 13,000 sites for Africa’s largest MNOs and all 4 towercos.

www.ieng-group.com

Exhibitor

INCELL International

INCELL International creates a Smart and Sustainable Future by transforming battery backup in telecom to lithium. Incell is a leader in high performance lithium batteries for the global telecom market through innovation and product quality by developing advanced lithium batteries for telecom sites’ backup power. With headquarters and R&D in Sweden, manufacturing in Mexico, sales offices in the USA, Europe, and Asia, Incell services telecom customers around the world.By developing and providing the latest in battery monitoring and analysis, Incell provides cutting-edge smart lithium power backup solutions, addressing both the telecom replacement market as well as new macro and small cell sites.

www.incellint.com

Exhibitor

iQron

SMALL WIND GENERATORS SUITABLE TO BE MOUNTED DIRECTLY ON TOP OF THE BASE STATION.

Sponsors and exhibitors for TowerXchange Meetup Africa 2020the latest technology, commit to developing new products to help customer solve problems and enhance customer value.

www.nanhua.com

Exhibitor

NorthStar Battery NorthStar is a global leader in designing, manufacturing and deploying a wide range of batteries and energy storage solutions. Our mission is to deliver reliable and sustainable power to the world.

Using advanced technology, our products have been built to ensure longer battery life, lower operating costs and reduced environmental impact. We maintain a global presence with major operations in Sweden, USA, China and the Middle East and distribution and service centers in Latin America, Europe, Africa and APAC.

Visit our booth for more information about our innovative products including NorthStar ACE® – Wireless Battery Management.

www.northstarbattery.com

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

iQron, based in Germany, designs and manufactures unique small wind turbines for telecom towers. These units are optimized in terms of weight, windload, efficiency and sustainability. Mass produced to the highest industrial quality, and coupled with best-in-class costs per kW, provides for an exceptional ROI !!

Our turbines, supplied with electronic control devices and very reliable safety systems, have a life span of at least 20 years!!

iQron´s small wind turbines, are a perfect fit to hybrid energy systems, and reduce one’s CO2 footprint, immediately. Visit us live at our stand at theTowerXchange African Meetup 2020.

www.smallwind4telecom.com

Exhibitor

NANHUA Electronics Co., Ltd.

NANHUA is an independent enterprise with modern management which is located in Shanghai.

We design, manufacture and sell world leading signal, lighting and control products which be applied in industrial areas since 1990, and focusing on aviation obstruction light system for telecom towers from 2007, has full experience in the complete line of cost-effective obstruction lighting and control solutions. NANHUA products have been proven to be professionally designed and highly reliable. NANHUA will continue to maintain reliable, safety and simple R&D concepts, combine with


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

PRECISION INDUSTRIES

PRECISION INDUSTRIES have grown to be a well-recognized and one of the reliable manufacturers of diesel generating sets in the world. PRECISION INDUSTRIES is UAE based, who possess the Engineering

Know-How as a manufacturer and solutions provider in energy sector, especially TELECOM generating sets which are customized as per client specs from 10 to 60 kva.Certified (OEM) for major international brands such as Perkins, Cummins, Deutz, Kubota, Stamford and Leroy Somer.

PRECISION INDUSTRIES Own now an extensive network of distributors and dealer’s spreader through the GCC, Middle East, Africa, CIS countries and Far-East Region.

https://pi-dubai.com/







See you at our future events!


http://www.polarpower.com


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

The TowerXchange Meetup Africa 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 at the event you open up a world of 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 2020!

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

mailto:skerr%40towerxchange.com


TowerXchange Meetup Africa 2020 exhibition preview

83 Abloy Oy

85 Asentria

88 Bladon

93 Caterpillar

97 HIMOINSA

100 ieng Group

103 IPT PowerTech

106 NANHUA Electronics Co. Ltd.

108 NorthStar Battery

113 Polar Power Inc

118 STULZ GmbH

120 Tarantula

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 journal this

section gathers further interviews

with a selection of the top service,

solution and equipment providers that

will be joining TowerXchange Meetup

Africa in 2020.


A flexible solution for accesscontrol in the Middle East and Africa

TowerXchange: Please tell us about Abloy’s activities in Africa and the Middle East. Which countries are you active in?

David Knight, Area Director, Africa, Abloy: Abloy Oy provides high security locking systems to the telecoms market in Africa. We provide solutions that can combine electromechanical systems and mechanical systems. This means most clients start with the Abloy high security mechanical locks and keys. The keys cannot be duplicated and can be set onto a master keying system. This system is extremely effective in sites which are shared. A case in point is in South Africa where most sites are shared between five telecom companies. Everyone’s key can open the main gate and then only opens their own equipment (BTS or BBS). This method gives the client a cost advantage as when upgrading to an electromechanical system their previous investments would not be wasted, and can be used in the electromechanical system. Abloy is active in most countries in the Middle East and in the majority of Sub-Saharan countries, namely, SADC countries, East Africa (Kenya, Tanzania, Uganda and Ethiopia) and West Africa (Nigeria, Ghana, Democratic Republic of Congo and Congo).

TowerXchange: Who are your main clients? And how does the demand change between operators and towercos?

David Knight, Area Director, Africa, Abloy: Our clients are mobile network operators and the tower companies. There is a huge demand from

Read this article to learn:< Abloy Oys history and footprint in Africa and the Middle East< How security requirements vary across the region and between customers< Urban compared to rural sites and their specific risks< The award-winning Abloy CLIQ Connect and other top range products

Keywords: Abloy Oy, Access Control, Africa, Africa & ME, Monitoring & Management, Site Surveys, Urban vs Rural, Who’s Who

Abloy Oy’s PROTEC2 CLIQ system combines the benefits of electromechanical and mechanical solutions

Abloy Oy’s high security mechanical locks and keys are widely used to secure cell sites across the MEA region. There is a smooth product progression path, without wasting the original investment, to Abloy Oy's electromechanical PROTEC2 CLIQ solution. This is supplemented by CLIQ CONNECT, which manages full access rights and provides an audit trail.


the operators who require site efficiency and long term solutions. There is a growing trend where there is a need for an integrated solution within the sites. Over the last couple of years, with the towercos purchasing, and taking over operators’ towers, the demand has certainly moved towards the towercos. The “big 4” towerco companies, IHS, Eaton Towers, ATC and Helios are certainly the main players, however, the operators still have a clear presence in the Sub-Saharan region.

TowerXchange: How does the demand for security solutions differ between different countries across the MEA region?

David Knight, Area Director, Africa, Abloy: In certain countries there is a high demand for security. There are two types of scenarios; first, there is a need for controlling access into our clients’ infrastructure, such as the base station sites. Our solution gives the client the ability to determine who actually has entered a site. The second scenario deals with re-enforcing security. In most cases this means the Abloy solution must provide stronger locks which cannot be easily cut. We have also cooperated with cabinet manufacturers to create integrated cabinet locking solutions.

TowerXchange: How do you find security issues vary between rural and urban areas?

David Knight, Area Director, Africa, Abloy: The security issues between the rural and urban

sites differ greatly. We have realised that there is a higher theft in rural areas than urban areas. Rural area sites are generator driven, as opposed to direct electricity in the urban areas, therefore a continuous supply of diesel is required. The theft of diesel is a major headache for the towercos and operators. Due to the fact that the rural sites are generally outside of a populated area, anything of value is vulnerable to theft. In these areas, where thieves have more time on their hands, the demand for re-enforcing security is more prominent than controlling access.

TowerXchange: How does your product differ from others in the market?

David Knight, Area Director, Africa, Abloy: We are an established global company with 110 year track record in protecting critical infrastructure. Our PROTEC2 CLIQ is a proven solution with over 1000 customers worldwide, 500,000 cylinders and 500,000 keys already delivered and in use.

We are also the only company who has introduced a product progression plan. This means clients can install a mechanical solution with the intention of upgrading these products to electromechanical products.

PROTEC2 CLIQ is the only product in the market where one solution combines the benefits of electromechanical and mechanical solutions. The CLIQ CONNECT feature provides access rights and logs audit trail in any situation, whether you are working at an online or offline location. Not only is it a highly advanced electronic key controlling system, but as an extra level of security, we have the ABLOY PROTEC2 mechanical platform backup. So, if ever your electronic system is compromised your assets remain secure with the mechanical platform backup.

We are also able to provide a complete solution from padlocks and cylinders to door closers and electric locks to secure and protect our clients’ facilities, infrastructure and assets

“

“

We are also the only company who has introduced a product progression plan. This means clients can install a mechanical solution with the intention of upgrading these products to electromechanical products


Ensuring RMS systems work in the fieldHow Asentria bring extensive expertise in trials to ensure a solution is fit for purpose

TowerXchange: Please can you introduce Asentria and their portfolio of solutions for the telecom sector - what is the company’s origins?

Jon Baars, Director of Sales and Marketing, Asentria: Asentria is a thirty year old hardware manufacturer based in Seattle, WA USA. We began by designing and manufacturing hardware devices to integrate to PBX (voice) switches, and deliver alarm and telemetry data. Telecom operators began to use our devices for different purposes than just for PBX. The US military was also an early user. We began to transition to working more specifically with US-based mobile network operators to monitor their remote locations; power, security, and environmental issues at cell sites primarily. We have installations with two US based MNOs with approximately ~10,000 sites apiece currently in operation, and other worldwide networks with hundreds or thousands of sites deployed. Our current customers refer to us as part of “cell site optimisation” efforts. It is far beyond just alarming now.

TowerXchange: What is Asentria’s go to market strategy?

Jon Baars, Director of Sales and Marketing, Asentria: We are used in many different telecom networks; rail or highway projects, oil and gas, utilities, and others. Our focus, however, is on MNOs and tower companies. There is a large amount of upfront integration and support necessary in order to get the most sophisticated projects up and running. The primary product we sell is hardware, but there is

Read this article to learn:< How Asentria has evolved into more than just a hardware supplier< The number of sites using Asentria systems in operation worldwide< The mistakes many companies make in selecting an RMS system< How trials and selection processes should be designed to minimise the risk of failure< What differentiates Asentria from its competitors

Keywords: Asentria, Monitoring & Management, O&M, Operational Excellence, RMS, Site Level Profitability, Site Surveys, Skilled Workforces, Who’s Who

Asentria, with over 100,000 sites in operation have become an integral part of their customer’s cell site optimisation efforts. Bringing extensive experience from working on fully operating networks, Asentria’s application engineers understand what is essential to get a network up and running successfully and cost effectively, with proper trials fundamental to this process. Asentria’s Jon Baars examines why RMS projects can often fail and explains where Asentria’s successful track record in such projects stems from.


also a large component of services and integration that go with that hardware to get a project up and running within the operational environment of a large network operator. With larger network operators, the projects really never end, it is more of a partnership. We seek large networks as the large scale enables us to devote significant upfront time to integration, proof-of-concept, and rollout plans. We help people who are motivated to solve a variety of operational issues at those sites optimise their sites. We’re broadening the geographic scope of our market seeking these large networks and the people responsible who want to make their networks better.

TowerXchange: The first question our readers usually ask of any vendor in the RMS category is “how proven is your solution in the field”?

Jon Baars, Director of Sales and Marketing, Asentria: We have over 100,000 sites in operation at this moment. The largest deployment we have had was approximately 18,000 sites at its peak for a US based MNO; it was a pretty sophisticated solution. Our hardware device was in a smaller cabinet, and we allowed wireless (EDGE) access to the cabinets, and enabled them to reboot individual -48VDC powered devices within the cabinet. The initial goal was to reduce truck rolls and mean time to repair, but the solution evolved to where we were managing many other things at the site; antenna tilt, managing power usage, and general network troubleshooting. Our current largest ongoing project is for a US based MNO, and it is more focused on issues tower owners would be concerned with; power, security,

and environmental monitoring and integration to all the various sub-systems at the site. We “flatten” all this data into a usable form so that operational decisions can be taken. We are doing a project for hundreds of sites in the Middle East primarily for security purposes. We have a current project in the EU for what will eventually be thousands of sites that is based primarily on wireless modem access to sites.

TowerXchange: Why do you think it is that RMS projects often fail?

Jon Baars, Director of Sales and Marketing, Asentria: At this point, we have a lot of experience in what is actually being done successfully and cost-effectively.

We expect to do a trial for any large network; go to a site and deploy our solution so we test our assumptions and prove that we work. Sometimes decisions are made regarding an RMS system solely based on paper RFQ document. It is difficult for us to know what exact solution we would propose until we actually go to a few sites. We expect to go to one site, then move on to deploying to a few sites, testing our deployment documents, and then support the process as it moves on to a broader deployment. As previously mentioned, we look at this as an ongoing process.

Trials are a must; it is very difficult for us to come up with realistic pricing until we can agree with the customer what the solution is. Very rarely do

“ “We have installations with two US based MNOs with approximately ~10,000 sites apiece currently in operation, and other worldwide networks with hundreds or thousands of sites deployed. Our current customers refer to us as part of “cell site optimisation” efforts. It is far beyond just alarming now


we decide in advance what the solution is, and the scope of the solution doesn’t change during the trial phase. If we had our preference, there would be an initial request for information phase, where some broad data could be given by the RMS vendors. A short list of vendors could be created and some small budget could be dedicated to getting the short-listed vendors to come do a trial at a small number of sites. Using this method, I think failures would be much more rare. Everyone could agree in advance of a large rollout what was to be delivered and the RMS vendor could deliver a much more accurate price based on a promised solution.

TowerXchange: Finally, what differentiates Asentria from other RMS providers?

Jon Baars, Director of Sales and Marketing, Asentria: We have a lot of experience doing these systems. We expect every large project to run through a trial phase and we have application engineers whose job is to successfully create these trials. People in this application engineering role have generally worked on many other fully operating networks, and have a very good idea of what the standards are that are necessary to get a network up and running. We are aware of what other network operators are doing successfully and cost-effectively, and we will push to make our trials model the ideas that others are currently making work. We bring a lot of value at the trial phase, just for the opportunity to show what our solutions can do. We have a broad, flexible, and high quality product, and have thirty years of experience successfully implementing these projects










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


The global telecompower supplierCaterpillar provides the equipment which keeps digital infrastructure running, and they have more to offer for 5G and telecom infrastructure convergence

TowerXchange: Please briefly introduce Caterpillar, and your history supplying the telecom industry.

Neil Smith, Sales Manager - Europe Africa Middle East, Caterpillar: Caterpillar is a global leader in supplying and servicing equipment for the construction industries, resource industries and energy and transportation sectors. As a global business we are a Fortune 100 company, one of the thirty on the Dow Jones Industrial Average and have also been named to the Dow Jones Sustainability Indices. In addition to physical products and parts and service support, we also have a financial products business which supports our dealers and customers.

In the energy sector we are a recognised world leader in diesel and gas engines, industrial gas turbines and increasingly in renewable energy solutions. It is our Electric Power Division which works most closely with the telecoms industry, having powered tens of thousands of towers across the world, and also powering many of the data centres that support mobile data.

In the tower industry we have supplied generator sets and hybrid systems for many years, initially working directly with operators, and then through the growth of the towerco industry. When the industry was being built in the Middle East and Africa we already had dealers in place to provide local expertise and service support (and often provided logistical and security support in the very early days of GSM rollout).

Read this article to learn:< Caterpillar’s global footprint and years of experience

< Cat dealers’ ESCO offerings

< How data centre experience can help in telecom sites

< How Caterpillar is responding to 5G

Caterpillar is a global leader in energy equipment for many sectors, including telecoms. In the tower industry they have supplied generator sets and hybrid systems for many years. As well as powering cell sites, Caterpillar has also been a leader in the data centre industry since its birth, powering much of the digital infrastructure the world relies on today. As the world transitions to 5G increased power demand will lead to some very interesting challenges, and an increase in the commonalities of the two spaces. Caterpillar, and its dealer network, have been offering remote asset management, and ESCO-like services for many years, and will play a major role in telecom tower power for years to come. TowerXchange speaks with Neil Smith, Sales Manager - Europe Africa Middle East and their plans for the sector.

Keywords: 5G, Caterpillar, Data Centre, ESCOs, Edge, Energy, Energy Efficiency, Hybrid Power, Multi-Country Partner, Off-Grid, Unreliable Grid, Who’s Who

Neil Smith, Sales Manager - Europe Africa Middle East, Caterpillar


TowerXchange: Caterpillar has a global presence through its dealer network, can you explain the benefits to customers of this route to market?

Neil Smith, Sales Manager - Europe Africa Middle East, Caterpillar: Caterpillar has a network of 168 dealers serving 193 countries, some of whom have been with Caterpillar for generations – for example our dealer in Lebanon celebrated its 90th anniversary as a Cat® dealer this year. Our global presence means we can assure the same level of support to telecom customers expanding into new markets, almost wherever they go they will find an active Cat dealer with world class support services and infrastructure.

Many of these dealers are major companies in their own right, with the financial strength, logistical networks and local knowledge to allow growing customers to quickly scale up their operations in new places.

TowerXchange: 5G is driving a convergence in digital infrastructure, how is Caterpillar reacting to this trend?

Neil Smith, Sales Manager - Europe Africa Middle East, Caterpillar: Caterpillar has been a leader in the data centre industry since its birth, and we power much of the digital infrastructure the world relies on today. As we are also heavily involved in the telecom tower industry globally, we can see a lot of commonalities in the two spaces. Uptime is critical across the network. Both mobile

networks and data centre infrastructure are seeing continuous growth in demand, and in capital expenditure.

The hosting of cloud data in co-location data centres and co-location of mobile networks by towercos are driven by the same economic drivers. The Caterpillar approach in both industries is to work with end users or service providers to support

critical uptime requirements with solutions that optimise life-cycle costs. The optimum solution in most cases will be a combination of product and services, often including financial services.If, as expected, the rollout of 5G requires our customers in the mobile industry to become data centre operators as well as tower operators we already have the expertise to help them be successful in that transition.


TowerXchange: How do you see power requirements at cell sites changing with green agendas and increased data consumption in the 5G-era?

Neil Smith, Sales Manager - Europe Africa Middle East, Caterpillar: We have all seen over the last decade the transition of cell sites in the MENA region from being diesel powered to being mostly hybrid powered, which is driven as much by economics as by any green agenda. However, the increased power demand of 5G could lead to some very interesting challenges. Increasing solar power supply on existing tower sites could be difficult given the space claim requirements of larger panels, which could lead to a greater use of diesel power in the mix.

At the other end of the scale, the potential for more distributed small cell coverage in cities, which would appear simple in developed markets with reliable grid power, could prove challenging in some of the MENA markets where reliable power supply is an issue.

The optimum solution will probably not be a “one size fits all” 10kW base station. We are likely to see power supply changes in existing infrastructure, and possibly see much more distributed power supply for new 5G infrastructure depending on the approach to cell sizes in different markets. As a supplier of power to the industry we know we will need to be flexible and support a wide range of products to support the divergent demands in power requirements.

TowerXchange: What has driven Caterpillar’s focus on service innovation in addition to product innovation? Can you give us a couple of examples?

Neil Smith, Sales Manager - Europe Africa Middle East, Caterpillar: Caterpillar has a long history of innovation and constantly invests in research and development, not just in products but also in service provision. As an example, our dealers have been using remote monitoring to support service operations for decades before it became industry standard – I recall myself using a system before the mobile phone revolution where generator sets would contact service technicians by pager or even in one case with a connected fax machine!

Of course, the use of modern communications makes remote condition monitoring much more straightforward and we are continuing to roll out Cat Connect throughout our product range to improve efficiency in asset management and service support.

Our remote monitoring tools now connect to a range of other service innovations – from mobile apps designed to allow operators critical data at their fingertips, to fluid sampling laboratories which monitor oil and fuel for signs of component wear which allows repair before failure and improved uptime.

TowerXchange: How can towercos use your remote monitoring and data collection systems to improve uptime and site autonomy?

Our remote monitoring tools now connect to a range of other service innovations – from mobile apps designed to allow operators critical data at their fingertips, to fluid sampling laboratories which monitor oil and fuel for signs of component wear which allows repair before failure and improved uptime


Neil Smith, Sales Manager - Europe Africa Middle East, Caterpillar: The Cat Connect system allows towerco asset managers to receive and share information about their assets in real time. Customised dashboards and web-based maps allow a view of the whole fleet, whether in the office or out in the field, allowing maintenance and service operations to be planned out proactively and in a timely manner. The dashboards can be configured to focus on key assets, or on critical KPIs to make fleet management simpler.

Where the system really differentiates itself is in Preventative Maintenance Planning, which can be either time based or condition based depending on the mode of operation and is based on millions of hours of operating experience of Cat equipment. The Cat Connect system allows the towerco asset manager to leverage the expertise of Caterpillar and the dealer organisation to optimise life cycle costs and improve equipment efficiency and life expectancy.

TowerXchange: Your dealers have been offering Cat products on rental and ESCO-like basis for some time, do you see opex-based offerings as an important growth area?

Neil Smith, Sales Manager - Europe Africa Middle East, Caterpillar: We see opex-based offerings as an important growth area across our business, not just in telecoms. Businesses want to use their capital in their core business and leave the owning and operating of supporting infrastructure such as power supply to experts in the field. In the telecoms industry we expect this demand to grow rapidly as

operators apply themselves to the capital intensive development of 5G infrastructure.

Cat dealers have a long history of offering rental or financed solutions to our customers in many industries, and in the electrical power industry many are used to offering contracts based on hours run or cost per kWh. Cat dealers can offer a menu of options to customers, from simple equipment purchase, repair and maintenance contracts, equipment rental to full power supply contracts. In fact, after the discussion on ESCOs in last year’s TowerXchange MENA meetup, one of our dealers commented that they had been working as an ESCO in telecoms for over a decade, they just didn’t realise it was a new thing!

TowerXchange: How would you summarise the approach Caterpillar is taking to telecom power, and how does it differentiate you from your competitors?

Neil Smith, Sales Manager - Europe Africa Middle East, Caterpillar: Caterpillar’s approach to the telecom industry is rooted in our history of providing solutions to help our customers be successful. We were in at the start of the mobile telecoms industry, and in at the start of the data centre industry. We know we can only be successful and grow if our customers are successful and grow. We want to build long partnerships with the people in this industry as it goes through continued radical change, and we will do that by applying the combined experience, expertise and financial strength of our global family of Caterpillar and Cat dealerships<









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









Rural rollout, densification,site upgrades and ESCO contractsInfrastructure experts, ieng Group, expand their support to the telecom industry

TowerXchange: It was a while since TowerXchange last interviewed ieng Group and the company has expanded and integrated new companies since then. Please can you introduce i-eng Group and its subsidiaries.

Kadri Hakim, Co-CEO, ieng Group: ieng Group is a leading turnkey infrastructure solution provider active in both the African and Asian market providing end-to-end engineering infrastructure solutions to the telecommunications and power industries. The company was founded in 2007, initially focused entirely on EPC (site build and refurbishment), and then in 2009-10 we moved into also providing O&M services to the telecom sector. We now have 13,000 sites under management with plans to increase this to 20,000 sites by 2020.

ieng Group has recently integrated tower design and manufacturing business, Eki.Struct into our group. Eki-struct produces a broad array of different tower designs; from lattice, tubular and hybrid (a combination of angular and tubular towers) solutions to low cost, quick deployment towers and camouflage designs. With a fully-fledged design and engineering office in Croatia, adopting a customized approach to designing towers for our clients, Eki.Struct has acquired more than 120 tower structure certifications for various clients across the globe, from a library of more than 200 solutions.

In addition to Eki.Struct, ieng Group recently integrated power business, GreenPole into the group. GreenPole designs and co-manufactures intelligent hybrid power systems for telecom clients across the globe. Our system combines battery power cabinets

Read this article to learn:< How ieng Group’s structure, subsidiaries and service offerings have expanded

< The role that ieng Group is playing helping operators improve rural coverage

< Details of Eki.Struct’s Multi-Tenant modular solution and how it can revolutionize the way Towercos

specify sites

< ieng Group’s ambitions in the ESCO market

Leading turnkey infrastructure provider ieng Group has further expanded its capabilities in tower design, power system provision and tower services through the integration of GreenPole and Eki.Struct and formation of their new ESCO sister company, CREI. TowerXchange speak to ieng Group’s Co-CEO, Kadri Hakim to catch up on the company’s latest developments and how ieng Group is strengthening its position as an invaluable partner to the African and Asian telecom markets.

Keywords: Africa, Camouflage, Capacity

Enhancements, CREI, Densification, Eki.Struct,

Energy, ESCOs, GreenPole, ieng Group, Multi-

Country Partner, Network Rollout, O&M, Site

Surveys, Urban vs Rural, Who’s Who


with gensets and/or grid connection, with our smart controller allowing for remote monitoring, control and optimization of the system.

ieng Group is also expanding into the ESCO space through our new sister company, CREI which has entered into negotiations with telecom companies in multiple markets.

Headquartered in Lebanon, ieng Group has a presence in 18 countries (figure one), employing over 1,600 staff. The integration of Eki.Struct and GreenPole and creation of CREI enables ieng Group to offer a more holistic service offering to the industry (figure two).

TowerXchange: There is a major focus in Africa at present on improving rural coverage, something that ieng Group is heavily involved in. Please can you tell us more about this?

Kadri Hakim, Co-CEO, ieng Group: In Africa, all MNOs are focused on finding ways to access the 20-30% of the population that they are yet to connect, most of which live in rural and remote areas. With typical high sites costs being around US$80-100k to build with an annual opex of around $1500-2000 (depending on the country), the revenue that could be generated in such rural and remote areas would not be sufficient to cover costs.

We have developed the ieng low cost rural (iLCR) and ieng ultra low cost rural (iULCR) sites to address this area of the market. The solutions, combining both active and passive infrastructure as well as a power source (solar) can deliver coverage for dramatically

Figure one: ieng Group’s geographical footprint

LEBANON

Figure two: ieng Group’s range of telecommunication services

Network deployment< Site planning, acquisition and property services< Design engineering and construction< Towers and masts solutions< Power supply< Procurement, logistics and warehouse management< Network equipment installation

Fibre optics< Design & Construction< Testing and commissioning< Procurement, logistics and warehouse management

Managed services< Operations and maintenance< Procurement, logistics and warehouse management


lower capex and opex. Our iLCR sites, which cover a radius of approximately 15km cost US$50k to build, whilst our iULCR sites which cover a radius of around 3km cost US$35k, including passive and active material; both have an opex of around $400-500 per month. As simpler systems, deployment is rapid, with it taking around a week to build a site.

Different contractors are offering a range of different business models to operators to deploy low cost rural sites. A large number of players offer a revenue sharing model, others offer a pure capex model and others offer an opex model. ieng Group offers the capex model to MNOs, with some opcos opting for a capex model and others opting for opex and revenue sharing models.

With operators competing to cover rural areas in Africa, we are getting a huge amount of interest in our iLCR and iULCR solutions and we expect demand to continue to increase dramatically over the next 3-5 years. There is a big race between operators to be the first into a given market, capturing market share ahead of their competitors.

TowerXchange: What about new build outside of ultra-rural areas, have you seen this picking up in Africa? What demands do you see from clients and how is ieng Group addressing these?

Kadri Hakim, Co-CEO, ieng Group: We have seen new build picking up across Africa; the market is turning a corner following the recession and 4G rollout is requiring an increased number of sites.

In terms of requests from clients, the one constant

is the need to push down prices. For this, you need to take into consideration both the tower structure and the foundations. Eki.struct tower designs are particularly efficient, being able to take the same load whilst using less steel. In terms of foundations we have explored different options including towers that are up to 55m high without conventional foundations. In this instance, boxes filled with stones at each of the corners are used in place of concrete foundations. The result is that the sites are much quicker to deploy with a lower TCO, such sites are useful in rural areas.

In urban areas we’re seeing increased rollout of sites to improve capacity for 4G and even for 3G. We see lots of demand for monopoles with a smaller footprint (although these are typically more expensive than angular towers), as well as for demand for alternative structures such as advertising boards and street lights. We are currently looking at the potential to develop a smart street pole solution.

TowerXchange: Ease of upgrade is an important feature in tower designs, particularly for Towercos whose business model is predicated on securing additional tenancies. Can you tell about Eki.Struct’s multi-tenant modular solution and the benefits this can offer?

Kadri Hakim, Co-CEO, ieng Group: Our Multi-Tenant modular, is a single tenant tower which is upgradable to a two, three or four-tenant tower in a single day. This allows Towercos to deploy towers with lower initial capex, safe in the knowledge that they are able to upgrade them to sites capable of

hosting multiple tenants within just a few hours. It is a groundbreaking solution for Towercos, allowing them to deploy lower capex solutions without slowing their ability to add further tenants. Towercos save around 15-20% on capex by deploying a single tenant tower and only need to pay the additional amount when upgrading to multiple tenants. This generates considerable savings for the Towerco and changes the way that Towercos prepare for tower specifications.

TowerXchange: And finally, looking more towards the power side, we have seen ESCO activity picking up considerably in the telecom sector at present with several contracts now signed and further RFPs live. Can you tell us more about ieng Group’s ambitions in the ESCO market?

Kadri Hakim, Co-CEO, ieng Group: ieng Group has formed our new ESCO sister company, CREI which stands for Communication and Renewable Energy Infrastructure. CREI has been involved in pilot projects in Afghanistan and Myanmar and we are also participating in a number of RFPs, hoping to be able to make some announcements this year.

Whilst it is not a requirement, our expectation is that we will use GreenPole power equipment in our projects, whilst also leveraging ieng Group’s extensive field experience in operating sites. We offer both an ESCO model and a guaranteed savings model to the market, anticipating that Towercos will have a stronger appetite to invest the capex themselves and opt for the guaranteed savings model, whilst MNOs will lean more towards the ESCO model (although there are always exceptions!)<


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<


Obstruction lights: a small component of a tower but fundamental for everyone’s safetyShanghai Nanhua Electronics has sold over 150,000 virtually maintenance free obstruction lights

TowerXchange: Please introduce Shanghai Nanhua Electronics - what products do you offer to the telecom tower industry, how long ago was the business established?

Stella Su, Vice Director of Sales, NANHUA: NANHUA was established in 1990 as a family business with the goal to produce audible and visible alarms for a couple of industrial enterprises. In 1999, the company had one hundred clients from a variety of industries and kept growing at a steady pace.

In 2007, we decided to open up to the telecom tower industry and since then, there have been over 150,000 installations of our obstruction lights in eighty-one countries. Our lights are designed according to ICAO and FAA standards and include low, medium, high density and solar lights, all with LED light source. TowerXchange: What proportion of Shanghai Nanhua’s business comes from mobile network operators compared to towercos? Stella Su, Vice Director of Sales, NANHUA: Most of our business comes from towercos as obstruction lights are a small component of the eco-system and usually don’t fall under MNOs’ responsibilities. In Africa and Asia we have cooperated with over 50% of the existing towercos.

TowerXchange: From which countries are you seeing most demand for your products? How are your products sold worldwide - do you sell direct or through local partners?

Read this article to learn:< Nanhua’s footprint and key business area< Which international standards govern obstruction lights < The balance between safety and light pollution< How to ensure obstruction lights have a long lifespan

Most of the time TowerXchange is caught up in strategic talks and deal analysis but today, we are focusing on one of the smallest and yet most important components of a tower: obstruction lights. Their function is key not only for the aviation industry but also to protect residential areas while ensuring towers don’t become an impediment to the ever growing air traffic.

In this interview, we chat with Stella Su of Shanghai Nanhua Electronics, a leading organisation with twenty-five years of experience in the sector, and find out more about obstruction lights and their function in the tower industry ecosystem.

Keywords: Interview, South America, Shanghai Nanhua Electronics, Central America, Southeast Asia, Myanmar, Vietnam, Health & Safety, Towercos, Regulation

Shanghai Nanhua Electronics’ Headquarters


Stella Su, Vice Director of Sales, NANHUA: Right now, we forecast most of the Asian demand to come from Myanmar but there is also a considerable amount of business coming from Vietnam and other emerging Asian markets. Latin America is another region which is particularly active.

TowerXchange: Are the requirements for aviation warning lights standardised worldwide, or are there different requirements in different markets? And what are those requirements?

Stella Su, Vice Director of Sales, NANHUA: Yes, they are generally standardised by ICAO and FAA and then there are some nationwide regulations depending on the country, but they’d still have to comply with these international standards.

ICAO and FAA standards present different characteristics. In fact, ICAO requires photometric tests while FAA checks the product in its entirety, including its materials, EMI, EMC, surge protection et cetera. TowerXchange: What is the optimum balance between maximising visibility whilst minimising light pollution?

Stella Su, Vice Director of Sales, NANHUA: This is a very interesting question and I think there are two sides to this. On one hand, different intensities of aviation lights have different vertical angles, and each angle will need to comply with strict intensity requirements to ensure that pilots can see it but the light won’t disturb any residential area nearby.

That said, the flash is about ten times brighter during daytime due to the reduced contrast. Therefore the intensity requirements during daylight are about 20,000cd in comparison to the nighttime when 2,000cd is sufficient and is the maximum to avoid light pollution.

TowerXchange: How do you ensure the long lifespan of your lighting systems to minimise maintenance and replacement costs?

Stella Su, Vice Director of Sales, NANHUA: Nanhua uses LED light sources that last a minimum of fifty-thousand hours. Additionally, we use aluminium light bases to extend the light’s lifespan and protect it from corrosion.

TowerXchange: What warrantee is offered with your aviation warning light systems?

Stella Su, Vice Director of Sales, NANHUA: Currently, we offer two years full warranty and three years of free maintenance and spare parts. TowerXchange: How have your products been designed to ensure safe and correct mounting on tall structures?

Stella Su, Vice Director of Sales, NANHUA: Every aviation obstruction light and bracket product should be tested for wind and vibration resistance to ensure its correct mounting and suitability.

TowerXchange: Please sum up how you would differentiate Shanghai Nanhua’s aviation

warning light systems from your competitors’. Stella Su, Vice Director of Sales, NANHUA: Nanhua is a leading organisation which serves the global tower industry with top quality products in compliance with ICAO and FAA obstruction standards. Our packages include cable connections, controllers and light installation as well as a long lasting warranty and maintenance service.

We use high quality LED light sources whose lifespan is extremely long and that are virtually maintenance free. Nanhua is also very careful about its pricing as we know opex is an important component of the decision making process and we are confident our prices are quite competitive!

Courtesy of Shanghai Nanhua Electronics


NorthStar: more than justa battery companyMarket leaders in premium lead acid batteries committed to understanding and resolving their customers’ energy storage problems

Thierry Tardivent, Head of MEA and APAC, NorthStar Battery

TowerXchange: Please introduce NorthStar to our readers - what role do you play in the telecoms infrastructure ecosystem? Thierry Tardivent, Head of MEA and APAC, NorthStar Battery: Since 2000 NorthStar’s telecom batteries and site solutions have been delivered in more than 150 countries. NorthStar helps its customers globally to extend battery life and save energy by providing High Performance AGM Batteries specially designed for different grids and telecom applications – I believe today NorthStar Batteries makes the best AGM batteries in the industry. But NorthStar Battery is more than just a battery company. We also have a unique expertise in power systems for emerging markets which is key to optimise battery life and energy saving. TowerXchange: We usually ask how many cell sites in Africa, LatAm and Asia the interviewee’s solutions are installed - I guess that may be difficult to specify given the scale of NorthStar’s business! However, can you give us a sense of the size of your telecoms business in those three regions. Thierry Tardivent, Head of MEA and APAC, NorthStar Battery: Tens of thousands sites in MEA are equipped with NorthStar products. In Pakistan alone, Northstar has equipped over 5,000 sites with a pure fuel saving application delivering outstanding results. Many thousands of hybrid

Read this article to learn:< Why premium lead-acid batteries remain the best compromise between capex and opex

< How to choose the right battery for the grid profile and application

< How to overcome common problems in the installation and setting of batteries

< How to cool batteries with just 40W, even at 30-40°C ambient

< How to protect batteries from theft and vandalism

NorthStar is more than just a battery company. They’ve made a commitment to really supporting their customers. A commitment to help customers select the right batteries. A commitment to identify and resolve power system problems, even if they aren’t caused by batteries. And a commitment to manufacture, and dispose of, lead-acid batteries in an environmentally aware manner. Of course, NorthStar also manufactures premium lead acid batteries which they say represent the best compromise between capex and opex, which is why they are one of the market leaders in energy storage for emerging market cell sites.

Keywords: Who’s Who, How to Guide, Meetup Preview, Energy, Installation, Opex Reduction, Batteries, Fuel Security, Air Conditioning, Off-Grid, Unreliable Grid, ROI, Hybrid Power, DG Runtime, Dimensioning, Procurement, Warehousing, Shelters, Rectifiers, Africa, Asia, Pakistan, NorthStar Battery


sites in Africa have been equipped with NorthStar technology since 2000. TowerXchange: Why are lead acid batteries standing up to the challenge of alternate energy storage chemistries in a telecom context? Thierry Tardivent, Head of MEA and APAC, NorthStar Battery: Frank Fleming, our renowned CTO, has a strong belief that lead acid can remain the technology of choice for telecom energy storage for the next 50 years, as long as we push the limits of the design. We also want to push back against the bad environmental image of lead acid batteries, which is why we invested massively in environmental controls when we built our new factory. Many of our key customers select NorthStar as their preferred / strategic supplier partly because of our strong environmental control. Corporate Social Responsibility policies make environmental control a key target for companies like Ericsson, with whom we’ve been a key strategic partner since 2002. We’re also strategic suppliers to NSN, Huawei and ZTE. TowerXchange: How much tailoring to the specific requirements of individual sites can really be achieved through the selection of batteries? Thierry Tardivent, Head of MEA and APAC, NorthStar Battery: One battery cannot fit all applications. You need different chemistry

depending on the grid profile and energy situation. There’s a huge difference between the battery you should deploy on a stable grid in USA, compared with the unpredictability of the grid in Pakistan, and pure off grid applications in Myanmar for example. NorthStar differentiates ourselves by offering different chemistry depending on the application and grid profile. Whereas with other vendors the battery is a standard, commoditized component, forcing site designers to solve their problems through the modification of other power systems, NorthStar have been able to customise the design of our batteries for different grid availability and telecom applications. For example, one of the most unstable grids we have experienced was in Bangladesh. No matter what power system we used, there were so many repeated power outages that it seemed we were never able to fully recharge our batteries. That presents a problem for traditional lead acid energy storage technology, but we were able to modify our electro chemistry to be fully partial state of charge (PSOC) compatible. TowerXchange: Why is the replacement cycle so much shorter for batteries on developing market cell sites, and what can be done to deliver reliable, sustainable power? Thierry Tardivent, Head of MEA and APAC, NorthStar Battery: We think there is too little

understanding of why batteries are failing. While the right choice of battery is crucial, it’s as much about the electrochemistry as it is the choice of supplier – so simply switching to a different supplier won’t fix the problem. Energy storage solutions need to be redesigned to provide reliable, sustainable power to cell sites in emerging markets, providing faster recharge, high cyclic, high temperature, high efficiency operation. You need to deploy the right power system, on the right settings and ensure it’s installed properly. This is why we are lauching the NorthStar Academy – to help to extend battery life by two to three times and save energy. While some battery vendors may prefer their batteries die sooner to accelerate replacement cycles and sales volumes, NorthStar want to make sure our batteries last a long time and deliver the opex savings targeted. Our success comes from our people in the field, people with a background from the power industry, who can address power system problems holistically and who can help our customers fix those problems. If it’s not a battery problem, we don’t just say “talk to the power system vendor”, we help the customer to change controller settings, cabling et cetera – training their people to avoid repeating mistakes. TowerXchange: I understand NorthStar initially, and to a certain extent still do, sell a significant proportion of batteries via OEMs – how does the entry of the independent towercos affect the


criteria against which energy storage solutions are acquired?

Thierry Tardivent, Head of MEA and APAC, NorthStar Battery: We have always had a strong strategic relationship with OEMs and we will always will. But we also realised we need to accelerate the battery technology and solutions awareness at the end customer level such as with towercos as they are more and more driving the battery selection process. Our technology has been approved already by two major emerging market towercos this year. We still see a few examples where energy storage

solution selection is driven by short term capex savings, resulting in a temporary improvement in the P&L. However, making the wrong decisions in the selection of energy storage is does not yield performance improvements that are sustainable in the medium and long term, particularly at unstable and off grid sites. There are only three or four factories worldwide that can manufacture premium AGM batteries. But the good thing about premium AGM is that they have a two year shelf life thus we can then easily maintain inventories in hubs all around the world and provide a short lead time to our customers; we adapt to the logistical challenges to ensure

our products are available as close as possible to market.

TowerXchange: What is the performance, and cost, difference when using premium lead acid batteries versus lower cost alternatives at cell sites in harsh conditions?

Thierry Tardivent, Head of MEA and APAC, NorthStar Battery: A premium AGM (thin plate technology) would normally cost 30% more than a Standard AGM battery with three to four times greater storage life and up to five times longer operating life in real harsh conditions (typically 2.5 X the life). A lot of our customers are migrating from dual DG to DG plus battery hybrids to cut DG runtime by 50% or more. If you want to optimise energy efficiency programmes, you have to think about total efficiency; about DG efficiency, the efficiency of rectifiers, and the efficiency of batteries. A standard battery can suffer two to three times more loss than a premium battery, which can make a huge difference for some applications. A premium, fast charge battery can take a lot of energy to recharge the battery in short time, which enables the customer to run the DG faster and more efficiently, for a shorter time. For example, when we rolled out NorthStar Blue Technology in Pakistan, we found that most of the operators were buying low cost batteries because of their focus on capex. When they saw that at off

Delivering reliable and sustainable power to the world

Using Premium AGM in Offgrid will offer best Capex /Opex compromise

0

10

20

30

40

50

60

70

80

90

100

0

10

20

30

40

50

60

70

80

90

100

Genset Only Genset + Power + Controler + OPZV

Batteries

Genset + NorthStar Hybrid Power

Genset + Power + controller + Solar or

Wind

Genset Power &controller + Solar &

Wind

Pure Renewable Energy Mix

Capex

Opex

Source: NorthStar Battery


grid sites we were cutting DG runtime by up to 85%, we helped them realise that it doesn’t even matter if you replace in your batteries every two to three years if you payback the investment in three to four months.

NorthStar Blue Technology is ideal for unstable and off grid sites; it’s a fast charge, high efficiency battery with Partial State of Charge (PSOC) compatibility. If used in a hybrid genset combination, it offers the best capex and opex compromise. Other technology such as sodium and lithium batteries are two to three times the price and are not so easy to implement in large scale projects.

TowerXchange: Why are telecom batteries failing so early? And what are the key steps towercos and MNOs can take to extend battery life? Thierry Tardivent, Head of MEA and APAC, NorthStar Battery: We need to increase customer awareness of the root cause of batteries problems. What NorthStar have done, and what all the battery manufacturers should have done, is make an assessment on over 60 countries where our batteries had been installed, to find out what were the key challenges were with using batteries, and to and try to find a solution for each: 1 Make sure to select the right battery based on grid and application including sizing/dimensioning; in too many cases there is not enough power to

recharge the batteries. Our recommendation is that customers need to use different chemistries for different locations.

2 Solve installation and setting issues: everything from cabling the battery properly to controller settings (charging voltage, boost timing et cetera); low voltage disconnect; temperature sensor configuration and cooling systems. Too many site installers don’t even know how many rectifiers they need to recharge the batteries – spending an extra US$200 on a rectifier can save a US$5,000 battery bank. 3 Temperature: a 10°C change in temperature can reduce battery performance by as much as

30-50%. But air conditioning just to cool energy storage elements costs a lot of money. A few years ago we partnered with one of the most famous fridge manufacturers to leverage proven consumer product technology into the telecom fields. We took the high efficiency, high reliability DC compressor cooling technology, added a unique cabinet structure and made the world’s most efficient telecom battery cooler called SiteStar. We can now cool batteries with just 40W even at 30-40°C ambient. Over 30,000 sites have been equipped with our SiteStar technology to date with very positive feedback from the field. 4 Protect batteries from theft and vandalism: One approach we’re trying is to protect batteries in a

Source: NorthStar Battery

Why are telecom batteries failing so early?

35%

30%

20%

10%

5%

Wrong setting or installation

Incorrect battery selection

Temperature

Theft and vandalism

Others


safe-like structure. We’ve co-operated with a safe manufacturer to come up with a cabinet which used to be a safe box; made of robust, very thick metal. Another area we’re starting to explore is advanced locking systems.

In some countries theft is related to the parallel market; at one point batteries were even being resold to the operators from which they were stolen! This was resolved with a relatively easy to fix – an engraving that cannot be removed. In other cases the parallel market is home usage, but I feel that’s minimal. No single approach to combating theft can be successful everywhere as there are different causes of theft, from theft by large organisation’s to pilferage within the fuel supply chain. Ultimately combating theft requires working with the operators and towercos to develop an understanding of the nature of their theft problem and what budget they can afford to resolve it. Theft is a problem, and we want to address it. NorthStar can help MNOs and towercos overcome all four of these challenges. I’m particularly concerned when people talk about minimising the competence required of people in the field. While the solution needs to be as simple as possible to be installed and operated, the competence of the average field engineer is not necessarily the same in Southern Asia and Africa as it might be in Europe. We see a lot of mistakes in installation, and we’re happy to the deliver first training at the

NorthStar Academy on the basic principles – we can put all the installers in one room, identify common problems and misconceptions, and make corrective actions. TowerXchange: How do NorthStar ensure you remain sensitive to environmental considerations from manufacture to disposal? Thierry Tardivent, Head of MEA and APAC, NorthStar Battery: NorthStar has invested heavily in building the most environmentally advanced battery plant in the world. But our environmental policies actually start from the design of the product; making sure the battery is designed to last longer and also not to deteriorate beyond the end of its life. We are also developing an advanced solution to operate batteries with the minimum energy consumption – our SiteStar battery cooler designed in Sweden is still the most energy efficient Battery cooler in the industry. TowerXchange: Finally, please sum up how you would differentiate NorthStar’s batteries from other energy storage solutions for remote cell sites. Thierry Tardivent, Head of MEA and APAC, NorthStar Battery: Most battery companies are focusing only on selling their own components. But NorthStar are more than just a battery company. We take a different approach – we really want to help our customers (as well as help ourselves). How we support our customers

is a tangible, core value for NorthStar Batteries. In the past few years we’ve assessed the typical problems faced by our customers, and come up with solutions for what can we do to extend battery life and save energy. We seek to understand our customers’ problems. We’ll audit your site for you and we won’t leave without giving you an analysis of the problem and corrective actions. You won’t get an “it’s not a battery problem – talk to power system vendor” attitude with NorthStar – we have a strong competence on the whole power solution, not just the batteries. We’ve changed the focus of our business to help our customers understand how to select the right batteries. One best electro-chemistry and battery technology isn’t right for all grid profiles and applications. For example, low technology batteries could be good enough for some developed market applications. But battery performance is more problematic in developing markets, so we’ve developed energy storage solutions for unreliable and off grid applications which we think represent the best compromise between capex and opex. Lastly we are developing solutions which have a very quick payback. Payback after five to ten years won’t work in telecom industry – everything needs to pay for itself in less than two years. NorthStar are focused on developing the best opex solutions, with affordable capex and quick payback – making our energy storage solutions a ‘no brainer’!


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,

“

“

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


Scalable solutions for aconverging infrastructure landscapeSTULZ is building on a strong pedigree in cooling to offer shelter and edge solutions to evolving customers

TowerXchange: Please introduce STULZ, your footprint and background.

Johann Mater, Global Key Account Manager, STULZ: STULZ was founded in 1947, and has been providing solutions for mission critical cooling since the 1970s, so we look back to more than 45 years of experience in this area. Though being a family business in the third generation, we are a truly global company, with a footprint in over 140 countries, by which I mean more than just a sales office or box movers: we can cover a full cycle of services, working through tenders, preparing shipments, installing and maintaining equipment in each country where we operate. The further developed idea of this holistic approach can also be found in our claim, which at the same time reflects our philosophy. "ONE STULZ. ONE SOURCE.” stands for the comprehensive range of our portfolio – From Room Cooling and chillers to Airhandling Units and self-developed DCIM software to our EDGE solutions called "True Edge".

TowerXchange: STULZ is a global brand, with operations all over the world. Tell us more about the specific dynamics of the European market and what your European clients are looking for?

Johann Mater, Global Key Account Manager, STULZ: For MNOs we’ve seen a huge increase in demands for mission critical cooling, particularly in terms of hyperscalers entering the European market and changing the way they see cooling requirements. The scale of their needs is much bigger and influenced by ideas we have seen over the last two to three years in America and Asia.

Awareness of the TCO is also becoming more and more important. If you look back five years, all of

Read this article to learn:< STULZ’s history and credentials in the market

< The dynamics in mature markets driving tower owners to upgrade their passive infrastructure

< The importance of TCO and tangible savings which can be made in efficient cooling solutions

< How STULZ’s modular shelter and edge datacentre solutions can help avoid costly missteps

As tower owners face increasing pressures to improve

efficiency in their passive infrastructure and prepare for

5G rollout across their networks, STULZ have leveraged

their 40 year history in providing cooling solutions

for MNOs, towercos, datacentre providers and other

infrastructure owners to offer modular, scalable solutions

which meet modern infrastructure needs. TowerXchange

caught up with Johann Mater, Global Key Account

Manager at STULZ, to find out more about how STULZ has

seen the market developing and how their new solution

will help infrastructure owners avoid costly mistakes.

Keywords: 5G, Air Conditioning, Energy Efficiency, Europe, IoT, Operational Excellence, Outdoor Equipment, Passive Equipmentm Rectifiersm, STULZ, Site VisitsJohann Mater, Global Key Account Manager, STULZ


the conversations we had were about CAPEX, we were always finding the most effective solutions and training our partners and consultants to look at the TCO but procurement teams were only paying attention to CAPEX. They didn’t pay the electricity bills so they had no awareness or personal interest in going for the most efficient units. Over the past couple of years this attitude has changed a lot, the hyperscalers and big datacentres are using so much power that we’re talking about a cost difference of six figures in some cases, so it’s playing a much bigger role. Europe still has cooling with a raised floor but new ideas are coming from datacentres and we will see this change soon.

TowerXchange: We find European tower owners are starting to pay much closer attention to squeezing operational cost savings/efficiency out of their networks. Tell us how STULZ can deliver measurable results to mature tower portfolios?

Johann Mater, Global Key Account Manager, STULZ: We’ve worked with European MNOs for many years. Eight years ago we set up a joint development with an MNO partner to help them become the most efficient telecom operator in terms of towers. We provided specialised equipment for shelters with integrated free cooling to cope with efficiency requirements in non-urban areas. Through this joint dev we were able to save up to 95% of energy costs per container by using a unit paid off within half a year. Joint dev allows us to dev what companies really need.

TowerXchange: The European market has changed rapidly over the last five years and 2019 is set to evolve further. Do you see a distinct difference in the way MNOs, towercos and other

infrastructure providers approach the way their portfolios are managed?

Johann Mater, Global Key Account Manager, STULZ: They have always been quite focussed on energy, the awareness was always there, but it’s increased recently. I actually don’t see a big difference, I see that people are more looking at serviceability and service capabilities, and specialised service is playing a big role as well.

TowerXchange: As 5G rolls out we’re going to see new equipment placed on towers and much higher demands placed on the network. How ready do you think European tower infrastructure is, and what advice would you give to tower owners wanting to prepare their networks?

Johann Mater, Global Key Account Manager, STULZ: The challenge with 5G is that there are no fixed parameters and definitions yet. I would really like to see what the speakers say about it at Meetup Europe. Nevertheless, 5G is a great opportunity for us: it’s the start of IoT, connected vehicles etcetera, and we are looking forward to creating a future with 5G companies and helping them find the right solutions. With our True Edge system we are perfectly prepared for the requirements of providers and towercos that are specialized on 5G and Edge development. The STULZ portfolio offers everything from cooling on a component level up to turnkey solutions. At the moment, we are just waiting for our customers to give us the go-ahead so that we can start planning and realizing their projects.

When it comes to the demands of 5G, everything is going to change: densities in shelters will increase, telecoms equipment has new requirements, cooling

equipment will need to change. Particularly looking at the energy efficiency trend and evolution of cooling equipment over the last few years – if it’s over five years old it might be worth considering new technology. It might even make sense to think about a holistic conversion towards a turnkey solution. STULZ can help with their tools to identify the TCO and ROI of these new systems.

TowerXchange: We’re seeing a shift towards infill and convergence between communications infrastructure networks, particularly in urban areas. How has this affected your offering and what can clients expect from you in future?

Johann Mater, Global Key Account Manager, STULZ: Our portfolios starts with cooling solutions from 500W to 2MW, so we can offer anything from watts to kilowatts to megawatts. The full range is there and can be implemented into our turnkey solutions. When it comes to infill and convergence, we have edge solutions so we can go from one solution with fire suppression, UPS backup and cooling up to a full datacentre made of modules. Scalability is important as customers want to start small and pay as you grow. Scalability is a given. We have been working on this solution for the last three years and 2019 is the year when we will bring the whole solution to market. Despite the fast pace of the 5G market, our “True Edge” solutions are scalable and modular, so they are designed to meet the needs of our customers in an ideal way - for every conceivable scenario. By combining the customer’s expectation with our expertise, we will be able to customize our solutions to make it fit for their environment – turnkey means you can scale what you like instead of re-inventing the wheel each time


Tarantula: swiftly adapting toIFRS 16 and always innovating for its large customer baseCutting-edge lease modules, critical projects across Asia and more

TowerXchange: Most of our readers know Tarantula but can you please re-introduce the company, its operations and footprint? And what is your role within the company?

Anders Smedberg, CEO, Tarantula: I joined Tarantula at the beginning of 2018, taking on the dual responsibilities of CEO and head of the Sales team. I have over 25 years of experience in leading telecom, IT, and financial market companies and I was previously working with Ericsson where I was responsible for their BSS portfolio.

At Tarantula, I’ve been working closely with our customers since I started and establishing contacts in the towerco industry with the aim to secure our position as market leader in the telecom site management software space. Based on the feedback, we have adapted our go-to-market model to suit the market needs of rapid deployment, quick turnaround times and a flexible license model that suit small, medium, and large towercos. The response from the market and customers has been very positive and we already see a steady demand growth for our solution and expertise.

Tarantula was launched more than 15 years ago with the objective of creating site-sharing solutions for the operators and tower companies in the UK. At a time when telecom infrastructure sharing concepts were still considered to be a novelty, we offered web-based solutions with embedded workflows to simplify the process of site sharing. We have come a long way since then, having developed an end-to-end, purpose-built site portfolio management solution for tower

Read this article to learn:< Introducing Tarantula’s new Chief Executive Officer

< Tarantula’s latest products suitable for small cell portfolios and IFRS 16 standards

< The company’s engagement in Asia and examples of latest regional projects

< Why towercos shouldn’t manage their portfolios via Excel sheets

Tarantula has a long history of successes in providing towercos across the globe its cutting edge portfolio management solutions. In this interview, Anders Smedberg, who has been recently appointed CEO and Head of Sales for the company, shares with TowerXchange some of the latest addition to the company’s product portfolio such as the new IFRS 16-ready lease module and the innovative small cell module as well as insights into some of the most complex projects they have been working on.

Keywords: Asia, Asset Register, Build-to-Suit, Business Model, DAS, Infrastructure Sharing, Job Ticketing, KPIs, Logistics, Monitoring & Management, Operational Excellence, RoI, Site Management System, Small Cells, Southeast Asia, Tarantula, Valuation

Anders Smedberg, CEO, Tarantula


site owners to help them monetise their towers with efficiency and control. Additionally, with our value-based services, we strive to advise and lead our customers to maximise the value of their businesses.

We were acquired last year by Volaris Group, an operating arm of Constellation Software Inc., a Toronto-based software and services provider. The new ownership has opened avenues for us to enter new markets such as South America and Eastern Europe while enabling us to expand our product marketing capabilities. We have offices in Sweden, Singapore, and India while our customer footprint spans 15 countries. Our customers include both towercos that are in the growth phase as well as larger towercos operating in multiple markets with a mature business model.

TowerXchange: What is your latest innovation and product and what should potential customers know about them?

Anders Smedberg, CEO, Tarantula: The most time-critical concern for all infrastructure owners is the new IFRS 16 standard, which comes into effect after 1 January 2019 and will require organisations to include all leasing contracts with a contract term longer than one year on their balance sheets.

With most of our customers operating a large number of lease contracts across their portfolios, it was imperative for us to provide the tools for them to be compliant with this regulation. We have worked closely with our customers to understand the specific requirements of IFRS 16, the relevance

for tower companies and MNOs, and developed an IFRS 16 add-on which will be deployed with our lease module. The add-on will enable our customers to recognise all assets and liabilities for all their leases and quickly move them to the new accounting standard.

The ultimate objective for any towerco is to enable its customers to search, order, and follow the deployment process of their equipment online. We have strengthened this capability in our solution to offer a “theatre booking” system where towercos customers can order tower space by assessing availability online. This is now operational with a couple of our clients already and we are certain

this unique capability will spread across all of our customers.

We have also been working on developing a small cell module for organisations that deploy large-scale small cell deployments. Delivering a small cell module with standardised process templates that can be swiftly configured has been a key focus of this module. We believe this will be well-received by the new and upcoming infrastructure companies especially across mature markets.

We are also keenly aware that with the onset of modern technologies and hardware, most infrastructure owners are striving to keep


operational costs low while harnessing modern tools such as drones to oversee and conduct their field audits. With that end goal in mind, we are setting up partnerships with drone operators and site audit vendors to ensure that the information gathered from the field gets synced back to the central data repository of our platform and gets converted into actionable data.

TowerXchange: Could you give us an update on some of your recent activities in the Asian market? Is there any new project that should be highlighted to our readers?

Anders Smedberg, CEO, Tarantula: We have been focused on strengthening our engagements across the Indian sub-continent as well as in Southeast Asia. Whether it is problem solving urgent issues or deploying new modules, our teams remain driven by a common goal of empowering tower site owners to build profitable and sustainable businesses. We believe that keen engagement from our customer end users alongside regular interactions from our account management and engineering teams can lead to a mutually beneficial partnership with our customers. We are rolling out programs such as user forums and webinars to enable our customers to highlight their ongoing requirements to us as well as share best-practice knowledge with their peers. This initiative has been well received by all our customers.

A major accomplishment for us this year has been the automation of billing for one of the largest towercos in Southeast Asia. Our billing module deployment enabled the towerco to achieve

complete control over their cash flow across multiple markets, with built-in support for multiple currencies, FX conversion, and complex billing mechanisms. Additionally, we also helped the organisation achieve optimisation and streamlining of their existing business processes across all markets through simplification and configuration of the process workflows. This exercise will simplify the daily tasks of most functional groups, helping them to increase their speed to market. Our next objective is to enable the organisation achieve control and visibility of their fixed asset register through a single source of data.

TowerXchange: What are the key markets where you operate in Asia and what are the characteristics of the portfolios that use your solutions?

Anders Smedberg, CEO, Tarantula: Our core markets in Asia are India and Southeast Asian countries including Malaysia and Indonesia. We have a strong local presence in both the Indian sub-continent as well as Southeast Asia, thus allowing us to expand with greenfield as well as mature organisations, in some of the most and least developed nations. We are closely following developments in places such as the Philippines and Bangladesh where the market is opening up for towercos.

We also understand that while most tower companies and MNOs typically follow similar ways of working, they also have unique differences due to the diversity in the region. Our product platform provides a baseline for organisations to get started rapidly with using a professional toolset

for site portfolio management. At the same time, the configurable layer offers a capability to tweak the tool to suit specific business requirements, thus enabling us to provide a flexibility typically not available in most large-scale ERP systems. This flexibility allows us to solve customer problems with the same efficiency, be it for new entrants in the process of rolling out towers in an under-developed market or mature organisations in the process of securing their investments and maximising profitability.

TowerXchange: What would you say to MNOs and towercos who manage their assets via an Excel or a less specialised platform? And how does your solution help manage different stakeholders within the tower supply chain, from tenants to subcontractors?

Anders Smedberg, CEO, Tarantula: Usage of Excel spreadsheets and homegrown project or asset management tools is an all-too frequent phenomenon that we see in all markets, big or small, irrespective of the nature of the infrastructure owner company. Used efficiently and accurately, there is definitely some advantage in managing one’s business through one or more simple tools. However, these organisations will reach a stage where the amount of information becomes too massive to be managed in spreadsheets. Alternatively, the information sits in various silos spread across the organisation’s functional groups with no alignment or integration between the data streams. As the volume of information grows, discrepancies in data increase, leading to revenue leakage.


This is where having a central repository of all site information can be highly beneficial. We offer the capability to store comprehensive information regarding sites, assets, projects, and contracts in a single, centralised data hub, thus maintaining complete integrity of the data. Moreover, these data streams are interlinked in such a way that the information flows through the entire quote to cash value chain. Additionally, we integrate our platform with third-party tools such that information always gets updated from the appropriate sources. The value of having accurate information over your assets is tremendous, paving the way for a high valuation of the tower portfolio.

Our solution is designed keeping in mind that multiple stakeholders are involved in the management of a site. We can create different user groups to record contract information, capture real-time site data, complete various tasks and generate reports, or provide electronic approvals in line with different processes. This enables towercos to know who is involved in what activity and provides a project contact list with all stakeholders recorded.

We also enable access to contractors and field staff who need limited access to data so that they can perform the tasks assigned to them. The proactive management of subcontractor work with tracking of key milestones increases efficiency so that all stakeholders know what they need to do, what’s next, and whether any changes are required.

TowerXchange: How can your solution be configured to adapt to different towerco’s unique business processes and workflows?

Anders Smedberg, CEO, Tarantula: Our end-to-end purpose-built site asset management solution is built on the foundation of a configuration engine, which provides a highly flexible and time-efficient way of adapting our solution for every customer’s business needs. The configuration layer offers an efficient way to configure business workflows, add user-defined data forms, define service level agreements, and generate reports from the same information. Moreover, the configuration is achieved through an easy-to-use interface, eliminating the need for code development and speeding up the time to market for any changes required on the default functionality. A critical part of our deployment for every customer is analysing their requirements and automating their business processes through quick configuration.

TowerXchange: How can a robust approach to asset registers and asset lifecycle management improve the valuation of tower assets? And how has Tarantula contributed to increasing the valuation of assets of some of your customers?

“ “Some of our customers that used our solutions for many years were successfully able to not only scale but also sell their businesses at a healthy premium. Examples include VIOM Networks with more than 42,000 towers that sold its tower portfolio to American Tower Corp. in 2016 and KIN Towers with more than 1,400 towers in Indonesia sold its tower portfolio to Protelindo in 2018

Anders Smedberg, CEO, Tarantula: For a towerco, having complete and accurate knowledge of its assets, being able to know where they are installed and by whom, and tracking a history of the entire asset lifecycle is crucial to get an accurate valuation of its business. Additionally, if the asset data is linked with the master lease agreements as well as the tenancy billing, a clear picture of the recurring cash flow becomes visible. Our product design is centred around these key principles of optimising tower cash flow.

We have witnessed first-hand the benefits of having a robust fixed asset register with end-to-end management of the asset lifecycle. Some of our customers that used our solutions for many years were successfully able to not only scale but also sell their businesses at a healthy premium. Examples include VIOM Networks with more than 42,000 towers that sold its tower portfolio to American Tower Corp. in 2016 and KIN Towers with more than 1,400 towers in Indonesia sold its tower portfolio to Protelindo in 2018<










© 2020 Site Seven Media Ltd

Tower Xchange

Design by BLACKLIGHT Design Agency

Documents

division of Exide Technologies GRIDSERVE GS Yuasa Halo Energy HIMOINSA INCELL International iQron Leoch Mantrac Ltd. NorthStar Battery Okaya Power Pvt. Ltd. Polar Power Inc PowerX