Inala: How to identify the smallest capex that yields the biggest return

Inala is one of the first companies in Africa to offer Remote Monitoring Systems (RMS). The company has deployed over 24,000 systems over eight years. Inala count Airtel, Helios, Eaton, IHS Africa, SWAP Technologies, Warid, Orange, MTN, Vodafone Group, Indus, IndoSat, Digicell and Vodacom among their many clients, and they own their own hardware IP. TowerXchange spoke to Laurentius Human, CEO of Inala and the newest member of the TowerXchange “inner circle”.

TowerXchange: Tell us about the Remote Monitoring of cell sites in Africa

Running telecoms infrastructure in Africa isn’t easy. But the challenges aren’t so much about crime or corruption as many people think; they’re challenges of geographical reach and of supporting diverse requirements rather than deploying a standard solution.

Almost every cell site is unique, whether we’re retrofitting or dealing with a new build; they have different priorities, different passive infrastructure hardware, different software and active equipment installed, so a different configuration of RMS is needed for each site. You simply can’t have an out-of-the-box standard RMS system and expect to have clean, complete data coming in.

TowerXchange: What are the KPIs for passive infrastructure management?

Tower owners mainly use RMS to understand the reason for power failures, whether it’s just running out of diesel, power grid or mechanical problems. So it’s all about energy.

The key performance metrics around energy concern generation, consumption and interruption of energy at a site. On a generation site, we monitor grid power quality, DG runtime, battery discharge and any solar or wind components. Any interruption triggers alarms that call attention to problems such as diesel theft, grid or battery failure or discharge issues. We also help monitor and remotely manage consumption: measuring what is contributing the greatest energy load to the site and providing the capability to switch on and off generators and air conditioning.

Cell site power optimisation is a process; it’s not something you can ever “finish” because the profile of each site changes, from environmental conditions and unreliable power grids to diesel delivery and problematic traffic. The data from RMS becomes more valuable as it enables tower operators to not just identify grid failure but also to map grid failure phases and identify the right phases.

TowerXchange: How does the communication of these critical data vary whether the site is operator-owned, run by a third party towerco or managed by a service provider?

It’s important not to underestimate the importance of RMS in communicating these critical data back to the NOC. As Inala has such a substantial installed footprint, we carry all sorts of data over the GSM network via SMS or a GPRS link back to the NOC. If a cell site is owned and operated by the MNO, then they have direct control. But if the cell site is owned by an independent towerco, then they have to acquire a SIM card from the MNO and if that SIM card gets disconnected or runs out of credit then they’re blind. Inala provides a buffer by saving management data on the site for later upload.

Management service companies often lack the hardware platform to optimise remote monitoring – they try to use generic hardware with standard configurations, but the performance metrics differ for every site. So one size definitely doesn’t fit all.

TowerXchange: What kind of capital investment should tower operators anticipate when investing in RMS?

A basic monitoring system to log data for the top 20-30 key performance indicators is going to cost $3,500-7,000 per site for the hardware and sensors, that’s before installation and commissioning and excludes batteries and generators.

Competitive RMS range from $1,500 up to $20,000 per site. Of course it varies according to what you need to monitor; whether it’s grid power, diesel consumption, any renewables, security, navigational lights, humidity, access control, et cetera. If you’re talking about full hybrid monitoring and control, line conditioning and deep cycle batteries providing eight hours of autonomy, you could be looking at north of $20-40,000 per site on a retrofit basis.

New sites offer a lot more options. Many generators now have in-built sensors tracking the top fuel consumption alarms. We can reduce capital outlay by integrating with these sensors.

TowerXchange: How do tower operators translate RMS data into actionable intelligence?

That’s the million dollar question! An RMS system delivers between 20 and 200 data points to the MNO or towerco and, while we present it in a simplified graphical format, they must be able to interpret the data. They’ll need to prioritise which measurements are more important for any given site; it might be temperature for sites in arid environments, or fuel consumption at sites prone to pilferage. The towerco’s Service Level Agreement will define their tenants’ priorities

We’ve built dashboards that show the ten worst performing sites, the ten most prone to theft, or the ten with the worst battery performance. But RMS won’t provide job ticketing or a work order. A third party system is used for maintenance and scheduling. For example, Bharti Airtel is working with IBM in Africa. Others have opted for custom developments to integrate into their active network management software and yet others prefer to deploy stand-alone third party solutions.  Integration between that maintenance scheduling system and the RMS is an obvious thing to do. However, most job ticketing systems don’t allow for the level of data input our RMS can provide, so there’s usually a human element to reading and responding to alarms.

If you can translate RMS data into actionable intelligence, you can build models for asset management and asset optimisation, helping you prioritise battery bank replacement, investment in line conditioning to clean up grid power, or whatever it is that incurs the smallest capex for the highest return. In my experience, international tower companies have got extensive modelling from other markets, but those models don’t necessarily apply to Africa, where pilferage alone can bleed you of all your profits.

Ultimately, remote monitoring is an iterative process to finding the right data that provide customers the right insights for the particular challenges they face at portfolio and individual site level.

TowerXchange: What has attracted Inala to diversify into the hybrid power and energy services markets?

We’ve done a number of hybrid sites. It’s a fiercely competitive market, with a number of battery and DG manufacturers playing in this space. Controlling hybrid sites is about more than RMS. For example, it requires a substantial outlay on batteries to get 8-15 hours of autonomy from the grid.

Hybrid power is a necessary first step on the road to renewable energy as tower operators balance capital investments to identify the right sources of renewable energy, where they slot in and how to manage and get the most from them. Again, it’s got to be a case of the right solution addressing the needs of the individual site. For example, there’s generally not much wind in central Africa, which means a need for more investment in batteries. The sunlight angles onto solar panels mean that solar energy has a tough business case on the equator. At Inala we favour chemical fuel cells; power generation from methanol.

Introduction of renewable energy sources may be best undertaken in conjunction with a technology upgrade or swap enabling installation of new, low-power active equipment. There are plenty of sites at which we can move away from diesel altogether.

There is a plethora of new technologies with which tower operators must be familiar and up-to-date: batteries, generators, renewables and now ESCOs (Energy Service Companies) – companies that own and operate distributed power generation. Few if any tower companies want to be electricity companies; towercos would much rather back-to-back their Service Level Agreements to ESCOs.

Inala has stimulated some debate about energy as a service within the IFC and GSMA Green Power Initiatives and we are positioning ourselves to be an ESCO. But fools rush in where angels fear to tread. Diesel is a currency and so getting into that business cuts close to the livelihoods of some people who you don’t want to meet in a dark alley!

TowerXchange: Is the transfer of towers from operator-captive to independent towercos a good thing from Inala’s point of view?

Of course it’s good news for us if there’s continuing growth in the number of base stations deployed, whether by MNOs or towercos. Towercos may mean there are less towers on the hillside, but co-tenanting makes RMS more critical. We’re finding ourselves retrofitting retrofitted sites where the RMS wasn’t sufficient to meet the new needs of tower companies.

The entry of tower companies has changed the market. The towerco may now negotiate on behalf of a whole region, so we have fewer people to sell to and the sales cycles are long. But Service Level Agreements require towercos to understand the assets they’ve acquired and how they are performing, so we’ve seen an increase in orders.

Tower companies tend to be more attentive to passive elements. While MNOs might have seen the passive elements of their networks as a necessary evil, tower companies are focused on the maintenance cycle and opex savings. The focus of our business will naturally be drawn to multi-tenant sites with 99.5-99.8% DC uptime Service Level Agreements.

TowerXchange: Do tower companies’ Service Level Agreements reflect the current state of energy opex at the sites they are acquiring?

The terms and conditions of Service Level Agreements between Africa’s MNOs and tower companies have been drafted with a forward looking bias.

Tower companies have very little real case study evidence of the conditions of the networks they are bidding for and acquiring. They may have basic uptime numbers but do these refer to DC or AC power? Is it load balanced? Tower companies are taking a risk on their ability to close the gap between potential opex reductions and actual performance.

Remote Management systems are not a panacea, we’re not a magic bullet that delivers 100% uptime - we’re just the messengers. If you’ve acquired a low quality site with an old battery bank that cannot hold its charge, on a grid that fails 70% of the time and a worn out DG, RMS data will identify the deeper-lying problems in the acquired hardware, but then it’s up to the tower owner to prioritise which capital investments to make first to improve site-level profitability.

TowerXchange: How are RMS and other passive infrastructure investments negotiated?

Africa’s tower industry is a small network of people, and generally we all know each other. Negotiations are based on long-standing relationships. We negotiate on price of course, but also on getting sites installed and commissioned. The site acceptance procedure that defines an acceptable installation is also usually part of the negotiation.

Ultimately it’s a similar sales approach for us whether we’re selling to an MNO, towerco or bank – we’re selling to the owner of the asset. In the end, grid power is going to fall short of telecoms infrastructure requirements systemically across all of Africa. Generation of electricity to power infrastructure must be one of the single biggest operational headaches for tower owners and I don’t see that changing.