PowerOasis: Smart towers

The PowerOasis team came out of Motorola, where they spent 20 years building three generations of mobile networks. PowerOasis CEO John O’Donohue noticed that development was focused on radio architecture (2G, 2.5G, 3G & 4G) while cell site power solutions hadn’t fundamentally changed in 20 years. With the next billion mobile subscribers to be found in emerging markets, with limited electrification and unreliable grid connections, John saw an opportunity to transform the power infrastructure at cell sites, reducing power consumption by 50% and increasing site uptime & reliability.

TowerXchange: What is PowerOasis’ value proposition?

PowerOasis has a three level value proposition: developing power architecture at cell sites to reduce energy consumption by 50%; network management and control systems that cut O&M costs by 50%; and ensuring 97% reliability at the site.

Unlike many of our competitors, PowerOasis develops power solutions exclusively for the telecom industry. We offer holistic site monitoring and control to achieve the same reliability in energy as operators have come to expect from the radio network. PowerOasis have a transformational meantime of failure (MBF) of in excess of 250k hours.

Our low cost, volume manufacturing partner Jabil produce equipment to meet industry quality standards, and PowerOasis is agnostic to subcomponents, so we can integrate batteries and generators that suit clients’ objectives and budgets. We put in the architecture necessary to introduce renewable components such as solar, wind, hydro or hybrid power, integrated to optimise economic performance and uptime.

We’re able to treat each site differently, for example if a hub site has a power problem we can sequence which elements are shut down, temporarily suspending the local site but keeping the critical transmission traffic. And of course we’re able to alert the NOC to fuel shortages and pilferage.

TowerXchange: How would you characterise the unique challenges in cell site energy management in emerging markets?

Cutting diesel consumption and O&M costs while increasing reliability is critical. CTOs may be drawn to the excitement of upgrading to to 3G or LTE and rolling out exciting VAS like mobile money, yet in emerging markets power can represent 50% of network opex.

Too often there’s a legacy of rollout teams having purchased a bag of power components under a tight deadline, handing over to the operations team components that work for a while, then fail. No one person “owns” power. There has seldom been a holistic strategy for cell site design to optimise power consumption. In the context of flattening revenues, declining ARPU and fierce tariff competition, operators have got to take cost out.

TowerXchange: How do operators respond to the need to reduce energy opex?

I see three typical responses. First they might take the view “power is too hard to manage, I want to outsource power to companies offering energy as a service”. ‘Energy as a service’ is largely theoretical at the moment; many operators just want to pass on risk under a Service Level Agreement.  I’d liken ‘energy as a service’ today to the early days of IT outsourcing contracts, when early contracts ran into litigation – it’ll take five years to form a stable business model.

PowerOasis are a product and service company. We install the products, and provide an after service contract, putting people in the NOC, or training the client’s people to operate the system. While PowerOasis has the crown jewels to enable energy services, we’re not an ‘energy as a service’ company.

The second response is similar: “power is too hard to manage, so I want to outsource energy and all passive infrastructure management to a towerco”. The tower industry is more competitive in Africa than in Asia, and the four market leading towercos are bidding aggressively and investing substantial sums just to acquire portfolios, so they are going to need to grapple with delivering operational efficiencies, taking operational cost out, and increasing service levels to achieve profitability.

Ultimately I feel there will be consolidation in the African tower industry, and the best valuations are going to be realised by towercos that can demonstrate the operations and asset value they have created.  Software control and remote monitoring systems may help demonstrate the value they’ve added to their expensive network acquisitions.

The third response is “I’m going to transform the value of my network, differentiate through superior uptime, and tackle the power problem myself – so I get the benefit of an increased valuation whether I retain my towers or transfer assets to a towerco in the future.”

TowerXchange: What data does the MNO or towerco need to evaluate a site’s suitability for hybrid energy solutions?

We can forecast potential savings to Total Cost of Ownership based on energy consumption and cost, inventory on site, and the load on a site.

An operator has a pretty good handle on energy costs if they know the cost of delivered diesel, and understand the extent of fuel theft, but too often they don’t have that data. It’s also useful to know if they are paying an aggregate grid electricity bill, or whether they know the energy consumption per site. It’s surprising what some operators don’t know – I recall a 1kW site in Asia being billed for 17kW. When we dug around near the site we found a wire leading to the village!

TowerXchange: What kind of capital outlay should operators and towercos anticipate to upgrade each site, and what’s the timeline to ROI?

All our solutions deliver an ROI within 18 months. We develop each business model using the operator’s real cost base, and offer a range of solutions to suit their Total Cost of Ownership objectives. For example we can use lower cost batteries that last two years, or make a higher capital investment in batteries that last five years. Our solutions offer a warranted performance level, so the investment is protected.

In terms of capital outlay, for remote monitoring it’s $2-5,000 per site, depending how many elements the client wants to monitor. We can stop fuel theft and help them get operationally smart with payback based on saving with just five site visits.

Incorporating diesel hybrid solutions at a new site costs anything from $12-30,000, depending on the choice of batteries and desired level of cell site autonomy, but payback is achieved within 18 months.

Off-grid new build cell sites running on solar only would cost in the region of $10-15,000.

TowerXchange: What proportion of your business comes from new sites compared to upgrading existing sites?

It’s about fifty-fifty between new builds and upgrades. Towercos are driving the upgrade market as they acquire portfolios and replace energy equipment to support multiple tenants, while there are still major rollouts going on in Africa.

TowerXchange: What’s the timeline for smart grids to have the capability to offer demand response pricing in Africa, thus maximizing the potential cost savings from active power management solutions?

I expect smart grids to become a factor within two years in South Africa and some North African countries. While the smart grid is driven by the green agenda in Europe and North America, in Africa the main practical driver is being able to put up peak energy prices to price people off the network and release capacity.

PowerOasis’ own smart grid platform was inspired by our experiences managing sites on an unreliable grid in Bangladesh, while in parallel we were seeing how operators in California were being asked to take their cell sites off grid in high summer when as energy demand peaked due to air conditioning use. We launched the world’s first smart grid platform, enabling operators to reduce site power costs and ensure network power resilience. We deploy a controller on telecoms sites that intelligently decides when to power the site from grid or battery. The controller can be pre-programmed or adjust to real time or forward price trading platforms, optimising energy consumption from the grid and reducing total power operating costs.

TowerXchange: Is the transfer of towers from operator-captive to specialist towercos good news for companies like PowerOasis?

Optimising power operating costs, and installing software that reports on site status and fuel consumption, increases the value of towers for independent towercos and operators alike.

Our solutions make an immediate impact and can take just 90-180 days to make start making a difference to operators. For towercos, the assimilation of newly acquired assets and transformation of the network can take 12-18 months.

TowerXchange: How do requirements change when moving from single tenant to multi-tenant shared sites?

Operators and towercos have a different focus because they each have a different end customer – for the operator it’s all about the subscriber, for the towerco it’s all about the operator. Operators focus on uptime and energy consumption reduction. For example MTN Nigeria market the most reliable network, and with 50% of outages in Africa caused by power, their competitors have to respond.

Tower companies are looking for the flexibility to manage multiple tenants, possibly offering different service levels to each. We can manage the power consumption of each tenant, for example sharing power according to Service Level Agreements in the event of disaster. And towercos want to know whether any outage is due to power going down – they don’t want penalty clauses coming into effect when the base station was really the problem!