TowerXchange Asia Dossier 2014 · TowerXchange Asia Dossier 2014 Countries covered: Bangladesh,...

TowerXchange Asia Dossier 2014Countries covered: Bangladesh, Cambodia, China, India, Indonesia,

Malaysia, Myanmar, Pakistan, Sri Lanka, Thailand ,Vietnam

Companies interviewed: Digicel MTC, edotco, Irrawaddy Green Towers,

Square1 Infrastructure, Telenor, Tower share, Viom Networks

www.towerxchange.com | TowerXchange Meetup Africa 2014 Special Edition | 11| TowerXchange Asia Dossier 2014 | www.towerxchange.com2

Chairman: Daniel LeeManaging DirectorIntrepid Advisory Partners

Michel FaivreDirecteur Programme Partaged’Infrastructure AMEAFrance Telecom-Orange

Jim EisensteinChairman & CEOGrupo TorreSur

Alan HarperCEOEaton Towers

Marc GanziPresident, Digital Bridge Holdings & Mexico Tower Partners

Thorsten SchaeferCEOazeti Networks

Areef KassamDirector of InfrastructureGSMA Mobile for Development

Andrew DoyleManaging DirectorTech & Comms PracticeMott MacDonald

Nina TriantisManaging Director, GlobalHead of Telecoms & MediaStandard Bank

John StevensCEOIrrawaddy Green Towers

Chuck GreenCEOHelios Towers Africa

Hal HessEVP, International Operations and President, EMEA and Latin AmericaAmerican Tower

John StevensCEOIrrawaddy Green Towers

Nobel TanihahaPresident DirectorPT SOLUSI TUNAS PRATAMA (STP)

Tunde TitilayoVice ChairmanSWAP International

David MeganckFounder & COOAcsys

Ayman Al AdlExecutive Director, TMT MEAStandard Chartered Bank

Adeel BajwaSenior GM of Legal Affairs andContractsWarid Telecom

Chris Gabrielformer CEO, Zain AfricaSenior Adviser, Macquarie GroupChairman, Clean Power Systems

Torsten EsbjørnRegional Director, AfricaRamboll

Kurt BagwellPresident InternationalSBA Communications

Riana DonaldsonManager: International NetworkOperations SupportVodacom

James MaclaurinFormer CEOedotco

Inder BajajCEOHelios Towers Nigeria

Jeffrey EldredgePartnerVinson & Elkins

Gary StauntonCEOLikusasa Group

Ahjeeth JaiJaiConsultantInvestec

Laurentius HumanSenior DirectorCorporate FinanceJabil

Suresh SidhuCEOedotco

Aniko SzigetvariHead, Africa & Latin America TMTIFC

With special thanks to the TowerXchange “Inner Circle”About TowerXchange

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

The TowerXchange Journal is free to qualifying recipients. We also provide webinars and regular meetups. TowerXchange monetizes this community through hosting annual Meetups and the sale of advertising, without compromising editorial integrity.

TowerXchange was founded by Kieron Osmotherly, a TMT community host and events organizer with 16 years’ experience, and is governed with the support and advice of the TowerXchange “Inner Circle” – an informal network of advisors

Our informal network of advisers:

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

Contents 81-131: TowerXchange Meetup Asia exhibition preview81 ACSYS

84 AIO Systems

87 Eltek

88 FLEXENCLOSURE

91 i engineering Group

94 Heliocentris

95 Infozech

99 Invendis

103 Mer Group, Telecom Division

108 NorthStar Battery

113 PN International (Karam)

117 Shanghai Nanhua Electronics

118 Tarantula

122 Telemisis

128 Vinson & Elkins

131 Abloy

Also exhibiting (see pp. 17-21):

Coslight

GS Yuasa

TowerXchange Meetup Asia, Singapore

13 Agenda (December 9-10, 2014)

14 Round table topics and hosts

15 Who you will meet

16 Exhibitor profiles

5-38

39-74

22-31

44-65

TowerXchange Asia Market Studies

Towercointerviews

edotco 360special feature

The Myanmar tower rollout

5 Introduction to the S and SE Asian tower industry32 Introduction to the Malaysian tower market36 Chinese tower industry migrates to towerco model38 A snapshot of the Indian tower industry

TowerXchange’s exclusive c-suite interviews:22 Nashad Emir, COO, edotco26 Wan Zainal Adileen, CSMO, edotco29 Thivanka Rangala, CFO, edotco

39 Umang Das, Chief Mentor, Viom Networks on India and Myanmar69 Ray Hassan, CEO, Tower share on MENASA74 David Burke, CEO, KIN on Indonesia

54 Oliver Coughlan, CEO, Digicel MTC

57 Daniel Ryan, CEO, Square1 Infrastructure (MIG)

60 John Stevens, CEO, Irrawaddy Green Towers

65 Ole Martin Gunhildsbu, COO, Telenor Myanmar

3Design by BLACKLIGHT Design Agency © 2014 Site Seven Media Ltd www.towerxchange.com | TowerXchange Asia Dossier 2014 |

empowering communication

effectivelycost-efficient

energizingcommunities

Empowering tomorrow’s connected world

www.edotcogroup.comConnectivity is at the core of everything we do. Providing first-of-its-kind regional accessibility, our telecoms infrastructure reach enables us to touch communities and expand communication businesses across Southeast Asia.

Enabling connectivity for the future

Introduction to the Southern and South East Asian telecom tower industryFrom newly formed towercos to maturing tower markets: a diverse and yet exciting region

www.towerxchange.com | TowerXchange Asia Dossier 2014 | 5| TowerXchange Issue 9 | www.towerxchange.comXX

Arianna Neri, Head of Asia and Americas, TowerXchange

An industry in the making

There isn’t a unified Southern and South East Asian tower industry. With an array of single-country towercos and only one, recently established multi-country organisation - edotco - the trend towards large, international towercos is at its very beginning.

While Korea and Japan are mature markets, whose early adoption of 3G contributed to their current high penetration and data consumption rates, emerging markets are now at the heart of the unprecedented mobile growth Asia is experiencing. In fact, mobile subscribers worldwide are expected to reach an astounding 7 billion by 2015 and 65% of it will be from Asia which will become the largest (mega) mobile market in the world.

That said, the entire region has been experiencing a wave of technological advancements, impressive rates of GDP growth, rapid movements towards smartphone adoption and, following a worldwide trend, declining ARPU. With ARPU around US$5 back in 2008, countries like India and Vietnam are now closer to US$4 and likely to reach US$3 by next year.

With declining margins and higher capex requirements as 4G LTE becomes a reality, the time is right for a shift towards passive infrastructure outsourcing and countries like Indonesia and Malaysia are embracing the independent towerco business model, albeit at a different pace.

Read this article to learn:< Can we talk about a pan-asian telecom industry?

< The Indonesian tower industry: mature yet growing

< Is Malaysia ready for large scale towercos?

< edotco’s expansion into Sri Lanka, Cambodia and Bangladesh: three markets at a glance

< Vietnam’s shift toward privatisation: a necessary move

Keywords: Indonesia, Sri Lanka, Malaysia, Thailand, Cambodia, Bangladesh, Vietnam, South East Asia, India, Myanmar, edotco, ARPU, 3G, 4G, LTE, Protelindo, Tower Bersama, Mitratel, STP, Komet Infra Nusantara, IBS Tower, Retower, Telkomsel, XL Axiata, Indosat, Digi, Maxis, Celcom, Common Tower, Instacom, KJS, Sacofa, Metfone, Smart, Cellcard, TRUEGIF, Truemove-H, Viettel Mobile, MobiFone, Vinaphone, Golden Towers, Mobitel, Grameenphone, Banglalink, Robi, MNOs, Towercos, Editorial, Market Overview

As TowerXchange start delving deeper into the reality of the multi-faceted Asian telecom tower industry, we are glad to offer our readers an initial overview of our findings.

The scope of our research is mainly focused on the Southern and South East Asian markets where the tower industry is in some countries established and mature, while in other countries still taking root and yet to reach its full potential. From India to Indonesia, encompassing Myanmar, Vietnam, Cambodia, Thailand, Sri Lanka, Malaysia and Bangladesh, we will provide our readers with initial data and insights into the evolution of these very diverse tower markets.

www.towerxchange.com | TowerXchange Issue 9 | XX| TowerXchange Asia Dossier 2014 | www.towerxchange.com6

Indonesia: a multitude of towercos beside the Big Five

Thanks to its scattered geographical landscape made of more than 17,000 islands, the Indonesian market is host to dozens of independent towercos with portfolios ranging from 10 to 10,000 assets.

Indonesia has recently surpassed Brazil and Russia to place itself as the 4th largest mobile market in the world after China, India and the U.S. With 278 million subscribers, or 165 million unique users, owning an average of 1.7 active SIM cards, and one of the world’s top 3G markets, Indonesia’s mobile industry is expected to reach 130% penetration

rate and 330 million subscribers by 2015. According to GSMA, Indonesian mobile subscribers are connected via approximately 90,000 towers which could become as many as 130,000 over the course of the next year. In fact, with a very fragmented tower industry, and a ‘long tail’ of regional players expanding way beyond the “Big Five”, it comes as no surprise that greenfield projects are developing at a swift pace throughout the national territory to reach out to uncovered rural areas and remote islands.

With Protelindo, Tower Bersama, STP and Mitratel leading the way and owning approximately 40% of the total national tower count, the country is

served by an array of regional towercos including Komet Infra Nusantara, IBS Tower and Retower Asia.

There are still as many as 60,000 towers in the hands of mobile operators and with three of them - Telkomsel, XL Axiata and Indosat - fiercely competing and expanding their geographical coverage, BTS projects are becoming available throughout the archipelago.

The country is definitely at the centre of attention lately for the recently announced deal between XL Axiata and STP. The MNO will divest 3,500 of its 8,000 telecom sites for an estimated USD 460 million. Once concluded, the deal will be one of the largest ever occurred in the region.

Malaysia: a mature market ideal for infrastructure sharing

With 30 million people of which 70% live in urban areas, and mobile penetration above 140%, the Malaysian market is among the best performing in the region, ahead of Indonesia and Thailand.

Tough competition among three main operators, Digi, Maxis and Celcom, is driving tariffs and devices prices down, compromising the sector’s growth potential and, with as many as eight mobile operators, the industry is likely to witness some consolidation over the next few years.

Infrastructure sharing in Malaysia has been a

Protelindo

Tower Bersama

STP

Mitratel

IBS Tower

Komet Infra Nusantara

Retower Asia

Balitowers

2,000 4,000 6,000 8,000 10,000 12,000

Estimated tower counts for Indonesia’s largest independent towercos

Source: TowerXchange, companies’ website, filings, third-party news

10,300

9,382

4,000

7,000

2,079

500

450

208


common practice for some time now, as initiated by Digi and Celcom in an effort to drive their capex down. With shrinking margins and higher capex as the market moves towards 4G LTE, telecom operators are likely to start outsourcing parts of their operations. Divesting their tower portfolios seems like the next obvious move.

To date, few opportunities remain for urban site acquisition and telcos are increasingly focused on in-building and small cells in order to optimise urban coverage in public spaces and high-traffic areas. Co-locating multiple tenants on

scarce urban sites and supporting rollout of IBS is yet another area where towercos could offer technical expertise and allow operators to focus strictly on their core business.

An array of towercos is available to serve the needs of the Malaysian telecom industry. Along with the newly-formed edotco, a tower company spun out of the Axiata group, which owns 3,400 sites across Malaysia, TowerXchange are tracking a series of regional towercos with portfolios ranging between 100 and 700 towers such as Common Towers, Instacom, KJS and Sacofa, all of

which are involved in BTS projects along with the antenna space leasing business.

Sri Lanka: A regulatory environment favourable to infrastructure sharing

Although with varying scenarios, other countries in the region are slowly getting closer to the independent towerco model. Sri Lanka, Cambodia and Bangladesh are now served by edotco, which has recently started operations in five markets with an overall portfolio of 12,000 towers. Sri Lanka, with its population of 20 million and mobile penetration rate just above 99%, is an ideal marketplace for towercos. In fact, the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) has recently developed the National Policy on Antenna Structures in order to “safeguard the environment and public interests while not unduly restricting the development of telecommunication services.”

Along with it, at the end of 2012, the Sri Lankan cabinet has approved new tower guidelines which will govern the actions of the telecom operators currently active in the country and operating its 2,900 telecom towers. These guidelines include incentive schemes to develop all new telecom towers with additional antenna space to potentially accommodate additional operators - the perfect scenario for towercos to get involved as mobile operators won’t lightly invest extra capex to develop multiple tenant towers. Additionally, the regulation stipulates the creation of Antenna Structure Farms: specific

Estimated tower count for Malaysia

Sacofa 765

Touch Matrix 460

D’harmoni 346

KJS 309

Common Tower 260

Infra Quest 201

Yikedbina 200

Perak Integrated Networks 150

Asia Space 137

Desabina 118

Melaka ICT Holdings 95

Rangkaian Minang 90

PDC Telecommunications 43

Perlis Comm 23

edotco 3,500

13,300 Remaining MNO-captive 3,200

Source: TowerXchange

State-backed and other independent towercos


areas where towers will be grouped together with very detailed limitations in terms of zoning.

edotco enters the young Cambodian market

A very different scenario is found in the less penetrated Cambodian mobile market (69%), where a technology-hungry population of 15 million people can choose from five network operators after a rationalisation phase in 2011, when nine operators were active in the country. Two mergers and one market exit led to Smart Mobile (formed by the merger of Hello Axiata and Smart) and Viettel’s Metfone owning the majority of the market share.

Based on our research, edotco is the only independent towerco in the country where it operates 1,500 sites. Despite frequent rumours of towerco launches and sale and leaseback opportunities, Cambodia’s telecom towers are still mostly in the hands of operators. Cellcard, the third telco of the country, has recently denied any intention to sell its portfolio of 3,000 sites.

Bangladesh booming despite electrification challenges

Strongly positioned thanks to its presence as a mobile network operator - Robi - Axiata group launched its first towerco operations with edotco in Bangladesh as well where it owns and operates 5,300 sites.

With six mobile operators - Telenor’s Grameenphone, Banglalink and Robi leading the market - and subscribers doubling since 2009 (from 45 million up to 114 million as of January

2014), the Bangladeshi mobile industry has boomed over the past few years.

According to GSMA, 25,858 telecom sites provide almost 90% coverage. However, a substantial rural population is concentrated in the uncovered 10% of the national territory.

Privatisation might open up Vietnam to towercosTo date Vietnam is the fastest growing mobile market in the region, leading the way in terms of mobile penetration (150%) and with forecasts that

Sri Lanka 2,150 Towers

Cambodia 1,500 Towers

Bangladesh 5,300 Towers

Malaysia 3,300 Towers

Pakistan 12,000 Km of Fiber

edotco portfolio in Asia

Source: TowerXchange, companies’ website, filings, third-party news

Asia Tower Deals

* Company aquisition

Year Seller Buyer Country USD/Tower Tower Sites Value (USD)

2012 KPN Telecom Protelindo Indonesia 371.6 261 97 million

2014

2014

KJS* company aquisition

XL Axiata

YTL Power International

STP

Malaysia

Indonesia

48.5

131.4

309

3500

15 million

460 million

2010 Essar Group American Tower India 97.1 4450 432 million

2012 Hutchinson Protelindo Indonesia N/A 503 N/A

2009 Xcel* company American Tower India 80 1700 136 million

2012 PT Central Investindo Protelindo Indonesia N/A 152 N/A

2008 Bakrie STP Indonesia 64.45 543 136 million

2012 Indosat Tower Bersama Indonesia 207.6 2500 519 million

2008 Hutchinson Protelindo Indonesia 135.43 3692 500 million


suggest it will reach 167% by 2018.

Military-run Viettel Group, the leading mobile operator, is a state-owned enterprise with over 40% market share. Its two main competitors, Vinaphone and MobiFone, are both owned by the national telecommunications company VNPT although MobiFone is reportedly being privatised by the end of this year in a move to increase competition in the telecom market as ordered by the Vietnamese government.

By creating a more liberal environment for the telecom industry to develop, we can predict more tower companies seizing opportunities in Vietnam but for the moment, Golden Towers is the only active towerco we have identified in Vietnam. Backed by Alcazar Capital, Golden Towers has been active in the country since 2012.

Thailand: The first towerco after years of regulatory challenges

Thailand finally established an independent telecom regulator, the National Broadcasting and Telecommunications Commission (NBTC), in September 2011 after years of near-misses which contributed, along with the 2009 financial crisis, to a standstill of the telecom industry. Since then, several positive actions have been implemented with the 3G licence auction that took place in 2012 as a highlight. To date, the mobile market has reached over 85 million subscribers with a penetration rate above 130%.

True Corporation, owner of the third operator in the country Truemove-H, has recently set up the first national towerco, the True Growth Infrastructure Fund (TRUEGIF) with the goal to transfer the operator’s assets into the newly formed towerco over the course of the next two years. The assets include 6,000 telecom towers (planned and existing) of which 1,800 are in Bangkok and 4,200 in the rest of the country.

As the first mobile network operator to offer 4G LTE in Thailand, divesting its passive infrastructure and lightening its opex was a

necessary step for Truemove-H to continue being profitable while being a pioneer in Long Term Evolution.

India and Myanmar: the region’s oldest and youngest tower markets

Left out in this analysis, India and Myanmar represent polar opposite tower markets with Myanmar’s telecom industry and infrastructure just about to be rolled out, while the mature Indian market is emerging from a period of consolidation and restructuring

Bangkok, Thailand

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One gathering, countless opportunities. Take YOUR seat at the table with 200 leaders of the Asian tower industry

Meetup Asia 2014

Silver Sponsors:DiamondSponsor:

Exhibitors:

Bronze Sponsors:

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

9-10 December,Marina Bay Sands, Singapore

The unique experience of a TowerXchange Meetup

< Southern and Southeast Asian market forecasts< Q&A with the CEOs< Round tables add insight< Structured introductions< Select your own agenda< Local market knowledge

< Market transformation< Next sale & leasebacks< BTS opportunities< Site upgrades< Energy opex reduction< Country specific round tables

Insights

Infrastructure focused

Personal development

Connections

Experience

Learning

< Top 200 decision makers< Towerco CXOs< MNO tower strategists< Investors< Strategic advisors< Proven suppliers

< Networking< Selective audience< Curated exhibition< Relax and enjoy< Professionally hosted

< Undiluted focus on passive infrastructure< Real estate< Power< Construction< Monitoring< O&M

< Learn from 200 peers, the leaders of the Southern and Southeast to Asia tower industry< Align your role and strategy with the needs of the ecosystem

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

TowerXchange Meetup Asia 2014 Agenda

www.towerxchange.com | TowerXchange Asia Dossier 2014 | 13| TowerXchange Meetup Asia | www.towerxchange.com2

Day one, Tuesday 9 December

8:00 Registration and coffee

9:00 The status of the Southern and Southeast Asian tower industry and forecasts for the mid-term. Speaker: TowerXchange

9:40 Mobile network operator panelConfirmed panellists include:< Feisal Kurniadi, Site Sharing Roll-Out Manager, PT. Hutchison 3 Indonesia < Mohammad Razaul Karim Rizvi, Manager, Project, Planning & Implementation, 3G Project, Teletalk Bangladesh Limited< Nicholas Swierzy, Chief Strategy Officer - Myanmar, Senior Director, M&A and Strategy, Ooredoo

Moderator: Gulfraz Qayyum, MD, Head of Telecoms MEA, Citigroup

10:40 Morning coffee and networking

11:10 First structured networking roundtable

12:35 Networking lunch

2:00 Second structured networking roundtable

3:15 Afternoon coffee and networking

3:35 Strategic partners panel part I: the importance of partner selection for ROI optimisation and opex reduction

3:55 Towerco keynote panel - India Confirmed panellists include:< Bimal Dayal, COO, Indus Towers< Umang Das, Chief Mentor, Viom Networks< Nitin Doddihal, Vice President - Business Development, American Tower < Tushar Kapadia, Vice President - Strategic Initiatives, GTL Infrastructure< Moshe Shushan, Founder and Director, Tower VisionModerator: Pankaj Suri, Equity research - Asian Telecom and Media, Nomura Singapore Limited 5:15 Closing remarks from day one

5:20 Close of day one and cocktail reception sponsored by edotco Group

Day two, Wednesday 10 December

9:00 Keynote Address: Suresh Sidhu, CEO, edotco Group

9:20 Third structured networking roundtable

10:40 Morning coffee and networking

11:10 Strategic partners panel part II: the importance of partner selection for ROI optimisation and opex reduction

11:30 Investors keynote panelConfirmed panellists include:< Carlos Katsuya, Head - Asia - Telecom, Media & Technology, International Finance Corporation (IFC) < Pankaj Agrawal, Director, Capitel Partners< Tharma Kunaratnam, MD - Asia TMET, Macquarie GroupModerator: Lim Chuan Wei, Partner, Analysys Mason

12:30 Networking lunch

2:00 Strategic partners panel part III: the importance of partner selection for ROI optimisation and opex reduction 2:20 Towerco keynote panel - Myanmar, Malaysia, Vietnam and IndonesiaConfirmed panellists include:< Philippe Luxcey, Chief Executive Officer, Apollo Towers< Daniel Ryan, CEO, Square1 Infrastructure< Oliver Coughlan, CEO – Myanmar, Digicel Myanmar Tower Company< Patrick Tangney, Chairman, Irrawaddy Green Towers< David Burke, CEO, PT Komet Infra Nusantara (KIN)< Dr Mahadi Harris-Murshidi, CEO, Common Tower Technologies< Stephen D. Weiss, CFO, ProtelindoModerator: Enda P. Hardiman, Managing Partner, Hardiman Telecommunications Ltd.

4:00 Coffee and end of day 2

www.towerxchange.com | TowerXchange Meetup Asia | 3| TowerXchange Asia Dossier 2014 | www.towerxchange.com14

TowerXchange round table topics and expert hosts

1. Impact of spectrum regulation and technology policy on towerco tenancies< Pankaj Agrawal, Director, Capitel Partners2. Country focus: Thailand < Lim Chuan Wei, Partner, Analysys Mason3. How to connect rural areas – Operational and logistics challenges < Nashad Emir, COO, edotco Group4. Best practices in sourcing contractors in new markets: IGT’s experience< Arun Kapur, Vice-Chairman, Irrawaddy Green Towers5. Country focus: Pakistan< Akbar Shaukat, CEO, AWAL Telecom6. Improving profitability by putting RMS data into action < Ankur Lal, CEO, Infozech7. Country focus: Vietnam< Patrick Tangney, Chairman, Irrawaddy Green Towers9. Contractual terms that create and destroy value when negotiating S&LB and BTS programmes< Jeff Eldredge, Partner, Vinson & Elkins9. Financing tower projects in frontier markets< Phil Cooper, CFO, Apollo Towers

10. Country Focus: Malaysia< Hadi Helmi, Country Managing Director, edotco Malaysia11. The Investibility of the Southeast Asian telecom tower industry< Thivanka Rangala, CFO, edotco Group 12. Country focus: Indonesia< David Burke, CEO, PT Komet Infra Nusantara (KIN)13. Tower manufacturing and design know-how and best practices in preventive maintenance < Mandeep J. Sachdeva, Chief Supply Chain Management Officer (CSCMO), Indus Towers 14. Regional focus: MENA < Ray Hassan, CEO, Towershare15. Country focus: Myanmar Part 1< Umang Das, Chief Mentor, Viom Networks16. Country focus: India Part 1< Enda P. Hardiman, Managing Partner, Hardiman Telecommunications Ltd.17. Why and when Asian MNOs will divest their towers and what they are seeking to achieve < Gulfraz Qayyum, MD, Head of Telecoms MEA, Citigroup

Day one | 9 December | 11:00

Day one | 9 December | 2:00

Day two | 10 December | 9:20

18. Country focus: Bangladesh < Darryll Sinnapa, Country Managing Director, edotco Bangladesh19. Getting the best from RMS – Designing for reliability and return on investment< Chris Begent, Commercial Director, Telemisis 20. Country focus: Myanmar Part 2< Kieron Osmotherly, Founder and CEO, TowerXchange21. Creating a successful start-up towerco in Southern and Southeast Asia< Daniel Ryan, CEO, Square1 Infrastructure22. Country focus: India < Sameer Sinha, Chief Sales & Marketing Officer, Indus Towers23. Energy efficiency in Southeast Asia - Green sites for multiple tenants< Tushar Kapadia, Vice President - Strategic Initiatives, GTL Infrastructure24. Country focus: Sri Lanka< Enda P. Hardiman, Managing Partner, Hardiman Telecommunications Ltd.25. How to structure a tower transaction< Michael Reede, Partner, Allen & Overy26. Operational challenge of tower rollout in Indonesia< Feisal Kurniadi, Site Sharing Roll-Out Manager, PT. Hutchison 3 Indonesia 27. Acquisition and exit strategies for regional towercos< Di Kun Goh, Associate, Deutsche Bank

Please note - more roundtables will be announced shortly

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

How our structured networking round tables work

Interested in moderating a roundtable? Contact Arianna Neri, Head of Asia at [email protected]

Backhaul, FTTT, Core Network Active equipment

Tier 1 OEMs

Mobile Network Operators

Investors: private equity, debt finance, infrastructure funds

Law firms

www.towerxchange.com | TowerXchange Asia Dossier 2014 | 15

Group level strategistsC-suite & network planners at local OpCos

Outsourceto

Strategic consultancyDue diligenceDemand forecastsValuations

Independent TowercosSell co-locationsUpgrade capacityBuild-to-suitMaximise uptimeReduce opexInvest in network

Transfer assets to

Construction servicesTurnkey infrastructure rolloutManufacture of steelworkImport, customs & deliveryLeasing & permittingInstallation of towersUpgrades for capacityO&M services

Dynamic assets

Energy equipmentDiesel gensetSolarWindFuel cell

BatteriesRectifiersInvertersLine conditioningPIUs

Air conditioning Lightning protectionControllerVoltage regulator

Managed service providers

ESCOs

Static assetsTowers & mastsSheltersBracketsEnclosuresLightingFencing

0&M servicesMaintenanceStaffingSpare partsVMI?Refueling

Energy as a service

Monitoring & managementRMSIntelligence/analysisSite managementJob ticketingAsset lifecycle platform

Access control

Subcontract

MicrogenerationCommunity power

Subcontract or in-house

Outsourceto

Som

e be

com

e to

wer

co

Tower Industry Value Chain

Investment management advisors

TowerXchange serves the Southern and Southeast Asian tower community along two intersecting axes. On a horizontal axis we facilitate relationships between MNOs, towercos, investors and their advisers, aiding the structuring of deals and the transfer of assets. On a vertical axis, we examine the impact on, and opportunities for, the passive infrastructure supply chain, whether they sell to MNOs, towercos or through OEMs.

How TowerXchange ensure an audience of decision makers

Many of our clients complain that similar events have failed to deliver genuine decision makers; that won’t be the case at TowerXchange.

The TowerXchange Meetup is exclusively for Director, VP and C-level decision makers. If registrants are substituted, we will only accept replacement registrants of equal or greater seniority than those pre-approved.

Through our passive infrastructure focused journal publication and research, TowerXchange have cultivated relationships with 8,000 (at time of press) decision makers in emerging market towers, 84% of whom are Director, VP or C-level.

More importantly, we have personal relationships with the 200 or so individuals with genuine strategic and procurement decision making responsibilities. The TowerXchange Meetup has been requested and designed by the top decision makers in Southern and Southeast Asian towers, so you can be confident that the vast majority of those key contacts will be at the event.

Who will you meet

| TowerXchange Meetup Asia | www.towerxchange.com/meetups/asia6

ACSYS KARAM

Tarantula

Heliocentris

Invendis

AIOSystems

edotco

edotco

Eltek

Telemisis

NorthStar i engineering MerGroup Coslight

Infozech Nanhua TowerShare GS Yuasa Flexenclosure Abloy

i engineering


TowerXchange Meetup Asia floorplanDIAMOND SPONSOR:

Silver Sponsor:ACSYS Eltek

Bronze Sponsors:Vinson & Elkins RLLPTarantulaInvendis

Diamond sponsor: edotco

edotco

edotco Group is an integrated telecommunications infrastructure services company providing end-to-end solutions that includes towers, energy, transmission, operations and maintenance in the region of Southeast Asia.

Today, edotco Group has a large network sites its circle of operations in Malaysia, Sri Lanka, Bangladesh, Pakistan and Cambodia. This represents the company’s commitment to expand possibilities with cost-efficient telecommunications infrastructure that is built around growing competitiveness and connectivity for businesses.

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

http://edotcogroup.com

Private meeting rooms

Main Meetup room

Telemisis Ltd KARAMTowershareFlexenclosureInfozechHeliocentrisNorthStar

AIO SystemsCoslighti engineeringMer GroupGS Yuasa AbloyNanhua

Exhibitors:

Vinson & Elkins RLLP

Vinson & Elkins is one of the oldest and largest international law firms, with approximately 700 lawyers located in 15 offices around the world.

Our global telecommunications team has extensive experience advising on international telecoms and telecoms infrastructure transactions. We have significant industry experience, advising on telecoms transactions in numerous countries. Our telecommunications advice includes acquisitions and disposals, debt and equity financing, infrastructure development, operational arrangements, regulatory matters and dispute resolution.

We also have significant experience in the negotiation and drafting of sale and purchase, debt and equity financing, master lease, build-to-suit, site management and service level arrangements; and have played a prominent role in complex fibre transactions.

www.velaw.com

Tarantula

Tarantula is a world leader in telecom site

Our sponsors and exhibitors


Acsys

Acsys is one of the global leaders in cell tower access control solutions. Our patented, military-grade solutions fill the industry gap for highly secure, remote site access management. Acsys offers a combination of solutions that are wired, wireless and/or wire-free to gain access to any site under any circumstances. European-rooted, with an innovative team from around the globe, and the benefits of China-based production, Acsys stays at the forefront in designing cutting-edge security and staff management solutions at a competitive price. Our programmable locks and keys have earned recognition from leading telecom operators, tower management companies, and equipment providers.

www.acsys.com

Eltek

Eltek was established in Norway in 1971 as a specialist telecom power systems supplier. Since

then, the company has grown organically as well as through mergers and acquisitions to become the world leader in High-Efficiency power conversion electronics.

Eltek develops and markets power systems, based on leading proprietary technology and state-of-the-art products. A strong range of high power-density, flexible and cost-effective rectifiers, converters and inverters are the core of their offering for the Telecom, Datacenter, Rail and Infrastructure, Power Generation and Hybrid Solar sectors. Eltek also designs, builds and furnishes complex turn-key power solutions, as well as developing embedded system solutions for original equipment manufacturers. Eltek prides itself on assisting customers in reduction of their overall operational expenses with high efficiency solutions and innovative designs through reduction of wasted electrical energy and environmental impact.

Eltek’s headquarters is located in Drammen, Norway and the company has approximately 2,400 employees in 40 countries and business activities in more than 100 countries. With increasing demand and tremendous economic growth in Asia Pacific market, Eltek Power Pte Ltd was set up in Singapore in 1997 as the Asia Pacific Regional Office and continues today to provide key support for the region.

Visit: http://www.eltek.com/energy_saved_he.epl to see our live HE saving!

Bronze Sponsor:SILVER SPONSOR:

SILVER SPONSOR:

Bronze Sponsor:

full site management systems for operators, tower companies and the world’s largest generator leasing and rental company, providing fuel management, electricity metering, environmental management and machine/equipment control in harsh and demanding locations since 2000. Telemisis® manufacture the industry’s smallest, most flexible and cost-effective remote telemetry node “SiteNode®”. This coupled with Telemisis’ back-end server systems enable us offer standard or bespoke solutions.

www.telemisis.com/products

Karam

KARAM specializes in field of Fall Protection & manufactures the highest quality equipment, leading the way with innovative products & solutions for safe working at height.

Our complete vertically integrated manufacturing set-up is spread over a span of around 325,000 square feet area with work force of above 1500 highly skilled people.KARAM provides a range of Solution to the user working at Height on variety of towers, masts, monopoles and lattice structures that are used in Telecom industry.


management software and a trusted partner of leading telecom infrastructure operators in 13 countries. Through its specialized site management toolset, Tarantula is a fundamental pillar of support behind the management of more than 350,000 mobile towers and assets worth US$25 billion around the world.

Red Cube Enterprise is Tarantula’s flagship product for smart and efficient telecom site management, with modular design and configurable workflows. The platform is the worldwide industry standard for co-location and tower lifecycle management. The tool also offers additional capabilities such as location management, asset and lease management, operations and maintenance, invoice management, mobile field-force solutions, and comprehensive dashboard reporting.

www.tarantula.net

Invendis

Invendis Technologies India Pvt. Ltd. was started in 2007 by people with more than 100 man years of experience in Telematics. Today, we are a global leader in the business of Remote Monitoring of Telecom Towers.

Invendis designs and delivers technology-enabled

business solutions that help Telcos & Towercos to offer uninterrupted services to their clients. Invendis also provides a complete range of Remote Monitoring & Energy Optimization services by leveraging our domain and business expertise.

Our offerings span front end equipments, sensors, transducers, business applications, systems integration, product engineering, Installation, maintenance, 24X7 Global Monitoring & IT infrastructure services.

Invendis pioneered customizable Front End Monitoring & controlling equipments, which helped Towercos to roll out Monitoring & Energy optimization solutions in shortest possible time.

Invendis has a global footprint with over 25,000 installations spread across Asia, Africa & Europe

www.invendis.com

Telemisis

Telemisis manufacture the highly reliable SitePro® system for remote monitoring and control for all business sectors; our specialisation being mobile operators and tower owners. We have delivered

Our sponsors and exhibitors

Exhibitor:

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Bronze Sponsor:

iETS ( Infozech Energy Tracking Service ) manages energy costs worth about 837.5 million US $ across 150,000 towers in India. iETS was adjudged the most innovative product at The Economic Times Telecom Award 2013.

www.infozech.com

Heliocentris

Heliocentris is a German technology company that provides Managed Power Solutions and Services for commercial stationary applications for global Telecommunication Operators and Tower Companies. Services reach from energy optimization and solution engineering to implementation of customized turnkey power solutions and smart operations. The flagship product the “Energy Manager” enables smart connectivity between different components in hybrid energy supply clusters, such as batteries, solar panels, conventional diesel generators or fuel cells, thereby substantially decreasing the ecological footprint at much lower operating cost. The company is headquartered in Berlin with branch offices in Munich, Dubai, Vancouver and representations in Johannesburg and Yangon.

www.heliocentris.com

Our exhibitors


Our commitment to quality is reaffirmed by our ISO 9001-2008 certification. All our products are certified as per EN also meets American & other International standards.

www.karam.in

Towershare

Towershare is a leading independent owner and operator of wireless communications infrastructure, focusing primarily in the Middle East, South Asian and North African markets. Headquartered in the UAE, Towershare’s management team comprises telecom veterans who, between them, have built over 20,000 towers in MENA and Asia. TS has an operational footprint in Pakistan where it has completed a few small acquisitions and a small carve out. It is currently in discussions in more than four different markets for sale and leaseback and build-to-suit opportunities.

www.towershare.com

Flexenclosure

Flexenclosure is a designer and manufacturer of intelligent power management systems and prefabricated data centre buildings for the ICT

industry. The company provides systems that are fully integrated, modular, factory tested for reliability, adaptable to local conditions and quick to install.

eSite is a hybrid power system for off-grid and bad-grid cell sites that cuts diesel costs by up to 90%. eSite is an integrated single cabinet system for maximum reliability and speed of installation. eManager, an all-in-one toolbox for remote management, site power optimisation and KPI reporting, is an integral part of eSite.

www.flexenclosure.com

Infozech

Infozech is a leading provider of technology-led and data analytical solutions to Telecom – infrastructure, operators and communication service providers (CSPs). Infozech has been delivering cost optimization and revenue management solutions, over the past 10 years to 80 customers across 25 countries. Infozech drives efficiencies through data capture, data analytics and generating actionable recommendations that helps to improve operational performance of leading Telecom operators. Infozech’s innovative offering iTower (Infozech Tower Product Suite) provides an end to end solution for managing and reducing operating costs through tracking real time tower operations, prediction and analytics.

Exhibitor:

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NorthStar

NorthStar is an industry leader in designing and manufacturing high performance lead-acid batteries and high efficiency telecom cabinets. The company has state-of-the-art facilities in the USA and Sweden, and their products are used in more than 120 countries worldwide. NorthStar premium thin plate AGM batteries deliver long life at elevated temperatures, with faster recharge and superior PSOC cyclic performance. NSB Blue Batteries are today reducing 85% of diesel generator run time in offgrid telecom applications. The newly launched NorthStar Academy program will help customers to prolong their battery life and save energy in their telecom network.

www.northstarbattery.com

AIO Systems

AIO Systems is a solution provider of next generation of remote management, monitoring and control systems for critical unmanned sites. Offering customized infrastructure management solutions, AIO’s products are designed for telecom, infrastructure, power and water utilities, urban infrastructure, and others.

AIO’s total site efficiency solution offer 34% OPEX reduction to telecom tower operators, allowing to manage every asset and every tenant individually. Capable of monitoring all infrastructure aspects –power, environment, communication, access control and security - AIO Systems manages a modular configuration fit for the clients’ needs, in full automation, and providing timely alerts via a variety of communication channels. With powerful protocol implementation, AIO Systems ensures organizational business continuity and provides much more control and monitoring power – at a far lower cost.

www.aiosystems.com

Coslight

Since 2007, Coslight India operates via its manufacturing plants in Una, Himachal Pradesh, IMT Manesar and Gurgaon. We are 100% subsidiary of COSLIGHT International Group, a Hong Kong stock exchange listed company. COSLIGHT India covers EMEA, India and Asia Pacific.

We serve key telecom infrastructure projects globally and our mission is to deliver reliable and affordable energy solution for the bettertomorrow. We are a global approved vendor for Vodafone and our

products comply with all international standards and certifications. We offer a variety of battery solutions as well as Hybrid Power System and Telecom Integrated Power Unit. Our energy storage solutions are reliable, environmentally friendly and manufactured following world-class standards.

www.cncoslight.com

GS Yuasa

GS Yuasa is a Japanese company formed in 2004 by the merger of two large 100 year old battery manufacturers, Japan Storage Battery and Yuasa. At US$3.2B in sales, GS Yuasa is one of the worlds largest battery manufacturers.

GS Yuasa manufactures a full line of technologies including lithium, lead acid, nickel metal hydride, and nickel cadmium for the automotive, industrial, and specialty battery markets. Especially for Telecom market, we have developed a 48V lithium ion battery module that has outstanding cyclic life and charge acceptance that can reduce the runtime of generators and the total cost of ownership of telecom base stations. With 36 affiliates in 16 countries, GS Yuasa has a worldwide presence operating under the GS Yuasa, GS,

and Yuasa brands.

www.gs-yuasa.com (GS YUASA) www.gsbattery.com (GS Battery USA)

Our exhibitors

Exhibitor:

Exhibitor:

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Exhibitor:

Our exhibitors


Abloy

Abloy South East Asia is one of the leading manufacturers of locks, locking systems and architectural hardware and the world’s leading developer of products in the field of electromechanical locking technology. We develop safe, aesthetic and easy-to-use locking solutions which satisfy the needs of end-users and our construction industry partners for security, safety and ease-of-access.

Abloy Protec2, which is based on the patented rotating disc cylinder mechanism guarantees the physical security at your site, while electronic Abloy CLIQ technology brings together and integrates the very best of electronics and mechanics allowing flexible control of keys, access rights and audit trails.

www.abloy.sg

Nanhua

For more than 24 years, Shanghai NANHUA Electronics has been focused on the designing, manufacturing and marketing of industrial application products. NANHUA has begun the promotion and application of Aviation obstruction light system for telecom towers in the year

2007. NANHUA has full experience in manufacturing of the complete line of cost-effective obstruction lighting and control solutions for the telecom towers, chimneys, high buildings, port machinery and any other high structures that could threaten the aircrafts. NANHUA products have been proven to be professionally designed and highly reliable.

NANHUA Electronics is located in Shanghai, China, with a factory of 6000 square meters, 310 staffs till June of 2014, including 37 members in R&D center and ISO 9001 quality authentication certification.

www.nanhua.com

Mer Group Telecom Division

Mer Group Telecom Division provides end-to-end Wireless Infrastructure Turnkey Solutions – from network planning, site design and provision oftowers, to site construction, equipment installation, network optimization and maintenance. Combiningcost effectiveness, short lead times and advanced engineering techniques, we are strongly committed to client satisfaction. With a highly developed logistics chain, advanced tower manufacturing facilities andan extensive network of warehouses, our solutions are flexible and scalable, providing measurable benefits for customers. Our strong presence in Latin America enables us to leverage the combined in-depth regional knowledge of local partners with our industry

acknowledged engineering expertise for our customers’ benefit.

The division leverages its proven global track record, comprehensive knowledge and accumulated expertise to seamlessly deliver technologically innovative and best-of- breed solutions including M2M enablement and vertical market applications, mobile financial services, cloud billing, MVNO enablement, as well as on/off board and remote/contactless payment solutions for public transport operators.

www.mer-group.com/solutions/wireless-infrastructure

Exhibitor:

Exhibitor:

The TowerXchange Meetup Asia provides a

unique opportunity to develop business with a

high qualified audience of the top 200 decision

makers in Asian towers. Ensure your company

receives RFPs from one of the fastest growing

telecoms sectors in the world by sponsoring or

exhibiting at this event.

Contact Annabelle Mayhew at +44 7423 512588

or at [email protected]

Do you provide equipment and services to the Asian tower industry?

Exhibitor:

edotco 360: Applying Six Sigma mindset to performance measurement in the tower industryChanging mindsets to focus on resolving issues causing downtime, not measuring uptime

TowerXchange: What’s your background Nashad, and what do you bring to the management team at edotco?

Nashad Emir, COO, edotco Group: I have a background in operations and manufacturing from many different industries, including working for Sony and General Electric. I was the first Six Sigma Master Black Belt in GE Malaysia, so I’m very focused on quality and productivity, and on a project management approach to reducing and eliminating defects.

Six Sigma is a good philosophy – it’s a passion of mine. In my experience, we focus too much on ‘average’ in this business, we fail to focus on variation. To be at 99.8% uptime looks good, but it means there are still a few sites at very low or 0% at times. I want to know how much variation there is in performance at sites where power is down for a couple of days. I don’t want to measure the 99.8%, I want to measure the 0.2%. I want to subdivide that into categories of downtime. This requires a major change of mindset to a Japanese philosophy of zero defects. The language we use to describe performance has got to change – we should be asking how to reduce downtime, not how good is my uptime.

We need accountability and visibility into the causes of downtime to create an appropriate sense of urgency to facilitate that change of mindset. Remote Monitoring Systems (RMS) and the Tower Operating Centre (TOC) are crucial – you’ve got to have a real time speedometer and fuel gauge to

Read this article to learn:< How to change mindsets to focus on resolving downtime rather than measuring uptime

< How the KPIs used by telcos differ from those used by towercos

< edotco’s business models for managing O&M and power

< How edotco is leveraging RMS, asset lifecycle management and access control / time attendance monitoring

< edotco’s different approaches to building and managing distributed generation and backup power systems

within each country

Nashad Emir was the first Malaysian to be certified as a GE Six Sigma Master Black Belt. He’s brought that philosophy of zero defect tolerance to a telecom tower industry which he feels need to refocus on resolving downtime rather than measuring uptime. Nashad also explains some of the monitoring and management tools he is deploying at edotco, from RMS and access control systems to asset lifecycle management back at the TOC, and describes the structure of the O&M function at edotco.

Keywords: How to Guide, Towercos, Access Control, Monitoring & Management, O&M, Construction, Transfer Assets, Capacity Enhancements, Fuel Security, QoS, SLA, Uptime, KPIs, Change Management, Site Surveys, NOC, Asset Register, C-Level Perspective, RMS, Asset Lifecycle Platform, Job Ticketing, Stakeholder Buy-In, Asia, Malaysia, Bangladesh, Sri Lanka, Cambodia, Pakistan, edotco

www.towerxchange.com | TowerXchange Asia Dossier 2014 | XX| TowerXchange Asia Dossier 2014 | www.towerxchange.com22

Nashad Emir, COO, edotco Group

drive a tower business.

TowerXchange: How does the management and measurement of the performance of O&M differ as assets are transferred from MNOs to towercos?

Nashad Emir, COO, edotco Group: All edotco’s current assets have come from the carve out from the Axiata Group. Within a telco, the way performance is measured is a bit different. The main Key Performance Indicators (KPIs) and drivers of value are about subscribers and revenue, driven by marketing and branding – towers and passive infrastructure aren’t top of the list of KPIs.

www.towerxchange.com | TowerXchange Asia Dossier 2014 | 23| TowerXchange Asia Dossier 2014 | www.towerxchange.comXX

When passive infrastructure assets are transferred from telcos to towercos, it’s necessary to undertake a transformation in mindset, process, and a change in the way we approach managing O&M to become more productive. We need to focus on adding value within the supply chain in terms of cost efficiency and speed to market.

TowerXchange: Is there a significant step up required in uptime as assets are transferred from MNOs to towercos?

Nashad Emir, COO, edotco Group: Most countries are at 99 point something percent uptime already, so when we take on assets it’s mostly fine tuning and incremental improvement – even 0.1% or 0.01% downtime translates into a lot of lost revenue! So our SLAs often require improved uptime but it’s not a “significant step up.”

TowerXchange: What KPIs are on your dashboard?

Nashad Emir, COO, edotco Group: Our first KPI is quality of service measured in terms of uptime, or as I said earlier, reduction and elimination of downtime. We are managing power systems on behalf of our tenants so as soon as the site goes down it means a loss of revenue and a compromised Customer Experience. So our primary KPIs are focused on minimising downtime, and ensuring that any inefficiencies that might create downtime are reduced to a minimum.

The specific targets in our KPIs related to uptime

“

“

our primary KPIs are focused on minimising downtime, and ensuring that any inefficiencies that might create downtime are reduced to a minimum… Another set of KPIs measure how fast we deliver towers

Menara Tower, Kuala Lumpur


are defined in negotiation with each customer – critical sites have different grading as defined by the Master Service Agreement, and each customer has their own Service Level Agreements (SLAs).

Another set of KPIs measure how fast we deliver towers, whether new builds or co-locations on existing towers, in order optimise the management of those projects. Our KPIs measuring speed of delivery vary from market to market and according to local conditions. We coordinate the project coming together using internal and carefully selected third party subcontractors. Different processes may overlap or happen concurrently from site acquisition, leasing and permitting, ordering equipment, installing foundations, and above ground level tower construction. Each step in the process has it’s own cycle time, but much depends on how good the customer is in giving us reliable forecasts of their build requirements in advance.

Of course we also have a number of KPIs around cost, both costs to edotco and to the telco, helping us identify efficiencies that benefit both parties.

Our biggest challenge is not to measure the current performance of the business, but to forecast growth on a Quarter to Quarter basis as telcos are seldom able to share their forthcoming tenancy and tower orders in advance. So our processes have to be agile and flexible to changes; we have to be able to deliver towers within a short period of time with minimal notice. This is a natural challenge of working within the telecoms industry – the

dynamics change fast, and cycle time is critical.

TowerXchange: What are the implications of pressure on time to market for the maintenance of contingency capacity within supply chain?

Nashad Emir, COO, edotco Group: We make sure we have vendors who can ramp up if they need to. However, everyone is trying to save cost by keeping minimal stocks and raw materials, so having better planning and forecasting is critical, as is having secondary and tertiary sources of vendors. This gives rise to challenges in countries lacking a good base of local suppliers, at which point we have to select partners who can import quickly and easily. Alternatively we may create new designs that require different raw materials.

TowerXchange: Do edotco manage O&M in house or is it outsourced?

Nashad Emir, COO, edotco Group: Our O&M business model is defined by a balance of what makes sense in each country, together with trying to standardise the way we manage O&M.

In most countries we outsource O&M, but we manage the projects. But in Bangladesh we undertake maintenance of passive and active infrastructure in house.

TowerXchange: How deep is edotco’s service proposition? From pure steel and grass to full service inclusive of energy, maintenance et cetera?

Nashad Emir, COO, edotco Group: Our core service proposition in all markets will include power and passive infrastructure O&M but in selected markets, such as Bangladesh, we’re going into active infrastructure management as well. We intend to expand our offerings to meet the changing needs of our customers.

We are investing in a state of the art approach to remote monitoring. We’ve signed the deal with our vendor partner and are in the process of implementation in our TOC. This will enable us to offer a value added service to monitor and manage different tower components such as the remaining charge in the batteries, the level of fuel in tanks, temperature inside the cabinets, and it will help minimise fuel pilferage.

TowerXchange: What performance measurement systems do you use?

Nashad Emir, COO, edotco Group: Across all our towers, edotco are investing in tools designed specifically for passive infrastructure performance measurement, tools which telcos wouldn’t necessarily invest in.

We have already awarded a contract to a proven asset management system provider that will enable us to ensure that all the documentation about a site is in the right place, to ensure assets are tracked, to monitor the delivery timeline, and to automate the collection and analysis of data to ensure visibility at country and headquarters level.

TowerXchange: How do you translate data into actionable intelligence, for example integrating RMS data into job ticketing and project management workflows?

Nashad Emir, COO, edotco Group: Our asset lifecycle management platform has modules for project management, billing, inventory management, and resource management. So we’re able to track assets from when we inherit or build them all the way to decommissioning.

Real time data from our RMS is fed into our TOC, enabling edotco to be more focused on performance on a day to day basis.

We are also implementing digital lock access with time attendance monitoring. Data will be integrated between this and the RMS to create a more complete dashboard monitoring performance.

TowerXchange: How important is having an accurate and up to date asset register?

Nashad Emir, COO, edotco Group: We want to improve the accuracy of inventory data at all sites. Given the number of different countries edotco is already operating in, we need to automate the maintenance of a reliable asset register, otherwise data literally will be all over the place.

We’ve commenced our audits, gathering complete documentation on lease agreements, tower loading data, and site inventories. Once the asset lifecycle management system is up and running, the data


will be input and all future orders will be through this platform, providing valuable visibility for us and for our customers so they can see where orders are, and potentially improve forecasts.

Having a reliable and up to date asset register is also critical for sales, who are then equipped with the tools they need to tell the customer exactly how much space is available on any given tower.

TowerXchange: Talk to us about the challenge of building and managing distributed generation and backup power systems within your networks.

Nashad Emir, COO, edotco Group: Our approach differs from country to country. For example Malaysia has good grid supply, so our dependence on redundancy is less. Therefore our focus in Malaysia can be on the delivery of new towers, and structural upgrades, because uptime is stable.

In contrast grid availability is very poor in Bangladesh, basic transport infrastructure is lacking, and flooding creates havoc – so our focus is more on availability and site autonomy.

TowerXchange: Do many of your towers need to be upgraded to co-locate multiple tenants?

Nashad Emir, COO, edotco Group: The specification of the majority of towers we’ve acquired to date allow us to put additional tenants on – most towers don’t need to be upgraded, they tend to be built over-spec. Moving forward we want to optimise and right-size tower design

“ “Having a reliable and up to date asset register is also critical for sales, who are then equipped with the tools they need to tell the customer exactly how much space is available on any given tower

Nashad will be among the roundtable leaders at the TowerXchange Meetup Asia. Join him and many other senior executives from the regional tower industry in Singapore, 9-10 December 2014.

edotco 360: Localising sales and product innovation to meet the needs of each marketMonetising towers, power and fibre at Asia’s new multi-country infrastructure business

TowerXchange: Please could you introduce yourself to TowerXchange’s readers – what is your background, what is your role, and what attracted you to join the edotco team?

Wan Zainal Adileen Wan Puteh, Chief Sales and Marketing Officer, edotco Group: I have vast experience in telecommunications and IT industry having served in leadership positions in various multinational conglomerate over the last 20 years. My successful milestones include the deliverance of multimillion complex projects; setting up and operationalised country businesses in Pakistan, Indonesia, Malaysia and Singapore. I was also instrumental in delivering record breaking sales orders and closing of key projects in South East Asia, Australia and Japan.

Throughout my career, I’ve had significant involvement in corporate exercises in the areas of Project Management, Business Development and Sales and Country Management for companies - namely Maxis, Logica CMG, IBM and Tekelec (now known as Oracle).

My philosophy in building edotco’s regional sales organisation has always been to embed the aforementioned standard best practices across the organisation, whilst creating a sales structure that adapts to local requirements and is scalable whether we’re in five, six, seven, eight or more countries.

TowerXchange: Let’s talk about the marketing side of your role. How do you market

Read this article to learn:< Standardising best practices while localising edotco’s our proposition to meet the needs of different markets

and customers

< More than just a towerco – a broader vision of how to ensure edotco’s customers and their subscribers

receive a better service

< A closer look at the tower markets in Bangladesh, Sri Lanka and Pakistan

< How edotco sell co-locations and BTS programs

< The relationship between sales and marketing and new product development

Wan Zainal Adileen Wan Puteh is the Chief Sales and Marketing Officer of edotco Group. He is responsible for managing and setting the various key strategies for the overall spectrum of regional sales and marketing, corporate communications and branding for edotco Group.

Keywords: Towercos, Market Overview, Tenancy Ratios, Co-locations, QoS, Skilled Workforces, Multi-Country Partner, Rooftop, Asset Register, C-Level Perspective, RMS, Infrastructure Sharing, Asia, Malaysia, Bangladesh, Sri Lanka, Cambodia, Pakistan, edotco


Wan Zainal Adileen Wan Puteh, Chief Sales & Marketing Officer, edotco Group

‘enabling connectivity’? How do you promote an intangible concept to your unique target market?

Wan Zainal Adileen Wan Puteh, Chief Sales and Marketing Officer, edotco Group: ‘Enabling connectivity’ is deliberately a very broad concept. We wanted our name to be generic so as not to focus on a hard sell on the tower itself, but rather to position ourselves with social responsibility, environmental conscience and a broader portfolio of infrastructure solutions. Ultimately our goal is to ensure our customers and subscribers receive a better service, and how we support the end user in


having that better service is through the delivery of a solid base for the deployment and management of passive infrastructure.

While our main focus may be on towers, we want to expand into energy management, the improvement of tower structures and provision of special structures, remote monitoring, and other ways to monetise infrastructure not only limited to telcos.

“

“

While our main focus may be on towers, we want to expand into energy management, the improvement of tower structures and provision of special structures, remote monitoring, and other ways to monetise infrastructure not limited to telcos – we don’t want to limit ourselves

TowerXchange: I understand edotco are currently marketing 6,300 towers in Bangladesh. Can you share some insights from your initial months of serving the market?

Wan Zainal Adileen Wan Puteh, Chief Sales and Marketing Officer, edotco Group: Robi is one of the top three operators in Bangladesh. A division within Robi itself has been established as a forum to promote co-locations.

Dhaka, Bangladesh


As an independent infrastructure business, edotco is marketing around a fifth on Bangladesh’s towers (our most recent estimates suggest there are 25,858 towers in the country).

Reducing costs for our customers is a key objective in Bangladesh, but so is ensuring safety. There are a lot of rooftop structures in Bangladesh, and unfortunately some challenges with the architecture of buildings, so we have to be mindful of the weight of rooftop structures, which can in some cases limit co-location capacity.

TowerXchange: How does your business change in the more build to suit focused environment in Pakistan?

Wan Zainal Adileen Wan Puteh, Chief Sales and Marketing Officer, edotco Group: We plan to develop excellent relationship with Pakistan’s local operators and to build 200 towers in the next 12 months – to build best in class sites, leveraging new products and enhancements as a showcase for the country and edotco.

The concept of an independent towerco is relatively new in Pakistan, hence edotco is committed to establish its operations and points of contact in the country.

TowerXchange: How do you sell co-locations? Is it a proactive or a reactive sale?

Wan Zainal Adileen Wan Puteh, Chief Sales and Marketing Officer, edotco Group: Relationships and

knowledge about our assets and our customers’ assets are crucial.

Our sales team are equipped with comprehensive, reliable data on our assets, combined with market data so they know where the high yield sites are, where we know competitors have found it difficult acquiring a permit to build.

Our target customers are typically network planners within the CTO’s organisation, although initially we need to convince the CTO and CFO to lease not build, to move from capex to opex, but this is all hypothetical if we don’t have the sites they need, so the endorsement of the network planner is essential.

Planning new sites has to be driven to an extent by marketing. Site planning is effectively a funnel for us.

While we are proactive in forming relationships with our customers, co-location sales can to an extent be a reactive sale – it is real estate; either we have the location or we don’t. It’s a more proactive sale when we’re doing build to suit, both in terms of promoting the service to anchor tenants, and proactively selling site that are built to other operators to ensure they know what’s coming up.

TowerXchange: Talk to us about the relationship between your sales and marketing team and R&D when it comes to new product innovations.

Wan Zainal Adileen Wan Puteh, Chief Sales and Marketing Officer, edotco Group: It is a task for me and my team to package edotco products and services, combined with innovations and bring them to market.

Special structures, such as new tower designs, are an important part of our offerings in urban cities where we must meet local regulations concerning to the visibility of towers.

edotco is more than a towerco. We offer energy management, remote monitoring, special structures and we’re looking into provision of O&M for active infrastructure. It’s all driven by the needs of our customers and integrated under our vision to ‘enable connectivity.’

“ “

Our sales team are equipped with comprehensive, reliable data on our assets, combined with market data so they know where the high yield sites are, where we know competitors have found it difficult acquiring a permit to build

edotco 360: How to deliver telecoms infrastructure at the ‘right cost’How edotco make the business case to lease rather than build towers, or to sell rather than retain passive infrastructure

TowerXchange: Please could you introduce yourself to TowerXchange’s readers – what is your background, what is your role, and what attracted you to join the edotco team?

Thivanka Rangala, CFO, edotco Group: Prior to my current role, I was the VP Regional Development and Investor Relations of Axiata Group, looking after the Regional Development of the holding company subsidiaries which includes performance monitoring and analysis, KPI setting and management, strategy and investors relations.

In January 2014 when Axiata first set up edotco, I was assigned as the CFO of edotco Group, with a mandate to run standardisation and efficiency programs to ensure edotco is operating at the ‘right cost’.

In comparison to MNOs, infrastructure companies can be straight forward and trickier to manage. Controlling infrastructure means controlling somebody’s life blood for five, ten or fifteen years down the line.

The advantage with edotco is that we are the carved out assets from Axiata and that gives us a solid footprint from day one.

TowerXchange: How does the opportunity compare in markets where you have to build compared with markets where assets can be carved out from an existing Axiata Group opco?

Thivanka Rangala, CFO, edotco Group: The country

Read this article to learn:< How to create a tight operational model to maximise efficiency

< What should be managed locally, what should be standardised and managed centrally

< How to add value to assets in a mature market like Sri Lanka

< “Last mover disadvantage” – the risk of towers becoming stranded assets on the balance sheet

< The economics of building versus leasing towers

CFO Thivanka Rangala’s job is to oversee standardisation and efficiency programs, adding value to inherited assets with a potential future IPO in mind. Of course edotco’s first responsibility is to create value for its customers, while creating a business case where it makes more sense for operators to lease than build towers, and persuading operators to avoid the risk of ‘last mover disadvantage’ by transferring their assets to a towerco.

Keywords: Towercos, Market Overview, Valuation, Transfer Assets, Tenancy Ratios, Co-locations, Build-to-Suit, Business Case, First Mover Advantage, Bankability, Anchor Tenant, ROI, Procurement, Decommissioning, Carve Out, Infrastructure Funds, C-Level Perspective, Infrastructure Sharing, Asia, Malaysia, Bangladesh, Sri Lanka, Cambodia, Pakistan, edotco


Thivanka Rangala, CFO, edotco Group

where edotco’s business consists of completely new build is Pakistan, a market which is as complicated as it can be. In Pakistan we have the opportunity to start afresh, with no anchor tenant.

Operations, sales and marketing are done at ground level by our country operational teams. The rest of the business is fairly standardised, in turn allows us to manage centrally and create economies of scale.

TowerXchange: How is edotco financed? Is there the possibility of a future IPO?

Thivanka Rangala, CFO, edotco Group: edotco is fully equity based today - 100% owned by Axiata Group. It’s not efficient to be 100% equity funded – we’d look to leverage at some point or other.


You have to show you made it better after you inherited it - consolidating and growing the footprint, otherwise it’s tough to realise the valuation you’re looking for.

TowerXchange: Thivanka, you might recall speaking for me when I used to run the Mobile Money Group and associated events. Is there an opportunity to synchronise towers with mobile money branch network extensions?

Thivanka Rangala, CFO, edotco Group: With respect to the potential synergies between mobile money branch extensions and network extensions, I think any sort of speculative build can be dangerous, but if there’s a roadmap for an operator to extend into a new geographical area where the potential ARPU made the business case marginal, mobile money might make a couple of percentage points of difference. However, the first mover in such remote locations might have two to three year’s head start before the market can sustain a second operator and co-location becomes an option.

TowerXchange: Focusing on your old home of Sri Lanka, are edotco operating in a well served market where decommissioning of parallel infrastructure may be necessary, or are more sites needed to densify cell sites and extend coverage?

Thivanka Rangala, CFO, edotco Group: Sri Lanka is a relatively mature tower market with close to 100% coverage. edotco is marketing 2,150 of Sri Lanka’s ~7,000 towers.

“ “ There were a lot of tower swap deals before we inherited towers in Sri Lanka – the tenancy ratio was already 1.8 – a typical sign of a mature market. Co-locations are just ticking over 2.0 now so sharing is close to the maximum.

Sri Lankan operators have already rolled out LTE, but there’s more build work to be done particularly smaller sites to supplement capacity. There is

Sri Lanka

There were a lot of tower swap deals before we inherited towers in Sri Lanka – the tenancy ratio was already 1.8 – a typical sign of a mature market. Co-locations are just ticking over 2.0 now so sharing is close to the maximum


greater potential if there’s an upturn Sri Lankan in the economy; with the addition of new buildings, IBS and aesthetic towers, structures that blend in with environment, are likely to be in demand.

Towercos don’t have much incentive to decommission towers, which is seldom necessary as parallel capacity is often found in high yield locations where one tower may be at capacity, so someone else will want capacity on the other tower – there’s often potential to monetise the lower part of the tower to non-telco tenants.

TowerXchange: Do you agree with the threat of “last mover disadvantage” applying to operators who bring their towers to market late, whose towers become stranded assets on the balance sheet?

Thivanka Rangala, CFO, edotco Group: As operator you have legacy thinking that coverage is king, but in every market it’s only a matter of time

before parity is achieved and the competition catches up. If you are a market leader, you have an opportunity to be a first mover in infrastructure sharing and co-location. If you are a new market entrant with financial resource and planning to deploy, you can get to market quicker with co-location.

From towerco’s perspective, we can’t push out the tower network speculatively; it doesn’t make sense to buy idle towers. But if we get into a market early we can do amazingly well in terms of co-locations and tenancy ratios, even in markets with two or three towers in a GPS location, as long as there’s more than one tenancy the business model works.

For operators who sell late in game, it’s a bit of a trick. Operators who are a last to sell may not attract any interest from towercos, and if they do they are likely to only attract a valuation which is a product of the replacement value of those towers are minus the potential co-locations they have

missed. Similarly there is no logic for operators thinking about retaining their most strategic and valuable sites until later, if they bring less attractive towers to market first, they’re a headache and won’t attract the same interest.

TowerXchange: How do the economics of building versus leasing towers compare?

Thivanka Rangala, CFO, edotco Group: The reality today is that operators can’t build or operate towers at the cost of towercos are offering. We benefit from sharing costs two or three ways. In general capex recovery is ten years – that’s in line with tenor that you sign up for.

The economics are slightly different in remote areas where we might have to charge a slightly higher lease rate to recover capex.

The replacement cost of a tower in Southern and Southeast Asia can vary from US$30-200k depending on the size of the structure. Camouflage adds a lot of, and often doesn’t co-locate very well, but is a necessary option in some locations and regulatory environments.

These costs will go down with the use of new designs, structures and materials

“ “Thivanka will be among the roundtable leaders at the TowerXchange Meetup Asia. Join him and many other senior executives from the regional tower industry in Singapore, 9-10 December 2014.

operators can’t build or operate towers at the cost of towercos are offering. We benefit from sharing costs two or three ways. In general capex recovery is ten years – that’s in line with tenor that you sign up for

Introduction to the Malaysian tower marketAround a third of Malaysia’s 20,000 towers are owned and operated by independent towercos, the largest of which is edotco, plus several State-backed regional towercos


The size of the independent tower industry in Malaysia Malaysia has around 20,000 telecom towers, of which 3,500 have so far been carved out and transferred from Axiata to edotco. edotco has been trading for one year and is the newest and largest of several independent towercos operating in Malaysia. Many of Malaysia’s towercos are State-backed, regional players, some of which have been operating since the millennium. Towercos own around a third of Malaysia’s towers, a similar proportion to Indonesia, but lagging the mature Indian market where towercos own two thirds of the towers, and trailing Myanmar, which stands as a unique case with 15,500 new towers all being rolled out by towercos by 2017 (according to GSMA GPM forecasts). MNOs still own the majority of tower assets in Malaysia, although there is substantial bi-lateral sharing, with around half of each MNO’s towers having a single tenant, with the other half shared with their competitors or co-located on the third party sites. While DiGi and Maxis both currently retain their towers, both have been rumored to be considering launching their own carve-out towercos. An established culture and regulatory framework supporting infrastructure sharing Malaysia’s independent tower industry was

Read this article to learn:< Tower ownership and estimated tower counts for Malaysia

< The license regime, lease pricing and contractual terms established by the CMA and BPIT

< Organic and inorganic growth opportunities in Malaysian towers

< Opportunities in FTTT, IBS and small cells

< Time to market pressures for new LTE licensees creates demand for co-locations and RANsharing

Keywords: Meetup Preview, Editorial, Towercos, Market Overview, 3G, 4G, New License, Capex, Co-locations, Densification, Regulation, Off-Grid, IBS, DAS, RANsharing, Infrastructure Sharing, Asia, Malaysia, Celcom, Maxis, DiGi, edotco, BPIT, Sacofa, Touch Matrix, D’harmoni, KJS, Common Tower, Infra Quest, Yikedbina, Perak Integrated Networks, Asia Space, Desabina, Melaka ICT Holdings, Rangkaian Minang, PDC Telecommunications, Perlis Comm

There are a number different combinations of market dynamics that make a country a ‘perfect fit’ for independent towercos. Malaysia is one such ‘perfect fit’: three strong, competitive operators each with substantial market share; a wave of new LTE license holders seeking to co-locate rather than deploy their own sites; a data hungry subscriber base fuelled by growing disposable incomes; and an established culture of tower sharing. Malaysia is home to edotco’s headquarters and first live opco, and home to a multitude of smaller, regionally-focused State-backed and independent towercos. Let’s take a closer look at the structure of Malaysia’s tower market.

Figure 1: Mobile market share 1H 2014

Source: Digital News Asia

Maxis

Celcom

DiGi

37.6%32.9%

29.5%


effectively inaugurated by the Communications and Multimedia Act (CMA) of 1998, which recognised an infrastructure class license for “Network Facilities Providers”. Some State-backed infrastructure companies have near-monopoly status within their State, other regional markets are more open. Many of the important granular decisions in the regulation of the Malaysian telecom tower industry, such as matters concerning land title and infrastructure access permits, are typically in are taken at State rather than Federal level.

The State-backed towercos have an association known as BPIT which creates a framework within which the towercos abide by standard lease pricing and contractual terms. One of the noteworthy consequences of this market structure is that State-backed tower companies’ lease prices are believed to be discounted by 25% after 7-10 years. Therefore lease pricing on macro towers is well established and widely confirmed with in Malaysia, although there is more flexibility for the increasing number of Malaysia’s towercos that have ventured into provision of ‘Special Structures’ (such as lamp posts which have modular, upgradable designs).

There are a handful of completely independent tower developers in Malaysia, some of which offer disruptive pricing options significantly lower than the norms established by BPIT. While such companies seem to be targeting specific, attractive locations, the profitability of such an approach remains questionable.

Organic and inorganic growth opportunities in Malaysia The maturity of network rollouts, combined with aforementioned State-led regulation of new site

Figure 2: Comparing the penetration of the independent tower industry in each Southern and Southeast Asia’s top four tower markets

75% forecast y/e 2014

90% y/e 2017

66%40%

33%

Myanmar India MalaysiaIndonesia

Figure 3: Estimated tower count for Malaysia

Sacofa 765

Touch Matrix 460

D’harmoni 346

KJS 309

Common Tower 260

Infra Quest 201

Yikedbina 200

Perak Integrated Networks 150

Asia Space 137

Desabina 118

Melaka ICT Holdings 95

Rangkaian Minang 90

PDC Telecommunications 43

Perlis Comm 23

edotco 3,500

13,300 Remaining MNO-captive 3,200

Source: TowerXchange Source: TowerXchange

State-backed and other independent towercos


permitting, and the dominance of local State-backed towercos in some parts of the country, mean opportunities to build new towers are limited in the Malaysian market. It seems that independent towercos can secure permits to build new towers in around half of Malaysia’s States, with the State-backed towerco having exclusive rights in the other half. However, Malaysia boasts more or less umbrella 3G coverage (with 2G EDGE); the MNO’s coverage varies between the high 80’s and low 90’s percent. There are still opportunities for organic growth for towercos in Malaysia. Malaysia’s three incumbent MNOs announced 2014 capex budgets totaling RM 3bn (just under US$1bn). Cell site densification, driven by growing data demand and the technical specifications of LTE, mean infill sites are needed in Malaysia’s dense urban areas, but the demands of regulators and aesthetics mean smaller lamppost-style structures (often still sharable) will generally be preferred to macro towers. The fragmentation of Malaysia’s tower market may offer edotco, or prospective new market entrants, an opportunity to grow inorganically through the acquisition of one of the better performing, larger State-backed towercos operating in the more demographically attractive states, obviously subject to the consent of regulators.

At time of writing, it did not seem likely that either of the remaining MNO’s towers were likely to become available under sale and leaseback in the near term (although DiGi and Maxis have both been

rumored to be considering launching their own carve-out towercos). However, as TowerXchange has seen in several other tower markets, it’s amazing how quickly MNO’s stance on tower divestitures can change when a towerco of scale enters their market!

Cell site energy in Malaysia Less than 5% of Malaysia’s cell sites are off-grid, for example only 140 of edotco’s 3,500 Malaysian sites are off-grid. Malaysia’s grid power is generally reliable. More challenging transport infrastructure conditions in the East of Malaysia mean cell site autonomy is a greater priority here than in the West of the country. However, this doesn’t mean energy efficiency is not important in Malaysia – burgeoning data demand is driving the energy load on some sites to and beyond capacity, and Malaysia’s high availability expectations means many high traffic connector sites have backup power sources and battery banks. Fibre to the tower A surprising proportion of Malaysia’s cell sites still rely on microwave backhaul but, with LTE coming, fibre to the tower is becoming a priority. As more urban sites are connected with fibre, the removal of heavy microwave dishes frees up valuable space for co-location sales. With data traffic rising and the price per MB of data falling amid price competition, the cost of

fiberization may prompt collaboration and fibre sharing. Malaysia already has some active fibrecos offering bandwidth to operators, but their reach is limited and more are needed. There is less of a shortage in the trunk as at the costly metro access and last mile / fibre to the tower. Potential for IBS, small cells and Wi-Fi offload The majority of cell sites in Malaysia are still conventional macro sites. IBS remains a premium solution, with multi-tenant DAS representing around 10% of edotco’s portfolio for example, but with a pipeline for perhaps 3-4 times as many IBS. Malaysia needs improved indoor coverage, especially in dense urban areas, prompting the usual debate about the relative merits of small cells and Wi-Fi. LTE rides a wave of collaboration and RANsharing Malaysia recently issued eight LTE licenses, subject to a condition that 10% of the population be covered within the first year. With such time to market pressures, the majority of new LTE entrants are co-locating on towers and a lot of RANsharing is taking place. There seem to be minimal restrictions upon RANsharing within Malaysian towerco’s contracts, with the view prevailing that with the MVNOs piggy


backing on the radio area networks of Malaysia’s three incumbent MNOs, there will come a time when growing capacity demands will prompt ‘tenants’ sharing RAN to seek their own fully fledged networks. The three established MNOs simply can’t give capacity to everyone indefinitely. Incumbent operators Celcom and Maxxis are felt to offer the best 4G coverage, with the initial focus being on Malaysia’s biggest cities, beyond which 4G coverage is spotty rather than continuous. Conclusion The unique structure of the Malaysian telecom market means there are no benchmarks for international comparison. While 3G coverage is mature and there are plenty of macro towers, FTTT, special structures and IBS are needed to provide capacity as LTE takes root. With the permission of regulators, there seems an obvious opportunity to create economies of scale through the consolidation of some of the country’s more profitable state backed and independent tower companies. With eight new LTE licenses creating a race to market, there remains the possibility that DiGi and/or Maxis’s tower assets may follow Celcom’s in being made commercially available for co-location

Several of the key stakeholders in Malaysian towers will be represented at the TowerXchange Meetup Asia, taking place on December 9 and 10 in Singapore. For more details, visitwww.towerxchange.com/meetups/asia

< Access to the “Internet of People” in emerging market towers – a trust web of over 7,500 decision makers in passive infrastructure

< Independent analysis and commentaries on the prospects for tower transactions in selected countries

< The latest industry emerging market tower industry news – BEFORE it’s published in the TowerXchange Journal, accessible 24/7 from desktop, tablet or mobile

< A comprehensive archive of TowerXchange’s interviews and analyses, searchable by topic, country, company or grouped by category (e.g. interviews or how to guides)

< The latest news and registration information about TowerXchange’s Meetups.

Visit the TowerXchange.com website

Tower Xchange

Chinese tower industry dwarfs rest of the world, migrates to towerco business modelOpportunities to secure business during the early stages of China Tower Company’s development


There are almost 1.3bn mobile subscribers in China. However, while the US wireless market generates US$200bn per annum China generates a little over US$1.5bn on a customer base four times the size, which illustrates the gulf in ARPU. The Chinese mobile market is currently led by China Mobile, the world’s largest MNO, with market share of 62.4%, derived from a customer base of 780mn users, of which 228mn were high speed users (3G and 4G) in Q3 2013 (data courtesy of www.trefis.com). China Mobile has not engaged in significant infrastructure sharing to date, although China Unicom (23.2% market share) and China Telecom (14.4% market share) have shared infrastructure on a case by case basis. The wireless data revolution is only just beginning in China, with many users still on 2G and just 29% of China Mobile’s subscribers on 3G and 4G. China Mobile uses the TD-LTE 4G standard while Unicom and Telecom were both awarded licenses on the FDD-LTE standard. At the turn of 2014, 19 MVNO licenses were awarded in China. The MVNOs time to market will doubtless be accelerated by the launch of China Tower Company in July 2014, which has the potential to open access to China’s vast mobile network. Variously referred to as China Tower Company (which is the name TowerXchange will use), National Tower Company, or China Communications Facilities Services Corporation Limited, this unique shared entity was created as a joint venture owned by China Mobile (40%), China Unicom (30.1%) and

Read this article to learn:< A comparison of the size of the tower markets in China, India, Indonesia, Bangladesh, Malaysia, Sri Lanka

and Myanmar

< How many telecom towers there are in China now, and how many are needed for 4G

< The structure of China Tower Company

< Three phases of China Tower Company evolution; from BTS, through injection of legacy assets, to IPO

Keywords: Editorial, Towercos, Market Overview, 4G, LTE, New License, Deal Structure, Transfer Assets, Urban vs Rural, Market Forecasts, Network Rollout, Build-to-Suit, Exit Strategy, Renewables, Operator-Led JV, Infrastructure Sharing, Asia, China, China Mobile, China Telecom, China Unicom, China Tower Company

The Chinese telecom tower industry dwarfs that of every other country on the planet. With an estimated 900,000 towers in the country today, and another 900,000 towers needed as China migrates from the current blend of 2G and 3G to 4G, you can see why the Chinese market is attractive to tower entrepreneurs and passive infrastructure vendors. With the launch of joint venture China Tower Company, are there opportunities in China?

Estimated Asian tower count comparisons, Q4 2014

China900,000

India450,000

Myanmar5,800

Sri Lanka 7,000

Malaysia20,000

Indonesia75,000

Bangladesh26,000



China Telecom (29.9%). China Tower Company has registered capital of RMB10bn (US$1.6bn), and has started to announce the opening of regional offices. In phase one, China Tower Company will focus on build to suit, with an initial project to build 120,000 towers over the next three years already announced, although the majority of those 900,000 towers needed for 4G will ultimately be built by the new towerco. Phase two, which may be completed as soon as mid-2016, will involve the injection of most, or perhaps all, of China’s telecom towers into

China Tower Company. The structure of such a transaction has yet to be agreed. The final stage will bring private capital into the company with an IPO in due course. TowerXchange is aware of one other independent tower company operating in China, with a tower count currently under 1,000 but growing fast. There’s plenty of room for growth in China, with penetration around 90% and growing at 14% CAGR compared to 6% in the US. Much of the growth

potential in the Chinese telecom and tower markets is to be found in rural areas where high speed services are not widely deployed. China already accounts for more than half the world’s green powered base stations (22,763 compared to 20,188 in the rest of the world, according to the GSMA Green Power for Mobile Deployment Tracker), with more green power deployments expected as rural network extensions continue

More than half the world’s green powered base stations are in China

11,863

5,500

5,400

20,188

China Mobile

China Telecom

China Unicom

Rest of the world

Source: GSMA GPM Deployment Tracker

““

In phase one, China Tower Company will focus on build to suit, with an initial project to build 120,000 towers over the next three years already announced, although the majority of those 900,000 towers needed for 4G will ultimately be built by the new towerco. Phase two, which may be completed as soon as mid-2016, will involve the injection of most, or perhaps all, of China’s telecom towers into China Tower Company... The final stage will bring private capital into the company with an IPO in due course

A snapshot of the Indian tower industryEstimated number of towers owned or managed by towercos in India


In 2007, India hosted about 100,000 telecom towers,

considerably less than the current tower count of

450,000-500,000. Over the past seven years, operators

and independent tower companies have built an average

of 50,000 new towers per year and, as a result, telecom

coverage now extends to 90% of the Indian territory.

From 2010 to 2012, dozens of new mobile network

operators entered the Indian market attracted by its

growth potential and frivolous license regime. In the

meantime, towercos kept themselves busy building

thousands of towers every year. However, fierce

competition among carriers, often relying on cut-throat

offers to attract subscribers, forced several players to

exit the Indian market. In 2012 the highly publicised

cancellation of 122 telecom licenses, wiping out many

smaller players and stalled launches, forced the

restructuring of the Indian MNO market.

To date, India has more telecom towers than China

(420,000) and 800 million mobile connections. A broad

range of tenancy ratios can be found in India. While

residual operator-captive assets account for many

single tenant towers, many of the larger towercos boast

healthy tenancy ratios such as Viom Networks’ 2.2,

Bharti Infratel’s 2.01, GTL Infrastructure’s 1.35 and

Indus Towers 2.06 (tenancy ratios as stated in their most

recent annual reports). With an oversupply of towers,

consolidation of tenants and extremely high operational

costs, at one time it looked like independent tower

industry was stalling. However, the restructuring of

the Indian telecom sector may result in less operators,

but they will be higher quality tenants. Where at the

turn of the decade there was a swathe of acquisitions of

small to mid-sized towercos, helpfully consolidating an

overpopulated towerco market, the tower M&A market

in India stagnated whilst and is only now returning to

life.

Technology, innovation and operational excellence

represent the key for independent towercos to remain

competitive and Indian towercos are shifting their focus

to streamlining their operations and reducing costs.

The shift towards cost saving has already begun and

towercos are implementing drastic changes to reduce

their operational expenditure. Last year, Indus started

reducing reliance on diesel generators by installing

batteries at 20,000 of its 114,000 towers. Saving over 3.6

million litres of fuel a year, when fuel and power costs

account for 30-40% of opex is definitely a wise move.

The tower count we are providing is our best guess

on the current status of the Indian tower industry.

However, we will keep reporting on critical changes as

we believe the current status of the industry is likely to

be reshaped in the near future, as suggested - among

others - by American Tower’s intention to bid for the

acquisition of Viom Networks

State owned MNOs Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam retain 70,000 towers

Viom Networks

GTL Infrastructure

American Tower

Tower Vision

Ascend

Indus Towers

Bharti Infratel

Reliance Infratel

20,000 40,000 60,000 80,000 100,000 120,000

Source: TowerXchange research, quarterly filings, site lists

114,101

50,000

42,000

29,432

11,529

8,600

4,000

36,861 49,368 - 42% equity stake in Indus Towers

Insights of a pioneer of the telecom tower industry: what is the future for India and Myanmar?Umang Das on the evolution of the Indian tower market and the creation of the Myanmar telecom sector

TowerXchange: What where the key phases of the transformation of the telecom tower industry from Day zero to now?

Umang Das, Chief Mentor, Viom Networks and DG, TAIPA: The Indian telecom industry with close to 400,000 telecom towers is the critical support system for the world’s second largest base of mobile subscriptions. A seldom highlighted fact is that the concept of ‘telecom infrastructure sharing’ was pioneered by tower companies in India. This pioneering business model, coupled with the largest base of telecom towers anywhere in the world, gives the Indian telecom tower sector a unique distinction that is unparalleled globally.

The extensive network of telecom towers has ensured the availability of wireless telephony service in every nook and corner of the country and that too at unprecedented low costs. If we chronicle the history of telecommunications in India, the role played by telecom towers can be viewed as one of the key catalysts in the nation’s telecom revolution.

The sharing model of the Indian telecom tower industry encouraged best utilisation of assets with the backbone of the industry being provided by telecom infrastructure providers who have made 70% of network rollout investments. It has resulted in the world’s lowest tariff and in a ubiquitous and robust coverage across the country. Due to this model, the telecom sector reaped rich benefits through innovations in the design of a robust network. This is evident from the fact that India is

Read this article to learn:< Indian towercos: from pure infra-sharing to multi-service specialists< The potential for a breakthrough in the concept of single tenant sites< Implications and opportunities created for towercos by 4G and by India’s National Optical Fiber Network< What proportion of new points of service in India will be provided by IBS; DAS and small cells< Creating cost efficiency in equipment procurement and construction services through indigenisation in Myanmar

Mr Umang Das doesn’t need any introduction as a veteran of the telecom industry in India, Chief Mentor of Viom Networks and Director General of TAIPA. His involvement in the Indian telecom sector dates back to 1987, right after the start of the industry’s privatisation process. He has held a variety of high level positions in several business chambers and industry associations, and, back in August 1995, he initiated the first mobile call on the subcontinent.

In this exclusive interview, Mr Das shares his priceless insights into the evolution and future of the Indian telecom tower sector as well as perspectives on opportunities and challenges faced by operators and towercos entering Myanmar.

Keywords: Viom Networks, C-Level Perspective, Interview, Towerco, TAIPA, India, Southern Asia, Universal Service Obligation, Government of India, Myanmar, Irrawaddy Green Towers, Quippo Telecom, Srei Infrastructure Finance Limited, Alcazar Capital, Tower People, 3G, 4G, Market Overview, Tenancy Ratios, Urban vs Rural, Infrastructure Sharing, Market Forecasts, Penetration Rate, Active Infrasharing, Renewables, Hybrid Power, Greenfield, DAS, IBS

www.towerxchange.com | TowerXchange Asia Dossier 2014 | 39| TowerXchange Asia Dossier 2014 | www.towerxchange.com36

Umang Das, Chief Mentor, Viom Networks and DG, TAIPA

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

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


With innovation being the key driver behind tower companies to achieve the next phase of growth, we are now looking differently at structural architecture, active equipment integration and energy options. An innovation-led mindset for the industry as a whole may lead to a breakthrough in the concept of single tenant sites. Such sites will provide flexibility of site planning for the operators while ensuring that the capex outflow for the tower companies and the operators provide optimal return on investments.

The Government of India through its US$3.2 billion

corpus in the form of the USO Fund (Universal Service Obligation) is already setting up NOFN (National Optical Fiber Network) in the country. NOFN will connect 250,000 villages with high speed broadband connectivity. A plethora of government-to-citizen services is likely to transform the lives of the rural population. Bharat Broadband Network Limited, a special purpose vehicle (SPV), set up by the government for establishing, managing, and operating NOFN has already established connectivity in scores of villages. The tower companies and the CSCs (Common Service Centres) will play a central role in public-private-panchayat

“

“

Now the tower industry has already started to evolve from a mere infra-sharing proposition to one where it is being viewed by the operators as multi-service specialist rendering support to both passive and active elements

India Gate, New Delhi


partnership model wherein public investment will create the infrastructure and private initiative will give fillip to the ecosystem.

Recently the Government of India has proposed the launch of the Digital India programme to further bridge the divide between digital “haves” and “have-nots”. In addition, incremental allocations have been made towards the Rural Internet and Technology Mission, the development of ‘one hundred Smart Cities’, and setting up virtual classrooms and a programme for promoting “Good Governance”. The Department of Telecom’s 100-Days Plan charts the path for creating an ‘Always Connected Society’ and envisions ‘Right to Broadband’ for all. The Telecom Commission has also decided to allow Private Sector participation in National Optic Fiber Network (NOFN) projects. In light of these significant developments, towers will play a critical role in last-mile connectivity. This will be literally a convergence between the enabling of capacity (wireline) and the delivery of communication services (wireless).

TowerXchange: Which trends are now shaping the Indian tower industry?

Umang Das, Chief Mentor, Viom Networks and DG, TAIPA: The trends clearly indicate that the growth drivers shall be voice, primarily from rural communities, and data for which the emerging integrated solution will hold the key focus area. Data will be the next growth driver for urban India in the coming years as voice was in the last decade. Current contribution of data to total revenue

is quite low in India when compared with the contribution of data revenue in other developed markets. The primary reasons for this lag in data usage include lack of sufficient spectrum, affordable handsets and operator focus. However, with the advent of technology such as 4G, a mobile data boom is expected to usher in India in coming years.

Disruptive solutions like ‘lite anchor sites’ shall play another pivotal role in the growth of telecom tower companies as it will create a compelling business propositions for the operators. These towers are economically viable even with a single tenant while meeting the requirements of the customers for their growth and efficient networks. Our lite anchor sites are modular in design which allows upgrade of elements of the site as and when a new tenant comes onboard it helps reducing capital expenditure significantly across all the category sites.

Increasingly, tower companies are focusing on energy management. Earlier, power and fuel costs were passed through to operators. Now, the trend is evolving towards a fixed cost model to reduce power and fuel costs which will be shared with operators to create a win-win proposition.

The Indian telecom industry as a whole is imbibing a forward looking perspective that is green in vision with a mix of hybrid solutions that include enhanced battery backups and renewable sources of energy. On the technology front - outdoor BTS are going to be the key rollout strategy for operators from an economic proposition front.

TowerXchange: Given the maturity of independent towercos in India, who own around two thirds of the country’s towers, does the onus for building new towers come more from MNOs’ network extension programmes, or from towercos acquiring attractive locations?

Umang Das, Chief Mentor, Viom Networks and DG, TAIPA: In 2013-14, the Indian telecom tower sector witnessed multiple tenancy drivers as a result of voice and data demand driven by coverage gaps, low rural penetration, continued expansion and investments to address urban capacity bottlenecks and tremendous growth in data.

Telecom penetration in rural areas is still less than 42% and offers tremendous headroom for growth. Urban areas are increasingly facing capacity constraints, with choking of network causing frequent call drops and inconsistent data coverage,

“ “Telecom penetration in rural areas is still less than 42% and offers tremendous headroom for growth

thus creating demand for more towers particularly in the form of more infill sites that need to be constructed by the telecom operators to provide the desired end-user experience.

Going ahead, 4G rollouts by incumbent and new operators are likely to enhance popularity of the 4G ecosystem and in turn benefit the tower sector. Besides, the industry is likely to make network investments comprising 2G network expansions, urban in-fills and accelerated 3G rollouts.

The auction of telecom spectrum conducted in Q4 FY 2013-14 with regulatory clarity is expected to be beneficial to tower companies. We expect telecom operators to roll their networks rapidly. Besides, the demand for new towers and tower sharing will maximise the use of existing infrastructure.

The improvement in industry fundamentals has revived investment as operators will expand capacities to stay competitive. The Indian regulatory clarity augurs well for sector participants. Spectrum reframing also has a significant upside potential. The momentum in the Indian tower industry is undeniable and we believe there is still meaningful upside for the tower operators, given how economically compelling the sector fundamentals are.

TowerXchange: Please give us your views on data growth and the implications for demand for IBS and small cells.

Umang Das, Chief Mentor, Viom Networks and


DG, TAIPA: With India being at the cusp of mobile data growth, carrier network infrastructure will witness continued investments, as operators invest in favour of data traffic growth, and 3G/4G technologies gain momentum.

Mobile towers in India are handling a surge in cellular traffic as operators upgrade for a new generation of bandwidth-hungry smartphones and tablets. Some of that anticipated growth may come from additional users and more connected devices, but most of it is predicted to come from an increase in traffic per connected device as users demand more and more wireless data. The new traffic translates into soaring growth prospects for tower operators.

Reports predict wireless network traffic to grow another ten times over the next five years with about 75% of this growth expected to be delivered over traditional macro sites, primarily towers. In-Building Solutions (IBS), Distributed Antennae Systems (DAS) and other small cell installations are projected to support the remaining 25%.

With over 70% of data consumption in urban India happening indoors, in-building Solutions (IBS) in the form of micro-cellular technologies such as picocells and femtocells that create small-footprint cell sites within buildings, enable more effective coverage within the premises. With the growing demand for anywhere connectivity, IBS is gaining momentum. Operators use DAS and/or IBS to address issues related to poor wireless reception in indoor environments.

TowerXchange: What would be your suggestion to tower companies’ executives in emerging markets such as Myanmar? What does it take to succeed as a tower business?

Umang Das, Chief Mentor, Viom Networks and DG, TAIPA: Tower companies are uniquely positioned to help the Government of Myanmar to create the desired impact in building Myanmar’s telecom infrastructure and supporting the Government to realise its target of raising telecom penetration to 80% by 2016.

For tower companies to succeed in Myanmar, they should aim at supporting the telecom industry in building a widespread shared telecom infrastructure, with the objective of an accelerated coverage buildup, lower costs and lower consumer prices. Tower companies can do so by developing local partners and enhancing their capability, establishing a meaningful local ecosystem and manufacturing base by leveraging the strength of the large vendor base that international tower companies possess and, most importantly, bringing cost efficiency in equipment procurement and construction services through indigenisation. Tower companies should adopt a long-term commitment approach in Myanmar with the intent of culturally integrating local talent into their teams and skilling the local population in the field of telecommunications.

Tower companies must remain focused on improving the efficiency of tower operations and maintenance, with the objective of improving

into an opportunity for themselves.

While the goals are very much in place, there are uphill challenges in the overall ecosystem and when it comes to local skills development and training challenges. However, with Myanmar being regulated within a single regulatory framework, licensing nationally, and spectrum allocations in line with this, the business environment is congenial for both tower operators and telecom service operators to concentrate on their core deliverables


uptime, reducing energy and operating costs, and creating additional income from sharing with other operators. For the greenfield opportunity that Myanmar presents, tower companies should foster the establishment of telecom-information technology-citizen service centres at tower locations across Myanmar, with the objective of improving Government services, education and healthcare and helping propel Myanmar into the digital age.

TowerXchange: With regards to Myanmar, can you give us a brief overview of what is happening and what are your expectations for the future of the local tower industry?

Umang Das, Chief Mentor, Viom Networks and DG, TAIPA: Through Quippo Telecom, the telecom initiative of Viom Network’s joint-venture partner, Srei Infrastructure Finance Limited, we have established Irrawaddy Green Towers (IGT) in a strategic partnership with Alcazar Capital. As Viom Networks is one of the founding partners of IGT, we certainly have long-term strategic interest in Myanmar. Independently, Viom Networks is pursuing EPC rollouts as there is an urgent need for the rapid capacity enhancement of telecom infrastructure in Myanmar.

We are currently working towards integrating Myanmar within the regional ICT framework at the earliest. IGT has signed a contract with Telenor in Myanmar. We envisage being a participant in building 10,000 towers in next few years across operators and throughout Myanmar.

The rolling out of the telecoms network in Myanmar is a defining moment for the country and the region. Myanmar’s telecommunications sector is about to explode. Myanmar’s late entry into the information and communications market means it can leap directly to low-cost and high-connectivity options. It also means connecting Myanmar’s small businesses to new opportunities and its citizens to each other, and to a world of online information.

TowerXchange: How realistic are Myanmar MNOs and towercos goals in terms of infrastructure and network rollout?

Umang Das, Chief Mentor, Viom Networks and DG, TAIPA: Myanmar presents itself to us with a once in a lifetime opportunity to be part of a nation’s infrastructure buildup that will connect over 50 million people. Not often are you in midst of such a transformational juncture in the history of a nation. Hence, both operators and tower companies are equally and yet realistically excited about their prospects in Myanmar.

According to analysts, the number of new mobile subscribers in Myanmar will grow at a compounded annual rate of nearly 30 percent to reach 32.3 million people by the end of 2019. Indeed, it will be a challenge for operators to create a modern 3G network in Myanmar that reaches 90% of the population, including rural villages, in five years. But that is where tower companies and telecom operators will form of synergistic association to convert this challenge

“

“According to analysts, the number of new mobile subscribers in Myanmar will grow at a compounded annual rate of nearly 30 percent to reach 32.3 million people by the end of 2019

The Myanmar tower rollout: FAQs (updated)40 frequently asked questions cover Myanmar’s MNOs, towercos, powercos and the relationships between them


1. What was the state of mobile telecommunications in Myanmar at the start of 2014 before the rollout? According to data from the Myanmar Ministry of Communication, Posts and Telegraphs, at the beginning of 2014 Myanmar’s existing 5.44mn mobile subscribers (representing >10% penetration), were made up of 66% 2G, 14% 3G and 20% CDMA. 2. Who are Myanmar’s operators and how are they progressing? Oordeoo launched in August, with coverage available to 7.8mn citizens in 71 cities, attracting a million subscribers in its first three weeks of operation. Telenor launched in Mandalay in September and in Yangon in October, achieving their millionth subscriber on 25 October, 2014. Meanwhile, incumbent operator MPT, freshly rebranded and with a US$2bn capital injection in partnership with KDDI-Sumitomo joint venture KSGM, claimed to have sold a million SIMs in September 2014 alone. The future roles of MECTel and ISP Yatanarpon Teleport (YPT), to be restructured as a private company, remain unclear. 3. What spectrum has been allocated to Myanmar’s two new international MNOs, and have any LTE trials taken place? According to Hardiman Telecommunications,

Read this article to learn:< Who are Myanmar’s MNOs and towercos, and how fast are they rolling out?

< How many towers are in Myanmar now, how many will there be by year-end 2014 and by year end 2017?

< How many of Myanmar’s towers will be off-grid or on unreliable grids and what power solutions will be used?

< What are the contractual relationships between Myanmar’s MNOs and towercos and is there an opportunity

for an ESCO?

< Does Myanmar have local potential construction and O&M partners for towercos?

Keywords: MNOs, Towercos, Research, O&M, Construction, 3G, Tenancy Ratios, Loading. Network Rollout, Exit Strategy, Pass-Through, ARPU, Off-Grid, Unreliable Grid, ESCOs, Hybrid Power, Renewables, Greenfield, DG Runtime, Dimensioning, Logistics, Skilled Workforces, Warehousing, Rooftop, Private Equity, Debt Finance, RMS, Infrastructure Sharing, Asia, Myanmar, Ooredoo, Telenor, MPT, YPT, MECTel, KDDI, GSMA, Digicel, Myanmar Tower Company, Apollo Towers, Irrawaddy Green Towers, Pan Asia Tower, Myanmar Infrastructure Group, Leap Power Solutions, Flexenclosure, Heliocentris, Cummins

The Myanmar tower rollout often throws up more questions than answers. Having visited Yangon earlier this year, TowerXchange thought we’d share an FAQ; sometimes answers are simple, sometimes they are complicated, sometimes there are no answers at all! Due credit must be given to the kind folks at Apollo Towers, IGT, MTC, MIG, Ooredoo, Telenor, Leadcom, GSM TP and the GSMA GPM whose insights contributed to this FAQ. This FAQ was first published in August 2014, subsequently updated November 2014.


Telenor and Oordedoo each received 2 X 5 MHz in the 900 MHz band, and 2 X 10 MHz in the 2100 MHz band. Both have suggested a future migration to LTE. MPT undertook trials of LTE using 20 MHz in the 1800 MHz band during the course of 2013. YTP currently operates WiMAX, and claims 40 MHz in the 2600 MHz band and has announced plans to migrate to LTE.

4. Who are Myanmar’s towercos? Two towercos each have been appointed by Ooredoo (Myanmar Tower Company and Pan Asia Towers) and Telenor (Irrawaddy Green Towers and Apollo Towers) to lead the rollout. A fifth tower company, Myanmar Infrastructure Group (MIG) owned by Square1 Infrastructure, recently launched in Myanmar with an initial focus on IBS and DAS, but with a near-term target to build 1,000 macro sites. A sixth towerco, funded by a leading international private investment company in Myanmar, is rumored to be launching imminently. TowerXchange will share further details when confirmed. Meanwhile, MPT have refurbished many of their existing towers for co-location and awarded a contract to Huawei to build a further 250-400 towers. 5. How are Myanmar’s towercos financed? Myanmar’s towercos are well financed. Despite Pan Asia Towers’ (PAT) management DNA in common with Protelindo, Apollo’s links with Eaton

and Myanmar Tower Company’s (MTC) links with Digicel, each towerco represents a distinct investible platform for investors comfortable with Myanmar’s risk profile. There is no shortage of capital being made available from private equity investors excited by the Myanmar green field tower roll out. For example, backed by TPG (Texas Pacific Group), Apollo Towers may be the single largest US direct investment in Myanmar. PAT and MTC are more entrepreneurial ventures backed respectively by telecom billionaires Michael Gearon, who merged his company Gearon

Communications with American Tower in 1998, later becoming Vice Chairman of AMT, and Denis O’Brien. O’Brien made his fortune building and selling Esat Digifone in Ireland before turning his attention to the Caribbean with Digicel. Digicel had bid aggressively but ultimately unsuccessfully for one of Myanmar’s international MNO licenses. The consortium behind MTC also includes Yoma Strategic Holdings, one of Myanmar’s leading real estate companies. There has been speculation that Ooredoo is considering acquiring a 10% stake in MTC, although this has not yet been confirmed. As for Myanmar’s fourth towerco, IGT raised


US$150mn in their first round of financing, and their original partners can extend that total to US$300mn. Alcazar Capital and SREI Group have set up IGT as a company not a fund with a given expiration date, in anticipation of a liquidity event within as little as four to five years. MIG is funded by Singapore Windsor Holdings. 6. What are the potential exit strategies for investors in Myanmar’s towercos?

As international sanctions on Myanmar continue to relax, trade sale options may not be limited to regional players, while a leveraged recap or, perhaps less likely, IPO remain options. TowerXchange are also tracking several infrastructure and sovereign wealth funds with an appetite for emerging market towers. For now, Myanmar’s towercos’ priority is all about driving to scale.

The Myanmar market won’t support six towercos indefinitely, so in the medium term TowerXchange expects to see some consolidation among towercos, with the PAT-Protelindo axis believed to be particularly acquisitive. 7. Is debt finance readily available? While equity finance may be relatively easy to come by, Myanmar lacks a sophisticated domestic banking sector, with only a handful of small local banks and until now no foreign banks allowed, making the raising of debt a greater challenge. A pending change to the law will allow foreign banks

to have formal subsidiaries in Myanmar.

8. What is the population of Myanmar? As revealed in Myanmar’s first census for 30 years, the country’s total population is 51,419,420, a little lower than the 60mn rule-of-thumb previously used, but concentrated in the Yangon (14.3%), Irrawaddy (12%) and Mandalay Regions (12%) as expected. 29% of citizens of Myanmar live in urban areas. 9. How fast are the towercos moving? Fast. The site hunters are out hunting morning, noon and night, permits are being granted, several thousand new towers have already been erected. With as yet informal zoning regulations seldom permitting two towers within 500m of one another, a parallel race to market, and a race to secure the best sites, has been engendered among the towercos. So if you’re a reader with interest in supplying equipment or services to Myanmar’s towercos, consider this: they may be rolling out 250 sites per month – can you keep up? 10. What tenancy ratios are achievable in Myanmar? Modeling and forecasting prospective tenancy ratios in Myanmar will not be easy, and there are no precedents for a green field rollout using towerco-owned, shareable assets. On the one hand, you have the MCIT’s current policy of refusing to grant permits for towers within 500m of each other.

If such strict zoning restrictions are made law, then it may generate near-term location-specific territorial squabbles, but in the long term tenancy ratios should be excellent as Ooredoo, Telenor, MPT, (and whatever role YPT and MECTel play) plus ISPs, broadcast and wireless data tenants are all going to need to co-locate on the same tower if they want coverage at a specific location. On the other hand, how dependent are the tenancy ratio forecasts on the sale of co-locations to incumbent operators MPT? And what impact does KDDI’s investment in MPT have on their appetite to build their own towers? Data demand is another unpredictable variable which will demand drive capacity. The GSMA estimates tenancy ratios of 1.2 to 1.4 in Myanmar by 2017. 11. Can the towercos acquire the land under the towers in Myanmar? No. All land belongs the government in Myanmar; citizens can only lease land. If foreign companies secure an investment permit they are allowed to enter into long term leases of up to fifty years, with two ten year term extensions.

12. How many towers are needed? According to TowerXchange research, Myanmar’s four towercos have been contracted to build an initial 5,000 towers for Telenor and Ooredoo by


2015, with MPT adding a further 500-600 sites per year for the next three years. The GSMA agrees with and extends the forecast; 17,300 cell sites will be rolled out in Myanmar by 2017, providing 70% coverage. It’s interesting to note that in his TowerXchange interview Ole Martin Gunhildsbu, Chief Operating Officer of Telenor Myanmar talks about rolling out “up to 8,000 towers,” while at the GSMA GPM Working Group, Ooredoo were talking about rolling out 4,500 towers by 2018. Throw in a few thousand MPT towers, and you get pretty close to the GSMA’s forecast of 17,300 by 2017.

Addendum, October 2014: based on the volume of orders they are seeing, the tower installation firms TowerXchange have spoken to are more bullish than the GSMA’s forecast of 17,300 towers by 2017, with many feeling that the tower count in Myanmar by 2017 will be 25-30,000. 13. Who is building the towers in Myanmar?

The towers being built for Telenor and Oordeoo will be owned by the towercos, but they are subcontracting most of the construction work to specialist managed service providers. While most subcontractors employ substantial local workforces, it seems the lion’s share of the business to date has been won by proven international turnkey infrastructure firms such as Camusat, Leadcom, i engineering and firms like GSM Telecom Partners are being drawn up the value chain from tower manufacture into project management.

14. What do we know about the first 5,000 towers to be deployed in 2014?

Myanmar’s four towercos have been contracted to build the first phase of 5,000 towers by year-end 2014 (see TowerXchange’s “The structure of the Myanmar tower industry”). MTC’s sites for Ooredoo and Apollo’s sites for Telenor are focused on relatively urban areas, whereas PAT’s (for Ooredoo) and IGT’s (for Telenor) are more rural. Subsequent phase contracts have already been

secured by several towercos, for example IGT’s Telenor contract now extends from the initial 1,500 sites to a further 500 sites by the end of Q1 2015. It should be noted that all forecast tower counts will doubtless be subject to some rationalisation as parallel infrastructure is not permitted.

Addendum, November 2014: With Ooredoo getting to market several weeks ahead of Telenor, and with many of their first phase of towers deployed before the rainy season, it seems that the tower count

Forecast Myanmar tower count by end 2014*

Source: TowerXchange research

MPT

Apollo Towers

*Removal of duplicate sites at the request of MCIT notwithstanding

5000 1000 1500 2000

Irrawaddy Green Towers

Pan Asia Towers

MTC

1800

1500

1250

1250

1001


of Ooredoo’s partners MTC and PAT may exceed that of IGT and Apollo, who’s phase one network for Telenor remains at time of writing a work in progress. 15. What technologies will be rolled out? And what are the implications for devices and VAS? Ooredoo will rollout 3G. Telenor will rollout 2G plus 3G. Telenor’s 2G plus 3G strategy invites low cost prepaid handsets at or below US$10, while Ooredoo’s 3G only strategy suggests a keen interest in the availability of sub-US$50 smartphones, and the potential for MNO subsidies. Telenor and Ooredoo’s differing strategies hint at the possible creation of two overlapping markets; a 2G ecosystem driven by voice, SMS and basic VAS like SMS-based mobile money, and a smaller 3G

ecosystem for affluent personal and business smart phone users generating high ARPU. 16. What will be the ARPU in Myanmar? Ignore the current inflated ARPU figures in Myanmar as mobile communication is currently limited to relatively affluent people in Myanmar’s big cities. While bullish estimates suggest a post-rollout ARPU as high as US$9, the majority of stakeholders I met in Yangon anticipated ARPU around US$4, lowered by a significant proportion of subscribers receiving not making calls. 17. Will microwave backhaul be used? Is there any fibre? And will the Myanmar military play a role in the telecoms rollout? The precise role of MECTel, part of the military-owned Myanmar Economic Corporation which had been announced as a joint venture partner of

MPT, remains unclear. Military participation in the Myanmar tower rollout has its advantages. For example, the assumption that many rural towers will need to be built with capacity for microwave backhaul may be incorrect as apparently there are thousands of military bunkers connected by fibre. In addition to possibly making this fibre available as a transmission network, the military continue to own a significant amount of land. 18. What proportion of Myanmar’s towers now and in the next four years will be on-grid, on unreliable grid connections and off-grid? Of an estimated 1,800 MPT towers in Myanmar now, 45% are on reliable grid connections, 25% on unreliable grids and 30% off grid.The GSMA forecast Myanmar will have 17,300 sites by 2017, providing just over 70% population coverage. The GSMA GPM suggested there would be 9,990 potential green power sites in Myanmar in 2017, requiring an investment of US$388.5mn but yielding US$137.4mn in annual opex savings for a 2.83 year RoI period, based on reducing diesel consumption by 83%. For detailed breakdowns of the business model and opportunity, including a forecast that an ESCO could generate US$157mn in Myanmar in 2017 based on an investment of US$465mn, download the GSMA’s excellent “Sizing the Opportunity: Green Telecoms in Myanmar – Market Analysis” report.

Addendum, November 2014: As previously

GSMA GPM forecast tower site growth and grid connections in Myanmar

2013

2015

2017

540 450 810

5,0000 10,000 15,000

Off grid

Unreliable grid

Reliable grid

TowerXchange forecast

20,000 25000

Source: GSMA GPM/TowerXchange

2,850 2,043 2,707

9,640 3,498 4,162


mentioned, the GSMA’s forecasts that the tower count in Myanmar will reach 17,300 in 2017 is felt to be overly conservative by several participants in the rollout, who suggest 25-30,000 towers is a more likely total by that date. 19. Put that in context for me; how many green powered sites are there worldwide? The GSMA uses a tight definition of green powered sites, excluding for example the 60-90,000 CDC battery hybrid sites worldwide. Solar hybrids represent the significant majority. It’s notable that around 4,500 green powered sites are delivered under ESCO business models, the majority of which are in India, and 84.5% of green powered sites are in Asia, with the majority in China. 20. When will green power solutions be deployed in Myanmar? While the prevailing view shared at the Q2 Green Power for Mobile working group in Yangon was that the first 12-18 months of the Myanmar tower rollout would be more focused on grid-connected and DG backed up sites, rather than deploying renewables, the experiences of many vendors on the ground has contradicted that. TowerXchange know of several green power vendors reporting orders from Myanmar in high triple to quadruple digit site counts already, suggesting that the majority of greenfield sites are being equipped with modular, green power solutions from day one. 21. So what are the contractual arrangements

between the towercos and operators concerning power? According to the GSMA GPM Myanmar report “Ooredoo… has adopted a mixed deployment model during the first phase of network rollout. The tower assets (in phase one) are owned by the Tower Company (MTC in this case) and leased back to Ooredoo on a tower lease agreement, whereas the power assets are owned by Ooredoo (MNO led CAPEX model). In the second phase of rollouts given to PAT (its second partner Tower Company), Ooredoo is looking at completely outsourcing their power provision to the Tower Company.”The GSMA report continues, “On the other hand, Telenor… has outsourced both tower and power

ownership to the Tower Companies (IGT and Apollo towers in this case). However, the power outsourcing is partial OPEX model where the diesel consumption and electricity costs are a pass through. In this case, both the Tower Cos would be investing and owning the power assets (Tower Co lead CAPEX model).” 22. Okay, that’s the current state – what’s the ownership profile of power assets likely to be in the long term? Myanmar’s operators seem to agree that power sharing is essential in the long term, to avoid the inefficiencies of each tenant needing their own generator and deploying their own maintenance crews. This suggests power assets will be owned and maintained by towercos. Whether contract structures revert from power pass through to a fixed lease rate inclusive of a capped amount of power remains to be seen. Shared power releases significant savings, as high as 20%. 23. So are Myanmar’s towercos likely to become powercos? Maybe. Maybe not. Towercos create more value through co-location sales that they do through energy efficiency, so if they can get away without managing power, they will. In the words of one towerco executive “We dig a hole, we put some steel in it, and watch the

Breakdown of GSMA’s ~38,000 Green Powered Sites Worldwide

Solar

35,000

1,200

1,200

700

Solar+wind Wind Fuel cells

Source: GSMA GPM


revenue grow – investors like the steel and grass model; you get an annuity without risk! However, the predictability of cash flow is impacted by a towerco’s ability to deliver a reliable network, and most SLA’s are primarily concerned with power availability.” Some or all of Myanmar’s towercos may eventually carve out or outsource power operations. 24. Is there an opportunity for an ESCO in Myanmar? Ooredoo acquired their own power solutions for their first 1,000 or so sites under a conventional capex model, but they have an RFP out seeking to contract a third party power company on turnkey basis (effectively an ESCO). Ooredoo may want to sell the power solutions at those initial 1,000 sites to that ESCO, converting to a pure opex model. Most stakeholders feel the structure of the Myanmar tower market is evolving toward towercos or third party powercos (ESCOs) assuming responsibility for power in the medium term.

Based on the GSMA Green Power for Mobile’s recent Myanmar market analysis report, “there is a significant saving opportunity for MNOs by engaging with a 3rd party ESCO for the provision of their energy. The savings will amount to US$79 million in opex every year by 2017. For an ESCO, the market potential will amount to an annual revenue of US$157 million per year, with an investment of US$466 million by 2017.

Addendum, November 2014: While it has not yet been announced, it’s widely assumed that Ooredoo’s maiden ESCO contract, with a quadruple digit site count, has been awarded to Leap Power Solutions. 25. Is the climate in Myanmar conducive to solar and wind power?

Solar radiation is sufficient for solar power to be a viable option in all but the farthest Northern reaches of Myanmar, although wind resources are finite; seldom above the 5.5-6m/s generally held to make wind power a viable option.

26. How will power be provided at rooftop sites? Rooftop sites represent a challenge for backup power – even if the landlord has a backup generator, is he allowed to sell power to the owners of a rooftop installation? With the structural capacity and permissions limiting the number of rooftop sites suitable for DG backed up power, fuel cells may be an option for many sites. 27. How extensive is the grid in Myanmar? Electrification in Myanmar stood at 29%, growing at approximately 5% per annum, with rural electrification at 25.54% in 2013 according to the Ministry of Electric Power, with load-shedding common during the dry season. 28. What is the quality of grid power in

Myanmar? Myanmar’s towercos have yet to measure the quality of the grid in many locations, so most initial plans are being made on the assumption that all on-grid sites will have poor quality grid power. Sites of high importance, such as major transmission sites, will need a good backup generator regardless of grid quality, but tower owners are expected to resist the temptation to install backup generators at all poor grid sites until they have monitored the site. 29. Will off-grid sites be connected to the grid?

The grid is often too distant to for grid connection to be an option. However, one of Myanmar’s operators expressed a preference to connect to the grid if they could, no matter what quality or reliability of power was available: “even if the grid costs US$20-30k, it’s better to connect from a TCO perspective” 30. If grid connection is not an option, what power solutions are being considered at off-grid sites? CDC+DG hybrids, where the DG charges the batteries. “Looks simple, but it’s easy to get wrong if you don’t do it properly,” according to one operator. Solar+DG hybrids, typically relying 60% on the generator, 40% on solar, and anticipating 3-4 hours of DG runtime.

Solar only, low power consumption sites only for lower priority sites.


31. How do Myanmar’s operators figure the TCO compares between solar hybrid and CDC hybrids? One Myanmar operator revealed that their TCO comparisons, inclusive of the cost of installation, suggested that at a low power 1.5kW site, the TCO crossover between solar hybrid and CDC hybrid

was after two and a half years, pushed out over five years with a 2.5kW load and over six years with 4.5kW multi-tenant loads.

32. How important is vendor finance? Given the multi-tenant, higher load environment likely to evolve in Myanmar, MNOs and towercos

will find justifying the funding of renewables difficult, particularly with so many other demands on their finite capex. So vendor finance is critical. For example, Flexenclosure’s access to European export credit agencies provides good interest rates for opex models, which has helped them secure their largest order to date from Myanmar. One Myanmar operator summed it up succinctly: “we’ve got to ensure alignment between technical requirements and financial realities to ensure the best TCO solution is adopted – not simply cheapest capex solution. If we can’t get funding, we can’t do it.” 33. What are the opportunities for RMS and site intelligence solutions in Myanmar?

Data on grid availability and quality is non-existent in Myanmar, and is necessary to inform the selection and configuration of power solutions. RMS also provides important data on which to base the optimisation of fuel usage (and reduction of fuel theft); DG start/stop and runtime; battery charge, discharge and replacement; and the efficient use of any renewables. Integrating and aggregating data from different suppliers is key, based on which performance metrics can be generated for the comparison of sites and the evaluation of equipment and service providers.

Ooredoo talk about having a “smart controller at every site to maximise operational efficiency.”


34. How do you dimension cell site energy solutions for multiple tenants, and what are the implications for lease pricing? Dimensioning sites and power solutions in an unpredictable multi-tenant environment is never easy. Do you build for one, two or more tenants? How do you price leases? Do you discount for certain operators whose equipment requires less space and less power? How do you right-size a generator, or lease sufficient real estate to add a substantial solar array, if you cannot be sure how many tenants you’ll have an what their power requirement might be? How pragmatic are tenants prepared to be about SLA terms as these decisions and associated investments are made? Flexibility is going to be key for Myanmar’s towercos. Power solutions must be readily upgradable. As Myanmar’s race to market results in stringent delivery schedules, putting pressure in turn on towercos’ supply chain of partners, it becomes critical to be able to integrate multiple vendors. The complexity of planning power solutions for Myanmar’s new towers is exacerbated by the lack of data available on the pattern of grid availability, making it tough to dimension solutions for on grid sites. 35. How should Myanmar’s cell site energy solutions be made modular to accommodate multiple tenants?

The power equipment provider (or ESCO) may have to provide a solution to support a 4.5kW load for three tenants in the medium term, but from day one tenancy ratios are one. So to what extent can vendors modularise? IGT CFO Karim Dakki on modularity: “we spent time understanding the upgradability path of different solutions with our partners from Heliocentris. We wanted to understand how many extra batteries we would need to achieve a given level of autonomy, and whether the batteries would fit in one cabinet or two? Was there enough free cooling? When should we install a 15 KVA versus a 20 KVA generator to avoid having to deploy a new generator to accommodate a second tenant?” The prevailing view among Myanmar’s towercos was that it was better to overinvest initially than re-deploy.

36. What’s the delivered cost of a litre of diesel to a remote cell site in Myanmar? Nobody knows, because there are no remote cell sites in Myanmar. Nobody knows the impact of fuel theft either. 37. Which energy vendors are already on the ground in Myanmar?

Lots. But of particular note are Cummins, Heliocentris and Flexenclosure. Heliocentris offer a “managed power solution.” Heliocentris has some shareholders in common with IGT and are well positioned to support a significant number of their sites.

Flexenclosure are deploying close to 1,000 multi-tenant renewable energy eSites in Myanmar.After sales support is critical to long term success, particularly given the scarcity of skilled local resources. This is where the larger and more established energy equipment suppliers like Cummins, with local after sales service offices in Myanmar, are going to have an edge. 38. What do companies need to know about importing telecoms equipment into Myanmar? Quoting Polastri Wint & Partners in their recent TowerXchange interview: “Until recently, private telecommunications operators and contractors were not permitted in Myanmar. Only Government-owned enterprises had the right to import telecommunications equipment – the market has only just liberalised. With an investment permit issued by the Myanmar Investment Commission and an import permit, issued by the Ministry of Commerce, foreign towercos and their suppliers can import telecommunications equipment, with the recommendation of the Ministry of Communications and Information Technology, and where relevant, with the issuance of a telecommunications equipment license issued by the Posts and Telecommunications Department (which list of equipment will be formalised once the Telecommunications Rules have been enacted). Importers will be required to provide detailed information on the equipment proposed to be imported including the volume and specifications


of such equipment, as part of the application for an investment permit.”

39. What is the impact of Myanmar’s under-developed transport infrastructure? Quoting John Stevens, IGT CEO in his recent TowerXchange interview: “Everything in Myanmar flows through Yangon. There’s a decent port with warehousing capacity, and roads from India, China and Thailand. However beyond Yangon, there’s not much infrastructure. The single biggest challenge in Myanmar is the lack of transport infrastructure – there are good roads to Naypyidaw and Mandalay, but beyond that, the roads and bridges often can’t handle heavy goods vehicles, so we have to limit the physical weight of loads, and we expect to use oxen and mules to get construction products to remote sites. In Northern sites where we have site hunters out, it can take a two to four day round trip to get information back to Mandalay!”

40. Does the rollout get stuck in the mud and slow down during Myanmar’s notorious rainy season?

Inevitably the rainy season slows down the deployment, but work continues. In the words of Ofer Ahiraz, CEO of Leadcom: “when we return to sites surveyed in March, April and May, some are now under a meter of water! This wasn’t a surprise because our surveys had indicated the sites were prone to flooding, and we will be installing many elevated sites, but it’s difficult to commence civil works when the soil is sodden!

Recommended further readingThe GSMA’s Green Power for Mobile’s excellent “Sizing the Opportunity: Green Telecoms in Myanmar – Market Analysis”www.gsma.com/mobilefordevelopment/wp-content/uploads/2014/06/GPM-Market-Analysis-Myanmar-June-2014.pdf

TowerXchange’s introduction to the structure of the tower industry in Myanmarwww.towerxchange.com/the-structure-of-the-tower-industry-in-myanmar/ TowerXchange’s Interview with Ole Martin Gunhildsbu, COO, Telenor Myanmarwww.towerxchange.com/internet-for-all-telenors-plans-in-myanmar/ TowerXchange’s Interview with John Stevens, CEO of Irrawaddy Green Towerswww.towerxchange.com/how-irrawaddy-green-towers-plans-to-rollout-1500-towers-for-telenor-myanmar/

Hardiman Telecommunications’ introduction to the Myanmar tower rolloutwww.towerxchange.com/myanmar-the-last-frontier/Local law firm Polastri Wint & Partners on the legal and regulatory environment and site acquisition challenges in Myanmarwww.towerxchange.com/site-acquisition-challenges-in-myanmar/ Camusat’s perspective from the front line of the Myanmar tower rollouthttp://www.towerxchange.com/camusat-secures-

contract-to-rollout-500-towers-in-myanmar-for-apollo-towers/ A tower manufacturer’s view of Myanmar’s unique requirements, from GSMTPhttp://www.towerxchange.com/how-to-adapt-tower-design-and-packaging-to-the-unique-challenges-of-deployment-in-myanmar/ For an insight into the project management platform used by Ooredoo Myanmar, NeXsysOne, checkoutwww.towerxchange.com/how-one-user-interface-enables-management-of-complex-network-rollouts-and-maintenance/ To put Myanmar in the context of the broader Southeast Asian tower industry, checkoutwww.towerxchange.com/introduction-to-the-southern-and-south-east-asian-telecom-tower-industry/

Myanmar Census, May 2014countryoffice.unfpa.org/myanmar/drive/Censusobservationmissionreport_ENG.pdf Assessing the potential for Green Power for Mobile: Telenor Myanmarwww.gsma.com/mobilefordevelopment/wp-content/uploads/2014/10/Best_Practice_Myanmar-FINAL.pdf

Meet key stakeholders in the Myanmar tower rollout at the TowerXchange Meetup Asia, taking place on December 9 and 10 in Singapore.

www.towerxchange.com/meetups/asia/

How Digicel excelled in its first towerco ventureMTC’s CEO on the company’s successes in Myanmar

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

Oliver Coughlan, CEO, Digicel Myanmar Tower Company: As we all know, Digicel unsuccessfully bid for the telecom license in Myanmar and when that happened, the Group decided not to give up but to offer our expertise to successful applicants such as Ooredoo. In fact, Digicel went through a very detailed phase of groundwork and preparation ahead of the bid which created the foundations for our current venture.

Thanks to its incredible entrepreneurial spirit, Digicel Group was able to create MTC and I am proud to say, we are now the most successful towerco in Myanmar.

Personally, a number of factors pushed me to accept this professional challenge. I had the pleasure to work with the Digicel Chairman Mr. Denis O’Brien around sixteen years ago, back in Ireland, and even though we then parted ways, I always looked at the Group with interest and respect. Digicel Group is a strong company with great vision and entrepreneurial spirit.

At my age, I never thought I’d work in Asia and the day I received the call from Digicel, I just remained on the line a few seconds longer than I normally would as I had an interesting and rewarding position in Ireland. I listened to what sounded like a very challenging, therefore enticing, proposal. I

Read this article to learn:< Digicel’s journey from an operator to a towerco

< How MTC has successfully contributed to the Ooredoo network launch

< MTC’s business model in Myanmar: from power to partnerships

< Myanmar’s PTD: keeping the pace at times of change

Oliver Coughlan didn’t plan to accept a challenging opportunity in Asia, let alone Myanmar. But when Digicel approached him with such an ambitious idea, he couldn’t resist and went on to become the CEO of Digicel Myanmar Tower Company. To date, MTC has built the vast majority of Ooredoo’s infrastructure and is successfully operating in one of the toughest markets in Asia and worldwide. In this exclusive interview, Oliver shared with us his insights on MTC’s successes to date, the challenges of operating in a frontier market, and the key characteristics of the company’s business model.

Keywords: Digicel Myanmar Tower Company, MTC, Digicel Group, Asia, Myanmar, Asia Pacific, Caribbean, Towerco, Interview, Tower People, Hybrid Power, Unreliable Grid, C-Level Perspective, Regulation, Ooredoo, Network Rollout, Business Model, GSMA, Market Forecasts, Health & Safety, Co-locations, Infrastructure Sharing


Oliver Coughlan, CEO, Digicel Myanmar Tower Company

recall going back home and discussing it with my family… My kids and wife all pushed me to take this challenge and here I am, developing one of the hardest and most exciting rollouts ever and I have never looked back.

TowerXchange: Congratulations on MTC’s critical role in Ooredoo’s rapid greenfield rollout and launch in Myanmar. How did you get so many sites on air so quickly?

Oliver Coughlan, CEO, Digicel Myanmar Tower Company: The rollout didn’t happen without a great deal of energy, perseverance, financial and human capital. As we all know, Myanmar presents some very tough conditions in terms of logistics and infrastructure and delays are quite common in project development.

To be honest, we are a bit behind where we expected and wanted to be, according to our plans. However that said, we all agree it’s been quite a journey and we are proud of the results we’ve achieved to date. A key factor of our success is represented by the amazingly skilled teams we brought in from Digicel Group around the globe.

Digicel Group has a successful track record of developing networks in remote areas of the Caribbean and Asia Pacific and, with 9,500 sites around the world, our team is experienced and ready to face each challenge posed by a frontier market like Myanmar. Additionally, we have the backing of a strong Board of Directors which includes a very knowledgable and supportive local


partner in Yoma Strategic Holdings which allowed intensive capital expenditure and supported us in the Ooredoo launch.

We are very proud to play such a significant part in Ooredoo’s successful network launch and we are fully committed to Ooredoo’s expansion plans. The partnership between Ooredoo and MTC is a good match and the journey has been both challenging and rewarding.

This has been a successful venture for MTC and now we are keen to discuss co-location options with potential clients whilst we continue working to expand our infrastructure in Myanmar.

TowerXchange: Now that MTC has successfully proven itself in Asia, is Digicel looking beyond Myanmar?

Oliver Coughlan, CEO, Digicel Myanmar Tower Company: With thirty-two business units across the Caribbean, Asia Pacific and Europe, Digicel is a very forward thinking entrepreneurial organisation, open to new opportunities under the right conditions. With the addition of MTC in Myanmar to its successful global operation, I have no doubt that the company is looking for new opportunities.

TowerXchange: What is your business model? Steel and grass or power too?

Oliver Coughlan, CEO, Digicel Myanmar Tower Company: We adopted a pure steel and grass business model. We build the towers and

infrastructure, provide a secure environment for our customers and make sure we do so within the planned timeline.

Our customers provide their equipment as well as power to the site. I believe that so far, they have adopted a variety of energy solutions depending on the specific site conditions. In light of grid power availability challenges, hybrid is the more economical choice in the long run, and is now widely adopted here in Myanmar. However, we see standard dual diesel generator sites as well.

TowerXchange: How has Ooredoo’s power strategy evolved as they’ve moved from the initial phases of the rollout where time was of the essence, to later phases when they perhaps have more time to focus on site efficiency?

Oliver Coughlan, CEO, Digicel Myanmar Tower

One of MTC’s sites in Myanmar


Company: Every successful business, ours included, looks continuously at streamlining operations and reducing opex. I think as MTC evolves and improves, it is no surprise that our clients do the same. Myanmar has been a learning process for everyone involved in the market so there are opportunities to improve for us all.

TowerXchange: Are you able to find good partners locally or are international experts playing a big role initially?

Oliver Coughlan, CEO, Digicel Myanmar Tower Company: Myanmar is definitely a frontier market which is undergoing a cultural and industrial revolution, therefore finding the right partnership

can also be a challenge. The key for us was to engage with the right people, with a sound Health and Safety track record and culture, a proven cost effective model and simply willingness to work hard.

We are now working with some of the best and most capable companies in Asia with successful track records in India, Sri Lanka, Malaysia, Vietnam, Philippines and beyond. We are proud to say that we are also partnering with a number companies in Myanmar, which are keen to learn best practices and adopt our model. We’ve so far partnered with highly experience companies while also up-skilling national companies and individuals. I am delighted to say the vast majority of MTC’s Staff are Myanmar nationals, the current and future success of the company is built around these great people.

TowerXchange: Do you agree with the GSMA’s forecast that Myanmar will have around 5,000 towers by y/e 2014 and 17,300 by y/e 2017?

Oliver Coughlan, CEO, Digicel Myanmar Tower Company: To be honest, these past few months have been so hectic that we haven’t had much time to future-gaze. That said, I believe that GSMA forecasts have been issued prior to Ooredoo launch and if they had to re-look at them now, they might find them quite conservative.

The demand for infrastructure is driven by the continuous growth of the national user base and I believe the GSMA figures are at the lower end of the scale, when you consider the phenomenal growth in the subscriber base.

TowerXchange: How has the principal of shared towers played out in practice so far, are the towercos generally building sites at least 500m apart?

Oliver Coughlan, CEO, Digicel Myanmar Tower Company: MTC work to industry best practices and standards and have built the most robust tower infrastructure in Myanmar, with a view to sharing with other operators.

TowerXchange: How is the regulatory environment in Myanmar?

Oliver Coughlan, CEO, Digicel Myanmar Tower Company: We have a very good relationship with PTD (Myanmar’s Post and Telecommunications Department) and they have been very approachable throughout these past few months.

We always have to keep in mind that Myanmar and its National Authorities and Regulatory bodies have been literally hit by a storm of requests and information in a very short period of time. I believe any country, even the most advanced, would struggle to cope with this tremendous evolution we are experiencing here.

That said, I have dealt with very smart people within PTD who know their business and are willing to run the extra mile for the sake of the development of the national telecom sector. These are challenging and yet very exciting times and everyone is overwhelmed by the scale of business growth within this beautiful country

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The demand for infrastructure is driven by the continuous growth of the national user base and I believe the GSMA figures are at the lower end of the scale, when you consider the phenomenal growth in the subscriber base

How Square1 Infrastructure is building new towercos in SSA and MyanmarSerial tower entrepreneur Dan Ryan finds opportunities in rooftops, BTS, DAS and IBS in emerging markets

TowerXchange: Please introduce yourself Dan - how did you get into the tower business? Dan Ryan, CEO, Square1 Infrastructure: I’m a real estate-infrastructure attorney by training and education. I have focused my career on infrastructure development as a developer and attorney since I entered law school in 1992. With the 1996 Telecom Act I entered the booming US wireless industry, working initially for a network deployment firm which my partner and I later acquired through an MBO. At our peak, we were rolling out 1,000 sites a year across the Eastern seaboard. I became aware of the low barriers to a service business and decided to enter into asset ownership, and subsequently started a small tower company in the US. With tower owners increasingly disposing of assets through brokered auctions, it has become increasingly difficult to acquire a portfolio of any size in the US in competition with the publicly listed towercos, so I started focusing on emerging markets. TowerXchange: You’ve just launched a new towerco in Myanmar. Why? Dan Ryan, CEO, Square1 Infrastructure: After 15 years working in the US tower market, you don’t see 1,000 site BTS opportunities any more! In terms of new builds, you don’t find BTS opportunities of the size and scale to be found in Myanmar anywhere else in the world, and the green field rollout situation means you don’t have to pay a

Read this article to learn:< Launching a new towerco for Myanmar initially focused on DAS and IBS but targeting 1,000 macro sites

< Marketing several hundred rooftop locations in Class A office space in South Africa

< Global Infrastructure Investors: a BTS-centric towerco that will soon finish its first 100 sites in Nigeria

< The impact of major sale and leaseback transactions on the BTS market

< Growth and exit strategies for middle market towercos

At TowerXchange, we’ve been intrigued by the absence of ‘middle market’ towercos from many emerging markets. Filling the gap between a ‘Mom and Pop’ local operation and the multi-national private equity backed towercos, smart middle market towercos acquire attractive sites for macro towers and rooftops, fulfil build to suit (BTS) contracts that may be too small to attract larger towercos, and are often first movers when the market for IBS and DAS develops. TowerXchange spoke to serial tower entrepreneur/lawyer Dan Ryan CEO of Square1 Infrastructure about his middle market towercos in SSA and Myanmar.

Keywords: Who’s Who, Towercos, Market Entry, Network Rollout, Build-to-Suit, ESCOs, Greenfield, Rooftop, IBS, DAS, Sale & Leaseback, Debt Finance, Middle Market Towercos, Infrastructure Sharing, Africa, Asia, Myanmar, South Africa, Nigeria, Myanmar Infrastructure Group, SWORN South Africa Asset Management, Global Infrastructure Investors, Square1 Infrastructure


Dan Ryan, CEO, Square1 Infrastructure

premium for sale and leaseback. TowerXchange: What are your current activities in Myanmar? Dan Ryan, CEO, Square1 Infrastructure: Our local entity, “Myanmar Infrastructure Group”, started trading on June 1 2014. We jokingly call ourselves the “MIG fighters” because we develop so fast! We’ve secured funding from Singapore Windsor Holdings, and our goal is to rollout 1,000 macro towers and 100 or so in-building solutions in Myanmar. We’re already working on some macro towers, but our market entry has started with multi-tenant DAS solutions for airports and in-building solutions, targeting an initial 25 properties, to demonstrate our capabilities to Myanmar’s MNO community. DAS and IBS are unlike macro towers in that once you have secured an exclusive agreement on a property with the landlord, then you have that particular coverage opportunity locked up, you don’t have to worry about nearby sites’ coverage. TowerXchange: Tell us about your business in South Africa. Dan Ryan, CEO, Square1 Infrastructure: Our South African operation has its roots in the co-location management business. We trade as Square1 Infrastructure LTD in South Africa, where we were formerly known as SWORN South Africa Asset Management.


We manage rooftops, risers and ground for landlords while also providing audit services. We were fortunate enough to secure Brian Hosking from JHI, the largest property management company in SA. Brian has done a great job securing several hundred rooftop locations, primarily Class A office space in key areas of South Africa’s major cities, and we’re marketing those rooftop sites now. TowerXchange: And what’s your footprint in Nigeria?

Dan Ryan, CEO, Square1 Infrastructure: Our Nigerian business is known as Global Infrastructure Investors, and focuses on BTS and small one-off acquisitions. We identified an opportunity to consolidate several local service companies who had difficulty securing capital to put in proper power solutions and upgrade towers. Global Infrastructure Investors has been able to secure BTS opportunities while the Big Three towercos have been preoccupied with sale and leaseback auctions. We’ll finish our first 100 sites in Q4 2014, and we have a pipeline of several hundred more. TowerXchange: With Etisalat, MTN and Airtel’s Nigerian towers sold or in the process of being sold to towercos, will the expanded inventory of leasable sites have a suppressing effect on Nigeria’s BTS market? Dan Ryan, CEO, Square1 Infrastructure: Nigeria has around 25,000 towers at the moment, and our

models suggest 57-60,000 towers are required. The sites formerly owned by the carriers will attract more co-locations, but I don’t think it will affect the BTS market – we are still experiencing strong demand. The fundamentals of build to suit are common to both large and smaller towercos; we’re still reticent to build a tower for one tenant, we still need a multi-tenant structure to make math work, and we’re still not keen to build too close to another tower with capacity for co-locations. What

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our goal is to rollout 1,000 macro towers and 100 or so in-building solutions in Myanmar. We’re already working on some macro towers, but our market entry has started with multi-tenant DAS solutions for airports and in-building solutions


differentiates Square1 is that our backers, a ten-year fund in Luxembourg, enable us to be a little more patient about attracting a second tenant than the larger towercos backed by less patient private equity firms demanding higher returns. As a result, smaller towercos like us have a slightly different appetite for BTS. I think the transfer of towers from Nigeria’s MNOs to towercos like IHS opens more opportunities for small and mid-sized tower companies. If I bought thousands of towers via sale and leaseback, my focus wouldn’t be on BTS, it would be on integrating all these new towers. It’s similar in the US where the needle doesn’t move for the publicly listed towercos for BTS programmes of less than 100 towers – they would rather a smaller developer does the work, and they can always buy them out in the future. Africa’s private equity backed towercos are probably driving toward an IPO in the fairly near future, which means their focus is on growing tower cash flow, and means they are less focused on the negative cash flow differential of BTS. TowerXchange: Would you ever have an appetite to participate in sale and leaseback opportunities in SSA? Dan Ryan, CEO, Square1 Infrastructure: We’re still in our first year of trading in SSA, getting our feet wet. The challenges around power, and the fact that land titles often aren’t as good, means we’re happy sticking to BTS for now. Participating in sale

and leasebacks is not just about raising money, in the long term it’s about the ability to deliver. TowerXchange: What constitutes scale for a small to medium sized towerco in SSA? Dan Ryan, CEO, Square1 Infrastructure: You can get rich doing just 10-20 sites a year in the US, but the power issues and scale of operations in SSA mean you need to drive to 100+ sites. As the African telcos increasingly utilise towercos to build, maintain and, in many cases, acquire their cell sites, I feel there is room for a layer of 100-1,000 site mid-sized towercos, particularly if we can work with an energy services partner so we can focus on the pure real estate game. TowerXchange: What capabilities do you keep ‘on the payroll’ and what is outsourced? does your organisational chart look like in Nigeria, for example? Dan Ryan, CEO, Square1 Infrastructure: The critical resources which we keep in-house are country management, financial control, co-location sales and the guys who are our customers’ touchpoints. When it comes to field operations, Global Infrastructure Investors find quality local partners to provide fuel and resupply, which is a very fragmented market in Nigeria. TowerXchange: What is stopping Nigeria’s O&M subcontractors and the country’s smaller towercos from getting to scale?

Dan Ryan, CEO, Square1 Infrastructure: Local Nigerian businesses struggle to attract the domestic finance they need to scale and, with most contracts in Naira, international investors are reluctant to expose themselves to the currency risk. In the US, my general rule is you need 10% of a contract’s value to be able to fund it, so you need US$2mn working capital to secure a US$20mn contract, with the rest financed through accounts receivable lending, which can be found at a relatively reasonable rate. In contrast the cost of borrowing in Nigeria can be 25-26%, if it’s available at all. TowerXchange: What’s your long term strategy for Square1 Infrastructure in SSA? Dan Ryan, CEO, Square1 Infrastructure: Nigeria and South Africa are just the beginning of our story in Africa – we’re interested in opportunities across SSA, particularly in ECOWAS and SADC. As well as our venture in Myanmar, we’ve also started looking for opportunities in Central and South America. I’m a firm believer that risk and reward are linked together. A country like Nigeria has the population size, GDP growth and natural resource wealth to provide excellent fundamentals for a telecom real estate business, and those who are brave enough to tackle the power challenges have the opportunity to establish a tower business that generates a good margin in it’s own right. Of course most small to medium sized towercos are destined to be acquired eventually

How Irrawaddy Green Towers plans to rollout 1,500 towers for Telenor MyanmarThe progressive attitude of government is facilitating the co-ordinated, accelerated rollout of independently owned towers

John Stevens, CEO, Irrawaddy Green Towers

TowerXchange: Please introduce Irrawaddy Green Towers. John Stevens, CEO, Irrawaddy Green Towers: Irrawaddy Green Towers is one of four new tower companies operating in Myanmar. We started out as Golden Towers, a newly formed towerco with a small portfolio in Vietnam, and an interest in Myanmar. Golden Towers found ourselves on a shortlist of two towercos, together with VIOM QUIPPO, bidding for the award of a contract for 1,500 towers for anchor tenant Telenor Myanmar. Telenor liked our speciality in power, and liked the proven track record of VIOM QUIPPO, so we joined forces in a 50-50 partnership to create a stronger combined towerco. TowerXchange: What is your experience of attracting capital to finance emerging market towercos, and how is Irrawaddy Green Towers financed? John Stevens, CEO, Irrawaddy Green Towers: Whereas four years ago I was exploring an opportunity to launch a towerco in Cambodia, which ultimately didn’t come to fruition largely due to a lack of investor appetite, now it seems like there is too much capital chasing too few emerging market tower deals. Golden Towers is backed by Alcazar Capital, a private equity firm out of Dubai, while our partners VIOM QUIPPO’s financing comes from their original investors, SREI Group. We were

Read this article to learn:< The origins of Irrawaddy Green Towers: a JV between Golden Towers and VIOM/QUIPPO< Leveraging Community Centres to provide ancillary services at remote cell sites< The implications of under-developed transport infrastructure – limiting the weight of physical loads< Irrawaddy’s TCO focused procurement strategy – looking for better than 20% IRR< Government support: temporary licenses for towercos, easing access to government land, and not permitting duplication of sites

John Stevens is a tower industry veteran with over 25 years’ experience, having served in senior management positions and rolled out thousands of towers with US Unwired, Tarpon Towers and Sprint PCS. However, John is probably best known as the former CTO of SBA Communications, where his responsibilities included sales and incubating SBA Power Services. John currently owns Infinigy Engineering and his own towerco back in the US, but his passion remains emerging market towers, which is what brings him to Myanmar…

Keywords: Who’s Who, Towercos, C-Level Perspective, Construction, Investment, Tenancy Ratios, Network Rollout, Pass-Through, Off-Grid, Unreliable Grid, Hybrid Power, Solar, Procurement, Skilled Workforces, Infrastructure Sharing, Southeast Asia, Myanmar, Telenor, Ooredoo, YPT, MPT, Apollo Towers, Myanmar Tower Company (MTC), Pan Asia Towers, VIOM, QIPPO, Golden Towers, SREI Group, Alcazar Capital, Irrawaddy Green Towers


oversubscribed in our first round of financing of US$150mn, now fully raised, and our original partners are funding us further to our total of US$300mn. We’re also counting on a fair amount of vendor financing, similar to everyone else’s strategy. TowerXchange: Please introduce us to your leadership team and their respective roles. John Stevens, CEO, Irrawaddy Green Towers: TowerXchange has already spoken to Karim Dakki, our CFO. Karim is a finance guy from the Alcazar Capital team. My COO from the United Kingdom, Simon Payne, brings with him extensive deployment experience in towers, power and fiberoptics. We found him lounging in Liverpool after recent stints in Zimbabwe and Burundi, having previously held a group level implementation role at Celtel. Further my Board Chairman, Arun Kapur has very strong experience on the proven concept of Community Centres, which they’ve deployed at thousands of sites in India. Community Centres provide ancillary services at cell sites located in small communities, many of which hitherto had little in the way of digital communications with the outside world. The Community Centres typically consist of a small building with a computer and a dedicated Internet connection, enabling local citizens to access banking, e-commerce, health services et cetera. We setup these Community Centres very simply initially then, as the


community gets comfortable using basic services, more services get layered on such as an ATM or vaccine refrigerators. We’ve received a lot of support for such initiatives from the Myanmar government and from Telenor, who share the same philosophy of community development.

TowerXchange: How would you describe the challenges and opportunities of rolling out towers in Myanmar?

John Stevens, CEO, Irrawaddy Green Towers: Everything in Myanmar flows through Yangon.

The construction team


There’s a decent port with warehousing capacity, and roads from India, China and Thailand. However beyond Yangon, there’s not much infrastructure. The single biggest challenge in Myanmar is the lack of transport infrastructure – there are good roads to Naypyidaw and Mandalay, but beyond that, the roads and bridges often can’t handle heavy goods vehicles, so we have to limit the physical weight of loads, and we expect to use oxen and mules to get construction products to remote sites. In Northern sites where we have site hunters out, it can take a two to four day round trip to get information back to Mandalay! Another long-term challenge in Myanmar is the under-developed banking and insurance business. For example, Telenor requires its partners to have robust insurance, and want that flowed down to their subcontractors, but many of the contractors in Myanmar don’t have insurance because of the deficiencies of the local financial services industry.

TowerXchange: Can you give us a sense of the geographical focus of those initial 1,500 sites for Telenor, the timelines and the progress of your rollout to date? John Stevens, CEO, Irrawaddy Green Towers: Both Telenor and Ooredoo have roughly 2,500 sites to rollout in phase one, the timetable for which is ‘yesterday’ through the beginning of 2015. Actually, the rollout breaks down into phase 1A

and phase 1B, the former being concentrated on the bigger cities where the operator is going to get the best bang for their buck; Yangon, Mandalay, Naypyidaw, Taungoo, Bago and Tharrawaddy. Irrawaddy’s towers are in phase 1B, some in Yangon, but many in the next blush out. TowerXchange: Tell us about the power situation in Myanmar. John Stevens, CEO, Irrawaddy Green Towers: The structure of Telenor’s contracts with Irrawaddy Green Towers and with Apollo Towers includes both the tower and the power. My understanding is that MTC’s and Pan-Asia’s contract with Ooredoo includes only the tower, with power being handled under separate vendor purchase contracts.

There is little grid power beyond big cities, and with no near-term opportunity to extend the grid. We estimate two thirds of Myanmar’s cell sites will be off-grid. Even in the big cities a significant portion of sites need backup generators because grid power is not reliable enough. Sometimes it’s a timing issue – even if grid power is available, how long will it take to connect? Irrawaddy Green Towers is taking a hybrid approach. We’re considering solar in areas where the climate makes it a possibility – Telenor has a mandate to deploy green power where possible – but the engineering and economic circumstances at a lot of sites won’t support renewables, so we’ll roll out a lot of DG+battery hybrids. TowerXchange: Can you give us an insight into Irrawaddy Green Towers’ procurement strategy? John Stevens, CEO, Irrawaddy Green Towers: Acquiring the steelwork is relatively easy, selecting power solutions is more challenging. There are no shortage of renewable, DG and energy storage solution providers, but sometimes the technical data in their marketing literature doesn’t reflect the results you get onsite. Our procurement strategies are focused on Total Cost of Ownership (TCO), rather than focusing purely on initial capital outlay, which means we have some appetite for longer term payback solutions. Telenor has exacting requirements, and punitive terms in case their towercos fall short of

“ “roads and bridges often can’t handle heavy goods vehicles, so we have to limit the physical weight of loads, and we expect to use oxen and mules to get construction products to remote sites

their SLAs in terms of uptime, so we place more emphasis on technical capabilities than financial costs to ensure we install robust power solutions. Ultimately, we look for better than 20% IRR, and from day one we’re probably slightly less than that on power. Let’s put it this way; Irrawaddy is spending 60% more on energy solutions than VIOM did in India – that certainly led to some healthy internal debate!


TowerXchange: How has Irrawaddy Towers addressed the challenge of finding skilled and experienced people to install and maintain cell sites in such a challenging context? John Stevens, CEO, Irrawaddy Green Towers: Our strategy is unique in Myanmar in that Irrawaddy has two local equity service partners that have construction expertise and some telecom experience. For tower construction and tower

climbing, we’re bringing in experienced expat management to train local staff. All the towercos are taking a similar approach to training inexperienced local labour to take over later on. In Irrawaddy’s case, around a third of our staff now are expats, who will train locals, exposing them to O&M experience ready to take over. We expect our staff to include 80% Myanmar citizens in two years. TowerXchange: How supportive has the Myanmar government been in terms of licensing towercos whilst the new Telecommunications Law is still in draft form? John Stevens, CEO, Irrawaddy Green Towers: The Myanmar Ministry of Communications and Technology (MCIT) have been tremendously supportive and have adopted a very progressive strategy.

Whilst the new Telecommunications Law progresses from draft form to take effect, the MCIT has granted temporary licenses to all four Myanmar towercos, and can award more if necessary. Irrawaddy already had a license in place allowing for leasing land and building tower infrastructure through one of our local equity partners. The Myanmar Government has been very helpful. This rollout project is so large, with so many moving parts, that the government has regularly convened meetings between stakeholders and the

The Irrawaddy Green Towers project office


appropriate ministers, and has proactively helped to streamline and standardise processes. Rollout timetables are aggressive, and there are strong deadlines with penalties on Telenor and Ooredoo if those deadlines are not met, and the government doesn’t want be the cause of any hold ups. TowerXchange: How have government policies taken effect on the front lines, for example, how easy has it been to acquire sites (particularly to handle leasing and permitting) in Myanmar? John Stevens, CEO, Irrawaddy Green Towers: We cannot own real estate in Myanmar, but we are leasing land for 15-25 years, depending on location and the individual deal – this is an established way

of working in the tower industry. Challenges remain as the ownership of agricultural land is not clear, therefore agriculture land is currently not available to us, but all parties are currently trying to work that out with the government. And the Myanmar government itself owns much of the land, and most of the ministers are willing to work with us to support the rollout of telecommunications.

TowerXchange: What has been your experience of how the MCIT might encourage or ensure infrastructure sharing, and enforce privity around sites? John Stevens, CEO, Irrawaddy Green Towers: The tower companies and operators are summoned to Naypyidaw on a weekly basis to meet with the MCIT. We have all had to submit site list and locations to the MCIT, they conducted an internal evaluation, and yesterday the MCIT released a list of around 15% of sites that were conflicting sites. The MCIT has asked the tower industry to get together to resolve this as they won’t allow duplication of tower assets. There are some fascinating conversations over dinner needed to resolve this, as ultimately the four towercos are all in competition, but in the long term the MCIT’s approach is going to be great for the environment and for tenancy ratios. It’s in the tower industry’s interest to resolve this; we don’t want to do the wrong thing, harm the landscape and harm our

reputations, as has happened in certain other emerging tower markets where the hillsides are crowded with towers. The Myanmar government understands the risk of duplicate sites and will proactively prevent this issue up front. TowerXchange: Finally, please sum up how you see the future for Irrawaddy Towers and for the Myanmar rollout. John Stevens, CEO, Irrawaddy Green Towers: The operators and towercos leading the rollout in Myanmar are all experienced and, together with a very progressive approach from the MCIT, the process is being managed smartly. By the end of 2014, we’ll have two international operators with roughly the same tower count, and four towercos with similar sized portfolios. We’ll have our successes and failures along the way of course, but this is only phase 1A and 1B. There’s a large phase 2 of the rollout which we’ll start talking about in the middle of this year, and commence in 2015, which might include a further 2,500 towers each for Telenor and Ooredoo. MPT are YPT are not standing idly by, they are closing in on partnerships with foreign investors to bring in fresh equity and enable them to compete with Telenor and Ooredoo. Doubtless MPT and YPT will have their own tower building programmes, but with the MCIT limiting duplicating sites and the rollout already started, the two local incumbent operators will become tenants on many of the towers we’re building now

“ “

yesterday the MCIT released a list of around 15% of sites that were conflicting sites. The MCIT has asked the tower industry to get together to resolve this as they won’t allow duplication of tower assets …in the long term the MCIT’s approach is going to be great for the environment and for tenancy ratios

Internet for all: Telenor’s plans in MyanmarA tough project with an ambitious goal: connectivity as a driver for economic development

TowerXchange: What will it mean to the citizens of Myanmar to have access to mobile services?

Ole Martin Gunhildsbu, Chief Operating Officer, Telenor Myanmar: Telenor believes that mobile communication services are a basic necessity for everyone. We see mobile technology as an ‘enabler’ that will create a positive impact on people’s lives and contribute to the overall economic development in Myanmar. Beyond the convenience that mobile communications services will bring to their daily lives – for instance, allowing them to stay in touch with family and friends more easily – mobile phones can also help to transform the lives of individuals in Myanmar by enabling financial inclusion, access to knowledge, and bridging the digital gap.

In addition, mobile technology has the potential to deliver many benefits and create opportunities that support the establishment of vital infrastructure that will spur innovation in other critical industries such as education, healthcare and finance, and contribute to overall socioeconomic development. TowerXchange: What can you tell us about Telenor’s tower rollout in Myanmar?

Ole Martin Gunhildsbu, Chief Operating Officer, Telenor Myanmar: We are working hard to reach our rollout targets and will launch our services as soon as the infrastructure and network is ready to deliver the high-quality services that we are committed to.

Our goal is to ensure that we can offer a smooth

Read this article to learn:< The impact of mobile services on Myanmar’s socioeconomic conditions

< Telenor’s plans for the tower rollout in Myanmar

< How Telenor is planning to achieve 90% coverage within five years

< Geographical and technical challenges related to network deployment in Myanmar

< Telenor’s inclusive strategy: Internet for All

Telenor isn’t new to the Asian market and with successful operations in Bangladesh, Malaysia, Thailand, India and Pakistan, its track record indicates sound foundations for the launch of its operations in Myanmar. With challenges such as climate, road conditions and specialised skills shortage, the path towards launching its 2G and 3G offering is a challenging one.

In an exclusive interview, Telenor Myanmar COO, Ole Martin Gunhildsbu, shares his views on the impact that mobile services will have on the country’s overall wealth and development and on Telenor’s sound business strategy for this their newest venture.

Keywords: Telenor, Myanmar, C-Level Perspective, 2G, 3G, Bangladesh, Malaysia, Thailand, India, Pakistan, Asia, South East Asia, Interview, MNOs, New License, Universal Access, Infrastructure Sharing, Health & Safety, Market Entry, Network Rollout, Business Model, New Market Entrant, Regulation, Skilled Workforces


Ole Martin Gunhildsbu, Chief Operating Officer, Telenor Myanmar

and high-quality network and services, and we believe that the time we have scheduled for the implementation is sufficient. We are committed to providing network coverage to 90% of the population within five years of our roll-out, and will continuously review our infrastructure needs to ensure that we are able to support the delivery of high-quality mobile communications services to people throughout Myanmar.

Telenor will launch with coverage in the main cities and then gradually expand as we complete more towers across Myanmar. The current plan is to roll-out of up to 8,000 base stations in the country.

We have partnered with telecommunications infrastructure providers Apollo Towers and Irrawaddy Green Towers to build and manage our telecom towers in Myanmar.

TowerXchange: How is Telenor planning to achieve 90% coverage within five years?

Ole Martin Gunhildsbu, Chief Operating Officer, Telenor Myanmar: Telenor will launch and expand our network coverage areas from the main cities as we complete more towers across Myanmar, with the goal to provide network coverage to 90% of the population within five years of our roll-out.

An extensive distribution network will be the backbone of our mass market approach. As part of Telenor Myanmar’s network roll-out plan, we will recruit distributors and franchisees in each and every state and region in Myanmar with the goal of


establishing a network of 100,000 retailers within five years of the network and service roll-out. Our business plan for Myanmar is based on our extensive experience in running successful operations in all of the markets where we operate, including five other markets in the Asia region. The plan is also the result of a comprehensive, coherent and consistent planning exercise which encompassed all areas of our business and we are confident that we will be able to deliver on our commitments and support Myanmar in realising its telecommunications goals, while meeting the

objectives of all our stakeholders.

TowerXchange: What are the key technical challenges Myanmar presents in terms of accelerated network rollout? In terms of permitting, climate challenges, transport infrastructure and deployment expertise?

Ole Martin Gunhildsbu, Chief Operating Officer, Telenor Myanmar: There are always challenges when establishing a new business, especially in an industry as complex as the mobile telecommunications.

Myanmar Yangon


In Myanmar, many factors need to be considered when building the telecom network including build permits, climate, transport and deployment expertise.

With regards to permitting, we need to ensure we are collecting and verifying all legal documents to ensure we are dealing with the legal land owners as well as understanding and aligning with local authorities and on permit requirements.

Building towers in Myanmar’s wet season, also in light of road conditions and distances, is definitely a challenge we need to always take into account and one where our previous Asian expertise can surely help.

On the human side, there is a definitive shortage of skilled professionals for specialised tasks such as tower erection. We are also very actively involved to ensure local adherence to internationally recognised best practice health, safety, security and environment (HSSE) standards.

As is the case for all telecom operators around the world, building a network requires significant investment in infrastructure, and Telenor will be doing the same in Myanmar where we will invest to build a new and high-quality network.

TowerXchange: To what extent will the network in Myanmar be shared with Ooredoo, MPT and YPT?

Ole Martin Gunhildsbu, Chief Operating Officer,

Telenor Myanmar: We remain open to collaborating with other operators in the market and we support the government’s drive for infrastructure sharing as that is in the interest of all parties.

TowerXchange: How are the operators, towercos and regulators minimising parallel capacity?

Ole Martin Gunhildsbu, Chief Operating Officer, Telenor Myanmar: From a tower perspective, 150 metres is the normal regulated distance between towers. The telecommunications infrastructure providers will usually try to minimise parallel capacity since it is in their interest for more than one operator to use their towers.

TowerXchange: How can Telenor offer affordable packages and provide “Internet for All” in Myanmar while balancing its capex and opex?

Ole Martin Gunhildsbu, Chief Operating Officer, Telenor Myanmar: Our goal is to provide offerings that are attractive for the mass market in Myanmar and we have developed a clear roll-out plan to build an advanced mobile network that will deliver accessible and affordable services to people across Myanmar. For instance, our pricing plans, developed based on our experience in other developing markets and on the needs of the Myanmar market, will enable the mass market in Myanmar to enjoy Telenor’s innovative and affordable voice and data services. Telenor has a long-term commitment in

developing our operations and growing our presence throughout Asia, as demonstrated by the success of our businesses elsewhere in the region which, collectively, are a significant contributor to our company’s overall revenue. The major investment we are making in Myanmar further underscores our commitment to the region and to delivering the accessible and affordable mobile communications services that the market requires. The total peak funding, defined as the license fee plus accumulated losses until operating cash flow break-even, is expected to be around US $1bn. Telenor targets EBITDA break-even in Myanmar within three years after the license award. We are confident that we will be able to deliver on our commitments and support Myanmar in realising its telecommunications goals, while meeting the objectives of all our stakeholders.

TowerXchange: Who are your target demographics, given your decision to offer 2G and 3G?

Ole Martin Gunhildsbu, Chief Operating Officer, Telenor Myanmar: Telenor’s focus is to provide affordable and accessible mobile voice and data services for the mass market in Myanmar, and we will have a variety of products and services that meet different consumer needs. Our initial offering will be launched simultaneously over a 3G and 2G network, providing customers with high-speed data connectivity and excellent voice quality. In addition, our state-of-the-art network will be 4G-ready for when the time comes for the next evolution

TowerXchange: Please tell us about Telenor’s footprint in Bangladesh, India, Malaysia, Pakistan and Thailand

Glenn Mandelid, Head of Media Relations, Telenor Group: Telenor Group is a leading provider of mobile services in Asia. The Group has been present in the region since we first entered Bangladesh in 1997. Today, Telenor Group has operations in six Asian markets. In four of them, Telenor Group operations is amongst the top three players. In India we have license to operate in seven telecom circles,


covering half the population of the country. Our operation in India, Uninor, is the most successful new entrant and one of the fastest growing operators in the country. Our latest addition is Myanmar, where we expect to launch services later this year. TowerXchange: What is the relationship of Telenor with independent towercos in Asian markets beyond Myanmar?

Glenn Mandelid, Head of Media Relations, Telenor

Group: As a mass market operator it is important to focus on operational efficiency to keep cost low.For example, from our background in India we have learnt that outsourcing the tower operation allows us a more flexible solution that is more cost efficient and scaleable.

TowerXchange: Can you share the key features of Telenor’s Asian Internet for All initiative?

Glenn Mandelid, Head of Media Relations, Telenor Group: The three strategic pillars in our Internet for All ambition are:

< Enable people to use the internet (available network, affordable services, increase smartphone penetration)< Stimulate use (increase awareness, provide relevant content, partnership)< Monetize internet use (portfolios, packages, bundles) TowerXchange: How would you sum up the technology evolution and investment in network infrastructure within Telenor’s Asian operations?

Glenn Mandelid, Head of Media Relations, Telenor Group: Telenor is investing in networks that allow us to provide our customers with high-quality services in a cost-efficient manner. Our main focus is on operational efficiency, also when it comes to network deployment, so that we can deliver on our ambition to be a mass market provider of data services

Glenn Mandelid, Head of Media Relations, Telenor Group

Putting Myanmar in context - Telenor’s footprint in Asia

Towershare’s appetite for towers in MENA and Southern AsiaThe criticality of local knowledge and local relationships in tapping a diverse range of opportunities in the MENASA regions

TowerXchange: First please introduce yourself and your management team at Towershare. Ray Hassan, CEO, Towershare: I’ve been in telecoms for almost 20 years, working my way through various project management, radio planning, strategy, consulting and optimisation roles at Nokia and Lucent, before launching Telecom Global Solutions, a radio planning consultancy which we sold to Flextronics as part of their telecoms division. Seven years ago I joined Ericsson in what is now classified as the Middle East and Africa region (spanning 22 countries including Turkey, Iraq, Egypt, Sudan, Ethiopia, Saudi, GCC and Pakistan amongst others) first as VP and Head of Services across the region, rising to become the President of GCC (Gulf) countries and heading a Global account. On a daily basis I found myself having meetings with C-level executives at operators whose primary concern wasn’t the cost of active infrastructure, but the rising cost of passive infrastructure. The prices of steel and diesel have been steadily rising, while the grid has been struggling to meet increasing demand in many of the countries I was involved in, which was beginning to cause a significant opex challenge for many of my customers. It became clear that the rising costs of both building and maintaining passive infrastructure was a genuine problem that needed to be addressed, and that infrastructure sharing could be a pertinent solution. However, the Middle East has not been a priority market for global towercos.

Read this article to learn:< The credentials of Towershare’s experienced management team

< How Towershare is funded and their view of Islamic Finance as an option

< What happened when eight towerco licenses were issued in Pakistan, and the prospects for a

large scale tower transaction in the country

< The impact of the Arab uprising on the prospects for large scale tower transactions in the Middle East

< ‘Steel and grass’ versus end to end real estate, power, and O&M business models

Established in 2010, Towershare runs the largest independent towerco in Pakistan. Towershare’s renewed appetite for tower opportunities in the Middle East, North Africa and Southern Asia has been stimulated by funding from Cyan Capital at the beginning of 2014, followed by the appointment of Ericsson’s former President of GCC, Ray Hassan as Towershare’s new CEO. TowerXchange enjoyed a long chat with Ray to learn about Towershare and the countries they are targeting.

Keywords: Who’s Who, Towercos, O&M, Investment, Build-to-Suit, Business Model, Pass-Through, Regulation, Country Risk, Unreliable Grid, DG Runtime, Operator-Led JV, Sale & Leaseback, Private Equity, Islamic Finance, Infrastructure Sharing, Africa, Middle East, Southern Asia, Pakistan, Oman, Bahrain, UAE, Saudi Arabia, Cyan Capital, Towershare


Ray Hassan, CEO, TowerShare

I passionately believe in the benefits that mobile broadband can bring to society and hence believe in the many benefits that infrastructure sharing can bring in reducing the cost and accelerating access to mobile broadband. In some of the countries we deal with, there is such a shortage of basic resources and infrastructure that to spend hundreds of thousands of dollars to put towers next to each other seems almost criminal. It seemed to me that solving these issues in passive infrastructure was a business that was both compelling and noble. I was involved with the initial startup of Towershare, but had to exit because of other work related conflicts. At the end of 2013, Cyan Capital, a Private Equity Fund, enticed


my return and as entrepreneurial ambitions took over, we worked out a deal for my participation in Towershare. I will take on the role of CEO effectively from middle of July 2014. Towershare is assembling a management team of telecom veterans who between us have built over 15,000 towers in MENA and Asia. Farid Madhani will be moving across from Cyan Capital to look after strategy and M&A, Shannon Grewer (a US-based lawyer) will be joining us in Dubai as our legal counsel and a senior executive is about to join us as CTO.

TowerXchange: In which market is Towershare currently active, and where are your priority growth markets? Ray Hassan, CEO, Towershare: Towershare’s ambitions are quite huge and widespread, but our current HQ is based in Dubai and our only operational footprint is in Pakistan where we have completed some small acquisitions and are on the cusp of completing a small carve out. My vision is to expand from our new HQ in Dubai into new markets in the Middle East as quickly as

“ “

My vision is to expand from our new HQ in Dubai into new markets in the Middle East as quickly as possible, and from there we’ll expand by following the Middle Eastern MNOs into the other countries in which they are based. We are currently in discussions in four different markets for sale and leaseback and build to suit opportunities

The benefits of passive infrastructure sharing


possible, and from there we’ll expand by following the Middle Eastern MNOs into the other countries in which they are based. We are currently in discussions in four different markets for sale and leaseback and build to suit opportunities.

TowerXchange: How is Towershare funded, and therefore what is your ‘digestive capacity’ in terms of the scale opportunities you can bid for at auction? Ray Hassan, CEO, Towershare: We’ve brought in some private investors and commitments for up to $100mn in Private Equity from Cyan Capital and other regional PEs. We have further funding available, all (so far) sourced from within the region. Capital is readily accessible and relatively cheap in the Middle East, so I don’t forsee funding being a constraint for our business. Our ‘digestive capacity’ could be substantial given our initial funding of $100mn, depending on the leverage we want to take. In some of the markets we’re exploring, it is not permitted to charge interest, which could take us into the realm of Islamic Finance. Tower assets are perfectly tuned for the application of Islamic Finance principles. Different countries and different opportunities are more suited to one type of financing or the other – so, while we don’t want to limit ourselves to one way of working, we will of course work with our customers to find alternatives that suit them best.

TowerXchange: What can you tell us about your experiences in the Pakistani tower market – are there consolidation opportunities among small local towercos? Are there potentially larger scale opportunities? Ray Hassan, CEO, Towershare: Pakistan is a significant and sizable market for Towershare –

it’s no coincidence that it was our first market. Pakistan is a challenging tower market with five Mobile Network Operators, a population of 200mn, a sizable land mass, high import costs, an unreliable grid and a scarcity of electricity, which means all five MNOs have cell sites requiring 8-10 hours of DG runtime daily – not to mention security problems in some areas and very low ARPUs overall. We started up in Pakistan when the Regulator, one of the most forward thinking in the region, introduced regulations governing infrastructure sharing around 2009. Eight (non-transferable) infrastructure provider (towerco) licenses were sold, before the government stopped the issue of new licences, leading to the launch of six towercos while two never really came to market beyond single sites. Towershare has since bought and taken over the tower assets of some of the other licensed companies, and hence we’re the only independent towerco of any size in Pakistan. Pakistan’s operators have considered the consolidation of their networks on several occasions, but as often happens with almost all operator-to-operator network consolidations, it proved difficult to agree upon which towers to retain, and to agree the structure, management team and relative proportions of ownership of a joint venture towerco, hence nothing has materialised despite numerous efforts. At the time, the lack of a funded third party able to prove they could operate and maintain

““Pakistan’s operators have considered the consolidation of their networks on several occasions, but as often happens with almost all operator-to-operator network consolidations, it proved difficult to agree upon which towers to retain, and to agree the structure, management team and relative proportions of ownership of a joint venture towerco


a substantial portfolio of towers in Pakistan was another drawback. Now Towershare has experience, capability and funding, we feel large scale consolidation of tower networks may become a reality in Pakistan. TowerXchange: Is the launch of a edotco potentially good news for Towershare in further raising the profile of infrastructure sharing in Paksitan and elsewhere in South Asia? Ray Hassan, CEO, Towershare: We welcome the launch of edotco – the South Asian marketplaces are big enough for multiple towercos, and the more people working towards shared infrastructure, the better. Towershare differentiates itself by being flexible and adaptable. Understanding the local market is critical in every one of our markets, not just Pakistan; the dynamics of provincial rules, the different languages and security situations. We have extensive personal experience and local relationships in every market and international relationships with most of the large regional operators too (for example, in Pakistan, all five MNOs are ultimately owned by international operators). Towershare also has experience of owning, building and operating a network in Pakistan, and now we have plenty of local money that understands the local and regional risks well. TowerXchange: How will Towershare leverage your presence in Pakistan as a launchpad into

new markets in the Middle East?

Ray Hassan, CEO, Towershare: There are challenging markets very similar to Pakistan in the Middle East. There are also more developed markets with very different dynamics, where power is effectively free with 100% access – more akin to the Western towerco businesses. Leveraging our experience, local knowledge and relationships with the Global operators while being based in the UAE is crucial to our ambitions. A lesson I’ve learned running Ericsson in the GCC is that there’s a lot of complexity within the region. It would be wrong to categorise the Middle East as one set of operators and a recurring set of challenges. The Middle East is about as extreme in differentiation from country to country as you can imagine, with some of highest GDPs and ARPUs in the world, and some of the lowest; some of the most dense and least dense populations. Some countries are on the bleeding edge of advanced communication technology, and some countries are still anchored in 2G. With the diversity of religions, languages and security challenges, it’s hard to treat the Middle East as one market – you need to be flexible and adaptable. For example, I had 2,000 people working for me when I was running the Services business in Ericsson. In theory I felt we could sometimes do the job with 6-700 people if it weren’t for the logistical challenges of transportation, local representation, and travel restrictions on different nationalities and visas.

Towershare are establishing our headquarters in Dubai with local offices in three other countries based on local opportunities – we are being aggressive. TowerXchange: We haven’t seen the same pipeline of tower transactions in MENA as SSA to date. What opportunities are you finding in MENA – are there BTS programmes and/or large scale sale and leaseback opportunities to be found? Ray Hassan, CEO, Towershare: There are opportunities in the Middle East, and they are maturing. Resistance to the independent towerco business model has reduced just by operators observing what has happened in SSA. In the near term, the Arab uprising has demanded a lot of operators’ attention, but there is an acceptance that a large scale tower divestment is going to happen in MENA, and a number of operators are open to the idea. In all walks of life in the Middle East, business is generally conducted with the people you know. In the absence of local MENA towercos, the market has had to start slow while new entrants build relationships.

Towershare is in an advantageous position as our team have developed personal relationships with operators in the Middle East over eight years – we’ve done our time and now have an opportunity to capitalise on those relationships and trust.


We feel there are sale and leaseback opportunities in the Middle East, but you have to start with build-to-suit whilst you build relationships with your customers and demonstrate that you know what it takes to operate and maintain critical infrastructure within the specific markets. You have to put a foundation in place of a management structure capable of running an O&M team of scale. In countries where there are security issues, the biggest concern for MNOs and their towerco and investor partners remains whether an independent tower company can sustain and maintain networks given the uncertainty of those regions. Just look at Iraq as an example. The long term ability to maintain critical infrastructure remains the last barrier to outsourcing in many operators’ minds. TowerXchange: Do you see Towershare as a lean, “steel and grass” towerco, or do you have a full end to end build, power, O&M service model? Ray Hassan, CEO, Towershare: We struggled with this question ourselves – where do we want to play, what opportunities do we want to limit ourselves to? We concluded that if we want to grow we need to be flexible and adaptable. In some cases we are targeting more frontier markets, where if the customer will accept a steel and grass model then that’s perfect, but in many countries the primary driver of outsourcing is to solve power issues. In such circumstances, Towershare will take

advantage of the management team’s experience, including my own, of Managed Services in the region and take on energy logistics as well as real estate. So there is no clearcut answer; we’re open to doing both models and would consider opportunities on a case by case basis. Ultimately we’ll provide the service that our customers want. TowerXchange: Finally, please sum up your vision for the future of Towershare. Ray Hassan, CEO, Towershare: Towershare has capital, but capital is commoditised in this business, and all of our serious competitors have access to finance. What is unique about Towershare is our relationships with operators, regulators, subcontractors, and service providers in the MENASA region. We have a fantastic network of people; people with experience of

leadership roles at major managing service providers. If I felt we could maximise the opportunities in this region using a ‘steel and grass’ model then that would be great, but we need to be prepared to roll our sleeves up, get our hands dirty and do what operators need. Towershare is very aware of the challenges that our customers face on a market by market basis – we understand our customers and what we can do to help them. We’re going to be aggressive, but we have a degree of humility and understanding and genuine desire to do something good – I strongly believe in the benefit of mobile communications and I look forward to fulfilling Towershare’s opportunities to accelerate rural access and improve urban QoS in the MENASA regions while helping the operators unlock some cash and reduce their operating costs

“ “We feel there are sale and leaseback opportunities in the Middle East, but you have to start with build-to-suit whilst you build relationships with your customers and demonstrate that you know what it takes to operate and maintain critical infrastructure within the specific markets

An introduction to the thrivingtower industry in IndonesiaPlus a view on other opportunities in Southeast Asian towers: Myanmar, Cambodia and The Philippines

David Burke, Co-founder & CEO, Wellington Capital Advisory


TowerXchange: Please introduce yourself and your experience in the telecom tower industry. David Burke, Co-founder and CEO, Wellington Capital Advisory: I’ve been in TMT since 1995, starting on the banking side of the industry before progressing through C-level positions at M-Web and Kabelvision, Indonesia’s largest cable television provider, eventually becoming EVP for Strategic Investment and Corporate Planning at Telkom Indonesia, where I led the strategy to set up Mitratel, Telkom’s towerco. Subsequently, I co-founded and currently serve as CEO of PT Wellington Capital Advisory, a strategic advisory firm with extensive experience in helping clients find value through the re-alignment of the TMT value chain. We’ve advised a number of operators and towercos on their tower strategy. Following the creation of our strategy for an Indonesian towerco, we were fortunate enough to find the right investors to bring the towerco strategy to fruition. I’m also Co-GP of the Ananse TMT South East Asia Fund, and soon to be, on behalf of the investors, the CEO of the towerco, PT Komet Infra Nusantara. However, Wellington Capital Advisory will continue to provide services to regional towercos, mobile network operators and investment groups looking to invest in the TMT space within SE Asia. We have a strong team of partners led by Geoff Simms, Dave Shuker and Paul Hemming. TowerXchange: What have been Wellington

Wellington Capital Advisory CEO, David Burke, takes us on a tour of the Indonesian tower market, which is among the most developed and profitable in the world. Tenancy ratios in many cases exceed 1.7, EBITDA margins reach 60 to 80% and there is the potential for additional transactions through the consolidation of middle market towercos and further operator sale and leaseback arrangements. What are the prospects for Indonesia’s towercos to export their expertise elsewhere in Southeast Asia, and how do opportunities for the tower industry in Myanmar, Cambodia and The Philippines compare?

Read this article to learn:< Why is Indonesia perfect for towercos - multiple operators, mandated infrastructure sharing,

burgeoning data demand and a growing middle class

< The future of the Indonesian tower market; from 30% to >50% of towers independently owned, 4 to 5

towercos achieve scale, consolidation of 40 ‘middle market towercos’

< Why did Wellington Capital Advisory build a strategy for a towerco in Indonesia

< The investibility of Indonesian towercos - EBITDA margins of 60 to 80%

< The Myanmar ‘gold rush’, and prospects for towercos in The Philippines, Vietnam and Malaysia

Keywords: Towercos, O&M, Acquisition, Market Overview, 3G, 4G, EBITDA, Due Diligence, Tenancy Ratios, Fuel Security, Build-to-Suit, Exit Strategy, Bankability, Pass-Through, Densification, Regulation, Off-Grid, Skilled Workforces, Rooftop, Middle Market Towercos, Sale & Leaseback, Private Equity, C-Level Perspective, Infrastructure Sharing, Asia, Indonesia, Myanmar, Malaysia, Singapore, The Philippines, Cambodia, Mitratel, Tower Bersama, Protelindo, STP, Komet Infra Nusantara, Wellington Capital Advisory

Capital Advisory’s experiences in the tower industry? David Burke, Co-founder and CEO, Wellington Capital Advisory: In parallel with advising clients in the tower industry, we had built our own strategy for a towerco in Indonesia. We have become very excited about the sector over the last three years, having conducted a number of due diligence exercises on prospective tower sale and leaseback arrangements and other tower-related investment opportunities. We considered raising our own private equity fund, but eventually brought in third party investors, raising US$50mn in our first tranche, with access to

a further US$250mn, from equity investors and debt providers. Komet Infra Nusantara currently owns 500 towers, and is targeting a portfolio of 1200 to 1400 towers by end of 2014 through a combination of organic growth and acquisitions. TowerXchange: Please introduce us to the Indonesian telecom tower industry.


David Burke, Co-founder and CEO, Wellington Capital Advisory: There are four or five towercos of scale in Indonesia and over forty ‘mom and pop shops’ and middle market towercos in Indonesia, ranging from local community managed assets to substantial regional entities, owning anything from a handful to 1,000 towers each. Indonesia is a very diverse tower market, comprising dense metropolitan environments and

“ “

There are four or five towercos of scale in Indonesia and over forty ‘mom and pop shops’ and middle market towercos in Indonesia, ranging from local community managed assets to substantial regional entities, owning anything from a handful to 1,000 towers each


very remote rural areas. There is a population of 28 million in the Greater Jakarta metropolitan area alone at peak, and mobile data demand is accelerating, which in turn is firing demand for towers. 3G will morph into 4G, and smartphone penetration will jump from 15 to 30% in the next year. To visualize this demand for data, there are over 60 million Facebook users in Indonesia and Twitter recognises Jakarta as the Tweet capital of the world! GDP per capita has surpassed the US$3,000 threshold, indicating the emergence of a fast-growing middle class. A healthy 60% of GDP goes on local consumption - Indonesia has very little dependence on imports. During the 2008 global financial crisis, Indonesia was one of a handful of countries whose GDP growth remained positive. TowerXchange: What proportion of Indonesia’s towers has transferred from operator-captive to independent towercos? David Burke, Co-founder and CEO, Wellington Capital Advisory: Indonesia has around 75,000 towers, most of which are still operator-captive. The towercos own 25,000 to 30,000 towers, and there are still around 10,000 new towers being built every year. Over the last few years, operators such as Bakrie Telecom, Indosat and Hutchison have sold around 3,000 towers collectively to the independent tower providers. There is significant cell site densification occurring in Indonesia driven by consumer demand for

mobile data services, and the tower industry hasn’t grasped the heterogeneous networks (‘HetNet’) opportunity yet. Rooftop installations make up a significant chunk of the assets of Indonesia’s ‘Big 3’ towercos, namely PT Tower Bersama Infrastructure (‘TBIG’), PT Profesional Telekomunikasi Indonesia (‘Protelindo’) and PT Solusi Tunas Pratama Tbk (STP). We’ve seen innovations such as ‘BTS Hotels’ running fibre up the street with transmission equipment sited several miles away or hidden away in a basement.

TowerXchange: Do you anticipate further substantial tower sale and leaseback transactions in Indonesia?

David Burke, Co-founder and CEO, Wellington Capital Advisory: Our view is that Indosat, XL Axiata and others may potentially divest more towers, in pursuit of an ‘asset-light’ strategy. Currently, Axiata’s e.co infrastructure business unit does not include XL in Indonesia as part of the plan to mount a cross-border IPO. This is something XL Axiata has been very public about over the last few years. Indosat is also expected to release some towers in the future, but the management have yet to make a formal announcement. During my tenure at Telkom, I helped set up their towerco, Mitratel. At the time my strategy was to progress towards an IPO. This may still be the case and is under discussion at the board level in conjunction with the regulators. TowerXchange: Do you anticipate further consolidation of ‘middle market’ towercos? David Burke, Co-founder and CEO, Wellington Capital Advisory: Some of the middle market towercos are making good margins and are reluctant to sell. Indonesia is an economy where business is conducted through relationships and many regional towercos have very strong local government and carrier connections. Other middle market towercos are run on a more entrepreneurial basis, and we’ve done due

diligence on five to six towercos looking for exit opportunities. Some are excited by the multiples at which Indonesia’s Big 3 towercos are trading, and if they choose to sell they will want to retain a stake to benefit from any subsequent listing. In our experience, most investors are open to this model. TowerXchange: How profitable are Indonesian towercos? David Burke, Co-founder and CEO, Wellington Capital Advisory: The two largest towercos, Tower Bersama and Protelindo are operating at about an 80% EBITDA margin. But profitability isn’t confined to Indonesia’s largest tower providers - the two middle market towercos that came together to form Komet Infra Nusantara generated margins of 60% to 70%, even with relatively modest portfolios of about 200 towers each. In comparison, following aggressive price wars, most of the mobile network operators are operating at EBITDA margins in the mid-40s range. At the moment, Indonesia has ten operators, but should consolidate to four to five over time. For example the merger of PT Axis and XL Axiata will be completed in 2014. TowerXchange: Will there be a ‘correction’ to towerco margins in the light of operator consolidation? David Burke, Co-founder and CEO, Wellington Capital Advisory: There was always going to be rationalisation as technology moves on - much

of the operator consolidation is driven by the migration from CDMA to GSM, and I don’t believe operator consolidation will have much impact on towerco profitability because data demand is driving network densification. RAN sharing is not currently permitted, which is why there is no law governing the formation of MVNOs. However, there is growing awareness among the regulatory bodies of the benefits of allowing MVNO licenses in the future.


TowerXchange: How would you characterise the investibility of the Asian telecom tower sector?

David Burke, Co-founder and CEO, Wellington Capital Advisory: Indonesia’s mobile network operators have attracted significant international investment, namely Telkom Indonesia is 35% owned by SingTel, Axiata Berhad has a 67% stake in XL and Ooredoo owns 65% of Indosat. Indonesian towers currently provide better returns than Brazil and India; construction costs are sensible, passive infrastructure sharing is mandated by the regulator, and lease rates are still good - in the US$1,200 to 1,400 range per calendar month. Komet Infra Nusantara has achieved an average tenancy ratio of 1.7 from day one, having acquired portfolios with tenancy ratios of 1.3 and 2.2 respectively. TowerXchange: How do you foresee the medium term future for the Indonesian tower industry? David Burke, Co-founder and CEO, Wellington Capital Advisory: Indonesia has the most mature and robust tower industry in Southeast Asia - and it still has ‘legs’ for further growth. With a high number of smaller players within the tower market, the opportunity for ‘mom and pop’ companies to consolidate is high. Towers with just a single anchor tenant may yield an EBITDA margin of 40 to 50%. As the tenancy ratio is incrementally built up between 1.4 and 2.0, EBITDA increases to 80%. Tenancy ratios

““The two largest towercos, Tower Bersama and Protelindo are operating at circa 80% EBITDA margins. But profitability isn’t confined to Indonesia’s largest tower providers - the two middle market towercos that came together in the formation of Komet Infra Nusantara generated margins of 60% to 70% , even with relatively modest counts of about 200 towers each


tend to grow in 0.2 to 0.3 increments per year in Indonesia, and we forecast they’ll reach a long term equilibrium between 2.5 and 3.0. Less than 50% of revenue comes from amendment revenue. 3G rollouts are ongoing, 4G will be concentrated in urban areas, and 2G networks will need to be maintained for ten years for voice and M2M. WiMAX has mostly flamed out. Street furniture is becoming a highly prized asset, as Jakarta begins to evolve as a smart, mobile-enabled city.

Indonesia will support four to five good-sized towercos, each with over 10,000 towers - the regulator is doing a fine job to sustain competition by ensuring an equilibrium between the towercos,

which balances consolidation to four or five large mobile network operators, plus the potential for MVNOs.

TowerXchange: What is the quality and extent of the grid in Indonesia? Is power passed through to the anchor tenant? And is pilferage a problem?

David Burke, Co-founder and CEO, Wellington Capital Advisory: Power provision and associated costs are stripped out of Indonesian tower deals and handled by the mobile network operator through power pass-through clauses in most contracts. As such, the towerco has responsibility only for backup power and security. Currently, Indonesian towercos are more of a real estate company than a service provision business. However, we don’t see this situation enduring in the future.

Around 25% of cell sites are off grid, 15 to 20% are on unreliable grids, with a little over 50% with access to good grid connections. In all emerging markets in South East Asia, every tower needs a back-up power source - and in some cases primary power sourced off-grid - typically via diesel generators or solar technology.

It’s the early days for renewables - we see more usage of biomass than other alternative energy sources but at this point, the economics remain marginal.

Security remains an issue and pilferage is probably in double-digit percentages for most

tower portfolios. It’s not just an issue of fuel theft - we’ve seen generators, batteries, steel and cables all being stolen. It’s a good idea to engage the heads of local communities to help improve security and in return, providing social benefits such as maintaining a mosque or school, providing additional road access, etc. Viettel’s ‘Village’ model is a great example; they provide incentives to the local community such that they assume responsibility for the tower, as well as configuring the community’s wellbeing around service continuity.

As a side note, during one recent due diligence exercise, we found a company using wild geese as the ‘security system’ for one of their towers - it was very effective! TowerXchange: Are build-to-suit (BTS) projects and O&M generally outsourced by Indonesian towercos? David Burke, Co-founder and CEO, Wellington Capital Advisory: O&M is sometimes managed in-house, sometimes subcontracted. In our case Komet Infra Nusantara has three regional offices, and O&M is outsourced for half of the current tower inventory.

You can tell from the headcount numbers as to which towercos have maintenance in-house and which are using outsourced contractors. In general the market is moving towards an outsourcing model as a more efficient way of managing costs,

“ “In all emerging markets in South East Asia, every tower needs a back-up power source - and in some cases primary power sourced off-grid - typically via diesel generators or solar technology

while avoiding the liabilities of employment. BTS projects are generally sub-contracted. There are few established turnkey infrastructure and managed service providers, but we often run into regional protectionism. Some contractors have a strong local mindset and have no ambition to cross into new regions. The same companies that execute BTS projects also compete for O&M outsourcing contracts. TowerXchange: What is your view of the tower industry in Southeast Asia beyond Indonesia - are there any prospects for a pan-Asian towerco?

David Burke, Co-founder and CEO, Wellington Capital Advisory: I doubt whether the idea of a pan-regional towerco in Southeast Asia has any legs.

The towerco business is conducted locally in Asia; negotiations are held with individual operators and regional governments, there are local licensing variations from city to city, and domestically-sourced steel is generally used to manufacture towers - I can’t see significant benefits of an aggressive pan-Asian expansion.


It’s the early days for the Southeast Asian tower industry beyond Indonesia. There is a ‘gold rush’ into Myanmar at the moment, and it is a market we continue to look at. However, intensive due diligence is required for opportunities in Myanmar - as the saying goes, ‘the large print giveth, but the small print taketh away!’

“ “intensive due diligence is required for opportunities in Myanmar - as the saying goes, ‘the large print giveth, but the small print taketh away!


Digicel is in a strong position with their towerco proposition, given their close relationship with Yoma Strategic Holdings, a major real estate company in Myanmar. There is no established eco-system of site design, build and maintenance contractors in Myanmar, so foreign towercos like Protelindo have to bring in managed services from Indonesia, Vietnam and China. The macro network in Singapore is mature, so there are few opportunities for towercos in that lucrative but finite market. There are no independent towercos yet in The Philippines, and only two dominant prospective anchor tenants, neither of which seems motivated to sell their towers. While The Philippines could be interesting, I don’t foresee that market opening up in the near future. Political pressure might create an opportunity for towercos in Cambodia, but I wouldn’t anticipate the returns that we can realise from Indonesia.

In Malaysia, as part of the award of the LTE (2.6GHz) licences in December 2012, the regulator (MCMC) included an implicit condition for licensees to share spectrum. This led to a few operators making spectrum sharing agreements e.g. Maxis-Redtone and Celcom-Altel. More recently, DiGi Telecom and Celcom Axiata announced a three-year extension to their existing network collaboration agreement (NCA). Overall we think that there is limited scope for a new entrant towerco play in Malaysia within the short-to-medium term. It is a relatively small market with the national population being roughly the equivalent of the Jakarta metropolitan area alone. As the wireless network infrastructure in Vietnam continues to mature and as competition among the ‘Big 3’ mobile operators (Viettel, MobiFone and Vinaphone) remains intense, we see an opportunity for the development of an independent towerco sector if and when the necessary regulatory change takes place. The Vietnamese market has many similar characteristics to Indonesia and hence is an interesting prospect. The establishment of the Southeast Asian Economic Community in 2015 will facilitate cross- border trading, but there’s a big enough domestic market growth to keep Indonesian towercos busy. Indonesia is a trillion dollar economy and, as labour costs increase in China, Indonesia is becoming a destination for outsourced low cost

manufacturing and accelerating inbound rather than outbound investment.

However, Indonesian tower industry experience and skillsets travel well - we’re in a ‘one of us’ position as far as tower opportunities in Myanmar and Cambodia are concerned, so Indonesian towercos are welcomed as subject matter experts. All in all we believe that well over half of the Southeast Asian tower market sits in Indonesia, and there is still significant organic growth to come. The balance of the tower market in the rest of Southeast Asia is split between new markets such as Cambodia, Myanmar, Vietnam, maybe Malaysia and, eventually, The Philippines

“

““

“We believe that well over half of the Southeast Asian tower market sits in Indonesia, and there is still significant organic growth to come. The balance of the tower market in the rest of SE Asia is split between new markets such as Cambodia, Myanmar, Vietnam, maybe Malaysia and, eventually, The Philippines

The Vietnamese market has many similar characteristics to Indonesia and hence is an interesting prospect

Cell site security and access control problems?There’s an app for that!

David Meganck, Founder and COO, Acsys


TowerXchange: Tell us about your new app David. David Meganck, Founder and COO, Acsys: With the rapid proliferation of smart phones, and their lowered costs, and based on the demand of some of our customers, we saw the opportunity to create an app that integrates the CGS into a smartphone app and some added features which are very useful for remote site workers. One of the significant features is the geo-location or geo-fencing solution. This allows the system to be run automatically and only generate access codes if a user has reached a specific location defined by latitude and longitude. This function also allows the control center to know in real-time where the users are located which can be of very significant value when a site is down and an assessment needs to be made on who is closest to the site and certified for that type of maintenance. TowerXchange: What other functionality does the app have? David Meganck, Founder and COO, Acsys: Based on customer input, we also added several other features. Task assignment, scheduling and reporting - whenever an event is created through the remote site management platform, the user will receive a message with a clear description of the task, location and others. Multiple tasks can be assigned to a user. Upon completion the user can report back to the NOC with the result of his work allowing the NOC to either close or leave the event as pending.

Acsys has designed and successfully deployed a solution called the CGS (Code Generating System) which allows control centers (such as a telco or towerco’s NOC) to give users with programmed keys access to any site, anytime, anywhere by issuing a single-usage time-limited code that is issued by the software. The user needs to contact the control center by phone or SMS to get the real-time code which in turn alerts the control center that someone is accessing the site. The advantage of the Acsys CGS solution is that any phone can be used, making its application universal.

Read this article to learn:< Issuing a single usage, time limited code enabling specific users to access sites using programmed keys

< How to “close the loop” on task management and job ticketing, reducing downtime

< Live chat and access to document repositories to enhance remote worker support

< How customers are using the app to minimise theft, generate KPIs and optimise maintenance processes

< Sharing critical information and images with emergency services to improve H&S

Keywords: Access Control, Monitoring & Management, Fuel security, Health & Safety, KPIs, Site Visits, RMS, Site Management System, Fencing, Africa, Acsys

Optionally a dynamic solution can be proposed which, after the creation of the event, the software will determine which available and certified user is closest to a site which is down, leading to an intervention and a significant decrease in downtime. We have often seen that some people travel one hour to get to a site when in fact another technician was only 15 minutes away leading to a waste of resources and increased downtime. Event documenting - events can be documented through picture taking (for example in cases of broken or vandalised equipment) and to document events from the site such as broken trees, floods, fires et cetera. With time, date and location stamp information, this data is genuine, reliable and impossible to defraud. Live bridge between user and NOC - the app also has a chat platform allowing the user to communicate directly with the NOC and other users of the app to get information and advice.

Document repository - allowing the user to access data sheets for new equipment and/or other documents that are stored on the company intranet. TowerXchange: Please tell us about one of your customers who are using the app. David Meganck, Founder and COO, Acsys: Our first customer was mostly interested in the geo-fencing solution as they had dealt with a number of cases where a user gained access to a site and then left without closing it, allowing others to gain access and steal equipment. With the geo-fencing and CGS, the

NOC now has real-time feedback of where the user is, and also can control when the user opens and locks a site. In some cases the company required a vendor to go on site but they arrived only within the limit of the two hours as specified by contract when in fact they could have gone much sooner as staff were available, but since the NOC didn’t know where those staff were and if they were available they had no data on which to base a conversation about improving service with the vendor. The task scheduling was also a significant step forward as many times issues arose with users going to the wrong sites or carrying out the wrong tasks as communication over the phone wasn’t good, leading to misunderstandings. As a prominent company in the telco industry, they also felt they had a moral obligation to ensure staff security by knowing where they are. If a member of staff doesn’t move for three hours even though his maintenance task should only take 45 minutes, the NOC knows there might be some issues with the site or the user himself. Moreover the data which is created serves as a benchmark for future interventions in terms of time spent to reach site, and time spent to complete a recurring task. TowerXchange: How does the app integrate with site management and job ticketing systems back at the NOC?

David Meganck, Founder and COO, Acsys: It can


work fully independently or fully integrated. The integrated version (ex with Remedy) gives a full and clear reporting of who was assigned to the task, when, where this user was located, when he requested access to get in, when he requested access to get out and how much time was spent on site. By making everything electronic, we also prevent collusion between employees. TowerXchange: What does it cost? David Meganck, Founder and COO, Acsys: In order to lower barriers so that everyone can use the app, we have decided to make the app free of charge and available to the public on the Android store starting 1 November 2013. TowerXchange: How does using the app improve health, safety and security at emerging market cell sites? David Meganck, Founder and COO, Acsys: By providing real-time location and location-based code generation we are able to improve operational efficiency in a significant way allowing for more efficient, controlled and rapid response to events. This data in turns serves to create KPI’s and benchmarks for similar interventions in the future. Equally the NOC is now able to see where all their workers are and in the case of conflict or emergency, the NOC can provide support to the user and/or send emergency services to the user’s location. By allowing pictures to be sent to the NOC instantly, events can be acted upon in a more efficient way

The synergy between tamper proofing, energy efficiency and cloud services solutionsAddressing towercos’ most pressing challenges, all-in-one solution

Asher Avissar, Co-founder and CEO, AIO Systems

TowerXchange: What kind of monitoring services and solutions are required at cell sites in Asia? And how does AIO’s proposition differ in Asia from other markets?

Asher Avissar, Co-founder and CEO, AIO Systems: With the enormous amount of towers changing hands to independent towercos in Asia, the sheer volume and diversity of these towers is a daunting challenge in itself.

AIO’s power lies in the knowledge and experience we have worldwide. Our site solutions and services are developed based on day to day site operations, through trial and error. The Asian market is slightly more complicated than other markets. We have to ensure towercos address complicated issues such as implementing and controlling alternative energy resources, countering sophisticated tampering, floods, humidity, multi-tenant disputes, et cetera. The absolute synergy between AIO’s site hardware control elements, management systems, and cloud service solutions gives towercos the competitive edge.

TowerXchange: How does AIO ensure its clients operational and energy efficiency?

Asher Avissar, Co-founder and CEO, AIO Systems: With the complexity around energy at Asian towers, AIO’s site components together with our software and hybrid solution automatically selects the optimal energy resource in real-time. A sophisticated algorithm calculates the status of batteries, rectifiers and system variables based on

Read this article to learn:< AIO’s proposition for the Asian towerco industry

< How towercos can significantly reduce energy consumption and optimise site management

< How to prevent white collar tampering

< AIO’s latest innovation and how it will serve the tower industry

The demands for running towerco operations today go beyond the services provided by conventional RMS vendors. True to its name, AIO is addressing the growing need for innovation under its All-In-One umbrella. Presently, towercos need to focus their attention on reducing energy costs, excelling in managing site operations while avoiding white collar fraud and system tampering. AIO’s solution relies on a simple and yet efficient synergy: increase energy efficiency, circumvent complicated white collar tampering and safeguard data, simultaneously providing towercos much needed operational flexibility.

Keywords: AIO Systems, C-Level Perspective, RMS, Interview, Southern Asia, Southeast Asia, Security, Opex Reduction, Energy Management, Diesel Consumption, Batteries, KPI, Operational Excellence, Towercos, Site Management Systems, Opex Reduction


voltage, current, environment, temperature and humidity. Automated free-cooling units eliminate unnecessary use of air conditioning during stable temperatures… I could give you many other examples of how we ensure energy efficiency. This all occurs to secure the harmony of the site’s operation in real-time. From a managerial point of view, you can easily assess data for any country for any site, establish whether or not energy consumption was optimised, how sites perform, what equipment operates the best under which conditions, and where to take specific pre-emptive actions. Furthermore, AIO’s data validation structure is based on duplicated measurements, site behaviour profiles, data input verification systems and algorithms, which assures the absolute accuracy of the data.

TowerXchange: What are clients demanding when it comes to reducing energy opex? And how is AIO addressing these demands?

Asher Avissar, Co-founder and CEO, AIO Systems: Reducing the energy bill is usually on the highest list of priorities for towercos in Asia. In India for instance, the sheer volume and type of users sharing the same power line may greatly impact the stability of power on site. Matters are further


complicated with tapping into the power lines, operating the generators simultaneously whilst refuelling in order to inflate the bill, water or other liquids mixed with diesel and other forms of theft. This is in stark contrast to Myanmar where towercos are simply interested in optimising energy usage and such practices are practically unheard of. Management requirements are further challenged by new legislation aimed at protecting the environment and reducing site carbon footprints.

AIO Systems’ NOC“ “Reducing the energy bill is usually on the highest list of priorities for towercos in Asia. In India for instances, the sheer volume and type of users sharing the same power line may greatly impact the stability of the power on site

AIO can tell you what the realistic cost of your energy bill should be, but our measures will also ensure that you can drastically reduce this bill. You will definitely know if someone is tapping into your line. Our intelligent solutions will automatically switch to alternative energy sources during inconsistent power supply, shut off generators during refuelling, or close fuel tanks if fuel quality is impaired. AIO is also at the forefront of resolving towercos’ concerns regarding environmental protection. With our energy, hybrid and environmental solutions we protect the environment simultaneously ensuring that towercos minimise opex.

TowerXchange: What do you mean by operational flexibility?


Asher Avissar, Co-founder and CEO, AIO Systems: It has become clear to us that in the race to acquire more towers, companies are looking for a more flexible approach to run their operations. AIO takes operational flexibility a step further. We offer a whole range of services, geared for almost any business or operation. The first group of services are our cloud and NOC services. Towercos can simply choose to access the data or let AIO handle the full range of their operations: rollout, monitoring, alert response, performance, maintenance and more.

The second service is our Business Intelligence (BI) module. This module is centred on expanding the towercos’ operational intelligence across their entire network structure. Data is accessed over any web portal from any location, providing an overall global perspective of site operations that can be drilled down to the minutest KPI.

We have also recently developed a “pay-as-you-go” module structured in a way to facilitate businesses at any stage of their operations. These modules will provide towercos with full flexibility, today and for future operations.

TowerXchange: How does AIO circumvent white collar tampering, whilst at the same time protecting site data?

Asher Avissar, Co-founder and CEO, AIO Systems: It’s not easy to circumvent white collar tampering and you always need to stay a step ahead. Sites are usually setup with inconspicuous camouflaged

SMART-Tampering components, advanced hardware controllers and accessories that are equipped with wireless communication. In many instances in Asia site data itself has been tampered with. The backup software has control systems in place that pre-emptively manage user levels and will automatically detect inconsistent data entries. AIO also protects wireless communication with effective firewalls that will protect site data. As I mentioned previously, data is further secured with our data verification systems. TowerXchange: What are the next challenges towercos will face in the near future and how is AIO addressing them?

Asher Avissar, Co-founder and CEO, AIO Systems: Managing a wide variety of sites spanning across complex infrastructures and dispersed geographical locations is a challenge in itself for towercos. An optimal solution for both active and passive site management is urgently required.

A minimum prerequisite from most carriers today dictates that sites are managed uniformly by towercos. From AIO’s perspective this needs to be changed. AIO is in the finishing stages of developing a smart hardware controller that will correlate data via the SNMP communication protocol. The idea is to correlate both active and passive site data, which is combined within AIO’s BI module. This means AIO will provide towercos with the business intelligence on how to manage different infrastructure, both active and passive, from a global perspective

“ “Managing a wide variety of sites spanning across complex infrastructures and dispersed geographical locations is a challenge in itself for towercos. An optimal solution for both active and passive site management is urgently required

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Flexenclosure secure $multi-million deal to rollout eSite for Apollo Towers in Myanmar“By far our largest eSite order to date” – David King, CEO, Flexenclosure

Mattias Karlsson, VP eSite, Flexenclosure

TowerXchange: Congratulations on winning Flexenclosure’s largest ever order for eSite from Apollo Towers in Myanmar - please tell us how you secured the order.

Mattias Karlsson, Vice President eSite, Flexenclosure: eSite is a perfect fit for the customer’s requirements in Myanmar as it has been developed to be used in rural areas with limited if any access to power infrastructure.


We were also one of the first hybrid power solutions vendors in country, demonstrating clear commitment to Myanmar when many others still considered it too much of risk and an unknown quantity. That early start gave us the opportunity to fully understand the challenges that the towercos were facing and we established a strong relationship with Apollo Towers, who had a very clear plan for their business which matched very well with our product strengths. TowerXchange: Please tell us about the cell site energy context in Myanmar - I understand grid power is very limited beyond the big three cities… Mattias Karlsson, Vice President eSite, Flexenclosure: Outside the three main cities grid coverage is more-or-less non-existent. This is not an issue for eSite though as it is designed for plug-and-play upgrade for solar power. The initial roll out is anticipated to be mainly in locations with some grid availability, but most of the future sites will be 100% off grid. TowerXchange: I understand energy logistics

are also a challenge given the under-developed transport infrastructure in Myanmar - how does that improve the business case for hybrid solutions in terms of reduced truck rolls versus DG+battery hybrids, and how does Flexenclosure intend to work around the installation logistics challenges? Mattias Karlsson, Vice President eSite, Flexenclosure: Flexenclosure’s eSite is perfect for a challenging deployment like this one in Myanmar. eSite is a single cabinet solution which minimises the need for extended on-site installation work, and a two man team can handle the entire installation in a single day.

Fully integrated into eSite is eManager, an advanced tool for site power network optimisation. eManager installation and future software updates can be done entirely remotely, with no-one needed on site. And on-going eSite management can also be handled completely remotely, whether fine-tuning for improved performance or correcting an error or issue caused by an on-site event. eSite can deliver up to 90% reduction in diesel fuel consumption, CO2 emissions, and energy-related opex, and the best sustained performance over time versus any competing hybrid power system. So the business case in terms of reduced truck rolls is clear.In addition, we have been working very closely with local partners who have helped us to understand and overcome specific infrastructure challenges, and we will continue to work together throughout the project to ensure the smoothest possible rollout.


TowerXchange: With an estimated 17-25,000 towers to be rolled out in Myanmar in the next five years, do you have a sense of the proportion of those towers that might be built on unreliable or off-grid sites? What does the future hold for Flexenclosure in this exciting country? Mattias Karlsson, Vice President eSite, Flexenclosure: Our sense is that close to 80% of these sites would be off grid. As for the future, we are wholly committed to successfully delivering on this first project for Apollo Towers and to extending our footprint in the country in follow-on deployments

“

“

Myanmar is the largest remaining green-field market for cellular mobile networks and this is a great opportunity to do the right thing by designing a world class green network from day one. Flexenclosure’s eSite provides us with a flexible turnkey solution backed up by a strong deployment and support team. The use of renewable energy options and minimal use of diesel generators will benefit both our bottom line and Myanmar’s environment - Francois Lorelli, Formerly CEO, Apollo Towers

An eSite from Botswana

An eSite from Myanmar

eManager by Flexenclosure

Operation

Property

Site logistics Engineering

Local server Dew Point 0.1 Normal

Local Server Humidity 22.8 Low

Local Server Pressure 991.8 Rather Low

Local Server Humidity 23.1 Low

Local Server Temperature 21.6 Rather low

Local Server Temperature 22 Low

Local Server CPU 1 Load 43 High

Local Server CPU 2 Load 40 Moderate

Local Server Physical Memory 31815

Info=Job execution started Information Discover and Connect Info

Info=Device is online Information Local Server (SNMP) Notice

Status=21, Comment=Online Status Changed Local Server (SNMP) Notice

Info=Device is offline Information Local Server (SNMP) Notice

Status=20, Comment=Offline Status Changed Local Server (SNMP) Notice

Info=Disconnection detected Information Local Server (SNMP) Warning

Temperature 21.8

Humidity 24.4

Computed value 0.6

Temperature Limit low -200.0

Temperature Limit High 300.0

Humidity Limit Low 5.0

Humidity Limit High 100.0

Computed Value Limit Low -50.0

Computed Value Limit High 80.0

Temperature alarm delay 20

Humidity alarm delay 30

Computed value alarm delay 30

Temperature hysteresis 1.0

Humidity hysteresis 1.0

Computed value hysteresis 0.1

Temperature *10 218

Data Event Level

Network Overview

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rver (SNMP) Notice

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al Server (SNMP) MP) Notice

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in

Surveying, building and strengthening towers for the era of infrastructure sharingi engineering Group is a proven partner to towercos in eleven African countries and in Myanmar

TowerXchange: Please introduce i engineering Group – what role do you play in the telecoms infrastructure ecosystem? Kadri Hakim, COO, i engineering group: i engineering Group is one of Africa’s leading turnkey infrastructure solution providers. We are established in twelve countries: Algeria, Burkina Faso, Cameroon, Congo B, DRC, Ethiopia, Ghana, Rwanda, Uganda and Zambia. Our newest and soon to be biggest operation is Myanmar. Our headquarters are in Lebanon. We’re a cash flow funded, Lebanese-Canadian company, co-founded by myself and CFO Rami Shibley. TowerXchange: What are i engineering’s capabilities, and can you tell us who some of your key clients are?

Kadri Hakim, COO, i engineering group: We plan, procure, build, optimise and maintain telecom infrastructure. We also provide tower manufacturing through our partner Eki-Struct. Most of our business now comes from the Big Four African towercos, although we also work with MTN, Airtel, Orascom and Ooredoo. TowerXchange: Did you win your managed services contracts after the towercos acquired the towers, or was the relationship with i engineering transferred from MNO to towerco with the tower transaction? Kadri Hakim, COO, i engineering group: We were

Read this article to learn:< i engineering’s capabilities, footprint and credentials as one of Africa and Myanmar’s leading TI firms< The impact of tower transactions on the managed services ecosystem< Balancing the business between recurring, stable O&M contracts and higher margin, less predictable EPC contracts< Contrasting the approaches to energy efficiency programmes of towercos in Myanmar and Africa

Multi-country turnkey infrastructure solution provider i engineering has seen their business transform from an initial focus on site build and upgrade, to focusing on longer term O&M contracts. i engineering increasingly see Africa’s ‘Big Four’ towercos as their primary clients for managed services, tower surveys and strengthening, and for build-to-suit programmes. i engineering has also recently opened an office in Myanmar.

Keywords: Who’s Who, Managed Services, O&M, Construction, Installation, Batteries, Capacity Enhancements, Build-to-Suit, SLA, Hybrid Power, Greenfield, DG Runtime, Site Surveys, Skilled Workforces, Multi-Country Partner, Infrastructure Sharing, Asia, Myanmar, Africa, Algeria, Burkina Faso, Cameroon, Congo Brazzaville, DRC, Ethiopia, Ghana, Rwanda, Uganda, Zambia, Eki-Struct, i engineering Group


Kadri Hakim, COO, i engineering group

already providing managed services to the MNOs – after the acquisitions our contracts eventually became with the towercos. Towers are the core business of the towercos – they know exactly what they want, and they know exactly what it costs. They want the same services we are currently providing to MNOs, but with a higher service quality – reflected in the SLAs. TowerXchange: When towercos enter a new market, how do managed services providers like i engineering position yourselves to secure new contracts? Kadri Hakim, COO, i engineering group: We find out about the tower transactions after the deals close, not before. We use the experiences and credentials we have from our existing relationships with the towerco to enter new markets. TowerXchange: Do you forsee there still being a role for the tier one OEMs, Ericsson, Huawei, Nokia and ZTE, in managed services for passive infrastructure in Africa? Kadri Hakim, COO, i engineering group: When they were maintaining both the active and passive infrastructure for the MNOs, it made sense. But towercos don’t own active equipment, so they have no need to use a vendor like that for managed services. We believe the towercos will work more and more directly with companies like us to manage their passive infrastructure, leaving MNOs still working with vendors for the management of


active infrastructure.

TowerXchange: What is the balance of your business between EPC contracts and O&M? Kadri Hakim, COO, i engineering group: When we started the company in 2007, all our business was EPC – site build and refurbishment. When the EPC business started slowing down from 2009-10, we went into O&M. We now have more than 3,000 sites under management. O&M provides good recurring, stable business; we know the work is coming. We try to stabilise our operations on O&M revenue, such that any EPC revenue is the cherry on the cake. i engineering provides managed services for both passive and active infrastructure. TowerXchange: What are the implications for your business of the current wave of tower transactions in Africa, with towercos acquiring 17,877 new towers in the last quarter alone? Kadri Hakim, COO, i engineering group: We believe all the managed service providers will see a surge in their businesses. Towers are the core business of the towercos, they are well financed and will invest in new site builds, refurbishment programmes, strengthening for co-locations and energy efficiency programmes. With the recent wave of tower transactions, towerco’s short term focus is to understand and

stabilise the networks they just acquired, and to understand the quality of sites – based on which they will determine which towers they have to refurbish or upgrade. Then they will tackle co-location sales and building new sites for their anchor tenants – the framework agreements often include a build to suit programme. TowerXchange: What do you anticipate being the impact of the increasingly important role of towercos on the build to suit market? Kadri Hakim, COO, i engineering group: Whenever we’ve been asked to execute build-to-suit

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O&M provides good recurring, stable business; we know the work is coming. We try to stabilise our operations on O&M revenue, such that any EPC business is the cherry on the cake. i engineering provides managed services for both passive and active infrastructure


programmes for the towercos, they’ve built towers with capacity for at least three tenants. We’re not seeing a lot of single tenant towers being installed any more – EPC contracts from MNOs have decreased significantly. TowerXchange: What factors influence the cost of upgrading a single tenant tower and power solution to be suitable for multiple tenants? Kadri Hakim, COO, i engineering group: The power system has to be upgraded or replaced to suit the new power requirements. The tower part is more complicated and depends on the load of the existing

tower structure. We have been providing tower strengthening services to a lot of towercos. We do a structural analysis of tower to see if it is suitable to take another operator. If it isn’t suitable, we provide and implement a strengthening solution. Occasionally we find there is no solution and the tower has to be replaced – or we might find that the cost of strengthening is so great that it’s preferable to build a new tower.

TowerXchange: How do the priorities of the Myanmar towercos differ from those in Africa? Kadri Hakim, COO, i engineering group: The towercos in Myanmar are undertaking a massive

build to suit program rather than acquiring existing networks which involves refurbishment, upgrades and tower strengthening services. Myanmar is witnessing for the first time a substantial telecom site deployment, so the priorities and challenges are very different. Because it’s new network being deployed, all the towercos have the possibility to utilise the most recent technologies in telecom passive infrastructure, for example they are putting in place the most recent hybrid power systems; energy efficiency programmes and security locking systems. TowerXchange: Finally, please sum up how you would differentiate i engineering from other turnkey infrastructure firms in SSA and Myanmar. Kadri Hakim, COO, i engineering group: i engineering has an edge thanks to our well-structured, flexible management system which allows us to adapt to the local culture with our global experience. We understand what’s required locally to adapt our structure and be the most efficient turnkey infrastructure firm in each country. We are also fortunate to have a young, experienced, motivated, smart management team that excels in their work. i engineering is happy to follow its clients into new countries – we typically start two new operations every year. This includes following the Big Four towercos as they enter new markets in Africa. We know how they work, and they know what to expect from us

The i engineering team in Myanmar

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Infozech’s footprint in India and MyanmarSuccess story of a leading technology-led solution provider

TowerXchange: Please tell us about Infozech’s footprint in Asia.

Ankur Lal, CEO, Infozech Software: Infozech is one of the leading providers of energy management, remote monitoring and analytical solutions to passive infrastructure providers in Asia. Currently, we are providing solutions to leading tower operators in India who account for more than 50% of market share in towers.

Through Infozech’s iTower Tower Product Suite, we have been able to provide an end to end tower operations management solution to two of the leading tower companies of the world, who are currently deploying towers in Myanmar. Infozech has a unique expertise which will contribute to the overall tower sector growth in Myanmar by providing various solutions to tower companies.

TowerXchange: Which of your capabilities are most in demand in the region?

Ankur Lal, CEO, Infozech Software: Our solutions are focused to help customers improve profitability through increased operational efficiency and providing actionability on the data captured through different systems.

Poor grid supply is one of the major issues in Asia. Energy constitutes approximately 40% of total operational costs and the other 60% is represented by equipment such as diesel generators, batteries, SMPS and other passive infrastructure, operations, maintenance and field force costs.

Read this article to learn:< Infozech’s footprint in Southern and Southeast Asia

< The wide array of solutions offered by Infozech and their benefits to the tower industry

< Key energy challenges and how to reduce energy-related expenditure

< Success stories from their Indian and Myanmar projects

Infozech currently serves the Indian and Myanmar tower industry with game-changing solutions to enable its clients to monitor their assets and efficiently manage their sites. Thanks to its varied portfolio of products, Infozech has become a leading supplier to the main towercos in India and, more recently, of MNOs and tower companies in Myanmar.

In this interview, Infozech’s CEO, Mr Ankur Lal, offers his perspectives on how telecom players can successfully manage their assets, reduce their opex and achieve operational excellence.

Keywords: Infozech Software, C-Level Perspective, Energy Efficiency, RMS, Southern Asia, Southeast Asia, India, Myanmar, Off-Grid, Unreliable Grid, Batteries, O&M, Access Control, Urban vs Rural, Passive Equipment, Fuel Security, Operational Excellence


Ankur Lal, CEO, Infozech Software

In order to manage these huge operational costs, operators are constantly looking towards solutions which can reduce their opex without affecting the existing system. We believe that our products are the optimal solutions to serve passive infrastructure providers.

Our solutions include an RMS called iROC which monitors tower operations on a single platform, the energy tracking and management, iETS, to check energy consumption, the iAsset and iMaintain to schedule, track and report activities related to maintenance and critical events, the iAnalytics to improve actionability, and the iAccess for security and accessibility purposes.

TowerXchange: Can you tell us about a recent success story from your Asian portfolio?


Ankur Lal, CEO, Infozech Software: Infozech has developed ‘iTower’, a complete tower product suite which caters to the people, asset and energy needs of passive infrastructure providers. We started deploying ‘iTower’ for the leading tower operators in Myanmar.

In India, we are currently managing energy costs of approximately US$830 million across 150,000 towers.

Our success story started with one of the leading

“ “In India, we are currently managing energy costs of approximately US$ 830 million across 150,000 towers

towercos in India. They have a portfolio of over 42,000 towers and created an industry benchmark with the highest tenancy ratio of about 2.2 from over 92,000 tenancies. The client is committed to green and sustainable energy initiatives and wanted to monitor and reduce their energy consumption as a part of these initiatives.

The diversity of telecom towers in India is highly distinct because many are spread across remote areas with very low electricity grid availability. The client had to collect energy consumption data from

Infozech’s iTower


these remote locations and evaluate and optimise their operational performance, which had been a critical challenge for them. Moreover, there were lots of reconciliation issues in their energy supply chain (both power and fuel), which led to high operational expenditure and long billing cycles between telecom operators and passive infrastructure providers.

In order to optimise and control energy consumption, the overall supply chain of power and fuel consumption was the key area to be addressed. We offered an innovative and cost effective service which involved very low capital expenditure and superior operational efficiency. Infozech helped our client to monitor their energy consumption through energy tracking, analytics and reporting.

To deal with various types of data, we built various check points in the system to bring transparency and accountability in energy consumption. In order to make sense out of data, we built an analytics platform and real time dashboards to drive actionable insights for the client.

To ensure smooth implementation of a service, we also offered onsite operational and help-desk support to bring the different types of data to a granular level and provide energy consumption records for billing.

We solved this challenge through the implementation of iETS (our Energy Tracking Service). Our solution made a significant impact on the client in terms of time savings, which led

to improved decision-making and cash flow. They were also able to reduce the operational expenditure by saving 5% of diesel costs with a commitment of “Going Green” in line with the Indian regulator requirements.

Our client recently stated that “Infozech team has made tremendous effort in closing costs on-time and streamlining the entire process. Key data is easily accessible online on the Infozech ETS portal. We can now say goodbye to spreadsheets and PowerPoint presentations and utilise our time on analysing business critical data.”

TowerXchange: Infozech has done extensive work in Myanmar, please tell us about your experience, challenges you’ve encountered and the opportunities you’ve found in the country.

Ankur Lal, CEO, Infozech Software: Myanmar is one of the last few greenfield telecom markets with huge potential for growth. Therefore, it presents various infrastructure challenges including limited

grid and power supply, poor transport et cetera. Power provision is crucial for deploying and operating Myanmar’s new mobile networks in a cost effective manner. To achieve cost effective network deployment in Myanmar, MNOs and their towerco partners are looking beyond diesel based solutions and are considering efficient energy management.

Myanmar tower companies are looking beyond RMS solutions. Thanks to the fact that the Myanmar industry is being created from scratch, tower companies have decided to go for a complete automation of sites. One of challenges while working with leading towercos was about bringing all their data on a single platform, as there were multiple power equipment vendors each giving alarms and data from sites. Moreover, 50% of tower sites are located in remote areas. Tracking the field force activities and operational status of these telecom towers was a big hurdle for tower companies. We enabled tracking of these field force activities through our mobile application

“ “Thanks to the fact that the Myanmar industry is being created from scratch, tower companies have decided to go for a complete automation of sites

Profitability

Energy

Process

Asset

People

Improving Profitability

iTower – Intelligent tower operations with enhanced revenue

Infozech Software Private Limited, New Delhi, India | Website : www.infozech.com | Email : [email protected]

How RMS adds value to multi-tenant towersInvendis enables separate energy bills for each tenant, resolves SLA disputes, reduces manpower costs and gives management visibility into tower performance

Satish Kulkarni, CEO, Invendis


TowerXchange: Where do Invendis fit into the telecoms infrastructure ecosystem?

Satish Kulkarni, CEO, Invendis: Invendis started its operations in 2007 as a telematics company for vehicle tracking and mobile workforces. In 2008 we got into telecoms as the industry needed telematics for static platforms such as shelters and fuel tanks.

2008 was an exciting time in Indian telecoms, and there are many parallels to Africa today. A lot of new licenses were being issued and a many international new market entrants were coming in. Towers were being hived off as separate independent towerco entities.

With the big operators and towercos commanding portfolios of 60-100,000 towers, as a startup Invendis decided to focus on new, smaller towercos with less than 5,000 towers. We did demonstrations to three towercos, one with 1,800 towers, another with 200, and a third with 2,200. Our first order came in for systems for all 1,800 towers six months after the demonstrations. We secured a second order from the 200 tower company before they were acquired by a large American towerco, then we were shortlisted to get a PO for the 2,200 tower business before they were acquired by the same towerco! So this large North American towerco came to us as a legacy supplier.

TowerXchange: What is Invendis installed base in telecom towers?

Satish Kulkarni, CEO, Invendis: Between 2008 and

Read this article to learn:< How to optimise selection of energy source to reduce energy opex

< The criticality of remote management of air conditioning in tropical climates

< Insights into how towercos trial and buy solutions

< A comparison of RMS installation costs in India and Africa

< Why equipment with integrated sensors is an opportunity not a threat for RMS companies

Keywords: Who’s Who, Monitoring & Management, Opex Reduction, Batteries, Installation, Air Conditioning, Unreliable Grid, Hybrid Solution, Fuel, Site Visits, RMS, Infrastructure sharing, Africa, India, South Africa, Invendis

Invendis (INVENt and DIScover) is a telematics technology developer from Bangalore, the Silicon Valley of India. They have developed an RMS solution that adapts perfectly to the tropical climates in India and Africa, and which is in use today monitoring over 24,000 towers, most with multiple tenants. Invendis are one of the few RMS suppliers to have successfully passed through a North American towerco’s rigorous partner selection process – naturally, TowerXchange wanted to learn more…

now we have installed end-to-end RMS in 6,000 towers in India, and we’ve also added energy management, alarm extension and inventory management for another 15,000 towers. So our domestic installed base is around 21,000.

About three years ago, after our domestic rollout, we decided to see what we could do in other markets. The North American towerco had just acquired about 2,000 towers in South Africa, so we brought our reference credentials from India, we responded to their RFP and were invited to participate in a trial, then agreed commercial terms and secured the order. Deployment started a year ago on the first 250 towers, with the total order being for 600. Deployment will be complete by the

end of July. So our installed base in Africa will be 600.

We are currently participating in other African trials and have been shortlisted in Uganda, and have active prospects in Kenya, Nigeria and Tanzania.

In Oman we have a major rollout of approximately 400 telecom exchange buildings, and 250 systems about to be installed in Kuwait.

TowerXchange: Please tell us how tower operators can achieve RoI in remote monitoring and control systems such as yours?

Satish Kulkarni, CEO, Invendis: Our approach is to move the customer operations from a reactive mode to a proactive mode by monitoring various parameters including alarms to detect and eliminate a potential site outage and also to optimise the equipment usage and operational expenses.

We are not just a remote monitoring company, we consider ourselves an energy optimisation company. We optimise the selection of energy source to reduce energy opex.

Our systems are most commonly installed at multiple tenant sites and we implement hybrid system based on power source and temperature. Cell sites have three major power sources: an often unreliable grid, 99% of towers have a diesel generator, and many have a huge battery bank (in some cases there is also solar or wind power, but in most cases it’s still grid, diesel generators and


batteries). Our systems help decide which power source to use to optimise operational expense and also increase the battery lifetime.

As long as you have grid power, the site runs on the grid. The moment grid goes down, what used to happen was the DG was switched on because the tower operator didn’t know how much charge was in the battery. With RMS, you can run batteries more often and run them for deeper cycles to optimise battery lifetime.

Many parts of India and Africa share a tropical climate, which means air conditioning is needed to keep the temperature in the shelter down to 25-30°C and operate the telecoms equipment within specified operating temperature ranges. When the cell site is running from the battery bank, air conditioning is often switched off. However, if RMS is installed we can monitor the temperature and run the air conditioning off the DG if the temperature exceeds a threshold of 35°C.

However, the biggest difference between Africa and India is that in India the infra company owns the shelter and the DC power is shared between the operators where as in Africa the shelter is often owned by the operator and the infra company provides AC power to the operator and hence we install RMS devices inside the shelter in India and in Africa we install outside the shelter using weatherproof enclosures. TowerXchange: What is the typical capital outlay per site to install your system?

“ “

Our approach is to move the customer operations from a reactive mode to a proactive mode by monitoring various parameters including alarms to detect and eliminate a potential site outage and also to optimise the equipment usage and operational expenses

Satish Kulkarni, CEO, Invendis: In India, the cost is around US $2,000 per site for the equipment and installation, with 6-7 months to RoI based on monthly savings of US $300-350.

In Africa because of import duties, local regulatory mechanisms, and very high installation costs (technical manpower can be six to seven times the cost in India), typical installed costs might be around US $4-5,000 per site. The costs are also higher in Africa because of the geographical distribution of cell sites, poor transport infrastructure, and more complex specifications to manage multiple tenants at sites on an unreliable grid. So RoI in Africa can be around 10-12 months.

The cost also varies based on geography, sensors, accessories and services required by the customer.

TowerXchange: How do the requirements of remote monitoring and control change when managing multi-tenant sites?

Satish Kulkarni, CEO, Invendis: Different tenants often use different active equipment with different specifications and different power consumption. So in multiple tenant scenarios, towercos need visibility of how much power each tenant has consumed so that each operator can be billed separately.

In the absence of RMS, the towerco would divide the power consumption bill between tenants, but tenants are increasingly unhappy with such arrangements, especially if they’ve invested in new low energy equipment that can use a quarter of the power.

Secondly, RMS resolves disputes as to whether the active equipment or power solution was responsible for any outage. BTSs take a long time to power up after any outage, and SLAs often mean penalty clauses are triggered if the towerco lets the power go down.

The third way RMS adds value for multi-tenant sites is by reducing expensive technical manpower costs. Previously maintenance teams may have visited every day to check the site, but with RMS now they only need visit when an alarm is triggered and a site visit is necessary, and you know what expertise is needed and what spare parts are required to stabilise or resolve the incident.

RMS plays a major role in ensuring the health of the tower site passive equipment and helping to prevent or minimise site power outages by acting proactively before an incident occurs which leads to


outage, SLA penalties and compromised quality of service. Finally, RMS plays a very important role in giving towerco management an overall picture of tower performance.

TowerXchange: What were your impressions of selling to that North American towerco – what can you tell us about their procurement process?

Satish Kulkarni, CEO, Invendis: When they acquired four towercos in India, including the two towercos with whom Invendis had contracts, they held up equipment rollout and said they’d consolidate and normalise RMS requirements across the entire organisation. So they sent us their specifications and ultimately trialled two different RMS companies. After a full technical evaluation, including the last 3-4 months on multiple sites, they refined their requirements, wrote a new specification, and issued a new order for RMS at approximately 1,000 towers.

So this towerco took a four step approach after acquiring new towers; first they held up deployments scheduled by the acquired business, second they issued new specifications, third they trialled alternate suppliers, and fourth they issued refined specifications based on the trial.

Working with the North American towerco has been a great experience. They have worked closely with us to define their requirements and refine our solution to meet those requirements, and we now have almost 3,000 of their towers running on our

software.

We don’t see any major differences between the way that Africa’s big four towercos trial and buy RMS.

Towercos tend to standardise the equipment and operation of their towers. However they understand that every tower has different equipment (especially older towers with multiple tenants using different equipment vendors), so a degree of customisation is required for every site.

TowerXchange: Is there a danger that the monitoring devices embedded in new hybrid equipment will reduce investment in dedicated RMS?

Satish Kulkarni, CEO, Invendis: Who owns the sensor hardware is becoming less important – remote monitoring is a data-driven market. Successful remote monitoring requires a software platform to capture and normalise data and render it in a uniform way to support decision making.

We have supplied software in India, the Middle East and in Africa that integrates data from our own sensors and data from Emerson, GE Power Management Systems and other intelligent equipment with embedded wireless communication.

The equipment inside the cell site comes from a wide variety of companies that are experts in a certain field, whether it’s power management

systems, batteries et cetera. Even if remote monitoring is built into the genset, I’m not sure how much these systems talk to the different equipment at the cell site. Hence the need for dedicated, equipment agnostic and sensor agnostic RMS systems to integrate data from hardware manufactured by different vendors into a single platform.

I don’t think RMS vendors feel that integrated sensors are a threat to our business. These other companies specialise in power management - how many R&D dollars are invested into remote monitoring? We’re investing fully in remote monitoring and energy efficiency.

TowerXchange: Finally, please sum up how you differentiate Invendis from your competitors.

Satish Kulkarni, CEO, Invendis: Invendis is an end-to-end company – from software to remote monitoring equipment, temperature/fuel monitoring and alarms, we have expertise in all three disciplines.

We have a software platform running 24,000 towers across 6 countries.

Ours is the newest hardware on the market – our latest equipment is from a design three months old. Competitors’ industrial equipment was often designed five to six years ago, and doesn’t have the same customisation capabilities.

Africa needs solutions designed for emerging


markets, not systems designed in Europe or America where they are used to clean, uninterrupted power and don’t have the same need for robust outdoor equipment as Africa.

Another differentiator is our speed of rollout. Having done 21,000 towers in the last four years, I don’t think our competitors have done even 5,000. To install in 21,000 towers you need robust installation processes. Invendis has only been in Africa for a couple of years, yet we’ve already deployed in two countries.

Finally, Invendis is a technology-driven company, not a box manufacturer. Our expertise is systems development and software development, so our systems are very robust, with no need for manual interventions

Low cost sites: how to reduce capex and opexLeading TI firm Mer Group on the business models, site and power systems designs necessary to improve the economics of rural connectivity

TowerXchange: Good to speak to you again Arie. How have Mer’s customers’ priorities changed since Africa entered what might be described as the ‘infrastructure sharing era’? Arie Bendayan, VP Sales Africa-Asia, Mer Group, Telecom Division: As part of an on-going strategy to respond to recent telecom market trends, we are continually adapting our services and products to meet these changes. In our day to day discussion with our customers, we find ourselves frequently offering solutions such as: < Multi-tenant infrastructure migration. A complete offering for towercos with a variety of solutions including products and services to enable a swift and cost- efficient migration from a single tenant to a multi-tenant infrastructure< End to end solutions for In-Building coverage for both towercos and MNOs< Turnkey low cost site solutions to enable MNOs and towercos to penetrate areas with lower ARPU and/or smaller expected revenue generation than traditional sites TowerXchange: How can MNOs and towercos improve the economics of site deployment in areas that might not generate the ARPU necessary to meet MNO’s investment criteria, or towerco’s preference to build sites where they can sell co-location? Arie Bendayan, VP Sales Africa-Asia, Mer Group, Telecom Division: First and foremost by

Read this article to learn:< New turnkey infrastructure services for the ‘infrastructure sharing era’

< Proven solutions for providing connectivity in low ARPU areas: hybrid energy systems, micro BTS,

low cost towers

< A pragmatic approach to site and power design

< Opportunities for rural network companies offering revenue sharing business models

Mer Group is a global telecom infrastructure solution provider and tower manufacturer with active offices and operations on four continents, and with over 60 years of experience. Mer Group provides end-to-end cutting edge wireless infrastructure turnkey solutions with services covering network planning, site design, manufacture and erection of towers, site construction, equipment installation, network optimisation and maintenance. Mer has successfully delivered over 30,000 telecom sites.

Keywords: Who’s Who, How to Guide, Meetup Preview, Managed Services, O&M, Construction, Installation, Capex, Universal Access, Opex Reduction, Batteries, Urban vs Rural,, Capacity Enhancements, Loading, Outdoor Equipment, Foundations, Business Model, Site Level Profitability, Tender, ARPU, Off-Grid, Hybrid Power, Renewables, Solar, Wind, Dimensioning, Site Visits, Next Billion, IBS, Infrastructure Sharing, Africa, Mer Group Telecom Division


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

approaching and working hand in hand with companies such as Mer, companies which specialise in the design and implementation of efficient and cost effective turnkey (both passive and active) low cost solutions specifically designed for on and off grid rural areas. Today innovative passive and active infrastructure solutions such as hybrid energy systems, micro BTS, low cost towers et cetera are freely available and their performance is proven. These solutions significantly lower capex and opex compared to conventional cell-sites. This enables the redefinition of traditional site deployment criteria. Of course this model is certainly relevant for remote and rural areas where coverage is needed but it is also relevant in urban areas where sometimes additional capacity is needed and co-location is more relevant. TowerXchange: Talk us through the details of how you can design towers to minimise capital outlay and installation costs? Arie Bendayan, VP Sales Africa-Asia, Mer Group, Telecom Division: In my opinion one should invest time in the planning stage, which should be done in full co-operation with the customer. More often than not, we find MNOs putting out general tenders, and by doing so locking themselves into generic solutions which do not necessarily meet the needs of specific sites. As an example I would discuss the following points


with the customer, and by such build tailor made solutions.

1. Wind and load information in order to come up with the most efficient and cost effective solution, avoiding over design2. Consider with the customer the possibility of applying a temporary tower foundation solution that will enable reuse of the foundation and tower

in an alternative location3. Decrease to a minimum the tower loading by advising the customer to use innovative small antennas and fiber optic feeders4. Fine tune the design taking into account possible tower upgrades in the future TowerXchange: Similarly, talk us through the detail of the power solutions MER Group


Telecom Division advocate using at remote, low cost sites? Arie Bendayan, VP Sales Africa-Asia, Mer Group, Telecom Division: I would say that there is not an off-the-shelf solution. An efficient energy solution must be calibrated per specific site and customer requirements.Therefore there are a few critical parameters which have to be considered, such as:

< The geographic locale, helping us to take into consideration the local climate parameters. For example average number of hours of sun per day, and average number of rainy days< The electricity grid availability is also critical and will have an impact on the energy system design< The specific site power loads and back-up autonomy requirements< The space available on site These basic parameters will enable us to design the

most efficient hybrid power system, based generally on solar energy and using deep cycle batteries (and possibly wind turbines) and where applicable optional “worse case” backup generator. Of-course our primary goal is to reduce capex and minimise opex compared to traditional sites where high energy costs make them not economically viable for low-cost rural implementations. TowerXchange: Is there a gap in the market between MNOs and the major towercos for a new class of rural network company, perhaps focusing on a revenue sharing business model? Arie Bendayan, VP Sales Africa-Asia, Mer Group, Telecom Division: Typically a towerco’s business model is focused on sharing the infrastructure between several tenants, and of course having

“ “our primary goal is to reduce capex and minimise opex compared to traditional sites where high energy costs make them not economically viable for low-cost rural implementations


preferably a high tenancy ratio in excess of two. There are obvious obstacles in sharing the rural kind of infrastructure such as:< In rural areas, the ARPU is often half of the average ARPU and potential subscribers significantly lower, therefore I am not sure that more than one tenant would be viable< Adding additional tenants to the rural site will have a severe impact on the cost of the site. Exceeding a certain power load will entail the installation of a generator and therefore substantial opex which will kill the business model for both towercos and MNO. Therefore yes, we can see today few initiatives where MNOs have partnered with “rural network companies” on a revenue share business model. But it is too early to see a clear outcome of those initiatives as models and countries are different. I suggest another possibility by encouraging government entities to take the lead in developing rural telecommunication by imposing a modest “development levy” on the operators and using the funds for initial financing of rural sites as is already being done in a number of African countries

Arie Bendayan will be leading a round table breakout session on “Low cost sites” how to reduce capex and opex” at the TowerXchange Meetup Africa, taking place on October 20 and 21, 2014 in Johannesburg. For details visitwww.towerxchange.com/meetups/africa.

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Low CAPEX & OPEX cell-site solutionsNo-fuel running sitesFixed, COW & dismantable sitesEfficient low consumption micro BTS solutions

Tower/Site auditingStructural analysisTower & foundation reinforcementInnovative & cost effective site collocation solutionsIn-house design & manufacturing of efficient heavy-load, multi-tenant towers

Multi-service, multi-operator and multiple bands in a single systemEnd to end solution:- Survey- Design- Supply- Installation & commissioning

Visit us at the Tower Xchange Meetup Asia, 9-10 December 2014, Stand No. 5 | Contact Email: [email protected] | mer-group.com

Single to Multi-Tenant Cell-Site Solutions1. Low Cost & Rapid

Deployment Sites2. Innovative In-Building & Coverage Solutions3.

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 sites in Africa have been equipped with NorthStar

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


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 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.

Delivering reliable and sustainable power to the world

Using Premium AGM in Offgrid will offer best Capex /Opex compromise

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Source: NorthStar Battery

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 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.

Source: NorthStar Battery

Why are telecom batteries failing so early?

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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’!

NorthStar Battery are exhibiting at the 2014 TowerXchange Meetups for Africa (October 20 and 21, Johannesburg) and Asia (December 9 and 10, Singapore). For more information, visit:www.towerxchange.com/meetups/africawww.towerxchange.com/meetups/asia

The criticality of protecting tower climbersFall protection experts Karam on the current state of safety systems in Africa

Hemant Sapra, President, Marketing, Karam


TowerXchange: Please introduce us to yourself and your company. Hemant Sapra, President, Marketing, Karam: I’ve been with Karam since the inception of the business in 1997. I run the marketing side of the business, my partner Rajesh Nigam runs the technical side - he’s a qualified engineer having graduated from IIT-Kanpur, the number one technical university in India. Karam started out manufacturing safety nets for people falling from height, then moved on to manufacture safety harnesses and eventually to focus on fall protection and fall arrest. Karam were the first Indian supplier to meet European safety standards in 1999 - all our equipment is tested and certified to the European EN standards by certifying body SATRA in the UK. We now sell into over 50 countries worldwide. The business has grown rapidly from a staff of 10 and US $1m turnover in 1997 to over 2,000 staff and US $40m turnover now. We offer a complete range of products which can arrest the fall of person who is working at height - anchorages, harnesses, ropes, hooks, carabiners, fall arresters and fall arrest safety blocks. We started working for telecom companies three years ago. First we studied the market to understand what kind of systems were being used to protect tower climbers, the hazards which still existed, and then did a subsequent gap-analysis. After three years of R&D, we developed systems that could take care of both telecom tower climbers

Read this article to learn:< What should be included in a complete set of Personal Protection Equipment (PPE) for tower climbers< How fall arrestors on fixed line systems work for lattice towers and for tubular poles, and what they cost< The necessity of using twin shock absorbing lanyards for 100% tie off< Training and motivating the work force to use PPE to create a safer culture in Africa< Integrating access control and ladder design to combat theft

Keywords: How to Guide, Passive Equipment, Health & Safety, Fall Protection, Risk, Change Management, Skilled Workforces, Rooftops, Masts & Towers, Africa, Americas (North), Asia, Europe, Middle East, Vodafone, Karam

Karam is a manufacturer of personal protective equipment, with their core competency being fall protection. The complete range of products offered by Karam are manufactured in its fully backward integrated operational set-up and today Karam is one of the world’s largest manufacturers of full body harnesses. Based in India, the company has a global footprint in over 50 countries. Karam offers a fine balance between quality and price and hence it’s products finds its way into the markets in Europe, America, Australia, Middle East, South East Asia and Africa. Karam has made significant inroads into developing new products in this field and prides itself on making systems that are idiot proof and theft proof.

and people climbing ladders to repair rooftops. The system was certified by both European laboratories (as per EN 353-1) and also complies with American standards - where we’re certified by Intertek-USA. The biggest hazard while working on a telecommunication tower or while erecting the tower is a fall from heights. The user while climbing a ladder can slip and fall sometimes resulting in a fatal accident. Of course the most important thing is the loss of life, but the accidents also cause lost revenue in terms of compensation, legal costs, medical expenses and loss of work. Another related issue is unauthorised climbing on towers which results in theft and which hits the bottom line of the telecom industry. TowerXchange: What are the major potential hazards tower climbers and other workers at cell sites need to be guarded against, and how can they be protected? Hemant Sapra, President, Marketing, Karam: The major hazards are the risk of a fall while working at heights; exposure to RF; electric shocks; attacks by eagles or bees (eagles nests and bee hives are sometimes found on towers); and snake bites. There are several ways to protect workers at cell sites. First you have to ensure that the worker is medically fit to work at height, with medical certificates from an approved doctor and appropriate insurance. Then the workforce needs to be properly trained on rescue procedures, trained on the correct usage of equipment, and that

equipment needs to be regularly inspected. There is a risk of falls from telecom towers since there is no easy available anchorage on which a worker can secure himself for a safe tie-up. To counter this, Karam offers a vertical fall protection system using a stainless steel cable. While working at height the user wears a full body harness to protect himself from a fall. However the harness is useful only if it is connected to a strong anchor point that can withstand a load of greater than >12kN. While climbing the user is continuously changing his position thus requiring an anchor which always keeps him connected. This can be achieved by installing a stainless steel cable on the ladder of the tower. A special fall arrest device (fall arrestor) is connected to the harness of the user. The fall arrestor glides smoothly over the stainless steel cable while climbing or descending on the ladder. However in case of a fall the fall arrestor locks on the cable and hence the fall is arrested. The impact is reduced to comfortable levels with the help of a shock absorber installed at the top end of the stainless steel cable. The impact is thus reduced to an acceptable level of less than 6kN. The cable is installed on the ladder with a stainless steel bracket set which is fitted on the top and at the bottom step of the ladder. To provide a reasonable tension to the cable, a tensioning device is connected to the lower end of the system. These systems are highly recommended for the lattice towers which are widely used by the telecommunication industry.


For tubular poles where it is even more challenging to have an anchorage for a safe tie-up, Karam provides an aluminum rail ladder system with steps at regular intervals, connected to an aluminum rail. A special trolley glides smoothly on the aluminum rail while ascending or descending. This trolley is connected to the harness of the user, and works as a safe anchor point for him. In case of a fall it’s special fall arrest design locks the trolley on the aluminum rail and hence the fall is arrested. Again, the trolley has an in-built shock absorbing mechanism which reduces the impact to acceptable levels of less than 6kN.

Solution for safely climbing tubular poles

The other important component of our fall protection system is the specially designed tower harness. The harness holds the user and connects him to the fall protection system. Apart from fall protection, the harness also helps in work positioning using a work positioning lanyard. The work positioning belt of the harness provides lumber support while working at a height. The user also makes use of a twin energy absorbing lanyard

for 100% tie off when not connected to the fall arrest system. A full set of personal protective equipment also includes safety shoes, safety eye wear and protective gloves. TowerXchange: Tell us your first impressions of the African market when it comes to tower climber safety. Hemant Sapra, President, Marketing, Karam: We think the addressable market for us may be 80%+ of Africa’s towers. Many African towers weren’t designed with tower climbers in mind. There are often no rest points and there aren’t even proper ladders on some towers - climbers have to clamber around like monkeys! We’ve undertaken a good survey of the kind of safety products being used in Africa, and we feel the quality of products needs to be enhanced. Our products are life-saving - if the safety equipment fails, the tower climber dies - it’s not something we will ever make a compromise on. However, the problem in Africa is more with the culture than with the safety equipment. Owners of towers have to realise that the first initiative must come from them. They need to see safety as an investment not a cost. It is critical that tower climbers’ employers develop and document a health and safety system for their


workers to follow, and that they monitor the same to ensure compliance. For example, Vodafone have taken the onus to ensure the safety of tower climbers, and their acceptance level of permanent solutions is strong. Only Europe and the US mandate the use of such safety equipment. There should be laws in every country requiring the use permanent equipment fixed to the tower for the lifetime of that tower. We’ve started working with dealers in South Africa and Nigeria at a relatively low scale right now, but the African market will be a focus for the next couple of years. African tower operators are starting to look at climber safety. Since we started focusing on Africa in January this year, we’ve already received a couple of big enquiries. TowerXchange: What are the costs of good safety equipment, on a per site basis? Is there an additional cost in the time taken to fit a harness correctly? Hemant Sapra, President, Marketing, Karam: It depends on the height of the tower of course - stainless steel wire rope is expensive. But the average cost to add permanent safety equipment might be around US $1,500 per tower, with a 40m tower costing US £1,300-1,400 and an 80m tower around US $2000. The time taken to harness up is not a significant factor - it takes 15-30 minutes of training to show a technician how to put on their harness correctly in

60 seconds, and it only takes a few more seconds to ensure they are anchored with a carabiner. TowerXchange: What can Karam do to help change the culture and improve safety standards? Hemant Sapra, President, Marketing, Karam: It’s not our job to just provide the equipment, it’s also our job to provide training on the selection of the right harness, the use of that harness and of other safety equipment. And it’s not just about showing the technicians the equipment; it’s about motivating them to use it. Many don’t want to be tied down, but we have to show pictures and video of what can happen if you don’t tie on properly. TowerXchange: Please tell us how Karam is working with Acsys to integrate access control and safety equipment. Hemant Sapra, President, Marketing, Karam: We’re

working on a definitive solution with Acsys that will mean people cannot go up a tower unless they are anchored. Tower operators are also concerned about theft of equipment, so we’re working on a first of its kind, innovative design of a ladder where the rungs fold away except when unfolded by authorised climbers with a key. TowerXchange: Who is your target client, operator, tower co or both? Hemant Sapra, President, Marketing, Karam: We target both operators and tower companies - whoever owns the tower. Some of our solutions are fixed assets - part of the tower. In many cases operators will demand certain safety equipment and standards from towercos. The approach might vary between operators and towercos. For example in India towers owned by Vodafone have 100% implementation of permanent fixed systems, whereas on towers they rent from Indus, climbers are being trained to use temporary systems.


Temporary systems require a lower capital outlay in the short term, but as a capital investment permanent fixed systems make sense over three years or more. Tower operators’ preferences often depend on their financial performance. TowerXchange: Finally, please sum up how you differentiate Karam from your competitors? Hemant Sapra, President, Marketing, Karam: We have few competitors, mostly from Europe. Karam are still the only major supplier from Asia certified as per the European standards, and that means we have a cost advantage. For example, Vodafone had a tie up with a French company, but when they contacted Karam for their operations in India, we were able to undercut their European supplier by 70%. We now have 12 years of experience of working with Vodafone, which is how we developed solutions for Vodafone towers in India. We are exporting to over 50 countries globally - we sell under our own brand in India and in the Middle East, but for all other countries we do private labelling on products and OEM, so we are manufacturing the equipment for most of the big brands around the globe. Karam is able to meet all tower climber equipment needs in-house. We buy yarn, convert it into webbing and ropes. All our metal and mechanical components are manufactured in-house by our own factory. This ensures customisation as per need while maintaining superior quality in the product at all times

“ “it’s not just about showing the technicians the equipment; it’s about motivating them to use it

Tarantula’s successful move to Southeast AsiaLeading site portfolio management software company’s expansion into the region and the drivers of its success

TowerXchange: Udhay, could you give us a brief history of the company? Which countries are driving Tarantula’s business in Asia? Who are your main clients?

Udhay Mathialagan, CEO, Tarantula: We commenced business in the UK in the late nineties by solving problems relating to site sharing and by creating an industry-wide data sharing platform. In 2004, we established our software development centre in Hyderabad, India. As India’s local tower industry began to expand in 2007, we worked hard to became the go-to software platform for a number of India-based tower companies including Viom Networks and American Tower. In the following years we continued to grow our business in Europe.

Last year, we decided to establish our new head office in Singapore to get closer to the opportunities emerging across the Asia Pacific region and to bring together an international team of tower industry and software product experts. We currently have staff available in multiple locations in the region and have expanded our customer presence across multiple countries in the region, including Irrawaddy Green Towers in Myanmar and Komet Infra Nusantara in Indonesia. We have also commenced work for major Southeast Asian telcos across a number of their regional assets.

TowerXchange: Which countries do you feel are driving business for Tarantula?

Udhay Mathialagan, CEO, Tarantula: Myanmar is going through a rapid expansion phase with

Read this article to learn:< Tarantula’s expansion into Southeast Asia

< Which countries are driving Tarantula’s Asian operations

< Why towercos need to properly manage their data

< Tarantula’s business in Africa versus Asia

Tarantula, the leading telecom site portfolio management software company, relocated its global head office to Singapore a year ago and is expanding its product offering in Southern and Southeast Asia. Thanks to its highly focused telecom infrastructure management products, Tarantula already provides its solutions to manage information relating to portfolios covering more than 400,000 telecom towers worldwide. This includes tower businesses of Indus Towers, Viom Networks and American Tower in Southern Asia. In this interview, Udhay Mathialagan, CEO of the company, tells us about Tarantula’s successful first twelve months in the region.

Keywords: Tarantula, South Asia, Southeast Asia, India, Myanmar, Indonesia, Viom Networks, Indus Towers, American Tower, C-Level Perspective, Irrawaddy Green Towers, Komet Infra Nusantara, Malaysia, Thailand, Cambodia, Bangladesh, Sri Lanka, Site Management System


Udhay Mathialagan, Chairman and CEO, Tarantula

multiple tower companies active and greenfield projects being developed. India, in contrast, has a well evolved tower market and represents opportunities for us to expand our offering as our customers focus on improving asset utilisation and management. Our offering is suited to both newly forming as well as mature markets and this is the interesting side of Asia for us as the region is host to very advanced as well as very young tower industries.

Although primarily working with towercos in Asia, we are now starting to bring to a new group of telcos the offerings we have in other regions into Asia where mobile operators are seeking to have a better understanding of their wireless assets. As Asian telcos seek to create options to spin-off their towers or to enter into new forms of sharing arrangements, they need to have a more comprehensive and detailed understanding of their towers. Tarantula has extensive experience in this process.

TowerXchange: What is the percentage of business that comes from MNOs compared to tower companies in the region?

Udhay Mathialagan, CEO, Tarantula: Internationally our business is split evenly between MNOs and tower companies. In Asia, it is more skewed towards tower companies rather than MNOs. However, as previously mentioned, this could change as MNOs are becoming an increasingly relevant client for us.

One of the underlying issues in the industry that drives our business is that the cost of wireless


infrastructure keeps increasing – particularly the costs relating to passive infrastructure. It is very important for MNOs - and they are well aware of it now - that they find smarter models to manage the lifecycle costs of their passive and the property aspects of their wireless infrastructure.

MNOs with the intention to divest their portfolios can significantly improve their value by having high quality and well organised information on their portfolio of site assets. It is not unusual to see

companies that have invested billions of dollars in their wireless infrastructure not having basic information around the property and physical utilisation aspect of these assets.

TowerXchange: Which specific challenges does Tarantula help address?

Udhay Mathialagan, CEO, Tarantula: We help asset owners improve the long-term economics of their business by automating business processes and


by concentrating asset data in a “single version of the truth”. We offer a data-hub for towercos to operate their end to end business in a seamless way. This “single version of asset data” connects with a number of other sub-systems covering downstream activities like remote sensors or energy management systems or higher-level business functions such as financial management. Importantly, our product helps tower operators track and implement the various aspects of customer and ground lease contracts ensuring revenue integrity.

TowerXchange: A lot of tower companies struggle to manage their data. Do you believe that there are circumstances when a data hub is not necessary for telecom tower companies?

Udhay Mathialagan, CEO, Tarantula: Some

companies do try to manage their information without a single source of core data for example, by relying on department level data and consolidating them into spreadsheets. They sometimes even use this method for time-bound activities such as asset deployment projects but spreadsheets don’t offer any meaningful capability to make connections and comparisons across projects or asset types. The business misses out on a common core set of data that could have eliminated re-work. A strong argument for Tarantula’s business proposition is that we enable them to consolidate all their asset data in our hub and help tower companies to reduce costs and revenue leakage.

In addition, some towercos aim to build scale by using distributed spreadsheets which won’t support their growth beyond a certain point. Our platform offers significant payback in terms of revenue

realisation. In fact, Tarantula tracks revenue streams and growth potential while also helping companies to make better investment decisions.

TowerXchange: How do you compare the Asian market for Tarantula with Africa and other regions where you operate?

Udhay Mathialagan, CEO, Tarantula: We see some similarities between Africa and Asia such as patchy energy infrastructure and challenges in securing the required human talent and skills.

Asia is host to a very diverse array of countries, including some of the world’s most and least developed nations. We have learned not to generalise and to focus on solving a specific market or customer problem using our products that have been tested in real-life conditions in more than thirteen countries.

TowerXchange: How would you judge the last 12 months of Tarantula, have they been successful?

Udhay Mathialagan, CEO, Tarantula: Over the past year, Tarantula has secured customer deals that cover seven new markets in the region so I’d definitely say establishing our base in Singapore and deploying resources in this region has been a good move.

I expect our business to continue growing as wireless penetration increases and new business models and ideas are deployed to manage the expected subscriber and data volume growth

“ “Some companies do try to manage their information without a single source of core data for example, by relying on department level data and consolidating them into spreadsheets. They sometimes even use this method for time-bound activities such as asset deployment projects but spreadsheets don’t offer any meaningful capability to make connections and comparisons across projects or asset types

Customers in 17 countries

C O N T R O LYOUR ASSETS TO INCREASE

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Assets worth US$ 28 billion managed

350,000 towers worldwide

www.tarantula.net Contact us: [email protected]

RED CUBE ENTERPRISETarantula is the global leader in creating intelligent and configurable site management tools for the tower industry. Red Cube Enterprise is our flagship product for overseeing end-to-end tower site life-cycle management.

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How to combat fuel theftTamper protected sensors reveal fuel theft at sites while comparing fuel alerts with invoices deters fraud

Chris Begent, Commercial Director, Telemisis

TowerXchange: Thanks for speaking to us Chris. Let’s be honest, a lot of fuel pilferage originates within the supply chain, so is there a risk of remote monitoring sensors being damaged by staff or subcontractors?

Chris Begent, Commercial Director, Telemisis:Unfortunately much of the fuel fraud or theft is internal, so interference with sensors is a common problem we pick up.

For example, one of our clients was aware of regular small amounts of diesel theft, enough to supply one or two vehicles, at one of their sites. The parties responsible tried to sabotage the sensors by disconnecting the power. They thought they’d disabled the system and started draining the fuel. Fortunately our devices are extremely resilient to tampering (our systems have independent power systems, internal disconnection sensors, tamper protection on fuel probes and fuel hatches), so the thief triggered an alarm and the client was able to dispatch someone to the site, where they discovered the security guard was pilfering fuel.

We can also combat fraud by cross-referencing fuel alerts against invoices. On one fairly large system we picked up invoices routinely 10% above what the subcontractor said had been delivered. We conducted an accuracy test on our system and found it was accurate within 1 litre. In that particular instance, we found that the metering on delivery vehicles was 10% high across the board, so the error was corrected.

Read this article to learn:< The importance of tamper-protected RMS in minimizing fuel theft within the supply chain

< How to prevent the damage caused by kerosene contamination

< The importance of remote upgrade and reprogramming of RMS to minimize site visits

< How self-configuring RMS reduces reliance on high skilled deployment technicians

< How data from RMS is filtered to support different users, from technicians monitoring local alarms

to management comparing and selecting equipment and service providers

Fuel theft is believed to add up to 30% to energy opex in Africa. In the battle with the diesel mafia, how can RMS tip the conflict in favour of the tower owner? TowerXchange wanted to learn more about fuel theft, and learn more about how to configure and filter RMS data to meet the needs of different users. So we spoke to Telemisis, who have an installed base of tens of thousands of RMS systems from small deployments at fifty sites to many thousands. In Africa, Telemisis’ SitePro RMS systems have been deployed in Egypt, Tanzania, Kenya, Ghana and Nigeria.

Keywords: RMS, Fuel Security, Installation, O&M, Capex, Batteries, Site Level Profitability, DG Runtime, Site Visits, Skilled Workforces, KPIs, Job Ticketing, Opex Reduction, Infrastructure Sharing, Africa, Telemisis


On a single site the operator was paying for 12,000 litres of diesel per year that they were not actually using!

In Tanzania we had a site where the client was burning 1,000 litres of diesel per month in two deliveries of 500 litres… yet the tank capacity was only 430 litres! After we deployed our RMS the system didn’t need refuelling again all year, as the grid supply was reliable. So on a single site the operator was paying for 12,000 litres of diesel per year that they were not actually using! Multiply that kind of saving across many sites, and add in the savings from reduced truck rolls, and it pays for an RMS system in no time at all!

In another example, I remember one of our Caribbean customers had installed one of our main units into their gensets when they experienced the theft of one of their generators from a site. The system has GPS ring-fencing, so they dispatched someone to the site with local law enforcement, noticed on the way that the GPS said they’d just passed the generator, stopped, turned around and found the dumper truck the thieves had used to rip the generator off the site! Unfortunately theft of the actual generator itself is a common occurrence in Africa so GPS tracking provides the potential for the equipment to be tracked and recovered.

TowerXchange: Is watering down of diesel another common problem?

Chris Begent, Commercial Director, Telemisis:Yes, so fuel quality monitoring is also essential.

Water in the fuel is actually relatively easy to detect. On the other hand, kerosene or biodiesel contamination is extremely difficult to detect. If you put kerosene into a diesel generator, it will keep on running, but the generator will run until it destroys itself, so it can be extremely harmful. We have a solution for monitoring kerosene and unexpected hyrdocarbons contamination that costs a tenth of the price of the other solutions available on the market.

TowerXchange: How do you differentiate Telemisis from competitive RMS solutions?

Chris Begent, Commercial Director, Telemisis:Telemisis has a background in electricity monitoring, security and automation, using small format solid-state site equipment designed to work in harsh environmental conditions meaning that reliability and ease of deployment are designed in. Our rugged SiteNode telemetry device is capable of withstanding operating temperatures from -30oC to +80oC.

SitePro is designed to work in tough environments, often deployed in generator canopies where extreme temperature and humidity is experienced. Used by the world’s largest generator lease and rental company for over 6 years it has proven its ability to get the information from many thousands of sites to where it needs to be reliably. Our experience in power source management on cell sites, whether utilising green energy sources or maximising battery usage within operational limits before remotely starting the genset, means

that we can provide a solution for the most important aspect of cell sites; the power source. Because Telemisis SitePro is designed as a remote telemetry system from the ground up, it largely self-configures, which reduces the need for highly skilled technicians to deploy the system.

Site owners can install all elements of the system supplied by Telemisis, or it can be designed to work with equipment and sensors already on site.

Our system ranges from small format, solid-state devices deployable for machine monitoring and GPS tracking on generators or off grid solar-powered sites, to larger switch sites.

TowerXchange: How have your clients’ requirements changed and how has your solution evolved over the last ten years?

Chris Begent, Commercial Director, Telemisis:Our system has evolved in many ways over the past ten years from feedback from our customers’ requirements and to take advantage of new technologies as they become available. Some of our systems have been installed for many years, and over that time our clients’ requirements have evolved and their site monitoring solution from Telemisis has expanded to meet these needs. If you can address changes without sending people to the site, that fulfils one of the key aims of RMS; to reduce site visits. We don’t want to create site visit requirements for the telemetry, so remote upgrade and reprogramming is made possible though our secure interface.


most applicable route such as Ethernet, GPRS or SMS. Multiple back-up communications options are available to ensure the information gets back, particularly when there are problems on site that may affect the primary transmission path.

Integration with the NOC systems is often implemented by Telemisis at an SNMP level but higher levels of integration provided by SitePro provide valuable insight into site condition allowing proactive site visits or reduced site visits by diagnosing the faults remotely and responding accordingly. The more detailed information is useful particularly where customers want integration with back-office systems. This makes business intelligence more powerful through the integration of live, real-time data.

Our ability to buffer data in the event of a communication problem is critical to the integrity of the system but fallback transmission means the data is available to the engineers when it is most needed, when normal site communications are down.TowerXchange: Tell us where the Telemisis SitePro system fits within the systems and processes within the NOC.

Chris Begent, Commercial Director, Telemisis:It depends what systems the client already has and what information they want. Typically the NOC has basic alarms transmitted to it through BTS inputs which typically offer very little useful information on the site systems, or in some cases by SNMP which can generate a large amount of alarms which are too numerous to handle at the NOC.

pre-calibrated and fuel sensors are automatically calibrated as part of the startup procedure.Once we’ve established communications with the central server, the intelligence in that server enables a project manager in the NOC to rapidly apply the correct configuration. The system only presents options that are viable in terms of the equipment that is connected on site.So we only need a skilled technician at the NOC, who configures and commissions the site with the person on site processing through physical tests by walking in front of sensors, closing breakers etc.

TowerXchange: How do your sensor devices in the field communicate with the NOC?

Chris Begent, Commercial Director, Telemisis:The information collected on site is intelligently processed and transmitted to the NOC through the

We understand that once you’ve gone down a route partnering with a telemetry supplier in your network, it is expensive and difficult to change so to a certain extent you’re committed to that supplier. For this reason we think it’s critical that new hardware retains backwards compatibility so that expansion and upgrade is easy. Our SitePro system is backwards compatible to the equipment we installed in 2002-3.

TowerXchange: Tell us more about deployment of your systems, from self-configuration to communication with the NOC.

Chris Begent, Commercial Director, Telemisis:Our devices automatically configure themselves to connect to the server. For example the system recognises the SIM card and the settings it needs. Our temperature and humidity sensors are all


SiteNode

The SitePro system collects a lot more than alarms, by providing readings that enable the user to have valuable additional information enabling them to act more efficiently. SitePro passes the clear cut alerts that the NOC operators want to the NOC screens but makes the extended information available to the engineers or managers providing them with the information they need so that they have a good idea what to expect before they go onsite and can respond efficiently, maximizing productivity and site availability.

For example, an operator might see a generator alarm from a remote site two and a half hours drive away. From the NOC he can see that the charger alternator has failed. He can then dispatch a maintenance person equipped with a replacement charger alternator to replace then and there, rather than having to make a five hour round trip for diagnostics and another to perform the actual repair.

Our job doesn’t end with the installation of sensors; it’s critical to feed back management information into the decision making processes of site owners and operators to support their tendering.

TowerXchange: How do RMS support decision making processes?

Chris Begent, Commercial Director, Telemisis:We think it’s important that we provide genuine Remote Management not just Remote Monitoring. Our job doesn’t end with the installation of sensors; it’s critical to feed back management information

into the decision making processes of site owners and operators to support their tendering with provable information on service patterns, fuel use, and fuel theft.

Our information helps identify patterns in faults and equipment degradation, informing battery replacement decision-making processes by assessing battery performance over time against specifications laid out by the client.

We provide accurate data on fuel delivered and fuel burned, which is critical when re-tendering for fuel supply and delivery.

TowerXchange: Why is RMS so critical for towercos?

Chris Begent, Commercial Director, Telemisis:The intelligence from RMS enables towercos to optimise their site operations, which is critical for improving site level profitability. The visibility of site condition is of prime importance because if you don’t know what is happening on site you can’t respond, and failure to meet SLAs can be costly to towercos.

SitePro also provides remote control capabilities meaning that action can be taken either without sending an engineer or while the engineer is en-route. For instance you receive a generator “fail to start” alarm from site, meaning the site is running on the batteries and so time is ticking away towards a site outage. Remote control of the generator means that the engineer can take remote control of the generator and manually start the set and check its condition so keeping the site operational.

In the unlikely event of disputes, towerco’s can use SitePro to prove the achievement of SLAs.

Towercos also often install tracking devices on their fleet of vehicles. With SitePro this can be integrated within the same monitoring system, providing a more comprehensive enterprise solution. If fuel delivery vehicles are included on the system, the fuel supply chain information is condensed into a single point of interface.

TowerXchange: Tell us about the scale of human


“

“

Our job doesn’t end with the installation of sensors; it’s critical to feed back management information into the decision making processes of site owners and operators to support their tendering

outlay per site to acquire and install your systems?

Chris Begent, Commercial Director, Telemisis:That really is a “how long is a piece of string” question as so much depends on the client’s objectives, and that may differ from site to site.In general, you’re probably looking at an average capex of around £2-3,500, depending on which country you’re in. That’s the installed price including a reasonable base of sensors. Installation costs vary significantly and some countries you need to add £1,000 per site just for labour costs. So I’d estimate maybe £1,800 for the equipment in a well equipped system, plus £1,000 for installation since you don’t need technical guys on site.

TowerXchange: Please tell us an example of the Telemisis solution in action.

Chris Begent, Commercial Director, Telemisis:When Hurricane Dean struck Jamaica in 2007, the incident really illustrated the benefit of RMS. The network equipped with our telemetry was able to get up and running within 24 hours, while a competitor’s network took many days to get back into full operation. Telemisis monitored the shut down of grid power at the peak of the hurricane (so 240V weren’t running through the systems during extreme weather!), and the immediate start of generators afterwards. Vital information on site alarms allowed the prioritisation of visits to affected sites keeping active sites on air and enabling rapid repairs to be undertaken efficiently with best use of resource

supplemented by a unique user login that filters the information to just the information at the level of concentration that user needs to see. Auto reporting means that the users don’t need to login to the system for day to day information, it is in their inbox each day that they need it, for that region, for that person in the org-chart. Automation is important if you’re managing more than ten sites, and it’s critical if you’re managing thousands.For example, a towerco they may want to make some fuel data available to a subcontractor, so that data can be filtered by geography and by subcontractor, and only the information important to that subcontractor is shared. Similarly, towercos can allow network managers and operator tenants to login and examine certain data across multiple regions, but only seeing sites on which they are tenants.

The central monitoring team in the NOC can use their normal screens, other users can use our web-based interface, while the field engineers use integrated mobile apps for industrial tools and smartphones. The management team typically uses business intelligence tools fed with information from our system. We can provide trouble-ticketing and service management alerts, or our data can be fed into existing systems if preferred.Ours is a scalable system able to manage ten to twenty sites on a Telemisis hosted system, or up to tens of thousands of sites where operators typically host their own systems and often have data fed into their existing business intelligence systems.

TowerXchange: What is the estimated capital

intervention required to respond to remote monitoring alarms – at what point is the network too big for one person to manage alarms and manually integrate with job ticketing?

Chris Begent, Commercial Director, Telemisis:You need to set up a tree structure and group sites by area to keep supervision to perhaps a maximum of one hundred or so sites per region. It varies according to the requirements of the network concerned. Some operators might only be able to cope with ten or so sites, but automated processing and filtering of information is critical.

With Telemisis SitePro, automatic reporting is


User interface examples

How to structure a joint venture towercoOperational issues should be covered by the MLA, not the JVA

Vinson & Elkins have been advising on tower transactions for decades. Previously they represented American Tower, and more recently they represented Crown Castle during their push into Europe, when a flurry or potential tower transactions was triggered by MNOs’ need to raise capital for their 3G licenses. When the emerging market tower industry started to become active over the last decade, Vinson & Elkins drew on their relationship with Chuck Green from his time at Crown Castle, and some work they had done for Helios Investment Partners, becoming a natural choice to represent Helios Towers Africa in their pioneering transactions. Keen to become more active outside Europe, Africa and North America, Vinson & Elkins are sponsoring TowerXchange Meetups for the Americas and Asia.


TowerXchange: Structuring joint ventures is a complex process, but what are the unique complexities of tower JVs? Jeffrey Eldredge, Partner, Vinson & Elkins: The biggest concern is the tension between Mobile Network Operator’s (MNO) desire to maintain some form of control over what they view as critical assets to their business and operation, and the necessity to retain only a minority interest in the joint venture and make sure the towerco is independent from the MNO and can be marketed as such to potential co-locators.

There can be a tendency for the MNO’s operational control provisions to bleed into the Joint Venture Agreement (JVA), whereas I feel they belong in the Master Lease Agreement (MLA). We take the view that the MLA defines the commercial relationship between the mobile network operator and the towerco, so matters pertaining to the provision of tower space and rights belong in MLA not in the JVA. If you start putting contractual and operational issues into the JVA, those matters become known when other operators participate in the joint venture, and it can also lead to issues about who controls the business and who is responsible for commercial decisions, such as leasing and pricing. For the independent tower company business model to work effectively, it is key that the towerco retains control, not the anchor tenant MNOs, otherwise competitive MNOs may be disinclined to co-locate.

Jeffrey Eldredge, Partner, Vinson & Elkins

Read this article to learn:< How to balance MNO’s need for control with the need for towercos to be independent to maximise

co-location sales

< How to use the MLA to protect MNO’s operational needs, and use the JVA to protect MNO’s investment

< How to add a new party to a joint venture towerco: experiences in Tanzania

< How the management of competitively sensitive information is governed within a joint venture towerco

Keywords: How to Guide, Lawyers & Advisors, Deal Structure, Rental Rates, MLA, Anchor Tenant, Joint

Venture, Stakeholder Buy-In, Infrastructure Sharing, Africa, Tanzania, Helios Towers Africa, Vodacom,

Millicom, Tigo, Vinson & Elkins


If you allow operational matters to bleed into the JVA, you can muddle the business model, and it makes it tougher to sell the towerco as independent. TowerXchange: What’s in it for the seller to structure a joint venture in this manner? Jeffrey Eldredge, Partner, Vinson & Elkins: The legacy tower owners, or anchor tenants, can still secure certain rights that are superior to the rights of co-locators, but they need to relinquish control rights over the assets.

““

Structuring a joint venture towerco becomes more difficult as you bring additional operators into the joint venture, but that should not discourage MNOs from considering joint venture transaction structures when selling their towers

Given the rationale for MNOs to retain a stake and to participate in the growth and economic benefits of co-location on joint venture-owned towers, there are greater co-location opportunities if those towers are no longer seen as owned and controlled by the MNO. TowerXchange: Vinson & Elkins recently advised Helios Towers Africa on the creation of a joint venture towerco in Tanzania, bringing together assets previously acquired from Millicom-Tigo, together with additional assets acquired from Vodacom Tanzania. What insights can you share from structuring that joint venture?

Jeffrey Eldredge, Partner, Vinson & Elkins: Structuring a joint venture towerco becomes more difficult as you bring additional operators into the joint venture, but that should not discourage MNOs from considering joint venture transaction

structures when selling their towers. Again, the priority has to be to balance the control rights of the parties coming together in the joint venture. If you give one MNO control rights, how do you balance that as subsequent MNOs participate in the joint venture? The joint venture has to be run by the towerco, which in most cases means the towerco needs to retain at least 51% equity. So once again, the lesson learned is that if you agree on rights to do with the operation of towers, or even a limited right of veto, put it in MLA, don’t let it bleed into the governance of the joint venture company. The reality is that when you bring in new party, they have a different world view and different priorities. You can’t just impose an existing JVA on them, so there were inevitably some intensive

Helios Towers Africa acquired an estimated 1,149 towers from Vodacom Tanzania. The assets were rolled into the joint venture towerco Helios Towers Tanzania, in which Helios Towers Africa retained a controlling interest and 51% equity, with 24.5% equity each retained by Millicom-Tigo and Vodacom Tanzania.

A reminder of the details of the Helios Towers Africa deals with Millicom and Vodacom Tanzania


Helios Towers Africa acquired an estimated 729 towers from Millicom Tigo for a purchase price of US$60mn. The transaction was structured as a joint venture with Helios Towers Africa receiving 60% equity and Millicom 40% equity in the joint venture towerco, Helios Towers Tanzania.

2010: 2013:


three-way negotiations. TowerXchange: What were the main transferrable lessons learned from that three-way negotiation? Jeffrey Eldredge, Partner, Vinson & Elkins: The ease of completing joint venture tower transactions is largely defined by the extent to which you can keep the JVA and MLA separate. With the help of our towerco client, we were able to work each party’s unique needs into their MLA. Structuring a JVA is tough enough without a bunch of operational clauses clouding the picture!

My advice to MNOs considering participating in joint venture towercos is to work hard to figure out what you need and how to protect yourself in the MLA. The MLA is your hook into the towers, through which you protect your operational needs. In contrast, consider the joint venture as an investment vehicle, and concentrate on protecting your investment in the JVA. The MLA will be around for the full term of the leaseback, sometimes 20 years or more, while the joint venture company in many cases may substantially restructured during refinancing or during a strategic sale. So it doesn’t make sense to put operational clauses in the JVA when the MLA will likely outlast it. TowerXchange: How is the management of competitively sensitive information governed by the joint venture structure?

Jeffrey Eldredge, Partner, Vinson & Elkins: The most competitively sensitive information is the lease rate paid by each party. Under ordinary circumstances, you would share such fundamental revenue information with board members, which may include competitive MNOs. So if towercos are renegotiating a contract and lease rate with one MNO tenant, there may be provisions to exclude the board members from other MNOs. With many towercos securing build-to-suit

programmes, sensitive information around network coverage maps and rollout plans are similarly dealt with. TowerXchange: Finally, why should operators and towercos not be scared of structuring JVs? Jeffrey Eldredge, Partner, Vinson & Elkins: If MNOs are comfortable entering into MLAs concerning co-locating on independent towerco sites or bi-lateral swaps with other MNOs, then there’s no reason to be afraid of participating in a more expansive joint venture towerco. The economic benefits of selling towers are obvious – you take a non-core asset off your balance sheet and release cash and/or negotiate a good lease rate opex, and you remove the operational burden of owning and operating the passive network. If MNOs retain an interest by forming a joint venture, they can benefit from the enhanced value of the towers in the hands of someone who can benefit from the co-location opportunity. Forming a joint venture is a way of MNOs retaining an interest in the success of the towerco, which is in everybody’s interests. Forming a joint venture towerco is complicated, and it takes a lot of work, but if you work with people who know how do it, then win-win-win deals can be agreed. But I would urge MNO’s to let go of control of the joint venture itself, and to protect their operational interests in the MLA. Separate the JVA from the MLA, otherwise it gets messy

““Forming a joint venture towerco is complicated, and it takes a lot of work, but if you work with people who know how do it, then win-win-win deals can be agreed. But I would urge MNO’s to let go of control of the joint venture itself, and to protect their operational interests in the MLA. Separate the JVA from the MLA, otherwise it gets messy

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TowerXchange Asia Dossier 2014 · TowerXchange Asia Dossier 2014 Countries covered: Bangladesh,...

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