In recent years, we have witnessed remarkable advancements in communication technologies. The widespread use of mobile networks, the emergence of 5G technology, and the continuous improvement of broadband speeds have all contributed to this rapid growth. As a result, communication networks are becoming increasingly complex.
The international tower business has shown an explosive growth trend. Towercos are actively expanding their market share and geographical coverage. The continuous integration and mergers and acquisitions of capital have led to the formation of larger and more competitive towercos.
This not only enhances their ability to provide high-quality services but also promotes technological innovation and cost reduction. The intense competition and dynamic changes in the market has made the towerco sector an attractive opportunity for investors and other industry stakeholders. It is likely that this trend will continue in following the coming years, bringing more opportunities and challenges to the industry.
As environmental awareness grows, so has the importance of ESG. The decreasing price of solar panels offers a more accessible and cost-effective option for generating clean energy, reducing reliance on fossil fuels and helping mitigate environmental pollution and climate change.
It is not only economically viable but also essential for achieving sustainable development goals. This trend is expected to persist and drive further advancements in the adoption of green energy sources.
Facing fierce competition, increasing profits is the key
1. DC sharing unlocks new revenue streams for towercos
In the contemporary landscape of towerco operations, there is a notable emerging trend in the shift from AC sharing to DC sharing. In the case of AC sharing, a towerco only provides site rental services such as tower space, equipment room and grid power feeding, while operators retain the ownership of power supply systems and batteries.
In DC sharing, the towerco also provides the energy infrastructure, network management facilities and O&M services to maintain a stable and reliable power supply to tenants. This transition holds significant implications for the industry's growth and profitability.
The investment in basic power supply requires upfront capex, but this should be viewed as a strategic move rather than an additional burden on capital allocation. The establishment of advanced and efficient DC power supply infrastructure paves the way for enhanced service quality and reliability.
Concurrently, the increase in tenant rents plays a crucial role in driving higher profits for towercos. As the demand for reliable and high-quality power supply grows, tenants are willing to pay a premium for the improved services offered through DC sharing. This increase in rental income offsets the initial investment and contributes to the overall financial success of the tower business.
Moreover, the shift to DC sharing enables better energy management and optimization. It leads to reduced power losses and improved energy efficiency, which in turn lowers operational costs in the long run.
The transition from AC sharing to DC sharing in towerco operations, despite the initial investment in power supply facilities, is a forward-looking strategy. The subsequent rise in tenant rents and the associated benefits of improved energy management positions towercos to generate higher profits and sustainable growth in a competitive market.
2. New businesses expansion
The evolving landscape of technology and industry dynamics necessitates the adaption and innovation of the towerco model. New radio generations bring forth opportunities in advanced communication services.
Cross-industry collaborations open avenues for diversified revenue streams. In the realm of energy operations, there is potential for integrating sustainable energy solutions to not only reduce costs, but also create new business models.
By venturing into these new areas, towercos can leverage their existing infrastructure and expertise to create additional value and enhance their profit margins. It requires strategic planning, investment in research and development, and new partnerships to successfully navigate and capitalize on these emerging trends.
3. A future-oriented energy network
Comprehensive solutions offer wide coverage, encompassing all intricate scenarios. It demonstrates integrated solution capabilities, ensuring accurate management and optimal logic. This approach is not only about addressing the surface-level issues but delving deep into the core of problems to provide holistic and effective resolutions. It implies a detailed understanding of various elements and their interrelationships, allowing for precise decision-making and efficient resource allocation.
Asset protection primarily focuses on smooth expansion to safeguard existing assets. Parallel operation is crucial to ensure the seamless capacity expansion of power systems, including lithium batteries, solar, and more. The smooth integration of solar access on third-party power is another aspect that demands meticulous planning and execution. This approach helps maintain the value and functionality of assets, minimizing disruptions and maximizing their lifespan and productivity.
Digital energy management involves the interconnection and management of all devices through a network management system, leveraging big data and AI. Remote operation and maintenance, fault prediction, energy efficiency analysis, and a one-site, one-policy approach for accurate management are all integral parts. This enables real-time monitoring, proactive problem-solving, and data-driven decision-making to optimize energy usage and enhance overall system performance.
One-stop delivery of products, engineering, and operation and maintenance comes with a clear responsibility interface. This simplifies the process, reduces complexity, and ensures accountability at every stage. It streamlines the entire workflow, eliminating potential confusion and delays, and providing a seamless experience for clients. This model promotes efficiency, quality control, and a unified approach to project execution.
4. An end-to-end solution across the entire energy chain & full life cycle
Towercos need end-to-end suppliers. That means full turn-key solutions which cover the while site power supply from power generation, to conversion, energy storage, power consumption, and management.
Moreover, suppliers need to implement end-to-end construction of the entire industry chain, including consultation, planning, design, production, delivery, and O&M.
An end-to-end solution ensures a stable and continuous power supply to the site, minimizing the risk of power outages and disruptions. This leads to improved operational reliability and uptime, which is crucial for maintaining seamless services and avoiding costly downtime and providing better power quality and voltage regulation.
This helps to protect sensitive equipment and prolong their lifespan, reducing the need for frequent replacements and maintenance. It also enables more efficient energy management. By having control over the entire power supply chain, energy consumption can be monitored and optimized, resulting in cost savings and reduced environmental impact.
Furthermore, end-to-end site power supply simplifies the management and troubleshooting processes. When there are power-related issues, it is easier to identify and resolve them quickly, enhancing overall operational efficiency.
The adoption of end-to-end site power supply brings many benefits, including enhanced reliability, improved power quality, efficient energy management, and simplified maintenance, making it a valuable solution for various sites.
want to learn more about how towercos can accelerate their business models to unlock new sustainable growth? Don't miss ZTEs keynote presentation The pathway to sustainable growth: energy network management and revenue growth in the 4G/5G era at 12:10 on Tuesday 10th September at TowerXchange Meetup Africa, the meeting place for Africa's telecom tower ecosystem.
