Opportunities for site optimisation in MENA

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

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

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

Auditing sites is essential for buy and leasebacks because those assets which were on the tower on purchase will be grandfathered in, on your original lease rates. This means that accurately auditing sites will enable you to properly charge for amendments and additional loading on your sites. Plus, if you have a good asset registry you can say yes to new tenancy requests without visiting the site, in fact, you can say yes without even leaving your desk.

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

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

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

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

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

For TAWAL, Saeed Alshehri discussed how they were prioritising site upgrades and optimisation across their 14,000 towers: not every site can be upgraded at once. They are working to understand their assets first through their due diligence process. Once their assets are well understood and the status of sites is live in their tower management tool, they will be able to combine this with information on what their clients want to prioritise their work.

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

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

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

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

Luckily, in Oman, grid power is very reliable, and sites only require a backup generator. Each operator has its own power meter and they get their bill directly because Oman Towerco is not into power at the moment. Because there are off grid sites in Oman, Omen Towerco is looking at partnering with an ESCO to manage power. Coordinating site design and power with an ESCO will create additional complexities, but by keeping power off Oman Towerco’s books, it will also remove headaches: an innovative business model, and one which may inspire imitators.

It can be tempting to cut corners, to neglect capex but pay for it in opex, in fact, MNO corner-cutting and consequent underperformance is one reason towercos are so important, so you cannot stress enough about the importance of doing a good job properly. That includes helping vendors to do maintenance with the correct training, with the correct materials and to the correct standards, but it also includes innovation. Innovation in site design is another area where towercos have realised efficiencies and improvements which eluded the mobile operators.

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

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

Standardisation can help push down costs, but there are many tower suppliers and everyone has slightly different products and most MNOs have different expectations. Modular designs are therefore becoming more popular as they allow towercos to bolt together a structure which is appropriate now, and easily modifiable later. However, despite modular construction’s advantages there are still additional up-front costs associated with modular designs which can lead to towercos purchasing designs on a less costly basis.

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

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