The core competencies key to success in BTS

Innovattel/Torresec is a build-to-suit (BTS) towerco with operations in Puerto Rico (Innovattel Properties), Ecuador(Torresec Ecuador), Peru (Torresec Peru), and Colombia (Torresec Colombia). The company was created by Manuel A. Aviles, an entrepreneur with a passion for telecom infrastructure, with the goal to plan, develop and administer tower sites in the CALA region. After a career in telecoms, Manuel launched Wireless Infrastructure Group back in 2001. The company grew to become leader in the Caribbean region and its 100+ portfolio was then sold to Crown Castle Communications in 2010. Manuel then entered various ventures in Panama (Topsa), the Dominican Republic (Teletower) and is currently the Founder and CEO of Innovattel. Juan Cueria joined the team as VP and COO and in this interview, shares with his insights into the company’s footprint and regional ambitions.

TowerXchange: Please tell us about Innovattel brands and their activities.

Innovattel is best known as Torresec in most of the CALA region and acts as a BTS firm involved in the construction of sites for all the main carriers. Thanks to our highly specialised competency and local presence, we have been able to acquire considerable business from carriers who recognise the importance of picking expert partners for their BTS projects.

To date, the company has a total tower count of 209 sites with an additional 700 under contract split between the countries where we operate.

TowerXchange: Innovattel/Torresec is a company in expansion. How do you evaluate new markets?

The political and economic stability of the country is of primary importance for us. Investing in stable countries is at the top of our list.

Once we assess that element, we look at the regulatory environment and its future outlook. This includes the licensing process, spectrum auctions and anything that can affect not only our operations as a towerco but also the carriers’ business.

Another factor to take into consideration is the competitive landscape in terms of other towercos and the state of play among carriers. We believe competition is necessary but we try and avoid entering saturated markets. Mature markets are tricky and so far, we are active in countries that still present considerable growth opportunities.

TowerXchange: Tell us about the permitting process in the countries where you operate and how you manage to overcome licensing challenges.

Each country presents different permitting conditions. For instance, in Peru we have virtually no difficulties. In fact, it can take as little as one month to obtain a response once a request for permits is presented.

Peru is a peculiar case because the Government has recognised the need for cell site densification and identified that the country needs at least 14,000 new sites. When you work in a  country with such a forward-thinking and involved Government, which aims at expanding mobile coverage in untapped communities by speeding up the licensing process, our work becomes much smoother.

TowerXchange: Can you share some information about the BTS projects that Innovattel/Torresec is developing?

Right now, we are working to deploy more than seven hundred sites across Colombia, Ecuador and Peru. BTS projects present specific challenges in terms of accessibility, logistics et cetera. However, working with local teams helps making things simpler.

On the other hand, we face delays mostly because of the concern of local communities living in the surrounding of a new site. The whole issue around radiation has to be explained carefully and once people understand that sites aren’t harmful for them, we tend to work quite smoothly. The support and buy-in of local communities is key in this region.

TowerXchange: What is the ideal scale for Innovattel/Torresec as a group?

Our goal is to build 5,000-7,000 towers within five years while expanding our footprint in two additional countries. To date, we are blessed with a strong, capable and committed team and we are confident about the future of the company.

TowerXchange: Tell us about what towercos are doing to achieve optimal coverage in Peru.

There are several strong towercos in Peru, including American Tower, Torres Unidas, NMS, QMC Telecom and Torres Andinas. In addition to us towercos, there are a number of construction, O&M subcontractors that are now starting to build their own sites with aspirations to become towercos. There are several companies with portfolios of one hundred sites or less across the country. And this trend is popular not only in Peru but also in Colombia and Brazil.

These service providers turned towercos don’t really follow the traditional towerco business model and we are not really threatened by them in terms of competition.

TowerXchange: Does Innovattel/Torresec outsource any of its operations?

We outsource the construction of sites while everything else is developed in-house, from engineering to contracting. Moreover, we are committed to developing local workforces and are sourcing and training local individuals within each operation.

TowerXchange: How do towercos compete in the region?

You see, I believe there is an unwritten code of conduct among towercos that pushes us to try and maximise the value of our markets, in addition to our own return. We are committed to the local territory where we operate.

Obviously the level of competition is extremely high when it comes to winning a BTS contract and the same can be said about sale and leaseback transactions. But generally towercos work quite fairly.

TowerXchange: Which factors can help a towerco winning a BTS project? What are carriers searching for?

One key element is your past performance in a given country. Because of the peculiar conditions of each territory - mountains, roads, logistics, weather, et cetera - carriers take past experience into consideration. They would also take into account similar projects in different country.

I would say price is not the only factor and your core competencies and knowledge can really make the difference when trying to secure a deal.

TowerXchange: How many towers do you believe are still operator-captive in Colombia, Peru and Ecuador? And how many towers are owned by towercos?

I would say - and these are just my best guesses - that in Colombia there are around 10,000-15,000 still owned by operators. In Peru probably 5,000 and in Ecuador 3,000-4,000.

Towercos own around 4,000 towers in Colombia, approximately 1,200 towers in Peru,and just a few hundred in Ecuador.

TowerXchange: Which country do you believe is the most competitive that you have worked in? 

Puerto Rico is definitely the most competitive country we operate in due to high presence of towercos with five very active operators.

Colombia is quite competitive as well, with plenty of active towercos such as American Tower, Torres Andinas, Continental Towers, Torres Unidas, Centennial and PTI. There are four active carriers and a number of MVNOs as well, making it a very diverse market and a fast growing one.

Juan Cueria and Manuel Aviles will join us at the TowerXchange Meetup Americas, in Hollywood, Florida, 28-29 April 2015. To find out how you can get involved, please contact tsmith@towerxchange.com