How Irrawaddy Green Towers will remain the largest towerco in Myanmar

A few months ago, David Venn was enjoying life in the sunny south of Spain while advising American investors and towercos. Now, he is leading the biggest telecom infrastructure provider in Myanmar and despite the merger of two of his biggest competitors, he is not planning to let that number one spot go away! During our last visit to Yangon, we sat down with Mr Venn to learn how he ended up as CEO of Irrawaddy Green Towers (IGT) and how he is coping with the innumerable challenges of his new role while setting goals and targets for IGT’s future. 

TowerXchange: A few months ago, you were enjoying life in the south of Spain and now you are leading the biggest towerco in Myanmar. Can you tell us where are you coming from and how you ended accepting this exciting challenge?

I have lived all over the world in my career, from Hong Kong to the United States passing through Malaysia, Indonesia, Pakistan and Australia. I have really loved the travel and the opportunity to experience different cultures. During the last 20 years, I have worked mainly in emerging markets and now I find myself in Myanmar. I was CEO of Vodafone in Ghana and Celtel in Zambia and I spent the last three and a half years in Nigeria. While with MNOs, I have built hundreds of towers and have also been a customer of numerous tower companies.

Before moving to Myanmar, I was based in Spain working as an advisor to private equity funds and an American-based towerco that was looking to invest in Africa. This helped me to further understand the towerco business model and caught my interest. Then, unexpectedly, the opportunity with IGT came up. I did not know much about Myanmar but in the true spirit of how I have lived my life and career, I had an open mind and evaluated the possibility. I met the shareholders, who I seemed to get on well with and after analysing the business, I decided to take the role. I thought that my background and experience with operators could bring something unique and make a difference so, in March 2018 I moved to Yangon, where my wife and I have now made our new home. 

TowerXchange: You have spent most of your career working in emerging markets. What are the differentiators of Myanmar compared to other regions you have worked in?

I have enjoyed every country that I have lived in, even those often described as “more challenging”. In sequence these include Hong Kong, Australia, Malaysia, Indonesia, Pakistan,  the United States, Zambia, Ghana, U.A.E, Nigeria and now Myanmar. 

Each country has its own operating environment, its own character and particular challenges. When I look at Myanmar and compare it to my other experiences, I see a very unique and interesting place. Some of the challenges are similar to the ones you see in many emerging economies, including a developing regulatory environment as well as the need to build constructive relationships with partners and Government. However, each market tends to have something unique that stands out and differentiates it from the others. In the case of Myanmar, it is the community spirit. This country hast a very strong sense of community at all levels in society and this has a big impact on our business.  

As an example, if you have a noisy generator or your activities cause disturbance, you are going to hear about it very quickly. The sense of community goes all the way through society here, even at the high ends of government. I have not seen this before in other markets, at least not at this level. As mentioned, this has a large impact on business activities, especially if you operate more than 3,000 towers across the country and have to work closely with 3,000 communities and landlords. Community engagement is a huge strategic issue for IGT. 

TowerXchange: After a long career working for different operators, this is your first experience as a towerco executive. How do you think that your MNO background can better position you to lead the company?

I have been in the telecommunications industry for more than 35 years and have worked for operators most of my career. I have run fixed and mobile businesses, broadband companies, 4G, cable TV companies and even an international gateway carrier. A tower company is just another part of the telecommunications sector. 

For many years, we did not have tower companies. We were building our own towers and we used to own, operate and maintain our own sites. I have done all the tower maintenance and management from an operator perspective, so I feel I have a strong link to my customers and understand their needs. 

When I was introduced in Myanmar, a number of IGT’s customers were interested to understand why I had “changed sides”. They have all been very open with me about their issues and challenges, as if I were one of them. I hope that my experience will help me understand the needs of IGT’s customers and appreciate how much they rely on their infrastructure partners. I am hoping that this insight will lead to innovative solutions and approaches that will be a win-win for IGT and its customers.

TowerXchange: IGT is the biggest towerco in the country. How many towers do you have on the ground and what are your development plans for 2018-2019?

Indeed, we are still the biggest towerco in Myanmar. Earlier this year we commissioned our 3,000th site and we are on-track to build 250 new towers in 2018.

Following last year’s downturn in demand, for build-to-suit sites, a number of tower companies in Myanmar closed or significantly reduced their in-house construction teams and focused their attention on maximising their co-location business. We evaluated that strategy but decided that we wanted to keep building sites and decided to keep our in-house construction capability. 

IGT’s construction team has built more than 3,000, sites and it has gained a vast experience with site acquisition, permitting and working with communities. We are also doing pretty well with co-locations and are working to increase the lease-up rates across our portfolio. 

TowerXchange: Our visit to Myanmar confirmed that power is still a big headache for the industry. What innovations and solutions are you exploring to overcome your energy challenges?

As mentioned, we have more than 3,000 sites but more than 65% of these don’t have direct access to the grid. So, for these sites we have to rely on generators, batteries and hybrid solutions. 

Grid coverage is actually expanding in Myanmar and we have a programme to get us connected as soon as possible. However, we will still have lot of sites that will not be connected for quite a long time, so we are actively seeking reliable and economic alternatives to power our towers.

Hybrid solutions are the future and we have already installed solar systems at some sites, mostly in the northern part of the country where the weather is more favourable. We are working closely with our customers to implement solar across our towers and we already have 100 sites powered by solar with one of the operators. The typical model with around ten panels next to a tower is not enough to cover our current loads. With 4G and a couple tenants on your tower, you will need 6-7KW of power, 24 hours a day. To generate that, you need at least a 20KW solar plant. Solar this size would require a decent size field, so securing enough land becomes an additional challenge.

We are also working closely with micro-grid companies. They have an interesting business model whereby an independent company develops a solar farm to provide power to local communities but has the tower company as its main tenant. Solar is the preferred alternative, but not the only one. In Myanmar, many communities live next to a river and some of them are actually using small, self-contained hydro plants, so we are looking at that option too.

In Myanmar, most of the tower company contracts include fuel costs as a pass-through. So, within reason, the operators pay for whatever tower companies spend on fuel. This business model does not provide enough incentive for towercos to explore cheaper solutions and reduce their energy costs. Now that operators are feeling the competitive squeeze, there is more pressure to reduce opex and I believe there will be win-wins through energy efficiency programs. 

TowerXchange: Most industry experts agree that towercos should go beyond towers and expand their business model. Are you willing to lead IGT to explore new routes such as DAS, small cells and fibre?

During our recent strategic review, we looked at fibre. If you want to get into fibre in an emerging market like Myanmar, you need to go to the main cities first. There are already a number of fibre providers in Yangon and I was very surprised about the availability of data services in the main markets. I was also amazed to see how much data is consumed in Myanmar and that, for the operators, data revenue already exceeds voice revenue. 

Operators will need to rollout more 4G and improve both coverage and capacity, especially in major cities. They all are going to need fibre to their towers because microwave is not going to be able to cope with the huge data demand. 5G will arrive in the next few years and this, coupled with a huge and growing demand for data, will result in larger backhaul pipes.

Small cells, in-building solutions and monopoles in cities are also great opportunities for towercos.

TowerXchange: Myanmar now has dozens of towercos but some industry experts believe that the number will dramatically decrease in the next couple of years. What are your views on that and what will be IGT’s role in consolidating the market?

Our business has done very well to get to the number one position and we want to maintain that lead. I agree that there are too many small tower companies in Myanmar now and many won’t have the resources to operate in the long run. More recently we have seen a few small companies that won build-to-suit deals but they don’t have the scale to operate these sites after constructing them. Many of these companies are candidates for consolidation, but it needs to be the right fit for the buyer. You cannot buy just to increase your numbers; the assets need to add value to your portfolio and your shareholders. I believe that in the next couple of years, the number of towercos - currently around 12 - will be down to around three. Some companies will be out of business and the biggest players will absorb the others. We expect to take part in that consolidation so we are looking at opportunities. There are exciting times ahead!

TowerXchange: Next December you will attend your first TowerXchange Meetup Asia in Singapore. What are your expectations for the event and what are you most looking forward to at the Meetup?

I really want to learn from the industry experts as much as I can and see what others are doing. I have always been a very creative and innovative manager and am looking for new ideas and inspiration. I hope to return with a better understanding of new technologies, innovative approaches and different business models.