With the power systems at many thousands of sites under management in Nigeria and Myanmar, IPT Powertech is effectively one of the world’s largest telecom energy services companies. TowerXchange spoke to COO Khaled Habbal to understand their business model and value proposition.
TowerXchange: Can you tell us some of IPT Powertech’s major achievements for the benefit of readers not familiar with your company?
Khaled Habbal, VP & COO, IPT Powertech:
IPT Powertech has been a first mover in the industry at multiple times throughout its 24-year-long history. Back in the 1990s, we started out as a provider of starter and specialty batteries. We were the first to introduce and stock sealed and specially application batteries. When the telecom sector picked up in 1995-1996, we immediately noticed the great value we can add, so we started offering battery systems to telcos. A few years later, we expanded into selling power systems, and we were also the first to foresee the need to integrate power into outdoor cabinets, so we made a strategic decision to manufacture our own cabinets independently, and hence became a full-fledged energy system integrator. We were also the first to launch the hybrid battery concept, we became one of the few companies in the region, if not the only one, to combine product R&D to our assembly facilities in Romania and Lebanon.
In parallel, we had launched our telecom services division, which consists of three main pillars:
1) site construction service, that is, building telecom sites and laying optical fibers;
2) telecom installation and network services; and
3) field managed services and maintenance.
Our ability to combine our power expertise, telecom services, and managed services at the same time became our differentiation factor, and this propelled our recent success in introducing and implementing the Guaranteed Savings and T-ESCO models.
Our journey has been a rapid evolution to becoming one of the regional players in our field with reach to more than 50 countries coupled with a geographic presence in 11 countries in Africa, South East Asia and the Middle East.
The past year has been an exceptional one. We ventured into two large projects for a major towerco in Nigeria, supplying energy efficient power solutions including a long-term management, maintenance, and guaranteed opex optimisation contract.
We also signed a long-term contract with one of the major operators in Myanmar, providing managed services through a combination of a guaranteed savings model and T-ESCO models for their entire network.
All these achievements would not have been possible without the dedication of our 2,500+ experts who live our slogan “Redefining Power Solutions, Reinventing Telecom Infrastructure.” They relentlessly serve the top clients in the region and deliver projects to more than 60 operators in more than 50 countries.
TowerXchange: How have you adapted the Telecom Energy Services Company (T-ESCO) business model to better serve MNO and towerco needs?
Khaled Habbal, VP & COO, IPT Powertech:
We have been serving the largest MNOs across many continents for more than 20 years by providing a wide range of products and services from comprehensive and tailor-made power solutions through to passive and active infrastructure. Throughout the expansion of our business and diversification of our activities, our broad array of offerings has seen a considerable evolution across the whole telecom and power value chain of MNOs and towercos. As for telecom power, we adapted our business model to fulfill the needs of our customers by providing an holistic solution of energy efficient products and managed services as a Telecom Energy Services Company (T-ESCO).
Our own energy services offerings are categorised in two main streams, one called The Guaranteed Savings Model and the other T-ESCO model and both serve MNOs and towercos in a way to reflect the appetite for capex spending or capex leasing. Both models ensure the deliverables of power availability and reliability to the network respecting all Service Level Agreements (SLAs) related are met.
We have seen in some instances in Africa, MNOs that are not planning to divest their towers however are looking to divest their power equipment. In those instances, with the pressure coming from the global profitability of the MNOs, we are providing the T-ESCO model whereby all investment to modernise power solutions and making them efficient and deliver the required availability are provided by IPT Powertech Group. Naturally, servicing a long-term contract for the same is a key factor for its success. On the other hand, we have noticed that towercos have access to investment resources and strategic directions whereby they invest themselves through innovative and energy efficient power solutions; however, they need the deliverables to be met and the promise of those solutions to be achieved which is reflected in our guaranteed savings model.
TowerXchange: What is your approach to eliminate the ‘blame game’ where energy equipment manufacturers and O&M service provider blame each other for any performance failures?
Khaled Habbal, VP & COO, IPT Powertech:
It has always been a dilemma between the energy equipment manufacturer and O&M service provider where one side blames the other side either on the actual specs of a product and its deliverables or on the service level and the maintenance operations.
Our approach is simple: combine energy equipment provider, system integration, and O&M service contracting services to create a single point of accountability. By being the energy system integrator and the contractor at the same time, we are able to manage key points in the value chain, thus leaving no room for performance failure—or for the ‘blame game.’ In fact, we believe that our group is one the few solution providers globally offering and merging hybrid and renewable energy solutions with telecom infrastructure services and offering field managed services and maintenance all at the same time.
Managed services contractors buying energy solutions and managing them will only be able to cover themselves during the warranty period. Their real challenge starts after the warranty period expires.
The combination of expertise all under one roof makes IPT Powertech Group one of the few global parties able to eliminate the blame game and provide top-notch services to towercos, MNOs and ultimately power availability for the telecom networks.
TowerXchange: We understand IPT Powertech operate power systems at over 3,200 Ooredoo Myanmar towers - can you give us a sense of the operating conditions and challenges in Myanmar?
Khaled Habbal, VP & COO, IPT Powertech:
IPT Powertech Group is enrolled in an end-to-end managed service contract with Ooredoo Myanmar including rollout services, operation and maintenance, grid connection, generator fueling, power management and power colocation which is extremely challenging from a geographical, political, operational and financial perspective.
From an operational and organisational perspective, the situation is very challenging as we are covering the totality of the country with its area of 677,000 sq km ranging between mountains, forests and tough terrains through to rivers, lakes and oceans. Out of the total universe of Ooredoo’s 4,500 sites, Linfra Myanmar is currently managing 3,200 sites which are divided between edotco’s 1,250 sites, PAMEL’s 1,250 sites and 700 Ooredoo self-built sites which are spread-out all over Myanmar across the 15 regions. Approximately 65% of the sites are off-grid while the remaining are grid connected. The grid availability and reliability is not consistent which means lots of outages, both planned an unplanned. The off-grid sites by themselves bring tremendous challenges from regular fueling to preventive maintenance ensuring mean time to repair (MTTR) is in line with our committed SLAs.
With a five month season of ravaging monsoon and rampant floods, operating conditions become extremely stringent, whereby we take necessary measures to overcome such constraints by deploying additional resources and enhanced logistics to maintain the quality and best performance of our services. We also face access, security and political issues in some regions which are handled by our CSR team who is strongly engaged with local communities and groups to come up with proper resolutions. Availability of stable power remains a major challenge to our operations and service level agreements.
TowerXchange: How do you see the future of cell site energy in Myanmar, given that edotco has committed to provide full power as a service, and that the towerco which owns the other substantial portion of Ooredoo’s towers, PAMEL, is for sale? Other Myanmar towercos provide energy equipment with energy costs passed through to the tenant - how can we correct the disincentive to invest in energy efficiency this results in?
Khaled Habbal, VP & COO, IPT Powertech:
The tower landscape in Myanmar is divided between seven tower companies surpassing the 10,000 towers mark during 2017. Major players are edotco, Pan Asia (or PAMEL), Irrawaddy Green Towers (IGT), Apollo Towers, OCK, EFT and MIG. Under our managed services contract with Ooredoo, we are fully responsible in managing the energy consumption on sites comprising of supplying and delivering generator fuel and managing the electricity supplied by the national grid of Myanmar. The energy pass-through model does not have a disincentive outcome for us to invest in energy efficiency for two main motives:
- Our objective is to optimise the operational expenditures (opex) of our customers notably on the energy consumption.
- Our guaranteed savings model starts with the design, engineering, manufacturing and supply of power-efficient solutions to ensure lowest capex, opex and TCO to our customers. Moreover, we are committed to our environmental values in protecting the environment and reducing carbon footprint by continuously optimising the use of generators, and by reducing engine run-hours while minimising noise pollution to local communities.
TowerXchange: Let’s talk about Nigeria. How have IPT Powertech come to be so trusted by Nigeria’s leading towerco, IHS?
Khaled Habbal, VP & COO, IPT Powertech:
We started working with IHS in 2003. At that time, IHS was a site construction contractor. Over the years, we developed a strong relationship with IHS by repeatedly reengineering our proposed solutions to fit with their growing site requirements. It wasn’t long before IHS became the largest tower company in Africa. Our stellar achievement was the deployment of hybrid concepts on their sites, which was recognised when IPT Powertech was selected as the preferred power solution vendor of several towercos in multiple countries.
Our stellar achievement was the deployment of hybrid concepts on their sites, which was recognised when IPT Powertech was selected as the preferred power solution vendor of several towercos in multiple countries
Now, we are engaged with IHS in Nigeria on the largest project of Guaranteed Savings across the African continent. We are proud to be one of the largest suppliers of power efficient solutions and one of the main contractors ensuring the Guaranteed Savings Model.
The Guaranteed Savings Model is a risk-free approach for securing full economisation and savings for the operators and towercos. The model works by reducing the capex and opex to reach the optimal Total Cost of Ownership (TCO), while maximising the lifetime of the equipment.
TowerXchange: We understand IPT Powertech manages the energy equipment at a large number of Nigerian cell sites for IHS. How does the contract structure and operating conditions in Nigeria compare to those in Myanmar?
Khaled Habbal, VP & COO, IPT Powertech:
As I mentioned, IPT Powertech Group is engaged in Nigeria with the largest towercos on the major project of Guaranteed Savings across the African continent, supplying energy efficient power solutions—including management and long-term maintenance — and opex optimisation under a long-term contract.
As for Myanmar, we established our business there a little less than two years ago, by offering the Guaranteed Savings Model and T-ESCO Model. Myanmar has interesting potential for the future, and our growth there is stimulated by the need of this region for energy-efficient products and infrastructure services adapted to the local market’s requirements. Based on our agreement, all future expansion of the network comes as a kWh model which is effectively our T-ESCO model.
According to this model, energy is sold as a service. We guarantee that no capex, nor capex replacement investment, is required from the operator. The operator will only be charged based on a consumption scale of our own solutions. We will be responsible for all the investment in capex, opex, replacement of spare parts over time, and system management.
TowerXchange: Who defines your energy equipment selection policy? Is it driven by your clients, Ooredoo and IHS, or does IPT Powertech decide what equipment to buy and install?
Khaled Habbal, VP & COO, IPT Powertech:
Our selection of energy equipment is a two-phase process that run simultaneously: on one hand, our team undertakes extensive and thorough site surveys to gather useful information that will help us determine the appropriate type of energy equipment; in parallel, we conduct several meetings with the client to clearly understand their needs, then we crosscheck their requirements with the survey results to decide on the best course of action. The findings of the field study and the customer’s main demands are communicated back and forth with our IPT design team, who are always on standby mode to create customised solutions that fully compliment the client’s requirements.
Our positioning in the market as the complete solutions provider has provided us with the expertise to propose the right solution that the client is looking for, and we move forward with development, manufacturing the equipment, integrating it within the system, and maintaining our own solution for optimal performance. In short, we provide customers with a complete and hassle-free service, so that they can focus their attention on their core business.
A key element behind the successful relationship with our clients is our common focus on the Total Cost of Ownership “TCO”, and in particular that we work with IHS and Ooredoo on long-term contracts.
TowerXchange: Providing energy as a service in Myanmar and Nigeria is a costly undertaking. How is your business financed? Would you welcome third party investment to finance further deals of this nature?
Khaled Habbal, VP & COO, IPT Powertech:
One of IPT Powertech’s strengths is that it is self-funded, and this has given us an inherent autonomy when it comes to decision-making. Naturally, we take well-calculated risks, which is why we were able to grow exponentially over the past years without needing external funding. Being highly capitalised with good financial backing from commercial banks allowed us to internally invest in and finance the Guaranteed Savings and T-ESCO models. The introduction of the Guaranteed Savings and T-ESCO models has been extremely successful and has gained the attention of new clients.
In order to accommodate this exponential growth and finance further opportunities, we have recently started looking for external funding though third-party investment or other type of financial means.
TowerXchange: There is often a tradeoff between capitally intensive hybrid and renewable energy equipment with lower operating costs and longer lifecycles, compared to other proven DGs and battery combinations that might have less longevity but which might be more familiar to field engineers - what is your energy equipment investment philosophy?
Khaled Habbal, VP & COO, IPT Powertech:
Switching from the conventional solution to hybrid solutions has been an on-going dilemma in the last couple of decades for MNOs and tower companies.
Hybrid solutions were born from the need to reduce opex, which basically consists of maintenance expenses, fuel expenses and energy bills. When any of these expenditures increase — consequently increasing the opex — clients start searching for alternative power solutions. Therefore, we tailor our power solutions based on the country conditions and specificities such as solar and wind applicability, geographic and land conditions, accessibility to sites and the spread of sites and operation method.
When fuel prices skyrocketed in 2007-2014, the majority of the MNOs easily made the decision to switch to hybrid solutions and put an end to this dilemma. Nevertheless, it is not easy to identify the starting point of this switch since the investments and networks are huge. So the focus was on reducing the cost of diesel, which reached unprecedented levels and put a huge stress on MNOs on many levels: operation, logistics, vandalism, cost, and so on. Accordingly, we have designed solutions that reduce diesel consumption drastically. That was an appealing strategy since it eliminated the client’s fuel stress while achieving a short payback time, given the high fuel price back then.
IPT Powertech always emphasised to the clients the required resources to run the solution and provided all the training needed accordingly.
Each country and operation has its own specificities and accordingly, their own suitable solutions. Therefore, and after the fuel price went back to lower levels, MNOs and tower companies started to focus more on optimising the maintenance expenditures to control opex. More attention was given to technologies used inside the solutions and its compatibility to the operation and country. Available technologies in the market were not an issue by themselves since they are mature enough and tested, but the technical capabilities of the technical teams and the available business model had a more direct effect on the operation of the solution.
To conclude, each time and period has its own energy equipment investment philosophy. With the price of oil today and the need to reduce opex, we are developing solutions that answer our clients’ need.
We can assure that operational excellence is a strategy that proved successful across all times and this can only be driven by operational leadership and by continuously investing in our people.
TowerXchange: Finally, what lessons have you learned that might be transferrable in other countries where MNOs or towercos are considering partnering with ESCOs?
Khaled Habbal, VP & COO, IPT Powertech:
Based on our experience, we believe that the long-term partnership between towercos, MNOs and powercos is essential and driven to deliver the lowest TCO.
Our group is proud to be among the few global players that have presence in multiple geographies in different continents along with power system integration expertise putting us in a unique position to be able to offer this end-to-end solution eliminating the otherwise unavoidable blame game which is seen almost everywhere.
Therefore, the single point of responsibility is key to the success of outsourcing power to become a service.
