On 19 October, TowerXchange hosted the first working group for Civil Works & O&M in the African and Middle Eastern tower industry. The aim of the group was to identify some of the key challenges in the rollout, operations and maintenance of cell sites in the region and provide recommendations to MNOs, towercos and managed service providers on how to better work together amidst increasingly challenging economic conditions.
Working group members:
- Geert van Eijk, CEO, Helios Towers Ghana
- Hassan Nayef Dakhlallah, Advisor, Network Sector, Saudi Telecom Company
- Stefan van Heerden, Construction Manager, Atlas Tower
- Martin Black, Head of Procurement & Supply Chain, Tigo Tanzania
- Ahmed Saeb, Principal Category Manager, Networks SCM Technology, Vodafone Procurement Company
- Yatendra Chadha, Vice President (National Head - Site Acquisition), Indus Towers
- Salah Medawar, Chief Operations Officer, ieng Group
- Arie Ben-Dayin, VP sales, AEMEA, Mer Group
- Jean Farhat, Group CEO, NETIS
- Anita Pauperio Paulino, Business Unit Manager, Telecom, Metalogalva
Civil works and O&M Working group recommendations
Training and contractor management
RECOMMENDATION 1: Implement a continuous retraining programme with contractors
RECOMMENDATION 2: Integrate contractors with equipment manufacturers to ensure installation and maintenance is done to guidelines
RECOMMENDATION 3: Create an interface between basic skilled workers and higher skilled workers on rotation
RECOMMENDATION 4: Ensure remuneration is in-line with standard levels and progression is achievable
RECOMMENDATION 5: Rationalise and simplify site equipment
Strategies to combat theft
RECOMMENDATION 1: Deploy multi-faceted solutions
RECOMMENDATION 2: Prosecute where possible and hold thieves accountable
RECOMMENDATION 3: Examine strategies to share poor contractor experiences
RECOMMENDATION 4: Engage local communities
Specify sites correctly and look towards the shape of future networks
RECOMMENDATION 1: Employ more attention to detail in checking the specification of sites to avoid unexpected costs
RECOMMENDATION 2: Better understand the pros and cons of camouflaged towers
RECOMMENDATION 3: Ensure new sites are future proofed for the advent of 4G
Smarter use of time on site
RECOMMENDATION 1: Implement better planning to coordinate site visits from all parties
RECOMMENDATION 2: Employ the use of remote solution experts
RECOMMENDATION 3: Do not allow preventative maintenance schedules to slip
RECOMMENDATION 4: Minimise man hours through new technologies (e.g. drones)
RECOMMENDATION 5: Carry out a full refuelling in place of multiple trips
Focus on relationships with communities and landlords
RECOMMENDATION 1: Educate local communities on the central role of towers in providing critical communication services
RECOMMENDATION 2: Develop expertise with landlords and legal teams advising them on lease negotiations
RECOMMENDATION 3: Prioritise community relation skill sets in your supply chain
Innovation and partnerships across the supply chain
RECOMMENDATION 1: Diversify into new geographies and service lines
RECOMMENDATION 2: Negotiate longer term contracts and think strategically rather than tactically
RECOMMENDATION 3: Provide expertise and guidance to MNOs and towercos and fundamentally shape their O&M strategies
Executive summary
Across Africa and the Middle East, pressures on mobile revenues are felt throughout the value chain. Whilst MNO expectations and requirements on quality and timelines continue to rise, a focus on reducing costs is creating challenges for towercos, tower builders and managed service companies who need to meet such targets whilst being simultaneously faced with escalating costs of raw materials. Identifying where inefficiencies are brought into civil works and O&M is critical to improving quality of service whilst protecting the increasingly thin margins of all stakeholders in the value chain.
To tackle the topic, TowerXchange brought together MNOs Vodafone, Saudi Telecom Company and Tigo, towercos Helios Towers Africa, Atlas Tower and Indus Towers, leading managed service providers ieng Group, Mer Group and NETIS and tower builders Metalogalva. After first mapping out the problem areas, the group focussed on steps put in place and innovative strategies being considered to address such challenges and drive forward quality and cost efficiency in the tower industry in MEA and beyond.
Better training, management and retention of contractors
Personnel management remains one of the biggest challenges in overseeing new site rollout and maintenance of existing sites. Whilst there is a noticeable skills gap, even relative to other developing regions such as the Indian market, the moniker that it’s “good enough for Africa’” is not acceptable.
There are two challenges that need to be addressed; on the one hand, contractors may not be adequately trained, whilst on the other hand it may be more a case of negligence or non-compliance whereby they are not carrying out tasks in the manner explained or potentially not carrying them out at all.
To tackle the first issue, more robust training programmes need to be put in place. This is not just a once off experience; training needs to be repeated and updated to ensure that skills are up to scratch. Stakeholders also need to work to ensure better interaction between the supply chain; equipment manufacturers should be liaising directly with contractors and subcontractors, equipping them with the knowledge and expertise to install and maintain equipment in accordance with manufacturer guidelines. There needs to be a rotation of experts to support the lower level skill sets, and a rationalisation of equipment to simplify operations is key.
On the second issue, operational governance strategies need to be implemented effectively and monitoring systems put in place to verify and validate that the work is being done in a correct and timely manner.
Work smarter on site visits
The time spent travelling to and between sites is often significantly greater than the amount of time spent on site by a contractor, an issue only compounded by the poor road infrastructure in much of Africa. Reducing the number of visits to site is fundamental to controlling costs and timelines in site maintenance.
One solution to inefficient site visits proposed was the use of remote solution experts. Whilst there is nearly always a need for there to be a pair of boots on the ground during maintenance, the opportunity for an expert to log in remotely enables them to service a larger number of sites in a shorter period of time. In the meantime, the manual worker on site can carry out key preventative maintenance tasks whilst the more sophisticated works are carried out by the expert.
Another technological advance discussed which could help reduce man hours was the use of drones. Examples are now coming to light of MNOs using drones to carry out thermal imaging and structural assessment, which not only reduces man hours but also helps to remove risks associated with climbing towers for inspections. When there has been a severe storm, it is possible to deploy a drone to inspect a site for damage, rather than mobilising a team on the ground. Going forward there exists the potential for drones to carry out some of the maintenance as their usage by the industry becomes more widespread.
It is also important to reduce the amount of reactive maintenance carried out. Whilst the call outs themselves result in costs adding up, the unplanned nature of such visits means that contractors often turn up on site with the wrong spare parts, thus delaying the repair works. Implementing a robust preventative maintenance strategy is central to alleviating the issue. Whilst working group members agreed that that this was fundamental, most felt that their preventative maintenance often fell by the wayside with reactive jobs taking precedence and that renewed focus needed to be placed upon preventative maintenance being done.
One working group member explained how they had introduce a “one site visit per month” strategy, whereby various teams are deployed to a site to carry all preventative maintenance in conjunction with a complete filling of the fuel tank. Carrying out preventative maintenance ahead of schedule and reducing the number of access requests to site has had a significant impact on site level profitability.
Combat theft and safety concerns through a variety of solutions
Theft is undoubtedly one of the biggest challenges faced by tower owners. With the vast majority of pilferage events occurring during site visits, minimising the number of times various parties can access sites will help to alleviate some of the problem. Security measures also need to be put in place, be it smart locking systems, response teams, alarm activated tear gas or CCTV systems.
Holding culprits accountable is also key. Some stakeholders referenced the success of publicising photos of thieves, whilst others advised they had adopted a strategy of involving the police and prosecuting where possible in order to send out a clear message to other would be thieves.
Panellists also questioned how, within legal and ethical frameworks, it could be possible to share a list of companies or individuals who had been caught pilfering. Whilst word of mouth provided one such means, the group were hesitant to propose a formalised process as legal implications would need to be carefully considered.
Focus on relationships with communities and landlords
Increasing resistance from local communities and municipalities is creating challenges in the rollout of new sites. Community engagement programmes whereby stakeholders help the community view towers as part of essential infrastructure are critical to expediting rollout programmes and the full supply chain must work together to strengthen the value proposition, from access to power to job creation.
Further challenges are arising as a result of the increasing commercial awareness of landlords of the value of their ground or buildings. This challenge is further compounded by the rise of a new breed of law firm, educating landlords on the rates which they could be charging. With continuing downward pricing pressure on the supply chain, those managing new site build need to become increasingly adept at dealing with such situations.
With local community support also important in helping to curtail theft, the importance of human skills and cultural understanding is an essential item in the tool set of firms carrying out civil works and O&M.
Specify sites correctly and look towards the shape of future networks
The misspecification of sites by MNO, towerco or tower builder is a major source of headaches. If a line item is missed out and a charge applied later it creates significant challenges for the signed off budgets of the procurement teams. An increased amount of diligence is required to ensure that sites are specified correctly from the off.
Amongst increasing resistance from communities, camouflaged towers are growing in popularity although concerns still exist around their competitiveness. Many still felt that they were harder and more expensive to build and maintain and so tower designers still had a way to go in promoting their value.
How towers need to be designed for the advent of 4G and an increased role for small cells still need to be ironed out. It was observed that many older sites were not designed with multiple tenancies in mind and so it is important to ensure that today’s new sites are future proofed. Tower manufacturers need to work closely with the MNOs and towercos to ensure that these needs are met.
Innovation and partnerships to address pressures on margins
Perhaps the most contentious subject in the working group focussed on the way in which stakeholders needed to adjust in order to account for declining revenues in the mobile market. Maintenance contractors voiced concerns that quality was meant to increase whilst expenditure decreased, towercos expressed how they had fixed costs agreed with MNOs and so could not pass on escalations, and MNOs explained they continued to be faced with decreasing ARPU. With the downward trend on revenues not showing any sign of letting up, and the cost in raw materials continuing to rise, concern was expressed around how already thin margins may be further eroded.
Stakeholders underscored the importance of partnerships in helping to protect margins whilst ensuring quality was not compromised. Giving companies longer term contracts and procuring services strategically rather than tactically is an essential step; with longer term contracts companies can invest in their people, processes and technologies which enable them to reach new efficiencies. Larger scale contracts will also enable stakeholders to reach economies of scale, further bringing savings to the value chain.
Diversifying both geographically and into the offering of new service lines was another piece of advice given by the group. MNOs and towercos had an appetite to work with parties who had broader competencies and footprints which would help to bring new efficiencies to the supply chain.
MNOs and towercos also voiced the opinion that service providers needed to be forthcoming with recommendations of what is and and isn’t working in an O&M protocol laid out by a towerco or MNO. MNOs and towercos are looking for guidance and expertise from service companies, and looking for areas in which they are innovating to reduce their own costs in house - many of which strategies were shared by the group during discussions.
Download TowerXchange Meetup Africa & ME 2016 report
Supporting insights from leading managed service providers and tower suppliers to and towers builders in Africa and the Middle East
ieng Group: Surveying, building and strengthening towers for the era of infrastructure sharing
Metalogalva: Introducing tower designers and manufacturers Metalogalva
NETIS: How to develop and retain a highly skilled workforce
