From Fixed Wireless to towerco

From fixing laptops in a South African suburb, to a Fixed Wireless Operator, to a fledgling towerco, WIRUlink’s management have not been afraid to take the initiative. Offering Fixed Wireless through a combination of leased towers and their own sites led WIRUlink to consider the opportunities of becoming a towerco themselves. Now with 51 sites leaseable and hundreds more ready to build or ready for occupation, WIRUlink have a steady growth plan and prospective investor which will see them expand throughout the 2020s. TowerXchange sat down with CEO Jaco Maree, to discuss WIRUlink’s entry into the world of towercos.

TowerXchange: First please introduce yourself – how did you get into the telecom business?

In the early 1990s, whilst still in primary school, my father’s desktop computer broke down so he sent it in for repairs. Two weeks later they told him “this cannot be fixed, please buy a new PC”. My younger brother, Riaan, looked at it, changed a few settings and, 15 minutes later, the PC was working perfectly fine. At the age of 13, I immediately knew this is a great business opportunity.

We registered as a dealer at all the wholesale computer hardware distributors (Rectron, Mustek, Pinnacle, etc.) and started selling and repairing computers for friends at school, their parents and their businesses. Riaan was responsible for everything technical and I dealt with the clients. After school I listened to the answering machine and called the clients back. Very often the question was “where were you this morning?” and my response was “I was out seeing clients.” To source new regular customers, I called all the local IT shops in some small rural towns across South Africa, faxed our price list to them and very soon started receiving multiple orders for PCs, laptops, servers and printers. The distributors would deliver the parts to our home and Riaan assembled it and loaded all the software. I attended to the supplier invoices, customer billing, payments, and arranged the overnight courier to deliver the assembled and configured goods to the various clients across South Africa.

With an ever growing client base, Riaan and a team of IT technicians continued with the business full time after completing school. I assisted in the evenings and over weekends with the finances and accounting, whilst working at an auditing firm in Johannesburg as an auditing clerk during the day.

During this time the incumbent telecoms operator had a monopoly in South Africa. When our IT services customers reported faulty ADSL and telephone line problems to us, we had to log the fault with the incumbent. During this time we started offering managed internet access services to gated communities and high-density residential estates, bonding multiple ADSL lines connected to our bandwidth management system then sharing internet access equally and fairly to each end user throughout the complexes. However, on many occasions the copper ADSL lines went off due to lightning strikes, cable theft and lack of proper infrastructure maintenance. We needed an alternative, thus Riaan started researching and testing alternative fixed wireless technologies.

In 2008 the South African telecoms market opened up to all Value Added Network Service (VANS) licenced operators, allowing them to compete and stop the previous monopoly. We acquired ICASA licences to build our own telecommunications network across South Africa. Our existing customers were relieved that we could offer an alternative and immediately switched from copper to our wireless network. After finishing my articles and working as a financial manager at a few businesses, I joined Riaan full-time because of rapid customer growth and the future prospects of the business.

TowerXchange: Please introduce your company – tell us first about the core offer of WIRUlink, wireless internet for home and business.

WIRUlink is a wholly owned family business and self-funded by reinvesting all returns back into the business. We offer fast, reliable and affordable internet and telephone services to home and business customers using the latest fixed wireless technologies. By building, managing and maintaining our own network infrastructure, WIRUlink offers a true alternative to ageing copper lines.

We service many areas where copper lines have been stolen or no connectivity is available. We started on a very small scale. I was personally doing the sales, marketing, accounting and new high site acquisitions. Riaan was personally doing high site maintenance and customer installations. We started with two exclusive use rooftop high site towers to the west of Johannesburg servicing only five customers. The demand for our fixed wireless connectivity was high, making the wireless services quickly outgrow the original IT support services. In 2017 we sold the IT Support Services business operations to focus on the connectivity side of the business.

Since 2010, I have been the Chief Executive Officer of WIRUlink, with most of my effort spent managing the Sales, Marketing and Tower Acquisitions departments. I am personally involved with the Tower Acquisitions team to plan and select all new high site towers for network expansion, including WIRUlink owned greenfield towers and co-location sites of other tower holding companies (Gyro Group, American Tower, Atlas Tower, Sentec, et cetera). In 2017 the third Maree brother, Botha Maree (Chartered Accountant), joined the WIRUlink team as Chief Financial Officer and is responsible for the Finance and Accounts departments. With his extensive experience gained at one of the big auditing firms, he has been a great asset to the company.

Today WIRUlink directly employs more than 100 full time staff and indirectly work with hundreds of contractors, resellers and channel partners throughout South Africa. Customer satisfaction is our number one priority. The business is profitable and still grows at a rapid pace year on year.

TowerXchange: Tell us more about your transition to towerco - what assets do you have on the ground?

Years ago we realised that there just was not sufficient tower infrastructure in the majority of the areas we wanted to service. In the long run co-location rental opex did not make financial sense. We therefore decided to invest in our own tower infrastructure, for WIRUlink’s exclusive use. From the get go we followed the correct permitting procedures before the construction of towers. We always do business in the correct and ethical way. Our in-house Site Acquisitions team includes lease negotiators, town planners, draftsmen and lease administration staff. We also have our own in-house civil construction teams to build and properly maintain the sites. WIRUlink’s current tower portfolio includes over 100 high site towers both ready for occupancy (RFO) and ready to build (RTB) with almost 200 additional sites in various stages of permitting. Our Site Acquisition team is currently busy securing over 1,500 more sites across South Africa over the next two years.

All sites have electricity supply (AC and/or DC), are physically very secure, with added 24/7/365 remote alarm and CCTV monitoring, backed by armed response that is just around the corner. This added benefit comes standard for all co-location tenants. We envisage that at some point in the future, we will split the business into two separate legal entities. The ‘ISP’ business will focus on offering fixed wireless connectivity and the ‘”towerco” will hold, manage and maintain the tower infrastructure, leased to the ‘ISP’, MNOs and other co-locators.

TowerXchange: What proportion of your sites are available for leasing?

In late 2019 we felt our high site tower portfolio has grown to a decent enough size to attract sufficient attention from MNOs and other interested network operators. We know our sites are located at prime positions with all the required onsite services, including the value added 24/7/365 security. We therefore made an executive decision to release just over 100 high site towers (RFO & RTB) sites into the tower colocation market. The portfolio is growing every month with sites moving from RTB to RFO, and from permitting to RTB. Under the current economic environment in South Africa, the response from MNOs and other operators has been great.

TowerXchange: And does your management team have a history in tower leasing, or are your backgrounds a ISPs?

Our executive and middle management team have been on both sides of the fence as lessor and lessee of towers.

TowerXchange: What are your plans for expansion – will you predominantly be building your own sites or will you be leasing space on other towers too?

As a fast growing company in terms of coverage, customer growth and demand from MNOs to co-locate on WIRUlink high site towers, we will continue to build our own towers as well as leasing from other towercos.

TowerXchange: What is your relationship with fibre – are fibre network operators potential partners, would you like to deploy your own fibre, and what proportion of your towers are fibreised?

The majority of our towers have DFA, OpenServe or other fibre network operators on site, therefore operators can easily and quickly connect to reliable carrier grade fibre for backhaul purposes. Where no fibre is available, microwave point-to-point links between towers are available that can be used to connect to a “fibre-connected” high site. Should a tenant’s own fibre installation have any delays, for whatever reason, WIRUlink can immediately provide L2 fibre capacity to any tenant.

TowerXchange: How lean is your business model – what capabilities sit on your payroll’ and what is outsourced?

While we do in some instances make use of outside consultants and contractors, most of the functions relating to the towerco business, are done in house.

TowerXchange: How do you anticipate your business model evolving for the 5G era?

5G will be great for everyone once deployed, however it requires a lot of capital and very high tower density to work reliably. We anticipate that 5G will initially only be available in the FTTX-enabled suburbs and high footfall communal areas, for example, airports, hotels, shopping centres, sport stadiums, because of the high costs to deploy. We believe African operators can still economically bring lower cost connectivity to the millions using lower cost LTE and fixed 5G technologies for the foreseeable future.

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

WIRUlink strives to establish itself at the forefront of the telecommunication and tower company industries, and as the preferred option in South Africa and the rest of Southern Africa. We want to have a positive influence on millions of people’s lives, including our staff, suppliers and customers. We strive to set an example to all South Africans on how to operate a successful and sustainable business while acting with integrity and honesty. Please visit our website for more information about our vision and mission, supported by our core values.