Network infrastructure in an e-society: Estonian towerco Levira

Levira’s roots lie in Soviet-era broadcasting, but now the company is turning its attention towards digital outsourcing and providing a service in line with Estonia’s new e-society initiative. We spoke to Tiit Tammiste, the new CEO, about how the company is evolving, the Estonian tower landscape and how Levira fits into the future of Estonian telecoms infrastructure.

TowerXchange: Please introduce Levira, your background and how the company was formed.

Levira was initially a broadcasting and transmission company with roots back to Soviet times, when it was the National Broadcasting and Transmission Company of Estonia, owning the terrestrial TV and radio networks across the country. Over the last ten years we have diversified into new businesses, including media management for companies such as Turners and Discovery in the Nordic and Baltic markets. We have also built a 1000 square metre data centre at the base of the Tallinn TV Tower. We do offer colocation for IT infrastructure in this centre but more and more we offer a full ‘infrastructure as a service’ package.

I’ve been working for Levira for the last year. Prior to that I spent 16 years as CIEO and CTO of Telia Estonia, so I’ve been in the MNO business for a while and know the region well.

TowerXchange: How is the company backed and funded?

Today Levira is still 51% owned by the Estonian government and also partly owned by French broadcaster and towerco TDF. It was from TDF that we originally heard about the tower business and decided to offer this service as well as technological real estate here in the Baltics.

TowerXchange: Who are the management team and what are your different backgrounds? What capabilities do you manage in house? 

There are two cultures at Levira. First people who have worked in the company for 20 - 30 years, know terrestrial transmission by heart and have great knowledge of the towers and technology. Second, there are people like me who are trying to develop a new futureproof product portfolio on top of that. Our mission is providing infrastructure services in the media, IT and telco worlds.

We believe that in the future Levira will be a kind of service provider helping companies with digital transformation, particularly the technology side. Our target customers are companies whose business isn’t technology but who need technology to run their business. For example TV by nature isn’t a technology-based business, producing content is their core competence, and we can help them focus on that competence by taking care of the rest.

We do quite a lot in house and we are proud of the fact that we can design bespoke solutions for our customers. Usually in outsourced services providers try to standardise everything to bring the cost down but as we come from a media management background, every solution is unique.

TowerXchange: Tell us about your network - what type of sites do you have, how many and where are they located? How does that match up against other infrastructure in Estonia? 

Our broadcasting network has just over 30 sites, 22 of which are high towers in Estonia from where we mostly run terrestrial television, about 35 programmes.

In general, Estonia is very developed in terms of IT infrastructure. Our e-government, e-society and e-residency programmes continue to grow and establish an environment where people can run their businesses remotely from Estonia. Because of that all kinds of infrastructure and services are also highly advanced.

TowerXchange: What’s the current state of 4G rollout in Estonia and what are plans for 5G? 

In 2012, when the 800MHz licenses were introduced in Estonia, we became the third country in the world to cover the territory with 4G. There was a competition for the frequency license during which Telia promised to cover the full country with at least 5Mb per second coverage, and subsequently won the competition. They promised to deliver it in just two weeks! We went to Telia headquarters in Stockholm and said that we had promised to roll out 4G by 16 June, and they asked what year. We had 35 teams working here in Estonia and rolled out to about 200 base stations - it was a great project. I saw a lot of passion and commitment in the teams, as they felt that we had to be one of the first in the world to roll out 4G.

We are currently introducing a new initiative - IoT. We are working with the LORA Radio network which has just started rolling out in several countries. If you have high towers you can put base stations on top and cover a large area. The sensors we use in our network are autonomous and work on batteries. It’s a low-power and low-data network which means that the amount of data exchanged is low, frequencies are low and we can keep the sensors autonomous for seven to ten years. We are already seeing advantages in rural areas: you can install the sensor and forget about it. Our slogan is ‘buy and forget’ - we’re not competing with MNOs, who are looking at 5G with high data speeds and volumes, practically real time with very low latency.

Our IoT solution has an advantage in logistics, tracking cars and containers and so on, and we’re actively looking for solutions in this area, plus any kind of security and smart city solutions. The Tallinn TV Tower is a smart tower: it has got sensors for parking lots, it can flag empty spaces, and sensors can locate empty taxis. It’s cheap to run this kind of solution. The solution enables us to say that we can help companies transform to a digital form.

For our MNO clients the beauty of our sites is that we have electricity, diesel generators and data connections from different operators - it’s all highly reliable. What it means for MNOs is that if there’s a storm or outage, we can provide a fully backed up network. We are looking at customers like utilities andsecurity companies who need reliability.

TowerXchange: Can you break down your tenants - are MNOs the biggest group? Who else uses your towers? 

Our tenancy ratio is not so straightforward, as we are maxing out revenue from each tower. Our first priority is installing our own equipment; after that we rent the remaining space, mostly to MNOs. We also have a new customer in the European Aviation Network and Sigfox are renting space in the network too. There are new businesses who need the tower space which is great, as we see that renting towers to MNOs isn’t growing. They mostly use our network in the short term and then move to fibre (demounting their equipment) and the height of our towers is not cost efficient for mobile base stations.

TowerXchange: What can you tell us about how Estonian MNOs operate - are they embracing the independent towerco model? 

In Estonia tower space changes between MNOs. Originally all three operators built their own masts and in rural areas it was common to see three masts close together, but now they are focussed on sharing space. Their business model is to do bilateral swaps, exchanging equal space for equal space. It’s driven in the main by local governments and communities who want to reduce the impact of towers on views and landscapes. There’s no particular legislation in place but it’s usually a key part of the negotiations for new towers. Cost reduction is also a key factor now that coverage is no longer a competitive factor. It means that in Estonia it’s no longer a business which commands high rental prices. This has weakened the towerco business model here.

TowerXchange: Does this mean towers in Estonia are being decommissioned?

There are around 500 - 600 towers in Estonia, and the infrastructure is still very young, so no, I don’t know of any towers going out of commission. Sharing mainly takes place where new sites are needed. MNOs in Estonia use a mixture of towers, rooftops and technical buildings as well as our towers. Infrastructure from Soviet times and energy infrastructure probably accounts for a handful of sites as well.

TowerXchange: Do you see 5G driving a need for new network infrastructure? 

I think there was a commitment from two Estonian MNOs to have the first 5G sites up and running by the end of 2018.  I assume that will mean rolling out small cells. I believe that 5G functionality will be applied first and foremost in manufacturing, and once it’s running they will start to build low latency networks for self-driving cars etc. For the public, who cares? In Estonia we have 4G over 98.8% of the territory and in most places the data speed is better than  fixed network connections. It will be industrial IoT needs, smart cities and transportation which will drive 5G growth here. We don’t plan to compete in the provision of 5G infrastructure, unless more macro towers are needed. Our main focus is currently on building fast fixed network connections in rural areas, with support from the government and the EU, but even this is not a pressing priority as mobile coverage is so good - most of the rural population has a mobile router and a mobile TV solution.