Corporate governance and towerco partnerships in Africa’s largest telecoms market

In 2015, Airtel Nigeria completed the transfer of their 4,700 sites to American Tower. With Airtel’s passive infrastructure now outsourced to third parties, we speak to their Vice President of Network Operations, Adedoyin Adeola (who oversees Airtel Nigeria’s opex budget and relations with towercos in the market) to understand how the company works with its partners to improve site uptime and reduce network TCO.

TowerXchange: Please can you provide an introduction to yourself and your background in the telecoms sector.

My background is in engineering, having studied Electrical-Electronics at university and I have since completed an MBA, PhD, master Lean Black-belt Six Sigma and various management qualifications.

I started my career at Globacom in Nigeria back in 2002 before to moving to Alcatel Lucent (now Nokia) to work as a Core Engineer. At Alcatel Lucent, I moved around a number of African countries doing different projects. I became a solution architect for managed services and then progressed into management, serving as the CTO for the Vodacom account in the DRC. From there I left to become Vodacom’s Executive Head of Technology and Data Network in the country and then in 2013 I returned to Nigeria, taking the role of Chief Operating Officer for Managed Services at Ericsson. In June of last year I started my current role at Airtel Nigeria as Vice President of Network Operations responsible for Airtel’s opex budget which runs into several hundred million dollars annually.

TowerXchange: Can you explain your role in light of Airtel’s towers having been sold to American Tower back in 2014?

Whilst Airtel have handed over 98% of our sites to American Tower (with the transfer being completed 10 months ago) we still maintain a very active involvement in overseeing the running of the network.  Coming from a managed services background, I understand the risks in handing over your operations to a third party and how, particularly in the transition period there is a risk of things slipping. It is important that you remain involved and bring your local knowledge and history of running the operations to the partnership, working closely with the vendor to ensure a seamless integration.

At the beginning of the handover to American Tower we firstly defined with them the focus of what we wanted to achieve. The next step was to guide them on the specifics of working in the market and operating our towers. Whilst American Tower have experience of managing towers in Ghana and other parts of Africa, as well as across the globe, when they took over our towers it marked their first entry into Nigeria. The Nigerian market comes with its own set of challenges; processes and technologies that are applicable to other countries are not necessarily suitable for Nigeria. The third step was then to establish a strong governance structure which we actually operationalise. This ensures that everyone is clear on commitments and action points so that the team is focused on getting the job done.

TowerXchange: Can you tell us a little more about this corporate and operational governance structure and how this translates into the day to day management of relations with American Tower?

On the corporate governance level, we meet with American Tower’s executives on a monthly basis where we review every operational aspect of the business and their project delivery - looking at both the operation and refurbishment of existing structures and at new site build. In addition to this, every quarter we have a steering committee where we bring in their regional senior executives.

With the more operational staff who are more regularly involved in the day to day running of the towers, I meet with them on a weekly basis. I review any outages and question the reasoning for these outages, looking at what is happening and any more that can be done to avoid them. I review upcoming project deliveries, looking at what diesel generators, batteries and solar panels (passive infrastructure) are coming in the week. I review the telemetry project progress report and look at how many sites are going to be connected to the grid. It is a very tight and robust operational governance structure, where we are heavily involved but it translates to the effective running of our sites.

TowerXchange: Whilst 74% of Airtel Nigeria’s sites are operated by American Tower, just over a quarter are operated by other towercos - do you have a similar strategy in managing those relationships?

When it comes to the other towercos we also have a weekly review with their teams, however it is less detailed than the review that we hold with American Tower.

TowerXchange: Did many of Airtel’s operational staff and contracts that they had with third parties transfer over to American Tower following the sale of your towers?

In Nigeria, local knowledge is extremely important and so we were keen to retain the strong staff and transfer those over - this people transfer contributed to the success of the integration process. The same goes for third party contractors - we know all of the main players in the Nigerian market, who are the good and who are the bad ones and so educating American Tower on this and retaining key relationships was again central to an effective handover. We are confident that the team in place in American Tower is a highly competent one.

TowerXchange: How have both American Tower and IHS performed since taking over the management of your sites and do you see any differentiators between them?

Whilst we need to fully analyse and interpret the data, we see the performance of towercos as compared to our performance as good. Whilst I do look at performance against SLAs, I prefer rather to look at the company as a whole, looking at the tools, people and processes they have in place and what needs to be done to improve them. Given my previous employment with Ericsson prior to taking on the role at Airtel, I understand the importance of an end to end approach in monitoring performance.

Both IHS and American Tower are strong in delivering power uptime on sites which is an extremely commendable achievement in this challenging market. The competition in the market has also had a positive impact on both towercos readying sites for integration and both are continuing to make steps to improve.

With the majority of towers being previously owned by the operators however, there is still a lot of refurbishment work that needs to be done to improve the quality and also readiness for the addition of more tenants. Whilst both towercos are performing well, it is a continuous effort to get to the level that I want and there are still things that they can both do to improve.

When comparing the two companies we do see differences in terms of processes and personalities but on the whole, I am satisfied with both parties. Whilst in many elements the two companies are comparable, one area where where IHS’s strengths are most clear is when it comes to the rollout of new sites - this is due to their size in the market. As the company with the biggest footprint, IHS have more sites for us to make use of and what’s more they are continuing to build sites in the country.  IHS’s Business Continuity Planning (BCP) is very robust and they have stated that they are completely immune to Nigeria forex issues and as such have continued to add new sites. American Tower has its differentiating status in terms of its responsiveness and its customer service.

TowerXchange: You speak about refurbishment of sites; what kind of work is going on in this area?

There is of course a focus on looking at equipment that is damaged or coming to the end of it’s life - looking at the batteries, rectifiers, diesel generators that may need repairing or replacing.

A second area is on modelling the stress load on towers and with ATC on board this has been greatly improved.

A third, and very important area of focus is on the integration of monitoring systems as most of the operators didn’t have effective passive monitoring systems in place. Monitoring and telemetry are key in understanding what is happening on cell sites - it tells you when the generator is running, when the fuel has dropped below a given level, when the battery has kicked in and various other metrics - this kind of visibility is extremely important in understanding what is happening and is critical in reducing the MTTR.

TowerXchange: How involved is Airtel in selecting the equipment and service providers and setting the specifications of towers?  

There is very much a cross pollination of ideas between the two companies - we bring experience of what will work in the Nigerian market with a vast experience of working in the country and American Tower can bring innovative products and solutions that have worked in other regions.  Examples of innovative strategies brought in by American Tower include a method to mitigate theft of passive equipment by installing diesel generators with metal encasement and integrating an internal automatic transfer switch into the diesel generator to improve integration with the grid – both of which help with issues specific to the Nigerian market.

TowerXchange: What do you feel are the most critical success factors in ensuring the uptime and long term performance of your network?

There are three key pillars - tools, people and processes. With tools, this is having the right equipment and monitoring systems in place; with people you need to have the right team in place, people with strong technical, operational and local knowledge and people that you can trust; and thirdly, you need robust processes. I spoke about Business Continuity Planning - if for example there is a fuel crisis in the country, you need to be prepared to be immune to that - your processes need to be continuously reviewed and refreshed to adapt to the market.

TowerXchange: What is the status of active sharing in Nigeria in order to improve the efficiency of Airtel’s network?

Active sharing is the right thing for us to be moving towards - there is no doubt about it. It is not a matter of whether you should or shouldn’t do it - it’s a matter of time.

There has been some reluctance from the regulators to enable active sharing, with concerns about the loss of revenue from spectrum auctions with operators sharing frequencies. There are also concerns from government about a loss in tax revenue as the volume of equipment that needs to be imported will be reduced. With this in mind they have tried to slow the process down and so it is the responsibility of the operators to continue to demonstrate the value that active sharing will bring to the country as a whole from economic and technological perspective.

In the balance, active sharing will have a positive impact on the country’s economy. In Nigeria 9% of GDP comes from the ICT sector. Active sharing will bring connectivity and coverage to previously underserved areas, improving business and also what’s more generating further tax revenues from an increased number of calls and telecoms services. We need to work to continue to educate the government on the benefits of active sharing to the country and the telecom sector. Active sharing will also present new opportunities for towercos who can also get into this space - in the next five years, top tier telecoms OEMs will be moved or forced away from the managed service space for active equipment – creating opportunities for other parties.

Adedoyin Adeola will be joining leaders of the MEA tower industry at the upcoming TowerXchange Meetup Africa & Middle East on 19-20 October 2016 at the Sandton Convention Centre, Johannesburg