1. Tower Xchange
Tower Xchange
Top 200 decision makers in African towers invited to TowerXchange Meetup
ISSUE 3 | April 2013 | www.towerxchange.com
Marc Rennard: Why Orange is sharing towers
Structuring deals to meet the requirements of each affiliate
Why IHS invested in Cameroon and Cote d’Ivoire
Eaton CTO Thomas Jonell’s procurement priorities
Egypt’s 4 companies licensed to lease infrastructure
Growth stock ATC vs the PE-backed towercos
Africa’s New telecoms infrastructure journal
3. Contents
Departments
5 Tower People
6 News
< Etisalat seeking buyers in Tanzania
< Telma’s towers for sale
< Airtel to acquire Warid Uganda
< African MarketWatch
14 Cover story: Why Orange is sharing towers
19 BMI Analysis: Why Kenya could be next
23 Editorial: Announcing the TowerXchange Meetup
50 How to guide: Understanding FX risk in Africa
92 Beyond passive infrastructure:
93 The case for transmission sharing
99 Wholesale network sharing
29 54 63
117102
Towerco
perspectives
Egypt
case study
Who’s who in tower design,
manufacture, installation & MS
TowerPower – reducing Africa’s
reliance on diesel, part two
From RMS to monitoring and
management platforms
30 How IHS creates shared value
35 Eaton’s procurement priorities
40 Helios on H&S, ethics and compliance
45 Growth stock ATC vs PE-backed towercos
55 The Mott MacDonald Share Square: Egypt
57 Mobiserve believe a tower deal is imminent
60 EEC Group are positioning themselves to partner
towercos
71 Mer Telecom’s one-stop-shop
76 End-to-end services from NETIS
81 Static asset manufacturers TESA & GSM TP
85 How to design towers for easy installation
90 Fast deployment by Viettel’s rollout consultants
118 Power beyond the tower
122 The dawn of the green energy era
126 Why you should re-think charging batteries with DG
129 Achieving desired autonomy
103 How to combat fuel theft
109 How to create actionable intelligence from your
Infrastructure data
114 How to measure what matters
www.towerxchange.com | TowerXchange Issue 3 | 3| TowerXchange Issue 2 | www.towerxchange.com3
4. Leadcom Integrated Solutions Ltd. is
an international leader, in the provision,
management, and implementation
of telecommunications network
deployment services and solutions for
pan-regional operators, vendors, and
major enterprises.
Our extensive and longstanding experience
and extensive footprint, building and upgrading
networks worldwide qualify us to offer our
customers excellent, comprehensive operation
and maintenance services for their networks
aimed at reducing the Operator’s OPEX and
increasing network efficiency and availability.
Contact us at info@leadcom-is.com
5. Tower People
IHS appoints new Chief Commercial Officer
to drive continued growth
IHS has appointed Rhys Phillip as Chief
Commercial Officer. Mr Phillip joins IHS from
Ernst & Young where he was Partner and Global
Head of Transaction Advisory Services for the
Telecommunications Sector.
In addition to advising tower businesses on
many of the African transactions since 2007 –
particularly focusing on deals in Cameroon, Cote
d’Ivoire, Ghana, Kenya, Nigeria, South Africa,
Tanzania and Uganda – Phillip led cross border
transactions for leading operators, infrastructure
businesses, financial investors and Managed Service
Providers. Prior to Ernst & Young, Mr Phillip led
M&A transactions in house for Vodafone and BT
Group and spent a number of years in Investment
Banking in the UK and Europe.
Issam Darwish, CEO, IHS commented on the
appointment: “Rhys has been one of the most
impressive experts on African infrastructure in
the market for years. Having advised some of the
world’s largest mobile network operators, he is an
exciting addition to the IHS leadership team as we
continue to grow our business. He is an expert in
constructing value driven acquisitions, ensuring
efficacy and accuracy throughout. We are looking
forward to benefiting from Rhys’ knowledge and
network in the telecoms sector at this important
stage of our growth.”
Rhys Philip said: “IHS’ recent deals with Orange
Daniel Lee developed the leading tower advisory
practice at Citi where he advised on the sale of over
10,000 towers (with a corresponding deal value of
US$1.75bn) from mobile operators primarily in the
emerging markets. Daniel brings incredible insight
and tremendous relationships across the sector.
Daniel advised on the first sale-leaseback in Africa
and many other ground breaking transactions,
each representing the first tower transaction
in a number of different markets (e.g. Ghana,
Tanzania, DRC, South Africa, Uganda, Cameroon,
Cote d’Ivoire). Daniel has broad experience in
working with a variety of different mobile operators
including MTN, Millicom and Cell C among
others. Additionally, Daniel successfully advised a
number of towercos in Africa in their critical early
funding rounds, raising more than US$500mn in
equity.
Daniel recently departed from Citigroup, but
we’re delighted to announce he has accepted our
invitation to join the TowerXchange Inner Circle
advisory board, and you’ll hear more from him in
an in-depth interview to appear in the June edition
of TowerXchange
Daniel Lee leaves Citigroup, joins TowerXchange Inner Circle informal advisory board
www.towerxchange.com | TowerXchange Issue 3 | 5| TowerXchange Issue 3 | www.towerxchange.comXX
6. News
in Cameroon and Cote d’Ivoire highlights the
dynamism of the management team and the
momentum they have created for IHS, Nigeria’s
most exciting telecommunications infrastructure
provider. The focus on providing cutting edge
technology solar energy innovations in addition to
terrific growth over the last 18 months makes me
very proud to join Issam’s team and I am thrilled to
be part of IHS’ continued growth story and increase
the tower portfolio while attracting supportive
investors.”
You can read an interview with Mr Phillip on pages
30-34
Etisalat seeking buyers for Zantel Tanzania
or for Tanzanian towers
TowerXchange understands that Etisalat is
concurrently seeking a buyer either to acquire
Tanzanian subsidiary Zantel, of which Etisalat
owns 65%, or to acquire the 600-700 towers Zantel
has in the region. Standard Chartered have been
appointed as Etisalat’s advisors.
Helios Towers Africa would be favourites to acquire
Zantel’s towers, if sold separately, as Chuck Green’s
pioneering towerco acquired a 60% stake in a
joint venture with Millicom-Tigo in 2010, to which
Millicom-Tigo’s 1,020 Tanzanian towers were
transferred.
Market conditions in Tanzania appear very
favourable to the towerco business model.
Tanzania has four licensed tier one mobile network
operators; Etisalat’s Zantel, Airtel, Vodacom and
Millicom Tigo. There’s room for growth in the
market – according to the GSMA, Tanzania has 62%
mobile subscriber penetration, growing at 4.4%
CAGR 2011-2012, with 75.8% population coverage.
Diesel and maintenance costs push opex in
Tanzania to a point where the efficiencies offered by
the towerco business model makes sense. Tanzania
had 4,593 base stations in 2012, a 25% growth from
2011, of which 1,442 were off grid and another half
on unreliable grids experiencing power outages of
more than six hours per day – statistics again from
the GSMA.
Rumours persist that Etisalat is still seeking to sell
it’s 3,000 towers in Nigeria, but securing the buy-in
of local stakeholders is believed to continue to hold
up any potential transaction.
www.towerxchange.com | TowerXchange Issue 3 | XX| TowerXchange Issue 3 | www.towerxchange.com6
With the appointment of Thomas
Sonesson, former CEO at managed
services company Reime Group, as CEO
of ATC Ghana, Gordon Porter has moved
from Ghana to become CEO of American
Tower’s other joint venture with MTN,
ATC Uganda.
Both Ghana and Uganda share a similarly
challenging operating environment
with high capex and particularly high
opex due to only around half of cell sites
benefitting from grid connections
American Tower swaps CEOs in
Ghana and Uganda
According to Bloomberg, Madagascan telecoms
firm Telecom Malagasy (Telma) has asked
investment bank Lazard to explore options
for the complete disposal of its business or the
divestment of its portfolio of 500 towers, believed
to be valued at between US$50-70million. Several
towercos are believed to be interested. Telma
recently created one of Africa’s first operator-led
towercos, TowerCo of Madagascar, to which 100
sites were transferred.
Telma competes with Bharti Airtel, who hold
a similar number of towers, and Madagascan
market leaders Orange who have an estimated
700 sites.
According to BuddeComm, mobile penetration
in Madagascar remains at a modest 47%. 3G was
launched in 2012
Telma’s towers for sale
8. Bharti Airtel has acquired 100% of the equity
in Warid Telecom Uganda for an estimated
US$100million, in news broken by Reuters just
before TowerXchange issue 3 went to print. The
deal was expected to bring Airtel’s market share in
Uganda to around 39%, very similar to MTN who
have around 40%. Also competing in the market are
Uganda Telecom Ltd (UTL), Orange Uganda and iTel.
The implications for the tower industry could be
significant. In 2012, Eaton Towers acquired an
estimated 400 towers from Warid Telecom Uganda,
combining them with a further 300 sites acquired
from Orange Uganda. With 260 of those cell sites
already shared between the two operators at the
time of the transaction, as a result of a conscious,
co-ordinated rollout, the deal to buy Orange and
Warid’s networks gave Eaton Towers over 1,000
tenants, meaning they had “scale, pre-existing
revenue, and an ability to run a bigger business
from day one,” according to CEO Alan Harper in his
interview in issue 1 of TowerXchange.
In 2011 American Tower paid US$89m to MTN
Uganda for 51% equity in joint venture towerco
ATC Uganda, to which 1,000 of MTN’s towers were
transferred. UTL’s towers had also been believed
to be on the market recently, although towerco’s
appetite for the portfolio may have been limited
due the proximity of so many UTL sites to the ATC
Uganda and Eaton towers already being marketed
for co-location. Over half of of Uganda’s towers are
operated by independent towercos. According to
the GSMA, there were a total of 3,067 cell sites in
Uganda in 2012, 1,249 of which were off-grid.
This month’s deal between Airtel and Warid was
described by Airtel’s Managing Director and CEO
(International) Manoj Kohli as the “first in-market
acquisition” in the telco’s history, and remains
subject to regulatory and statutory approval. With
Airtel’s Africa Towers towerco strategy still unclear,
the Indian-owned operator has been an enthusiastic
tenant of shared towers in the recent past in several
of the seventeen African countries in which they
operate
Atlantique Telecom, which has operations in
Benin, the Central African Republic, Cote d’Ivoire,
Gabon, Niger and Togo, and part of The Etisalat
Group, announced that it has entered a five year
multi-country managed services agreement with
Ericsson to manage its entire mobile networks. This
agreement enables Etisalat to focus even more on
their core business - delivering innovative offerings
to their customers.
Nagi Abboud, CEO of Atlantique Telecom said: “With
the evolution of the competitive landscape in our
markets, we need to adapt our operating model to
provide a better service to our end users. Adopting
this business outsourcing model is therefore an
important step in our group strategy execution that
will be for the benefit of our subscribers, who remain
our top priority, and this will, as well, open new
growth opportunities to our employees.”
Lars Lindén, Head of Ericsson in region sub-Saharan
Africa says, “Managed services is a proven business
model to support operators in growth mode and it is
one of the most dynamic areas in our industry. Our
work together will support Atlantique Telecom in
defining a new generation of operators in Africa.”
The contract covers network operations, field
maintenance, network optimization and spare parts
management for Etisalat’ s multivendor mobile
networks, including access, core and transmission, as
well as value added services
www.towerxchange.com | TowerXchange Issue 3 | XX| TowerXchange Issue 3 | www.towerxchange.com8
Bharti Airtel to acquire Warid Telecom Uganda
Atlantique Telecom awards Ericsson five
year managed service contract
9. Accelerate your sales cycle
and close your next major deal in Africa
Advertise in the TowerXchange Journal, circulated to a highly targeted community of the 1,868
most influential tower decision makers
To book your advertisement, contact: Kieron Osmotherly | kosmotherly@towerxchange.com | M. +44 (0) 7771 148001
27%
4%
16%
11%
11%
10%
10%
9%
3%
Operators
Turnkey & managed
services
Towercos
Power equipment & ESCOs
Investors & advisers
Passive equipment
providers
Active equipment &
services
Regulators
Others
Sub-Saharan
Africa
MENA
Americas
Europe
Asia
45%
10%
22%
18%
5%
C-level
VP, Exec Director,
Partner
Director-level/
Dept Head
Senior Manager/
Managing Exec
Middle & Junior
Manager
24%
17%
13%
2%
44%
10. MTN and Airtel CEOs on the
profitability of African mobile
network operators
any one market?” Asked Dabengwa, referencing
countries with five of six operators serving
populations of 30 million. “I’m not sure how many
operators in Africa are actually profitable.”
“Lots of African operators are making losses,”
agreed Manoj Kohli, CEO of Airtel Africa. “The time
has come to turn around Africa into a profitable
sustainable, healthy business. We’ve placed a big
bet on Africa, which has cost us US$13.5bn in cash.”
“We think Africa is a great market with a great
future, and a great frontier. With population of two
billion, median age of eighteen, we can grow voice,
data and m-commerce.” Kohli added that it was
tough to maintain infrastructure in Africa, with site
running costs up to US$5,000 per month at off-grid
sites in some markets, compounded by high taxes
and levies.
“Operators are losing money at the point of
acquisition, which leads to taking multiple SIM
cards,” continued Airtel’s Kohli, adding that he had
been surprised at the low elasticity in Africa, with
usage of minutes per month being half India’s.
“Competitive intensity can be harmful rather than
fruitful,” said Kohli, agreeing with Dabengwa’s
concern about saturation of markets by adding
“While Africa’s 54 countries can digest more
operators, countries with 10-25 million population
and three to five operators are a non-viable
situation. Governments and regulators should
build agenda of consolidation, otherwise a lot of
operators’ investments will be pulled back, which
will not be good for Africa.”
“The mobile market in Africa has had ten to fifteen
years of good growth. Penetration levels are at 50%,
but with up to 30% of consumers using multiple
SIMs, real penetration is below 50%. Nonetheless
data penetration, internet penetration, is still no
more than 10%, so overall the opportunity is still
very significant,” declared MTN Group CEO Sifiso
Dabengwa.
Challenges to long term sustainability identified by
Dabengwa included aggressive price competition
(“operators selling product below cost is a bit of a
problem”), and the need to avoid regulations stifling
the industry, as seen in Europe where the market
capitalisation of telecoms companies is in many
cases in decline.
“What is the sustainable number of operators in
www.towerxchange.com | TowerXchange Issue 3 | XX| TowerXchange Issue 3 | www.towerxchange.com10
Sifiso Dabengwa, CEO of MTN Group, and Manoj Kohli, CEO of Airtel Africa appeared on
the Sub-Saharan Africa regional focus panel at Mobile World Congress 2013. Here are the
highlights of their contribution.
Manoj Kohli, CEO, Airtel Africa and Sifiso Dagengwa, CEO, MTN Group
11. While they agreed on competition, the CEOs of
MTN and Airtel Africa disagreed on the regulation
of infrastructure sharing. “We expect regulators to
lead on infrastructure sharing,” suggested Airtel’s
Kohli.
“I don’t agree that regulators should be involved
in infrastructure sharing,” said MTN’s Dabengwa.
“Operators should do that among themselves.”
Continuing the discussion of infrastructure sharing,
Kohli added: “I believe if Africa is to achieve full
coverage of voice and data, all towers have to be
shared. Towers are expensive and the revenues in
small towns are small. Similarly, for voice and data
we need fibre. No single operator can bear the cost
of fibre,” added Kohli, referencing a consortium of
three operators and government in Tanzania as an
example model. “Tower and fibre sharing will pave
the way for fantastic penetration tomorrow.”
“In Africa generally every site, even if connected
to grid, needs to have pair of backup generators.
This can be hugely expensive, complex and frankly
wasteful,” said Kamar Abass, Country Manager for
Nigeria and Head of Regional Accounts, RSSA for
Ericsson. “However, the power consumed by our
equipment is on a downward trajectory.”
“Nigerian regulators are insisting on infrastructure
investment – coverage requirements are ‘baked in’
to licenses – so the mindset of operators is focused
on physical investment; on RAN and on building
significant transmission networks that didn’t exist
in the pre-mobile world,” added Abass.
“Property rights aren’t enshrined in Nigeria as
they are in other countries – land may be owned
by families, with no paperwork,” continued
Ericsson’s Country Manager for Nigeria. “Passive
infrastructure has been a key focus for network
sharing in Nigeria, but nothing is happening yet
with active infrastructure sharing, and we think
that’s a major oversight. Passive infrastructure
sharing has the potential to halve the infrastructure
requirement, and gives you capacity to densify
the network and improve QoS, but the operational
complexity of running a secondary power network
means active infrastructure sharing is something
Nigeria simply has to explore.”
Kamar felt that the intensity of competition in
Nigeria may be preventing operators from opening
www.towerxchange.com | TowerXchange Issue 3 | 11| TowerXchange Issue 3 | www.towerxchange.comXX
Speaking at the Reuters Africa
Investment Summit, MTN Group
CEO Sifiso Dabengwa said: “Growth
through mergers and acquisitions is
still an important part of our strategy.
Anything between ZAR35.56 billion and
ZAR71.12 billion is something that we
could look at.”
MTN’s US$8 billion M&A war chest
When challenged by Nic Rudnick,
CEO and Founder of Liquid
Telecommunications, that Africa’s
mobile network operators were
sharing with each other but not with
smaller ISPs trying to enter new
markets, Manoj Kohli responded: “We
have towercos in seventeen countries.
Give me a list of countries and towers
you need, you’ll get it in 24 hours!”
Perhaps Africa Towers have a few
more towers on the market than we
realised!
Q&A soundbyte: Airtel offers
shared towers in all 17
countries
“ “I believe if Africa is to
achieve full coverage of
voice and data, all towers
have to be shared
– Manoj Kohli, CEO,
Airtel Africa
Low energy active equipment and
active infrastructure sharing
12. a conversation about active infrastructure sharing,
while many operators felt there might be a
potential regulatory objection. “The only possible
regulatory objection would be how to aggregate
the spectrum when you combine two networks.
Beyond that issue, we suspect the regulator would
no have objection to active infrastructure sharing
as it helps improve QoS.”
TowerXchange wanted to learn more about
Ericsson’s Managed Rural Coverage. “As long as the
top of a tower is at 10m then it can often give the
right level of coverage in a rural context. Ericsson’s
solution supports 2G and 3G (and LTE if required),
with a satellite uplink opportunity, solar power,
and a pair of standard 12v batteries that will power
base station for four and a half days if fully charged
if there’s a failure of the weather.”
“There is no need for microwave re-planning – we
buy satellite capacity and manage the whole piece,
so we can charge the operator an installation fee to
cover part of cost of the hardware and installation,
then Ericsson recovers the rest of the cost and
a small margin from a share of the revenues
generated.”
“The model is one of national roaming, and it
will take calls from any operator. In reality local
subscribers will buy whichever prepaid cards the
supervisor sells. If you put it in a village where the
community leader takes responsibility for security,
if you’ve chosen the right person that security
tends to be assured.”
“We think Managed Rural Coverage works in
villages of more than 1,000 people, but there’s a
new satellite that offers a lower price point. While
the operator could claw back some installation
costs from Universal Access Funds in certain
markets, it’s a modest capital outlay: around
US$5,000 per site depending on the situation and
installation conditions.”
“From our point of view, the rural market is
lacking investment,” said Gerry Collins, Head
of Business Development at Altobridge. “I think
towercos will put up more sites in rural areas if
they can get into active infrastructure sharing,
and if low energy equipment continues to
reduce opex requirements.”
“In remote communities, energy and backhaul
costs can make rural mobile communications
uneconomic. Altobridge believe we have the
best balance of energy usage (90% of our sites
exclusively use solar power) and coverage with
a 7-10km radius. We have an optimised satellite
backhaul band that can bring the price down to
US$300-400 per month.”
It seems that in rural contexts, coverage
remains king. “Rural telecoms is a land-grab.
If an operator extends coverage on their own,
they can acquire most of the potential minutes,
data and subscribers within the first three
months, destroying the business case for other
operators,” said Altobridge’s Collins. “I’m not
convinced that building and sharing towers
makes sense in these finite rural markets.”
“If you put our solution in a market town,
traffic might increase four-fold on market day,
and traders all need to have the local operator’s
SIM card. So the key is for mobile network
operators to be where people live, work,
are educated, and where they trade,” added
Collins. “With on network call plans, you’re
going to persuade urban migrants to switch to
the same network as their home village.”
www.towerxchange.com | TowerXchange Issue 3 | XX| TowerXchange Issue 3 | www.towerxchange.com12
Kamar Abass, Ericsson
13. XX | TowerXchange Issue 3 | www.towerxchange.com
News
TMT Finance reports that MTN has appointed
Citi to advise on the sale of towers in Rwanda,
with talks under way with American Tower
Korea Times reports that KT Corp has signed an
MoU with the Rwanda Development Board to
establish a joint venture to develop, install and operate
a nationwide LTE network, providing wholesale LTE
services to MNOs and MVNOs
Unitel emerged as the sole applicant to meet
the technical and financial requirements of the
tender, and so were awarded the islands’ second fixed
and mobile license, according to Panapress
President Macky Sall has asked his government
to “take practical steps” toward the launch of a
fourth MNO license, according to Agence Ecofin
Cell C CEO Alan Knott-Craig was quoted on
mybroadband.co.za stating that the network
now has around 4,000 cell sites nationally, having added
1,223 new 3G sites in 2012. Cell C has 100 active LTE sites,
targeting to increase to 1,000 by the end of 2013
The Lusaka Times reports Zamtel CEO Dr
Mupanga Mwanakatwe as saying the operator
will deploy 400 2G and 3G base stations in less connected
areas, with LTE expected in Livingstone by late May 2013
Aquiva Wireless plans to invest US$80mn over
the next three years to deploy LTE nationwide,
according to Chief Executive Brian Maphosa, quoted in
The Herald. Meanwhile Telecel Zimbabwe say they will
expand their network of 437 BTSs by 120 by July 2013
Having been openly discussed since 2011,
it seems that licensing of 3G may finally be
imminent. Moussa Benhamadi, Minister of Posts,
IT and Communications, told Agence Ecofin: “The
administrative record, which allows us to embark on
the introduction of 3G and 3G+ is completed. In the
meantime, ATM Mobilis, Nedjma and Djezzy have
been encouraged to prepare their 2G networks for the
transition to 3G”
It seems that the government of Burundi
is again interested in selling a majority
stake in national public operator Office National
des Telecommunications (Onatel), with a view to
modernising the network
BiztechAfrica quotes Patrick Benon, CEO
saying “Orange is now the first operator to
operate a 3G + network in Central African Republic,
and it reinforces our position as an innovative
operator”
Vodafone Egypt and Etisalat Misr have both
appointed Ericsson to manage and operate
their base stations in Egypt, according to Daily News
Egypt
Ghana’s operators must first focus on
developing 3G before implementing LTE,
according to Albert Enninful, Acting Deputy Director
General of the NCA. Meanwhile, MTN Ghana have
announced their intention to deploy more base
stations, bringing their total number of 3G sites to 994
A press statement from Orange Guinea CEO
Alassane Diene announced plans to invest
US$56mn in network upgrades and extensions over
the next three years
Mauritania’s third telecoms operator
Chinguitel may be up for sale. Chinguitel is
a subsidiary of Sudanese telco Sudatel which is also
rumoured to be considering the sale of its licensed
operators in Ghana, Guinea, Senegal and South Sudan
Who will acquire Maroc Telecom? With the
preliminary bid deadline of 22 April looming
as we went to print, MTN were rumoured to be late
entrants into the auction, joining Qatar Telecom,
Etisalat and possibly STC
According to the Daily Trust, MTN will invest
US$1.5bn rolling out 5,000 2G and a further
4,000 3G base stations in Nigeria in 2013. At the recent
Reuters Africa Investment Summit, Etisalat Nigeria
Commercial Officer Wael Ammar revealed that the
operator was raising US$500mn in debt finance, with a
view to expanding their network and services. Etisalat
is believed to have 3,000 cell sites in Nigeria.
African MarketWatch: New licenses, acquisitions and upgrades in brief
Algeria
Burundi
Central African Republic
Ghana
Egypt
Mauritania
Rwanda
Rwanda
Sao Tome & Principle
Morocco
Senegal
Nigeria
South Africa
Zambia
Zimbabwe
Guinea
www.towerxchange.com | TowerXchange Issue 3 | 13
17. TowerXchange: Thanks Marc! Moving on to
speak to Michel, who has agreed to speak to us in
more detail about Orange’s latest infrastructure
sharing deal with IHS. Michel, please could you
introduce us to the Cameroon and Côte d’Ivoire
markets to put this in context.
Michel Faivre, Directeur Programme Partage
d’Infrastructure AMEA, France-Telecom Orange:
The two markets are significantly different, with
different situations when it comes to infrastructure
sharing. Cameroon has only two competing
operators at present and only 2G services. A new 3G
license has been attributed to Viettel, and they will
have 3G exclusivity for two years.
The three main players in Côte d’Ivoire are Orange,
MTN and Etisalat, with two further operators
covering part of the country. With five operators,
the potential for co-location is larger in Côte
d’Ivoire.
TowerXchange: What were Orange’s objectives in
agreeing this deal?
Michel Faivre, Directeur Programme Partage
d’Infrastructure AMEA, France-Telecom Orange:
Our objective is same as for all mobile network
operators; cost reduction, especially opex but
also capex. Sharing towers shares renewal capex,
primarily to modernise energy units, and shares
the cost of new towers. Even with Orange’s large
network, we are still adding sites to cover rural
regions.
As Marc mentioned, we want to improve QoS, even
though our QoS is not bad. In the past, competitive
mobile network operators were fighting on
geographical coverage, now we are fighting on QoS
– and that is especially true for 3G.
In Côte d’Ivoire, Orange is more present in the
South than in the North of the country, while MTN’s
network (recently acquired by IHS) is stronger
in the North than the South. Working with IHS
therefore improves our coverage and gives us
capacity for nationwide services. The development
of 3G also requires us to densify the network.
Sharing infrastructure enables us to focus on
other tasks such as modernising, increasing and
improving capacity, rather than focusing on energy
efficiency.
Eventually, we are also sensitive to government
and community objectives to reduce the number of
towers by adding tenants to existing towers.
TowerXchange: Should we refer to the deal
structure in Cameroon and Côte d’Ivoire as an
“operational lease”?
Michel Faivre, Directeur Programme Partage
d’Infrastructure AMEA, France-Telecom Orange:
We refer to our agreement with IHS as managed
services with a build-to-suite programme. Orange
has not sold its towers in Cameroon and Côte
d’Ivoire.
TowerXchange: Are the 2000+ sites included
in the deal all Orange’s towers in those two
countries?
Michel Faivre, Directeur Programme Partage
d’Infrastructure AMEA, France-Telecom Orange: In
Cameroon, the deal includes all the towers, while in
Côte d’Ivoire it includes all the towers on which we
have mobile RAN equipment. It doesn’t include our
Ivorian fixed telecom towers, although the option
to negotiate their inclusion in the future remains
in the contract, as we did not have time to include
them in the first place.
www.towerxchange.com | TowerXchange Issue 3 | 17| TowerXchange Issue 3 | www.towerxchange.comXX
Michel Faivre, Orange
18. TowerXchange: Why was IHS a good partner for
Orange in Cameroon and Côte d’Ivoire?
Michel Faivre, Directeur Programme Partage
d’Infrastructure AMEA, France-Telecom Orange:
IHS was very professional in the way they
negotiated with us, and they understood the
technical aspects of what we were trying to achieve.
However, we have no exclusive relationship with
IHS elsewhere in Africa, and we will work with the
right towerco for each market.
TowerXchange: What are the benefits for the
development of telecoms infrastructure in
Cameroon and Côte d’Ivoire, and benefits for
Orange, of the same towerco managing the
towers of both market leaders, Orange and MTN?
As opposed to for example Ghana, where each
operator partnered with a different towerco…
Michel Faivre, Directeur Programme Partage
d’Infrastructure AMEA, France-Telecom Orange:
We felt that having two towercos in Cameroon was
not possible for the market. There were only two
operators when we started the negotiation, so how
could we share and get the benefits of co-location if
we partnered with different towercos? Even with a
third operator, we are still not sure if it is possible to
have two towercos.
On the other hand, in countries like Côte d’Ivoire
with three tier one operators and five in total, we
could imagine having two towercos.
Working with the same tower provider helps to
shorten the process. If we had partnered with
another towerco, we would need to negotiate a
service management contract and build-to-suite
programme with them, but we would need to
negotiate another contract to co-locate on the
towers IHS acquired from MTN. Working with one
towerco was simpler, and resulted into a better
price.
TowerXchange: What is the power grid
availability like in Cameroon and Côte d’Ivoire,
and how important is hybrid energy in cell site
efficiency?
Michel Faivre, Directeur Programme Partage
d’Infrastructure AMEA, France-Telecom Orange:
There is grid power in most places, but there is
an issue with some power cuts for which we need
alternative solutions.
Orange already has some solar powered base
stations in Cameroon and Côte d’Ivoire, but our
build-to-suite contract with IHS will increase the
percentage of solar sites in these countries.
TowerXchange: Did Orange work with any
advisers on the Cameroon and Côte d’Ivoire deal
with IHS?
Michel Faivre, Directeur Programme Partage
d’Infrastructure AMEA, France-Telecom Orange: No,
we did not appoint a bank or a legal adviser for this
deal. We handled it 100% in-house – we have a very
efficient team!
TowerXchange: Finally, in the press release
about the deal, Marc was quoted as saying “this
agreement leaves open the possibility for Orange
subsidiaries elsewhere in Africa and the Middle
East to look into similar partnerships.” Are there
any other markets in which Orange is actively
exploring infrastructure sharing? Any update on
Kenya?
Michel Faivre, Directeur Programme Partage
d’Infrastructure AMEA, France-Telecom Orange: We
will implement this kind of passive infrastructure
sharing contract in other countries. The competition
is still open – we will work with any of the towercos
according to what is best in each country.
We have started a similar project in Kenya. We are
in the final stages. During the negotiation phase, we
try to sort out the maximum of issues in order to
decrease the risks during the migration phase
www.towerxchange.com | TowerXchange Issue 3 | XX| TowerXchange Issue 3 | www.towerxchange.com18
“ “We have started a similar project
in Kenya. We are in the final
stages. During the negotiation
phase, we try to sort out the
maximum of issues in order to
decrease the risks during the
migration phase
19. Why Kenya could be
next for tower sharing
BMI Analysis: a new guest column by Ken Okeleke, Senior
Analyst at Business Monitor International
Ken Okeleke, Senior Analyst, BMI
Kenya’s mobile market – Safaricom dominant,
price wars raging
Kenya’s mobile market reached the 30m mark for
the first time during the three months to September
2012. According market data published by the
Communications Commission of Kenya (CKK),
there were 30.433m mobile lines in the country at
the end of September 2012. This was a 2.5% q-o-q
growth and 14.9% y-o-y growth, making it one of
the fastest growing markets in the region. However,
a considerable number of lines were not registered
at the end of the latest mandatory SIM registration
exercise in December 2012 and a grace period was
granted by the regulator until the end of March
2013. The disconnection of these lines could push
the country’s mobile penetration rate below the
70% mark it attained in September 2012, according
to BMI data.
Safaricom remains the dominant player with a
market share of over 63%. Airtel Kenya is in a
distant second position with a market share of less
than 20%, while Orange Kenya and Essar-backed
YU Mobile are separated by less than 1ppt in their
market shares, which jointly account for around a
fifth of the mobile market.
Safaricom’s smaller rivals tried to erode its
market share through intense price competition,
which set off a brutal price war that ravaged
the market for most of the last three years. The
impact of this development on operators’ financial
indicators, along with rising opex, has brought
the need to improve operational efficiencies in the
Read this article to learn:
< Why market growth, price wars, declining ARPU and the struggle to achieve profitability attract
Kenya’s MNOs to consider tower-sharing
< Country risk perspectives on Kenya’s economy and election results
< The Kenyan regulator’s stance on tower-sharing
< BMI’s view on which MNOs and towercos are likely to be most active in Kenyan tower-sharing
Kenya is arguably the largest of the remaining mobile
markets in Sub-Saharan Africa yet to see the uptake of
independent tower-sharing services. However, some key
market dynamics make the service almost inevitable
to ensure that some operators in the market remain
competitive and for a general improvement in network
quality of service and coverage. The leading independent
tower sharing firms operating in the region have all set
their sights on the Kenyan market, which may finally yield
to independent tower-sharing services in 2013.
Keywords: BMI Analysis, MNOs, Towercos, Research, Market
Overview, Country Risk, Market Forecasts, ARPU, Operator-
led JV, Regulation, Infrastructure Sharing, Africa, Kenya,
Safaricom, Airtel, FT-Orange, Essar, Helios Towers Africa,
IHS, Eaton, Business Monitor International
www.towerxchange.com | TowerXchange Issue 3 | 19| TowerXchange Issue 3 | www.towerxchange.comXX
20. Kenyan mobile market to the fore. Although not
independently confirmed, local media reports,
citing key stakeholders in Kenya’s telecoms markets,
suggest that only market leader Safaricom is in the
black among the country’s four mobile operators,
largely due to its scale and success of key non-voice
services such as M-PESA.
Lagging behind peers...
Mobile network operators across Africa currently
face the task of developing new revenue streams
and reducing input costs in order to improve
their bottom-line figures and remain competitive
in the market. In Kenya, the focus over the past
three years seems to be on driving revenue
growth through voice tariff increases, as in the
case of Safaricom, or through the rollout of non-
voice high-value services such as mobile data and
m-commerce services, as in the case of the three
smaller operators. However, declining revenues
from traditional voice services due to increasing
competition and the sluggish take-up of high-
value services due to low income levels make it
inevitable for operators to look in the direction of
reducing input costs as a means of improving their
profitability.
One of the key strategies for efficiency improvement
for most leading operators in Africa are tower-
sharing deals with independent tower firms. Tower
deals took off in Africa in 2011 and 2012 after a
wave of price wars swept across most markets in
the region. Surprisingly, Kenya, which is widely
regarded as the source of the price war, is lagging
behind other major markets in the region in the
tower-sharing business.
The closest the country has come to tower sharing
was an announcement by Safaricom and Orange
Kenya in mid-2011 to form a jointly owned,
independently managed infrastructure company
to acquire and manage their portfolio of towers.
There is no update on this development, although
we would not be surprised if the operators are
separately exploring alternative tower sharing
options.
Tower sharing deal may be imminent in Kenya
It is increasingly unlikely the Kenyan mobile market
will buck the trend towards tower-sharing services
for much longer. There are a number of factors
expected to push the case for the market to open up
to independent tower firms, possibly before 2013
runs out. Some of these factors, which will likely
strengthen over time, are highlighted below.
Downward pressure on ARPUs
Market average mobile ARPU in Kenya is below
US$5 and is forecast to trend downwards over
the five years to 2017, according to BMI data.
Meanwhile, Kenyan operators have witnessed a
steep rise in opex over the past three years, mostly
due to external factors such high inflation, currency
instability and high diesel prices. Although adverse
macroeconomic factors that plagued the country
in 2011 and early 2012 appear to have abated,
according to BMI’s Country Risk team, network
www.towerxchange.com | TowerXchange Issue 3 | XX| TowerXchange Issue 3 | www.towerxchange.com20
63.2%
9.9%
10.2%
9.9%
16.8%
Safaricom
Airtel
YU
Orange
Source: BMI, CCK, operators
operators are unlikely to see a significant easing in
opex. This, along with declining ARPUs, will further
squeeze operators’ margins and strengthen the case
for more aggressive cost-cutting measures, of which
we expect tower sharing to be at the top of the list.
Regulatory environment
Kenya’s code of practice for the deployment of
communications infrastructure is silent on the role
of independent tower firms. Instead, it outlines a
framework for operators to engage in site sharing
or co- location. However, we do not expect the
regulator to hinder the operations of independent
tower firms in view of the potential for tower-
sharing services to contribute to the faster roll
out of network services to underserved areas and
other operational targets set for the mobile market.
The fact that there is no express prohibition of the
Multiple operators drive competition
Kenya Mobile Operators By Market Share,
September 2012
21. www.towerxchange.com | TowerXchange Issue 3 | 21| TowerXchange Issue 3 | www.towerxchange.comXX
e/f = BMI estimate/forecast. Source: BMI, operators
operation of tower firms suggests that a framework
for their services could be prepared once the
country’s operators make significant moves towards
engaging the services of independent tower firms.
Willingness of tower firms to enter the market
Kenya is perhaps the most attractive ‘new’ market
for the tower firms operating in the region and
those looking for a foothold owing to the market
size, the number of operators in the market and
the country’s positive economic outlook, which
will inevitably drive growth in the telecoms sector.
Helios Towers was previously reported to be
interested in the joint tower company proposed
by Safaricom and Orange Kenya. The company,
along with other leading firms including IHS and
Eaton Towers, have been open about their desire to
enter the Kenyan market. We believe competition
by the tower firms for the Kenyan market will be a
key factor in the conclusion of a tower deal in the
mobile market.
Election results will not affect investor
confidence
There were concerns over the possible reaction
of Western investors if the PNU won the March 4
2013 presidential elections due to the indictment
of Uhuru Kenyatta and his running mate, William
Ruto, for war crimes by the International Criminal
Court (ICC).
BMI Country Risk team’s assessment of the situation
is that the impact of Western action against Kenya
would be far more pronounced if that action
involved the imposition of sanctions that precluded
Western companies and individuals from investing
in and trading with Kenya. Europe remains
an important market for Kenya’s horticulture
industry and the source of a large proportion of the
country’s tourists. Western portfolio and FDI flows
also play a meaningful role in plugging Kenya’s
large current account deficit. A reduction in these
inflows would have a significant impact on the
currency, inflation and macro stability generally.
However, as things stand, the chances of sanctions
being imposed are close to nil. That could change
if Kenyatta reneges on his commitment to comply
with the ICC process but there is little reason to
believe that he is about to backtrack. On the whole,
we believe that the election of an ICC indictee to
the presidency is unlikely to have as meaningful an
impact on the economy and investor confidence as
some might fear.
Which Kenyan operators are candidates for
tower-sharing
Kenya’s four mobile operators have a combined
towers portfolio of around 6,000 towers. This is
grossly insufficient for the country’s population of
almost 45mn and land area of around 570,000 sq
km. Meanwhile, operators’ poor financial results
over the last three years raise significant concerns
about their ability and willingness to invest in new
tower deployments to underserved areas, especially
where ARPUs are likely to be lower than in major
Kenya’s mobile ARPU (KES) heading south
100
2010 2011 2012e 2013f 2014f 2015f 2016f 2017f
200
300
400
500
22. www.towerxchange.com | TowerXchange Issue 3 | XX| TowerXchange Issue 3 | www.towerxchange.com22
towns and cities.
All four network operators are potential candidates
for tower deals in view of the market dynamics and
factors mentioned in the previous section. However,
Orange Kenya and Safaricom are the most likely to
move first in the market, mainly because of their
proposal to form an infrastructure company that
may seek to partner with an established tower firm
in the region. Furthermore, both companies are
closely associated with operators that have adopted
the tower-sharing strategy in other markets.
Orange and Safaricom’s parent companies, Orange
Group and Vodafone Group respectively, have
implemented the tower-sharing strategy in some
other markets in which they operate, including
South Africa, Ghana and Uganda.
YU Mobile is close behind Safaricom and Orange as
a likely candidate for a tower deal. The operator’s
lack of 3G network services limits its ability to
expand its high-value data offerings, making it
almost entirely dependent on voice revenues. The
operator is keen to invest in 4G LTE services when
spectrum becomes available. However, this may not
happen soon and it will need to aggressively reduce
costs in order to remain competitive in the mobile
market. For its part, Airtel Kenya is likely to follow
a group strategy, which is yet undefined for tower
sale and leaseback deals. The operator subscribes
to the services of tower firms in other markets it
operates and will likely do so when independent
tower firms launch operations in Kenya
www.businessmonitor.com/bmo
Tower Xchange
Participate in the TowerXchange community
Join the TowerXchange LinkedIn™ group at
www.linkedin.com/groups/TowerXchange-4536974
Investors &
advisers
Decision makers
at operators
Independent
towercos
Tower
manufacture &
installation
Equipment
& managed
services
Regulators &
policy makers
23. The TowerXchange Meetup will accelerate the
transactions, innovations and partnerships that
unlock new efficiencies for the African tower
industry.
TowerXchange has created a unique community
of 1,868 decision makers in African passive
infrastructure, and set out to share best practices
through this journal. Insights can be found on a
page, but new relationships are formed and deals
agreed face to face, so it’s time to invite you all to
the inaugural TowerXchange Meetup Africa.
The leaders of the African tower industry
have warned us that they don’t want or need
a conference; there is too much competitive
sensitivity for the pioneers to say anything
interesting “on the record”. That’s why
TowerXchange have created a Meetup, not a
conference.
The TowerXchange Meetup is designed around
structured networking round tables held under the
Chatham House Rule, plus “Shootouts” in which
buyers shortlist the energy equipment, RMS and
managed services partners they need to stabilise
and reduce opex.
Business leaders in passive infrastructure feel
disenfranchised by today’s telecoms exhibitions,
overrun as they are by devices and VAS.
TowerXchange maintains a laser-beam focus on
towers, on passive infrastructure, and on the low
Editorial
Top 200 decision makers in African towers to gather at
TowerXchange Meetup
Kieron Osmotherly, TowerXchange Founder
www.towerxchange.com | TowerXchange Issue 3 || TowerXchange Issue 3 | www.towerxchange.comXX 23
TowerXchange
Passive
Infrastructure
footprint
AfricaCom:
5% passive
infrastructure
Mobile World
Congress:
1% passive
infrastructure
Devices & VAS footprint
Mobile World Congress footprint
Africacom footprint
TowerXchange: 100%
passive infrastructure
energy, compact active equipment that stretch
the capacity of Africa’s towers. So while 1% of
Mobile World Congress exhibitors are from passive
infrastructure, and 5% of AfricaCom, everyone
you meet at TowerXchange will be a passive
infrastructure decision maker.
Let me tell you how the TowerXchange Meetup will
work. The TowerXchange Meetup is by invitation-
only, and those invitations will be extended in early
June. However, you can e-mail me to apply for your
place now. The open, strategic debates hosted at
the TowerXchange Meetup require that the event is
for decision maker level people only. Usually that
means Director, VP or C-level only, but if you’re the
top tower decision maker for your business and
you’re a manager or executive, drop me an email
and we’ll confirm whether we can extend you an
invitation.
24. | TowerXchange Issue 3 | www.towerxchange.com24
TowerXchange carefully manages the ratio of
buyers to sellers, and plans seating so that each
round table includes a senior representative of
a towerco, an investor, advisor, RMS or static
equipment manufacturer, a tier one OEM, a
managed service provider, and two senior decision
makers from an operator. Attendees will participate
in four different round tables, each with a regional
or topic matter focus chosen to meet their specific
objectives. So attending the TowerXchange Meetup
guarantees you an agenda tailored to answer your
questions, and guarantees “face time” with 28
decision makers at prospective clients, suppliers or
partners interested in the same segment of towers
and sharing the same round table as you. Of course,
attendees also have lavish networking receptions
to network with the rest of the top 200 African
telecoms infrastructure decision makers.
Finally, if you are one of African towers’ thought
leaders and you want to share your expertise by
hosting a round table at the TowerXchange Meetup,
please contact me.
I look forward to meeting you in Cape Town at the
end of September!
All the best,
Kieron Osmotherly
Founder, TowerXchange
M. +44 (0) 7771 148001
kosmotherly@towerxchange.com
www.towerxchange.com
www.towerxchange.com | TowerXchange Issue 3 | XX
Backhaul, FTTT, Core Network Active equipment
Tier 1 OEMs
Mobile Network Operators
Investors: private equity, debt finance, infrastructure funds
Law firms
Group level strategists
C-suite & network planners at local OpCos
Outsource
to
Strategic consultancy
Due diligence
Demand forecasts
Valuations
Independent Towercos
Sell co-locations
Upgrade capacity
Build-to-suit
Maximise uptime
Reduce opex
Invest in network
Transfer assets to
Construction services
Turnkey infrastructure rollout
Manufacture of steelwork
Import, customs & delivery
Leasing & permitting
Installation of towers
Upgrades for capacity
O&M services
Dynamic assets
Energy equipment
Diesel genset
Solar
Wind
Fuel cell
Batteries
Rectifiers
Inverters
Line conditioning
PIUs
Air conditioning
Lightning protection
Controller
Voltage regulator
Managed service providers
ESCOs
Static assets
Towers & masts
Shelters
Brackets
Enclosures
Lighting
Fencing
0&M services
Maintenance
Staffing
Spare parts
VMI?
Refueling
Energy as a service
Monitoring &
management
RMS
Intelligence/analysis
Site management
Job ticketing
Asset lifecycle platform
Access control
Subcontract
Microgeneration
Community power
Subcontract
or in-house
Outsource
to
Somebecome
towerco
Tower Industry Value Chain
Investment management advisors
Source: TowerXchange
25. TowerXchanges’ unique structured networking round tables
Energy Provider shootout in Progress
Small groups of buyers recieve
5 minute demonstrations
200 Director, VP and C-level Decision makers broken down as follows:
Mobile Network Operators (50)
Towercos (25)
Investors and Investment Management Advisors (25)
Lawyers and Strategic Consultants (25)
Energy Equipment Providers (25)
OEMs & Managed Service Providers (25)
Static Assets (10), Access Control (5) & Monitoring and Management (10)
TowerXchange roundtables bring together 1 representative from each of 8 segments of the
tower industry, brought together by a common geographical focus or hot topic. There are
4 roundtable sessions at the Meetup, each new roundtable "reshuffles" the decision maker-
level participants at your table so you will meet 28 different prospective partners.
25| TowerXchange Issue 3 | www.towerxchange.comXX www.towerxchange.com | TowerXchange Issue 3 |
26. TowerXchange Meetup Africa 2013 Agenda
Round table topics
Each “Round table” is a 90-minute structured networking session assembling participants in groups of
8, brought together by a common regional or topic matter interest, and arranged so each group ideally
includes 2 MNOs, a towerco, investor, advisor, OEM or managed service provider, energy equipment and a
static asset or RMS manufacturer.
Buying and selling towers
How to determine your organisational goals from tower
sharing; balancing opex reduction with cash released and
equity stake retained
How to structure a tower sharing deal to meet your
requirements: operational lease vs sale and leaseback vs
joint venture
Would an Indus Towers-like operator-led JV work in certain
countries in Africa?
Creating shareholder value by retaining an equity stake in a
JV-towerco
How to prepare the data room; from asset registers, permits
and leases to tower designs, load valuations, maintenance
logs and DG runtime data
How to structure MLAs, SLAs and anchor tenancy
agreements
Transferring assets from MNOs to towercos: confirmation of
permits, novation of leases, transfer of staff and evaluation
of contractors
Financing African towers
Are towercos paying a premium for first mover advantage?
When will the gold rush end?
Are African towers a bankable investment? What level of
gearing will investors permit before waiting for proven
results?
How to measure, manage and mitigate country risk and
operational risk
What are my / those towers worth? How to use demand-side
models, lease pricing benchmarks and GIS information to
assess the commercial potential of a tower portfolio
How to conduct a tower load valuation to unlock hidden
capacity and prioritise upgrades
How tower auctions work, what terms are variable and
which are non-negotiable, and what separates the winners
from the losers?
A dedicated round table
for each of the following
countries: Cameroon, Côte
d’Ivoire, DRC, Egypt, Ghana,
Kenya, Mali, Nigeria, South
Africa, Tanzania and Uganda.
One roundtable for the rest of
North Africa
(Morocco, Tunisia,
Algeria, Libya and
Western Sahara)
One roundtable for the rest of
East Africa
(Burundi, Djibouti,
Eritrea, Ethiopia,
Rwanda, Somalia,
South Sudan and Sudan)
One roundtable for the rest of
SADC (Angola,
Botswana, Lesotho,
Malawi, Mozambique,
Namibia, Swaziland,
Zambia and Zimbabwe)
One roundtable for the rest of
Central Africa
(Central African
Republic, Chad, Congo
Equatorial Guinea,
Gabon)
One roundtable for the rest of West Africa (Benin, Burkina Faso, Gambia, Guinea, Guinea-Bissau, Liberia, Mauritania,
Niger, Senegal, Sierra Leone and Togo)
One roundtable for the rest of Africa’s Islands (Cape Verde, Comoros, Madagascar, Mauritius, Mayotte, São Tomé and
Principe, Seychelles)
| TowerXchange Issue 3 | www.towerxchange.com26 www.towerxchange.com | TowerXchange Issue 3 | XX
27. Towerco business models
Are tenancy ratios above two achievable in Africa?
And how towercos can improve their margins by
optimising site level profitability
What are the criteria that govern how many
towercos can operate in a given market? How does
competition between towercos affect markets such
as Ghana?
Are there still opportunities in Africa for new
entrant towercos?
What infrastructure sharing needs (and does not
need) from regulators
Build-to-suite and refurbishment programmes
How to determine your OM requirements,
select the right partner and structure BTS and
refurbishment programmes
How to accelerate time to market in roll outs and
network extensions
Key performance indicators for the management
of African towers; how to meet SLA clauses
concerning uptime, site visits and MTTR
How to optimise logistics from manufacture to
port to site
Cell site densification and equipment amendment
implications of 3G and LTE
How to reverse-engineer tower designs
How to upgrade the structural capacity and power
systems at a cell site to support multiple tenants
How to evaluate whether to upgrade or replace
a tower to add capacity for multiple tenants, and
how to maintain service when consolidating
towers
From corrective to preventative to just-in-time
maintenance
Vendor Managed Inventory for the tower industry
Health and safety, ethics and compliance - from
policy to practicalities
How to reduce energy opex
How to combat fuel theft
How access control systems reduce vandalism and fuel
theft while helping to integrate maintenance logs with
job ticketing and asset life cycle platforms
How to measure the performance of Integrated Power
Management Solutions
Which hybrid and solar hybrid energy solutions are
proven in Africa?
How to evaluate a cell site’s suitability for hybrid energy
solutions
How to proactively manage power to optimise MTTR
How to get the most out of unreliable grid sites
How to future proof power at a cell site to accommodate
multiple tenants
What will it take for the ‘energy as a service’ proposition
to work in Africa?
Selecting the right battery supplier to minimise diesel
consumption and extend replacement cycles
Defining a business model to pay for energy by the kWh
Community power initiatives
Site intelligence
How to leverage RMS to identify the smallest capex that
yields the biggest return
How to translate RMS data into actionable intelligence
How to demonstrate and optimise performance against
SLAs
How to measure, monitor and extend the life cycle of
passive (and active) infrastructure assets
Beyond passive infrastructure sharing
Active infrastructure sharing in Africa
How transmission sharing creates new revenues/
efficiencies whilst freeing load capacity for additional
co-locations
FTTT
Wholesale infrastructure sharing
Day one
9:00 Welcoming Remarks from
TowerXchange
9:30 Towerco CEO panel
10:30 Morning coffee and networking
10:50 First structured networking round table
12:20 Networking lunch
1:40 Second structured networking round
table
3:10 Afternoon coffee and networking
3:30 Mobile network operator tower decision
makers panel
4:30 Partner selection shootout: innovations to
reduce energy opex
5:30 Close of Day one
Evening drinks receptions, awards and dinner
Day two
9:00 Third structured networking round
table
10:30 Morning coffee and networking
10:50 Investor panel
11:50 Partner selection shootout: managed
services
12:50 Networking lunch
2:10 Fourth structured networking round
table
3:40 Afternoon coffee and networking
3:30 2020 vision of African tower industry
and action points for 2013
4:30 Close of day two
TowerXchange Meetup Schedule
27| TowerXchange Issue 3 | www.towerxchange.comXX www.towerxchange.com | TowerXchange Issue 3 |
28. TowerXchange Meetup Benefits Packages
MNOs
Towercos
Investors advisors
Managed services
Tier 1 OEMs
Lawyers consultants
Energy equipment
Other passive infra
Attendees
Sponsors/
exhibitors
Pass
discount
50
25
25
25
25
25
25
25
2
4
4
9
3
6
7
10
*100%
50%
0%
0%
0%
0%
0%
0%
e.g. RMS, site management, job ticketing asset lifecycle platforms
Static asset manufacture and distribution
Access control systems
*100% discounts for qualifying Director to C-level execs from MNOs
By invitation only: restricted to Director, VP and C-level attendees
Maximum of 2 delegate passes per company except for MNOs, towercos and sponsors
*Expo only pass only available to exhibitors and sponsors
Bronze, Silver, Gold and Platinum Sponsorship Benefit Options - choose one Capacity Limits
*Expo only
pass
Delegate pass Exhibitor
Bronze
Sponsor
Silver
Sponsor
Gold
Sponsor
Platinum
Sponsor
Diamond
Sponsor
1 pass 1 pass
90 secs
100
180 secs
100
180 secs
200
up to 5 mins
200
up to 5 mins
200
up to 10 mins
200
1 pass
with booth with booth
either
or or or or
either either either
with booth with booth with booth
2 passes 2 passes 3 passes 3 passes
Benefits
Exhibition access
Daytime catering
Complimentary volume one TowerXchange
Access to Meetup
Round table interactions with 28 selected prospects
After hours networking receptions catering
Acess to VIP lounge
Dedicated post event e-mailshot to all attendees
Presentation in Shootout to shortlist RFPs
Video on TowerXchange TV
Profile in show guide and directory word limit
Logo on backdrop, podium, signage, fliers invites
3x3 turnkey booth
Private meeting room
Your choice of bronze sponsorship benefit
Your choice of silver sponsorship quality benefit
Your choice of gold sponsorship premium benefit
Your choice of platinum business-class benefit
Your choice of diamond first-class benefit
Contact Annabelle Mayhew, amayhew@towerxchange.com, for price information
Your choice of bronze sponsorship benefit
Gift drop (gift provided by client)
USB sponsor (USBs provided by TowerXchange)
Pad and pen sponsor (stationary provided by client)
Your choice of silver sponsorship quality benefit
Host of phone charging point (provided by client)
Sponsorship of massage area
Sponsorship of coffee break day 2 pm
Sponsorship of coffee break day 2 am
Sponsorship of coffee break day 1 pm
Sponsorship of coffee break day 1 am
Brand sponsorship of lanyards
Brand sponsorship of tote bags
(Bags provided by client)
Your choice of gold sponsorship premium benefit
Sponsorship of lunch day 1
Sponsorship of lunch day 2
Sponsorship of icebreaker drinks
Sponsorship of breakfast (Open) day 1
Sponsorship of breakfast (Open) day 2
Your choice of platinum business-class benefit
Sponsorship of post dinner party
Sponsorship of VIP networking lounge
Host of private lunch day 1
Host of private lunch day 2
Host of private breakfast day 2
Your choice of diamond first-class benefit
Sponsorship of Drinks Reception
Sponsorship of Award Dinner
Sponsorship of Operator and Towerco only reception
29. www.towerxchange.com | TowerXchange Issue 3 | 29| TowerXchange Issue 3 | www.towerxchange.comXX
Special Feature:
TowerXchange will take you on a virtual tour of
Africa’s leading towercos, building an holistic view
of the key roles within the towerco business, and an
appreciation of the differences between Africa’s ‘Big
Four’ towercos and the local tower operators hoping to
develop a pan-African towerco footprint.
This first installment concentrates on the ‘Big Four’
towercos. We introduce you to IHS Africa’s new CCO
Rhys Phillip as he discusses their recent transactions
in Cameroon and Cote d’Ivoire. Eaton Towers’ CTO
Thomas Jonell provides a revealing insight into their
procurement processes and priorities. Helios Towers
Africa’s Nick Summers explains their Health and
Safety and anti-corruption policies. And we hear
from American Tower’s CEO Jim Taiclet and CFO Tom
Bartlett as TowerXchange examines ATC’s 2012 annual
results for insights into their international strategy.
Towerco
perspectives
Four perspectives from towerco leaders:
30 How IHS creates shared value
35 Eaton’s procurement priorities
40 Helios on health and safety, ethics and compliance
45 Growth stock American Tower playing a different
game to PE-backed towercos
30. How IHS creates
shared value
The rationale for IHS’s acquisitions in Cameroon and Cote d’Ivoire and their
plan to scale to 25,000 co-location towers in the next five years
Rhys Phillip, CCO, IHS
IHS’s twelve-year track record of success
and leadership position in Africa
CEO Issam Darwish and CTO William Saad
created IHS in Nigeria in 2001, establishing IHS as
“commercially the leading independent towerco in
Nigeria.”
“We started out as a builder,” said IHS’s Director
of Business Development Romain de Villeneuve.
“This enabled us to develop operational excellence
and build mobile network operators’ confidence
in the quality of service we provided, which led to
us offering managed services. Becoming a towerco
was a natural next step after our huge operational
experience in Nigeria.”
IHS targeted a move up the value chain from
managed services into tower acquisition and
leaseback, described as “great for investors, for
network operators and for consumers.” 2012 was
a transformational year for IHS, trebling their
number of towers owned and managed through
the agreement to acquire 1,758 towers from MTN
in Cameroon and Cote d’Ivoire. This deal made
IHS Africa’s number one towerco by number of
towers owned and managed, and gave them a
substantial footprint in these two high growth
countries through ownership of the market leader’s
towers. According to IHS’ Chief Commercial
Officer (CCO), Rhys Phillip, “IHS was chosen over
competing bidders because of our engineering
expertise – over 80 percent of our 1,000 staff are
technical engineers.” IHS has built over 3,000
sites and maintains 99.95 percent power uptime.
Read this article to learn:
Why IHS invested in Cameroon and Cote d’Ivoire
The 14 new African markets IHS have targeted
Why towercos will build most new towers in Africa
How IHS buys and their views of renewable energy and ESCO propositions
How IHS extend operator relationships from one country to the next
IHS has risen from a proven engineering and managed services
business partner in Nigeria to become the largest towerco in
Africa, by number of towers owned and managed. IHS were in the
headlines again in early April 2013, taking over the management
and marketing rights of over 2,000 towers from Orange to add
to the 1,758 towers they acquired from MTN in Cameroon and
Cote d’Ivoire in 2012. Selected members of the press and analyst
community joined three senior members of the IHS management
team for a breakfast briefing in Barcelona during Mobile World
Congress, where they explained their breakthrough year in 2012 and
ambitions to scale to over 25,000 towers owned or managed in MEA
within the next five years.
Keywords: Who’s Who, Interview, Towercos, Managed Services,
Acquisition, Investment, 3G, EBITDA, Tenancy Ratios, Infrastructure
Sharing, QoS, Build-to-Suit, Exit Strategy, Regulation, Anchor Tenant,
ESCOs, Hybrid power, Procurement, Sale Leaseback, Operational
Lease, Private Equity, C-level Perspective, Africa, Cameroon, Cote
d’Ivoire, Nigeria, Sudan, South Sudan, Viettel, Orange, MTN, IHS
www.towerxchange.com | TowerXchange Issue 3 | XX| TowerXchange Issue 3 | www.towerxchange.com30
31. “This transaction has accelerated revenue growth,
extended our reach and extended the amount of
help we can deliver to MNOs,” added Rhys Phillip.
The transaction also saw the introduction of new
investors, with new 25 percent equity holders,
Wendel, providing guidance and support at a
shareholder level.
The October 2012 deals with MTN were followed in
early April 2013 by the announcement that IHS has
taken over the management and license to market a
further 2,000 sites from Orange in Côte d’Ivoire and
Cameroon. In this latest deal the towers will remain
the property of the Orange subsidiaries: IHS will
manage the towers for Orange for an initial term
of 15 years, whilst Orange subsidiaries will benefit
from access to available slots on towers that IHS
currently owns in both countries.
IHS’s rationale for the acquisition and
long-term lease of towers in Cameroon
In acquiring 827 towers from MTN in Cameroon, IHS
secured the largest and most exciting tower portfolio
in a country with plenty of capacity for growth in
mobile penetration. Mobile subscriber numbers
grew from 3.1m in 2006 to 10.5m in 2011 at a CAGR
of 38 percent, and are projected to increase to 17m
by 2016, at a CAGR of 10 percent. Cameroon’s two
active operators, MTN and Orange, are looking to
expand coverage to rural areas and second tier
cities. 3G services are yet to be launched; however
regulatory guidelines encourage co-location in
Cameroon.
IHS’ anchor tenancy agreement with MTN, the
most profitable and creditworthy MNO in Africa,
also locks-in fulfillment of future build-to-suit
requirements from the number one operator.
IHS has positioned itself as the natural partner for
new MNO entrants in Cameroon. IHS noted that
Viettel had acquired a 3G license in Cameroon late
in 2012, and that the company was well financed
with annual sales over US$6bn and profits over
US$1bn. IHS also noted the presence of eleven
WiMAX/ISP players in Cameroon as potential
tenants.
IHS’s rationale for the acquisition and
long-term lease of towers in Cote d’Ivoire
In acquiring 931 towers from MTN in Cote d’Ivoire,
IHS secured the largest tower portfolio with the
highest potential for co-location in another country
with plenty of capacity for growth in mobile
penetration. Mobile subscriber numbers in Cote
d’Ivoire have grown at a CAGR of 26 percent since
2007, and are projected to increase from 18.7m in
2011 to 24.2m by 2016, at a CAGR of 5.3 percent.
Cote d’Ivoire’s three major operators are seeking
to expand capacity, while a further two tier two
operators are expanding to rural areas and second
tier cities. 3G services are in their infancy. The Cote
d’Ivoire government has hinted at the potential
creation of a legal framework making tower sharing
mandatory for MNOs. IHS also noted the presence
of eight WiMAX/ISP players in Cote d’Ivoire as
potential tenants.
IHS’ anchor tenancy agreement is again with
creditworthy MTN and, like in Cameroon, locks-in
future build-to-suit requirements. Strong build-to-
suit demand is expected from all existing MNOs in
Cote d’Ivoire.
The lease conditions released for IHS in Cote
d’Ivoire were the same as in Cameroon: the lease
www.towerxchange.com | TowerXchange Issue 3 | 31| TowerXchange Issue 3 | www.towerxchange.comXX
32. term was ten years with annual renewals for the
following five years.
3G and cell site densification in
Cameroon and Cote d’Ivoire
“With the development and rollout of 3G in
Cameroon and Cote d’Ivoire comes a need for
densification. Where a network planner might
have needed three towers to cover in 2G, 3G
might require five towers. We are still at the start
of investment in 3G in these countries; more
investment is needed in build-to-suit and we
anticipate 3G requirements driving more tenancies
on the towers we’ve acquired. On top of that there
is still a need for the improved voice call quality
and growth in the number of voice customers – the
50-60 percent penetration in these countries is quite
low,” said IHS’s Director of Business Development,
Romain de Villeneuve.
IHS targets 25,000+ co-location towers
over the next five years
“We retain an ambition to keep the growth curve
steep and maintain IHS’s leadership position in
Africa,” said CCO Rhys Phillip, showing a slide
that highlighted that Senegal, DRC, Kenya, Mali,
Zimbabwe, Mozambique, Morocco, Tunisia, Guinea,
Egypt, Madagascar, Rwanda, Ethiopia, and Zambia
are countries particularly targeted by IHS.
As for the Middle East, “we have a relationship with
Etisalat and a presence in the Middle East, but for
moment IHS is an African towerco. The Middle East
will always be part of our plans at the right time,”
said Phillip.
IHS is targeting over 25,000 co-location towers in
the next five years. “We will work on group level
relationships with mobile network operators and
partner with those operators as they explore new
opportunities, evaluating the attractiveness of
individual markets from a macro economic point
of view as well as the telecommunications and
network opportunity,” said Phillip.
“We have built up a reputation for performance
www.towerxchange.com | TowerXchange Issue 3 | XX| TowerXchange Issue 3 | www.towerxchange.com32
“ “Senegal, DRC, Kenya, Mali,
Zimbabwe, Mozambique,
Morocco, Tunisia, Guinea,
Egypt, Madagascar, Rwanda,
Ethiopia, and Zambia are
countries particularly targeted
by IHS
IHS CEO Issam Darwish signing the Orange deal
33. and quality of service in our markets and it is
one we are very proud of. It’s important that we
consolidate what we have in Nigeria, Cote d’Ivoire
and Cameroon, North and South Sudan, investing
in energy innovations, while leveraging our
commercial teams to build IHS’s revenue profile
and margins, enabling further investment in RD,”
added Phillip.
What defines IHS’ interest in a region
- does IHS have an appetite to acquire
any of the big portfolios rumoured to be
coming to market?
“We’re often interested if penetration of mobile
gives us room to improve,” said the Director of
Business Development, Romain de Villeneuve. “It’s
important to be the first towerco in a country, to
secure first mover advantage. There is greater or
lesser demand from all 54 countries in Africa, of
which we’ve prioritised 17 or 18. And then there’s
the operational challenge: it’s not easy to operate
towers in Africa, so risk monitoring is vital.”
“If any big tower opportunities arise from MTN,
Airtel, Orange, Etisalat, Vodafone/Vodacom or
Millicom take place, IHS will want to play a role,”
added the CCO Rhys Phillip.
“IHS are not risk averse. Our founders set up
a company in Nigeria when few would have
wanted to startup in such a complex market. As an
organisation, we like challenges: it has to be large,
growing market with potential tenancy growth. If
there is a large portfolio, we’d go for it,” added Rajiv
Jaitly, IHS’ CEO, Nigeria.
Towercos will build the majority of
new sites in the markets in which they
operate
“We believe few new towers will be built by mobile
network operators in the future; they will look to
outsource. In markets where there are towercos,
I don’t think operators are going be building any
more towers,” continued Rhys Phillip. “When
operators outsource their towers, much of their
network rollout and management expertise is
transferred to the towerco. Subcontractors will
continue to do much of the actual building, but
towercos will take over those relationships and be
responsible for the tower, for power, security and
maintenance.”
Is there enough incentive to build towers
in rural areas with low ARPU?
“This is an age old dilemma, how do we make
rural connectivity commercially viable?” said
Rhys Phillip. “Governments remain keen to push
the rural agenda, and the World Bank and others
support that ambition. IHS is keen to play our
part in driving that, and we structure our pricing
in rural areas so that it makes sense for both the
operator and us. The investments we’re making into
power solutions, such as uninterrupted solar, makes
it easier for us to develop in rural areas.”
Romain de Villeneuve took on the debate: “Where
there is a lack of RoI in rural area networks,
subsidies may be needed. But if we can build one
site for three operators and share the revenue, then
the mobile network operator doesn’t have to take
the risk. Rural networks will benefit from huge
growth thanks to tower sharing. We can be neutral
and independent in network rollout, enabling the
industry to invest together without acting anti-
competitively.”
“It’s not our policy to ‘build it and they will come’.
We talk to RF departments, and we know where
they want to go,” added CCO Rhys Phillip.
Given that the entry of towercos will
transform the passive infrastructure
supply chain, how do you buy?
“The towerco will be a filter in front of all suppliers
and subcontractors,” said IHS’s Director of Business
www.towerxchange.com | TowerXchange Issue 3 | 33| TowerXchange Issue 3 | www.towerxchange.comXX
“ “IHS are not risk averse...
As an organisation, we like
challenges: it has to be large,
growing market with potential
tenancy growth. If there is a
large portfolio, we’d go for it
34. unreliable grid power, and rising fuel prices, we
are interested in opportunities to share the risk
with energy innovators who are key to effectiveness
and profitability. Something like 80 percent of IHS
staff are African engineers, and we like to find
new solutions, not only through solar panels but
deep cycle batteries, the latest gensets, and remote
monitoring – we’re interested in innovations across
the whole passive infrastructure supply chain. With
every new tenant, our cost of energy decreases by
approximately 40 percent, so the infrastructure
sharing business model is aligned with energy opex
reduction models.”
“Power uptime is so critical, and the implications
of failures so huge, that giving that responsibility to
an unproven ESCO partner would be a step too far,”
added CCO Rhys Phillip. “But that’s probably what
CTOs were saying about towercos a few years ago!
Towercos had to prove themselves in Africa, and
they’ve done that over the last three years. I feel
the ESCO proposition will take a similar number of
years to mature.”
“African telecoms remains around 95 percent
prepaid, which means if there’s no power, there’s
no revenue. So our head is on the block. We have
to provide excellent Quality of Service (QoS) to
ensure our operator tenants do not lose revenue.
QoS in energy is a priority for IHS, and our mobile
network operator partners’ first expectation is
that we improve energy QoS and increase network
availability,” concluded IHS’ Director of Business
Development Romain de Villeneuve.
Extending operator relationships from
one country to the next
Ken Okeleke, Senior Analyst at Business Monitor
International asked an excellent question: “MTN
also work with IHS’s competitors – how easy is it to
establish relationships in one country and extend
those relationships to other countries?”
“Trust is a major requirement,” said CCO Rhys Phillip.
“Once you’ve attained the trust of a mobile network
operator it’s easier to get into another country. Our
experience is that the relationship has to be right at
country level, but relationships with the head office
are also important of course.”
“We’re very proud of what we’ve achieved to date –
we won those deals in Cameroon and Cote d’Ivoire on
merit. MTN will doubtless continue to make decisions
based on what’s best for them in each market, but
we’re confident we can maintain and deepen our
relationship with MTN,” concluded Rhys Phillip
www.towerxchange.com | TowerXchange Issue 3 | XX| TowerXchange Issue 3 | www.towerxchange.com34
“ “With every new tenant, our
cost of energy decreases by
approximately 40 percent, so the
infrastructure sharing business
model is aligned with energy
opex reduction models.
Development Romain de Villeneuve. “We buy like
all towercos: we research partnerships, we seek
loyalty, quality, and a competitive price.”
“Operators have their suppliers on a country by
country basis,” added CCO Rhys Phillip. “Our due
diligence process includes stepping into their
shoes, conducting our own due diligence on those
suppliers, looking at alternatives and leveraging
relationships with trusted existing partners.”
“IHS replaces the mobile network operator in
managing subcontractors,” added de Villeneuve.
“We have the time to focus on acquiring the
best engineering systems, the best innovations
combining grid, batteries, genset and renewables.
It’s a major change from mobile network operators
managing passive infrastructure, which is not their
core business. We know the passive infrastructure
industry, where fuel, steel and concrete are 75
percent of costs.”
“There has been an acceleration in solar energy
innovation. We won’t develop solar ourselves,
but will select the right partners with time and
focus on energy. Builders of towers will stay
builders of towers, and we’ll maintain our 10-year
relationships with companies on the ground,”
concluded IHS’ Villeneuve.
IHS’s view of the ‘energy as a service’
proposition
“Energy is our number one cost,” said Romain
de Villeneuve. “With many sites off-grid or on
35. Eaton’s procurement
priorities
CTO Thomas Jonell reveals what opex saving equipment and services
Eaton are buying, and how they buy it
Thomas Jonell, CTO, Eaton Towers
TowerXchange: Thanks for speaking to us
today Thomas. Please tell us about Eaton’s
procurement processes.
Thomas Jonell, CTO, Eaton Towers: Eaton Towers
puts a lot of emphasis on procurement – deploying
capital effectively is critical to our ability to
create value for our customers, our investors and
ourselves.
We’re always very specific in defining and writing
up the scope of our requirements before we go to
market. We think it’s critical to establish what we
want and how we want it, including specifications
of work and material use, expectations of rollout
and internal rate of return (IRR).
We typically use two official rounds. First, we
send our RFP to at least ten vendors. Responses
to that RFP are scored on quality of submission,
compliance with the specification, and adherence to
guidance pricing. By the second round it’s usually
down to two or three suppliers, with whom we’ll
exchange a framework agreement for the product
and related rollout requirement.
TowerXchange: Tell us about Eaton’s
procurement decision making unit.
Thomas Jonell, CTO, Eaton Towers: Eaton Towers
has a Planning Board Committee that approves
all OM subcontracting and capex deployment.
Decisions are made based on our requirements
and on our annual budgeting and reforecasting
processes. I chair the Planning Board Committee,
Read this article to learn:
Eaton’s 25% IRR and opex criteria when selecting equipment and services, and their use of VMI
5-year contracts with pan-African OM partners to implement refurbishment plans
Using site management systems to display alarms from RMS in the NOC
Eaton’s installation of a “Rolls Royce” access management system
Analysing data and designing energy solutions tailored for each individual site
Thomas Jonell has been a CTO in African telecoms
for more than ten years. He served as Celtel’s CTO in
Nigeria and DRC before spending the last five years
at the helm of the technology side of Eaton Towers’
business. TowerXchange wanted to know which
categories of partner selection merited the most
attention from the CTO, and to understand how one of
Africa’s ‘Big Four’ towercos define their requirements,
select partners and evaluate performance of key
equipment and service partners.
Keywords: Capex, Procurement, OM, SLA, RMS, Site
management system, Job ticketing, NOC, Energy, PIUs,
Line conditioning, Batteries, ESCOs, Access control, Air
conditioning, Active infrastructure sharing, Infrastructure
sharing, Africa, Ghana, Uganda, Eaton Towers
www.towerxchange.com | TowerXchange Issue 3 | 35| TowerXchange Issue 3 | www.towerxchange.comXX
36. which also includes our CFO Peter Lewis, our Group
Technical Manager and our Financial Business
Planner. We review the capex that each of our local
OpCos want to spend based on the budget and the
expected IRR on that specific build out.
In order for the Planning Board to grant permission
for a new purchase, we require at least three,
sometimes as many as five quotes from approved
suppliers contracted under our framework
agreement. So we secure firm quotations based on
volumes and lead times, and we select not just on
price but on ability to deliver and over the lifetime
of the equipment.
Assuming the selected supplier’s presentation
matched up to their quotes and our expected IRR,
then the Planning Board’s approval is granted.
TowerXchange: What are the most strategic
investments on which you spend the most time
– which categories of equipment and service
provider are most critical?
Thomas Jonell, CTO, Eaton Towers: The answer
differs according to the needs of each market and
depending on the timing within a tower transaction.
If we close a new deal where a number of existing
assets are taken over then the number one priority
is identifying the right OM service partner to
maintain these assets. Can they execute? Do they
have a clear scope? Our second priority is often
the immediate rollout of a management system so
we can understand how the OM subcontractor is
delivering against our expectations and SLAs.
TowerXchange: Do you often inherit legacy OM
contractor relationships?
Thomas Jonell, CTO, Eaton Towers: We may be
asked to maintain existing OM relationships with
some tower transactions, and we usually don’t
have any problem with that. Our thinking is that if
things are working well, we are unlikely to have any
issue with maintaining that relationship. However,
the mobile network operator’s relationships and
requirements may be very different compared to
those of a towerco. For example, when we came
into Uganda the operator’s OM contractor had 30
people. As towercos have fundamentally different
processes this has increased to nearly 70 since
we’ve taken over.
We like to encourage healthy competition by
having at least two, maybe three or four, OM
partners in each country to make sure they are
benchmarked, that they can flex their muscles, fight
for the business, and receive more sites or lose sites
according to their ability to meet KPIs and SLAs.
TowerXchange: Do you have a preference to
work with pan-African OM contractors who can
replicate service levels in multiple countries?
Thomas Jonell, CTO, Eaton Towers: Yes. In the
next country in which Eaton will operate, we will
maintain our existing contractor relationship
formed in Uganda and Ghana. We know their
management team, they know what we expect, and
we have pre-agreed price lists.
TowerXchange: How long are your typical OM
contracts?
Thomas Jonell, CTO, Eaton Towers: We’ll often
award a three to five year agreement to give our
OM partners a longer term view and sense of
security. This enables them to make investments
in fuelling trucks, tracking systems and training,
and ultimately to see Eaton as a bit more serious
than the other clients who might offer only a six to
twelve month contract.
TowerXchange: What are your key performance
metrics for OM contractors?
Thomas Jonell, CTO, Eaton Towers: We prefer
to use the same KPIs and the same expectations
www.towerxchange.com | TowerXchange Issue 3 | XX| TowerXchange Issue 3 | www.towerxchange.com36
“ “
We like to encourage healthy
competition by having at
least two, maybe three or
four, OM partners in each
country to make sure they
are benchmarked… and
receive more sites or lose sites
according to their ability to
meet KPIs and SLAs