PowerCom: working to boost Namibia’s tower inventory by nearly 50%

In a short space of time, PowerCom has transformed the Namibian tower market. Since 2016, Alisa Amupolo has been the Chief Executive Officer of PowerCom – her focus on professionalising the lease up of towers and bringing focus to the efficiency of capex deployment has reoriented the market. Owning around 40% of Namibia’s towers, PowerCom is investing in build-to-suit projects and energy innovation to bring real changes to this market of 2.8mn mobile subscribers. TowerXchange speaks with Alisa to discover her story, PowerCom’s origins and the next steps in filling the gaps in Namibia’s coverage map.

TowerXchange: First please introduce yourself – how did you get into the tower business.

I have been in the communications industry since 2004. I started in radio, and later moved into broadcasting, but since 2007 I have specialised in communications technologies, following a Masters at Leeds in the UK. During the Masters, my thesis focused on telecom market liberalisation and benchmarking lessons for Namibia. We also spent time studying European communications regulation. In 2011 I returned to the UK for further study at London Business School to augment my industry skills with a business skill set.

I have always been interested in how technology can be harnessed to reach the masses. I always say that business is my second love and communications is my first, and I am very privileged to work in this sector.

From 2009 to 2012 I worked for the now defunct Namibia Communications Commission (NCC) as it created a new regulatory dispensation under the Communications Regulatory Authority of Namibia (CRAN). At CRAN we worked towards the creation of a new service-neutral licencing regime which enabled Namibia’s communications companies to be licenced in a technology-agnostic way and also facilitate new market entry; enabling them to experiment with LTE or satellite services or whatever they think will work. I used the experience gained from studying in the UK to inform Namibia’s ICT sector reform initiative and to operationalise the communications Act, which made provisions for the establishment of CRAN, and established licence fees regulation to fund the regulator and develop universal service obligations for rural and underserviced areas, amongst other objectives.

After I left the regulator I launched a tech start-up to bring better information and digital solutions to the whole of Namibia, but found I couldn’t fully access my market because there was a lack of infrastructure and robust connectivity. That’s when I applied for the CEO job advertised at PowerCom towards end of 2015, and eventually emerged victorious and assumed duty on 15 March 2016.

TowerXchange: Tell us more about PowerCom’s history, how does it fit into the Namibian market?

PowerCom is owned by one of Namibia’s MNOs, Telecom Namibia, which in turn is owned by Namibia Post and Telecom Holdings (NPTH), which is a state entity. The other two operators are MTC, also a partial state entity, and Nampost. PowerCom is Namibia’s first dedicated ICT infrastructure player with a network facility license from the regulator CRAN.

Our day-to-day business is deploying capex and opex to maintain and expand our footprint and to bring new tenants onto our existing towers to reach an optimum tenancy ratio. Prior to 2013, PowerCom operated as an MNO and was originally owned and operated by Telenor, however it was eventually sold to Orascom before subsequently being acquired by Telecom Namibia for its mobile license and equipment.

After PowerCom ceased operating as an MNO in 2013 it became an ICT infrastructure provider. In addition to its tower portfolio of around its own 100 towers, the entity acquired 198 towers from Telecom Namibia. Today PowerCom operates a portfolio of 300 towers and is in the process off aggressive Capex rollout.  Prior to 2016, PowerCom had done relatively little to increase tenancies and find new customers, and as of today there is a huge appetite for investment in new capex roll out and lease up opportunities.

After I joined in March 2016, the shareholders’ objective to develop PowerCom as a dedicated infraco business was made clear in its business objectives. By July the company had repositioned itself as a dedicated infrastructure provider with a new focus on increasing sharing and deploying new infrastructure. To encourage independence from Telecom Namibia, all our capex is funded internally with no reliance on our shareholders for financing. We are exploring other options for investment partners to undertake aggressive capex rollout to cater for all dark spots in the market.

TowerXchange: How many towers are there in the country? Roughly how many does each MNO own?

PowerCom owns 300 towers, with 11 more in the pipeline. MTC owns over 400 towers and 38 are still owned directly by NBC. Telecom Namibia is our anchor tenant and key client and MTC, the largest mobile operator, is our second largest client. We have helped jumpstart MTC’s move towards universal service known as “081every1” phase 1 by supporting them with our existing towers.

We believe there is a need in the country for more shared infrastructure. The regulator is however working on a market need analysis to identify the gaps which new services and new infrastructure needs to fill to achieve universal service. Whilst continuing with our new capex roll out efforts, we are very enthusiastic about the move towards universal service as a license condition. As soon as the regulator has identified the required sites in underserviced areas we will be looking at a bidding process to build out the rural sites required and all underserviced areas ideally on a colocation bases.

TowerXchange: How is PowerCom situated in the market? What is in the future for tower development in Namibia?

The independent tower market in Namibia is evolving and presents ample opportunities. The geographical land space is vast and the terrain is harsh and population is scarcely dispersed it can be challenging to deploy greenfield to reach 100% coverage. Looking into the future, I don’t think a simple model of co-location on macro towers alone will be sustainable and Namibia will require diversification within the vertical market i.e at school buildings & hospitals. Therefore we have expanded into rooftop sites and are leasing space to tenants on water towers and elevated buildings in various urban areas. The sites can require reinforcement or additional space creating for new tenants, but they work well for our clients’ dynamic deployment needs.

In terms of ownership, both MTC and Telecom Namibia are NPTH subsidiaries with the former in the process of being listed. There is a strong sentiment at policy-maker level that a national infrastructure company should come to fruition and we are positioning ourselves to be that body, currently because of our ownership structure, it is sometimes harder for PowerCom to appear like the neutral ICT landlord than we would like. Over the last few years we have put in place governance structures to ensure we act neutrally and have independent directors, but we would like local investors from private equity and pension funds to explore investment opportunities. We already operate objectively and impartially, but there is a perception which private investment would help solve, and improve outcomes for everyone.

The regulator discourages new operators deploying duplicate infrastructure. As a pre-requisite to becoming an MNO in Namibia CRAN requires a letter of intent to share infrastructure. So we are well placed to satisfy the market’s appetite for infrastructure sharing from existing MNOs and any new entrants.

TowerXchange: Operations in Namibia are very lean, how do you prioritise your opex to protect your margins?

We have moved from a reactive approach to maintenance to a more proactive and preventative maintenance approach. This has made our maintenance planning much more robust. Not all of the maintenance is intensive, sometimes a job as simple as repainting a tower to protect against rust can make a big difference. But we also do restrengthening work to prevent structural issues developing and sometimes it is necessary to take down a tower to rebuild and overhaul it, although luckily this is rare and our towers are in good shape overall.

Most of our towers are of lattice structure but we also have a few concrete towers, some monopole, some guyed masts, and of course the water towers and rooftop sites I mentioned earlier. Our proactive maintenance has advantages for reducing opex, but it is also good for our balance sheet as a better maintained tower is also a tower that depreciates more slowly.

TowerXchange: How would you characterise your energy investment strategy?

Currently, 99% of our sites are on-grid and the grid is relatively stable in Namibia, and unlike in much of Africa. However our clients do deploy hybrid solutions to hit reliability targets and for redundancy. The energy situation in Namibia has historically been quite secure and predictable, but that has changed recently, and we are exploring more options such as a reseller license to be able to provide more robust energy solutions on sites. Namibia imports around a quarter of its power from South Africa and with declining reliability, everyone in Namibia is having to reassess their energy strategy. To illustrate, our clients have installed gensets at some key sites, while historically we have only had two towers which rely solely on solar.

PowerCom has owned and controlled the whole yard space for each tower. But while our clients provide their own power at the moment, we are exploring smart energy solutions. Thanks to last year’s TowerXchange ESCO Report we have been able to take a fresh look at our power strategy. We are exploring a partnership with an ESCO to introduce power offering on site and to build up our multi-tenant capability for energy leveraging on multi-tenant experience from tower co-locations model.

TowerXchange: Please summarise your vision for the future of your company.

We are looking at market consolidation in Namibia and our goal is to seize the opportunity to become Namibia’s dedicated infraco. We would like ICT players to move away from deploying their own capex into new towers and to share infrastructure more, and we are already delivering that for them to a great extent, however there remain gaps in the market which we would like to address. We are engaged with Telecom Namibia, MTC and MTN about their new plans and are working on how sharing infrastructure can speed capex deployment and reduce costs associated with greenfield deployment, like unneeded environmental clearance.

We can deliver value to our clients through greenfield deployment and striving towards a superior capex efficiency, coordinated build-to-suit programmes, and by improving the execution of the co-location model and lead time. There is a fantastic opportunity for us in Namibia: the fixed asset market is burgeoning, infrastructure sharing is strongly favoured by operators and the regulator, and we are excited to play our role and save Namibia’s operators money and make life easier for them.