Ausonia: adapting telecom energy solutions to the varying needs of clients

Ausonia is bringing their 86 year-long heritage to the whole world, with thousands of units deployed in Europe, Asia, LATAM and Africa. Ausonia is constantly innovating and upgrading the energy systems they provide and the business models through which they are supplied, offering both opex and capex models. TowerXchange talks with Giuseppe Taranto about Ausonia’s global footprint and how they differ from their competitors. 

TowerXchange: For those that don’t know Ausonia, please introduce your company – where do you fit in the telecoms infrastructure ecosystem?

Ausonia is among the leading genset manufacturers in Italy and has been active since 1932. We have a very long history and experience in the industry and work in many sectors, telecoms is a major area but we also work in healthcare, military & defence, oil & gas, transport & travel and utilities.

We have a very deep and wide knowledge of the solutions needed in telecoms. Because of our long history we have seen how demand has changed since MNOs entered the world. We work with all major MNOs in Italy and have customers worldwide too. We are one of the reference companies used worldwide for MNOs and towercos to benchmark their performance. Also, because we are smaller than other major genset manufacturers, we work closely with our customers to customise our solutions. 

An additional advantage to Ausonia is that in 2003 we created our own ESCO, Medipower. Medipower provides energy on a pure opex model to all MNOs in Italy for their off-grid sites. We design, produce and deliver the gensets, we install, maintain, refuel, remotely monitor and control them. Medipower then just charges the MNO a monthly fee based on kilowatt-hour consumption.

TowerXchange: What is your footprint in Africa, where are you active and how many units have you already deployed? 

We have deployed several thousand units in Africa so far. The most common unit deployed is from our AC gensets ranges, which are being used in Mozambique, Tunisia, Morocco, Sudan, Ethiopia, Algeria, Libya and Egypt. We have also deployed several units of hybrid systems. These are typically DC gensets with integrated batteries, but we also sometimes integrate them with solar. We provide these solutions in Gabon, Zimbabwe, Morocco and Liberia. We are targeting other markets like Angola and the DRC. Africa is a major growth target for our business as the energy and power requirements there are large and growing. 

Many of our units are deployed in a capex model to MNOs and towercos, who operate them themselves. In some cases our hybrid solutions are being offered under an opex model by other ESCOs active in Africa. For example, in Gabon, Energy Vision are using Ausonia units. We are active in supporting those that deploy our systems using an opex model to get the best deal with their customers, and ensure the best performance from our units. 

Ausonia is not a giant company, so we see no conflict of interest in ESCOs deploying our technology, even though we offer them in an opex model too. We are happy to expand our opex offering, but we have our feet on the ground, and are happy to support other ESCOs in their markets while we target sustainable growth ourselves. Africa is a big market. 

TowerXchange: How do you configure your solution differently for off-grid sites versus poor-grid sites? In what ways do you need to address off grid sites differently to poor-grid sites?

In both cases the target is to maximise uptime and maximum power availability for the site. For Ausonia, the appropriate technology and system to achieve that are chosen in open discussion with the customer. Both Ausonia and our customer will have an idea and we will work together to find the right solution and satisfy their expectations.

For sites on poor grids, more and more customers are opting for lithium ion batteries to take advantage of their fast charging and long life cycle. The cost of lithium ion batteries has also dropped significantly over the last three years. Off grid sites tend to be different, especially where customers want to use solar or other renewable energy solutions. You need more substantial energy storage, which means higher capacity gel or lead acid batteries, which are still cheaper than lithium ion batteries. 

TowerXchange: You work with both MNOs and towercos, have you noticed any differences in their requirements? Do both towercos and MNO tower divisions take the same long-term approach to power investment?

The main difference is the speed. Towercos respond more quickly than MNOs. MNOs can take up to a year to identify a problem, evaluate solutions, work on the project and execute it – sometimes longer. Towercos want to see results quickly. It is understandable: MNOs have more than towers and power to take care of in their business. They need to increase subscribers, increase revenue, upgrade their networks, so power should not be on the senior management’s mind. But towercos own infrastructure, so they are quicker. Every inefficient cell site weighs more heavily on a towerco. 

However, MNOs are more interested in our ESCO model than towercos. In some markets towercos manage only grass and steel and don’t have anything to do with power, and it is the MNOs that are really interested in solutions which can reduce their costs. But in Southeast Asia some of the biggest towercos like edotco, or those in Myanmar, are managing power assets and they can be keen to evaluate an opex-based proposal for power supply.

TowerXchange: Please tell us your footprint outside Africa in Southeast Asia and LATAM and what services do you offer?

We have good footprint of units deployed in South America (Chile, Argentina, Panama, Trinidad & Tobago), and are also in negotiations with a towerco in Latin America for the supply of DC gensets. Across Southeast Asia, we started a few years ago delivering good numbers of units too, from Philippines to Malaysia, where we recently started working with a local partner to supply the power assets on an opex model. We are supporting them with all the operations, maintenance and monitoring and our partner offers energy as a service to local MNOs. This is a new challenge for us but we will be deploying 250-300 units in this project over the next 12 months.

In Latin America our business is currently done through a capex model, not opex. We have local partners who are responsible for fuelling, services, maintenance and so on. Co-operation with a local partner enables us to offer the best product, combined with a responsive and local service. In Chile, for example, we are working with Entel and have almost a hundred hybrid solutions in place incorporating our DC genset, lithium ion or gel battery and solar. Their power solution has been also designed by Ausonia with a dedicated space capable to house and cool the active equipment they had to install, so Entel only had to build a fence and a mast.

TowerXchange: You are now providing power as a service in Southeast Asia, there are a variety of business models for this, please describe your value proposition and contract structure – for example do you charge a fixed monthly fee or a variable fee based on kWh consumed?

We are providing our Southeast Asia ESCO model to a local MNO in Malaysia on their rural sites. We offer a fixed monthly fee based on site survey which assesses power requirements, refuelling costs, maintenance requirements and other operational items. We then charge a monthly fee for power which is variable depending on increases in power consumption. These are off grid and we have specified and installed the whole energy system. 

TowerXchange: How is your ESCO proposition financed? What does that mean about your ‘digestive capacity’ in terms of the number of cell sites you could readily finance the energy equipment at in Africa?

Financing depends on the credit worthiness of our local partner as they are the main interface to the final customer. The credit worthiness of that final customer is also important. The political and commercial risk of the country also matters. 

There are two ways in which we help finance our proposition. The first is to through leasing our products to our customers, which is supported by a three or five year contracts. The alternative is long-term financing which Ausonia can provide through a dedicated export financing programme from the Italian government. Financing is agreed project by project, and we offer no general terms because every project is different. 

TowerXchange: Any advice on pitfalls ESCOs should avoid when investing in energy for telecoms?

The most important thing is to get very good information about the sites you are going to serve. You need to know the power consumption and the site configuration and account for any changes in the future. Through the term of a five year contract you have to account for the possibility of extra tenants or next generation technology being installed. Every site will be different and you must account for that.

Once you have surveyed your sites, you can design the best offering which reduces your total cost of ownership and write the most appropriate contract for you and the customer. ESCOs need to be run in a profitable way. If you get the calculation wrong or you low bid a contract because you want to win it, neither you nor the customer is happy. You are losing money and if an ESCO is losing money then you will not deliver their service with excellence and MNOs or towercos will be affected negatively. Power availability will decrease and different problems will appear. In the worst case scenario, the contract could be cancelled and that leads to all sorts of costly distractions.

TowerXchange: Towercos are beginning to diversify into other communications infrastructure, are you solutions compatible with the high-spec demands of data centres and fibre networks?

Almost 90% of Vodafone sites in Italy are backed up by Ausonia power systems, including their data centres. We are the only vendor on Vodafone Procurement Company’s list of no-break power system suppliers. 

The entire Ausonia portfolio of energy solutions for data centres is designed according to the highest market standards and the specific ratings designed by the Uptime Institute, satisfying any level of redundancy up to TIER IV requirements, including also CHP/CCHP and Medium Voltage solution. We have delivered several of this high performance units and if towercos are moving into this market, we are ready to support them.

TowerXchange: Please sum up how you would differentiate your solution from your competitors’?

Ausonia is not a giant so we are a very responsive company. We are able to closely follow our customer and sit with them to evaluate and compare different options. As well as being consultative, we also work very quickly, normally just to two to three months, where larger companies can take a year to deliver what the customer wants. Customers don’t like waiting once they identify a problem and a solution! 

We also use our own solutions. That has two advantages. The first is that we demonstrate, through operating our own gensets in an opex model, that we have total faith in our product. We also get a constant cycle of improvement from product development, testing in the field and feedback internally. Any improvement or insight generated for our opex business we also make available to those purchasing our equipment under a capex model. We are an Industry 4.0 company too, with a high technology level and high degree of automation, enabling a lower cost of production. And as mentioned above, we have some great financing options which we can sync with payment terms our customers receive, which can make or break a project. 

And so far, despite deploying many sites, under many different contracts, we have never seen a major problem. In Italy we have worked as an ESCO since 2003 and every contract we have signed has been renewed ever since. That is almost 16 years of complete customer satisfaction!