Network Management Services (NMS) has quietly built 600 towers across Central America, Mexico, Colombia and Peru since 2011. NMS pride themselves on their ability to execute build-to-suit programmes entirely in-house. Only recently, TowerXchange managed to speak on the record with Mariano Gomez, Executive Vice President and one of the Founders of NMS, about the company’s activities, outlook for the future and challenges CALA towercos face in terms of fair competition.
TowerXchange: Mariano, please tell us about NMS, its footprint and future plans.
Mariano Gomez, Executive Vice President, NMS:
NMS was founded back in 2011 by Tatum Martin and myself. Soon after the creation of the company, executives Omar Vallecillo and Carlos Barrantes joined the team.
Our executive team is formed by tower professionals who prior to NMS were engaged in tower manufacturing, turnkey services and network development all over the Caribbean and Latin America. Therefore, our team features a unique combination of technical and strategic skills, all very relevant to the local tower industry.
To date, NMS is focused on the Central American market, Mexico, Colombia and Peru. We have staff based in every country where we operate with a great level of synergy between our head office and subsidiaries.
TowerXchange: Out of the countries where you operate, which ones are leading the expansion of the tower model in the region and why?
Mariano Gomez, Executive Vice President, NMS:
To date, I’d definitely say that Mexico, Colombia and Peru are leading the expansion for us and for the tower industry as a whole.
The entrance of AT&T, as well as a dated network in need of upgrading are the main growth drivers in Mexico. Colombia and Peru both require substantial improvements to their networks to satisfy the ever-growing demand for coverage and improved quality standards.
TowerXchange: Do you feel CALA towers are changing hands for a justifiable premium price? And talking about build-to-suit (BTS) projects, do you think they are fairly priced?
Mariano Gomez, Executive Vice President, NMS:
Some tower companies active in the region are very hungry for assets, no matter what the asking price is. Whether the price is justified or not, it’s all a matter of financial projections… And I have always believed that numbers don’t lie!
The CALA tower market is very energetic and customers demand seamless wireless service from carriers virtually everywhere. The ever-increasing pressure on carriers has stimulated the growth of the towerco model and, as a side effect, the level of prices we have been witnessing for sale and leaseback transactions are pretty high.
On the other hand, I believe BTS prices are decreasing, and not for the right reasons. Prices often go down due to the irresponsible decision of small companies to lower their bids beyond sustainable levels just to sign a contract and obtain search rings.
Unfortunately, way too often we see purchasing teams within carriers exclusively focused on their opex rather than the quality of service a towerco can offer. If a new towerco arrives in town offering lower prices, some carriers will take the opportunity and force all of us to revisit our pricing.
Sometimes, the same dynamic happens due to tower giants who own hundreds if not thousands of sites in a country and are able to offer heavily discounted lease rates on their existing portfolios in exchange for search rings.
Both these strategies are technically legal but can cause a great deal of damage to the tower business from a revenue perspective and by shrinking our capex budget. This is particularly relevant nowadays when multiple regional governments are adopting laws demanding that we conceal sites, which results in even higher costs.
BTS is a beautiful and proven business model, I believe all tower companies must preserve its attractiveness by fulfilling contract scope, preserving reasonable market prices and providing seamless service to carriers.
TowerXchange: What are the key challenges you are encountering in the countries where NMS operates from a regulatory/permitting perspective?
Mariano Gomez, Executive Vice President, NMS:
Although with differences among countries, I’d say one common challenge is the Not In My Back Yard (NIMBY) mentality, whereby communities are often opposed to greenfield projects due to misconceptions related to the risk of radiation. The region still lacks awareness on the actual issues around radiation and I believe communities need an educational resource to inform them which can only partially be fulfilled by towercos.
TowerXchange: What is the ratio between portfolio acquisitions and BTS for NMS? And if you rely exclusively on BTS, how many towers are you building per year and what are the key capabilities that allow you to win projects with carriers?
Mariano Gomez, Executive Vice President, NMS: NMS operates exclusively in the BTS market and to date, we have the capacity to build 800 sites per year in the countries where we are active. The demand for tower sites across the region is still very high and this is why we are sticking to what we do best.
That said, we see small cells as a growing market trend and have been evaluating the opportunity to get involved.
TowerXchange: So is the entirety of NMS staff in-house or do you outsource any function to trusted partners?
Mariano Gomez, Executive Vice President, NMS:
We rely exclusively on our in-house staff. NMS is a fully integrated company which owns every single phase of the tower management business, from bidding all the way to construction.
Our staff is our greatest asset. From civil work technicians to C-level executives, we are all committed to delivering the best possible final product to our clients and our relationship with carriers is very much based on trust, a proven track record in the region and quality control.
Over the course of the years, NMS has acquired a deep understanding of the regional telecom industry and our staff brings to the table years of experience in market analysis, regulatory issues, demand and business case modelling.
TowerXchange: Our research tells us that NMS owns over 400 towers in the region. Is that correct?
Mariano Gomez, Executive Vice President, NMS:
Actually, we are getting close to the 600 mark thanks to our solid financials which have been helping us to scale our business exponentially.
We firmly believe that the right combination of performance, excellent customer relationship and seamless team integration gives us the right edge to achieve our growth goals.
