THIS ARTICLE HAS BEEN ARCHIVED FOR HISTORICAL COMPARISONS BUT IS OUT OF DATE. FOR THE LATEST OVERVIEW OF THE MYANMAR ROLLOUT, VISIT:
https://www.towerxchange.com/data/News/documents/b1qxwpk5vrvckg/
TowerXchange has consolidated dozens of sources to sketch our initial impressions of the shape of the Myanmar tower rollout. With around 1,800 towers already standing, owned by incumbent operators MPT and YPT, new international license holders Telenor have engaged Apollo Towers and Irrawaddy Green Towers, while Ooredoo have engaged MTC (Digicel) and Pan Asia Towers (Protelindo) to rollout an initial 10,000 independent towers over the next two years.
Phase one of the rollout of towers in Myanmar, which has already commenced and will run through the end of 2014, will consist of approximately 5,000 towers, concentrated in and around Myanmar’s three main cities; Yangon, Mandalay and Naypyidaw. Phase two, commencing in 2015, could consist of a further 5,000 towers and is likely to extend deeper into rural Myanmar.
Four towercos are currently active in Myanmar, each of which has been issued temporary licenses to enable them to acquire sites and commence civil works, and each assigned initial tranches of 1,000-1,500 towers by the two newly licensed international operators, Telenor and Ooredoo.
Reports from the front lines of site acquisition suggest it will be challenging to secure land leases to get new sites installed, but plenty of site hunters are scouring Myanmar for cell sites! All land belongs the government in Myanmar; citizens can only lease land. If foreign companies secure an investment permit they are allowed to enter into long term leases of up to fifty years, with two ten year term extensions (for details of the application of real estate, investment and telecommunications law to the tower roll out, read our interview with local law firm Polastri Wint & Partners).
Challenges and opportunities for the Myanmar tower rollout
Introducing Myanmar’s towercos and their role in selecting power equipment
In phase one of the rollout, Ooredoo has assigned 1,250 towers each to MTC and Pan Asia Towers. Telenor has assigned 1,001 towers to Apollo Towers and 1,500 to Irrawaddy Green Towers.
Ooredoo has pledged to spend $15 billion on its network infrastructure throughout its 15 year license. Ooredoo partner MTC (Myanmar Tower Company) was given a head-start by parent company Digicel’s work on staffing up and building a radio network plan in support of their ultimately unsuccessful bid to acquire one of Myanmar’s two international MNO licenses. The consortium behind MTC also includes Yoma Strategic Holdings, one of Myanmar’s leading real estate companies. There has been speculation that Ooredoo is considering acquiring a 10% stake in MTC, although this has not yet been confirmed.
Ooredoo’s other towerco partner is Pan Asia Towers, part of the Protelindo stable, whose roots trace back to Gearon Communications, so they have considerable experience and resources to draw upon.
Power costs are believed to be passed through to the tenant by MTC and Pan Asia Towers. Ooredoo issued an RFI in March 2014 seeking to explore opex sharing business models for cell site energy, but the complexity of establishing an ESCO in Myanmar means a capex model remains an option for Ooredoo, who will likely make their own power system procurement decisions and instruct their towerco partners what to roll out.
Telenor has taken a slightly different approach, assigning tower and power to their towerco partners, Apollo Tower Company and Irrawaddy Green Towers.
Apollo Towers Vice Chairman and CEO Francois Lorelli told TowerXchange that they had been assigned 1,001 towers by Telenor, to be delivered by end of September. Lorelli continued: “We will own the site passive assets i.e. the towers, the power equipment, the shelters if any, the fences and the land leases. We will be fully in charge of security, this means that we have the access control for all our tenants. Telenor has chosen to pay the exact amount of power used, i.e. the electricity and fuel costs will be passed through. For other tenants we’ll offer a flat power fee per site category as an option.”
Apollo Towers’ ownership structure and management team shares some personalities with Africa’s Eaton Towers. Apollo Towers is a subsidiary of Tillman Global Holdings LLC, a Delaware LLC wholly owned by Sanjiv Ahuja. Former CEO and COO of Orange, subsequently Chairman and CEO of LightSquared, Ahuja is one of the co-founders of Eaton Towers. Apollo’s management team includes Lorelli, formerly a consultant to Eaton, and Eaton alumni Philip Cooper (CFO) and Brian Edwards (Operations Director).
Last but not least, receiving 1,500 towers from Telenor in phase 1B, are Irrawaddy Green Towers – a joint venture between Alcazar Capital’s Golden Towers, and India’s VIOM QUIPPO, backed by SREI Group. Alcazar Capital had explored several tower opportunities in Africa and Southeast Asia, and owns a small portfolio of towers in Vietnam. Irrawaddy reportly issued an RFP for cell site energy solutions at good and bad grid sites, based on a five year TCO, but like all four towercos there is likely to be a threshold of capex they can deploy initially.
You can read more about Irrawaddy Green Towers in our interview with CEO John Stevens.
Average precipitation in Myanmar (in)
Incumbent operators and OEMs in Myanmar
Myamnar’s incumbent operators are intrinsically aligned. YPT (Yatanarpon Teleport) is 51% owned by the other incumbent MPT (Myanmar Post and Telecommunications). MPT and YPT own some towers, have a limited BTS programme, and are likely take co-locations on the new towers being rolled out ahead of their funding being secured.
New prospective international towerco and telco partners are jostling for position. Tower Bersama and Axiata’s edotco are both thought to be holding discussions over potential opportunities in the towers space, while Japan’s KDDI and Orange are seeking to partner with and invest in MPT. Axiata and Thailand’s True Corp are believed to be in discussions with YTP. YTP is being advised by Deloitte and MPT is thought to be advised by Roland Berger.
TowerXchange understands that until Autumn of 2013, MPT bought most of their equipment through Huawei, but that MPT has subsequently outsourced their network of an estimated 1,800 towers to ten different Local Support Partners (LSPs), with two LSPs each receiving 400-500 towers.
In terms of the OEMs, Huawei dominated the equipment and service market in Myanmar and continue to hold substantial market share, however Ericsson recently opened an office in Myanmar and the Swedish OEM is becoming increasingly visible.
Forecast Myanmar tower count by end 2014*
Myanmar: on the road to creating a global benchmark for successful tower sharing
Myanmar could be a unique proof of concept for the independent tower company business model. It seems all the new towers in Myanmar will be built, owned and operated by towercos.
To date the Myanmar Ministry of Communications and Technology (MCIT) has refused to grant permits to build towers in conflicting locations, which could maximise tower sharing and fuel healthy tenancy ratios.
When one considers the capital commitments made by Telenor and Ooredoo to secure licenses, and the imminent capital injections into incumbent local operators MPT and YPT, there will be no shortage of credit-worthy tenants in Myanmar.
The partnership between the tower industry, a forward-thinking government, and tenants on an aggressive rollout timetable could make Myanmar a global benchmark for successful tower sharing. TowerXchange will, of course, keep you informed and connected to the key stakeholders as the Myanmar tower rollout progresses!
