Encompassing marco structures, DAS networks and small cells, Cellnex’s Italian portfolio represents a strong mix of structures and solutions for their partners. We spoke to three of the architects of this mix: Walter Spera, Managing Director of Cellnex Italia and MD of Towerco; Gianluca Landolina, Galata’s MD and Deputy MD Cellnex Italia; and Piercarlo Giannattasio, Managing Director of CommsCon, about how they see this market developing.
TowerXchange: Can you summarise your operations and network topography in Italy for our readers please?
Piercarlo Giannattasio, Managing Director, CommsCon:
Cellnex Italy’s network is homogenously deployed throughout the country covering all the regions in the country. Galata’s macrocells as well as the tunnel and DAS networks of Towerco and CommsCon guarantee a full coverage countrywide. In terms of figures this represents a network close to 8,000 sites served by Galata and Towerco, enhanced with the more than 1,000 nodes (DAS and small cells) served by CommsCon. Let us underline as well, while this is a market segment which will continue to drive growth and may well fall in the area of the so called “mission critical services”, that Cellnex already covers more than 300km of galleries and subways: 160km managed by TowerCo and 150km by CommsCon. This speaks well for the capabilities and engineering skills that Cellnex’s team is able to contribute in Italy.
TowerXchange: What opportunities does Cellnex see in the arrival of Iliad in the Italian market? Do you envisage more towers will come to market?
Walter Spera, Managing Director, Cellnex Italia and Managing Director, Towerco:
What is clear is that in the current EU framework the concept of keeping competition at the end-consumer level by maintaining four big MNO’s in every “big” market has become a rule. The arrival of a fourth operator following the merger and integration between WIND and H3G will also become an opportunity for each one of the telecom infrastructure operators in Italy. It is perhaps too early to anticipate if more towers will be divested. One can assume that the combination of efficiencies and synergies creation following the integration of the two entities, as well as the market entry of a new operator may act as a trigger for network rationalization and as a driver of higher tenancy ratios in existing –and already deployed- tower networks in the country. Anyhow, this will take time and we will have more visibility on how this may evolve during 2017.
TowerXchange: As one of Europe’s most towerco-heavy markets, where does Cellnex see growth opportunities in Italy?
Gianluca Landolina, Galata’s MD and Deputy MD Cellnex Italia:
More than a towerco-heavy market - we would describe it as one of the most dynamic in Europe. Due to the ongoing consolidation between MNOs and the newcomer entry we already spoke about, the market continues to offer sound growth opportunities in terms of network rationalization and better use of “installed capacity”. This is valid as well for the increasing need for DAS and small cells systems that guarantee right and efficient coverage both indoors and outdoors. Beyond this and with a medium- to long-term vision, LTE deployment (including 5G) will drive densification and will, thus, let new business models emerge which will rely more on assets sharing and a multi-operator approach, involving active equipment as well.
The arrival of a fourth operator following the merger and integration between WIND and H3G will also become an opportunity for each one of the telecom infrastructure operators in Italy
TowerXchange: As towercos and operators turn their attention to 5G and network densification, how does your network in Italy need to develop to meet the needs of the next rollout?
Gianluca Landolina, Galata’s MD and Deputy MD Cellnex Italia:
This is directly related to the previous question; densification will definitely play a decisive role. Existing macrocell networks should not see major changes in their current topology, aside from the rationalization of their potential, which is independent of an upcoming 5G rollout. There will be complementarity between macrocells, with an improved FO backhaul and fronthaul connectivity, and small cells and DAS networks that will interact with the current macrocells asset base. In fact the challenge lies in the upgraded connectivity backhaul to the towers.
TowerXchange: How do you find meeting the strict radio frequency regulations in Italy? Does it have a noticeable impact on your tenancy ratios compared to elsewhere in Europe?
Walter Spera, Managing Director, Cellnex Italia and Managing Director, Towerco:
Radio frequency regulations in the country is something which have always been done. So it’s factored into our plans because it’s part of the competitive landscape. Having said that it is clear that Italian emission levels are among the most restrictive in Europe with thresholds placed far below the EU average. Existing thresholds limit the tenancy ratio potential for each existing site but this is valid for all the Italian players, so from this perspective there is a level playing field. In the specific case of Cellnex’s network sites in Italy we do have a tenancy ratio which offers space for growth able to capture more PoPs.
TowerXchange: As you’re expanding into new European markets, how much ‘cross’ pollination do you see between your experiences in Italy and elsewhere and to what extent is each market unique?
Walter Spera, Managing Director, Cellnex Italia and Managing Director, Towerco:
This cross experience sharing concept is already a reality. For Cellnex Italy is the most important market for its telecom business. Here we have a well established track record and this has positioned the italian team with the right capabilities to drive a competence centre for the group based in Italy covering areas such as enhanced DAS and small cells coverage projects for highly effective installments.
What we are seeing in Europe, although stepwise, is that we are working with customers whose presence and footprint cover different European countries in which Cellnex is able to offer and deliver its services. This is a business in which the “glocal” concept duly applies. We see space for a cross-border approach with a European vision, while realizing that each market deserves uniqueness. It is a fact as well that infrastructures do not relocate and thus involve a strong local anchorage working together with our customer base as well as with regulators and public administrations on site.
