Something became evident during the efficiency roundtable at the TowerXchange Meetup Americas 2018: energy management and security remain the main challenges for operators in Central America—and they are demanding innovative solutions from both towercos and solution providers. This roundtable report highlights on how those energy and security challenges are manifesting in CALA, and some of the solutions being proposed to overcome those challenges.
Over 20 industry stakeholders and energy experts gathered at one of TowerXchange’s renowned roundtable breakouts at the TowerXchange Meetup Americas 2018 to analyse what keeps efficiency managers awake at night across the region. This dynamic discussion, which brought together MNOs, towercos, ESCOs, security experts and battery providers, explored some of the main efficiency challenges that the industry is trying to overcome.
Moderated by Jesus Eduardo Diez, Telefónica’s Manager for Efficiency and Planning across Central America, the session highlighted energy supply as well as security as the main operational concerns and many participants suggested that towercos should go beyond the steel and grass business model to offer power supply and maintenance services to their clients.
Understanding efficiency and its relevance for operators
What’s the real meaning of efficiency in a telecoms context? The central point of the roundtable was briefly addressed by the moderator on his opening statement. “Efficiency means reducing your opex, and in order to do so, cutting energy cost is absolutely critical in CALA.” Pretty straight forward, but it becomes trickier when you manage 5,800 towers in five different countries across Central America. From battery providers to torreros—as they are called in the region—all participants agreed on one point: power supply and security are fundamental aspects, and reducing energy expenses is critical in achieving efficiency.
Operators like Telefónica are currently exploring various alternatives to cut down their energy bills. Self-generation is one of the solutions and renewable energy—mainly solar—is helping MNOs to secure power supply and reduce their site costs. Telefónica has achieved a 10% opex reduction by deploying 320 solar panels in Nicaragua, an initiative which aligns with its corporate policy. The company has a 50% renewable generation target by 2020, and aims to achieve a 100% by 2030, a trend becoming more and more popular among global telecom giants.
Solar seems to be the most reliable solution compared to wind, an option which is perceived as unstable and seasonal. However, solar still requires a complex hybrid system made of panels, batteries as well as a backup diesel generator that will ultimately require an expensive and complicated maintenance process. Additionally, installing solar panels requires more space and therefore significant extra investment from the operator. Both vendors and MNOs are now testing solutions to optimise the space and 3D solar panels are arising as an interesting alternative. Ironically enough, replicating the vertical model used by towers can become the optimal solution in terms of space use when deploying solar.
Energy generation though is far away from the core business of MNOs, who have been forced to explore those alternatives in order to save some pesos and relieve their balance sheets. In an ideal scenario, infrastructure operators should guarantee supply and energy maintenance on site, which would make operators life significantly easier, as it was agreed by several panellists. “We don’t really want to go there and we expect towercos to be more proactive and include power supply solutions along with the infrastructure,” stated one of the operators around the table. “Our business is not energy generation. We are energy consumers and we need to reduce the opex we allocate for that.”
In addition to the above, operators also need to monitor energy consumption for each of their sites; an exercise that can become a real hurdle in some CALA countries! In fact, some power suppliers refuse to digitalise their statistics and won’t provide digitalised consumption rates to operators. “In some areas we receive 150 different physical invoices and it’s almost impossible to have a precise record of the energy consumption in 20% of our regional operations, which is massively affecting our efficiency targets,” claimed one of the operators.
Most participants agreed that towercos should embrace additional services and go beyond leasing vertical real estate. Often in this region, operators are assuming all the risks and the market requires a shift. Towercos might want to consider offering a complete solution, which will drive energy efficiency but also overall operational efficiency.
Towercos, energy suppliers and vendors: exploring potential synergies
On the other side, evolving to provide power services is not an easy mission for regional and international towercos, and many towercos in the Americas remain reluctant. CALA is a very diverse market and each country is facing different issues including high electricity prices, tricky regulatory scenarios and political volatility that are posing challenges to their business and capabilities.
Complimentary equipment is another potential solution: efficiency can be improved by reducing the amount of times you perform maintenance site visits, which are one of the most expensive operations in the field. Additionally, modern equipment can reduce the amount of fuel used and solutions providers need to bring innovative and efficient solutions to the table.
Energy maintenance is expensive and complex, therefore collaboration and dialogue between vendors, operators and towercos is critical. In many cases, operators contract third parties to deal with the equipment maintenance, but those companies are not really familiar with the onsite tools. A dialogue is hence necessary and vendors might need to take a more proactive approach. Every battery or air conditioning system has different features so they have the power and responsibility to educate their clients on its uses and maintenance requirements.
Energy as a service could be the solution in many CALA markets, but are towercos willing to provide a full service that includes energy supply, management and maintenance for a fee? Again, dialogue and synergies between ESCOs and towercos could lead to innovative and favourable solutions for operators and ultimately push the market forward in Latin America.
Increasing security, reducing expenditures
Security has always been another major headache for the industry both in Central America and globally, and it is impacting onsite operational efficiency all around the world. Vandalism and burglary are a continuous threat to telecom infrastructure and everyone in the ecosystem is seeking innovative solutions to protect their property, prevent robberies and reduce damages at every level of the network supply chain.
Service providers, vendors and security companies who joined the discussion are focusing on this issue and currently testing alternative solutions to prevent site intrusion and thefts. Concrete cabinets, Bluetooth locks and underground vaults were some of the innovations highlighted, but replacing lead acid batteries (with high re-use value) with lithium batteries was the most commented on and popular alternative.
Operators and towercos are progressively replacing acid lead batteries with lithium batteries, which have proven less appealing for thieves. Acid lead batteries can be used for domestic applications such as boats and motorcycles and the sulphuric acid inside is used to process drugs in the region, so there’s a high risk of theft. That problem has disappeared with lithium implementation. “We have allocated around 1,000 lithium batteries in Central America and we haven’t experienced a single robbery,” commented one of the battery vendors, who also guaranteed the technology would provide better performance on hybrid, open applications.
“But what about the cost?” a participant spontaneously asked. Effectively, lithium batteries require a larger initial investment, but they do have a longer life and require very little maintenance, which at the end of the day is also translating into efficiency as mentioned earlier.
How solution providers fit into the equation?
Finally, we can’t forget about the role of vendors because they are the ultimate provider of all the equipment’s required onsite. Many roundtable participants pointed out that frequently, the onsite employees and maintenance managers themselves are responsible for a considerable amount if pilferage. “The onsite manager would come to the tower to refill the battery. Then he will take a picture and extract the liquid right after to sell it again,” said one of the experts. Now some battery providers are developing special equipment that won’t allow employees to extract the liquid, an important guarantee to the end user. And similar systems are being applied on solar panels to prevent robberies.
Business opportunities are arising for towercos, vendors and ESCOs in countries like Chile, where climate instability forces MNOs to have a reliable back up system in place in case of a shutdown or climate catastrophe. Security is definitely a priority, but securing supply is an additional challenge in some remotes areas and particular CALA regions.
Food for thought
The roundtable held at the fifth annual TowerXchange Meetup Americas highlighted some of the critical concerns of mobile network operators when it comes to partnering with towercos in both power and security assurance. On the other hand though, with the exception of very isolated cases, towercos seem reluctant to get involved beyond provision of structures and real estate.
TowerXchange wonders if there is an underlying opportunity for innovative towercos to explore synergies with their customers and a new, enhanced level of service offering which might result in a more complex business model but also, on the other hand, open up more business opportunities and revenue streams.
One thing is clear though, a couple of years back we’d hardly be able to engage in discussions related to power or added services with towercos while nowadays, the trend has shifted and some players are paying closer attention to the demands of their customers. Could this be the beginning of the power + tower business model taking root in CALA?
