Alexandre Tude, Vice President Latin America at Lemcon Americas, is a civil engineer with a MBA by background and has been with Lemcon since the very beginning of its American operations, back in 2000. He leads the Latin American operations of this originally Finnish company which has recently been acquired by American telecommunications company, Blue Skies Networks.
TowerXchange: Alexandre, tell us about Lemcon and its overall operations
Alexandre Tude, Vice President Latin America, Lemcon Americas:
Lemcon Networks was part of the Lemminkäinen Group, the number two Finnish construction company, which entered the telecom projects market in 1996. Originally the Group was involved in the construction of the Nokia factories in Finland and when we entered the telecom business, we started working with them on the equipment side.
So we started as a construction business for companies like Nokia and our core activity was tower installation. Then we got involved in the installation of all active equipment needed for the network.
In 2000, we started our Latin American operations with contracts in Brazil. From there, we expanded into Argentina, Colombia, Mexico and to date, we have presence in 8 countries in the region.
Since April 2013, Lemcon is part of Blue Skies Networks, an American telecommunications company headquartered in Boston, and we changed name to Lemcon Americas.
TowerXchange: Who are your main clients in Latin America?
Alexandre Tude, Vice President Latin America, Lemcon Americas:
We are currently working with SBA Communications in Brazil and with American Tower in Brazil, Colombia and Mexico. We keep serving Nokia Solutions and Networks, which remains one of our core customers.
For example, we are serving American Tower in Colombia for their site management programme following the site acquisition of over 2,100 towers from Tigo.
we have been contracted by Comba Telecom, a leading supplier of infrastructure and wireless enhancement solutions, to deploy DAS in some of the stadiums that will be used for the 2014 World Cup
Moreover, we are very active in the deployment of wireless networks. We have been contracted by Comba Telecom, a leading supplier of infrastructure and wireless enhancement solutions, to deploy DAS in some of the stadiums that will be used for the 2014 World Cup.
We are not very active in Argentina at the moment but we hope to be able to do more in the country in the future and we do have some projects being discussed at the moment with Telecom Personal.
Other projects we are developing include a collaboration with Google in Bolivia, Ecuador and Venezuela.
TowerXchange: How does Lemcon adapt your offerings to serve customer needs across Latin America?
Alexandre Tude, Vice President Latin America, Lemcon Americas:
Our company has been very flexible in adapting to market changes. When you work in a large and sometimes unstable region, you need to be ready to move from country to country, chasing projects.
Our main team is constantly in the field. Whether it’s in Peru or in Brazil, we are ready to go where there are new opportunities. Moreover, our local footprint in Brazil, Mexico, Argentina and Colombia has greatly contributed to our growth.
TowerXchange: Which of Lemcon Americas’ service offerings has seen the most growth this year?
Alexandre Tude, Vice President Latin America, Lemcon Americas:
Due to recent acquisitions of SBA and ATC, there is a huge demand to adapt sites to host co-locations. At the same time, we remain very active on the maintenance side.
This year, carriers haven’t invested a lot of capital yet to expand their LTE network. I think they are somehow assessing the market while some of them are also very active in selling their tower portfolios. In my opinion, the next phase will be of network expansion and investments on LTE.
On the other hand, tower companies have been extremely active and we are increasingly working with them.
For vendors, we are carrying out a lot of BTS projects. Companies like Nokia and Ericsson contract us on a BTS basis so that they can sell their equipment while we cover all the other aspects of the project.
TowerXchange: How easy is it in the region to access permits and licenses for greenfield projects?
Alexandre Tude, Vice President Latin America, Lemcon Americas:
I have been involved in permits and site acquisition for a long time and I don’t think that Latin America faces different challenges from anywhere else in the world, in terms of permitting.
The real issue is bureaucracy and the length of the procedures. It can be very time consuming to get all the various licenses needed for a new site.
Every area is different though. Some areas have rules to protect landscapes and historical sites and in those places, it will always be very hard to get permits. And once you do get it, most likely you will need to build a tower that respects certain criteria, for example, that is hidden so that it doesn’t have a visual impact on the area.
In less urban areas, it is definitely less complicated to develop new projects and receive permits.
Taxation is another issue for new sites. For example, in Brazil, the service tax for new towers is established by each city hall and the whole taxation system is very complex. So companies looking at building new sites really need to get informed beforehand on what the legal and tax-related requirements are for each state and each municipality in Brazil.
Overall, the demand for connectivity is very high but it clashes with bureaucracy. The proposed Lei des Antennas, which could simplify this issue, is a long way to being approved and I think it will take some time before we see it in action. However, carriers and other parties involved have a lot of interest in it being carried forward.
due to recent acquisitions of SBA and ATC, there is a huge demand to adapt sites to host co-locations
TowerXchange: Carriers in Latin America are divesting their tower portfolios. What are the drivers behind this trend?
Alexandre Tude, Vice President Latin America, Lemcon Americas:
Carriers are focusing more and more on their core activity especially at this time, with 4G LTE requirements coming into play. Their business is to increase the level of voice and data connectivity among the population, to expand their network and to acquire new customers. Not to operate and maintain passive infrastructure.
Needless to say, the operational and maintenance requirements of passive infrastructure can be very costly.
By selling their tower portfolios, carriers are able to raise capital which is fundamental if they want to improve and expand their network.
On the other hand, portfolios in Latin America are now being sold for higher prices than a few years ago. Still not as high as in the United States but high enough to make the divestiture of infrastructure very attractive for carriers.
These transactions are still very convenient for US based tower companies used to paying huge amounts of US Dollars for portfolios in North America, which is a riper market that Latin America. Acquiring assets in Brazil or elsewhere in the region is still a very convenient move for them at this stage.
The length of these contracts, sometimes as long as 40 or 50 years, is another big driver. We are really moving towards a real estate business and we will see more transactions in the near future in Latin America.
TowerXchange: Energy and site security play a big role in Africa. How big of an issue are they in Latin America?
Alexandre Tude, Vice President Latin America, Lemcon Americas:
Fuel and security are an issue in the region. The difference is the scale of the problem compared to Africa. Whereas most sites in the region are connected to the grid, fuel theft is still a concern in some areas. In areas like the Caribbean and other islands, fuel security is a major problem. Some areas of Mexico can be very risky too.
Another example is Colombia, where American Tower contracted us to provide a connected alarm system to monitor all their sites. Our system enabled American Tower to keep their sites secure against robbery which is a problem in the country. Beside fuel and the overall security of sites, another trend is to steal copper.
So I’d say that although less common, security is a concern and tower operators are geared with all sorts of equipment to control their sites. Fuel theft is a reality in the region, not as big as in Africa but definitely disturbing in some off-grid areas.
TowerXchange: Beyond towers, tell us about the expansion of DAS in the region
Alexandre Tude, Vice President Latin America, Lemcon Americas:
DAS is a massive trend. Carriers are very interested in enabling 4G LTE connectivity especially in the areas of high concentration like shopping malls and stadiums.
We are currently developing a project to install and own the DAS in a shopping mall which will give us the opportunity to lease to various carriers, like a small scale tower company.
Moreover, we are in talks with Claro to cover their shopping mall project. You see, carriers have agreed to enable 4G LTE throughout Brazil but obviously they will start from the areas where there are more business opportunities, hence the high concentration ones.
Another growing trend is to enable Wi-Fi in stadiums, especially in Brazil due to the World Cup. Stadium projects are very exciting and relatively easy to develop as we are focused on one site only at any given time.
We have already completed one stadium in Bahia, Arena Fonte Nova which took us approximately five months. Sometimes these projects can actually take even less time. The average is between three and five months.
And Comba got four new World Cup stadiums which we hope to get the contract to build the DAS system.
we are actively involved in the deployment of 4G LTE in those cities but we haven’t seen huge investments from the carriers in 2013
TowerXchange: On that note, can the World Cup’s hosting cities be connected to 4G LTE on time, as planned by the government?
Alexandre Tude, Vice President Latin America, Lemcon Americas:
I am not sure if we will achieve 100% coverage in all the cities. It is more likely that carriers will guarantee coverage in the central areas and stadiums.
We are actively involved in the deployment of 4G LTE in those cities but we haven’t seen huge investments from the carriers in 2013.
Some carriers are finding alternative ways to enable 4G LTE that don’t necessarily involve huge investments. For example, TIM and Oi as well as Claro and Vivo have entered into an agreement to share the LTE network rather than creating two separate ones.
Personally, I think that Brazil is far behind the US in terms of 4G coverage, let alone LTE. I have a software called Netcover to detect the presence of an LTE network and there aren’t many sites covered to date.
That said, we are expecting a great start of 2014 from a business standpoint. And we are ready to serve our customers to achieve coverage targets ahead of the World Cup.
Additional articles in our Brazil case study:
The Mott MacDonald Share Square for Brazil
SBA Communications’ expansion into Central and South America
Over 9,000 towers needed ahead of the Brazil World Cup
A legal perspective on the Lei das Antennas
Exclusive: How Brazil’s Ministry of Communications is encouraging tower industry growth
