Tower Xchange Tower Xchange TowerXchange forecasts the growth of African towercos from 23k towers today to 54k by the end of 2014 ISSUE 5 | September 2013 | www.towerxchange.com Let’s meet up! Top 200 decision makers in African Towers converge at TowerXchange Meetup < Vodacom and Etisalat’s tower strategy < MTN’s tower strategy in Rwanda and Zambia < Tanzania case study with exclusive HTA interview < TowerCo of Madagascar, FTS and Eaton interviews The journal for the emerging market telecom tower industry
Transcript
Tower Xchange
Tower Xchange
TowerXchange forecasts the growth of African towercos from 23k towers today to 54k by the end of 2014
ISSUE 5 | September 2013 | www.towerxchange.com
Let’s meet up!Top 200 decision makers in African Towers converge at TowerXchange Meetup
< Vodacom and Etisalat’s tower strategy
< MTN’s tower strategy in Rwanda and Zambia
< Tanzania case study with exclusive HTA interview
< TowerCo of Madagascar, FTS and Eaton interviewsThe journal for the emerging market telecom tower industry
With special thanks to the TowerXchange “Inner Circle”About TowerXchange
TowerXchange is your independent community for operators, towercos, investors and suppliers interested in African towers. We’re a community of practitioners formed to promote and accelerate infrastructure sharing in Africa. TowerXchange don’t build, operate or invest in towers; we’re a neutral community host and commentator on African 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:
Chuck GreenCEOHelios Towers Africa
Michel FaivreDirecteur Programme Partaged’Infrastructure AMEAFrance Telecom-Orange
Fazal HussainCEOSWAP International
Nina TriantisManaging Director, GlobalHead of Telecoms & MediaStandard Bank
Jeffrey EldredgePartnerVinson & Elkins
Ayman Al AdlAssociate Director – TMTStandard Chartered Bank
Torsten EsbjørnRegional Director, AfricaRamboll
Gary StauntonCEOLikusasa Group
Alan HarperCEOEaton Towers
Riana DonaldsonManager: International NetworkOperations SupportVodacom
Laurentius HumanCEOInala
Andrew DoyleManaging DirectorTech & Comms PracticeMott MacDonald
Natasha GoodPartnerFreshfields
Ahjeeth JaiJaiConsultantInvestec
Rajat MalhotraCEO, Middle East & AfricaHayat Communications
David MeganckFounder & COOAcsys
Daniel LeeManaging DirectorIntrepid Advisory Partners
Adeel BajwaSenior GM of Legal Affairs andContractsWarid Telecom
Inder BajajCEOHelios Towers Nigeria
Chris Gabrielformer CEO, Zain AfricaSenior Adviser, Macquarie GroupChairman, Clean Power Systems
Areef KassamDirector of InfrastructureGSMA Mobile for Development
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.
5 Tower counts & transaction history8 The future of the African tower industry19 BMI: MTN’s tower strategy in Rwanda and Zambia24 Mott MacDonald Share Square: Senegal26 Cover story: Vodacom and Etisalat’s tower strategy87 TowerPower: profiles of Emerson Network Power, Ballard, UGE, Flexenclosure, Enatel and DAQS146 Who’s who in tower design, manufacture, installation and manages services151 Beyond passive infrastructure: data centres154 HS&S: cell site security and access control
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0
Updated independent tower counts and transaction history for AfricaEstimated number of towers owned or managed by towercos in AfricaSource: TowerXchange research, quarterly filings, site lists
2011 Millicom / Tigo Tanzania Helios 1,020 $80m for 60%** Joint venture
2011 MTN Uganda American 1,000 $89m for 51% Joint venture
2012 Orange Uganda Eaton 300 Unknown Sale and leaseback
2012
2013
Warid
Orange
Uganda
Cameroon & Cote d’Ivoire
Eaton
IHS Africa
400
2,000+
Unknown
Unknown
Sale and leaseback
Managed services
2012
2013
MTN
Orange/Telkom Kenya
Cameroon
Kenya
IHS Africa
Eaton
827
1,000+
$143m
Unknown
Sale and leaseback
Managed services
2012
2013
MTN
Vodacom
Cote d’Ivoire
Tanzania
IHS Africa
Helios
931
1,149
$141m
“$50-75m for 75.5%”
Sale and leaseback
Joint venture
*Cell C deal included 1,400 existing towers plus additional towers under construction**Millicom/Tigo’s stake in Helios Towers Tanzania reduced to 24.5% after Helios acquired towers from Vodacom Tanzania in 2013
Africa’s biggest infrastructure sharing transactions to date
Year Operator Country TowerCo Est. # of towers Publicly stated purchase price Deal structure
How TowerXchange tower counts are calculatedOur tower counts are typically obtained by simply asking the CEO of each towerco to confirm how many sites they own and manage and market in each country.
However, these counts should be considered our best estimate as it is impossible to guarantee each towerco has complied exactly with our request to include only active sites, not contracted further BTS sites, and complied with our request that sites that are only managed, not managed and marketing, be excluded from the count.
A note on power pass through contractsOne of the most common questions posed to TowerXchange is whether the cost of power is passed through to the tenant in Africa, a model which is prevalent in India.
In the absence of a power pass through, towercos are incentivised to invest to reduce energy opex. While we've received no formal confirmations, TowerXchange understands all the tower deals in Africa do NOT pass through power to the tenant, with the possible exception of American Tower's deals in Ghana and Uganda with MTN.
The future of the African tower industryTowerXchange forecasts that independent towercos will own or manage and market 30% of Africa’s towers by the end of 2014
As African telecom markets liberalise and mature, towers cease to be a source of competitive differentiation. There is a valuation incentive for operators first to market to sell their towers.
Towercos worldwide have been proved more efficient at managing towers than telecom operators. The capital markets recognise this, rewarding the split between passive infrastructure and the retail risk of customer-facing telecoms by increasing valuations of separated entities. So as the independent towerco business model becomes more proven in Africa, more towers come to market, more capital is raised by towercos, and the pace of transactions accelerates. We think the future of the African tower industry is all about the transfer of towers from operator-captive to independent towercos - it’s a question of when, not if, in the majority of African markets. So in this edition I thought I’d share a sneak preview of my opening address at the TowerXchange Meetup - our vision of the future of African towers. This analysis comes with the usual TowerXchange caveats - this forecast is our “best guess”. We’re qualitative not quantitative market researchers - we spend hours every day talking to key stakeholders in emerging market
towers, but we respect the confidentiality of tower transactions, so we can only forecast in which markets we think tower transactions may take place, we can’t tell you which operator’s towers will come to market.
The current state of the African tower industry - the “proof of concept” phase Regular TowerXchange readers will recognise this graphic on the next page from our last edition: this is our view of the current state of the African tower industry. See issue four of TowerXchange for our detailed commentary on the current state of the African tower industry. Updates since issue four:
< Announcement of a second transaction in Tanzania (Vodacom selling 1,149 towers to Helios Towers Africa)< A small deal potentially imminent in Burundi (see the FTS interview in this edition)< Hints at potential deals in the medium-term in Mauritius and Chad (see the news section) TowerXchange’s tower count (see page 5 of this edition) suggests there are currently 22-23,000 towers owned or managed and marketed by independent towercos in Africa. The total number of towers in Africa is tough to quantify, but for the purpose of this analysis we’ll use an estimate of 150,000, which would mean towercos own or manage and market approximately 15% of Africa’s towers.
How this map could look by the end of 2014 - the “acceleration” phase
TowerXchange forecasts ten further tower transactions (either full sale and leaseback or supped-up managed services deals with BTS programmes) in Africa before the end of 2014. In addition, we expect the maturation of Airtel’s formative Africa Towers strategy, bringing to market an estimated 18,000 towers across their 17 countries. I will present a detailed breakdown of this forecast at the TowerXchange Meetup, but it is summarised with our graphic on the next page showing of how we expect the TowerXchange tower transaction heat map to look by the end of 2014. TowerXchange expects the number of towers owned, or at least managed and marketed, by independent towercos to increase by more than 30,000 by the end of 2014. Such a volume of transactions which will test the capital raising and management resources of Africa’s ‘Big Four’ towercos to the limit. As a result, we expect at least one more international towerco to enter the African market during the coming year. Assuming the total number of towers in Africa increases to 175,000, towercos would own or manage and market over 30% of Africa’s towers by the end of 2014.
2015-16: the “scale and consolidation phase”
When will the African towercos run out of capital? Africa’s PE-backed towercos are going to need to substantially refinance if they are to have the digestive capacity to absorb all the towers coming to market, particularly if highly attractive, large portfolios in Nigeria become available. IHS announced their impressive raising of US$1bn of capital to date (see News), but a sizable transaction in Nigeria could cost that much alone, never mind the additional capex to upgrade structures and power solutions. American Tower are currently in a category of one with the strength of their balance sheet, and TowerXchange forecasts ATC will close several transactions in Africa in the next 18-24 months. But American Tower has appetite for only so much country risk, and Africa has to compete for ATC’s investments with opportunities in their domestic market as well as in the Americas and Europe. If African towercos scale to portfolios of 10,000+ towers, and if they continue to trade in line with their acquisition economics, then institutional investors and infrastructure funds may enter the market and we may see a phase of consolidation starting in 2015-16.
Trying to forecast how the heatmap might look two to three years from now would be a futile endeavor - there are too many variables. Consolidation among operators could change the landscape dramatically.
Towercos ability to raise the necessary capital is subject to the prevailing economic conditions. There seems to be a pool of investors who are comfortable investing in the American and European tower industry, and another pool comfortable investing in Africa, and relatively few investors at the intersection - as a community, we need to evangelise the African tower industry and attract more investors to the market. More expertise is needed - there are only so many “tower people” and only so many people with proven African telecoms management experience and again the intersection of the two groups is a shallow pool that needs to deepen if the acceleration in growth of the tower industry is to proceed along the lines we have forecast. When TowerXchange started our research 18 months ago, we spoke to a lot of senior decision makers at operators who were skeptical of the value proposition of selling their towers to independent towercos. But today every one of Africa’s tier one MNOs has structured deals with towercos or are seeking to do so. The African tower industry has reached “launch velocity” - it has an unstoppable momentum - and I hope you’ve enjoyed reading our view of how far the African tower industry can progress in the coming years.
Kieron Osmotherly will present TowerXchange’s detailed forecast for the next 2-3 years of the African tower industry at the TowerXchange Meetup on October 1 and 2. For details, visit www.towerxcahnge.com/meetups/africa
How TowerXchange forecasts the tower transaction heatmap to look by the end of 2014
123456
No tower transaction completed or rumoured
Either rumours of a tower transaction
(unconfirmed), or the country is known to be
on at least one towerco’s hit list, or there is a
registered Africa Towers subsidiary in the country
Rumours of a potential tower transaction have
been confirmed by TowerXchange
Tower transaction believed to be imminent
One or more tower transactions have taken place,
no more transactions expected imminently
One or more tower transactions have taken place,
more transactions are expected imminently
Number of tower deals in this market if more
than one
Source: TowerXchange
Legend
Index of countries
Malawi
Mali
Mauritania
Mauritius
Mayotte
Morocco
Mozambique
Namibia
Niger
Nigeria 3
Rwanda 2
Réunion
Senegal
Seychelles
Sierra Leone
Somalia
South Africa 2
South Sudan
Sudan
Swaziland
São Tomé and Prí ncipe
Tanzania 3
Togo
Tunisia
Uganda 3
Western Sahara
Zambia
Zimbabwe
Algeria
Angola
Benin
Botswana
Burkina Faso
Burundi
Cameroon 2
Cape Verde
Central African Republic
Chad
Comoros
Congo Brazzaville
Cote d’Ivoire 2
Democratic Republic of the Congo 2
Djibouti
Egypt
Equatorial Guinea
Eritrea
Ethiopia
Gabon
Gambia
Ghana 3
Guinea
Guinea-Bissau
Kenya 2
Lesotho
Liberia
Libya
Madagascar
IHS surpasses US$1 billion capital raised in the past 12 months
Transaction details:
IHS Towers, Africa’s largest independent mobile infrastructure company, has secured US$522 million of debt and equity, led by new and existing lenders and shareholders. The combined transaction, which represents one of the largest capital expansion initiatives in Africa during the last 12 months, brings the total financing raised by IHS Towers to over US$1 billion.
The transaction also marks another significant milestone with the addition of one of Asia’s premier
sovereign wealth funds to IHS’ already strong shareholder base. The capital raise marks the second time this year that an international fund has made its first investment into Africa through IHS and highlights the strength of IHS’ platform and the global attractiveness of market leaders in Africa. The other first-time African investor, Wendel, one of Europe’s leading investors, completed an investment into the company earlier in the year and participated in the round. IHS will draw significant benefits from its newest shareholder by having direct access to additional financial and intellectual resources. The partnership will further support IHS’ success in Africa while continuing to provide a strong investment platform for new and existing investors, that also reconfirmed their support in IHS by participating in the round. IHS will utilise the proceeds to finance the construction of more than 1,000 build-to-suit (BTS) towers in Nigeria, Cóte d’Ivoire and Cameroon, to invest in solar and energy efficiency solutions, and to fund further expansion into new markets. Issam Darwish, Vice Chairman and Chief Executive Officer, IHS Towers, said “We welcome our newest shareholder and we are proud to have their vote of
confidence in the IHS vision and management. We are also very excited that our existing shareholders have further increased their investments in the company. IHS has established itself as Africa’s leader in the mobile tower sector. Raising over US$1 billion in 12 months is a clear sign of a strong business model and a vote of confidence from new and existing shareholders in the future growth of mobile telecoms in Africa. We are now uniquely positioned to expand into new markets whilst supporting our current operations in Nigeria, Cameroon and Cóte d’Ivoire. Over the last two years we have tripled our towers under management across Africa to 8,500. This new financing round is critical to our aim to increase the portfolio to 20,000 towers under management, and will underpin our value creation strategy in the years to come”
Issam Darwish, CEO, IHS Africa
New debt: US$280 million new debt finance led by the World Bank’s International Finance Corporation (IFC)New equity: US$100 million from new investors and US$142 million from existing investors IHS Towers currently has 8,500 towers in its tower portfolio and has built over 3,000 for its clients, making it Africa’s largest independent mobile infrastructure provider. In Q1 2013, IHS signed an agreement with Orange in Cameroon and Cóte d’Ivoire to manage over 2,000 sites for a term of 15 years. This adds to the 1,758 towers that IHS bought from MTN Group in October 2012
American Tower acquires 5,400 towers in US plus 500 in Costa Rica from GTP for US$4.8bnAmerican Tower has acquired the majority of assets from the largest privately owned tower operator in the US, GTP. American Tower’s latest acquisition has secured high quality assets with strong existing cash flows and significant opportunity for future growth. The tenancy ratio on GTP’s domestic portfolio is believed to be around 2, while American Tower’s is 2.6, with the difference attributable to the younger age of GTP’s assets. GTP’s towers typically have capacity for four tenants without the need for upgrade investment. This acquisition extends American Tower’s runway for growth in their domestic market. With an acquisition of 5,400 towers, many in top metropolitan markets, plus 9,000 domestic managed sites (primarily rooftops), and with 70% of GTP’s revenue coming from the ‘Big Four’ carriers, American Tower has strengthened their hand to secure business as 4G deployment shifts into a higher gear. 4G growthAmerican Tower Chairman, President and CEO Jim Tailcet characterises 4G deployment as an 8-10 year process in which various carriers are between years 1 and 3. Phase one, according to Taiclet, is characterised by substantial amendment revenue as carriers add additional equipment to existing sites. Phase two, which some US carriers are entering, tends to require
new macro sites and thus drives co-location revenues.Applications for tenancies on American Tower’s own sites have been at record levels in 2013. Implications for emerging market towersWhile benchmarks are not readily transferrable from the domestic US market to less mature and more operationally complex emerging markets, this deal illustrates what emerging market tower portfolios have to compete with to attract investment from international towercos. While this transaction temporarily brings American Tower’s leverage up to 5.8, above their target range of 3-5%, they have expressed intent to bring that back down to within the target range in the short term, and the company expressed an appetite to continue to seek acquisition opportunities. American Tower has been linked with opportunities to acquire towers from MTN in South Africa, Rwanda and Zambia in recent months. The GTP deal illustrates the strength of American Tower’s balance sheet and access to capital markets, with the US$4.8bn purchase price (subject to some post closing adjustments, and inclusive of the assumption of about US$1.5bn of existing GTP debt) funded largely through the company’s current liquidity of over $3.2bn and their existing capacity under their revolvers. The deal is expected to close in Q4 2013
TMT Finance broke a story that Etisalat had hired Deutsche Bank to lead the sale and outsourcing of Tanzanian subsidiary Zantel’s tower portfolio, which comprises 711 towers located primarily in Zanzibar. Multiple sources in Tanzania suggest Zantel’s towers are on the market, and the regional nature of the Tanzanian tower network suggests there may still be a healthy market for Zantel’s sites, despite previous transactions in the country, Helios having acquired over 2,400 towers from Millicom-Tigo and Vodacom. TowerXchange spoke to executives at Deutsche Bank and Etisalat who neither confirmed nor denied the report. Etisalat are known to favour the appointment of third party advisors to advise on the sale towers, and they have worked with Deutsche Bank previously to advise on a strategic review of its African Atlantique portfolio. Etisalat are coming to the African tower market late after an abortive attempt to structure a pan-African deal last year. Etisalat now prefers a country by country approach, empowering local their local opcos to lead the process
Etisalat hires Deutsche Bank to sell subsidiary Zantel’s towers in Tanzania - Reports
Earlier this Summer, American Tower announced that it had reached an agreement with NII Holdings, Inc. to acquire up to 2,790 towers in Brazil and 1,666 towers in Mexico in two separate transactions, for approximately $413 million and $398 million, respectively, based on current foreign currency exchange rates. American Tower expects to use cash on hand and borrowings under its existing revolving credit facilities to fund the acquisition. The majority of the portfolio consists of towers located in and around major population areas and along major highways. On average, the towers have a tenancy ratio of just over one tenant per tower, providing significant opportunities for future site leasing growth. Nextel Brazil and Nextel Mexico have agreed to leaseback the towers from American Tower for a minimum 12-year initial lease term with additional renewal options thereafter. Jim Taiclet, Chairman, President and Chief Executive
Officer of American Tower, said: “Through this acquisition, American Tower will gain significant incremental scale in our Mexican and Brazilian operations, and we anticipate leveraging the strong demand backdrop in both markets to drive meaningful revenue and cash flow growth for many years to come.” “We are excited to reach agreement with American Tower and achieve our goal of unlocking the value of a significant portion of our tower assets while raising additional liquidity,” said Steve Shindler, chief executive officer of NII Holdings. The transactions are subject to regulatory approvals and the initial closing under each transaction is expected to be completed in the fourth quarter of 2013. These initial closings are expected to be followed by subsequent closings of additional tranches of towers as certain closing requirements relating to the remaining tranches are satisfied
American Tower acquires 2,790 towers in Brazil and 1,666 towers in Mexico
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Millicom and Orange re-engaging in African tower deals?
TMT Finance also quote anonymous sources suggested Millicom is considering spinning off towers in Senegal, Rwanda, Mauritius and Chad. The source suggested Helios Towers Africa have an exclusivity agreement in place with Millicom which would put them in pole position to acquire the towers. TMT Finance quote anonymous sources suggesting Millicom is considering spinning off towers in Egypt as well as in several West African countries
Tower People
Christian de Faria will replace Manoj Kohli as CEO of Bharti Airtel’s African operation, effective from January 1, 2014. De Faria was formerly Group Chief Commercial Officer at MTN. The well travelled new CEO has over 30 years experience in leadership roles at telcos worldwide. Kohli returns to India to head up International operations and advise on M&A and tower
strategy. The moves come at an interesting time as Airtel’s Africa Towers starts the separation of the infrastructure part of the Group’s African footprint
Chief Strategy Officer Robert Pasley will now be even more involved in tower strategy as he has also assumed the role of CFO for the fast-growing South African operator
Rare opportunity for an experienced procurement professional to join a fast-growing, successful tower company.
Salary to £110k + excellent benefits packageCentral London
Our client is a rapidly expanding Towers Company with more than 1,500 sites across the African subcontinent. The position is for a Group Director of Procurement with responsibility for a current annual spend of £70-£80 million. We’re looking for someone with a background in improving profitability and lowering purchase costs through strategic procurement solutions and contract negotiation. You should have first-rate procurement experience within the African Towers market.
As TowerXchange extends our footprint beyond Africa and into South and Central America, Arianna Neri joins TowerXchange on October 1 as our new Head of Americas. Arianna will be building relationships with key tower industry stakeholders in the Americas, preparing the programme for our TowerXchange Meetup Americas 2014, and commencing coverage of the region in future editions of the TowerXchange Journal. Arianna is crossing over to telecoms from previous roles hosting communities and events for oil and gas infrastructure, where she has spent over four years working for Clarion Events and Jacob Fleming. Arianna has a degree in law from Universitá di Bologna, and she speaks Italian, English and Spanish
TowerXchange appoints Arianna Neri as Head of Americas
Are you looking for a new member of staff with relevant experience in the emerging market telecom tower industry?
Get your job noticed by the best potential candidates by advertising in TowerXchange journal and on our website and reach out to over 2,700 of the most skilled individuals in the tower industry - TowerXchange is read by CEOs, CTOs, CFOs, commercial, engineering, operations and investment experts.
To see your advert here, contact Annabelle Mayhew on +44 (0)7423 512588 or email [email protected]
MTN’s tower strategy could open up Rwanda and ZambiaGuest columnist Kenechi Okeleke of BMI shares his view of potential MTN tower transactions
Kenechi Okeleke, Senior Analyst, BMI
BMI viewSouth Africa and Nigeria are MTN’s biggest markets by a wide margin, in terms of both revenue and subscriptions. For the six months ended June 2013, the countries accounted for 65% of MTN’s consolidated revenue and 40% of its total subscriber base. These factors, along with other market dynamics, including the presence of multiple international players and the volume of economic activity, make MTN’s tower assets in South Africa and Nigeria the most attractive for investors. However, it appears the operator is biding its time in making a move to outsource its tower infrastructure in both markets. This shifts attention to MTN’s remaining ten markets in Africa. Of these markets, BMI believes Rwanda and Zambia will appeal most to investors. MTN’s tower deals in Cameroon and Cóte d’Ivoire underscore the company’s inclination towards tower outsourcing, where possible, across its African subsidiaries. Prior to the deal with IHS Towers in October 2012, MTN had executed tower sale and leaseback deals with American Tower Corp. (ATC) in Ghana in December 2010 and in Uganda a year later. MTN has expressed satisfaction with the positive effect of its tower deals on the bottom line performance of its units in the four countries. This will encourage the operator to implement a similar strategy in the other countries it is present in the region, creating significant growth opportunities for tower investors in those markets.
Read this article to learn:< Reviewing MTN’s tower strategy in South Africa, Nigeria, Cameroon, Cote d’Ivoire, Ghana
and Uganda
< Macroeconomic indicators and telecom market dynamics that suggest Rwanda and Zambia
would be strong growth markets for towercos
< Pros and cons in Rwanda: price competition and low ARPUs, slow subscriber penetration growth,
mandated rural network extensions and a nationwide LTE network announced
< Zambian initiatives to encourage network infrastructure development in underserved areas,
Rwanda And Zambia are good betsAs investors wait for MTN’s move in its prime markets, there are considerable opportunities in some of the operator’s smaller markets. Two countries that stand out in the small operations cluster, as classified by MTN, are Rwanda and Zambia. There have been media reports of MTN’s intention to jointly sell around 1,500 towers in both markets. Although these reports were yet to be confirmed at the time of writing, BMI’s assessment of the countries’ macroeconomic indicators and telecoms market dynamics points to strong growth potential for tower outsourcing. We believe MTN’s tower outsourcing strategy could soon open both markets to investment by independent tower firms
and other stakeholders in the entire tower value chain. Rwanda and Zambia share some macroeconomic and industry-specific characteristics, which partly explain the rationale for MTN to join its assets in both countries in a single deal, akin to the MTN-IHS deal involving 1,758 towers in Cameroon and Cóte d’Ivoire. On the positive side, both countries have relatively stable political environments and are forecast to see strong economic and private consumption growth over the next few years, albeit from low bases. Annual economic growth in Rwanda averaged
8.2% between 2000 and 2012 and poverty has been significantly reduced. In Zambia, growth is driven by rising exports and diversification of the economic base. BMI is forecasting economic growth of 7.4% in 2013, a slight improvement on the already impressive real GDP expansion of 7.3% in 2012. On the downside, the two countries are landlocked and predominantly rural, with 77% of Rwanda’s population and 63% of Zambia’s population living in rural areas. With respect to the telecoms sector, Rwanda and Zambia boast the presence of multiple international operators, including Airtel which competes with MTN in both markets. The main risk associated with the two countries is the high cost of infrastructure rollout and maintenance owing to their geographical locations and poor social infrastructure in rural areas. Meanwhile, recent developments in Rwanda and Zambia suggest that both markets are ready for third-party tower-sharing services. Some of these are highlighted in the overviews of the market dynamics in both countries below. Rwanda: price competition and coverage targets call for tower sharingRwanda’s mobile market hosts three international operators - MTN, Tigo and Airtel. MTN is the dominant player with a market share of 56.1% at the end of Q213, although this has been trending downwards since mid-2012 owing to increased competition. Airtel’s arrival fuelled further price competition in the market, but did not significantly
In positive territory - real private consumption growth (%)
improve subscriptions growth as the market recorded double-digit growth in just one of the five quarters between April 2012 and June 2013. As a result, the government’s target of a 60% penetration rate by the end of 2012 was missed by a wide margin. BMI calculates that the country had a penetration rate of 50.5% at the end of 2012. Rwanda mobile operators by market share (%), June 2012
Growing competitionThe slow subscriptions growth is attributable to poor network coverage in rural areas where more than two- thirds of the population live. Rwanda’s mobile subscriber base and penetration rate reached 6.415mn and 55.3% at the end of June 2013. While BMI forecasts the penetration rate to rise to 61.3% by the end of 2013 and 80% in 2017, we note that weak rural coverage is a significant risk to the downside for our outlook. Extending network coverage to rural areas in Rwanda is an expensive venture, given the poor social infrastructure outside the cities and major towns. Meanwhile, intense price competition in the market has ramped up the downward pressure on operators’ revenues and, consequently, profit margins. MTN’s Rwanda unit has the second lowest ARPU across its entire footprint at US$2.8 in Q213. The requirement to meet strict network rollout targets in underserved areas and the prospect of lower ARPUs considering the low income levels in those areas creates the need for better cost management in network deployment and maintenance. We believe one of the strategies operators will be considering to achieve this is tower outsourcing. In addition to cost pressures for operators, BMI believes the government’s ambitious LTE rollout plan also creates significant opportunities for the tower market. In June 2013, Rwanda’s Ministry of Youth and ICT and Korean telecoms operator KT Corporation (KTC) announced a partnership to build a nation-wide LTE network in Rwanda.
KTC plans to invest US$140mn in the project and Rwanda’s government says it will contribute its 3,000km fibre-optic network assets, spectrum and a wholesale licence. The government has invited mobile operators to invest in the project, too, as it begins raising more capital for the network deployment. Rwanda plans to cover 95% of the population by 2016. We believe this can best be achieved by means of significant investment in tower deployments across the country. Zambia: already into tower sharing but independent players need to drive growthMTN competes with Airtel and Zamtel in Zambia. There is strong competition in the market, with the largest operator, Airtel, having a market share of less than 50%. Although the market was spared the brutal price competition that spread across the region for most of 2011 and 2012, ARPUs are relatively low, hovering around the US$5 mark, while high operating expenses add to the downward pressure on profit margins. Meanwhile, subscriptions growth is fairly muted considering that mobile penetration is well below 100%. According to BMI data, the country’s mobile penetration was 71.1% at the end of 2012 and is forecast to reach 91.2% by 2017. The government of Zambia has implemented a number of policies to encourage network infrastructure development in underserved areas, including a tax waiver on communication equipment issued in March 2011 and the launch of a universal access project (UAP) in November. The UAP is a joint effort by the Zambia Information Source: BMI, RURA, Operators
and Communication Technology Authority (ZICTA) and Airtel to construct and manage more than 350 shareable towers across the country. The country’s three mobile network operators as well as TV and radio stations can use the towers for a fee set by Airtel and ZICTA. The UAP is the first major step towards towersharing in Zambia. While the move has the potential to boost network rollout to rural areas and generate cost benefits to operators, the argument against Airtel’s direct participation in the project and the possibility of it gaining undue advantage over its rivals could undermine the benefits of the project. Despite the best intentions of the promoters
of the UAP, we do not rule out the likelihood of MTN and Zamtel getting uncomfortable with certain aspects of the project, including deployment strategies, service delivery and cost, in the future. In view of the potential pitfalls in the UAP project, BMI believes that ZICTA’s tower-sharing initiative and coverage targets would be better served by the participation of independent tower firms. MTN is the most likely of the three operators to initiate tower outsourcing in Zambia, especially if recent media reports are true. We also believe Airtel and Zamtel will be open to renting capacity on third party-managed towers in order to improve their services and trim costs.
Who will be interested?We expect the leading independent tower firms in Africa to find the prospect of expanding into Rwanda and Zambia attractive given their relatively stable political environments, positive economic outlooks and telecoms market growth potential. MTN has so far worked with ATC and IHS, two of the big four tower firms. This supports the argument that both firms will be in pole position to clinch the operator’s next tower outsourcing deal. However, Helios Towers has already acquired towers from Tigo in Tanzania and the DRC and is likely to set its sights on the operator’s Rwanda unit. This could make it push for a deal with MTN in Rwanda in order to scale up its assets in the country. Meanwhile, India’s Bharti Airtel is believed to be keen on hiving off its tower assets to Bharti Infratel, its subsidiary that owns around 34,000 towers in India. Bharti Airtel has an 80% stake in Infratel and also a 42% stake in Indian-based tower joint venture Indus Towers, which owns almost 112,000 towers across 15 circles in India. Another option could be to create a new subsidiary to manage its 18,000-strong tower portfolio in Africa. Either way, it is increasingly likely that the operator will play a more active role in the tower market, possibly before the end of 2013. This could significantly change the landscape and dynamics of the region’s tower market
www.businessmonitor.com/bmo
Under pressure: MTN Zambia ARPU (US$)
F = BMI forecast. Source: BMI
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Series 1
Share Square: SenegalMott MacDonald analyse the prospects for a tower deal in Senegal
Senegal Mobile Operators – Market ShareWhile Senegal is similar to Mali in terms of population and age profile of the population, the country has a GDP per capita (in PPP terms) twice that of its neighbour at $2,2006. ARPUs are low – Orange reports ARPU of €6 for 2012, down by 8.4% due to strong price competition from unlimited plans and an increase in lower usage customers7. Subscriber acquisition in 2012 shows that Expresso, as the new entrant, competed strongly for customers, growing from 864,000 to 1.7M, nearly doubling in size. Orange was able to grow by its customer base by 17% while Tigo grew by 11%.
There is no indication of tower sharing to date in the country. However, given that Orange has a strong relationship with Eaton Towers and Tigo (Millcom) with Helios, it would not be surprising to see a towerco considering entry into this market. The situation is made more interesting by recent reports that Sudatel, who owns Expresso, is looking to sell its stake in its African operations8. This might provide an opportunity for a recently established towerco to provide sites for expansion plans of the new owners of Expresso.
The operators will continue to focus on 3G deployment: with land line penetration at 282,000 lines and Internet lines estimated at less than 96,000, mobile offers the only real viable Internet access option
1 CIA World Factbook – data is estimate for July 2013 2 Orange owns 42.3%, Tigo is 100% owned by Millicom, and Expresso is 75% owned by Sudatel. 3 ARTP (Regulator) 4 GSMA 5 CIA World Factbook 6 ibid 7 Orange web site. 8 Reported in TeleGeography on 22nd March – Sudatel plots mass exodus; African subsidiaries up for grabs.
Senegal has a population of 13.51 million and is served by 3 mobile network operators: Orange Senegal (62% market share)2, Tigo (Millicom – 23% market share) and Expresso Sengal (Sudatel – 15% market share). With 11.5 million subscribers, penetration is estimated at 86.5%, and grew at 23% in 20123. 99% of subscribers use pre-paid SIMs and 3G penetration is estimated at 4%4. As with many African countries the population is young: it is estimated that over 63% are 24 or younger5.
Opportunity for TowerCo entry with focus on high Lease Up Rate (LUR)
Opportunity for Outsourcing by MNO to TowerCo
Limited opportunity for new entrant TowerCo
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Orange
Tigo
Expresso Sudatel
Senegal Mobile Operators
3 MNOs: Orange Senegal, Tigo (Millicom), Expresso (owned by Sudatel)
Subscriber penetration at ~86.5% with 99% of all subscribers using pre-paid SIMs. Strong subscriber growth in 2012 of 23%. 3G penetration at 4%.
No tower sharing to date – but Orange’s relationship with Eaton and Tigo’s (Millicom) relationship with Helios would suggest strong potential for a deal
Market opportunity dictated by continued deployment of 3G, however strong competition between operators may limit opportunity for high lease up rate – at least initially ... however...
Sudatel (Expresso) is reported to be considering selling its African assets. Change of controlmay provide a TowerCo with opportunity to support Expresso’s new owner’s continued rollout
Senegal
62%23%
15%
Accelerate your sales cycle and close your next major deal in AfricaAdvertise in the TowerXchange Journal, circulated to a highly targeted community of the 3,052 most influential tower decision makers
To book your advertisement, contact: Annabelle Mayhew | [email protected] | M. +44 (0) 7423 512588
TowerXchange: Please you to introduce yourself and your role in tower strategy. Douglas Lubbe, Group Executive: International Business Development, Vodacom Group: I’m part of the International business team, involved in tower strategy across Vodacom’s non-South African businesses: DRC, Lesotho, Mozambique and Tanzania, where we recently closed a tower transaction. My role includes central strategy and operational responsibilities. Tim Knowles, Head of M&A, Etisalat: I run the M&A team at Etisalat. My team also supports our OpCos on any tower transactions. Within Etisalat, tower transactions tend to be led at an OpCo level, although I have some dedicated members of my team to support transactions. TowerXchange: How would you summarise Vodacom and Etisalat’s current tower strategy in Africa? Douglas Lubbe, Group Executive: International Business Development, Vodacom Group: We evaluate each market on its own merits, considering the local market dynamics. We have no rigid tower strategy applied across the organisation. If we arrive at a view that a tower transaction makes sense in a certain country and it helps us achieve our organisational goals, then we’ll pursue it.
Tim Knowles, Head of M&A, Etisalat: Etisalat tried to do pan-African tower deal, but it didn’t work out, and it made us late to market. Now we take a
One of the highlights of the TowerXchange Meetup on October 1 and 2 in Johannesburg will be the operator keynote panel session, seeking insights into the experiences and strategies of the top tower decision makers at some of Africa’s leading operators. TowerXchange shares a sneak preview of that panel in conversation with Vodacom’s Douglas Lubbe and Tim Knowles of Etisalat.
Michel Faivre of Orange will also be part of the panel - you can read an interview with Michel in issue 3 of TowerXchange.
Read this article to learn:< The merits of pan-African tower deals versus evaluating each market individually
< How tower auctions work
< The challenge of assembling comprehensive data for due diligence
< The implications of tower transactions for supply chain partners
< How a large transaction in Nigeria could impact the African tower market
Keywords: TowerXchange Meetup Preview, MNOs, Deal Structure, Valuation, Due Diligence, Opex Reduction, Co-locations, Data Room, First Mover Advantage, New Market Entrants, Leasing & Permitting, Sale & Leaseback, Stakeholder Buy-in, Infrastructure Sharing, Africa, Tanzania, Nigeria, Vodacom, Etisalat
more opportunistic, country by country approach, considering tower transactions if it makes sense for the local OpCo. But we don’t view towers as a core asset.
TowerXchange: What criteria inform the structure of a tower transaction - for example a full sale and leaseback versus a long-term managed service deal versus structuring a joint venture where you retain equity in the towerco?
Tim Knowles, Head of M&A, Etisalat: In some markets Etisalat might need to retain a stake because of the credit worthiness of the country and the financial strength of the assets, while in others we would be happy to fully exit - whatever maximises the attractiveness of the portfolio to the towercos, while meeting our needs.
Douglas Lubbe, Group Executive: International Business Development, Vodacom Group: We consider the requirements of each market individually and would structure a transaction according to the needs of that market.
TowerXchange: Can you talk about the role of the Group HQ-level strategists in tower strategy and the role of the local OpCo stakeholders.
Tim Knowles, Head of M&A, Etisalat: In general we favour outsourcing technology or towers - there’s a push toward outsourcing across the whole portfolio.
As I mentioned, tower strategy is driven locally by OpCos, but our Group team will help to diagnose the
needs of that OpCo, for example supporting them in fulfilling coverage obligations, or if they are later to market, accelerating rollouts. If there is limited capex available, we’ll advise what financial structures and transactions they should look at, we’ll recommended advisers, and use our Group leverage over towercos as relationships can be extended from one market to the next.
Usually there is no problem getting the local management teams engaged with a potential tower transaction. If the OpCo needs several millions of dollars in extra capex and we don’t have it for them, yet they have to compete with other operators on coverage, then it is easy to bring up the possibility of a tower deal. If the towercos are already active
in that market, and if we can still secure first mover advantage, then we have no problem getting the local management team and stakeholders engaged.
Whether there’s the possibility of a tower transaction or not, we encourage our OpCos to spend less on new builds and to use co-locations where they can.
Douglas Lubbe, Group Executive: International Business Development, Vodacom Group: The group role is to support the OpCo in achieving the desired operational results. When we look at potential tower strategies at a group level, we come up with the best scenarios available for each market, and that could include tower transactions. Negotiating a tower deal takes a lot of management time, so we tend to manage it centrally to free OpCo management to focus on day-to-day issues.
TowerXchange: I appreciate you can’t talk about any active tower auctions that may be in the market, but if you were going to solicit interested parties to bid for a portfolio of towers, how would you do it?
Tim Knowles, Head of M&A, Etisalat: As a whole we tend to use advisers, again to protect management bandwidth. There are three or four banks with some depth of experience of transactions of this nature, a couple of which know Etisalat particularly well.
Once there’s board-level approval for a deal, there is a lot to sort out internally - having all the
“ “
If the OpCo needs several millions of dollars in extra capex and we don’t have it for them, yet they have to compete with other operators on coverage, then it is easy to bring up the possibility of a tower deal
documentation and permits is not a foregone conclusion in Africa. It can be surprisingly difficult to work out the real opex costs at each site.
Once we get all that information together, we have to define our organisational priorities, for example whether we’re going to sell and leaseback our towers to maximise the cash released, or whether we are going to prioritise stabilising and reducing opex. Then we go to market with a teaser to solicit indicative bids. We evaluate the offers, choose the most valid bid, and bring that back to our clearance team, who negotiate to maximise the price.
That’s how we’ve typically run the process. In one previous instance we were trying to maximise the proceeds, in other instances our priorities were more focused on outsourcing and reducing the amount of management time concentrated on towers.
Douglas Lubbe, Group Executive: International Business Development, Vodacom Group: Our recent transaction was not an auction however this does not rule out the possibility that this type of approach could be followed in other markets. Of critical importance is understanding the capabilities and abilities of the tower operators in our markets and what they bring to the table. We also use advisers, and a similar process to the one Tim described.
Because of the long duration of a towerco relationship, you have to evaluate all the commercial offers, and evaluate the towerco’s
strategy, management team and investor goals and then see how these fit with your long-term organisational goals. Partnering with a towerco is like a marriage, and a quick separation is not possible, so it’s important to choose the right partner on what is important for the business.
TowerXchange: Can you give us a bit more colour on the preparation of information about a tower portfolio - what kind of information is required for due diligence, and how do you gather that information?
Douglas Lubbe, Group Executive: International Business Development, Vodacom Group: The data sets are pretty standard for a tower transaction - towercos are clear on the information that they need to run their models. You have to rely on your
local team to assemble the documentation - sending a secondary team to support information gathering is not really an option for us as it would not add any value to that process.
If you decide you want to embark on a tower transaction, you’ve got to ensure all your ground leases and approvals are up to date. Simple things like the ability to cede a lease can often frustrate a transaction. Most big operators have been running for ten or more years, so it can be a real challenge to get the required documents in place. You also need to understand what information the towerco is looking for, as their metrics are different from yours - try to get a handle on those data sets prior to the negotiation; understand their requirements to future proof yourself!
Tim Knowles, Head of M&A, Etisalat: From my experience this is the biggest headache! Some of our OpCos are old, and the documentation may not always be complete. At times in Africa there has been a culture of not always getting all the permits you need - only when selling assets do you need to chase paper and ensure everything is stamped and done properly. Sometimes we’ll send a couple of people from Group to be on the ground and support this process.
At some of our newer companies, such as Afghanistan, all the information is in place. But in
“ “Partnering with a towerco is like a marriage, and a quick separation is not possible, so it’s important to choose the right partner on what is important for the business
Etisalat’s older markets gathering information for due diligence can take many months. Calculating the opex can take a surprising amount of time, we’ve found that OpCos don’t always have true grasp of costs on a per site basis.
Tower deals are time consuming and complex, and can take many months!
TowerXchange: Please talk to us about the implications of tower transactions for your existing supply chain partners. For example, when do your suppliers find out about a deal?
Douglas Lubbe, Group Executive: International Business Development, Vodacom Group: In our case we already had a managed services contract, and we felt we could engage with certain external parties without jeopardising the deal.
Tim Knowles, Head of M&A, Etisalat: Etisalat have not closed any tower transactions in Africa yet, although we have a number of transactions in progress. Many of our outsourcing contracts are structured to allow review if towercos were to take over. Unfortunately suppliers further down the food chain often have to be the last to find out. We try to make sure existing suppliers are taken over by towercos - if we’re joining forces with a towerco that has already been formed, it’s a different situation compared to when we’re first movers.
TowerXchange: What happens after a portfolio of towers has been transferred to a towerco - what is the role of the operator, for example in equipment and service partner selection?
Douglas Lubbe, Group Executive: International Business Development, Vodacom Group: After a tower deal, passive equipment is no longer our concern. We hold the towerco to SLAs and how they achieve those SLAs is their business.
Tim Knowles, Head of M&A, Etisalat: Again, we haven’t closed any deals yet, but I’d imagine the role of the operator would depend if they retain a stake in the towerco. Operationally, it’s now the towerco’s problem.
TowerXchange: From your perspective, do the existing towercos have the digestive capacity to acquire a substantial portion of African towers? Are there gaps in the market for niche towercos targeting smaller markets?
Tim Knowles, Head of M&A, Etisalat: I think the real question is whether they have the financial capacity. The big tower market not in play yet is Nigeria, where MTN alone have 10,000 towers. I think it would be tough to do a single deal there. We’re also concerned about management bandwidth at the towercos; are they able to ensure QoS across all their local companies as they expand? Personally, I’m not sure if additional towerco players have the necessary appetite for and
understanding of Africa. The existing four leading towercos should be able to meet market requirements, but if Nigeria does come to market, it will be interesting to see the impact.
Douglas Lubbe, Group Executive: International Business Development, Vodacom Group: In some smaller markets, I don’t believe towercos are necessarily prepared to invest the capital they need to. They don’t see them as attractive markets. The towercos seem to focus on large markets first, to achieve growth, then they may look at clusters of small markets.
Hear more from Douglas Lubbe and Tim Knowles as they participate in the operator keynote panel at the TowerXchange Meetup, taking place on October 1 and 2 in Johannesburg. For more information, visit:www.towerxchange.com/meetups/africa
“ “In some smaller markets, I don’t believe towercos are necessarily prepared to invest the capital they need to. They don’t see them as attractive markets
The TowerXchange Meetup facilitates dialogues between operators, towercos, and investors to accelerate tower transactions, while examining the impact on the supply chain and showcasing innovations proven to reduce opex.
This unique event features small group, round table sessions dedicated to key infrastructure sharing topics or regions, enabling you to tailor your agenda to your learning and networking objectives.
A unique, invitation-only gathering of the top 200 decision makers in the African tower industry
Meetup Africa 2013October 1 and 2, Birchwood Hotel, Johannesburg
developed by
Media and association partners:Diamond Sponsor: Silver Sponsors: Bronze Sponsors:
Register now at www.towerxchange.com/meetups/africa. Questions? Call Annabelle on +44 7423 512588
<Ahjeeth Jaijai, Investec<Daniel Lee, Managing Director, Intrepid Advisory Partners<Christian Skaanild, Partner, Capital International Private Equity Funds<Aniko Szigetvari, Head - TMT Group, IFC<Gilles Tre-Hardy, Lazard<Nina Triantis, Managing Director, Global Head of Telecoms & Media, Standard Bank
5:20 Close of Day one
5:30 Operator and towerco only drinks reception6:30 Main drinks reception8:00 Dine-around (evening meal is not included in your registration fee)
Day two, Wednesday 2 October
9:00 How towercos are valued: public towerco valuations and private market M&A multiples<Jonathan Atkin, Managing Director, RBC Capital Markets
9:10 The current state of the African tower industry and forecasts for the next three years<Kieron Osmotherly, Founder & CEO, TowerXchange
9:40 Mobile network operator tower decision makers panel:<Michel Faivre, Directeur Programme Partage d’Infrastructure AMEA, Orange<Douglas Lubbe, Group Executive: International Business Development, Vodacom International<Tim Knowles, Head of M&A, Etisalat
10:40 Morning coffee and networking11:00 First structured networking round table
12:20 Networking lunch
1:40 Second structured networking round table3:00 Afternoon coffee and networking3:20 Investor keynote panel:<Chris Gabriel, Senior Adviser, Macquarie and former CEO, Zain Africa
3:40 Case study: the launch and expansion of TowerCo of Madagascar<Laurent Roineau, General Manager, TowerCo of Madagascar
4:00 Where value is being created and where value is being destroyed in the African tower industry<Andrew Snead, Managing Partner SSA, Delta Partners<Fede Membrilla, Managing Partner and Head of Corporate Finance, Delta Partners
4:20 Summary and closing remarks<Kieron Osmotherly, Founder & CEO, TowerXchange
TowerXchange Round Table Ropics and Expert Hosts
How our structured networking round tables workEach “Round table” is a 80-minute structured networking session assembling participants in groups of 8-10, brought together by a common regional or topic matter interest, and arranged so each group ideally, includes 1-2 MNOs, 1-2 towercos, an investor, advisor, OEM or managed service provider, energy equipment and a static asset or RMS manufacturer.
Country-specific round tables
Country focus: Tanzania Hosted by Norman Moyo, CEO, Helios Towers Tanzania
Country focus: Nigeria Hosted by Fazal Hussain, CEO, SWAP International
Country focus: South Africa Hosted by Keith Boyd, Managing Director, Eaton Towers South Africa
Country focus: DRC Hosted by Jeff Schumacher, Chief Commercial Officer, Helios Towers DRC
How to reduce opex
Business models for buying and selling energy by the kWh Hosted by Bob Hurley, VP MEA, Eltek
How to efficiently implement intelligent power systems Hosted by Bill Bubenicek, Managing Director, Clean Power Systems
‘Real’ asset management - how to identify the capital investments that deliver the best RoIHosted by Jannie van Rhyn, General Manager, Inala Infrastructure Intelligence
Optimising the relationship between towercos and hybrid systems suppliers Hosted by David King, CEO, Flexenclosure
How to protect your sites from theft of fuel and equipment Hosted by SiteOne
How to progress from reactive to proactive maintenance Hosted by Satish Kulkarni, CEO, Invendis
How to conduct a green power feasibility studyHosted by Satish Kumar, Africa Project Manager – Green Power for Mobile, GSMA Mobile for Development
How to conduct a green power feasibility study (repeat session) Hosted by Areef Kassam, Director – Infrastructure, GSMA Mobile for Development
�< Jonathan Atkin, Managing Director, RBC Capital Markets�< Inder Bajaj, CEO, Helios Towers Nigeria�< Michel Faivre, Directeur Programme Partage d’Infrastructure AMEA, Orange�< Chris Gabriel, Senior Adviser, Macquarie and former CEO, Zain Africa�< Chuck Green, CEO, Helios Towers Africa�< Alan Harper, CEO, Eaton Towers�< Fazal Hussain, CEO, SWAP International�< Ahjeeth Jaijai, Investec�< Daniel Lee, Managing Director, Intrepid Advisory Partners�< Douglas Lubbe, Group Executive: International Business Development, Vodacom International�< Tim Knowles, Head of M&A, Etisalat�< Fede Membrilla, Managing Partner and Head of Corporate Finance, Delta Partners�< Laurent Roineau, General manager, TowerCo of Madagascar�< David Porte, Vice President, International, SBA Communications�< Christian Skaanild, Partner, Capital International Private Equity Funds�< Andrew Snead, Managing Partner, SSA, Delta Partners�< Aniko Szigetvari, Head - TMT Group, IFC�< Gilles Tre-Hardy, Lazard�< Nina Triantis, Managing Director, Global Head of Telecoms & Media, Standard Bank
Our speakers and panelists will include
How to build a separate P&L for each tenantHosted by Asher Avissar, CEO, AIO Systems Upgrading passive infrastructure and extending networks
Tower strengthening and power system upgrades for multiple tenants Hosted by MER Telecom
Buyer beware: is the cheapest price the lowest total cost for passive infrastructure products?Hosted by Anni Boddington, CEO, TESA Africa
How to audit the tenancy capacity of legacy towers from a structural and power systems perspective Hosted by Gary Staunton, CEO, Likusasa
How to make rural communications commercially viable Hosted by MER Telecom + special guest
How to make the economics of rural connectivity work by combining low cost, low power base stations with community power and value added services Hosted by Dion Jerling, Director of Special Projects, Connect Africa
Health, Safety and Security
Health, Safety and Security Working Group I: Policy & Practice Hosted by Marnus van Wyck, Managing Director, EMSS and Nick Summers,
Director of Director of Compliance and Safety, Helios Towers Africa
Health, Safety and Security Working Group II: Access Control and PPE Hosted by David Meganck, Founder & COO, Acsys and Hemmant Sapra, President, Karam
Tower strategy
How towercos achieve SLAs Hosted by Glyn Sowerby, General Manager – SMC Operations, Quintica
How to measure and improve Tower Cash FlowHosted by Udhay Mathialagan, Chairman, Tarantula
How to measure and maximise performance and the achievement of SLAs Hosted by Laurentius Human, CEO, Inala
How to overcome the perceived country risk, political risk and operational risk of operating towers in frontier markets Hosted by Monty Simus, CEO and Chris Lundh, COO, Frontier Tower Solutions
Opportunities to buy, sell or build smaller portfolios of less than 300 towers in AfricaHosted by Nathan Foster, CEO and Mike Powers, Legal Director, Atlas Tower
How to structure a tower carve outHosted by Andrew Doyle, Managing Director, Communications & Technology, Mott MacDonald
Structuring African tower transactions: which type of transaction works best? Hosted by Jeff Eldredge and/or Robert Dixon, Partners, Vinson & Elkins
The investibility of African telecom towersHosted by Nina Triantis, Global Head of TMT, Standard Bank
How to engage key group and local stakeholders at operators to improve the chances of closing tower transactions Hosted by Chris Gabriel, Senior Adviser, Macquarie; Chairman, Clean Power Systems & Former CEO, Zain Africa
How to raise capital for tower transactionsHosted by Alex Leigh, Business Development Director, Helios Towers Africa
Beyond passive infrastructure sharing
Business models for towercos to move beyond passive infrastructure sharing into FTTT, transmission sharing and active infrastructure sharing Hosted by Hallgeir Juliebo, HSJ & Partners
Active RAN sharing is coming, is your tower strategy future proofed? Hosted by Nick Elverston, Partner, Herbert Smith Freehills
11:15 How to raise capital for emerging market tower transactions
This workshop will explain how to demonstrate the investibility of an emerging market telecom tower transaction.
We’ll explore the financing options available given the risk, size of investment, hold and potential returns of investment in emerging market towers. We’ll consider the relative cost, availability and appetite of debt, private equity, development fund and infrastructure fund finance.
And we’ll examine tower portfolios from an investor’s perspective in terms of country risk, regulation, competitive environment, the credit worthiness of anchor tenants and the key components of potential Tower Cash Flow (TCF) in terms of tenancy ratios, demand and capacity for additional tenancies, and operating costs.
<How to secure a terms sheet to demonstrate your ability to finance a winning bid<The due diligence investors will conduct on your business and on your prospective tower transaction<What you need to know about the documentation that underpins a towerco investment<What level of gearing will investors permit towercos to reach before they wait for proven results before investing again?<Thinking ahead: refinancing and exit strategies
2:00 How to maximise the value of passive infrastructure through the sale and leaseback of towers
This workshop will explain how to structure a tower transaction to meet your organisational objectives, and how to drive the strategy for the sale and leaseback of tower assets.
Operators able to bring their tower assets to market in a timely manner can secure first mover advantage and a premium valuation, while those left behind risk their towers becoming stranded assets on their balance sheets.
<Defining your objectives, including the balance of capital release and opex reduction<The information you need in your data room<How towercos conduct due diligence to evaluate tower portfolios<Identifying the best deal structure to meet your needs: operational leases versus sale and leaseback versus retaining a stake in a joint venture<What you need to know about the documentation that underpins a tower transaction<How to solicit and negotiate bids<Priorities after the deal has been agreed – what needs to be done during the ‘run period’ and who should do it
9:00 The implications of 3G or 4G deployment for tower operators
Whilst mobile penetrations are reaching high levels in some African countries, all expectations are that there is still considerable growth remaining across the continent. The growth in penetration will come through providing voice and SMS services to currently unconnected people; something which 2G technologies can easily accommodate. As experienced all over the world though, there will also be significant growth in data use, particularly given the generally limited reach and capabilities of fixed infrastructure. 3G and 4G technologies will be needed to meet this demand. However, there can be very different drivers and outcomes when deploying 3G/ 4G compared to 2G. This workshop will seek to explore some key areas that may impact tower operators.
<What are the technical underpinnings of 3G and 4G (in particular), and why is this important to towercos?<How far will 3G/ 4G deployment reach, and how can towercos assist?<What capacity densities might be needed, and can/ will towercos offer more than macro sites?<Will there be any impact due to Single RAN solutions, and can towercos maintain their revenues?<Will active shared infrastructures be deployed, and what might the implications be for towercos?
About your workshop host
Daniel Lee is the “rainmaker” of African towers, having worked on eight different tower transactions, advising mobile operators such as MTN, Millicom and Cell C. Daniel has also worked closely with a number of independent towercos, including assisting them in raising capital to finance transactions. Daniel recently left Citi to form Intrepid Advisory Partners – an independent advisory firm focused on the tower industry.
Your workshop hosts
Andrew Doyle, Managing Director, Technology & Communications Practice, Mott MacDonaldand Dave Tanner, Director of Technology Strategy and Design, Mott MacDonald
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
TowerXchange serves the African 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 3,052 (at time of press) decision makers in African towers, 85% of whom are at 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 African towers, so you can be confident that the vast majority of those key contacts will be at the event.
Who will you meet
| TowerXchange Issue 5 | www.towerxchange.com36
Sample of registered delegates to date at the TowerXchange Meetup
AfricaChief Commercial Officer, DRC Helios Towers DRCCEO, Helios Towers NigeriaChief Marketing Officer, Helios Towers NigeriaCEO, Helios Towers TanzaniaSenior Manager: M&A, MTNDirecteur Programme Partage d’Infrastructure AMEA, OrangeVP, Business Development, SBA CommunicationsVice President - International, SBA CommunicationsGroup CTO, Smile CommunicationsCTO, Smile CommunicationsGeneral Manager, Stelekom Global Network LtdCEO, SWAP InternationalDirector Real Estate Consulting South Africa, SWORNSenior Manager, Telkom MobileExecutive, Telkom MobileExecutive, Telkom MobileManaging Executive, Telkom SA SOC LtdGeneral Manager, Towerco of MadagascarChief Technology Officer, Vimpelcom (Telecel Zimbabwe)Business Performance Partner, VodacomManager, Network International Operations Support, Vodacom GroupExecutive: International Business Development, Vodacom International
Investors and advisers
Head: TMT Coverage, Absa Capital / BarclaysPartner, AT KearneyInvestment Analyst, Capital InternationalPartner, Capital International Private Equity FundsManaging Partner, Ergos EnergyHead - Telecom, Media & Technology Group, IFCInvestment Banking Specialist, InvestecConsultant, InvestecSenior Advisor, MacquarieManaging Director, Mott MacDonaldDirector of Technology Strategy & Design, Mott MacDonaldHead of Africa, Mott MacDonaldMD: Energy & Infrastructure, Shanduka Group MD, Global Head of Telecoms & Media, Standard BankInvestment Banking Credit Manager, Standard BankManaging Partner, SSA, Delta PartnersManaging Partner and Head of Corporate Finance, Delta PartnersPartner, Herbet Smith FreehillsManaging Partner, HSJ PartnersManaging Director, Intrepid Advisory ServicesMerger and Acquisitions, LazardPartner, Vinson & ElkinsAfrica Project Manager, GSMA Mobile for
Operators and towercos
CEO, Africa Towers (Airtel’s towerco)Operations Director, Africa Towers (Airtel’s towerco)Key Accounts Manager, Africa Towers (Airtel’s towerco) CEO: Africa, American TowerHead: Power Solutions, American TowerCEO, Atlas TowerLegal Director, Atlas TowerSpecial Projects Director, Connect AfricaCEO, Eaton TowersManaging Director, Eaton Towers KenyaBusiness Development Director, Eaton Towers South AfricaGroup Corporate Finance Operator, Econet WirelessHead of Mergers and Acquisitions, EtisalatDirector - Valuations M&A / Corporate Strategy, EtisalatChief Operations Officer, Frontier Tower SolutionsChief Executive Officer, Frontier Tower SolutionsChief Commercial Director, Globalcom GroupCEO, Helios Towers AfricaCOO, Helios Towers AfricaBusiness Development Director, Helios Towers AfricaDirector of Compliance and Safety, Helios Towers
Channel Manager, DialightHead - Telecom and structures, Ganges InternationaleCo-Founder, President and CEO, GeostrutCEO, Intelli Towers LtdMarketing Manager, OrionHead of Business Development, TESA AfricaCEO, TESA AfricaSales Manager, International, Valmont Site Pro 1Export Sales Manager West Africa, Valmont Structures
Others
Founder, AcsysCOO, AcsysManaging Director, Anzac Cables & WirePresident Africa, Ceragon,VP, CHANNEL IT NIG LTD.Managing Director, EMSS ConsultingPresident, PN International (Karam)Chief Executive Officer, Site Acquisition Services
DevelopmentDirector of Infrastructure, GSMA Mobile for DevelopmentManaging Director, RBC Capital Markets
Turnkey infrastructure and managed services
CEO - Africa, AlkanCountry Manager, AlkanSales Account Manager, AlkanDirector Business Development, CamusatDeputy CEO, CamusatMember of the Board of Directors, HOI - MEAInfrastructure Sharing Project Manager, HOI - MEACountry Manager, HOI - MEACEO, LeadcomBusiness Development, LeadcomSVP, LemconCEO, LikusasaManaging Director, Likusasa,Divisional Director - Group Sales, LikusasaVP Sales and Marketing, MER TelecomRegional Director Africa, MER TelecomHead - Projects & Strategy, NEWLBusiness Development Manager, NEWLManaging Director, Reime East AfricaChief Marketing Officer, Reime/ACMEManaging Director, Reime/ACMEDeputy Sales Director, SagemcomEnergy & Site Management Product Manager, Sagemcom
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With the second major tower transaction in Tanzania between Vodacom and Helios Towers Africa following the sale of Tigo’s towers to the same entity; with Zantel’s towers believed to be on the market; and with Airtel having registered Africa Towers in the country, Tanzania is fast becoming a model market for infrastructure sharing. As well as the tier one MNOs, several significant tier two and ISP players exist as potential tenants, including Smile who already offer LTE services in major cities, hinting at potential amendment revenue for towercos as LTE is more widely rolled out. In this special feature, TowerXchange draws upon the TCRA and the GSMA’s Green Power for Mobile East Africa Market Analysis for contextual data, adds some colour to the recent Helios Towers Africa transaction in Tanzania in conversation with CFO Andres de Orelans-Borbon, and speaks to NEWL, Tanzania’s leading managed service provider.
Tanzania case study
Don’t miss:41 Infrastructure sharing in Tanzania
43 HTA to acquire 1,149 towers from Vodacom
46 A view of Tanzania from the front lines
at NEWL
Case study: infrastructure sharing in Tanzania
Image: Luisa Puccini
are Airtel, who are dominant in the Lake Zone, while Tigo is strong in coastal areas and Zantel are very strong in Zanzibar.
Tanzania also hosts several tier two, niche operators and ISPs including Smile, which is
The Tanzanian market evolved with a distinctly regional pattern to network rollout, with each of the four tier one MNOs (Vodacom, Airtel, Tigo and Zantel) dominant in different regions. Market leaders Vodacom are particularly strong in the Arusha area, just behind them in market share
rolling out LTE, TTCL, BOL and Sasatel, as well as active infrastructure sharing pioneers Rural NetCo. With operators seeking to expand beyond their regionalised footprint, but the politics of tower swaps complicated, Tanzania was an obvious target for exponents of the independent towerco model. Helios Towers Africa acquired 1,180 towers from Millicom-Tigo in 2011, and have reportedly improved service levels. Helios Towers Africa recently added the aforementioned 1,149 towers, constituting the entire Vodacom Tanzania network. Tigo and Vodacom are now minority shareholders in Helios Towers Tanzania, owning 24.5% each. TowerXchange features an interview with Helios Towers Africa CFO Andres de Orleans-Borbon later in this special feature. Reports suggest Zantel’s towers could be the next portfolio to change hands in Tanzania, while Airtel has registered an Africa Towers subsidiary in the country. Tanzania looks set to become a keenly observed example of how independent towercos can accelerate infrastructure sharing, stablise and improve opex, and support the extension of networks into rural areas! Tanzania market overviewThe GSMA Green Power for Mobile Programme published an excellent report which
After Helios Towers Africa’s recent acquisition of 1,149 towers from Vodacom Tanzania, TowerXchange thought it would be a good time to examine the tower market in Tanzania.
TowerXchange recommends to our readers; ‘Powering Telecoms: East Africa Market Analysis’. In the report, the GSMA size the Tanzanian market as having 4,593 cell sites in Q3 2012, up from 3,671 in 2011, and forecast an increase in the number of base stations to 5,474 by 2013. The same report quantifies the number of subscribers in Tanzania as 26.8m in 2012, with penetration of mobile services at 62% and coverage at 75.8% of the population. According to the IEA, World Bank, urban electrification is just 40% in Tanzania, and rural electrification 2%. The 2009 Electricity Act set a target to raise electrification to 30% of the Tanzanian population by 2015. The GSMA count 1,442 of Tanzania’s cell sites being off-grid, with 30.7% of off-grid sites running DG 24x7, 65.5% running DG-battery hybrid, and just 56 sites (3.9%) classified as Green Power. 52% of the remaining 3,151 on-grid sites were classified as unreliable (receiving less than 6 hours of grid power per day). As a result, diesel makes up 57% of opex at on-grid sites in Tanzania
Helios Towers Africa to acquire 1,149 towers from Vodacom TanzaniaTowerXchange presents an exclusive interview with Helios Towers Africa CFO Andres de Orleans-Borbon
TowerXchange: Congratulations on Helios Towers Africa’s deal with Vodacom Tanzania! What was the rationale for the deal? Andres de Orleans-Borbon, CFO, Helios Towers Africa: Tower transactions are typically motivated either by financial engineering or by operating reasons. Emerging market operators with successful international strategies like Vodacom don’t need cash, so in this case the motivation was operational. Vodacom are the number one operator in Tanzania, and they are investing in an important network expansion. They needed access to most of the infrastructure Helios Towers Africa owned in Tanzania, and they needed a programme to build a large number of new towers. Vodacom and Vodafone are tenants on Helios Towers in Tanzania, Ghana and the DRC, so they knew they could rely on us to manage their towers and to rollout new infrastructure. And they liked the towerco platform and took a stake in that platform - the deal includes Vodacom acquiring a 24.5% equity in Helios Towers Tanzania. TowerXchange: What can you tell me about the structure of the transaction and the BTS programme? There are reports that the acquisition price was US$75m - is that correct? Andres de Orleans-Borbon, CFO, Helios Towers Africa: The only guidance I can give you is that it
The big transaction this Summer in the African tower industry was the announcement of Helios Towers Africa’s intent to acquire 1,149 towers from Vodacom Tanzania, in a deal valued between US$50-100m in which Vodacom acquired a 24.5% stake in Helios Towers Tanzania, which had previously acquired 1,180 towers from Millicom-Tigo in the East African country. Helios Towers Africa’s CFO Andres de Orleans-Borbon generously took the time to speak to TowerXchange about the deal.
Read this article to learn:< The structure of Helios Towers Africa’s recent deal acquisition of 1,149 towers from Vodacom Tanzania
< The balance of cash release vs opex reduction in this deal
< The impact of LTE on the tower market
< The implications of this transaction for Zantel’s towers in Zanzibar
< How to navigate the risks of investment in emerging market towers
Helios Towers Africa, Vodacom, Millicom, TigoAndres de Orleans-Borbon, CFO, Helios Towers Africa
is within the US $50-100m range.
What I can tell you about the deal is that it’s a long-term contract, that it includes all 1,149 of Vodacom Tanzania’s existing towers, and that it reduces Vodacom’s Total Cost of Ownership in terms of the discount to opex plus the maintenance capex. From a cash flow point of view, the transaction releases immediate savings for Vodacom. All sites built under the build-to-suit (BTS) programme will be, owned, managed and marketed by Helios Towers Tanzania. All the other operators have access and are interested in the sites. TowerXchange: Is there a power pass through clause or does Helios Towers Tanzania take on all the energy opex risk? Andres de Orleans-Borbon, CFO, Helios Towers Africa: There are many components to the deal, but I can tell you that we take on the brunt of the risk - if the grid fails, that is our problem, if efficiency is improved, that is our gain. Vodacom are convinced we can achieve efficiencies, otherwise they wouldn’t have taken a stake in the towerco. When an operator retains a stake it incentivises them to work with us as partners to ensure the towerco is successful. For example, when we
might want to decommission one of two adjacent HTT and Vodacom towers as both operators are shareholders in the towercos, the discussion is an easier one. Where operators buy into the towerco, it suggests the deal is fair for all parties.
TowerXchange: With LTE being trialed and rolled out in Tanzania, what’s the impact on the tower market? Andres de Orleans-Borbon, CFO, Helios Towers Africa: The impact of LTE varies from country to country. If LTE is rolled out at a higher frequency than 2G and 3G, then operators will need to densify their networks. If operators need higher density, they don’t want to build new towers and own every tower, so independent towercos can fill the gaps in the network. Towercos need new technologies being rolled out and new technologies need towercos. TowerXchange: Please introduce us to the tower market in Tanzania. Andres de Orleans-Borbon, CFO, Helios Towers Africa: There are four large operators in Tanzania; Vodacom, Airtel, Millicom and Zantel. The infrastructure can be broken down into three pools of assets; Airtel own their towers, Zantel own their towers and Helios Towers Tanzania will own the towers that were the heritage of Millicom and Vodacom. All three pools of towers will likely be available to all operators in a competitive market.
The other operators, Sasatel, TTCL, Benson, Smile and Rural NetCo are all important customers and will likely lease capacity on ours and other operators’ towers. TowerXchange: After the two transactions by Millicom and Vodacom, is there still a market for Zantel’s towers? Andres de Orleans-Borbon, CFO, Helios Towers Africa: Zantel is very strong in Zanzibar so their tower assets have value. If Zantel want to sell, we’ll talk to them. This transaction doesn’t end Helios Towers Africa’s appetite to own further infrastructure in Tanzania and make it available to all mobile operators. In any market where towers have been transferred from operator-captive to independent towercos, there is still a market for towers in unique locations. If towers for sale are located right next to other towerco owned sites, they might attract a reduced valuation, so there is an advantage to being first movers. TowerXchange: Finally Andres, as Helios Towers Africa have been pioneering first movers in African towers, what progress has been made in demonstrating reduced execution risk in what is still quite a new African tower industry? Andres de Orleans-Borbon, CFO, Helios Towers
Africa: It takes a certain type of investor to be attracted to opportunities in emerging markets. While you can’t take the risk out, towercos are one of safest investments in emerging markets. You need to know what you’re doing to prosper in emerging markets, so it’s important to choose your management team very carefully. Vodacom are smart investors - their international business is doing very well. Millicom is a very entrepreneurial operator. When two such companies want a piece of your business, it’s a huge vote of confidence in Helios Towers Africa and in the emerging market tower industry
“ “
It takes a certain type of investor to be attracted to opportunities in emerging markets. While you can’t take the risk out, towercos are one of safest investments in emerging markets
Helios Towers Africa (HTA), the leading, independent, telecoms towers company in Africa, announces that its Tanzanian subsidiary, Helios Towers Tanzania (“HTT” or “the Company”) has reached an agreement with Vodacom Tanzania Limited (“Vodacom”), Tanzania’s leading mobile network operator to acquire 100% of its existing tower network in the country for stock and cash in Vodacom Group’s first ever towers transaction. The partnership between HTT and Vodacom involves the transfer of 1,149 existing telecoms towers from Vodacom to HTT and a commitment to an ambitious, short-term rollout which will see a significant increase in points of service owned by HTT and more than doubles HTT’s existing presence in Tanzania. Transaction highlights < HTT acquires all of Vodacom’s existing passive infrastructure and supplies Vodacom with a significant increase in points of service in Tanzania< Vodacom to lease back the infrastructure subject to a long term contract< Pro forma for the acquisition, HTA will be providing close to 2,700 points of service to Vodacom and affiliates across Africa The deal will expand HTA’s tower coverage in Africa to 4,700 owned towers and is another example of HTA partnering with an industry-leading mobile
network operator in Africa. This partnership model is core to HTA’s offering. By collaborating with its customers and being solely focused on providing a telecoms infrastructure solution, HTA helps its customers to achieve their goals of reducing operating cost, preserving capital, focusing on their core business, and mitigating the proliferation of towers through infrastructure sharing, as they expand network coverage and capacity to meet demand and improve quality of service. The structure of the cash and shares transaction, which involves Vodacom acquiring a 24.5% share in HTT, also demonstrates the belief and confidence of a leading African telecoms operator in the business model of tower sharing and in the business model and operational capabilities of HTA. The transaction is subject to customary closing conditions and regulatory approvals. Chuck Green, Chief Executive Officer of HTA, added: “HTA is proud to be chosen by Vodacom as its partner for the ownership and management of its existing infrastructure and as the solution provider for its future roll out. This is a ground-breaking move for Vodacom and their equity investment is a significant endorsement of HTA’s reputation, management team and operating track record”
Here’s the press release about the deal: Helios Towers Africa to partner with Vodacom in Tanzania
A view of Tanzania from the front lines of the market’s leading managed service providerHow infrastructure sharing is creating economies of scale for NEWL and for their clients
TowerXchange: Please introduce our readers to NEWL Peter Kiloli, Business Development Manager, NEWL: NEWL was registered as a company on 1987. Our initial focus was on general engineering supplies and services, and we had agreements with various parastatals to maintain their vehicles. In 2000, NEWL entered the telecoms market, and in 2001 we commenced our first tower maintenance contract with CelTel (now Airtel). In the 21st century NEWL has diversified our service portfolio to include site audits, tower management services, installation, commissioning, network field operations and maintenance, and diesel refuelling. NEWL services extend beyond passive infrastructure to include the radio network - our engineers have experience with multiple vendors’ equipment, we conduct network planning and optimisation through benchmarking drive tests, we’ve deployed in-building solutions and network quality analyses. We have experience of preventative and corrective maintenance, on passive, active and field maintenance on transmission equipment. We’ve deployed just about every type of site from GSM and CDMA BTS to microwave hops, MSC and BSCs. NEWL has also undertaken many commercial grid installations for Airtel. We’ve deployed 70% of their grid-connected sites in Tanzania, deploying both HT (high tension) and LT powerline installations.
NEWL (Northern Engineering Works Ltd) is the leading managed services company in Tanzania, managing O&M for passive and active infrastructure at 2,100 tower sites in Tanzania across three leading mobile operators. NEWL also has an operation in Malawi where they maintain 285 sites, half of the Malawi Airtel network, on behalf of NSN. NEWL’s regional expansion plans are now at an advanced stage, as well as plans to further extend their service portfolio with an objective of offering end-to-end services including site design, build, installation, commissioning and maintenance.
Read this article to learn:< NEWL’s credentials proven by managing over 2,000 sites in Tanzania and Malawi
< How NEWL modify hybrid energy solutions to meet local requirements in Tanzania
< The progress of, and pent-up demand for, LTE in Tanzania
We manage equipment warehousing and logistics in-house and maintain a fleet of trucks and cranes, providing services to transport equipment to remote regions of Tanzania and Malawi. TowerXchange: What is NEWL’s footprint in Africa? Peter Kiloli, Business Development Manager, NEWL: We’re managing over 2,000 sites for Vodacom, Airtel and Zantel in Tanzania, that’s roughly half of each of their networks, making NEWL the largest maintenance contractor in Tanzania. We’re also managing over 280 sites in Malawi for Airtel Malawi, about half their network, on behalf of NSN. Our headquarters is based in Arusha, Tanzania, but we have local offices in every major city. Our Malawi head office is in Lilongwe and we have a sub office in Mzuzu. NEWL are in the process of registering a business in Kenya, with further plans for offices opening in Zambia, Rwanda and Uganda, cementing our focus on East and Central Africa. TowerXchange: What has been the impact of Helios Towers Africa entering the Tanzania market, initially acquiring towers from Millicom / Tigo, and now also from Vodacom? Peter Kiloli, Business Development Manager, NEWL: The entry of Helios Towers Africa into Tanzania
has had a big impact on our business. We have been monitoring the progress of Helios Towers Africa’s most recent transaction (in which HTA acquired 1,149 towers from Vodacom Tanzania). NEWL manage over 780 Vodacom sites at present, so we are currently negotiating a new contract with Helios Towers Tanzania (HTT) - we hope to continue serving those sites under HTT, and we’re working hard towards achieving that, and are keen to meet the key stakeholders at the TowerXchange Meetup. The entry of towercos into the Tanzanian market is
good news. There has been substantial pressure to improve operator margins and to reduce opex costs. That has impacted us directly. The towerco model has the advantage of co-locations, concentrating more tenants per site, making it easier to manage operations. NEWL are developing innovative operations models to deal with the towerco business model. TowerXchange: How does tower sharing enable economies of scale?
Ray O’Shea, Head of Projects & Strategy, NEWL: In the five years I’ve been in Tanzania the structure of our business has changed. Where once we had dedicated teams for each operator, and field engineers spent a large proportion of their time on the road, now our model is regional, with each local team looking after a cluster of 20-25 towers for a mix of operators. Competitive pressure and reducing ARPU means operators need to reduce opex, and we can help them create efficiencies and cost savings. HTT’s shared towers leads to efficiencies for all stakeholders, saving wear and tear and diesel consumption within our fleet, which is one of our biggest costs.
TowerXchange: What are the logistical challenges of rolling out new towers in Tanzania?
Ray O’Shea, Head of Projects & Strategy, NEWL: Tanzania is a huge country, the size of France and Germany combined, with a limited road network, so it’s important to unlock operational efficiencies. Many of the cell sites follow the main road backbone, but an increasing number of sites are being built in populated areas that are not so well served by road network. NEWL’s local teams of technicians use our fleet of 4x4’s, usually Land Cruisers or similar types
of Pickups, to maintain access infrastructure, including power, and active equipment. We manage security at some sites too. NEWL has strict SLAs with KPIs with our clients, and must attend each site within 1-3 hours, depending on level of that site.
TowerXchange: Tell us about the energy solutions deployed at Tanzania’s cell sites. Ray O’Shea, Head of Projects & Strategy, NEWL: The grid in Tanzania is currently not stable, and
“ “Where once we had dedicated teams for each operator, and field engineers spent a large proportion of their time on the road, now our model is regional, with each local team looking after a cluster of 20-25 towers for a mix of operators
at times can be quite poor. There were periods last year when sites had 18 hours per day without grid power, even in the main cities. This has driven an increasing interest in hybrid energy. NEWL has particular expertise in the rollout of hybrid and solar systems. These hybrid systems are being shipped in from all over the world, but often without any local expertise to modify them to the specific requirements of different locations in Tanzania. For example, we’ve often found that alarms and reporting systems require configuration so as not to cause confusion and ultimately prevent hybrid from delivering the expected efficiencies. NEWL have built up a team of technicians with solar and hybrid solutions expertise, who can get to grips with these systems very quickly, and we’ve
been working with international companies on how to adapt their systems to Tanzania. TowerXchange: What has been the impact of LTE so far in Tanzania? Peter Kiloli, Business Development Manager, NEWL: To date, LTE has been deployed mostly in big cities such as Dar es Salaam, Arusha and Mwanza. Smile are targeting business users, and NEWL uses Smile in our own office in Dar es Salaam. Smile planning to launch in Arusha in October this year. NEWL have been part of the LTE Vodacom trial team, providing drive test services.
Tanzania’s data network is serviced largely through the National Fibre Backbone at present, and can be a bit restrictive due to the monopoly, so we’re eagerly awaiting LTE. We think there is huge pent-up demand for mobile broadband in Tanzania. Most of the callouts we get are from mining areas and other resource rich areas. If LTE comes reaches such regions, uptake will be huge. TowerXchange: Tanzania is a very regionalised market - will infrastructure sharing transform the regionalised structure of the market?
Peter Kiloli, Business Development Manager, NEWL: Tanzania is indeed a very regionalised market - each operator has more subscribers in a particular region, and seemed not to have immediate plans to expand aggressively into other regions, although Vodacom and Airtel have a presence across all regions.
“ “We think there is huge pent-up demand for mobile broadband in Tanzania. Most of the callouts we get are from mining areas and other resource rich areas. If LTE comes reaches such regions, uptake will be huge
Ray O’Shea, Head of Projects & Strategy, NEWL: In the last 2-3 years there has been substantial bi-lateral tower sharing even without towercos. Airtel are in the process of transferring their Tanzanian towers to their local Africa Towers subsidiary. Tigo have been strong in cities and have particularly targeted the youth market - students and universities. Vodacom have been in expansion mode, building new sites aggressively. And of course they recently sold their towers to HTT, who will help with their network expansion. Zantel are looking at similar options with their network. TowerXchange: Please introduce us to the telecom industry and to the tower market in Malawi. Peter Kiloli, Business Development Manager, NEWL: There are two leading operators in Malawi. Airtel are market leaders, then you have TNM, the state-owned operator (in whioch Vodacom have been rumoured to be interested in purchasing a share), and a couple of operators so small that they don’t even outsource O&M. We recently met the Malawi Communications Director General at an ICT Summut, and he confirmed that there were no major changes expected in the Malawi telecom tower market apart from the registration of Airtel’s Africa Towers. Ray O’Shea, Head of Projects & Strategy, NEWL: Airtel Malawi dominate with 80-85% market share. There are around 500 towers in total in Malawi,
and even though the the country is challenged economically, the number of mobile subscribers is growing substantially. TowerXchange: Finally, how do NEWL differentiate your company from other managed service providers?
Peter Kiloli, Business Development Manager, NEWL: Over the last five years NEWL has differentiated ourselves through our efficient operational model, which makes us very attractive to operators and to services providers like NSN. As we see the transition of towers from operator-captive to independent towercos, we see an opportunity to manage more sites, to create more efficiencies through our cost saving models, and this will allow us to pass on more value to the customer. NEWL is a one stop shop for managed services - we don’t subcontract - we cover the whole supply chain from leasing, permitting, installation, O&M all the way to warehousing and logistics. For quick rollouts, NEWL is the partner of choice. Ray O’Shea, Head of Projects & Strategy, NEWL: NEWL is a private company and the management team get full support of our principal, which means we’re able to make quick decisions. We have a strong mix of locals and international on the management team, supported by local engineers and technicians and we continue to develop local
engineering skills by formalising our relationship with local technical colleges, giving them guidance on courses and taking in interns and trainees. Those colleges are now better connected to what the industry wants, and they’re turning out mechanical, telecommunications and electrical engineers and technicians at with a high level of skills. We are serious about H&S and about investing in new technologies and management systems, for example we have recently completed the installation of a tracking system in our fleet.
Five years ago there were probably 25 subcontractors competing in Tanzania, but pressure on prices has whittled that down to four large, strong players, of which NEWL is the market leader, plus five or size smaller players. Managing towers in Tanzania is like a military operation with a 24-hour system. We learn from the last 24 hours and focus on the next 24 hours. Success comes from structuring our business and our NOC to manage the little crises that are going on all the time
NEWL MD Samwel S. Lema received the International Arch of Europe Award
In this latest installment of ‘Towerco perspectives’, TowerXchange introduces readers to two of the new, niche towercos focusing on smaller markets that can fall ‘below the radar’ of the Big Four. We introduce you to Laurent Roineau, General Manager at Towerco of Madagascar, formed in late 2011 after a sale and leaseback deal with TELMA. Learn how this startup towerco adapted to the challenging tropical climate in Madagascar, and how growth is being fuelled by BTS and broadband transmission projects for PICOM, funded by the World Bank. We also speak to Chris Lundh, COO of Frontier Tower Solutions, whose experience managing towers in conflict zones in Afghanistan and Iraq gives them a unique appetite for managing towers in high risk markets.
Finally we talk to one of the original pioneers on the frontiers of the African tower industry, Keith Boyd, who has been running African towercos since 2002. These days, Keith heads up Eaton’s organic market entry strategy in South Africa, and he shares some interesting views on the potential future of MTN, Vodacom and Telkom’s shareable structures in SA.
Towerco perspectives - the “Frontiersmen”
Don’t miss:54 Case study: TowerCo of Madagascar59 FTS on how to manage towers in high risk markets64 The future of South Africa’s telecom towers
Energy & Fuel Optimization Monitor and Control Operation Optimization
Case study: the launch and expansion of TowerCo of MadagascarSelling urban co-locations and building sites with five days of autonomy in deep rural locations battered by tropical cyclones
TowerXchange: Please tell us about the evolution of TowerCo of Madagascar. Laurent Roineau, General Manager, TowerCo of Madagascar: TowerCo of Madagascar is financed by two major private equity shareholders. We setup the company processes, and led the recruitment of most of our 30 employees. We acquired 50 sites in late 2011 via a sale and leaseback transaction with incumbent operator TELMA. Transferring the towers to an independent towerco created the opportunity to develop co-location services for a portfolio of mostly urban towers, with the potential to achieve high tenancy ratios. So TowerCo of Madagascar was not a green field operation, but we subsequently have ongoing exploitation and build-to-suit activities to setup new sites for TELMA and have nationwide co-location contracts with Airtel, Orange, Gulfsat and several broadcasters to develop usage of the portfolio. We rolled an out 50 additional sites in 2012, taking our current tower count to 100 at the end of 2012, and in the next 18 months will rollout over 100 more sites. Those additional towers consist of an order for 32 additional build-to-suit sites for one operator, as well as two projects in which TowerCo of Madagascar is working in consortiums for PICOM with World Bank funding; one to build 21 sites in the southeast of the country, and another to build, operate and own broadband transmission infrastructure between Tulear and Mahajanga, for traffic collection and potential connection with two submarine cable landings.
Read this article to learn:< What capabilities are managed in-house and what is outsourced by a new towerco< The impact of the political and related economical crisis on 3G broadband deployment in Madagascar< Why renewable energy solutions have been deployed using a capex rather than opex model< How TowerCo of Madagascar monitors and maximises cell site autonomy to ensure continued availability during the tropical rainy season< The role of TowerCo of Madagascar in a consortium funded by the World Bank to extend rural access and transmission infrastructure
Laurent Roineau joined incumbent fixed line operator TELMA as CTO shortly after privatisation at the end of 2006, launching Madagascar’s third mobile network, rolling out 250 GSM sites and upgrading others wireless transmission technologies (satellite and microwave). Laurent subsequently became deputy CEO at Electricity of Madagascar, where he re-organised the maintenance of passive infrastructure, before becoming General Manager of TowerCo of Madagascar in November 2011.
Keywords: Who’s Who, TowerXchange Meetup Preview, Towercos, Sale & Leaseback, 3G, Capex, Opex Reduction, Batteries, Urban vs Rural, Network Rollout, Build-to-suit, Business Model, Off-grid, Solar, Wind, Logistics, Private Equity, C-level Perspective, RMS, Infrastructure Sharing, Africa, Madagascar, Africa Towers, Airtel, Orange, TELMA, PICOM, World Bank, TowerCo of Madagascar
TowerXchange: What are the core capabilities managed in-house by TowerCo of Madagascar, and what is outsourced? Laurent Roineau, General Manager, TowerCo of Madagascar: We have three core activities; the promotion and sale of capacity on our infrastructure sites, the rollout of new build-to-suit sites, and the quality monitoring and optimisation of power consumption. We also have support functions in finance and in legal, for customers and suppliers. The breakdown of capex for a new site is typically 60% infrastructure, 40% energy. TowerCo of Madagascar are pushing a power saving approach with our operator partners, enabling us to offer lower cost lease rates and reduce our own capex
and opex. While 97% of the initial 50 sites we acquired from TELMA were connected to the grid, many of our new build-to-suit sites, including those funded by the World Bank, are in isolated rural areas where we’ve deployed solar and some wind power with a longer term payback, and agreed a different fee structure with the operators. While TowerCo of Madagascar uses in-house project managers to oversee the acceptance of sites, site deployment is 100% subcontracted. We think it’s important to ensure a high level of externalisation of non-core activities, but if an activity is not done correctly by a subcontractor, we internalise it. Exploitation is 95% externalised with KPI close monitoring - TowerCo of Madagascar maintain a procurement and performance management role to ensure best in class service delivery.
Madagascar market overview
Airtel
TELMA
Orange
Airtel
Orange Madagascar
TELMA Mobile
TowerCo of Madagascar40%
31%
29%
Population: 22mMobile penetration: 29%Electrification: 5% of rural population have access to electricity
Source: GSMA Operator sites inventory in 2013
100
200
300
400
Operator sites inventory in 2013
TowerXchange: It sounds like TowerCo of Madagascar almost has two business models - an urban business with a relatively conventional tenancy leasing business model, and a rural business extending coverage and transmission. How does the management of those portfolios differ? Laurent Roineau, General Manager, TowerCo of Madagascar: We have three distinct strategic approaches - one for urban towers, one for rural build-to-suit sites and a third for the sites we’re building as part of the consortium funded by the World Bank. Our urban strategy is affected by the current political crisis in Madagascar, which has meant investment in 3G broadband has mostly been
Source: TowerCo of Madagascar
delayed. For now we are largely meeting our clients’ needs using our existing infrastructure - less than 5% of our new site rollout is in urban areas. However, with the international community pushing for elections before the end of this year, this may unfreeze economic development and broadband requirements. With the expertise TowerCo of Madagascar has developed in co-location sales, multiple technologies and the optimisation of site infrastructure utilisation and power usage, we’ll be well placed to catch wave of new site requirements for 3G.
When managing our rural build-to-suit programme, it’s important to only setup new sites where there is full potential for co-location. We never setup a site when there is any concurrence in location. If one of our client operators requires a site at a certain grid reference, if there’s an existing site between 200m and 3000m from that proposed new site, then the existing site is raised to the customer as having the potential to accept their tenancy.
It is a delicate balance to encourage co-operation and tower sharing between operators to optimise
capex. We have internal framing protection rules and are cautious to protect the confidentiality of our customers. Whenever we setup a site with a real co-location opportunity, the initial structural design has capacity for the equipment of two operators, but the energy systems are adapted to the requirements of just the first tenant, typically with a small margin of +20% to ensure flexible “time to market” capacity expansion for the tenant. Our third strategic approach helps us optimise the deployment of public and World Bank funds. The structural and energy capacity of sites built under our World Bank contract are defined by a Public Private Partnership agreement. The agency that manages the project is called Projet d’Infrastructure de Communication pour Madagascar (PICOM), and we bid for the infrastructure part of a tender that they issued as part of a consortium together with construction company Camusat and Madagascar’s three leading operators, Orange, Airtel and TELMA. With the three operators engaged, we are able to anticipate the needs of those operators and avoid building sites that might remain unused, and we’re able to consolidate revenue generated from these rural and deep sites to get the right equilibrium of capex, opex and lease rate pricing. TowerXchange: How do you select and finance energy solutions for off-grid sites? Laurent Roineau, General Manager, TowerCo of Madagascar: So far we’ve used a capex model for
“
“Madagascar is typically hit by one to three cyclones per year. As a result, for sites within 60-80km of the shore, we have specific rules to build heavy-duty, strong civil works, steel structures and solar arrays to ensure availability and security. We install a big bank of backup batteries to ensure at least five days of site autonomy
the rollout of energy solutions, rather than using an opex or ESCO model. We are trying to optimise procurement, managing an integrated “home made” scheme but mixing suppliers to achieve the best solution technically and economically. Our batteries come from Europe, our regulation systems come from electric power equipment suppliers, and our PV usually comes from an efficient and reliable supplier in Asia, and it’s all 100% fully certified in terms of IEC requirements. The reason we’ve used a conventional capex model for energy is because the current economic situation in Madagascar means local financing is
not easy to find and is expensive, so leased solutions for energy will incur substantial financing costs. We monitor each solution to measure the return on capex capital deployed and to optimise opex - when you put heavy capex into solar, usually the opex is low. Maintenance is 100% subcontracted, with different fee schedules depending on distance to the site. TowerXchange: How does the tropical climate in Madagascar affect your operations? Laurent Roineau, General Manager, TowerCo of Madagascar: The climate presents significant logistical challenges in Madagascar. During the rainy season, it can take five days to reach deep rural sites, as roads are of poor quality and degrading further.
100
Start of 2012 End of 2013End of 2012 End of 2014
200
300
400
Sites
Contracts
TowerCo of Madagascar expansion plan
As the fourth largest island in the world with a tropical climate on the coastlines, Madagascar is typically hit by one to three cyclones per year. As a result, for sites within 60-80km of the shore, we have specific rules to build heavy-duty, strong civil works, steel structures and solar arrays to ensure availability and security. We install a big bank of backup batteries to ensure at least five days of site autonomy. It’s important to have efficient site monitoring of diesel tanks, battery capacity, battery storage, power usage et cetera. We maintain a central server to monitor and calculate the autonomy of each site each day, and we monitor weather forecasts to anticipate heavy rain periods so we can boost battery capacity in advance, and manage potential predictive refueling on genset equipped sites.
TowerXchange: Has Airtel starting up their own towerco had much effect yet in Madagascar?
Laurent Roineau, General Manager, TowerCo of Madagascar: Airtel has launched Madagascar Towers here, and they seem to be operational. They seem to be concentrating on supporting
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Airtel’s rollout at the moment, rather than pushing the promotion of other services. We will work constrictively with Madagascar Towers - each time Madagascar Towers is rolling out where we plan to install our infrastructure, we have a discussion to match operating requirements and to finalise which towerco will set up the infrastructure.
TowerXchange: Does TowerCo of Madagascar have any international ambitions? Laurent Roineau, General Manager, TowerCo of Madagascar: Yes my shareholders wants to go into other operations. We’re evaluating opportunities and are open-minded. TowerXchange: Finally, how would you sum up TowerCo of Madagascar’s value proposition? Laurent Roineau, General Manager, TowerCo of Madagascar: We are proud of the quality of our co-location services to our customers. We are able to undertake deep analyses of customer requirements and advise on optimisation. If an operator wants 1000W of capacity and I can show how he can use just 800W, it might mean less lease revenue for my business, but it also means less opex and enables us to secure a trusted relationship with that operator. We operate a lean tower company, keeping a good ratio of services delivered to the number of employees. As a Frenchman, I have to conclude with an “Asterix druid” reference - TowerCo of Madagascar tries to be a magical potion to ensure reliability and strong customer relationships.
Laurent Roineau will be presenting a case study on the launch and future strategies of TowerCo of Madagascar at the TowerXchange Meetup, taking place on October 1 and 2 in Johannesburg. For full details of the event, visit:www.towerxchange.com/meetups/africa
www.towerxchange.com | TowerXchange Issue 5 |
How to manage towers in high risk marketsFrontier Tower Solutions have built and manage over 1,200 towers in Afghanistan and Iraq - and are now focused on deals in East Africa and the Americas
TowerXchange: First, please introduce us to yourself. What’s your personal background in emerging market telecoms Chris? Chris Lundh, COO, FTS: I have over twenty years of experience working with high profile MNOs and ISPs in Africa and South America, starting in the Democratic Republic of Congo as Managing Director of Telecel, then the first mobile network operator in Africa. I also held Managing Director or CEO roles with Africa Online in Kenya and Tanzania, Rwandatel in Rwanda, and with Nuevatel in Bolivia. Prior to working with FTS, I most recently spent two years in Afghanistan as Deputy Managing Director with Afghan Wireless. TowerXchange: Please introduce our readers to Frontier Tower Solutions (FTS). Chris Lundh, COO, FTS: FTS is a leading owner, operator, and developer of broadcast and cell sites in emerging high-growth markets in the Middle East, North and East Africa, Central Asia, South America and the Caribbean. While FTS is a young company, operating as an independent entity for just over one year now, we grew out of our own experience building, operating, and maintaining more than 900 towers in Afghanistan for more than a decade for our MNO “sister” company, Afghan Wireless. We are proven in Afghanistan and in Iraq, and have taken our experience as an operator and leveraged our 160+ dedicated network rollout personnel and strong supplier relationships to explore projects
Read this article to learn:< FTS’s proven credentials managing 1,200 towers in high risk markets
< The ownership of and investment opportunities in FTS
< How FTS maintain neutrality in conflict zones
< Partnering with local communities for on-site security
< Current opportunities FTS are exploring in Burundi, Suriname, French Guyana, Guyana and Bolivia
Chris Lundh, COO, FTS
Frontier Tower Solutions are appropriately named. Over the last year CEO Montgomery Simus and COO Chris Lundh have built a towerco with a unique appetite for acquiring, building and operating towers in frontier markets: they have experience in Afghanistan and Iraq, two of the toughest parts of the world, and they are closing in on opportunities in Africa and South America. FTS focus on tower markets that are largely off the radar screen for other towercos, either because they are believed to be too small, or because the market is considered too risky. TowerXchange met Chris Lundh on his way out to Nairobi.
Keywords: Who’s Who, Meetup Preview, Towercos, Investment, Build-to-Suit, New Market Entrant, Country Risk, Conflict Zone, Sale & Leaseback, C-level Perspective, Infrastructure Sharing, Africa, Americas (South), Middle East, Burundi, Suriname, French Guyana, Guyana, Bolivia, Afghan Wireless, Frontier Tower Solutions
worldwide. As our name suggests, we are very comfortable building and managing towers in austere locations. That is our core expertise so we are looking to operate in some of the most under-served and challenging regions of the world, engaging in active and passive infrastructure outsourcing (tower sale and leaseback), structural engineering, network design, transmission and RF planning, and site development / build out activities for mobile network operators. Our main focus thus far has been structuring tower sale and leaseback opportunities, with colocation agreements in place pending final tower acquisition, in East Africa and Bolivia (the anchor market for our South American “cluster’), and we are now in the process of finalising investor interest in these projects. FTS is also soon to open regional client support and technical service centers in Nairobi, Kenya and La Paz, Bolivia. TowerXchange: What is the ownership of FTS? Chris Lundh, COO, FTS: FTS is U.S. corporation wholly owned by an American ownership group with MNO operator experience. Because of the smaller numbers of towers in transactions we typically bid for, we’re still self-funded, but we are presently in discussions with investors regarding several specific project finance opportunities and have also been approached by others looking to invest at the overall FTS holding group level. We are happy to explore either but, initially, have been setting the projects up as market-specific investment opportunities.
Because of FTS’ “frontier market” focus, we’ve also attracted interest from certain types of international, development and institutional investors whose mandates include very dynamic, emerging markets. For example South Sudan is a key priority for OPIC funding (“Overseas Private Investment Corporation”, the US government’s development finance institution) so, if we were to proceed with a project in that market, we would definitely explore this type of potential access to US government financing and a degree of political risk cover. Our CEO Montgomery Simus handles the financial side of the business. Monty is a Yale and Harvard graduate with more than two decades of experience with leading technology, telecommunications, financial services, and energy corporations, and he has experience in building and obtaining finance for technology/telecommunications start-ups, holding accountability for P&L management, and developing and deploying technology-related services for new emerging markets worldwide. He has spent significant time with various MNO and broadband service provider initiatives through our “sister” organisation in Afghanistan and also lived in Kenya earlier in his professional career. TowerXchange: How are the operational norms of building and managing towers affected when you’re operating in high risk markets, such as conflict regions? Chris Lundh, COO, FTS: We rely on local knowledge and expertise and try to use people from the
neighboring villages or the area to assist in the physical construction of sites and towers. Additionally, we prefer to use in many cases the same local people as the backbone of our on-site security. This generally provides better results than high walls and razor wire!
Yakatoot, AWCC’s facility on the outskirts of Kabul
We’re used to political risk - we eat this stuff for breakfast! There aren’t many environments in which it’s more challenging to manage towers than Afghanistan. For example, we lost 25 towers in Afghanistan to the Taliban last year. TowerXchange: So how does it work in practice, for example do you need a military escort when installing or maintaining towers in conflict regions?
Chris Lundh, COO, FTS: No. In some ways a military escort is exactly what you don’t want when building and maintaining towers in conflict zones. It’s important to be neutral and focus on our mission which is Connecting Communities, Building Markets. Ultimately it’s in everyone’s interests to extend communications, and we want to foster that sense of community partnership in the markets in which we operate. We have our own people and
selected partners who we send into the field of course, but we’ll never take a chance with the lives of our employees or contractors. Political risk is another challenge. We think a strong, transparent government can be helpful if they have a will to attract international investment in infrastructure. But you don’t want a government to be so strong that there is a risk that they could simply seize assets.
TowerXchange: Tell us about the opportunity FTS are working on in East Africa. Chris Lundh, COO, FTS: We’re presently focused on opportunities in Burundi and in South Sudan. We got to know the Aga Khan Foundation through their work with universities, hospitals and clinics in Afghanistan. Through East Africa Telecom, the Aga Khan Foundation is starting up new mobile network
“ “There aren’t many environments in which it’s more challenging to manage towers than Afghanistan. For example, we lost 25 towers in Afghanistan to the Taliban last year
operators in Tanzania, Uganda and Burundi. We’re exploring an opportunity to acquire 43 towers, and operate a build-to-suit programme, with Lacell, East Africa Telecom’s subsidiary in Burundi. There are five active licensed operators in Burundi, although none has more than 180 towers. 3G has been rolled out by Econet and by U-Com / Leo, the old Telecel business that was recently sold by Vimpelcom to Niel Telecom. There’s also Africell, Onatel and Lacell. We think there are more pros than cons about the Burundi market, including real tourist potential. We are exploring a similar sized opportunity in South Sudan, a very low-density market. There is limited geographical coverage in South Sudan - the tower count is in the low hundreds - and
the challenges of logistics, security, and distance remind us of some of things we had to overcome in Afghanistan. We are currently establishing partner relationships with local specialists in specialists in building and maintaining tower infrastructure in Africa, and also developing energy partnerships for diesel generators and hybrid equipment. TowerXchange: What can you tell us about FTS’ interest in Latin America?
“ “We’re exploring an opportunity to acquire 43 towers, and operate a build-to-suit programme, with Lacell, East Africa Telecom’s subsidiary in Burundi
Chris Lundh, COO, FTS: Outside of the very large markets such as Brazil, Colombia, Chile, and Argentina, we have believe that there are a number of compelling tower opportunities in South America, and strong potential for upside when towers are migrated from operator-captive to third party towercos.
We’ve been examining opportunities in markets such as Suriname, French Guyana and Guyana - three adjacent but very different markets - as well as Bolivia. Populations in the former countries are
concentrated along a coastal strip, where there is grid power, but inland most sites are off-grid. High towers are required to overlook the jungle. TowerXchange: Finally, please sum up what role you see FTS playing in the emerging market tower industry compared to other towercos? Chris Lundh, COO, FTS: Our niche/expertise is smaller, “frontier” or very dynamic post-conflict markets that may not normally appeal to bigger
tower companies, or markets with tower portfolios too small to be worth larger towerco’s due diligence to acquire. Having grown out of a GSM operator’s background, FTS acutely understands what it takes to build, maintain, fuel, and service large numbers of towers in austere environments. We bring a MNO mindset first, keeping our operational experience as a large scale MNO as the main criterion for successful service delivery to our customers versus that of a
“steel, rigging & power” mentality. Our business model - true to our name - is focused around building “clusters” of infrastructure in challenging but high-growth markets in two expanding primary locations: East Africa and South America. FTS does not harbor ambitions to take on global passive infrastructure sale and leaseback operators in developed or mature markets; rather, we prefer to work with MNOs who share our understanding of the challenges and potential presented by such relatively young, dynamic and “frontier” markets. Frontier Tower Solutions will be hosting a round table on “How to manage towers in high risk markets” at the TowerXchange Meetup. Visit:www.towerxchange.com/meetups/africa
“ “Our niche/expertise is smaller, “frontier” or very dynamic post-conflict markets that may not normally appeal to bigger tower companies, or markets with tower portfolios too small to be worth larger towerco’s due diligence to acquire
Unexploded RPG round wired to base strut of a tower
The future of South Africa’s telecom towersEaton Towers’ organic growth success story in South Africa hints at the long runway of growth in less mature SSA tower markets
Keith Boyd, MD, Eaton Towers Africa
TowerXchange: Thanks for speaking to us today Keith and for hosting the South African market round table at the TowerXchange Meetup. Please introduce our readers to the South African market. Keith Boyd, Managing Director, Eaton Towers South Africa: In South Africa, latest figures seem to show that Vodacom has around 45% market share, MTN 37%, Cell C is up to 16%, and Telkom Mobile (formerly 8ta) has 1-2%. Vodacom and MTN are very successful, cash rich operators. Telkom Mobile would appear to have a difficult road ahead, but they have options as the mobile arm of the fixed line operator Telkom. Cell C are within reach of becoming a sustainable, self-funding operator. Cell C, which recently benefitted from a US$350m injection of equity from parent company Oger Telecom, are pushing for asymmetrical call termination rates, or to have call termination rates dropped from their current level of R0.56 (about 6 US cents) to nearer to 2 US cents. It will be interesting to see how the Independent Communications Authority of South Africa (ICASA) views their request given the recent pricing competition from newer entrants Cell C and Telkom Mobile. About half of each of MTN and Vodacom’s subscribers are ‘data active’, and data usage is nearly trebling annually, increasing 193% last year according to MTN, driven by data bundle price reductions, and the uptake of smart phones.
Read this article to learn:< Insights into the market share and tower strategies of South Africa’s four leading operators< Quantifying the potential growth of the African tower market; forecasting a trebling of PoS in 10 years< Why Eaton Towers’ organic market entry strategy is working< Thoughts on the potential future of MTN, Vodacom and Telkom’s shareable structures< The implications of South African operators’ proven appetite for independent towers for less mature markets in SSA
Keith Boyd is a 13-year veteran of the African tower industry having served first as a Director at Plessey then as CEO of Venture Communications, later acquired by DPI and merged with Eaton Towers. Keith is now Managing Director of Eaton’s business in South Africa, and he’s kindly agreed to host the South African market round table at the TowerXchange Meetup, taking place on October 1 and 2 in Johannesburg. By way of a preview of that round table, TowerXchange caught up with Keith to ask his views on the South African tower market.
TowerXchange: Would you characterise South Africa as a mature telecoms market? Keith Boyd, Managing Director, Eaton Towers South Africa: Whereas SIM penetration in most of Sub-Saharan Africa (SSA) is around 50-85%, there are 70m subscribers in South Africa, representing 115% SIM penetration. Dual-simming is not as common as elsewhere in SSA, but anecdotally I do see an increasing number of people with more than one mobile device, whether it be a dongle for their laptop, a tablet or a business and personal phone. When Eaton Towers first started looking at South Africa, we wondered if the market had matured beyond the point at which a towerco would have a significant opportunity for growth. So we commissioned two independent consulting firms to prepare a report on the future expected demand for towers, and PoS (Points of Service). The levels of growth in demand for PoS they forecasted were surprisingly high. Both reports - although utilizing slightly different approaches - came to a similar conclusion, while our own conversations with key market stakeholders painted a similar picture. When we conducted these studies in the second half of 2011, there were just under 15,000 greenfield towers in South Africa, with 25,000 PoS in total including the towers plus DAS, rooftops, lamp posts et cetera. That was forecast to treble to just under 75,000 PoS in 9-10 years, with the bulk of the growth in the next 5-6 years. We knew if we could capture just 10% of the market growth, that would be a good business to have. With an increasing preference
for infrastructure sharing to avoid spending capital on ‘poles and holes’, a 3:1 growth ratio suggested an opportunity to secure 1.6-1.7 tenants per tower relatively quickly. TowerXchange: So how has Eaton Towers’ South African business evolved since your initial market studies? Keith Boyd, Managing Director, Eaton Towers South Africa: We realised we couldn’t control the timing of when South Africa’s existing operators sold their towers, but we could control an organic market entry by building our own towers, which is what we decided to do at the end of 2011. We spent 2012 acquiring, permitting and developing sites, signing up operator contracts and tenancy agreements, and have an expansion plan through 2013-17. Demand has been higher than we expected, and the average number of tenants on Eaton’s towers in South Africa are higher than in our original assumptions and business plan. Now
“ “a 3:1 growth ratio suggested an opportunity to secure 1.6-1.7 tenants per tower relatively quickly
Market share, South Africa
Vodafone
MTN
Cell C
Telkom Mobile
The context of tower rollouts and rumoured M&A activity in South Africa
Cell C are rolling out aggressively and currently have around 4,000 sites in South Africa. Speculation continues about potential M&A activity, either the consolidation of Cell C and Telkom Mobile, or the potential market entry of Airtel through acquisition. In the tower market, American Tower acquired 1,400 sites from Cell C in 2010, in a deal structured to release cash. American Tower is currently marketing 1,629 sites in South Africa, of which just over 1,000 are greenfield sites. Recent press speculation seems to indicate that MTN South Africa are in the later stages of agreeing a tower deal with American Tower. MTN has already established partnerships with American Tower in Uganda and Ghana, in both cases MTN retained 49% equity in the local towerco. MTN are estimated to have over 3,500 towers in South Africa, with a presence on another 2,000 sites.
it’s simply an issue of getting to scale in the next year and more. To date, we’ve acquired approximately 400 sites, and fully permitted more than half of those. Permitting can take 9-18 months in South Africa, so you can’t build 1,000+ towers overnight. We have already completed construction on over 80 of these sites (August 2013), and are constantly adding more sites as per increasing customer demand.The simple reality of our business is that, at the pricing levels we charge, any tower with one tenant is a liability - or at best, a very poor investment. Towers with two tenants are an asset. Fortunately, Eaton has signed up more than two tenants per tower on average already in South Africa. When we market a site to an operator, it’s already fully permitted, and we have a framework agreement in place, so both parties know the price. All they have to do is sign an ISA (Individual Site Agreement), and we can have them installed on a
new site in 30 days. We break ground as soon as we have a single anchor tenant signed up, and we’re able to react quickly to operator demand - in fact the passive infrastructure can often be ready faster than the time taken to get the transmission links in place and to get the active equipment installed. TowerXchange: How does running an organic growth towerco differ from a business model built on a sale and leaseback transaction? Keith Boyd, Managing Director, Eaton Towers South Africa: We have to make informed guesses where coverage gaps in the networks will appear, as voice and data capacity demands grow. It can be as simple as choosing sites more than 500-600m from
an existing tower, where people live in the shadow of the site. The truth is that it is not that simple for network planners at operators to be able to predict accurately more than a year ahead in terms of their network densification requirements, and the acquisition and permitting work can take several months, so towercos offer significantly reduced time to market, by speculatively acquiring and permitting sites. Our formula isn’t complex. As soon as one tenant needs a site, we build it. If we can add a second tenant in under 2-3 years, we’ll be successful, so it’s a case of assessing each site to determine how strongly we should market it.
“ “Eaton has signed up more than two tenants per tower on average already in South Africa
Cape Town, South Africa
“ “
Vodacom specifically has an excellent opportunity to... structure a deal with a towerco to secure an immediate opex subsidy in the region of 25-40%, creating industry-leading low opex, thereby putting them in a great place to prevail in any future price wars
TowerXchange: What would be the impact on your business of the rumoured transaction between MTN and American Tower in South Africa? Keith Boyd, Managing Director, Eaton Towers South Africa: I expect to see American Tower make more investments in South Africa. But I can’t comment on speculation linking them with another deal with MTN. Quite frankly, I’m glad American Tower is operating in South Africa as well as Eaton Towers - it makes operators more familiar with the towerco business model and price points. We’re not really in direct competition with American Tower - because uniquely located sites are exactly that - uniquely located. In our entire portfolio there are probably two sites where our tower is within 500-600m of American Tower’s. As an organic build towerco, if we saw a new site go up where we had acquired land and completed permitting, we probably wouldn’t market the site, as the supply:demand ratio would be out.
TowerXchange: How would you anticipate the South African tower market evolving if MTN and American Tower did get together? Keith Boyd, Managing Director, Eaton Towers South Africa: It would be interesting to see how Vodacom and Telkom would react. Both have larger portfolios of towers in South Africa, but there is overlap with the MTN portfolio, so I doubt it would make sense for them to deal their towers into the same vehicle
as all the others. That would be very poor for competition reasons - and no towerco would want to buy assets where they already have significant numbers of “near neighbor” sites. At Eaton, we are keen to expand and accelerate our investments in South Africa. And I expect that our local commitment and presence, coupled with our well funded position, in-market experience and customer base, would make Eaton Towers an excellent counter-party for any future towers transactions in the country. Vodacom specifically has an excellent opportunity to use their towers to drive their cost base as low as they can over the next 10 - 15 years and beyond. They could structure a deal with a towerco to secure
an immediate opex subsidy in the region of 25-40%, creating industry-leading low opex, thereby putting them in a great place to prevail in any future price wars. Dropping opex from around ZAR9,000 per month to ZAR6,000 simply cannot be done through efficiency programmes, so the towerco counterparty would have to agree an EBITDA-negative deal. The only place that the guaranteed “opex subsidy” comes from is the tower company’s shareholders, through their income statement. Obviously, at some point in the future, we would need to believe that the tower portfolio becomes EBITDA positive - but that is not something the operator would need to worry about. Their greatly subsidised site opex would be fixed by the towerco. Eaton Towers is the only towerco that has done a deal on this basis in Africa. Whilst our shareholders have a positive view on these types of transactions, I don’t see how publicly listed towercos, that are currently quoted as trading at a multiple of their EBITDA, could bring their management and shareholders along to do such a strongly EBITDA negative deal. Meanwhile state-owned fixed line operator Telkom is estimated to have over 6,000 shareable structures towers. It’s the largest ‘poles and holes’ network in SSA. Telkom has a great opportunity to do a tower deal. It’s not about the Telkom Mobile rollout, they can do that using other infrastructure. It’s an opportunity to become a carrier of carriers, to release cash and drive down opex, securing a stake in a towerco that would be a boost to the valuation of their business. In order to do this, Telkom would have to clarify the implications of the Facilities
Leasing Act, which forces “dominant” operators to sell slots on their infrastructure on a “cost plus” basis, but whether Telkom can really be considered a dominant operator in the mobile-era, and the exact definition of “cost plus” should both be up for debate. TowerXchange: Have there been a lot of bi-lateral tower swaps in South Africa? I recall the suggestion that one operator in South Africa had third party tenants sharing 50-60% of their towers. Keith Boyd, Managing Director, Eaton Towers South Africa: Historically there have been quite a few swaps of slots, but on a piecemeal basis. Bi-lateral swaps are not customer service oriented, and the turnaround time between requesting and securing a slot can be as long as 12 months.
I’d describe bi-lateral swaps in South Africa as significant but not strategic. Mobile networks have been functioning since 1994, so over the nineteen and a half years they’ve been operating towers, if the lease up rate is still only 1.5, then you can see they haven’t given the same attention to adding multiple tenants that an independent towerco would have. TowerXchange: What impact will LTE have on the South African tower market? Keith Boyd, Managing Director, Eaton Towers South Africa: LTE could be a shot in the arm for the telecoms business, and ICASA is expected to issue licenses in the coming months, but we don’t know yet what their strategy will be. The impact on the market will depend whether ICASA gives licenses to incumbent operators who
then supplement their existing 3G networks with LTE, or if they license new operators who are then motivated to build as much LTE coverage as they can in high demand areas, catalysing the data market.
Although operators are already running some LTE sites, there’s still a lot of ground to cover in South Africa’s LTE story.
TowerXchange: Beyond the four leading mobile network operators, are there any niche players that are significant potential tenants on South African towers? Keith Boyd, Managing Director, Eaton Towers South Africa: Internet Solutions and Neotel are two of the more interesting operators. And I expect that LTE licensing in future will see new entrants launch. Neotel is a non-mobile player targeting the SOHO (Small Office Home Office) segment and using WiMAX, WiFi and CDMA. They have a lot of rooftops in their infrastructure. While they may not be completely self-funding yet, they have an interesting business model in not competing in the retail market but focusing on broadband for business and high end users. Their opportunity seems to be partly due to current data capacity issues in many areas of all the GSM operators. If the last year is anything to go by, demand seems to be increasing faster than the mobile operators can expand and densify their networks - and I think Neotel are capitalising well on this.
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TowerXchange: For the benefit of our supplier readers, what capabilities does Eaton Towers South Africa have in-house, what do you subcontract? Keith Boyd, Managing Director, Eaton Towers South Africa: We retain project management oversight, quality, health and safety responsibilities, but we subcontract site builds to full turnkey contractors. Our field maintenance is outsourced, but we manage service levels, call escalations and keep the NOC and SLA management in-house. With the exception of a few permitting activities, our property team is managed in-house and permits 15-20 new sites per month. TowerXchange: What’s the energy logistics state of play - how extensive and reliable is South Africa’s grid? Keith Boyd, Managing Director, Eaton Towers South Africa: We have over 99.3% availability of grid power across our portfolio. Uptime is so high that we haven’t got fixed generators on sites - we simply use mobile gensets that we can dispatch to sites within three hours of a grid failure, before the operators’ batteries are depleted. So the focus on energy issues in South Africa is lower than anywhere else in SSA.TowerXchange: What are the implications of Eaton Towers’ success in South Africa for the rest of the African tower market. Keith Boyd, Managing Director, Eaton Towers South
Africa: I am pleasantly surprised that the South African market has already offered significantly better than expected growth for the tower sharing business. If you’d asked me in 2010, I would have thought South Africa was a mature market, but now we see a great opportunity for the tower industry here. Data-wise, South Africa is the most developed market in Africa. I recently met a consultant who forecast data consumption would rise to an average of 1GB of data being used per day per data subscriber. I don’t know whether we’ll reach those kind of numbers in my time, but that’s only an hour of HD entertainment. We’ve all been guilty at times of underestimating where technology can take us, and if 1GB per subscriber per day were the future, that would represent a thousand times increase on the data demand we have today. If active equipment becomes ten times as efficient, you still have a hundred times capacity to make up, and it still presents a tremendous opportunity. That’s why there’s upside in the South African tower market, and if you consider the relative data consumption in Eaton’s other tower markets, Ghana, Uganda and Kenya, then you can see there is still a lot of potential runway for towerco growth elsewhere in SSA as increasing data consumption drives cell site densification.The insatiable demand for voice coverage that drove the initial land-grab network rollouts in Africa is going to be replaced with an insatiable demand for data. Operators are going to need to accelerate project management again to densify the
last mile, or the last 400m as it is today, and to keep up with transmission requirements. If operator Points of Service treble between 2011 and 2021 in South Africa, as our forecasts suggested, operators will continue to escape the huge capital requirement this generates by using independent towerco sites. They’ll have to keep all their capex focused on active equipment. Eaton Towers has made a great start to our organically grown South African business, and we see plenty of room for growth in the future. And, if South Africa is not a mature market for the towerco business model, then there is even more room for growth elsewhere in SSA Register today to join Keith Boyd’s South African market round table at the TowerXchange Meetup on October 1 and 2.
“ “if South Africa is not a mature market for the towerco business model, then there is even more room for growth elsewhere in SSA
Special feature:
In part four of this special feature, TowerXchange introduces readers to azeti, who have an interesting new platform SiteOne, developed in partnership with managed services giants Lemcon, which they use to add intelligence to BTS site management. Tarantula have an alternative platform to manage information assets across the end to end workflow of a towerco that evolved with the tower industry itself. If you’re not familiar with Tarantula, or with their new Chairman Udhay Mathialagan - veteran of Macquarie, Crown Castle and founder of Insight Infrastructure, a greenfield towerco which he sold to ATC - then I’m sure you’ll enjoy his insightful interview in which he explains how harnessing information is critical to optimising TCF. Finally we check-in with M2M gurus HMS Industrial Networks, whose Anybus embedded communication modules enable communication between devices and networks across the ever-increasing variety of protocols, and whose Netbiter RMS ultimately enables the comparison and optimisation of sites’ energy efficiency ratios.
From RMS to monitoring and management platforms, part four
Don’t miss:71 azeti add intelligence to BTS site management77 Tarantula use information management to measure and maximise TCF82 HMS: If you can’t measure it, you can’t manage it
Adding intelligence to BTS site managementIntegrating monitoring and management, access control, maintenance, asset, inventory and HR management in an end to end managed service
TowerXchange: Where do azeti fit into the telecoms infrastructure ecosystem?
Thorsten Schaefer, CEO, azeti Networks: azeti Networks AG is a global manufacturer and supplier of high-performance, intelligent site management solutions. Founded in 2006, with corporate headquarters in Berlin, azeti also maintains subsidiaries in the UK, South America, the Asia-Pacific region and the Middle East. Today, more than 1,000 companies in 35 countries rely on azeti technology to monitor both their IT and physical infrastructures.
While we initially concentrated on industrial product monitoring, we now concentrate on telcos with special focus on BTS monitoring.
azeti’s unified monitoring solutions are not just limited to monitoring IT components (such as routers, switches, servers and software applications), but by supporting a wide range of sensors and detectors, we can also monitor and manage just about every sort of physical phenomenon imaginable: fuel levels and usage rates, temperatures and pressures, voltage levels and battery capacities, air quality and flooding, gages and valves... plus cameras, motion sensors, access-control devices and so on. The possibilities are virtually endless.
Information collected from all remote locations flows via communications networks into the SiteOne console that, regardless of monitored systems’ distance and location, acquires,
Site management experts azeti reckon there are 8m telecom towers worldwide, of which 640,000 are dependent on generator power, rising to 1m in the next two years. To serve this market, azeti has developed and deployed together with azeti’s business partner Lemcon Networks the cost efficient SiteOne solution for network management, based on azeti’s proven SONARPLEX product line.
Read this article to learn:< How azeti’s intelligent site management capability is integrated with Lemcon’s NeXsysOne in the new
SiteOne solution
< How to save 30%+ on the operating cost of HVAC Systems
< How predictive monitoring extends MTBF
< Integrating with a zero capex energy service business model and working with the local community to
share power and improve site security
Keywords: Who’s Who, Managed Services, Access Control, Monitoring & Management, Opex Reduction, Batteries, Fuel Security, Air Conditioning, ESCOs, Site Visits, Asset Register, RF-Units, Community Power, RMS, Site Management System, Asset Lifecycle Platform, Job Ticketing, Spare Parts, azeti, Lemcon
visualizes, controls and analyses every sort of information client companies need to precisely monitor and operate their most vital systems and equipment. In addition, It also produces management reports, analytics and historical information data.
Because azeti makes use of standard sensors and industrial bus interfaces, clients can depend on an uninterrupted flow of information. And even if there should be a communications network failure, azeti’s appliances continue to run without the central console, thus assuring a complete data record.
I joined azeti in 2009 with a substantial round of venture capital financing, with an objective to internationalise the business, which had been focused on Europe. By 2010 we had 60% of our revenue coming from outside Europe.
TowerXchange: Please introduce our readers to your business partners Lemcon Networks.
Thorsten Schaefer, CEO, azeti Networks: We conducted extensive research and identified Lemcon Networks as a top star in the managed services business for telcos.
Your site management system could be the best in world, but if you don’t install, rollout and manage services in the right way with qualified people, the project will not be a success.
Lemcon Networks Ltd. was established in 2000 to
focus on telecom projects. The company is part of the Lemminkainen group from Finland which has 9,000 employees and an annual turnover of €2bn. Over the years, the company has been involved in telecom network deployment projects in over 40 countries across all continents.
Lemcon’s core experience comes from upgrading and expanding GSM, WiFi, WiMAX, UMTS or LTE networks. Lemcon customers worldwide include or have included Globe Philippines, Econet Zimbabwe, T-Mobile USA, Nokia Siemens Networks, Ericsson, Huawei, Millicom, MTN,
and the Finland based S-group. Lemcon has successfully delivered more than 200 projects worldwide since 2000. Many of these projects are complete end-to-end turnkey delivery service from site acquisition to final network operations. On-going projects include system integration type services centralised around data capacity expansions, site management, mobile network system integration, asset management, building maintenance and managed services.
It was perfect timing when we contacted Lemcon 20 months ago, as Lemcon had developed
software around managed services for BTS and towers; software that combined monitoring and management, staff and project management, maintenance, repair and resale management. They were consolidating their managed services offering into a new suite – NeXsysOne, so azeti’s SONARPLEX Product line became the site monitoring component thereof.
Lemcon has established its Global Technical Support Center in Dubai (GTAC) that supports activities directly linked to the professional NeXsysOne software suites.
TowerXchange: What is the installed base of SiteOne in emerging markets?
Thorsten Schaefer, CEO, azeti Networks: azeti and Lemcon as mentioned have delivered successfully more than 1.000 installations independently. Now with the unique combined solution SiteOne we have successfully deployed our first installations around the globe. The solution will be implemented at 250 sites in Q3/2013 and is shortlisted in projects with in total more than 100,000 sites.
TowerXchange: How does using SiteOne add value to the management of remote cell sites, particularly in emerging markets?
Thorsten Schaefer, CEO, azeti Networks: We collect data from remote sites to the NOC, and enable tower operators to react. For example, an engineer may set the air conditioning to
lower the temperature in the shelter to 18 degrees for a maintenance visit, yet forget to reset the temperature when he leaves – that can cost a fortune in air conditioning power consumption. With SiteOne we can detect the temperature, verify from the surveillance module that is integrated in SiteOne that the site access is complete, and reset the air conditioning remotely.
We can monitor for water intrusion into the fuel tank, we can switch off the pump or generator remotely... Any number of sensors and data points can be deployed to SiteOne for control from the NOC.
TowerXchange: How can intelligent site management be simplified?
Thorsten Schaefer, CEO, azeti Networks: Many site management processes can be automated using SiteOne. Local events can be handled within our SONARPLEX appliance that can automatically reset temperatures, water pumps, entrance gates, cameras or reboot IT and RF components.
For example, all we need to know to configure the air conditioning is the highest critical temperature of every piece of equipment in a shelter. We don’t need manual intervention from the NOC, temperatures can be managed automatically onsite. The only important input is to know which asset will overheat and at what temperature.
With our technology, up to 40-50 different measurements of temperature can be gathered, enabling us to identify the optimal sweet spot for air conditioning, which should lead to at least 30% savings.
Our reports require very low data traffic when everything is fine – there’s no need to transport data about the temperature every minute, all that does is blow up the data traffic.
Our solution is powered by an intelligent Modbus, BlueTooth, Zigbee, WirelessLAN, GSM-enabled box onsite, each with the processing power of a computer but as big as two cigarette boxes. There is no need for 10 boxes from different vendors – more sensor devices only means more installation and maintenance hassles! Whether it’s a diesel generator, solar panel array, deep cycle battery, or the monitoring of rectifiers, complex power scenarios can be managed from a simple device.
TowerXchange: What impact does intelligent site management have on Mean Time Between Failures (MTBF)?
Thorsten Schaefer, CEO, azeti Networks: We provide predictive monitoring for IP devices logging file size, CPU usage, HDD status et cetera, while we can detect fuel refilling status and purification with water, and optimise battery cycles and performance to extend battery life cycles.
Generator life cycles are extended by the many ways in which intelligent site management can reduce runtime, for example reducing fuel usage by energy (AC) management, such as by using a simple “maintenance” button.
Co-ordination with asset registers and spare parts inventory means spare parts can be delivered faster to the site, further reducing MTBF.
TowerXchange: How can tower operators combat fuel theft?
Thorsten Schaefer, CEO, azeti Networks: The most common challenges we encounter working with tower operators involve fuel, batteries or copper being stolen, or problems with access control and unqualified access.
With SiteOne, video surveillance is built into the site and linked to alarms, with a camera that automatically locks the site if broken, and a ‘dead man alert’ in case of tower falls.
Access control can be simplified with the Staff Manager tool from Lemcon plus SiteOne. Only qualified engineers can open the gates using an SMS code that works for six hours on a simple electronic lock and PinPad or barcode read from a smartphone – there’s no need for an expensive intelligent lock, although we can use fingerprint access control if the operator wants. We also support a proof container/area with separate access control for the fuel tank.
TowerXchange: How can tower operators “close the loop” on maintenance alerts and job ticketing to ensure priority actions are completed in a timely manner and recorded in asset registers?
Thorsten Schaefer, CEO, azeti Networks: SiteOne includes a ticketing system which can be integrated with an existing job ticketing system. On top of this, Lemcon offers a whole range of integrated applications to optimise maintenance of remote sites:
< MaintainOne is a comprehensive preventive and corrective maintenance management system. This web-based application is a one-stop solution for all your event and alarm management needs< AssetOne is the premier asset management and inventory solution< StaffOne is an advanced human resource management software that allows you to control and consolidate all your resource information in a streamlined and efficient
manner< TaskOne is a comprehensive task management solution that coordinates field activities with those of the NOC
Let’s use an example scenario in which the RF-Unit malfunctions. This generates an alert which triggers an automated restart of the RF-Unit by software command; and as we know it seems like 90% of malfunctioning assets work if you just switch them on and off!
Whilst we try to fix the problem intelligently and automatically on site, at same time we report the problem to SiteOne at the NOC, which generates a job ticket and alert with historical data on the asset. If the automated solution onsite still hasn’t fixed the problem, the alert goes into
“ “Co-ordination with asset registers and spare parts inventory means spare parts can be delivered faster to the site, further reducing MTBF
StaffOne to find the nearest engineer with the right qualifications. That engineer is SMS’ed an access code to open gate, together with a photo of the RF-Unit, and notification that this is the component in which we’ve detected an error. Meanwhile TaskOne governs the change of RF-Unit, and looks into AssetOne for stock of spare RF-Units of the right type (or orders one if out of stock), while also identifying who is the next engineer free to take the spare part from the store to the site. So there’s a seamless, end to end process from the azeti SONARPLEX boxes on the site to the dashboard at the NOC.
Typically our joint service is sold on a monthly base.
TowerXchange: Can you extend your business model into providing energy as a service?
Thorsten Schaefer, CEO, azeti Networks: We’re finalising a new partnership with a company that manufactures modular energy stations designed to provide efficient power to telecommunications base stations. The model will be based on a zero capex model, where they generate revenue solely from fuel savings. We have a contract to pre-install azeti inside their generators to manage the whole site and embed this in a managed service model. In this model, the energy service company might give the old generator to the community, which incentivises them to take care of the site. Security improves if you work with the community to
protect the site – it’s in their interest that the site is up and running. When locals can charge their phones using generators, if the gate is ever broken, local people can respond fastest. The model has been proven in the favelas in Brazil.
TowerXchange: Finally, please sum up how you differentiate SiteOne from competitive remote monitoring and intelligent site management systems?
Thorsten Schaefer, CEO, azeti Networks: The combination of azeti’s intelligent remote
technology SONARPLEX and Lemcon’s SiteOne software offer a unique solution to:
< Monitor ANY old or new assets at a remote sites from IP devices, plus sensors and cameras to control theft of fuel and assets< Manage ALL intelligent devices (AC, batteries, generator, cameras, entrance gates, et cetera) directly at the site
This significantly reduces energy consumption, theft, MTBF, and maintenance opex including truck rolls
azeti interface
Site Management - Made Intelligent
Using information management to measure and maximise Tower Cash FlowHow to harness critical information across the end to end tower industry workflow, from construction to monetisation and maintenance
TowerXchange: Please introduce yourself to our readers. Udhay Mathialagan, Chairman, Tarantula: Having been involved in a variety of different roles in developed and developing tower markets (Australia, India and Russia) involved in multiple towerco formats, from full blown asset purchases and carve outs to green field builds, and most recently being a financial sponsor, I was ready for a new role. I became interested in niche companies offering differential value to the tower industry, and got connected with Ravi Kuppan, Founder of Tarantula. I saw Tarantula becoming more and more relevant as towercos seek to establish themselves in new developing markets, they have found the Tarantula platform useful to help them expand quickly and efficiently. So I recently joined Tarantula as Chairman to partner with Ravi to build out a global platform and go deeper into complex site management tasks. TowerXchange: What does the Tarantula platform provide for tower operators? Udhay Mathialagan, Chairman, Tarantula: We provide a platform for telecom operators and towercos to manage information assets relating to towers across the end to end workflow - from establishing, operating and monetising assets through to the tracking and management of an inventory of assets. The platform is purpose-built for the tower industry and for the unique challenges of managing of communications and
Udhay Mathialagan tripped into the international tower industry almost 15 years ago, and for good reason he stayed! Having initially worked at Telstra and KPN, Udhay was a founding member of Crown Castle’s Australian business in 2000, playing an instrumental role in the acquisition of Singtel Optus’s US$225m tower portfolio, before serving as Director Strategic Development and Commercial in Crown Castle’s management team. Udhay founded Insight Infrastructure in 2006, a green field regional towerco in India, and served as CEO until its sale to American Tower in late 2009. Prior to joining Tarantula as Chairman a month ago, Udhay was a Senior Communications Industry Advisor to Macquarie Capital.
Read this article to learn:< How Tarantula’s platform built for towercos can be configured much more quickly and efficiently than
traditional ERP systems
< The critical data points required to calculate and optimise TCF
< Using a real time asset register to close the gap between what is in the contract and what is on the tower
< Leveraging ‘single source of the truth’ data to manage a complex supply chain
< The importance of high quality information to get a better valuation of your tower assets
Keywords: How to Guide, TowerXchange Meetup Preview, O&M, Construction, Valuation, Due Diligence, Opex Reduction, Tenancy Ratios, Co-locations, Data Room, Exit Strategy, SLA, Unreliable Grid, KPIs, Site Visits, Asset register, C-level Perspective, Ground Leases, TCF, Asset Lifecycle Platform, Job Ticketing, Africa, Americas (South), Asia, Europe, Tarantula
power across thousands of distributed sites. TowerXchange: How has the tower industry historically managed workflows and asset management? Udhay Mathialagan, Chairman, Tarantula: When I started out in the business almost 15 years ago, the tower market was confined to big players in the US, UK and Australia. These larger players typically managed their businesses using customised traditional ERP systems at great expense - the customisation effort even in a smaller country could cost US$5-10m to adapt the towerco’s business process, and in many cases it still didn’t respond very well.
As the tower industry evolved into a larger number of countries, including emerging markets, a new class of smaller and medium sized towercos began to emerge, including subsidiaries of large towercos entering new smaller countries. With the move from developed to developing markets, the business model also became more complex. We moved from a straight-forward real estate management model to a tower plus power model, with new operational challenges, new costs and new penalties associated with managing unreliable power. The large ERP systems didn’t respond well, they were too expensive for the scale of some of these new towercos, so Tarantula filled a natural gap in the market. We had codified tower industry specific workflow processes, were able to automate key business processes, offering a cost effective, fast deployment solution. TowerXchange: Tell us the story of Tarantula’s origins - how did you “codify tower industry specific workflow processes”? Udhay Mathialagan, Chairman, Tarantula: Tarantula started in the late 1990’s in the UK, initially as a web-based platform site-share.com, supporting the industry with information about what was happening in the sites market. Site-share.com provided an open platform, and everyone put their data on it. Tarantula developed an understanding of what people were doing with assets. As the emerging market tower industry took off, Tarantula entered
the Indian market, and eventually had almost half the towers in India running on the Tarantula platform. TowerXchange: What is Tarantula’s footprint worldwide? Udhay Mathialagan, Chairman, Tarantula: We have a substantial footprint in Europe, particularly in the UK and Scandinavia, and in India. We’ve done a few implementations in Africa, with a more in the pipeline. Our market-tested solutions are highly relevant to the rapidly growing markets in Africa. With our global headquarters being consolidated in Singapore, we’re going to get increasingly active in Asia, especially South East Asia, where there are some exciting market developments in the tower market. We’re also working towards a partnership approach in the Americas.
“ “
With the move from developed to developing markets, the business model also became more complex. We moved from a straight-forward real estate management model to a tower plus power model, with new operational challenges, new costs and new penalties associated with managing unreliable power
TowerXchange: How did the information management requirements of your customers evolve as your focus expanded from the developed UK and Scandinavian markets into emerging markets? Udhay Mathialagan, Chairman, Tarantula: In developed markets, our platform was mainly used for lease management - managing ground leases and leases to clients - and inventory management. The biggest difference moving into emerging markets was the addition of energy management - understanding the energy mix particularly at sites connected to the grid but not necessarily available all day; balancing the use of grid, battery and diesel generators (later adding renewables). So it evolved from a pure real estate to a real estate plus energy logistics game. Another big difference between developed and developing market tower portfolios is that in developed markets portfolios are most often assembled through asset purchase, whereas there is more green field activity in emerging markets. To support these complex construction projects, we developed a deployment module. So the Tarantula platform covers the end to end workflow; from a front end construction module, through a central module for managing financial and legal processes, to a back end O&M management module. We’ve codified tower management business processes in a box, enabling towercos and MNOs to get to market very quickly by configuring unique elements of their business process onto the platform. For companies moving into new markets it makes a lot
of sense. TowerXchange: Tell us a bit more about the configuration that is required to adapt to different towerco’s unique business processes. Udhay Mathialagan, Chairman, Tarantula: We’ve been through many combinations of different market dynamics and different customer needs, so we’ve market tested our codified tower industry workflow processes. There is always something unique to bring in from a new customer’s business plan, but we’re not starting from raw code; we have a platform that works. Towercos have a trade-off of cost and time to adapt, so time to market is critical. Configuration requirements vary by customer, but the core processes of tower operators are not that different - managing build-to-suits, leasing to tenants, managing maintenance processes and fuel supply. Tower operators need to be able to adjust dynamically to emerging new opportunities as they acquire more towers, win build-to-suit contracts, or as the regulations change. Tarantula has a dynamic platform built specifically for towercos, supported by people with knowledge of the towerco business, which means we can configure the system very quickly and efficiently, which is a compelling alternative for towercos who would otherwise spend US$millions adapting a much larger ERP system. TowerXchange: What are the KPIs through which tower operators should measure and manage performance?
Udhay Mathialagan, Chairman, Tarantula: When you’ve worked in the tower industry as long as I have, you know it’s all about Tower Cash Flow (TCF) - how much cash is being generated at a unit level. TCF is the first metric investors look at it when evaluating tower portfolios. TCF is a product of the revenue or cash flow per tower, which itself is a function of the tenancy ratio and lease rate. TCF also incorporates how much revenue is being dispersed to landlords through the underlying ground lease costs, and how much is spent on maintenance. The tenure on the underlying ground lease is critical, and Tarantula helps towercos track this. Investors always want to know the long-term lease costs and whether they are at risk. Towercos in developed markets spend $millions extending and stabilising their ground leases, but ground leases are even more complicated in developing markets where you’re dealing with multiple
“ “it’s all about Tower Cash Flow (TCF) - how much cash is being generated at a unit level. TCF is the first metric investors look at it when evaluating tower portfolios
federal, municipal and environmental regulatory authorities, not to mention a range of different real estate legal frameworks. The Tarantula platform enables you to add compliance processes to follow and to create a view of your lease model. This enables tower operators to create an early warning system when lease renewals are coming up, and to create a proactive strategy to secure leases at a good cost level. The tower industry may be young in Africa, but it’s important to have high quality data on ground leases that you can slice and dice. TowerXchange: What are the other critical data points when managing and maximising TCF? Udhay Mathialagan, Chairman, Tarantula: From a costs perspective, there are key data points around property. In developed markets you can almost have an attitude of ‘set and forget’, at least you can have that attitude to costs other than those relating to long-term ground lease costs. In developing markets property, power and regulations are always changing. The asset may be “passive”, but nothing about the information is! Tenants may add new equipment, the underlying lease may change - there are literally hundreds of data points per tower. A lot of first generation towercos didn’t need this level of information detail, but in developing markets you need better control and monitoring systems to optimise energy opex, maintenance processes and ultimately to achieve your business plans.
Revenue is reported through normal financial systems, with revenue assurance and asset tracking. What is physically on a tower and what’s reflected in contract are not always the same things! Having a real time asset register gives you a better quality framework for revenue assurance, and a sound basis for a mature conversation with the client. So good information management is critical to bridge the gap between what’s in the contract and what’s actually on the tower. Being able to get accurate and consolidated data across sites enables you to make commercial decisions on the front line of the marketing of towers and the sale of tenancies, and to meet specific client requirements. Having the ability to get accurate and timely information on these distributed tower assets will enable towercos to come up with smarter commercial and promotional deals, and ultimately to optimise revenue. Tarantula has the ability to create reports that have been proven across multiple markets and situations to give more levers for an emerging market towerco to run their revenue engine. TowerXchange: Looking beyond the tower operator, how does site-share.com help to align and manage subcontractors and suppliers within the tower supply chain? Udhay Mathialagan, Chairman, Tarantula: This is an area we’re particularly good in! Without a platform like ours, you can find a
managed service provider converting Service Level Agreement commitments into their own complex spreadsheet, then a field engineer converts it into a Word document - instructions and metrics are corrupted by their transfer. Our platform allows field engineers visiting a site to work against exactly the same task list as seen at the NOC, and to upload data back to the NOC. In this way, the tower operator can confidently tick off milestones - and suppliers don’t get paid until they have provided data, in the right format, proving a task has been completed in a timely manner, and the completion of that task has been accepted. Managing small suppliers in remote operations requires a “single source of truth” set of data. Managing subcontractors becomes a data-based interaction with remote supply chain participants. Significant managerial skills are required, but we’ve standardised data and embedded workflow processes in a way that results in a more professional approach to managing the supply chain. We also generate an audit trail of what’s happened - that’s the power of data - there’s a lot of information that can’t be retrieved from spreadsheets and word documents spread across locations. TowerXchange: How does Tarantula’s mobility platform support the management of remote suppliers? Udhay Mathialagan, Chairman, Tarantula: We’ve put our software on a smart phone to enable the
tower operator to push detailed jobs out to staff and contractors. The mobility platform enables accurate information transfer to field staff: which site to go to, which tasks to undertake, which data to capture. The app generates a geo-coded, time stamped audit trail. The mobility platform can help reduce site visits or make them more efficient - if someone is visiting to replace battery they can take a picture of the assets on the tower at the same time. Labour may have a cheaper unit cost in developing markets, but developing market towers require a lot more site visits, and the economic cost of inefficiency is quite high. Tarantula are bringing technology to bear to make site visits more productive. TowerXchange: Finally, as a tower-industry leader with experience of tower transactions, tell us how using Infrastructure Lifecycle Management platforms like Tarantula’s can improve the valuation of tower assets? Udhay Mathialagan, Chairman, Tarantula: Good question! There are two parts to my answer: one, having better systems and controls helps tower operators drive TCF in a smarter way. Through the lifecycle of owning an asset, you want do everything possible to optimise TCF using all the information and control tools we put at your disposal. Then two, once you’ve negotiated the headline valuation with an acquirer, the major international towercos have very thorough due diligence processes, and you
need to be able to withstand those due diligence processes to close the transactions. I have first-hand experience of selling my company to American Tower, and I’ve worked with Crown Castle so I know how they evaluate assets. High quality information gives confidence to the buyer. If you’re scratching around for information, you’re opening yourself up to downward renegotiation of the multiple. Information quality is the first impression even before a potential acquirer takes a sample of your physical assets - you can’t reverse engineer high quality information four years after the assets were built or initially acquired - you’ve got to ensure high quality information from day one. TowerXchange: Actually, one more question - in your experience how does the information quality compare between towercos and MNOs? Udhay Mathialagan, Chairman, Tarantula: A few MNOs in markets that are exposed to the towerco business model are starting to develop a concept of what their assets could be worth. They’re starting to appreciate the need to manage towers as a distinct asset element and therefore realise improving the quality of their information can improve value. Our engagement with MNOs has increased sharply this year. We have an end to end workflow and asset management system for managing distributed tower networks, and we’re noticing that MNOs rolling out 4G / LTE use tower assets and rooftops in different ways from what how they used them
with 2G and 3G. They’re using property rights in different ways, blending technologies at a combination of owned, shared and leased towers. The nature of tower sharing has shifted from one-to-one relationships, to the complexities of network joint ventures and multi-band technologies in the same slots; there are more variables. Towers are a multi-dimensional matrix that needs to be managed. MNOs’ traditional network management tools would need to be heavily customised to manage such complexity; Tarantula’s pedigree in wireless site management is embedded in our product and in our people - MNOs entering into complex sharing agreements for LTE or deploying purpose-built emergency networks need to manage information around these new modes of sharing at complex, distributed sites
“ “the major international towercos have very thorough due diligence processes, and you need to be able to withstand those due diligence processes to close the transactions... High quality information gives confidence to the buyer
If you can’t measure it, you can’t manage itNetbiter remote management system applies Drucker to the management of cell sites
TowerXchange: Please introduce TowerXchange’s readers to HMS Industrial Networks, particularly your experience in telecoms. Bartek S Candell, Global Key Account Manager, Telecom Infrastructure and Energy, HMS Industrial Networks AB: HMS is a leading supplier of industrial communication technology with 350 employees, operations in 10 countries, and distributors in over 50 countries. We’re a public company with annual turnover of €50m+. While the company was founded in 1988 and our initial applications were in industrial automation and control, we got into the telecom business three years ago; having supplied RMS to diesel generator control panel manufacturers for many years, we realised we could expand the package to provide more holistic monitoring and management of important aspects such as energy generation and consumption, and package it in to a ‘plug n play’ solution. We have two brands of interest to TowerXchange readers: Netbiter Remote management Solution (RMS) and Anybus protocol converters for industrial communication. Every device, whether on a cell site or production floor, has its own communication protocol, and the amount of protocols is increasing dramatically. HMS’s Anybus embedded communication modules enable communication in-between devices and networks. The Netbiter gateways and Netbiter cloud services connect
Read this article to learn:< Using a gateway to integrate the diverse communication protocols from different cell site equipment
< Progressing from scheduled to predictive maintenance to reduce opex
< The benefits of ultrasonic compared to pressure fuel tank sensors
< How to measure Energy Efficiency Ratios (EERs) to target underperforming sites
TowerXchange was once asked whether the integration of M2M-enabled sensors into cell site equipment would eventually render existing RMS systems redundant? We think the opposite - the integration of varying communication protocols from different sensors and the communication of the information back to the NOC has never been more important. HMS Industrial Networks’ Netbiter solution enables tower owners to connect any equipment with a communication interface to their gateway, which in turn provides critical information which the NOC can use to reduce opex costs. By understanding when, how and if equipment is operating, tower operators are able to make better decisions regarding site maintenance and take actions when necessary.
devices and enable remote monitoring, management and control. This provides instant access to information such as system status, performance and provides possibilities to analyse and remotely operate equipment. In turn this enables operators to reduce cost and improve efficiency, better analyse equipment behavior, and to transform maintenance procedures from reactive to proactive.
Cell sites are often serviced according to pre-determined, scheduled maintenance. As site visits, particularly to remote sites, are costly, those costs can be reduced through RMS by monitoring and configuring the site remotely. The benefit is that you will be able to send teams only to sites that need servicing, and you will also know in advance what equipment to tend to, enabling a team with the right skills to be
dispatched. TowerXchange: Tell us about the installation of your system and how it’s connected back to the NOC. Bartek S Candell, HMS Industrial Networks AB: It requires minimum of technical expertise to install the Netbiter gateway at a cell site. It’s
plug and play - all you have to do is install the hardware to the rack, power it up, connect to the equipment you wish to monitor and/or control, and leave the site - the gateway connects automatically with our Netbiter Argos cloud service. With all configurations undertaken remotely via the cloud, tower operators avoid the need to employ high cost, scarce engineering skills to install our system. Remote connectivity is provided via 3G, GPRS or Ethernet. We offer our own web-based front end, often used for more advanced configuration of existing equipment on site. Many customers use our API to integrate Netbiter cloud service with their third party OSS software, gathering data directly from our cloud into their own system. TowerXchange: What equipment can Netbiter monitor at a cell site? Bartek S Candell, HMS Industrial Networks AB: With the minimum of site modification, we can monitor and control basically any existing equipment on a site through our M2M communication interface. Netbiter is available in building blocks - it’s like a menu from which you can select ingredients such as: < Fuel management< AC metering< DC metering< Genset management
< Rectifier and battery management< Renewable energy management< Fuel cell management< Free cooling / air conditioning management TowerXchange: How big is the fuel theft problem at cell sites, and how do you help tower operators overcome that problem? Bartek S Candell, HMS Industrial Networks AB: The Indian telecom industry consumed 3200bn liters of diesel during 2012 and the estimation is 4400bn litres of diesel in 2014[i]. Customers have told us that approximately 30% of this can be fraud! This is of course a huge problem and we decided to come up with a good solution for this. But since our core business is remote communication and we had to come up with a high quality solution for level measurement, our choice was to team up with a German world leading manufacture of level measurement sensors - Pepper & Fuchs. The outcome of this great partnership is a very unique, top mounted ultrasonic sensor able to measure tank level, refilling, consumption and theft. To reach high resolution and accuracy we needed to take the environmental aspects into account. The sensor is compensating for temperature changes in the diesel tank as well as humidity. If a tank is mounted underneath a generator we compensate for the vibrations from the genset as well. With this high accuracy data collected we can easily present correct tank level, theft (on customer defined thresholds), low/high
level alarms and most important; verify the refills and reduce the fuel refill intervals. The ultrasonic sensor is tamper proof - if someone cuts the cable or removes the sensor we immediately get an alarm that incoming data is not correct. Furthermore, what’s unique about our ultrasonic sensor compared to other sensors is the possibility of remote configuration. Basically the only thing you do on site is to mount the sensor on a tank and connect to the Netbiter gateway. The rest is done remotely. TowerXchange: Tell us about your system’s capabilities in genset management. Bartek S Candell, HMS Industrial Networks AB: We have for several years been the preferred RMS supplier to many of the world’s leading genset control manufactures. If you connect the Netbiter gateway to the genset controller via existing Modbus interface you get access to all the parameters and settings you would have locally on the controller like DG runtime, genset output, battery levels, oil pressure, engine RPM, coolant temperatures et cetera. Our solution then enables you to remotely set parameters, or start / stop the genset and collect alarms. If there is no Modbus available you can easily connect the dry contacts to the Netbiter gateway’s built-in I/O ports. In Europe the problem is actually opposite from other markets, the DG’s are not running that
often. Our customers use our solution to remotely test-run the DGs to verify their operating status so they are ready to start when really needed. But probably the most important factor is that our RMS solution enables the tower operator to switch from scheduled to predictive maintenance of the DGs, creating savings in all the aspects that relates to service trips. TowerXchange: How does Netbiter measure and enable the better management of the performance of cell site energy? Bartek S Candell, HMS Industrial Networks AB: Netbiter enables tower operators to monitor the availability, quality and consumption of all incoming power, existing (passive) equipment and the telecom load. It’s possible to connect up to 32 energy meters to our gateway, this can be already existing meters or meters supplied
by HMS. The solution makes it simple to keep track of multi-tenant sites but most import; by measuring the incoming power and consumed telecom power you easily get a site energy efficiency ratio to compare with other sites which by evaluating the result, allows you to target underperforming sites that require investment. All data is collected in the Netbiter RMS cloud and can easily be extracted in weekly and monthly reports, exported to excel format, or sent via the API to customers’ existing SSO. In a similar way, Netbiter enables the management of free cooling, air conditioning units and PIU’s (i.e any equipment with Modbus) - with full remote access. We can collect all parameters, change settings to manage alarms and monitor when to change filters or perform any other necessary maintenance related activity. Finally, I also want to mention that in Q4 of this year we’ll be releasing a new product which enables a transparent channel to ex Energy controllers or rectifiers enabling upload of new firmware or the downloading of log files from the rectifiers. This will further strengthen our offer and allow us to expand our capabilities in site monitoring! TowerXchange: What’s HMS’s installed base in Africa? Bartek S Candell, HMS Industrial Networks AB: As Africa is a new market for us our presence is not
In Angola we are rolling out our solution on 1,000 cells where the customer will monitor and control the DGs remotely. I can also tell you that we are working with one of the world leading technology suppliers for cell sites. HMS will be going an African Roadshow with Business Sweden, Ericsson and other Swedish telecom suppliers this year. We will also attend the Towerxchange Meetup Africa, and we are as well working on several tenders from the region. TowerXchange: Please give our readers an idea of the capital outlay required on a per site basis and the timeline to RoI. Bartek S Candell, HMS Industrial Networks AB: Of course the answer varies according to which equipment is being monitored on a site, the level of existing diesel theft/fraud and the cost of diesel in the local market. Assuming that we have a cell site with DG running 24/7 with a consumption of 2 liters/hour (0,80EUR/liter diesel) and 4 % fraud, will give us an RoI of 12 months. The Netbiter Remote management solution for one site starts from approximately EUR360 for the hardware and approximately EUR50 per year for cloud services [i] http://www.greenpeace.org/india/Global/india/report/Enabling-Clean-Talking.pdf
“ “by measuring the incoming power and consumed telecom power you easily get a site energy efficiency ratio to compare with other sites
May 2013
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Special feature:
Another battle of the power makers ensues in this latest edition of TowerPower. In the hybrid corner, Emerson Network Power describe a broad portfolio of products and capabilities to provide hybrid and solar energy to data centres, core and access sites. In the fuel cell corner, market leaders Ballard make the case for methanol, a fuel which reduces theft as it has no alternate use, and highlight the efficient scalability of their system. In the wind corner, distributed small wind leaders UGE propose their Levelised Energy Agreement as an alternate model for outsourcing cell site energy. Continuing the business models debate, Flexenclosure preview their round table at the TowerXchange Meetup in which they will seek a middle ground between the pure-capex and the zero-capex contractual models. Finally, Kiwi-innovators Enatel describe how their energy solutions help operators and towercos achieve high 9s uptime, while DAQS introduce their free cooling systems.
TowerPower - reducing Africa’s reliance on diesel, part four
Your TowerPower profiles this edition:88 Emerson optimise critical infrastructure
93 Ballard: when should fuel cells replace diesel?
97 Outsource cell site energy to UGE
103 Flexenclosure’s business model round table
107 Enatel on how to achieve high 9s uptime
114 DAQs on how to cut the cost of air conditioning
TowerXchange: Where does Emerson Network Power fit in the telecoms infrastructure supply chain? Gary Niederpruem, VP of Global Marketing and Strategic Planning, Energy Systems, Emerson Network Power: Emerson Network Power’s Energy Systems group focuses on the critical infrastructure for both core and access sites. We have a broad portfolio of products and solutions that includes: automatic transfer switches for utility grid and generator interfaces, AC UPS systems, DC power for core and access sites, cooling solutions for data centres, enclosures for power and equipment, monitoring and management capabilities, and comprehensive service offerings. The breadth of products and services Emerson Network Power is able to offer is one of our key differentiators. TowerXchange: What is your installed base in emerging markets, particularly Africa? Nevan Witchell, Managing Director, SSA, Emerson Network Power: We’ve been operating in Sub-Sahara Africa (SSA) for decades, and our installed base is in the thousands if not tens of thousands of product installations. Those installations support critical infrastructure with DC power, hybrid solutions, thermal management and integrated shelter solutions. Emerson Network Power has sales and service
Emerson is a US$25bn conglomerate comprised of five different business platforms, including Emerson Network Power, which primarily supports telecom and data centre customers. TowerXchange spoke to two senior executives within Emerson Network Power’s telecom-focused Energy Systems business to learn about the company’s broad product and service capabilities.
Read this article to learn:< Deploying hybrid and solar energy solutions to meet the specific requirements of core and access sites
< Using an ‘integrated solution’ to provide a fast-deployment data centre in a remote region of Africa
< Using base components and building blocks to enable efficient customisation of energy solutions
< The critical role of monitoring and management, backed up by the service capability to resolve problems
Keywords: Who’s Who, Energy, Monitoring & Management, Capex, Opex Reduction, Batteries, Loading, Data Centres, Air Conditioning, RoI, ESCOs, Hybrid Power, Solar, Dimensioning, Africa, Americas (South), Emerson Network Power
representation in most countries in SSA, sometimes maintaining direct relationships with operators, at other times working with systems integrators or partners for power and thermal management. TowerXchange: Tell us more about these ‘integrated shelters’. Nevan Witchell, Managing Director, SSA, Emerson Network Power: We have many types of integrated shelters; some are on-demand data centres, central offices or core switching centres, while others provide the energy and thermal management infrastructure for smaller deployments and remote nodes. We recently had a large project where a customer needed a core site up and running quickly in a very remote region. We worked with the CTO and their technical team to establish how to achieve their objectives using our technology - starting with the customers’ pain points is a vital part of our approach. Since our integrated modular shelters are designed, built and tested at the factory, they can be rapidly installed onsite which was one of the key challenges for this customer. Thanks to our broad expertise we could take this project from equipment production to installation onsite, to full commissioning of the infrastructure in less than 12 weeks compared to a traditional brick and mortar installation which can take up to six months to complete. The above is backed up by remote monitoring and in-country maintenance and field services.
TowerXchange: How has Emerson Network Power been able to support your customers in the battle to reduce Africa’s crippling energy opex costs? Nevan Witchell, Managing Director, SSA, Emerson Network Power: Emerson Network Power introduced hybrid energy solutions into the access network in SSA in 2005, when energy opex first emerged as a critical issue, and that had a huge impact. There are many variables that contribute to defining what each customer thinks is important at a site - these range from site load
to site locality to the criticality of the site and of course any planned expansion of the site in the future. Furthermore, different operators have different approaches - some want zero-capex models; some accept some capex up front, with longer-term opex savings. Some operators believe in battery preservation to reduce their carbon footprint, while others take a shorter-term view on battery life to drive short term OPEX savings. This is why we look beyond product and focus on the complete solution. We look at sites on
an individual basis, deploying hybrid and solar solutions where appropriate, rather than taking a one-size-fits-all approach across thousands of sites. Gary Niederpruem, VP of Global Marketing and Strategic Planning, Energy Systems, Emerson Network Power: In core sites, no one situation is the same; everything is nuanced, and there can be substantial capex and opex required for a single facility. However, there also are substantial - and often untapped - opportunities
for opex savings. When we audit core facilities, we identify several ways to realise those savings, whether through cooling, power systems, electronics, lighting or layout, and almost always incorporating intelligent monitoring and controls. Emerson has substantial auditing and engineering expertise - an area where our Services team also excels. TowerXchange: How do you strike a balance between the need to customise energy solutions to meet the needs of each site, and the financial imperative to standardise where possible to reduce cost and complexity? Gary Niederpruem, VP of Global Marketing and Strategic Planning, Energy Systems, Emerson Network Power: That’s a constant debate, and our solution is to offer base components and building blocks that can be integrated and delivered relatively easily. We can configure those base components and building blocks to quickly create a customised solution. Nevan Witchell, Managing Director, SSA, Emerson Network Power: If it’s a substantial network upgrade or greenfield site rollout, we might take a small sample of sites, surveying the environment at those sites, and use that input to push the standardisation of solutions as far out in front of us as possible. TowerXchange: What data inputs do you need to dimension one of those upgrade or greenfield site rollouts?
Nevan Witchell, Managing Director, SSA, Emerson Network Power: We blend a lot of technical inputs, factor in whether the customer is taking a long-term or short-term approach to RoI, and devise the best solution to meet the customer’s needs. We usually start with site load, which isn’t a simple number to identify. The range can be quite broad, and even sites running the same equipment in different areas can have different loads. It’s also important to prepare a site to cope with the largest potential load required. Of course everyone would love to eliminate both capex and opex, but that’s not realistically going to work. We work with the customer to find a reasonable investment with a reasonable RoI period to ultimately deliver better opex savings in the long term. Gary Niederpruem, VP of Global Marketing and Strategic Planning, Energy Systems, Emerson Network Power: We also need to consider location in order to effectively dimension a cell site. How physically remote a cell site is might determine whether it uses dual diesel generators on one extreme or 100% renewables on the other, and of course grid availability and stability is key. We have solar profiles and array maps that predict the number of hours of sunshine per day to determine whether solar is an option or not. Another factor is the criticality of the site - smaller access sites versus critical macro sites. We consider all of these things.
TowerXchange: Is the zero-capex energy as a service business model a realistic option in emerging markets yet? Gary Niederpruem, VP of Global Marketing and Strategic Planning, Energy Systems, Emerson Network Power: I think there is a market for some form of capex financing where payment comes through shared opex savings, but most of the time the energy service provider has trouble making the long-term economics work. We have executed some programmes with financing involved, but I believe the traditional capex model will still exist 3-5 years from now. People are experimenting with the ESCO model, but we don’t believe it will be the predominant business model in the near-term. Ultimately we’ll stay close to our customers and be responsive to their needs. TowerXchange: Tell us about the role remote monitoring and management plays in your solutions. Nevan Witchell, Managing Director, SSA, Emerson Network Power: Remote monitoring and management is critical everywhere, but especially in Sub-Saharan Africa. We are dealing with remote sites in difficult-to-reach locations and extreme environments. Anything that can minimise site visits without impacting performance is incredibly valuable. Effective monitoring and management does that. Additionally, tower operators must improve visibility into their networks to manage them
effectively and efficiently, ensure reliability and deliver their full potential opex savings. Gary Niederpruem, VP of Global Marketing and Strategic Planning, Energy Systems, Emerson Network Power: Monitoring and managing critical infrastructure is essential. Emerson Network Power’s monitoring and management solutions can work with any equipment, however they deliver a richer set of information and maximum control when married up with our own equipment. TowerXchange: Finally, please sum up how you differentiate Emerson Network Power from your competitors. Gary Niederpruem, VP of Global Marketing and Strategic Planning, Energy Systems, Emerson Network Power: With the convergence of data centres and telecommunications, core sites increasingly will be mixed model applications. One of Emerson Network Power’s unique qualities is our ability to provide a broad portfolio of energy solutions supporting this evolving, converging space; AC or DC, monitored or unmonitored, sold or installed. Emerson is a global company with many global clients. Even where our clients have a more localised footprint, we can share best practices learned worldwide. We have a prevue over macro trends in different regions that provides us with unique insights to address customer problems.
“ “We’re not thinly engaged in different verticals and moving sideways into telecoms - our Energy Systems group has 50-60 years of domain knowledge in telecom and data centre infrastructure, globally as well as in Africa
We’ve invested R&D to develop our monitoring and management capabilities because we think visibility is critical. And we have our own service arm, so we can dispatch our people to resolve any alarms. Finally, this is what Emerson Network Power does. We’re not thinly engaged in different verticals and moving sideways into telecoms - our Energy Systems group has 50-60 years of domain knowledge in telecom and data centre infrastructure, globally as well as in Africa. Visit Emerson Network Power at booth #27 at the TowerXchange Meetup, taking place on October 1 and 2 in Johannesburgwww.towerxchange.com/meetups/africa
DECREASE NETWORK COSTS WHILE INCREASING RELIABILITY AND EFFICIENCY.
Hybrid Energy solutions from Emerson Network Power ensure the best operational cost … always.
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Hybrid Energy solutions feature innovative active site infrastructure management that can reduce energy consumption significantly to ensure your network is running at an optimal level of efficiency and reliability at all times.
When should fuel cells replace diesel power at emerging market cell sites?Fuel cell technology offers a clean, quiet and reliable power solution with a smaller footprint
TowerXchange: Please introduce us to yourself and to Ballard - where do you guys fit in the telecoms infrastructure ecosystem?
Karim Kassam, VP, Corporate & Business Development, Ballard Power Systems: One of my key priorities in this role is to leverage our products and capabilities in emerging market opportunities and build strategic alliances with partners who will deliver our solutions to telecom providers worldwide.
One of Ballard’s key commercial segments is telecom power solutions - emergency backup and supplemental power in areas where grid power is not effective or that are subject to crisis situations. We’ve achieved great traction in disaster prone areas such as coastal communities vulnerable to floods, hurricanes or tsunamis, where fuel cell systems offer extended duration power compared with batteries and diesel gensets. Fuel cell systems can run for days before refueling, which can be critical in disaster recovery contexts.
Fuel cell systems are also effective as a replacement for diesel gensets at unreliable or off-grid sites, or where there is a need for cleaner power solutions with a smaller footprint than incumbent solutions. Southeast Asia, Africa and Latin American are key growth markets for the use of fuel cells as backup or primary power solutions for telecom cell sites.
Read this article to learn:< What is the ‘sweet spot’ for adoption of fuel cells in terms of relative fuel cost, grid availability, runtime
and site load
< The impact on fuel theft of switching to a fuel with no alternate use
< The capex and installation costs of fuel cells and TCO compared to DG+battery power
< The refuelling logistics and asset lifecycle of fuel cell solutions
< The efficiency of fuel cells as sites expand from single to multiple tenants
Under what conditions are fuel cells a viable alternate source of power compared with diesel generators? How does the Total Cost of Ownership (TCO) and energy logistics processes compare to diesel? To find out, TowerXchange spoke to the pre-eminent fuel cell company worldwide, Ballard Power Systems, who have been at the forefront of fuel cell development for applications such as automotive, telecom backup power, material handling and buses. More recently Ballard has added focus on Engineering Services given its unmatched industry “know how” from working with Daimler and Ford and now Volkswagen. However, one of Ballard’s key commercial markets is in telecom, where their fuel cell technology is used to provide power at unreliable and off-grid cell sites and in emergency situations caused by natural disasters or extreme weather.
TowerXchange: How does fuel cell technology compare to DG, DG+battery and solar-hybrid primary and backup power solutions for cell sites?
Karim Kassam, VP, Corporate & Business Development, Ballard Power Systems: Fuel cells produce electricity without combustion, which means that, unlike internal combustion engines, they generate little (if any) noise, vibration, air pollution, or greenhouse gases and operate at high efficiencies over a wide range of loads. Unlike batteries, fuel cells do not have a need for replacement or lengthy recharging when its fuel is spent. Additionally, since fuel cells store their fuel in external storage tanks, the maximum operating range of a fuel cell-powered device is limited only by the amount of fuel that can be carried. One of the main value drivers for fuel cell technology in Africa is the replacement of costly diesel generators, and the eradication of pilferage. Fuels cell systems provide a mitigation strategy in markets where one of our chosen fuels, methanol, is available at a lower cost than diesel. Ballard’s ElectraGenTM-ME methanol-fuelled solution is a good choice because there is no alternate use of the fuel which means fuel theft ceases to be an issue. In addition, refueling visits to remote sites can be up to two weeks apart, depending on the size of the fuel tank, which means a significant reduction in site visits and associated opex.
The main advantage of fuel cells over wind and solar power is that you are no longer dependent on weather. With a fuel cell system you can access reliable power as needed rather than having to wait for the correct weather conditions.
TowerXchange: What’s the sweet spot for your solutions in terms of grid availability?
Karim Kassam, VP, Corporate & Business Development, Ballard Power Systems: The business case for investing in our fuel cell solutions is particularly compelling at sites requiring a minimum of 10 days between refueling visits, and where grid power is available no more than 6-8 hours per day.
TowerXchange: And what’s the sweet spot for your solutions in terms of site load?
Development, Ballard Power Systems: The benefit of fuel cell solutions is that they are able to follow the site load, which improves overall efficiency. Unlike diesel generators, it is efficient to oversize the power solution from the initial installation because it will only deliver the output required. For example, we can install our 2.5kW ElectraGenTM-ME fuel cell system, run it at 800w at an efficient cost per hour, and have the capacity ready to add a second and third BTS without the need for additional capex as power requirements increase. Ballard also offers a 5kW ElectraGenTM-ME system. With fuel cell systems, you simply run the power as you require it.
TowerXchange: Tell us about the capital investment required to install fuel cells at cell sites.
Karim Kassam, VP, Corporate & Business Development, Ballard Power Systems: The cost of fuel cell power has fallen by approximately 30% per year over the last five years. While the initial capital cost may be similar or slightly above that of a diesel generator, the total cost of ownership benefits outweigh the initial investment. Positive payback over the fuel cell system lifecycle are mainly driven by reduced maintenance requirements, reduced cooling expense, longer lifetime of the fuel cell system and the elimination of costs due to generator and fuel theft.
TowerXchange: Talk us through the process of installing fuel cell power at cell sites.
“ “The benefit of fuel cell solutions is that they are able to follow the site load, which improves overall efficiency... With fuel cell systems, you simply run the power as you require it
Karim Kassam, VP, Corporate & Business Development, Ballard Power Systems: In Africa, the installation cost of the fuel cell system is typically less than 10% of the cost of the fuel cell system itself.
Installation is simple; you lay down a pad, install the fuel cell system, and attach an external tank if needed based on site specific requirements.
Local site maintenance technicians can be trained to install the solution - there’s no need for scarce, expensive, niche technical expertise.
TowerXchange: What is the typical asset lifecycle of your solutions?
Karim Kassam, VP, Corporate & Business Development, Ballard Power Systems: We are continually focused on product development; making sure that we are responding to market requirements and delivering value to our customers. So where five years ago the forecast lifetime might have been 1,500-2,000 running hours, today our fuel cells can last 10,000 plus hours, which means you can go 3-5 years without having to replace the fuel cell stack if you are running the system at 8 hours or less per day.
TowerXchange: There’s a preconception that the refueling logistics of fuel cells can be as complex and costly as diesel - tell us about the process and change management implications of using fuel cells.
Karim Kassam, VP, Corporate & Business Development, Ballard Power Systems: The refueling logistics of hydrogen can be a bit more challenging. Hydrogen is an excellent choice for emergency backup power where you require a system to run for up to 72 hours but very infrequently. If the requirement for power is more frequent, such as on a daily basis, our methanol-fuelled solution is a better fit.
The nice thing about methanol is that the refueling process is similar to diesel - it’s a liquid fuel, with a hub and spoke distribution model, so the change management challenges are minimal. One of the reasons we work through
Total cost< Reformed methanol fuel cell solution < Running 11 and 24 hours per day < External tank 1,000 liters
Economic benefits< Positive payback over lifecycle, driven by: reduced maintenance requirements; reduced cooling expense; longer lifetime associated with fuel cell system; and reduced fuel theft issues < Savings grow linearly with number of sites
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• Total cost • Reformed methanol fuel cell solution • Running 11 and 24 hours per day • External tank 1,000 liters
longer lifetime associated with fuel cell system; and reduced fuel theft issues • Savings grow linearly with number of sites
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“ “five years ago the forecast lifetime might have been 1,500-2,000 running hours, today our fuel cells can last 10,000 hours, which means you can go 3-5 years without having to replace the fuel cell stack
local channel partners in emerging markets is that they are able to locally coordinate fueling logistics, which includes validating and approving trusted fuel suppliers to assure the quality of fuel as well as the delivery of fuel to the sites. TowerXchange: Tell us about your footprint of installed systems in Africa?
Karim Kassam, VP, Corporate & Business Development, Ballard Power Systems: We’ve got over 300 sites with fuel cell solutions installed with Vodacom - we’ve probably got close to a couple of MWs of fuel cells installed at sites in South Africa today. We expect to be deploying approximately 100 sites per year, and are currently looking at some larger deployments beyond South Africa over the next 12 months.
We are currently working with Inala in South Africa, and have a couple of additional African
partnerships under discussion. Ballard doesn’t compete with our channel partners - our role is to provide the technology, and our channel partners install and maintain our solutions according to the telco’s or towerco’s need.
TowerXchange: Is the transfer of assets from operators to independent towercos good news for companies like Ballard?
Karim Kassam, VP, Corporate & Business Development, Ballard Power Systems: We think so. They have different perspectives on energy opex. Towercos tend to think of the cost of power per minute, and they think about energy solutions as a service rather than as capex. Towercos look at Total Cost of Ownership (TCO) so higher upfront capex solutions with payout downstream tend to be viewed more favourably by towercos than by MNOs, where we often find
one part of supply chain team deals with opex, another deals with capex.
So this challenges us to come up with a financing mechanism that enables Ballard to be flexible to meet different clients’ unique requirements.
TowerXchange: Finally, please sum up how you differentiate Ballard’s solutions from other alternate energy backup power solutions for cell sites.
Karim Kassam, VP, Corporate & Business Development, Ballard Power Systems: The reliability of fuel cell systems is a major advantage in a critical application area like wireless telecom service, compared to lead-acid batteries or diesel generators. And, our fuel cell systems are capable of providing power for an extended duration. So, with minimal maintenance requirements, these performance advantages are available to telecom customers as an attractive financial alternative to traditional solutions. Additionally, we have a unique value proposition in markets where telecoms and ESCOs are looking for power beyond the 6-8 hours per day that the grid might be available; and our solutions are often used in disaster relief scenarios where power is required for days at a time.
Ballard’s fuel cell systems are cost competitive, convenient and effective. Telecoms customers who need reliable power they can depend on should consider fuel cells as an optimal solutionBallard’s ElectraGenTM-ME installed by Vodacom in South Africa
“ “We’ve got over 300 sites with fuel cell solutions installed with Vodacom - we’ve probably got close to a couple of MWs of fuel cells installed at sites in South Africa today
Outsourcing cell site energyUGE announces the Levelised Energy Agreement, a new business model for the outsourcing of cell site energy
TowerXchange: Please introduce our readers to Urban Green Energy (UGE), particularly your recent foray into telecoms.
Nick Blitterswyk, CEO, UGE: By early 2012, UGE had become market leaders in distributed wind turbines, with experience in over 70 countries. We started looking for new industrial markets where our knowledge could be applied to solve new challenges. We latched on to the telecoms market, attracted by the critical need for sustainable energy solutions at a large number of remote sites. With reliability critical, we felt we could provide a more robust solution by bringing solar and wind together.
UGE announced our telecoms solutions at Mobile World Congress 2012.
David Droz, AVP Telecoms, UGE: The growth of our telecoms department and capability happened organically as a result of the first telecoms sites installed within our partner network. When we reviewed those projects, and the types of clients they represented, we solidified our message and developed a full-blown strategy for telecoms.
Our first project of scale was with the Chinese Navy, which manages proprietary communication sites along the coast of China and in the South China Sea. Many of these sites were remote, off-grid and had been dependent on diesel, so they needed a reliable energy solution that was a fusion of solar, wind and batteries.
Early on it was clear there was a lot of interest in this segment, even before we launched UGE
Nick Blitterswyk grew up in a nature reserve, where his parents were caretakers, so whilst working in the finance industry, he sought a new challenge with a focus on sustainability. Nick founded Urban Green Energy (UGE) in 2008, with an initial focus on distributed hybrid energy solutions, growing UGE to become market leaders in small wind by 2012, which they’ve used as a launching pad for a focus on telecoms.
TowerXchange spoke to Nick and his colleague David Droz, an engineer with experience of liaising between engineering, sales and R&D. David is spearheading UGE’s entry into the telecoms market.
Read this article to learn:< How UGE conducts a resource assessment to specify a reliable solution combining solar, wind,
batteries and DG
< The flexibility and payback of investing in right-sized, scalable hybrid energy solutions
< A comparison of PPA and LEA business models
< How many cell sites does an investment of US $20m secure for a RESCO?
Telecoms. Alcatel-Lucent and Zain were among early potential clients, having contacted us looking for a solution, which led to us building out the Fusion platform for telecoms and launching UGE Telecoms.
TowerXchange: What are the typical use cases for UGE technology at telecom sites?
David Droz, AVP Telecoms, UGE: Every site has its own requirements in terms of kW, and we try to be flexible to meet those requirements. That said, the sweet spot for distributed renewables like ours tends to be off-grid, smaller scale sites below 10kW, that’s where we can deliver the fastest payback and best IRR. The higher the cost per delivered litre of diesel, the more renewables can save.
We offer customised solutions with solar, wind, batteries and Diesel Generators (DG) all core parts of the anatomy of our Fusion systems. How much of each energy source is used is what gives us our flexibility, and the energy mix is tailored according to the resources available onsite. We conduct a comprehensive resource assessment to determine the sun and wind available and to define what the approach is going to be.
Nick Blitterswyk, CEO, UGE: Let me give you an example. In the case of a client we’re hoping to close in Q3, there are 100 sites, each with slightly different requirements. Within the portfolio, we’ll look at every site, modeling the correlation of wind and sun, and the impact of seasonal considerations on energy logistics in order to come up with a reliable solution. Reliability is an order of
magnitude higher priority for our telecoms clients, because if the power goes out, the revenue stops.
TowerXchange: Does UGE focus exclusively on off-grid sites?
Nick Blitterswyk, CEO, UGE: No - we’ve deployed solutions at a number of sites with unreliable grid as well. These sites were relying on diesel for a
good portion of the energy needs, providing just as much of a headache to our client. In addition, for a new site the cost of connecting to the grid can be really high. Solutions like UGE’s Levelised Energy Agreement Program (LEAP) provide a better way. Oftentimes you can provide a better energy experience without needing to build that costly yet still unreliable link to the grid.
TowerXchange: How do you conduct a resource assessment?
David Droz, AVP Telecoms, UGE: Our resource assessment capabilities are one of our key differentiators from RESCOS and other distributed renewable energy providers. Assessment planning is all about understanding the topology of a network.
One of the keys is that we can remotely evaluate almost any site to a high enough degree to sign an MOU with a client for deployment of the LEAP. We draw upon the help of partners plus input data from the tower operator to enable us to understand the existing equipment onsite and to apply a baseline to the energy model. We then use statistical and environmental analyses to model changing requirements over a typical 10-year contract. So based on these models, we can iterate and
understand the design feasibility and cost impact of adding a little more solar or another wind turbine, for example, if additional tenants are added to the site.
TowerXchange: How do you minimise the cost impact of deploying customised rather than standardised solutions?
Nick Blitterswyk, CEO, UGE: Someone within our team recently coined the term “making customisation scalable” and that is really what we’ve been able to do. At the heart of it is using our stochastic modeling techniques to drive the cost down. There’s a tradeoff between risk and conservatism - if you oversize by 50% or more because you’re not sure how the site will behave, then you’re paying a lot more for that system. Right now we believe
companies are making a choice between grossly oversizing the energy solution and taking a large risk by sizing them closer to their expectation of how the site will react without fully understanding the risks. If you are only designing one site that can make sense, but when managing a portfolio of sites you are bound to have issues, and it only takes a small percentage of problem sites for it to become a very big problem for the client. What our stochastic model allows us to do is to really thoroughly understand the risks of each and every site to ensure that we can ensure uptime without the costs. By understanding those risks we don’t know longer need to balance conservatism and price.
TowerXchange: How do you ensure scalability for multiple tenants?
David Droz, AVP Telecoms, UGE: One of the trends we’ve been paying close attention to is the growth
“ “Right now we believe companies are making a choice between grossly oversizing the energy solution and taking a large risk by sizing them closer to their expectation of how the site will react without fully understanding the risks
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of tower sharing. When designing for scalability, you’ve got to consider the site as a whole. If the tower owner installs our Fusion system under our Levelised Energy Agreement (LEA), then what will happen if they later want to add additional tenants to the tower and increase the energy need? Our technology platform allows for this additional build out, and the LEA allows for adding capacity as well
to ensure these aren’t a problem. For our clients this shouldn’t be any more difficult than if you are asking your cellphone provider to add additional services to your contract. We will take care of the dirty work.
At sites where the mobile network operator is the key customer, they become the beneficiary and the savings get passed to them - adopting the LEA gives that operator a competitive edge.Independent tower companies are leveling the playing field, with some towers having up to 5 tenants, giving smaller operators the opportunity to benefit from renewables as well.
TowerXchange: What is an ‘Energy Service Agreement’ and how does your ‘Levelised Energy Agreement’ differ from other ESCO business models?
David Droz, AVP Telecoms, UGE: The Power Purchase Agreement (PPA) ESCO business model is now familiar to most people: the PPA defines a fixed cost per unit of energy, allowing the customer to escape the capex outlay required to first acquire a new energy system.
UGE wants to align our interests with our clients’, delivering the maximum return at low cost. The problem with the PPA structure is that it leaves money on the table for energy that is generated, not sold, which ultimately limits the savings that can be achieved. Furthermore, our clients’ revenue doesn’t change based on how much energy is consumed, so we feel the fluctuating nature of a PPA doesn’t fit very well with what our clients are looking
for. Instead, what really matters for our customers is uptime; i.e. reliability of the site.
Our approach recognises that operators want to stabilise opex costs - they don’t want to be exposed to the risk and unpredictability of energy. So we propose a model where we fix costs for each portfolio of sites and start the outsourcing process. The client is able to give up the need to source and manage their energy, and we fix the price and assume the risk.
This initial portfolio gives us the opportunity to quickly help our client and understand their energy supply issues. Using this on the ground experience and our proprietary modeling tools, we fine-tune
“ “
The problem with the PPA structure is that it leaves money on the table for energy that is generated, not sold, which ultimately limits the savings that can be achieved. Furthermore, our clients’ revenue doesn’t change based on how much energy is consumed, so we feel the fluctuating nature of a PPA doesn’t fit very well with what our clients are looking for
How UGE’s Levelised Energy Agreement Program (LEAP) accelerates the implementation of multi-site deployments
UGE proposes a new model for the outsourcing of cell site energy. UGE’s Levelised Energy Agreement (LEA) proposes a partnership between the customer (in telecoms this would be an operator or tower company); the local installation and maintenance subcontractor; LEAf-1 their current US $20m fund; and UGE themselves as the ESCO. First, UGE works with customers to determine a levelised cost for a small network segment. Once the Levelised Energy Agreement (LEA) is in place, they implement and maintain sites for the entire contract period. The customer simply pays the monthly fee to have all energy needs taken care of. Upon success of first network segment, expansion to greater number of sites will follow. As traditional fuel costs continue to rise, energy savings will increase exponentially.
the energy solutions to yield the optimal result in terms of reliability and cost, then expand the rollout across a larger number of sites. Therefore the interests of the tower operator and the RESCO have been mutually aligned.
TowerXchange: Talk to us about the process of engaging with a new client - starting with that initial 50-site proof of concept.
Nick Blitterswyk, CEO, UGE: It’s not really a proof of concept, it’s just a way to more quickly help out the tower operator to overcome problems maintaining a stable energy supply, such as supply chain issues, fluctuating diesel prices and theft. We could look at
50 or 500 sites, and of course we’d like to be talking about 4-figures of sites as well.
In emerging markets, we’ll take over the whole supply chain, and simply charge the tower operator an affordable monthly bill. This process takes time, so we’re looking for long-term relationships. Once we have the initial agreement signed, we get started with upgrading the energy infrastructure of the sites, such as adding or enhancing distributed renewable energy (DRE) products, power controllers, monitoring systems, et cetera. With the multi-year energy agreement in place we’re able to leverage our financiers to invest in a reliable solution that will stand the test of time.
TowerXchange: Tell us about installation and the integration of renewables with existing generators and batteries.
David Droz, AVP Telecoms, UGE: Though it’s in everyone’s best interest to leverage existing equipment where possible, we often have to replace legacy equipment, either upfront or over time. The installation of batteries has often not been well planned, so an audit is usually needed. We get in to the sites, learn about them, then press forward with the technology that will provide the best experience. Furthermore, we know space is a constraint; our solution is often smaller and more efficient than the legacy equipment we replace.
Nick Blitterswyk, CEO, UGE: Our approach speeds up deployment. Tower operators know it’s a headache and it’s expensive to deploy hybrid solutions. Under UGE’s Levelised Energy Agreement the tower operator knows what they’ll pay each month, they get a reliable service, and we’ll take ownership of the energy infrastructure, which alleviates energy capex and opex concerns, enabling tower operators to focus on their core competencies.
TowerXchange: How is UGE financed?
Nick Blitterswyk, CEO, UGE: In early August 2013, UGE announced our partnership with Tamra Tacoma Capital Partners (TTCP), raising a dedicated US $20 million fund for wind and solar DRE projects in the telecoms sector, particularly to finance our LEA program, and to speed up deployments. UGE is currently a private company and has had great
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support from our investors that has allowed us to grow into a leader in DRE. On the horizon is an IPO which will help facilitate our future expansion.
TowerXchange: How did you persuade your financiers that UGE could manage the execution risk that comes with doing business in emerging markets?
Nick Blitterswyk, CEO, UGE: Over the past five years we’ve grown to become the leading small wind company in the world. This wouldn’t be possible without overcoming implementation challenges for our clients, and that is what we have excelled at. With testimonials from major clients such as GE, Hilton, BMW, Nissan, Toyota and Ford, and growing experience with telco clients such as Claro and Verizon, it was something our investors were excited about. We may have an appetite for working in regions without good credit ratings, but our clients are credit worthy as they are typically some of the largest, most successful customers in those regions, and our credentials breed confidence among our investors.
Ultimately we focus on good service, and on creating a company culture that makes us easy to work with, and this has built upon itself as we continue to grow and succeed in DRE.
TowerXchange: How many sites does US $20m get you?
David Droz, AVP Telecoms, UGE: The cost of building out each site can vary by region, but US$20m will cover 200-500 sites which we’re looking to have
fully deployed in 2014. That’s a wide bracket because the power requirement can vary so much from a small, remote, single tenant site in a cool part of Scandinavia to a five tenant site in a very hot region of India where the active equipment and air conditioning load is much higher.
TowerXchange: What is UGE’s installed base worldwide?
Nick Blitterswyk, CEO, UGE: Across all sectors our solutions are deployed at over 1,500 sites. Telecoms is one of our newer areas, accounting for less than 100 sites, but the number is growing fast, and we expect to eclipse 100 by a good margin this year.
TowerXchange: I understand you have a deployment planned in Kenya - what can you tell us about that?
correct. We have a project there that is currently in the planning stage.
In this case we’re managing and installing equipment at a small number of pilot sites in Kenya to get data back and demonstrate the technology. This project came about before the LEA was announced and we are currently working with the client to understand how it can be scaled into LEA.
One of the biggest challenges has been how to scale from pilot to full rollout. Thanks to the LEA, tower operators don’t need to worry, UGE will manage the supply chain, and we’ll take the risk from day one.
TowerXchange: Finally, please sum up how you would differentiate UGE from other off-grid energy equipment providers?
David Droz, AVP Telecoms, UGE: We are the only RESCO that goes all the way upstream. UGE manages the entire energy supply for each tower, from manufacturing wind turbines, to initial site analysis and deployment, to ongoing management, ensuring reliable and affordable energy supply at minimum hassle to the tower owner. UGE architects sites, we provide finance, and under the same agreement we provide implementation. A big part of this is having a robust overall system encompassing different energy sources to provide a reliable result. Siting small wind is a challenge. UGE has the ability to remotely assess sites, and to get technology into the field. We have over 1,500 hybrid wind and solar sites in the field. We see telecom as the ideal customer
“ “UGE manages the entire energy supply for each tower, from manufacturing wind turbines, to initial site analysis and deployment, to ongoing management, ensuring reliable and affordable energy supply at minimum hassle to the tower owner
Optimising the relationship between towercos and hybrid systems suppliersIntegrating monitoring and management, access control, maintenance, asset, inventory and HR management in an end to end managed service
TowerXchange: Please introduce the topic of your round table at the TowerXchange Meetup. David King, CEO, Flexenclosure: Flexenclosure and our competitors come to the market with products to save energy OPEX, while the towerco has expertise around site acquisition, tenancy sales and improving site profitability. The question is what form of contractual relationship enables both parties to create the most value? We’re looking forward to hosting a debate about the best ways for hybrid energy system providers and towercos to work together, how to structure contracts and how to share responsibilities so as to leverage maximum savings from hybrid power systems. We want to discuss the different business models for governing the provision of hybrid energy, as well as exploring the services that towercos want from their hybrid system provider. How will the need for services evolve over time as towercos mature, as the scale of their deployments grow, as the capacity of their sites and their tenancy ratios increase? Will they be looking for a larger range of services, or do they see themselves becoming experts in managing hybrid systems? TowerXchange: How is value created and shared between towercos and hybrid energy providers? David King, CEO, Flexenclosure: Value is created by reducing the cost of running a site. The most substantial saving is achieved by transporting and burning less diesel. The other key factor
Independent towercos are still a relatively new phenomenon in Africa, and their relationships with critical hybrid energy partners are subject to a wide variety of business models and contractual relationships. David King and Ann Louise Johansson of Flexenclosure, one of Africa’s leading hybrid systems providers, will host a round table at the TowerXchange Meetup in which participants will seek to define business models and commercial relationships that target the common enemy of site OPEX and at the same time create the maximum value for the towercos and hybrid energy innovators.
Read this article to learn:< How to structure contractual relationships between towercos and hybrid energy companies to create
maximum value
< How the relationship evolves as additional tenants and new equipment are added
< The pros and cons of capex and zero-capex business models and options in the ‘middle ground’
is reliability - reducing or even eliminating the potential for faults that would result in downtime. Additional site visits are expensive and compromising QoS and revenue generation for operators often incurs penalties under towercos’ Service Level Agreements. The combination of these potential savings across a large network of sites amounts to huge amounts of money. However it’s important to realise that these savings are gained incrementally hour-by-hour, day by day and site-by-site. It is not enough for a hybrid system to work well in some sites for some of the time. Maximum value is created only if the system is able to provide sustained performance and reliability over a long time across an entire network of sites.
The value created can be shared in different ways, but for the sake of simplicity we can divide business models in three main groups. At one end of the spectrum is the pure purchase where a hybrid power system is sold as a piece of equipment to the towerco and at the other end of the spectrum is the Energy Service Company (ESCO) model where the towerco would purchase power and not own the equipment. In between these extremes is a model based on the purchase of equipment by the towerco but also including a KPI or SLA to ensure it performs at the promised level. TowerXchange: What are the pros and cons of the business models currently being used? David King, CEO, Flexenclosure: The pure purchase type of agreement has not always been successful. If results are disappointing it can sometimes be difficult to identify and agree upon the problem. Was under-performance of the system was to blame? Was it that peripheral equipment was sub-standard? Was the system configured correctly and integrated optimally with existing equipment? In such circumstances the purchaser can be left high and dry, feeling the vendor has taken their money and run. However, there are also challenges at the other end of the spectrum. Zero-CAPEX, or ESCO, business models can get stuck because the contract between the parties gets complicated or because neither party is able to fund the necessary equipment. We are searching for the middle ground whereby the towerco and the hybrid system supplier
“ “Zero-CAPEX, or ESCO, business models can get stuck because the contract between the parties gets complicated or because neither party is able to fund the necessary equipment
collaborate in such a way that they each focus on what they do best, there is a high degree of mutual trust and there are joint rewards. Ideas that we have discussed with towercos include KPI driven models where Flexenclosure provides some “local optimisation services” to ensure that the equipment hits the KPIs, and if it does we receive a performance bonus. We believe that this makes sense because we fundamentally know our equipment better than our customers and our involvement, at least for a period of time, can lead to greater savings. We’re looking forward to hosting an open discussion on towercos’ preferences regarding business models and exploring the optimal value creation scenarios for all parties. In addition to exploring different models it will be equally important to discuss how the models would be implemented and whether they would need to evolve as the towerco grows.
TowerXchange: Going back to your point services, can you describe the various service components for hybrid power systems, especially what you call “local optimisation services” and who should do them? Ann Louise Johansson, VP Strategy, Flexenclosure: Let’s first divide the service components in to three groups: Installation and Commissioning, Operations and Maintenance, and Support. We are usually responsible for the Installation and Commissioning of the equipment. We do it ourselves or we send our experts to train our local partners on both the equipment and the tools. This
results in fast and safe procedures. For example, we measured the time it took for cutover at an upgrade installation in Nigeria last week and it was only 7 minutes! The tool we use is eManager, which is our remote monitoring and management system. The Operations and Maintenance is usually handled by the towerco and/or its managed services partner. The part we can play as an equipment supplier is to provide technical and behavioural training to the services partner. For example if there is an older genset, which a site guard is often manually starting and stopping, then there is a risk that the site guard continues to interfere even after the hybrid system is in place. We have the expertise and experience to help the
services partner overcome these challenges and in addition we have the tools to enable remote monitoring and management. And that leads me to the third service component: Support. As a hybrid system supplier we provide what we call RSSM (Remote Support and Software Maintenance) where we provide hotline support, access to system experts and software maintenance. We enhance RSSM by providing remote network audits and KPI reporting using our eManager monitoring and management system.
With several hundred of our eSites deployed across Africa, we have significant experience of the kinds of practical problems on site that can limit performance and how best to overcome them. And going back to David’s point about where the value comes from, we know that towercos will only get full benefit from our equipment if it performs as expected each and every day at each and every site. With this in mind we can provide “local optimisation service” resources - a team focused on taking the output from eManager and using that data to maximise network-wide system performance. We can do this ourselves or through our local O&M partners. The local optimisation service would produce and advise on eSite system audit reports, as well as go to a site for hands-on performance improvement work when needed. Local services would also include support to the towerco’s first line support as well as support for eManger
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In our round table discussion we’ll explore how to structure a business model that will create value for all stakeholders and stand the test of time, particularly as more tenants are added and more kilowatts are needed at each tower
functionality and spare part inventory. TowerXchange: How will these business models and working relationships between towercos, hybrid energy and managed services providers need to evolve in the future? Ann Louise Johansson, VP Strategy, Flexenclosure: In our round table discussion we’ll explore how to structure a business model that will create value for all stakeholders and stand the test of time, particularly as more tenants are added and more kilowatts are needed at each tower. What happens when tenants modernise, adding next generation active equipment? Will towercos change their lease rates to incentivise tenants to use low energy systems? The key for a successful business model is to align the interests and responsibilities between towercos, hybrid energy and managed service providers so that we all work together with the focus on what is mutually most important. And that, of course, will be to achieve the best-possible reduction of site OPEX, and sustaining that reduction over time. For example, assume it costs around $40,000 per year to run a site in Africa. Introducing a hybrid power system that reduces the cost by 80% would deliver a saving of $32,000 per year per site, or $16,000,000 per year for a network of 500 sites. However, if over time that performance only averaged 60% rather than 80%, the lost value would be $20,000,000 over five years! A very strong argument for “sustained” performance to come front and centre in the working relationships between towercos, hybrid energy and managed services providers
TowerXchange: Where do Enatel fit in the telecoms infrastructure supply chain? Damien O’Regan, Global Sales Manager, Enatel Energy: We are a New Zealand-based energy equipment manufacturer. Enatel Energy designs and manufactures a range of rectifiers, converters, inverters, solar and wind chargers across multiple voltages for telecoms and industrial applications. Enatel is made up of three divisions. Enasolar manufacture a range of grid-tied solar inverters whilst the Motive Power group supply a suite of modular, high efficiency fast chargers. These are able to automatically identify the types of battery connected over powerline and apply the necessary voltage and charge profile. A long association with leading battery manufacturers has been a crucial contributor in identifying industry challenges and driving charger innovation. TowerXchange: What are your channels to market? Damien O’Regan, Global Sales Manager, Enatel Energy: We are headquartered in Christchurch, New Zealand, with direct representation via an operation in Croatia who manage parts of Europe; with Enatel Shenzhen responsible for the domestic Chinese market. However our primary business model is one that identifies and supports highly capable local partners. The results and potential is evident, for example in one instance I worked with a distributer that grew from 3 to 200 staff, driven primarily by the demand for DC power systems.
Read this article to learn:< How Enatel have overcome the consolidation of backup power to deliver high 9s uptime
< How to optimise the relationship between the genset and batteries to extend lifecycles
< The importance of modularity and scalability in meeting the different and changing
requirements of individual sites
< Designing systems that are pre-wired for the integration of solar
Rectifiers, converters, inverters, chargers and controllers are often critical to the efficient operation and integration of multiple energy sources at unreliable grid and off-grid cell sites. One of the pioneers in this field is New Zealand developer and manufacturer Enatel, who you’ll find exhibiting at the TowerXchange Meetup on October 1 and 2. We caught up with Damien O’Regan to find out more about Enatel’s capabilities.
Strong relationships are crucial in tailoring systems to meet specific requirements within local environments - Enatel supplies power modules and system building blocks for integration. Alternatively, turnkey indoor and outdoor solutions are available. Our designers and decision makers are only ever one call away - we maintain very high levels of engagement, support and training. TowerXchange: What is the ‘sweet spot’ for Enatel’s solutions - on-grid, unreliable grid, off-grid? What’s the typical load? Damien O’Regan, Global Sales Manager, Enatel Energy: Our typical applications have historically been grid connected standby power solutions where operators demand the highest levels of uptime. Demand and growth in emerging markets meant less grid dependence. Providing energy solutions for off-grid sites is a more recent challenge and one that allows us to apply innovative solutions to produce demonstrable and desired benefits Our portfolio can support any load requirements from a 100W to 100s of kW’s, but in a hybrid context we most frequently find ourselves supporting1-3kW loads. Whilst it’s possible to go outside this, careful dimensioning and evaluation of economics is necessary.
TowerXchange: Has backup power become a commoditised market? Damien O’Regan, Global Sales Manager, Enatel Energy: Within telco networks it’s a fair conclusion
based on volumes supplied, system generalisations and dollar per Watt erosions over past decades. However, sufficient and sometimes significant differentiation can still remain, particularly with the emergence of niche applications and recognition of particular capabilities. Commodification risks ‘me-too’ products that fail to suitably meet industry principles and foundations. Systems may aesthetically and technically appear similar, but that’s largely a consequence of industry drivers. Clear distinctions normally exist at nuts, bolts and deliverables level. We’ve refused to compromise - the bottom line is we must be able to support and maintain high 9s availability.
Tower companies target uptimes between 2 to 4 nines (99% to 99.99%) which represent site downtimes of three days to one hour per year. For partial grid and off-grid sites, delivering higher nines goes beyond rectifier MTBF’s and design architectures. It must in combination also include capabilities that address application specific issues, for example, a dependency in diesel generator uptime, information insight and self-healing elements. The towerco model is attractive because of the focus on operators, where delivering QoS means that maximising site uptime is a natural caveat.
Logically, commoditised system limitations can struggle to meet OPEX drivers where the challenges can be far more broad and complicated. Enatel responded to commoditisation by diversifying with an increased focus on partial grid and off-grid applications, viewing network expansion and ruralification in emerging markets as an opportunity to directly leverage our core DNA. Blending and optimising multiple energy inputs requires the right product portfolio and expertise, but this in association with our specific development efforts has yielded unique capabilities. TowerXchange: How do you integrate renewable energy and CDC batteries without placing excessive wear on the diesel generator?
Damien O’Regan, Global Sales Manager, Enatel Energy: The vast majority of all off-grid BTS outages relate to generator issues. Almost total site dependence can rest solely on a generator. For CDC hybrids, fast recharge requirements can overload and stall generators. The DC power community addresses this by limiting battery recharge parameters, sequentially starting rectifiers and delaying aircon startups to avoid excessive inrush currents. The relationship between the generator and cyclic batteries is critical - it necessitates tight but adaptive management. Each element is in continuous change within an environment that also never remains constant. Increased emphasis must be placed on power conversion devices, particularly as their performance and management capabilities are instrumental in significantly extending lifetimes. Our SYNERGi solution automates and optimises energy generation. During installation, one needs to simply enter the generator nameplate kVA, push the start button to commence the commissioning charge - no further human intervention required to revisit and retune. It automatically caters for variables which may be due to tenants, altitude, wear, weather and diesel quality. It will regularly determine what parameters are required for optimum energy output and automatically adjust to maximise them. TowerXchange: Is there still a place in the long term planning of cell site energy for diesel generators at off-grid cell sites?
Damien O’Regan, Global Sales Manager, Enatel Energy: Constant speed AC diesel generators have a bad reputation. Not totally without justification given obvious environmental and economic impacts, but it’s been unfairly compounded, particularly by 24/7 operation. There are already well proven and significant improvements available. Fundamentally this is still about efficiently moving and storing energy. We know a single litre of diesel can be converted into approximately 3 kWh of energy and a review of break specific fuel consumption data is a quick way of digesting generator actualities. Our objective was to develop a solution that was generator agnostic and addresses real-world challenges. While tower operators should always be looking to reduce their dependence on diesel, present day realities mean diesel generators will be with us for a while. With a reduction in loads and other influencing factors, alternative generation and storage mediums will increasingly come in to play.
TowerXchange: Tower operators always want to know that suppliers are proven in emerging market contexts - what is your installed base in emerging markets? Damien O’Regan, Global Sales Manager, Enatel Energy: We have many hundreds of thousands of products installed, with the majority in emerging markets. Our power modules have very high levels of protection beyond those you’d typically find. Enatel was established in 2002 by the same team
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For CDC hybrids, fast recharge requirements can overload and stall generators. The DC power community addresses this by limiting battery recharge parameters, sequentially starting rectifiers and delaying aircon startups to avoid excessive inrush currents
that founded Swichtec Power Systems, which was pioneering high frequency switch-mode power in telecoms during the mid-80’s. Swichtec grew rapidly and was supplying to the major Chinese operators in 1990s. We opened a large wholly owned facility there in ‘96. Swichtec’s products were recognised as being innovative, robust and there’s good reason you still see them operating in many networks 20 years later. Swichtec became the DC business within Eaton Corporation. The original Swichtec management team and founding head engineer Dennis Chapman, started Enatel. All remain intimately involved. Our initial hybrid systems were limited to mining and military contexts. Recent demand has increased and as a consequence, we are engaged in discussions regarding more significant projects. TowerXchange: Talk to us about how the challenge of hybrid dimensioning to meet the unique requirements of each site can be married up with the economic consideration where less customisation usually means less cost. Damien O’Regan, Global Sales Manager, Enatel Energy: The application of hybrid power is complicated, primarily due to the extensive variations within a site and across multiple sites. This has limited the wide deployment of ‘silver bullet’ solutions. Inherent site variability means a hybrid conversion that works at one site, won’t necessarily work at all
or as well on another. This can limit their successful deployment with time and cost complications. We see many sites dimensioned on the safe side to fit within particular capabilities. Such systems then risk being more about compromise, than optimise.
For us, addressing this variability was the catalyst in developing a unique dynamic solution which allows the expediting of multiple site deployments. The integration of renewable energy generally relies on a site survey or a very clear brief. Often we’re contacted by people saying we want SYNERGi. The modularity of building blocks takes much of the customisation pain off the table. However, there are some basic site information prerequisites which make dimensioning job easier.
TowerXchange: What specific parameters do you need?
Damien O’Regan, Global Sales Manager, Enatel Energy: Average site load is most critical parameter and almost always assumed to be greater than actual. We look to utilise the existing generator if possible for cost effectiveness and significant operational potential. We also need:< Generator - size (kVA &/or kW rating). Is it generator only? 1 or 2 generators?< Battery preferences (if any)?< Are there site noise curfew requirements?< Air conditioning/cooling requirements (if any)?< Will the site require solar or wind? Is there any likelihood of grid?< Fuel management?< Alarm & communication requirements? Et cetera...
TowerXchange: What’s the RoI in your systems? Damien O’Regan, Global Sales Manager, Enatel Energy: That’s always an interesting question. Within a CDC environment we can deliver an eight month payback, with a better than 80% DG runtime reduction and 70% diesel savings. However, whilst these numbers are all possible and others make similar declarations, the results remain highly dependent on existing configuration. Generally you can say between 12 and 24 months payback. We developed a tool to anticipate benefits, which
“ “We see many sites dimensioned on the safe side to fit within particular capabilities. Such systems then risk being more about compromise, than optimise
helps to reveal tangible effects in making slight configuration adjustments to meet desired balances between CAPEX and OPEX. For example, it’s possible to see impacts of particular battery types, capacities and strings. What influence on lifetimes will introduction of solar have in that location? What are the fuel savings and delivery implications? It provides insight into what all the idiosyncrasies can equate to. Our primary objectives focussed on delivering a solution that produces the lowest OPEX and greatest uptime. TowerXchange: How do you design a solution to be scalable in the event that additional sharing tenants or new technologies are added to a site, without oversizing and incurring inefficiencies? Damien O’Regan, Global Sales Manager, Enatel Energy: One of the luxuries of our business is its inherent modularity and scalability. The drivers and designs required to support multiple tower tenants are not totally unique. Almost two decades ago we saw similar requirements with LLU (local loop unbundling) deployments - where it was necessary to provision DC systems for the inclusions of multiple operators within enclosures and exchanges. This modular architecture has been part of telecoms power specifications since day one. The best results are most often realised by simple approaches and none are simpler. Its success is related to having the simplicity and scalability to meet periods of change and rapid growth while meeting QoS expectations.
Core to the architecture is a central 48v DC bus which allows for seamless integration of new tenants. This modularity intrinsically supports flexibility.
The DC power community continues to expand controller capabilities, where they nowadays are more representative of PLCs. They provide intelligence in managing modules and peripheral site infrastructure, such as climate control. Increasingly they are used for metering and load management. Functions such as our PowerSave, place rectifiers on standby depending on load, so regardless of variations, the system always maximises conversion efficiencies. TowerXchange: How can you ensure your systems are ready for the integration of renewables? Damien O’Regan, Global Sales Manager, Enatel Energy: Enatel’s solar business introduced solarreadyhomes.net; where homes are pre-wired to allow for more cost effective migration to solar, at such time home owners chose to do so. This has been successful and widely adopted. We applied that same model to telecoms, making systems that are pre-wired for solar, so when you wish to integrate solar power, it’s an extremely simple process and the system will intelligently blend in this renewable energy source. In comparison, retrofitting solar is more complicated, particularly if solar regulators are a type which cannot be intelligently controlled for optimal operation in combination with grid and
generator inputs.
TowerXchange: What do you see as the most exciting developments for the future of cell site energy? Damien O’Regan, Global Sales Manager, Enatel Energy: We naturally have huge interest in where energy storage innovation is heading. Bi-directional topologies also offer exciting possibilities. Various factors will ensure incremental efficiency gains. Our rectifier efficiency exceeds 96.5% and solar/wind chargers approach 98% - we continue to explore advancements and have demonstrated higher conversion efficiencies. The mobile network is largely about ‘the great Outdoors’ and the inherent challenges this brings. Packaging variations will elevate robustness and address cooling challenges, especially in combination with hardened batteries. Solar and wind will play increasing roles in everything we do. Time is right for dialogue around ESCO models and we have some past experiences. The electricity price within a PPA will among many things be dependent on contract durations, risk skewing and site characteristics. Mitigating the risk is crucial. A PV spot price falling 70% over four years highlights potential exposures to volatilities. It’s important we remain cognizant of energy trends and technology advancements; otherwise there
is a danger that we simply solve the problems of yesterday and not those of tomorrow.
TowerXchange: To sum up, how do you differentiate Enatel’s solutions from your competitors’? Damien O’Regan, Global Sales Manager, Enatel Energy: We don’t outsource manufacturing - design, development, and build are all done in New Zealand. This allows us to be highly agile and collaborative. Our business model is proven. We have exceptional product reliability and unique functional capabilities which are testament to Enatel’s rapid ongoing growth. We embarked on our hybrid path many years ago and during 2010 interviewed a number of key industry stakeholders, including the largest operators and towercos. This reinforced our committed and considered development efforts. We believe SYNERGi represents a solution that is unlike any other. It departs from traditional hybrids with the inclusion of a unique and advanced generator control capability. Loads vary due to multiple tenants and across multiple sites. The SYNERGi solution is generator agnostic and dynamically adapts to maintain maximum efficiencies ensuring extended lifetimes, maximized uptime and limits human intervention. This capability in combination with the intelligent, intuitive management of solar and wind harvesting offers a highly compelling package
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MANUFACTUREDIN NEW ZEALAND
POWERSECURITY ENVIRONMENTAL BACKUP REPORTING INDUSTRY-LEADING POWER SOLUTIONS REDUCE YOUR OPEX AND CO2 EMISSIONS www.enatel.net | [email protected] | Ph: +64-3-366 4550
~ W O R L D L E A D I N G ~EFFICIENCYapproaching 98%!HIGH EFFICIENCY BUILDING BLOCKSRobust, scalable power for flexibility and seamless integration
SYNERGi includes unique patented generator management with anti-stall and D2GO (Dynamic Diesel Generator Optimisation)
TowerXchange: Where does DAQS fit into the telecoms infrastructure ecosystem? Paul Crawford, General Manager, DAQS Europe: DAQS Europe - ‘The Free Cooling Company’ is dedicated to the design and manufacture of innovative, highly energy efficient cooling solutions for telecom/IT applications. Our designs are built upon Free Air Cooling principles, incorporating highly efficient EC fan technology. Whether your application is a radio base station, switch room or data centre; on or off grid, or high ambient temperature application, we have a solution to meet your needs.
All our product solutions are energy efficient, flexible, modular and moreover ‘futureproof’, interfacing with all industry standard communication protocols as standard.
TowerXchange: For our non-technical readers, please introduce us to the concept of free cooling systems and outdoor equipment, and please explain how use of these systems is helping emerging market MNOs and towercos reduce crippling energy opex at cell sites?
Paul Crawford, General Manager, DAQS Europe: Our free cooling systems use external ambient air to cool telecom shelters and switch cabinets. The system is interfaced with the existing air conditioning unit which uses a much greater amount of energy to cool the space. The system will always look to use the ambient air to maintain the setpoint in the shelter and when it can no longer do so, the unit switches over to
As equipment is increasingly able to operate at higher temperatures, replacing mechanical cooling with free cooling systems using ambient air to cool telecom shelters and data centres can significantly reduce energy costs. To find out more, TowerXchange spoke to Paul Crawford, General Manager at DAQS Europe.
Read this article to learn:< An introduction to how free cooling systems work
< The impact of widening climactic limits for equipment on the setpoint in base station shelters and in
data centres
< How free cooling systems can create energy reductions up to 90%, and payback in 18 months
Keywords: Who’s Who, Air Conditioning, Energy, Free Cooling System, RoI, Opex Reduction, Shelters, RMS, Data Centres, Africa, DAQS Europe
the air conditioning unit. ETSI & ASHRAE recommendations in recent years allow wider climatic limits for the operation of electronic equipment. This has in turn allowed MNOs to increase the setpoint in the shelter which means that external ambient air can be used to cool the shelter for longer periods of time. The use of free cooling can give the MNO up to 90% savings on opex costs. Maintenance costs of existing air conditioning equipment and the life of this equipment can be extended. TowerXchange: How do you apply similar principles to data centres? Paul Crawford, General Manager, DAQS Europe: 50% of the total power consumed in an existing data centre can be attributed to cooling systems. In general, compressor cooling and inefficient fan technologies are the primary users. As the data centre is operational 24/7/365, year on year, the use of free cooling to maintain the temperature is a viable option. Similar to telecoms, the server equipment can now live at higher temperatures which allows for a wider range of temperature and humidity limits to be accepted. We offer solutions that will use external ambient air to cool the data centre when possible and switch to air conditioning units thereafter. The use of this type of system also adds N+1 redundancy as the heat can continue to be removed from the data centre in the event of an air conditioning failure. TowerXchange: What are DAQS’ credentials in emerging markets?
Paul Crawford, General Manager, DAQS Europe: DAQS Europe currently have live projects in Algeria, Egypt, Morocco, South Africa & Tunisia.
TowerXchange: I know it varies massively according to the requirements of a site, but on the ‘back of an envelope’, what is the typical capex on a per site basis to invest in energy efficient cooling systems, what magnitude of energy reduction can be achieved, and what is the timeline to RoI? Paul Crawford, General Manager, DAQS Europe: The costs of the system can vary significantly depending on the control systems required.
We offer stand alone control which will modulate the fan speed dependent on the internal air temperature. We also offer our FC10CS microprocessor control system which offers a full control solution from basic alarm functionality right up to full remote communication with the system. The energy reduction will vary dependent on the prevailing climatic
conditions in the area, but in general payback would be under 18 months. Examples of energy reductions - Morocco up to 80%; Cape Town up to 90%.
TowerXchange: To sum up, how would you differentiate DAQS from your competitors?
Paul Crawford, General Manager, DAQS Europe: In general, in order to maximise the return on investment for this type of project, the two key variables to consider when comparing different solutions are capital cost and cooling capacity. The positive impact of a lower capex is obvious, but cooling performance is the most important limiting factor that controls the achievable savings on any free-cooling project. Simply put; the higher the free-cooling capacity, the longer mechanical cooling can remain idle and more money is saved. Our solutions deliver a greater cooling capacity than those of our competitors whilst minimising energy usage
“ “the higher the free-cooling capacity, the longer mechanical cooling can remain idle and more money is saved
Special feature:
How many days of autonomy does a deep cycle battery provide when exposed to the rigors of energy storage at remote cell sites located off-grid or on unreliable grids, and in harsh climactic conditions? What is the tradeoff between initial capex and long life? How do the different energy storage technologies compare in terms of TCO, energy density and reliability - which battery is best for which situation? And which innovative advanced energy storage solutions are proven on the front lines of emerging market cell sites? TowerXchange starts a new special feature to compare lead-acid, lithium, sodium and vanadium redox batteries, seeking answers to these questions in discussion with battery innovators from GILDEMEISTER, GE Energy Storage and SAFT.
Energy storage tradeoffs
In part one of ‘Energy storage tradeoffs’:117 Could vanadium redox be a game changer?
Could vanadium redox energy storage solutions be a game changer?Flow batteries ideally suited to meet the needs of larger sites off-grid and on unreliable grid
TowerXchange: Please introduce yourself and GILDEMEISTER to our readers. Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: I recently Joined GILDEMEISTER energy solutions as Head of Emerging Markets. The GILDEMEISTER Group is a leading German manufacturer of precision milling and machine tools, as well as software and energy solutions, all produced to exacting German engineering standards. GILDEMEISTER made a strategic decision to diversify into renewable energy with the acquisition of a+f GmbH, manufacturers of sophisticated PV Tracking systems for industrial use, and Cellstrom, one the pioneers of developing commercial Vanadium Redox Flow Energy Storage Systems. GILDEMEISTER Energy Solutions offers a full range of alternate energy solutions - PV, wind turbines and energy storage. Its PV tracking capability is a particular specialty. Any off grid site could be 100% green energy, however space is usually the limiting factor. We can also model sites to determine optimum alternative energy requirements, but this is such a large subject it is perhaps better to concentrate today on energy storage solutions. One of the challenges has been that license requirements require operators to provide coverage in areas where the commercial returns on network infrastructure were at best marginal - low ARPU was compounded by the difficulty of installing, securing and fuelling sites in remote locations.
When used as a diesel hybrid application Vanadium Redox Energy Storage Systems can provide tremendous energy savings, particularly at larger off-grid and poor, unreliable grid sites. The diesel hybrid concept of storing spare load from a diesel generator is nothing new, however the charging and discharging properties of different battery technologies allow some battery technologies to deliver much greater efficiencies and therefore cost savings than others. In this interview, Tom Tipple of GILDEMEISTER Energy Solutions introduces the CellCube Vanadium Redox Energy Storage System and shares his perspective on how to maximise the efficiency of the diesel hybrid model.
Read this article to learn:< How to use energy storage solutions as a buffer to mop up excess energy from gensets
< USPs of Vanadium Redox flow battery technology: unlimited deep cycle, fast charge capability, charge
and discharge to any state of charge, 20-year battery life expectancy and low maintenance requirements
< Why GILDEMEISTER’s CellCube is ideally suited to higher-powered off grid sites, poor grid sites and
small data centers
< The TCO and potential DG runtime savings from Vanadium Redox Storage Systems
With local currency depreciating against the dollar and fuel prices steadily rising, the payback time on remote installations increased, yet these network extensions remain a licensing commitment. So there is an increasingly urgent requirement for telecom operators to reduce energy costs at remote sites, and diesel hybrid solutions provide a convenient first step in reducing operating costs by capturing and utilising the spare generator power available in most off grid sites. The problem has always been the cost of replacing batteries which are simply not designed to be deep cycled on a regular basis. Vanadium Redox energy storage solutions are specifically designed to offer unlimited cycle capability to any state of charge. It has the potential to be something of a disruptive technology and a potential game-changer. TowerXchange: At which sites are vanadium redox batteries such a good potential energy storage solution? Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: Vanadium redox energy storage systems work well in a number of applications, specifically diesel hybrid solutions for off grid sites that require unlimited deep cycle capability and poor grid sites suffering daily outages, where the system essentially works as a UPS providing back up power for long periods until grid power is restored. Telecoms and tower operators are looking for efficient solutions to reduce energy OPEX - i.e.
reduce diesel consumption. The optimum way of doing it is to install large PV arrays, wind turbines and energy storage, but this requires a large capital outlay, and a lot of space - neither of which are readily available. For off grid sites, most diesel generators are sized three to four times above the average site load as they have been engineered to accommodate unusual load spikes and network expansion. However, this over-engineering is detrimental to a generator’s asset life and results in poor fuel efficiency. Running a generator at a sub optimal load leads to cylinder coking, which reduces the asset lifespan of a generator from around four years to around two and a half years. This is compounded
not just by the cost of the extra fuel being burned, but also by the high cost of remote fuel deliveries. To run generators at their maximum, most efficient load you would usually add a dummy load which removes the low load coking issue, but wastes around 60% of the available power from the generator. By harnessing this spare power in an energy storage device, you can reuse the wasted energy by simply cycling power to the site between the generator and the energy storage device. There are different energy storage options: lead-acid, lithium, sodium sulfate and vanadium redox batteries. The key performance criteria of the different battery technologies are defined by; the
round trip efficiency of the system, the charge / discharge ratio of the battery (i.e. charge the battery as fast as possible by using ALL the available power from the generator), the usable capacity of the battery, the ability to charge to different states of charge and the number of deep cycles (i.e. expected lifespan). TowerXchange: Talk us through a comparison of those different energy storage options. Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: First you need to consider which technology offers the best opex saving, then work out the total cost of ownership (TCO) which would include the capital cost, annual operation and maintenance cost, replacement cost, generator asset life extension and miscellaneous cost saving such as temperature control. Realistically, TCO or return on investment should be taken over a minimum of 5 years, as this would tie in with ESCO service contracts. So which energy storage technology can deliver the best performance? Lead-acid batteries are relatively cheap, proven, and readily available. The problem is that their chemistry is simply not designed for deep cycling, so even though a manufacturer may claim a lifespan of 10-15 years, the reality is that replacement is typically required every 2 years. You cannot use the full capacity of the battery to cycle without damaging the battery, usually only to the top 50% of its charge level, so you need
to dimension the battery capacity at least two times your actual capacity requirement. You also need to the charge the battery according to the manufacturer’s guidelines, to its full capacity which is a slow process, and does NOT use the full power available from the generator. This is the biggest performance handicap for lead-acid batteries - you have to charge to full capacity or you damage them, and as a result, you are not running the generator at its maximum load. The key to energy storage efficiency is to use as much of that excess power in the generator as possible, and to charge your energy storage system as fast as possible. As soon as charging begins to slow down (as you approach the top of charge), you want to be able to switch over from generator power to battery power. So whenever the generator is on, it should be working at its maximum and most efficient load. Vanadium Redox batteries allow you to do that; you can be very flexible with both charge and discharge criteria. As mentioned earlier, other energy storage solutions need a full 100% charge otherwise you’ll get performance issues and damage the battery - you don’t have to do that with vanadium redox. You can charge or discharge to any state of charge with absolutely no degradation to performance. So you can run your generator at full load to charge the vanadium redox battery and power the site, then as soon as the charging starts to slow down (usually at around 85% state of charge), you turn off the generator. This means the generator is working at full load when it is on. It is working at its most efficient optimised state.
Vanadium redox batteries are good for over 20,000 cycles without damage or degradation - they’re designed for a 20-year life expectancy. TowerXchange: Go easy on the chemistry Tom, but how does it work? Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: It’s a classic flow battery principle. The vanadium redox battery is a type of rechargeable flow battery that employs vanadium ions in different oxidation states to store chemical potential energy. The vanadium redox battery exploits the ability of vanadium to exist in solution in four different oxidation states, and uses this property to make a battery that has just one electro-active element instead of two, so if the electrolytes are accidentally mixed the battery suffers no permanent damage.
“ “Vanadium redox batteries are good for over 20,000 cycles without damage or degradation - they’re designed for a 20-year life expectancy
A vanadium redox battery consists of an assembly of power cells in which the two electrolytes are separated by a proton exchange membrane. Both electrolytes are vanadium based, the electrolyte in the positive half-cells contains VO2+ and VO2+ ions, the electrolyte in the negative half-cells, V3+ and V2+ ions. When the vanadium battery is charged, the VO2+ ions in the positive half-cell are converted to VO2+ ions when electrons are removed from the positive terminal of the battery. Similarly in the negative half-cell, electrons are introduced converting the V3+ ions into V2+. During discharge this process is reversed and results in a typical open-circuit voltage of 1.41 V. Vanadium redox technology has been around for a long time but it’s only been commercially available for the last ten years. It may have taken a while to get it right, but there are proven installations worldwide now - we know it works, and it makes economic sense on certain sites. TowerXchange: What is your installed base in emerging markets? Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: There have been over 150 installations of Vanadium Redox Battery systems between 10kW and 30kW, many in hostile environments (from deserts in Oman, to Saudi Arabia and India). The company is fairly new to the telecoms market, so we are actively appointing partners in key markets.
TowerXchange: What’s the ‘sweet spot’ for CellCube deployments? Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: The CellCube 48 Series comes in 10kW, 20kW and 30kW options. Most telecom sites need less than 5kW. So our current product is particularly suited to high-powered sites, multi tenant sites and small data centers. A 10kW system can be easily upgraded to a
20 kW or 30kW option by simply plugging in more power stacks, so this is a very interesting model for the towercos as they add more tenants and their site power budget increases. In terms of capacity, our smallest system is 40 kWh, then 70kWh, 100kWh and 130kWh. As it’s simply a case of adding more electrolytes into tanks, you can start with a capacity of 40 kWh and expand easily up to 130kWh with exactly the same site footprint.
TowerXchange: Tell us about the potential use of vanadium redox batteries at sites with unreliable grid connections. Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: Take Nigeria as an example where the grid is particularly unpredictable and outages are a daily occurrence. A Vanadium Redox energy storage system is an obvious solution for sites that need long autonomy during a power outage. A 130kWh system will provide 24 hours back up power for a 5kW site and can be fully charged in under 6 hours. So a CellCube system can be used as the first backup - when the grid goes off, the battery takes over, so it’s acting as a UPS (Uninterrupted Power Supply). With any other type of battery, you must charge the battery back to its full capacity to get the maximum lifespan, so if the grid goes off again when charging the battery and its only 80% charged, you will permanently damage the battery. Only vanadium redox batteries’ performance is unaffected by partial charge and discharge. I would personally keep the generator as a second back-up in case the grid is off an extended time, but in some cases, the generator can be removed completely. TowerXchange: Is there any prospect of developing a smaller vanadium redox battery for the average BTS sites? Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: Our design engineers are looking to develop a smaller 5kW power solution, but this is a little bit of a red
herring as you need to match the energy storage solution to the spare power available to get the best commercial return. TowerXchange: How should tower operators determine the right energy storage solution to meet their needs? Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: I got it wrong for years trying to dimension battery size and capacity to site load. It is more important to look at the spare power available from the generator rather than the
site load, and design a system capable of capturing as much of that spare capacity as possible in the most efficient manner. For instance, if I have a 25KVA generator providing power to a 5kW site, I theoretically have 20kW of spare, available power, so I should size my storage system to capture as much of that spare power as possible (i.e. run the generator at full load); in this case a 20kW storage system would provide the best cost saving and TCO return. For off grid sites, the storage power rating is more important than its energy capacity, it just means you have more cycles per day for smaller capacities. Each site is different, you decide which power / capacity system best suits that particular site. Where autonomy is important, such as on a poor grid site, you want the largest capacity possible to provide UPS back up. You don’t know how long the grid outage will be. TowerXchange: What kind of DG runtime savings can vanadium redox batteries deliver? Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: We have recently evaluated energy solutions for a number of different site scenarios ranging from 1-20kW load and different generator combinations. In some instances we can deliver up to 85% generator runtime saving. Of course this depends on the power difference between the generator and the site load. In practice, the lowest generator run time saving
Run time
100
80
60
40
20
00 20 40
Cellcube works in fastest charge zone, 0-80% SoC
Generator only runs at 100% load, always at maximum efficiency 4 hour generator run time, 10 hour Redox Battery.Run time reduction = 71%
we’ve had is 50% and the best is 88%. RoI is dependent on the amount of spare generator capacity - over-engineered sites with big generators and relatively low load yield a very quick break even. The beauty of Vanadium redox storage solutions is that they transform the OPEX inefficiencies of over-engineered sites into real energy savings. TowerXchange: High quality German engineering and bleeding edge energy storage innovations don’t often come cheap, so tell us about the Total Cost of Ownership of your solutions. Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: For our largest
48 series system which would be 30kW / 130kWh, you would be looking at a capital outlay of around €170k. This would be suitable for a multi tenant site with an average site load of around 25kW. The generator would probably be around 75KVA. For comparison, an equivalent lead acid battery would need to be at least 5400 Ah capacity rated at C5 and be able to supply 30kW of continuous power for 4 hours. The TCO for the CellCube overtakes lead acid batteries after three years. For smaller systems
(10kW) the payback is closer to five years. And that’s compared to lead-acid batteries - the payback cycle versus diesel is faster.
TowerXchange: Who are your main target clients for such systems?
Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: Towercos are empowered to take a longer-term view of opex savings, but we’ve seen forward thinking operators such as MTN and Vodafone embracing efficient
“ “The beauty of Vanadium redox storage solutions is that they transform the OPEX inefficiencies of over-engineered sites into real energy savings
Diesel Hybrid Opex and TCO Savings
Opex OPzV
48%
71%
32%39%20
40
60
80
Opex VRB TCO OPzV TCO VRB
Figures for a 10kW site with 30KVA generator, assuming 50% DoD for lead acid battery, 2000Ah, and a 20kW / 40kWh CellCube
energy saving technology. Another potential target would be the ESCOs, but making the ESCO business model work is tough on a site by site basis. Every site has different characteristics - pricing per kWh across 100 different sites means you’re going to win some and lose some. On a smaller scale site by site basis the energy service model might work, but no tower operator is going to accept the complexity of pricing for individual sites - you have to offer a generic tariff for a basket of sites, which means you have to agree a price that works for both the ESCO and the operator. Eltek are pioneering much of the ESCO debate, but the operators and towercos have to take longer term view on investment in more efficient technology. Alternatively you could install a self-contained microgrid, using a PV array and energy storage solution. If you can feed 15-20 cell sites, you have a very attractive business model, but you still have to transmit the power from the microgrid to the sites, so microgrids only work when everything is in close proximity, which is harder in Africa because of the distances involved. TowerXchange: Tell us about the maintenance and security implications of using vanadium redox batteries. Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: There’s nothing to do! You don’t have to backwash vanadium redox batteries, or clean filters, they keep on running
24/7. And you can switch them off. Sodium Sulfate batteries must be kept at on all the time to maintain their high operating temperatures, otherwise their molten salts solidify which can be an expensive mistake. There are no safety issues with Vanadium redox, the charging and discharging criteria are very robust, there is no chance of thermal runaway or explosion in the event of overcharging or short circuit as you have with certain Lithium batteries. It is recommended to replace the cell membranes every 10 years, which is a low cost service and in the unlikely event that a membrane fails, there are 10 cubes in each system providing redundancy so the battery will keep working.
Maintenance requirements are limited to an inspection - literally, opening the cabinet to check it’s still there. In-built remote monitoring sensors pick up and report performance status of the
system. As for security, everything is in a locked steel container, and the ground wiring comes up from underneath the container, so nothing is exposed. TowerXchange: Thanks Tom. To sum up, how would you differentiate GILDEMEISTER’s CellCube vanadium redox flow technology batteries from other CDC batteries? Tom Tipple, Head of Emerging Markets, GILDEMEISTER Energy Solutions: Fast and flexible charging performance is key when it comes to optimising energy efficiency in diesel hybrid solutions. You’re looking for an energy storage system that charges as fast as possible using all available power from the generator; that’s the key to reducing generator run time and making the site as energy efficient as possible. TCO models differ, but it all comes down to DG runtime saving and the round trip efficiency of the storage system. CellCube has the most flexible charge characteristics on any storage system specifically developed for the telecoms industry, and is ideally suited to larger power off grid sites, or poor grid sites. The life expectancy of a CellCube system is 20 years. It has unlimited cycle capability to any state of charge. No other storage technology can do that.
Visit GILDEMEISTER at booth 11 at the TowerXchange Meetup:www.towerxchange.com/meetups/africa
“ “You’re looking for an energy storage system that charges as fast as possible using all available power from the generator; that’s the key to reducing generator run time and making the site as energy efficient as possible
GE’s unique energy storage innovationDurathon’s long life, abuse tolerance and deep cycling an ideal fit for emerging market telecoms
Ganesh Subramanian and Peter Kalish, GE Energy Storage Solutions
TowerXchange: How does the technology and capabilities of the Durathon sodium nickel chloride battery differ from the lead acid and lithium based energy storage solutions currently in use on most African cell sites? Peter Kalish, Product Manager Telecom, GE Energy Storage: Durathon Battery technology is based on an advanced industrial battery design engineered to meet the growing need for safe, reliable and high performance energy storage for both stationary and motive applications. The electrochemical reaction within the Durathon battery is quite unique. Each cell is a sealed metal can, with no secondary chemical reactions. Sodium ions travel back and forth across a solid beta alumina electrolyte, which creates stable performance over long life. There is no self-discharge with Durathon batteries. Because all internal materials are solid at room temperature, they can stay in that state for years with no impact on performance. This characteristic is particularly useful when you consider the inventory management challenges for emerging market cell site equipment. The Durathon battery has applications across industries, including transportation, telecommunications and back-up power. GE initially began to explore alternative battery technologies that could power large equipment such as locomotives, which meant it required deep cycles, and had to survive
One of the most talked about advanced energy equipment innovations in the past year has been the Durathon battery from GE Energy Storage. TowerXchange wanted to understand the unique capabilities of this potential game-changing innovation, how the battery was performing in the field, and how widespread deployment may be within the next year.
Read this article to learn:< Characteristics of Durathon: long life, abuse tolerance, battery management system, deep cycling and
energy density
< How Durathon performs in the field: 50% fuel savings
< Why adding energy storage capacity for additional tenants doesn’t have to mean the replacement of the
battery bank
< From pilots to launch orders: Durathon batteries are being shipped all over the world and GE forecasts
Durathon will be deployed to 1,500-2,000 African cell sites by the end of 2014
< GE’s appetite to join forces with local banks and managed service providers to fund zero-capex
business models
Keywords: Who’s Who, Energy, Opex Reduction, Batteries, Air Conditioning, RoI, ESCOs, Solar, DG runtime, Warehousing, Rectifiers, Africa, Durathon, GE, GE Critical Power, GE Energy Storage
temperature extremes as locomotives moved from the warmest to the coldest regions on Earth. It was also designed to be very safe as in a transportation context you couldn’t afford catastrophic failures like fires. Thanks to improvements we have made to the cell design, we’ve created a safer battery. We noticed that the requirements necessary for its application in transportation - long life, abuse tolerance, deep cycling - were similar to those necessary for telecoms and industries needing stationary power. Currently, there is quite a bit of demand in places close to the equator. To deploy energy storage solutions close to the equator, the solution has to be able to withstand high temperatures and be robust enough to perform in tough conditions. Another characteristic of Durathon which makes it suitable for deployment in Africa is that it’s built in a single 48v block weighing 120kg. We intentionally didn’t add integrated handling features as a lot of tower operators in Africa have a problem with pilferage. The weight of Durathon doesn’t eliminate theft, but it’s a strong deterrent! TowerXchange: Tell us about the battery management system built into Durathon. Peter Kalish, Product Manager Telecom, GE Energy Storage: Because the Durathon battery runs warm, we built in a battery management system (BMS) to manage each module’s temperature, ensuring safe and consistent
operation. But our electronics package does more than just monitor and manage the module’s temperature. As tower operators become more sophisticated about site operations, they need a richer set of information passed to their network monitoring center. Durathon’s BMS can communicate most of its operating data, in real time, to the NOC or even via SMS to technicians.
TowerXchange: How does Durathon’s initial capex, battery lifetimes and Total Cost of Ownership (TCO) compare to alternate energy storage solutions? Peter Kalish, Product Manager Telecom, GE Energy Storage: Being an advanced battery, Durathon is more expensive than the prevalent lead acid batteries. However, lifecycle is key to TCO, and Durathon has a significantly longer life -
up to 15 years in float, and up to 8 years in heavy cycling applications. Durathon also charges in less than half the time of conventional lead-acid batteries. As a result, payback can be achieved in less than 24 months in Africa, with a longer post-payback lifecycle in which to benefit from efficiencies than with many other energy storage solutions. TowerXchange: How does the energy density of Durathon compare with alternate energy storage solutions? Peter Kalish, Product Manager Telecom, GE Energy Storage: Energy density is one of the reasons GE went for this particular technology. We pack a lot of energy into a small package - for example, we can get 150-200Wh per litre from the battery, making Durathon an attractive option on rooftop sites where space is often limited. We may replace a 1000Ah lead acid battery with our 276Ah module, which is the size of a carry-on suitcase. Which means those large battery banks on rooftops can be removed. For longer autonomy, the site owner may need two units, connected in parallel, to get 10-12 hours of backup time. Ganesh Subramanian, Global Sales Leader, Telecom, GE Energy Storage: Comparing our sodium solution with a lead-acid battery bank, Durathon would typically be one quarter of the weight, and half the volume.
TowerXchange: How does Durathon compare in performance in terms of charge/discharge cycles? And what kind of autonomy can be achieved? Peter Kalish, Product Manager Telecom, GE Energy Storage: We’ve done a lot of work worldwide on this, achieving 50% fuel savings compared to generator-only operation. Durathon can typically achieve an 80% state of charge in five hours. When we’re deep cycling, Durathon can repeatedly discharge almost fully without damage. For our 276Ah standard module we get around 15kWh over a very flat discharge curve. Of course runtime depends on load - for a fairly typical telecom load of 1.5kW, we’ll have usable capacity of 13.8-14kWh, which equates to nine or
more hours of discharge per battery. Ganesh Subramanian, Global Sales Leader, Telecom, GE Energy Storage: That’s based on a single 276Ah module. Of course you can place more batteries in parallel to achieve greater autonomy. The way Durathon charges and discharges is unique, such that older and new batteries will work fine in parallel, which means you don’t have to change whole battery bank if you’re upgrading the energy storage capacity of a site. This is key for towercos as they move from one to two to three tenants - adding extra energy storage capacity usually requires replacing the whole battery bank. TowerXchange: Is there a sweet spot in terms of the energy load on a site most suitable for Durathon? Peter Kalish, Product Manager Telecom, GE Energy Storage: Our best performance is 800w-2.4kw per battery. This is a hot battery - it runs at 300°C, although the outside temperature is only about 10°C above ambient. During discharge, the electrochemical reaction is slightly exothermic, so at higher loads the battery temperature will rise. While not a safety issue, excessive temperature can reduce the life of the battery, so the battery management system monitors and protects the battery against overheating.
“ “older and new batteries will work fine in parallel, which means you don’t have to change whole battery bank if you’re upgrading the energy storage capacity of a site
TowerXchange: How is Durathon cooled to adapt to some of the harsh environments in Africa? Peter Kalish, Product Manager Telecom, GE Energy Storage: Other batteries need a temperature controlled room, whereas all Durathon needs is a waterproof container. There is no need for air conditioning - the electronics can handle temperatures up to 65°C, and the internal cells have no trouble with temperature extremes. So you can eliminate air conditioning for batteries, and just use a DC fan or convective cooling to keep other electronics inside the cabinet within temperature limits. TowerXchange: Can you give us an idea of the number of cell sites currently using Durathon batteries? Ganesh Subramanian, Global Sales Leader, Telecom, GE Energy Storage: We’re progressing from pilots to launch orders in several key markets such as Kenya, Zambia, Nigeria, Ghana, Egypt and South Africa. As you know, telecoms operators typically run small scale pilots initially - we’re progressing over the next six to eight months to larger orders in 100s and 200s of units. By the end of 2014 we should see Durathon deployed at 1,500-2,000 sites in Africa. Peter Kalish, Product Manager Telecom, GE Energy Storage: We have deployed 20MWh across all applications since GE Energy Storage started up in the middle of last year. We’ve had very
good performance in the field, proof that the solution meets market needs. TowerXchange: How do you see the balance of business opportunities between green field new site rollouts versus upgrades to the energy storage systems at existing sites?
Ganesh Subramanian, Global Sales Leader, Telecom, GE Energy Storage: With many markets
approaching saturation, there are a finite number of green field site deployments, even in Africa. Some key countries still have significant numbers of new towers being deployed, such as Nigeria and Kenya. Sometimes the customer has the budget to invest up-front in an advanced sodium or lithium based energy storage solutions with a high warranty. At other times the rollout might only have budget
for low cost lead-acid solutions. However, there are 150,000 cell sites in Africa, many running primarily on diesel generators. So we see 90-95% of our market in Africa being retrofits. TowerXchange: What role could GE play in a zero capex, ESCO business model?
Ganesh Subramanian, Global Sales Leader, Telecom, GE Energy Storage: GE has a financial arm that is working on financing distributed renewable energy in Africa. Our ideal business model would be to support local lenders and local managed service providers who have “boots on the ground” in Africa. Typically these local managed service providers have the experience and expertise to
develop ESCO offerings, but their capital is bound up in their existing business and they struggle to secure the funding to acquire advanced renewable and energy storage technologies which require higher up front capex but which deliver better TCO over longer periods. GE would be interested to use our financial horsepower to work with local banks and managed service providers to develop the ESCO proposition. TowerXchange: What is the potential for GE Energy Storage to join forces with the GE Critical Power business? Peter Kalish, Product Manager Telecom, GE Energy Storage: GE acquired Lineage Power several years ago. They’re now GE Critical Power, one of the leading suppliers of electronics and conversion equipment for telecom. We’re finding that as GE Energy Storage matures as a business there are increasing opportunities to marry GE technologies into a single solution. By combining energy storage with power conversion and power components we can develop compact energy storage solutions that initially are finding a market in North America, but which will meet a global need eventually. This would enable us to support not just BTS, but BSCs and Switching Centres as well. Ganesh Subramanian, Global Sales Leader, Telecom, GE Energy Storage: Working with GE Critical Power particularly enhances our offering to towercos. We can then offer everything the
GE’s Durathon factory
towerco would need from a passive system perspective, including Eco-Priority rectifiers that manage energy from grid and solar and wind sources. With advanced batteries too, we have the makings of a market-changing offering. TowerXchange: What are the implications of the release of Durathon for hybrid and renewable energy solution developers? Have you established any relationships with hybrid energy solution developers? Peter Kalish, Product Manager Telecom, GE Energy Storage: We’ve been dipping our toe in the hybrid market, working with solar-diesel hybrids in a few cases. Some of our pilots have yielded energy savings significantly better than 50%. Durathon works better with solar-diesel compared to solar-only hybrid sites as ours is a warm battery and needs to stay warm. In situations that require long periods of autonomy, Durathon consumes its own power, reducing the amount of autonomy available. We’ve found that Durathon works best at sites that need 20 hours or less autonomy. If you’re looking for two days of autonomy or are deploying solar arrays in areas affected by frequent cloud cover, Durathon may not provide enough autonomy alone, you may need a diesel generator to ensure long term availability. TowerXchange: Finally, please tell us how GE’s re-entry into the energy storage market came about.
Peter Kalish, Product Manager Telecom, GE Energy Storage: GE has been in and out of the energy storage business for almost a century, starting with our involvement in early automotive batteries. GE offered consumer batteries through the 1960’s, but exited that business.
It was around the millennium when we identified a growing need for industrial batteries. As market leaders in locomotive production, we were constantly seeking for ways to differentiate ourselves and stay ahead of the competition. We were seeking to “hybridise” locomotives, doing the equivalent of what Prius did for cars. If, by hybridising a locomotive, you can save 10% of fuel consumed you have a game-changing technology. The transportation market was very hot until the world economic markets crashed, leading to a slowdown in locomotive sales, but by that time we’d done a lot of the R&D to get into energy storage. We also purchased Beta R&D located near Derby, UK - fourteen guys who had developed technology for commercial energy storage since the late 1960’s - we saw them as having the expertise to commercialise the technology. From late 2007 to 2009 we did a lot of work to understand the potential of the technology, layout the business plan, and determine the markets we wanted to be in. Stationary energy storage solutions in telecom backup power and industrial applications both
needed the same ruggedness, abuse tolerance, deep cycling and long life as was needed in transportation. So we found there was demand for advanced energy storage solutions in those markets, which stimulated the company to invest in energy storage. GE decided to bet big on batteries - investing US$150 million to incubate and commercialise the new technology, effectively creating a startup within the company. The resulting business, GE Energy Storage, is focused on delivering Durathon products, which offer a safe, reliable and cost effective option for a broad range of industries and uses. This is what GE does throughout its businesses: marrying best-in-class technology with deep market insights to bring innovation to market, on a large scale
“ “This is what GE does throughout its businesses: marrying best-in-class technology with deep market insights to bring innovation to market, on a large scale
Li-ion technology takes telecom backup power to the next levelNew generation Li-ion batteries minimise installation size and weight while optimising backup performance and TCO
Joel Brunarie, Telecom Business Development Manager, Saft
TowerXchange: Please introduce Saft - where do you fit in the telecoms infrastructure ecosystem? When network stability is low, customers need a solution with good cycling capabilities and good chargeability. When network stability is high, they need solutions with float charging capability and a long service life. Saft offers backup solutions for periods from 30 seconds to over one day. TowerXchange: What is your installed base and experience in emerging markets, particularly Africa? Joel Brunarie, Telecom Business Development Manager, Saft: Saft has extensive experiences and references in various African countries such as Algeria, Nigeria, Cóte d’Ivoire, Senegal and Gabon. In Nigeria, Saft’s specialised Sunica.plus nickel-based batteries provide the energy storage at the heart of Eltek Valere’s innovative hybrid telecom power systems, combining batteries with diesel generators, that have been rolled out to 80 mobile telecom sites across the country. These co-location sites are provided for Nigeria’s wireless operators on a fully managed leased basis, and QoS (Quality of Service) is absolutely vital in this competitive market.
TowerXchange: Batteries have an unfair reputation as a commoditised piece of equipment, the selection of which rarely attracts the attention of C-level decision makers - why should CTOs, CFOs and CEOs take an interest in
Effective, reliable backup power is essential for the telecommunications industry to maintain continuity of service as networks need to evolve to meet the demands of the ‘always on’ world that now includes cloud computing and high bandwidth data streaming, et cetera. Saft has used its extensive experience in the global telecoms industry to develop a broad portfolio of advanced, specialised battery solutions suitable for wireless or wireline installations, indoor or outdoor, on-grid or standalone, in very hot or cold climates, urban settings or remote hard-to-access locations.
Read this article to learn:< The critical issues you need to consider in order to select the right battery to meet the specific
requirements of a cell site
< TCO of Li-ion versus LA batteries
< The advantages of Li-ion batteries in terms of energy density, and the implications for the installation
footprint at a cell site
< Meeting differing backup power requirements at on-grid, unreliable grid and off-grid BTS and at larger
Joel Brunarie, Telecom Business Development Manager, Saft: Mobile network operators place a major emphasis on ensuring consistent quality of subscriber service. The design and management of backup power systems to maintain continuity of power, in the event of an interruption to the main site power supply, is therefore a vital issue. When the main power supply fails, the backup battery must be able to perform. My view is therefore that battery selection is a critical element in the success of the entire installation.So while it can be tempting to regard the battery as a simple commodity item, to be purchased at the lowest initial cost, I urge the C-suite to look at the bigger picture. A cheap battery can in fact prove very expensive if it fails to function when required, causing loss of subscriber revenues. In contrast, an initially more expensive specialised telecoms battery that delivers in terms of reliability, performance and life will provide a superior return on investment (RoI) as well as peace of mind. TowerXchange: What are the critical considerations in selecting battery backup power solutions? Joel Brunarie, Telecom Business Development Manager, Saft: There are a number of critical considerations that determine the correct choice of battery for a telecoms installation: <�The duration of backup time required, i.e. the capacity needed to support the duty profile,
which largely determines the battery sizing.<�The specific application, will the battery be subjected to frequent daily cycling with deep discharges or will it mainly be on floating duty?<�The environmental temperature, as extremely cold conditions can adversely affect performance, while elevated temperatures reduce the expected life. In some cases, batteries might need to be housed in a specially heated or cooled enclosure.<�The energy density (in terms of both volume and weight), can the battery provide the required performance from the limited installation footprint available at telecom sites?<�Maintenance requirements - how often will the battery need servicing or replacement? At remote locations, the cost of frequent service visits can exceed the battery purchase cost. TowerXchange: How does the TCO of Saft’s solutions compare to alternatives? Joel Brunarie, Telecom Business Development Manager, Saft: Currently, the majority of telecom backup power systems are supported by lead-acid (LA) batteries. While these batteries have operated successfully in the field for many decades, they have some drawbacks, including concerns regarding reduced life expectancy at higher temperatures, shorter cycling life, the necessity to over-size the capacity, low reliability, high weight and low energy density. In recent years, lithium-ion (Li-ion) battery technology has demonstrated its exceptional
capability to deliver high performance, reliability and long life in a range of demanding backup applications. Saft has now created a second generation of Li-ion batteries, known as Evolion® that capitalises on this experience by offering tailor made outside plant hardened modules to meet the specific demands of the telecom industry, where they offer possibilities to create compact, safe and reliable backup power systems. Thanks to its zero maintenance, sealed for life design, and long calendar and cycle life, Evolion® offers an optimised TCO (Total Cost of Ownership). So while a lead-acid battery might last only up to five years, Evolion® is designed to have the same life expectancy as the telecom equipment it serves. This means a long float life of 20 years at +20°C and more than 10 years at +40°C and a high cycle life of 4,300 cycles at 80% DOD (depth of discharge) and 8,200 cycles at 50% DOD. Furthermore, unlike lead-acid batteries that are prone to ‘sudden-death’ failures, the life and performance of a Li-ion battery is always predictable. TowerXchange: What are the operational advantages of Saft Li-ion batteries? Joel Brunarie, Telecom Business Development Manager, Saft: The operational advantages of the Evolion® modules include: <�High energy density (in terms of both volume and weight), delivering high performance from the limited installation footprint available at telecom sites<�High performance in cycling and floating
applications< Safe, reliable operation at extreme temperatures (-40°C to +75°C) that eliminates the need for on site heating or air conditioning< Easy battery management, since the state of charge (SOC) of a Li-ion battery is directly related to its cell voltage. This also offers the potential for intelligent remote supervision The main advantage of Li-ion technology for telecom networks is that it enables more energy per weight and volume to be stored. For example, a typical VRLA (valve regulated lead-acid) telecom battery will store 80-95 Wh/l and 35 Wh/kg. In comparison, the Evolion® module stores over 170 Wh/l and 139 Wh/kg, making it effectively two times smaller and four times lighter. TowerXchange: What are the typical applications in which your batteries are used? Joel Brunarie, Telecom Business Development Manager, Saft: Currently, Evolion® has four main applications: Outdoor in wire-line/wireless applications with a high quality grid - including outdoor cabinet applications such as BTS (Base Transceiver Stations), BSC (Base Station Controllers), MSC (Mobile Switching Centres) and access node terminals for FTTx. At these sites, the battery has to support around 10 to 30 power outages per year ranging from a few seconds to hundreds of minutes. Since it is in
an uncontrolled environment, the battery has to survive temperature ranges from -20°C to +55°C and large variations in relative humidity - Evolion® can work across this temperature range without affecting performance and life. These sites can be remote and hard to access. In this case, reducing expenses associated with transportation, installation and maintenance is a key objective when considering new solutions. Evolion® is ‘maintenance free’, with state of health and state of charge information available through
remote monitoring. On average, the power required in such applications is in a range of 800 W up to a few kW and the runtimes range from 2 to 8 hours. CO, MSC and DPCO applications - covering all types of indoor sites with high power requirements (from above 10 kW to several hundreds of kW) that are connected to electrical grids with good or poor quality, and including Central Offices (CO), the more recent architecture of Distributed Power
Central Offices (DPCO), where the power is locally distributed and decentralised and MSC (Mobile Switching Centers). The battery is installed inside under a controlled environment, where the average temperature is typically between +15°C to +25°C. The Li-ion module is an interesting alternative when compared with the conventional VRLA battery primarily because its low weight and low volume can minimise floor loading and the need for building structural enhancements.
Outdoor and inside wireless applications with no reliable electrical grid - typical of countries where the grid is unreliable. In contrast to the two previous applications, the battery can be discharged several times a day and with a variable depth of discharge.
Again, the battery is usually installed in an uncontrolled environment and must survive a temperature range of -20°C to +55°C and large variations in relative humidity. The average power
required is between 1 to 4 kW and runtimes range from 4 to 12 hours. And again the site is often remote and hard to access. In this case, reducing expenses associated with transportation, installation and maintenance is necessary. The Evolion® module offers high cycling capability at different depths of discharge and in particular at high temperature. Standalone, off-grid hybrid applications - As fuel costs continue to rise, operators are now seeking more cost-effective ways of powering their sites. A particularly attractive solution is to use a hybrid system that integrates a variable speed diesel DC generator (genset) with a deep cycling Li-ion module. This offers an extremely energy efficient alternative to using an AC generator operating 24/7, since the generator simultaneously charges the battery and powers the site load. When the battery is fully charged the generator shuts down and the battery takes over as the primary source of power. The genset runtime is reduced to typically 4 hours per day, with major savings in fuel consumption - usually up to 74 percent compared with a standard genset. It also reduces CO2 emissions while increasing refuelling and service intervals. A complete hybrid system of this type can be packaged in a compact and light ‘energy container’ to offer a turnkey solution that is quick and easy to install in remote locations. The addition of PV
(photovoltaic) panels and/or wind turbines could allow further reductions in operating costs (OPEX) while also increasing environmental benefits. For hybrid sites, Evolion® offers high cycling capability and long life at deep discharge; fast recharging; resistance to high temperatures; high charge efficiency and ultimately low OPEX.
TowerXchange: Finally, please sum up how you differentiate Saft from your competitors? Joel Brunarie, Telecom Business Development Manager, Saft: The important difference with Saft is that we don’t focus on simply selling batteries. We aim to design, develop, manufacture and supply cost-effective energy storage solutions that will ensure high performance and reliability throughout the life of the telecom installation. We are able to do this through our vast experience in the industrial standby power business combined with a wide choice of battery chemistries - including nickel-based and Li-ion technologies - provided within dedicated telecom battery designs and supported by the strength of our global organisation. All this means that we are able to offer a comprehensive approach that takes telecom customers from a blank sheet of paper through creating the ideal specification for their application, designing and manufacturing the battery system, on site installation and commissioning and then ensuring the system always functions at peak performance by providing through-life service support
In this new special feature, TowerXchange speaks to the engineers and innovators charged with responsibility for modernising Africa’s rooftops, masts and towers. We also look at site design innovations that improve the economics of rural network extensions. The special feature opens with a Q&A with Leadcom’s Chief Engineer, providing an introduction to the design and strengthening of Africa’s many single tenant towers as infrastructure sharing becomes more prevalent. We speak to Craig Barker, President and CEO of Geostrut, whose carbon fibre towers have recently entered mass production and provide a light-weight, easy to install, long-life alternative to steel towers. Finally, we look at the application of MER Telecom’s Light Sites to rural network extensions in Ghana.
Rooftops, masts and towers
In part one of our rooftops, masts and towers special feature:135 Designing and strengthening towers for
multiple tenants
139 Geostrut’s carbon fibre towers
143 Bridging the digital divide in Ghana
Why 1+1 doesn’t always equal 2 when designing and strengthening towers for multiple tenantsLeadcom explain how the load capacity of a tower is measured and upgraded
TowerXchange: Please tell us about the typical current state of Africa’s single tenant towers - were towers designed to accommodate additional tenants? Is there typically spare Equivalent Projected Area (EPA) for additional tenants? Hagai Admor, Chief Engineer, Leadcom Integrated Solutions: In the early stages of the massive rollouts in Africa, providers could sell their own ready-made product towers as there was lack of standardisation. Telecom operators defined their towers in three basic levels: < Standard - which was normally EIA/TIA 222< Wind speed - which normally was 40m/s< xx m² wind load in the top 10m Based on these categories, customers defined and standardised their early towers. A few years ago, a new version of the American standard was issued, better definitions for the different environmental factors were considered such as exposure area, importance factor, topographic factor, et cetera. This was given to the operators to be more accurate in their definitions and specifications. The fact is that most of the “old” towers, sold based on “old” standards, were not a product of new, cutting edge analysis and engineering tools, so they weren’t accurately tailored to suit environmental factors. As a result, some older towers are under-designed and overloaded, while some of them are
TowerXchange wanted a basic explanation of tower design and tower strengthening for readers who aren’t structural engineers, and our friends at Leadcom kindly obliged! Chief Engineer Hagai Admor’s interview takes us from Africa’s early over- and under-designed towers, with some towers overloaded and some with spare capacity, to today’s innovative tower designs that minimise initial capex but which are upgradeable for multiple tenants.
Read this article to learn:< Why many of Africa’s towers are under- or over-designed
< How the capacity of a tower was previously measured, and how it’s now measured based on exact loading
< How much capacity is required to add a second and a third tenant
< How service can be maintained when you can no longer avoid replacing rusty old towers
< How to control the capital outlay on new towers while retaining the flexibility to upgrade for multiple tenants
Keywords: How to Guide, Managed Services, Steelwork, Construction, Installation, Urban vs Rural, Co-locations, Capacity Enhancements, Loading, Foundations, Decommissioning, Masts & Towers, Infrastructure Sharing, Africa, Leadcom
over-designed and can accommodate additional loading. Another factor which has a major impact on the tower load is that with the technology evolution over the years (2G, 3G, PDH, SDH etc), operators added equipment to the towers without considering the designed capacity, and we have found some tower members that were over loaded by 300-400%! With today’s know-how, we define towers based on exact loading. Unless it is requested by the customer, we do not mention the equivalent projected area at the top, but express the load as a function of the specific equipment to be mounted, such as antenna models, mounting apparatus, microwave dishes, coaxial feeders, vertical cable ladder, et cetera. Expressing the tower capacity as a number of square meters at the top of the tower normally confuses the customer since some include feeders and some don’t, some express the load in a distributed method and some in a concentrated method, and some of the suppliers apply the load on one leg in one azimuth and some not. With the size of recent equipment, we rarely find that additional tenants cannot be added due to real estate issues and we believe that there is always a solution that can be found. Where once people would have talked about towers having 5, 10 or 15 square meters of capacity, towercos talk mainly about the number of tenants a
tower has capacity for. TowerXchange: How much additional capacity is required to add a second or third tenant? Does the load capacity increase proportionally; do you need double the capacity for a second tenant and three times the capacity for a third? Hagai Admor, Chief Engineer, Leadcom Integrated Solutions: No, 1 + 1 does not always equal 2 when it comes to adding tenants to towers! Sometimes 1 + 1 equals 1.5 and in other cases 1 + 1 equals 2.5!
To explain it simply, if a 1kg force is acting on a 40m pole, then the moment is 40kgm, but if the same 1kg is acting on a 35m level (5m below top), the moment is 35kgm. Equipment for an additional tenant placed at the top of a 40m tower creates a greater moment, a greater load, than if the same equipment was placed 5m below the top. So you see adding additional tenants do not mean the load on the tower rises proportionally. Additional equipment for the current or for a new tenant placed on top of a tower versus placing
interference. If the tower is already occupied, available slots may not be the optimum, and the space may or may not meet their needs. Some compromises may be possible with the location of RF equipment, but if they want to transmit data from one site to another via microwave then they need line of site, so if that’s not possible it tends to be a go / no go question. TowerXchange: How does the tower location affect capacity, for example in areas with high wind speeds? Hagai Admor, Chief Engineer, Leadcom Integrated Solutions: The new American standard takes into account environmental factors that directly influence tower performance. Which means that a tower in a sheltered urban area can be loaded more than the same tower if be located in open terrain. In addition, towers that are located on the top of a hill can carry lower loads then towers located in flat open terrain. Moreover the latest version of the standard takes into account the level of importance of the structures, such as whether the tower is a switch site. In addition to that, better and more accurate data on wind speed in different regions can be identified today, not like in the past where a whole country was considered with one or maximum two wind zones. The effects of site-specific topographic parameters introduced in the latest version of the “EIA/TIA-222 G” version have a significant influence on the tower’s actual capacity. Towers that were procured and erected during early rollouts without
the same equipment 5m below the top will create different moments and forces along the tower. Loading the tower at different heights causes change in its static forces distribution. The tower body changes and members with initial utilisation might see additional force which will lead to exceeding the member’s capacity. Operators want their equipment at a specific height to optimise coverage and capacity and to minimise
site-specific design can now, in the re-analysis stage, show very poor results due to topographic/environmental conditions and lose most of their potential vacant capacity to increased wind loads. TowerXchange: What ultimately defines the load capacity of a tower? Hagai Admor, Chief Engineer, Leadcom Integrated Solutions: The capacity of the tower is defined by the most stressed element/member in the tower. It can be a leg in the bottom section, but also can be diagonal or horizontal in the middle section. In some cases when analysing towers that have lower quality bolts, we find that the most stressed element/member is a bolt and the capacity of the entire tower is defined according to that. The way you modulate the tower is of critical importance, on one hand the geometry and the screening of the members, and the other hand modulating the antennas and accessories in their exact location (height and azimuth and tower leg). TowerXchange: What are the most common approaches to strengthening a tower structure? Hagai Admor, Chief Engineer, Leadcom Integrated Solutions: The engagement of a turnkey provider can bring the towerco the most cost effective solution for strengthening towers. We are not bringing just a pure engineering approach, but we also add aspects from manufacturing, delivery lead-
time, shipment and implementation which results in a tailor made solution for each specific site. We believe that our vast field experience with great engineering knowledge is a great benefit to the towerco. The approach of replacing a leg with a bigger/thicker leg is not necessarily the right solution. Replacing a leg often seems to be a straight-forward, feasible solution, but the risks entailed can cause the tower to collapse if poorly executed. Our approach to tower strengthening is on a case by case basis since each tower has it own parameters in terms of loading, wind speed, and environmental factors. It is like a heart surgery where you have a procedure that you go by but each patient is unique. A more sophisticated or innovative approach to tower strengthening, other than simply replacing failed members with stronger ones, is to change the static design and model geometry of the tower by installing additional members in a way that will better distribute the various forces within the tower main members, thus reducing the overstress in some of those members. TowerXchange: When would you recommend replacing rather than upgrading a tower? How can service be maintained during transition to a replacement tower? Hagai Admor, Chief Engineer, Leadcom Integrated Solutions: We do everything in our engineering capabilities to find solutions to keep the same tower and to reinforce it rather than replacing the tower.
The consequences of replacement not only involve the direct cost of the new tower but also lack of land (as normally the new tower will be tied in to the existing one), implementation of a new foundation, and telecom equipment cut-over which introduces a risk to the continuation of site performance. During the past three years I remember very few sites that we recommended dismantling. In most of the cases the reason was that our survey team found heavy rust on the structure. Replacement of towers because of inability to strengthen is rarely necessary and this is appreciated by our customers. One of the key elements that lead us when we design tower strengthening is the continuity of the site’s service; this is why we prefer to add members rather than replace members. In some cases, specifically rooftop sites with severely deteriorated or poorly designed towers that must be replaced, we solve the downtime/service continuity problems by erecting a light-duty (very small footprint) temporary tower just outside the compound parcel, which is used during the construction period of the replacement rooftop tower, and then dismantled and reused on another location. TowerXchange: Finally, how can tower operators control capital outlay on new towers whilst still having the flexibility to upgrade them for multiple tenants? Hagai Admor, Chief Engineer, Leadcom Integrated Solutions: Since 2010 Leadcom has undertaken thousands of structural analysis surveys and
strengthened an enormous amount of towers. From that experience, we devised a methodology to make a tower easily upgradable to accommodate extra tenants without interrupting service. If the customer doesn’t want to deploy the capex to rollout towers with multi-tenant capacity now, we can install a light model tower with geometry capable of adding or upgrading members to achieve higher loading on the same tower without downtime or changes to the foundation. We install an MM Series tower (with medium load capacity) with the potential to upgrade to an MMTP site (suitable for harsh topographic environments, or additional tenants) using 100% the same geometry but with the addition of certain members to achieve a 30-40% higher load on the tower. Clients seeking this kind of flexibility in capex deployment and upgradeable capacity are usually towercos, who can use these towers to mitigate the risk that it will take time to sell additional tenancies
“ “we devised a methodology to make a tower easily upgradable to accommodate extra tenants without interrupting service
Carbon fibre towers now mass produced and offer many advantages over steelLight weight, easy installation towers ideal for remote cell sites and rooftops in emerging markets
TowerXchange: Please introduce Geostrut to our readers.
Craig Barker, Co-founder, President and CEO, Geostrut: Geostrut is an eight year old company - our carbon fibre towers are our third generation technology, launched four and a half years ago. The prototypes we’ve built have been well received, and we’ve refined the product and completed our mass production process just three weeks ago. We’re ready to introduce a product design that is ready to compete head to head with steel towers on price.
Some people wonder how we compete with steel tower manufacturers, a mature, 75-100 year old industry, when we’re this new innovation that has only just gone into mass production. One of the keys to commercialising carbon fibre towers has been that suppliers of our raw materials have identified that our company has the potential to be the largest consumer of carbon fibre in the world. Thus, we are the recipient of very aggressive raw material pricing. Other applications of carbon fibre, even aviation, use a limited amount of raw material. But because we’re talking about infrastructure, the potential of the market is huge. Add to this a nearly automated manufacturing process and the price of our product has become very competitive.
We’re going to concentrate on the wireless market first, then consider moving into power transmission, automotive, aerospace and construction applications in the future. But we’re not moving on from wireless until we’re immersed in the business and we’ve mastered the mass production for this industry.
Geostrut will be unveiling an exciting new innovation in tower manufacturing at the TowerXchange Meetup. It’s been a long time coming, but carbon fibre towers are finally being mass produced - it’s been worth the wait! Carbon fibre towers have some genuine advantages over steel in terms of weight, ease of installation and corrosion resistance. TowerXchange caught up with President and CEO Craig Barker to learn about the potential use cases of carbon fibre towers in emerging markets.
Read this article to learn:< How carbon fibre towers are able to compete on price and wind load capacity with steel: lattice carbon
fibre structures with a carbon fibre skin
< The advantages of carbon fibre towers over steel: weight, ease of installation and long life
< Why carbon fibre structures are particularly strong alternatives for rooftops
< How many tenants can be accommodated on a carbon fibre tower?
< The current costs of a Geostrut’s towers and their plans to manufacture in Africa
Geostrut identified wireless as our core target market five years ago. The tensile and compressive strength of carbon fibre is well known, but used alone it would have needed so much raw material as to not be competitively priced against steel. Carbon fibre also didn’t have the bending and impact strength to withstand the wind loading required in telecoms. So we developed a lattice carbon fibre inner structure with a carbon fibre skin, and this combination requires less raw material while giving us independently certified bending strength to meet the wind load capacity requirements of telecoms.
We have secured a couple of patents and have a couple more pending.
We conducted a study with a major US aerospace company who were working with thin walled, pure carbon fibre tubes on a top secret project. They compared the strength of their pure carbon fibre tubes with our lattice Geostrut structures that use
directionalised carbon fibre enabling us to use half as much raw material, and found our lattices structures equal to or stronger and approximately half the weight of the pure carbon fibre tubes.
TowerXchange: What are the advantages of carbon fibre over steel towers?
Craig Barker, Co-founder, President and CEO, Geostrut: Carbon fibre towers have three main advantages over steel towers: weight, ease of installation and resistance to corrosion.
weight of an equivalent steel monopole. This is critical for logistics. Geostrut’s tapered monopole sections can be taken apart and nested, so a 26m tapered monopole is nested into the base section and the entire carbon structure weighs just 249kg. We can get eighteen such towers in a 40ft container! We are targeting opening regionalised manufacturing facilties, but for now we can manufacture and ship towers from the US to Africa for just US$250-300 per tower delivery costs.
Of course inland logistics are even more critical given the under-developed state of the road network in many African countries. Moving light-weight
“ “Carbon fibre towers weigh about one tenth of the weight of an equivalent steel monopole. This is critical for logistics
Geostrut towers to remote locations is a lot easier than moving the equivalent steel structures. Our towers can be moved on a regular truck trailer, and individual sections of our towers can even be moved around by hand by a couple of guys - on most of our designs, the heaviest section is 100kg. So not only are carbon fibres inexpensive to move, they are also safer to handle because they’re not as heavy.
Let’s talk about ease of installation. Labour
requirements are much lower than for steel towers - you can assemble a Geostrut tower and erect it at a new site in half a day. The bottom section is bolted to the base (there may be a need for a small change to the foundation, but it incurs little cost), then the foundation can be hinged, so you can assemble it on the ground and complete erection by hand swinging it up with ropes. This is important because heavy equipment to install structures is often not readily available in emerging markets, and not needing
a crane means there is no need to pass heavy transportation and installation vehicles along under-developed road networks.
Another advantage of carbon fibre is that it doesn’t corrode like steel, which means less maintenance visits and opex. We also have an additive to our resin that prevents damage by UV rays. We quote the same 50 year lifetime as steel but frankly we’re being conservative - industry standards attribute other carbon fibre structures quote significantly longer lifespans. The biggest difference in lifespan occurs in corrosive environments such as marine, coastline and island locations, where a steel tower can rust in less than 20 years. A carbon fibre tower is good for at least 50 years, regardless of the application.
Geostrut towers come out black, but can be painted for high visibility applications such as near airports.
TowerXchange: What are the typical use-cases of Geostrut’s carbon fibre towers?
Craig Barker, Co-founder, President and CEO, Geostrut: While we have designs up to 50m, to date we’ve manufactured up to 32m.
We compete primarily with steel monopoles. I remember visiting India two and a half years ago when they had just rolled out hundreds of thousands of three and four legged towers for 3G. At that time nobody wanted to talk about monopoles - now the market is maturing toward 4G, no-one talks about
towers over 40m, and monopoles are preferred!
Carbon fibre has a real advantage on rooftops because of its light weight. I remember speaking to a tower executive in India who said he couldn’t put steel structures on rooftops in certain sectors of the country because the buildings weren’t strong enough. Especially in emerging markets where building construction standards aren’t the same, a lot more rooftop sites are going to be viable options using 6-18m carbon fibre rooftop towers than if you use steel.
TowerXchange: What’s the maximum capacity of your carbon fibre towers in terms of tenants?
Craig Barker, Co-founder, President and CEO, Geostrut: We’ve built structures with capacity for the antennas with microwave dishes of three tenants, and good for wind speeds up to 55m/s, which is sufficient for the majority of multi-tenant towers.
TowerXchange: Tell us about the capital outlay required on a per tower basis.
Craig Barker, Co-founder, President and CEO, Geostrut: It depends where the tower is manufactured and local labour costs, and we’re determined to develop localised manufacturing bases. Based on manufacture in our current US factory, we can produce a 24m tower for US$8-10,000 and 30m for $11-13,000 depending on loading and wind speed. Which means both manufacturing costs and shipping
are very competitive to steel in the US and Europe. We can beat the price of equivalent steel monopoles in some regions, it’s tougher to beat the price of steel structures in other regions that source inexpensive steel locally.
TowerXchange: What is Geostrut’s interest in the African market?
Craig Barker, Co-founder, President and CEO, Geostrut: Geostrut are going to be making our African debut at the TowerXchange Meetup next month. Africa is experiencing very rapid growth in telecoms and the opportunities for us on the continent are very exciting. We have partnered with Connect
Africa, a specialist in rural telecoms, to determine the size of the opportunity. They want to reduce overall site infrastructure costs in the rural market and see real benefit in the ability to quickly and cost-effectively deploy light-weight towers in areas that are difficult to access. We are aiming to build a local manufacturing capability in Africa by the middle of 2014, in collaboration with the entrepreneur backing Connect Africa.
TowerXchange: I appreciate Geostrut have only just moved from prototypes to mass production, but do you have any towers already installed that prove their performance in the field?
Craig Barker, Co-founder, President and CEO, Geostrut: We currently have two towers standing in Brazil, three in Australia, and one delivered but not yet standing in India. The oldest structure went up two years ago with no reported problems since.
We only finished the mass production process three weeks ago, but we already have orders for our first 36 towers - including nine going to Malaysia to an operator who is excited to be the early adopter in that part of the world! Plus we have two towers leaving our facility by air freight to Africa - including a two section tower to be assembled outside the TowerXchange Meetup! Visit Geostrut at booth #16 at the TowerXchange Meetup and see their innovative carbon fibre tower installed in the courtyard outside! To register for the Meetup, visit:www.towerxchange.com/meetups/africa
“ “Especially in emerging markets where building construction standards aren’t the same, a lot more rooftop sites are going to be viable options using 6-18m carbon fibre rooftop towers than if you use steel
Bridging the digital divide in GhanaHow to make rural communications commercially viable
Arie Ben-Dayan, Marketing & Sales Director, MER Telecom
TowerXchange: Please introduce us to GIFEC and to your work with them to accelerate rural connectivity in Ghana. Arie Ben-Dayan, Marketing & Sales Director, MER Telecom: Ghana Investment Fund for Electronic Communication (GIFEC) is a nonprofit agency of the Ghanaian Government, funded by a levy on mobile network operators revenues, to facilitate the provision of universal access to electronic services to unserved and underserved communities in Ghana. GIFEC aims to connect isolated villages, typically with 1,000 to 2,000 citizens, that may generate too low ARPU to be profitable for MNOs to connect under their standard business model. To communicate, people in these villages had to walk 10 to 15 km to get sufficient cellular coverage to enable a phone call. GIFEC issued a tender and MER Telecom’s Light BTS Site concept was chosen based on the following criteria: proven experience in rural projects, coverage capability and low power consumption (150W). We have initially deployed ten Light Sites with renewable energy solutions. Light Site includes a 35m triangular tower, micro BTS, Wi-Fi and VSAT equipment, plus a hybrid energy solution. TowerXchange: Tell us more about the energy solution designed for these sites. Arie Ben-Dayan, Marketing & Sales Director, MER Telecom: Energy source design is very important at these sites and, as all the villages were off-grid, power supply for the site was sourced from a hybrid energy system that combines a solar array of ten
How can innovations in passive and active infrastructure and energy equipment support the objectives of governments and universal access funds to accelerate the extension of rural connectivity? TowerXchange took a closer look at GIFEC and at what they have achieved working with MER Telecom to connect remote villages in Ghana. We also look at how similar business models, technology and operational solutions could be applied to support similar universal access initiatives.
Read this article to learn:< How GIFEC use Light Sites to connect isolated, off-grid villages
< Using solar panels, CDC batteries and a low energy consumption BTS to reduce opex to 10-20% of the
costs to maintain a regular site
< The cost-effectiveness of VSAT connectivity in rural areas
< How VAS like mobile money drive rural connectivity and how rural connectivity drives mobile money!
solar panels of 280W each and a set of deep cycle batteries. The challenge was to provide a total solution at minimum capex and opex, by avoiding the need for a diesel generator onsite which would have meant a different and costly business model. Also, a solar-only solution avoids fuel supply and fuel theft problems. TowerXchange: Talk to us about the active equipment you installed. Arie Ben-Dayan, Marketing & Sales Director, MER Telecom: The challenge in selecting the right active equipment was to balance the need to provide enough capacity and coverage in order to serve the entire village and at the same time, ensure that the BTS had the minimum possible energy consumption (in order not to require a diesel generator on site) and ensure a minimum satellite bandwidth consumption in order to avoid a high opex due to wide bandwidth consumption. MER Telecom came up with a turnkey solution including active equipment, in this case a micro BTS with 2 TRX capacity (expandable on demand). This was much cheaper and more efficient than a standard BTS. The solution we delivered, which we call Light Site, had enough capacity and bandwidth to support the needs of the villages around, yet the power consumption and bandwidth required were very low. If we’d used a normal BTS then we would have needed more solar panels, and the site would have become bigger and more expensive. Based on a specification from GIFEC, the equipment was purchased from a variety of different suppliers,
with MER Telecom as the integrator. MER Telecom produce the passive equipment. Since we do not manufacture active equipment, we selected the right suppliers in order to meet the client’s specs and requirements.
TowerXchange: Under what business model are these sites going to be brought to market? Is it a revenue share? Arie Ben-Dayan, Marketing & Sales Director, MER Telecom: It’s not a revenue share model in this case.GIFEC has purchased the turnkey sites. When the site build will be completed, they will be available to connect to different operators. In this case I believe GIFEC is working with Vodafone Ghana, but it could be other operators as well or even become a multiple operators site. Either way, GIFEC remains the owner of the site. TowerXchange: Could the business model be extended to have multiple tenants sharing the sites? Arie Ben-Dayan, Marketing & Sales Director, MER Telecom: We can install the antennas of several different operators on these towers, but in a village that might have 500 users, hosting three tenants would make the site much more expensive in terms of additional capacity and energy, so GIFEC have deployed different sites with different operators. GIFEC would evaluate whether there was a case to deploy more capex to add additional solar panels or batteries and support additional tenants. The loading starts very low with just one tenant using standard size antennas and small microwave dishes - every
site can be upgraded. It is important to mention that there is no technical limitation in creating a multi-tenant site. The only limitation is the business aspect. If the village is large enough, a multi-tenant site can be a viable solution. TowerXchange: How does the capex and opex of a Light Site compare to normal cell sites?
Arie Ben-Dayan, Marketing & Sales Director, MER Telecom: With Light Sites, maintenance costs are a few hundred dollars per month - probably 10-20% of the opex of a regular site which might require US$2,000-2,500 per month and even more when considering the difficulties of maintaining rural sites separated by large distances. I can’t be too specific about the capex because we’re under NDA, but the BTS and passive infrastructure costs less than half of the cost of a regular site.
Light Site: a 35m triangular tower, micro BTS, Wi-Fi and VSAT, plus hybrid energy solution
TowerXchange: Tell us about the energy footprint of the Light Site solution Arie Ben-Dayan, Marketing & Sales Director, MER Telecom: Light Site consumes 150-200W in total, compared to a regular BTS which might require 1,500W. This is the reason why a diesel generator is not needed with Light Site. Each Light Site can be tailored to local power requirements by varying the size of the PV array according to hours of available sunlight, with a battery bank of a different size according to the number of hours of autonomy required. The hybrid systems are monitored by MER Telecom’s own smart controller which monitors and activates the solar and battery energy sources according to the availability of each. We selected a deep cycle battery with a lifetime longer than standard batteries to reduce battery related maintenance costs. TowerXchange: Talk to us about the merits of VSAT in rural areas. Arie Ben-Dayan, Marketing & Sales Director, MER Telecom: We chose the VSAT connectivity solution due to its cost effectiveness in rural areas where there is no line of sight to any existing cellular operator. The VSAT requires very low bandwidth and as such reduces each site’s monthly opex. TowerXchange: What is the appetite for other Universal Access Funds to engage in similar projects?
Arie Ben-Dayan, Marketing & Sales Director, MER Telecom: We are seeking to promote and duplicate this model beyond Ghana with other organisations with the same objective as GIFEC in order to develop and facilitate digital access. Universal Access Funds exist to close the digital divide, and building cell sites in remote villages shows the population that they are acting on their behalf to extend communications to the underserved. In the past many Universal Access Funds have been focused more on fibre optic connectivity in urban areas, however now their attention is focused more and more on rural areas hence projects like GIFEC’s are becoming more viable and common. TowerXchange: Who is the “client” when seeking opportunities on similar projects? Arie Ben-Dayan, Marketing & Sales Director, MER Telecom: The client in most cases is the Universal Access Funds which are administered by Ministry of Telecommunication and/or the regulator. TowerXchange: Are there other use cases for Light Site?
Arie Ben-Dayan, Marketing & Sales Director, MER Telecom: Yes, we are definitely targeting also the MNOs which are aiming to provide coverage and services access to the rural population at minimum cost. Light Site is used by MNOs as well as Universal Access Funds, which in some cases are driven by license obligations to extend coverage. Towercos
have also expressed their interest in our Light Site solution, although it’s a challenge to make the energy solution viable from a capex and opex point of view when capacity for two to three tenants per site is needed. Mobile Network Operators are offering an increasing number of VAS platforms that bridge urban and rural areas, such as mobile education and mobile money. How can an urban migrant send money home if there are no connections in the rural village where his family lives? ARPU from voice services is not enough to make many rural network extensions viable, so it is imperative to develop additional value added services like mobile money, which in turn drive the need to cover the maximum population - it’s a cycle. Innovative solutions like Light Site can transform the economics of rural network extensions that otherwise might be loss-making. It’s time to reconsider the deployment of full size cell sites in rural areas. For example hundreds of the regular cell sites deployed in rural Congo have been switched off because of the monthly maintenance cost which is higher than the monthly revenue generated. Using a small, lightweight site which incurs minimum capex and opex might offer lower capcity and bandwidth, but at least there is available service.
MER Telecom will be hosting a round table at the TowerXchange Meetup on “How to make rural communications commercially viable”. For more information, visit:www.towerxchange.com/meetups/africa
TowerXchange profiles the capabilities, experience and footprint of proven suppliersMatrix of African tower design, manufacture, installation and managed service providers
Company
Company
Company
Company
Tower Design
Tower Design
Tower Design
Tower Design
ADNA
Camusat
Alkan CIT
EEC Group
Tower Manu
Tower Manu
Tower Manu
Tower Manu
Install
Install
Install
Install
ManagedServices
ManagedServices
ManagedServices
ManagedServices
TOC
TOC
TOC
TOC
Acquire &lease
Acquire &lease
Acquire &lease
Acquire &lease
Permits & licenses
Permits & licenses
Permits & licenses
Permits & licenses
Footprint: Currently only operate in Egypt and supply products for Africa and Middle East. Before ADNA had been in Algeria and Sudan
Footprint: Algeria, Burkina Faso, Chad, Egypt, Ghana, Kenya, Libya, Mali, Niger, Senegal, Sierra Leone, Sudan, Tanzania (plus Bahrain, Iraq, Oman, Qatar, Saudi Arabia and UAE in the Middle East)
Footprint: Algeria, Egypt, Mali, Senegal, South Sudan and Sudan
Sample clients: Vodafone Egypt, Mobinil, Etisalat, Huawei, Orange, Omnia and Omantel
Sample clients: France Telecom/Orange, Digicell, Eaton Towers, Bulgaria Telecom, ZTE, Telma, TowerCo of Madagascar
Company profile: TowerXchange issue four, pages 83-86 or visit www.towerxchange.com/african-towerco-investor-may-be-required-as-tower-sharing-moves-to-phase-two-in-egypt/
Company profile: TowerXchange issue two, pages 96-99 or visit www.towerxchange.com/whatever-it-takes-to-get-it-done
Company profile: TowerXchange issue four, pages 79-82 or visit www.towerxchange.com/alkans-end-to-end-services-leveraging-tower-sharing-plans-in-egypt
Company profile: TowerXchange issue three, pages 60-62 or visit www.towerxchange.com/eec-group-positioning-itself-to-partner-towercos-in-egypt
Footprint: Full turnkey services in Egypt (HQ), Sudan, KSA, UAE and Qatar, also supplying products to Algeria, Bangladesh, Ethiopia, Kuwait, Oman, Lebanon, Iraq, Libya and more
Company profile: TowerXchange issue three, pages 57-59 or visit www.towerxchange.com/tower-deal-imminent-in-egypt
5,000199918,000 in MENA & AsiaInterested
Capabilities Approx # of towers in Africa Founded Staff
Company
Company
Tower Design
Tower Design
Likusasa
Mer Telecom
Tower Manu
Tower Manu
Install
Install
ManagedServices
ManagedServices
TOC
TOC
Acquire &lease
Acquire &lease
Permits & licenses
Permits & licenses
Footprint: Mauritius HQ, Mozambique, Zimbabwe, Zambia, Malawi, South Africa, Lesotho, Angola, Cameroon, Nigeria, Ghana, Liberia, SDR Guinea, Sierra Leone, Kenya, Tanzania
Footprint: Angola, DRC, Ghana, Guinea-Conakry, Mozambique, Niger, Rwanda, Senegal, Tanzania – able to perform and supply anywhere in SSA (also active in LatAm, Russia and CIS countries)
Company profile: TowerXchange issue one, pages 34-36 or visit www.towerxchange.com/design-for-shareability
Company profile: TowerXchange issue four, pages 93-95 or visit www.towerxchange.com/blue-chip-turnkey-infrastructure-provider-moves-into-managed-services
Company profile: TowerXchange issue five, pages 46-51 or visit www.towerxchange.com/a-view-of-tanzania-from-the-front-lines-of-the-markets-leading-managed-service-provider
10,000
600 full time, 2,000+ contractors
350
1945
Over 50 years ago
1987
7,000
12,000+
2,385
Capabilities
Capabilities
Capabilities
Approx # of towers in Africa
Approx # of towers in Africa
Approx # of towers in Africa
Founded
Founded
Founded
Staff
Staff
Staff
TP
TPTP
Software
Company
Tower Design
NETIS
Tower Manu Install ManagedServices TOC Acquire &
leasePermits & licenses
Footprint (Africa): Burkina Faso, Cote D’Ivoire, Ghana, Uganda (with offices opening soon in Kenya and Cameroon)
If you would like to refer us to other turnkey infrastructure companies that should be featured in this Who’s who, then please contact TowerXchange at [email protected]. We are generally interested in companies that have manufactured, installed or maintained at least 1,000 cell sites in Africa, or smaller companies with a unique capability within this segment of the tower industry supply chain.
The TowerXchange Meetup will feature a unique “Shootout” of managed service providers; five minute demonstrations and differentiations of the leading players in this category, giving buyers an opportunity to compare their capabilities, match them to their organisational requirements, and identify potential pan-African manufacturing and service partners to receive RFPs.
Inviting other static asset manufacturers and managed service providers to be profiled in TowerXchange
Company profile: TowerXchange issue three, pages 81-84 or visit www.towerxchange.com/time-to-market-a-critical-differentiator-within-the-tower-industry-supply-chain
Company profile: TowerXchange issue three, pages 90-91 or visit www.towerxchange.com/fast-deployment-at-a-reasonable-price
100
60
2001
2007
Tens of thousands of fences
1500 project managed
Capabilities
Capabilities
Approx # of towers in Africa
Approx # of towers in Africa
Founded
Founded
Staff
Staff
TP
TP TP
Company
Tower Design
Reime Group
Tower Manu Install ManagedServices TOC Acquire &
leasePermits & licenses
Footprint: DRC, Ghana, Cote d’Ivoire, Kenya, Madagascar, Malawi, Nigeria, Republic of the Congo, Tanzania, Uganda, Zambia plus satellite operations in Burkina Faso, Rwanda and Sierra Leone
Company profile: TowerXchange issue two, pages 91-94 or visit www.towerxchange.com/what-gets-measured-gets-done-at-reime-group
36019123-4,000
Capabilities Approx # of towers in Africa Founded Staff
Are you ready to meet the demands of the emerging markets data boom?Modular, quick to deploy pre-fabricated data centres essential for the transmission and management of data
Developing countries have always had myriad challenges for mobile operators and other telecom companies to overcome: lack of or substandard infrastructure, political uncertainty, regulatory issues, challenging environments, vast and sparsely populated geographical areas to cover, unreliable energy supplies, poorer target groups et cetera.
These challenges have been overcome with ingenuity and perseverance. In many countries, prepaid cards in small denominations sold in numerous mobile booths have given consumers with little money access to mobile telephony. Off-grid base stations in Asia, the Middle East and Africa are increasingly using green power
This is a guest article submitted by David King, CEO of Flexenclosure, a specialist developer of hybrid power systems and pre-fabricated data centres for the ICT industry. David has decade-long experience from C-level work with many international high-tech companies, many in emerging markets.
Internal view of the eCentre (Maputo)
solutions almost completely replacing the use of dirty and expensive diesel. In East Africa, M-PESA and other mobile money systems have revolutionised the way money is transferred, making it possible for almost everybody to use basic banking services.
Developing countries are next in line for a data boom So when the developing countries take the next big step into the “post-mobile data revolution”, there are of course going to be a number of challenges to overcome. The penetration of data in many of these markets is still low and prices are still high. And even if everybody agrees that data will take off in a big way, it is difficult to predict when it will happen and how fast. How can you best prepare to quickly respond to the anticipated demand without investing too much too early? The biggest challenge is infrastructure. High quality, efficient data centres are essential. They house and power all the equipment needed for transmission of data and are both the heart and brain of any network. But traditional builds for data centres take a lot of time to plan, co-ordinate (with different suppliers) and construct.
Furthermore, challenging environments add a lot of risk to a data centre project, often resulting in delays and budget over-runs. Buildings for data centres are often not purpose built to be used as technical facilities, often with water
leaks and other problems, as well as being over-dimensioned since they cannot be expanded quickly and easily.
Pre-fabricated modular data centres ideal for emerging markets networks The solution is pre-fabricated modular data centres. They are quicker to deploy and will in most cases save considerable time and money compared to traditional brick and mortar buildings. The facility will always be the “right”
size since its modular structure makes it easy to quickly expand in response to changing needs. More efficient power and cooling will make a pre-fabricated data centre more cost effective to run. And quality, budget and the time plan can more easily be ensured for pre-fabricated purpose built facilities, bringing predictability to the project. A pre-fabricated solution also makes it much easier to customise the data centre for specific needs and it can be deployed anywhere. Let us take a look at a live example: Vodacom in
Mozambique (a subsidiary of Vodafone) recently decided to deploy a modular data centre (the eCentre) on top of a six-storey parking garage next to its corporate headquarters in central Maputo, the capital of this southeast African country. The roof top turn-key deployment is a 126 square meter open space data centre. Vodacom needed to put the facility in place quickly, efficiently, and on time. The pre-fabricated build reduced the project risk significantly because the construction work was all done in ten weeks in a clean environment (in Sweden) and the installation work needed on site was completed in only eight days, in total a fraction of what a similar local brick and mortar project would have taken. Speed and predictability in challenging environments are critical issues in Africa considering it is the fastest growing mobile market in the world and the take off for data could be right around the corner. Pre-fabricated, modular and custom-designed data centres that can be deployed very quickly, and easily re-deployed if needed, is yet another innovative solution to an African problem (or rather African situation, since there is nothing problematic with fast growth). It is a solution that will allow data centre owners - internet service providers, hosting companies, mobile operators and banks - in developing countries to act quickly and confidently towards a demand for data that might be stronger than any of us expectThe eCentre Build by Flexenclosure for Vodacom
Cell site security and access control problems?There’s an app for that!
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?
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
