edotco keeps driving growth and innovation in its backyard

2018 has been a successful and dynamic year for edotco at home. The infrastructure innovator achieved a 30% year-on-year growth nationally and the acquisition of Yiked Bina has driven its tenancy ratios up to 1.8x. While the company continued to deploy traditional macro sites, over 50% of its new builds last year were infill lamp-poles and special structures, and they expect demand to keep moving towards new solutions such as small cells, street furniture and fibre integration as the country prepares for 5G transition. In this interview, edotco’s Chief Regional Officer in Malaysia Wan Zainal analyses last year’s performance, offers his views on the local market and shares some key insights on new solutions and edotco’s vision for the near future. 

TowerXchange: Would you introduce the tower market in Malaysia and the role edotco plays in that market?

The tower scene in Malaysia is at an interesting phase; while it is a mature industry, the market is still growing with about 1,000 to 2,000 new structures, including street level furniture, being put up every year. This is driven by operators needing to support current 4G requirements and to be 5G-ready, as well as meet the constantly growing demand for higher capacity and speed as data usage increases. More infill solutions will be required in order to meet all these requirements.

edotco owns and manages close to 10,000 towers across the country.  We are firm advocates of agile, shareable infrastructure that meets the connectivity and capacity demands. In addition to enabling connectivity through towers, we also fulfill capacity requirements via BTS hotels, in-building systems (IBS) and solutions, which allow for the quick setup of the MNOs’ hardware, are shareable and provide room for upgrades if and when necessary. Co-location is very much our core value proposition for the industry to help customers reduce cost of network operations and achieve operational excellence. 

TowerXchange: How would you characterise the current state of 4G rollout in Malaysia, and how much impact have the newer LTE operators have had? 

4G Rollout in Malaysia has registered rapid growth in the past few years with the main, established operators claiming coverage of more than 90% of the population. At the same time, the newer LTE operators have been aggressive in deploying new sites to extend their network coverage nationwide. 

We believe that this trend will continue for the next few years as the increased demand for high data capacity, especially in densely populated, urban environments, will require more in-fill sites.

TowerXchange: What is the extent of fiberisation of edotco’s Malaysian towers, and how does that compare to the other towers in the country?

One third of edotco’s portfolio in Malaysia is already integrated with fibre to provide a complete suite of services to customers, with relevant options to cater to their individual preferences and needs. Overall, the tower infrastructure in Malaysia is 30-40% fiberised. 

As it is crucial for the nation to be equipped with the right telecommunication infrastructure, edotco Malaysia will be looking to fiberise more sites to increase the link capacity and user experience. This will also support the growing demand for capacity and bandwidth in the backhaul system towards 5G readiness. 

TowerXchange: 2018 has been a good year in terms of build to suit — organic growth — for edotco Malaysia — are you primarily building for Celcom or also for third parties? Can you give us a sense of the build volumes and how they compare to previous years? 

While Celcom is our anchor tenant and most of our new builds in 2018 were for them, we are seeing an increase in demand from other operators as well. We are an independent towerco and we work with any party who entrusts us to build, operate or manage telecommunications infrastructure for them. 

Malaysia is experiencing high data growth, especially with 5G around the corner. New sites are still required to increase coverage, offload capacity and reduce latency. In 2018, edotco Malaysia grew around 30% year-on-year. However, beyond build volume, an interesting observation was the changing trend for infrastructure type; over 50% of our new builds last year were infill lamp-poles and special structures. We expect this trend to continue. 

TowerXchange: What site typologies are you building – for example what is the mix of traditional macro sites versus rooftop poles, lamp-posts, DAS and other innovations like BTS hotels? 

It depends on the project needs, the requirements of the customer and site availability. We evaluate the suitable solutions to deploy based on the brief and desired outcome as well as site acquisition.

For instance, for skyline harmonisation and aesthetic purposes, we would build camouflaged towers or lamp-poles instead of a macro tower or rooftop structures. In remote locations, a traditional 3 or 4-legged tower would still be rolled out. 

While towers remain important for us to improve connectivity levels in the country, we are also looking ahead to fulfilling capacity requirements to support the nation’s digital goals. We do this through the implementation of cell sites at street level such as panel antennae, small cells and other IBS in various projects, from transportation hubs, to stadiums and even smart cities.

The top three solutions that edotco Malaysia is focusing on aside from the traditional tower solutions are: 

1. In-building system (IBS) 

2. Lamp-pole solutions 

3. Street furniture 

TowerXchange: What exactly is a BTS hotel? In what typical scenarios have you deployed BTS hotels and why?

A BTS (base transceiver station) Hotel is a solution that integrates the benefits of fibre, common antenna and towers. It aggregates fixed and wireless traffic resources into a single location to provide shared network connectivity to the operators. The solution is ideal in townships that emphasise skyline harmonisation for space-constrained areas, while promoting shared infrastructure. 

In terms of capital, it provides up to 35% cost savings compared to deployment of a traditional site. This is achieved via a Plug & Play model, where operators are not required to invest in microwave equipment for backhaul, thus saving on bandwidth lease.

TowerXchange: Lets talk about the other primary growth driver, co-location sites — has it been a similarly good year for lease-up in Malaysia? Would you mind telling us about your current tenancy ratio and how you’ve achieved that success?

2018 has been a good year for edotco Malaysia. With the consolidation of Yiked Bina into our portfolio, our tenancy ratio has risen to the 1.8x mark and more operators are experiencing the value proposition of co-location. Kudos to the team’s diligence, tenacity and drive to deliver on our commitments to customers.

Our engineers work tirelessly around the clock to ensure the right solutions are deployed on time and thereafter work closely with our customers to optimise within the stipulated deadline, with minimal disruption to service. We are motivated to take on challenging projects and serve our customers with the goal of long-term partnerships. This is our strength that has helped set the benchmark for edotco to lead the industry.

TowerXchange: Congratulations on the acquisition of Yiked Bina! For the benefit of readers who don’t know what the State-backed towercos are in Malaysia, please explain the role they play. And can you describe some of the drivers behind the acquisition of Yiked Bina towers?

States in Malaysia progress at different pace and have different ICT aspirations. To ensure that telecommunication infrastructure development keeps pace with the state’s vision, they appoint companies that fulfil their requirements and that of the regulators. Typically, state agencies would also hold equity interest in these companies. 

In terms of the deal, we are always looking out for growth opportunities both organically and inorganically, and Yiked Bina synergised well with edotco’s business and value proposition. The acquisition also enabled our expansion in the northern state with readily available towers. 

TowerXchange: For the benefit of suppliers reading this, can you give a quick overview of edotco’s Malaysian portfolio in terms of on/off/unreliable grid connectivity, remote monitoring and typical service intervals? And what are your remaining priorities in terms of operational improvement?

edotco Malaysia’s portfolio consists of almost 4,300 owned towers, serving multiple operators in the country. The Malaysian industry has been growing rapidly in terms of infrastructure development and technology advancement in the last 20 years, helped by a stable power grid. 

Of our 4,300 owned towers, over 98.5% of them are on-grid, with the remainder being off-grid or with unreliable grid connectivity. We place emphasis on remote monitoring to proactively detect abnormalities at our sites in real time to enable quick response. More than 90% of our sites are equipped with remote monitoring capabilities. 

As for service interval, we conduct it on a quarterly basis. Our priorities for improving operations are in four key areas of safety and health, reducing opex to achieve operational excellence, increasing remote monitoring to at least 95%, and focusing on data analytics to increase efficiency of fault detection and improve reliability of service. 

TowerXchange: Finally, please sum up your vision for the future of enabling connectivity in Malaysia.

As MNOs gear towards preparing for 5G, there is a growing need to increase capacity and speed. In order to address this, fiberisation and densification are required. The installation of more IBS to complement macro sites is a solution. We envision greater densification in Malaysia to support the ever-increasing appetite for data consumption. Densification signals the shift to deploying more small cells and innovative structures such as panel antennae instead of traditional sites, especially as infill solutions in urban areas. 

This shift to wider use of small cells also enables the country to be prepared for 5G implementation on the horizon, as they are able to support greater capacity and speed required to power the technology. In line with this, edotco is reassessing and improving our engagement with stakeholders such as MNOs, municipal councils, authorities, and landlords as we collectively focus on supporting Malaysia towards achieving the nation’s digital goals.