TowerXchange Issue 16

Tower
Xchange
Journal of the telecom tower industry in EMEA, CALA and Asia
Issue 16 | May 2016 | www.towerxchange.com
TowerXchange CALA:
< Is it time to invest in Argentinian towers?
< Brazil tower industry facing its toughest year yet
< TowerXchange verdicts on Bolivia and Telesites
TowerXchange Africa and the Middle East:

< Analyses of AMT Tanzania and IHS+HTN deals
< BMI study the Big Four, MottMac study Algeria
< TowerXchanges whos who in MEA towers
TowerXchange Asia:
< edotco, Indus Towers, Protelindo perspectives
< Cam Towerlinks project to connect Angkor Wat
< TowerXchanges guide to Chinese tower market
TowerXchange Europe:
< Cellnex CEO Tobias Martinez interviewed
< Transformation in Turkey, Germany, Russia & CIS
< UK, France, Poland and Greece market studies
Meet the tower industry leaders

Reports from a dozen European roundtables join us next in Florida!
Dont miss TowerXchange Meetups for CALA (16 -17 June) and Africa (19-20 October)!
Tower
Xchange
Contents
Regular and special features
5
CALA tower count, analysis and news
50 Africa tower count, analysis and news

76 Asia tower count, analysis and news
92 Europe tower count, analysis and news
105 The evolution of Telefnicas Telxius
131
CALA: Argentina opens, Brazil

slows, Bolivia studied
132 Brazil tower industry facing its toughest year yet

148 Investment opportunities in Argentinian towers
157 TowerXchange and Mott MacDonald on Bolivia
163 Is Telesites a force to be reckoned with?
168
111 Global tower market maturation
MEA: whos who, plus AMT

and IHS deals analysed
169 TowerXchanges whos who in MEA towers

182 BMIs verdict on Africas Big Four towercos
186 AMT enter Tanzania, IHS acquire HTN and Hotspot
199 Mott MacDonald Share Square: Algeria
115 Ranking the top 185 towercos worldwide

119 RANsharing: the search for an equitable deal
124 Growing pains: how to scale a towerco
129 AMT and SBA quarterly results review
203 TowerXchange market analysis: China
329 Small cells special feature
TowerXchanges whos who

349 Directory of over 170 vendor profiles
353 Abloy, Acsys, Ascot, Ausonia, Bladon Jets, EnerSys,
Invendis, IPS, Nexsysone and Tarantula
202
Asia: China, Indonesia, Laos,

Cambodia and India
220 Inside edotcos NOC, plus Sri Lanka and Myanmar

236 Indonesia: MNO perspective, XL-Protelindo deal
242 Cam Towerlink connect Angkor Wat, Laos study
248 SCM at Indus Towers; BMI on Indian tower market
2
| TowerXchange Issue 16 | www.towerxchange.com
261
65% European towerco

penetration by 2020
272 Cellnex CEO keynote interview

275 Turkey: Global Towers IPO imminent
282 German tower market restructuring
289 UK, France, Greece, Russia, CIS, Poland, Romania
TowerXchange Meetup calendar

< TowerXchange Meetup Americas, June 16-17, 2016
< TowerXchange Meetup Africa, October 19-20, 2016
< TowerXchange Meetup Asia, December 13-14, 2016
< TowerXchange Meetup Europe, April 4-5, 2017
www.towerxchange.com | TowerXchange Issue 16 |
With special thanks to the TowerXchange Inner Circle

Our informal network of advisers:
About TowerXchange
Founded in 2012, TowerXchange is your
(Chairman) Daniel Lee

Managing Director
Intrepid Advisory Partners
Chuck Green
Executive Chairman
Helios Towers Africa
Kurt Bagwell
President International
SBA Communications
Zhiyong Zhang
Chairman & President
Miteno
Suresh Sidhu
CEO
edotco
Jim Eisenstein
Chairman & CEO
Grupo TorreSur
Akhil Gupta
Chairman
Bharti Infratel
Malcolm Collins
Chief Executive
CTIL
Bimal Dayal
COO
Indus Towers
Michel Faivre
Directeur Programme Partage
dInfrastructure AMEA, Orange
Ted Zhong
CEO
Q Towers International
Inder Bajaj
CEO
HTN Towers
Nina Triantis
Managing Director, Global, Head of
Telecoms & Media
Standard Bank
Hal Hess
EVP, International Operations and
President, EMEA and Latin America
American Tower
Riana Donaldson
Manager: International Network
Operations Support
Vodacom
The TowerXchange Journal is free to
Terry Rhodes
CEO
Eaton Towers
Nobel Tanihaha
President Director
PT SOLUSI TUNAS PRATAMA (STP)
Tunde Titilayo
Vice Chairman
SWAP International
monetises this community through hosting
Marc Ganzi
President, Digital Bridge &
Mexico Tower Partners
Umang Das
Chief Mentor
Viom Networks
Jack Dessay
Managing Director
Macquarie Capital
Arun Kapur
Co-Founder
Irrawaddy Green Towers
Gilles Kuntz
CEO
TowerCo of Madagascar
Jeffrey Eldredge
Partner
Vinson & Elkins
James Maclaurin
formerly CEO
edotco
Maria Scotti
CEO
Torrecom
Enda Hardiman
Managing Partner
Hardiman Telecommunications Ltd.
and is governed with the support and advice
Areef Kassam
Director of Infrastructure
GSMA Mobile for Development
David Meganck
Founder and COO
Acsys
Adeel Bajwa
Senior GM of Legal Affairs and
Contracts, Warid Telecom
informal network of advisors
Ayman Al Adl
Director - TMT
Standard Chartered Bank
Tilak Raj Dua

Director General
TAIPA
Scott Coates
CEO
Wireless Infrastructure Group
Dagan Kasavana
CEO
Phoenix Tower International
Peter Owen Edmunds

Co-founder and Chairman
Russian Towers
Carlo Ramella
COO, EI Towers
and Chairman, Towertel
| TowerXchange Issue 16 | www.towerxchange.com
independent community for operators,

towercos, investors and suppliers interested
in EMEA, CALA and Asian towers. Were
a community of practitioners formed to
promote and accelerate infrastructure
sharing. TowerXchange dont build, operate or
invest in towers; were a neutral community
host and commentator on telecoms
infrastructure.
qualifying recipients. We also provide

webinars and regular meetups. TowerXchange
annual Meetups and the sale of advertising,
without compromising editorial integrity.
TowerXchange was founded by Kieron
Osmotherly, a TMT community host and
events organiser with 18 years experience,
of the TowerXchange Inner Circle an
2016 Site Seven Media Ltd. All rights reserved. Neither the
whole nor any substantial part of this publication may be reproduced, stored in a retrieval system, or transmitted by any
means without the prior permission of Site Seven Media Ltd.
Short extracts may be quoted if TowerXchange is cited as the
source. TowerXchange is a trading name of Site Seven Media
Ltd, registered in the UK. Company number 8293930.
YOUR
SIGNAL
STARTS
HERE.
TOWER OWNERSHIP
LEASING
SITE MANAGEMENT
FLORIDA HEADQUARTERED.
INTERNATIONALLY CONNECTED.
Our clients depend on SBA to provide the wireless infrastructure that allows them to transmit the
signal to their customers. As their first choice provider of wireless infrastructure solutions, we are
continuously setting the standard for customer satisfaction by Building Better Wireless.
800.487.SITE sbasite.com
2016 SBA Communications Corporation. All Rights Reserved.
SITE DEVELOPMENT
CONSTRUCTION
TowerXchanges analysis
of the independent tower
market in CALA
New tower count, new towercos
Estimated
number of towers owned or managed
618 by towercos in CALA
**Telesites
Since our last update, weve seen the creation of

Telxius, Telefnicas spinoff towerco which is going to
incorporate the operators assets in Spain, Germany
and Latin America into one entity. Additionally,
TowerXchange has spoken to several towercos that
we hadnt identified before such as Balesia, active in
Colombia, Peru, Guatemala, El Salvador and Puerto
Rico; MX Towers, active in the Mexican market and
likely to focus on small cell deployment across the
country; and Golden Comunicaciones, a joint venture
between Innova Capital Partners and Goldman Sachs,
focusing on Colombia and Telecommunications
Partners, operating in Peru.
TowerXchanges periodical CALA baseline data

update doesnt only feature the latest tower count
but includes several news items in terms of new
towercos, market openings and changing dynamics in
the CALA tower industry.
Estimated number of towers owned or managed by towercos in CALA

1,212
618
*American Tower
3,765
18,851
484
Estimated
number of900 towers
owned or managed
by8,852
towercos
in CALA
13,350
Telxius 1,655
Estimated number of
328 towers owned or managed by towercos in CALA
1,212
12,874
*American Tower
*American
Tower1,655
Telxius
Grupo TorreSur
**Telesites 23
SBA Communications
1400
132
20,000
25,000
30,000
35,000
15,000
10,000
20,000
25,000
30,000
35,000
20,000
25,000
30,000
35,000
15,000
193
65
901
753
480
ic
o
Pa To
rt w
ne er
rs
1203
555
208
500
450
400
100
200
100
190
193
1203
650
650
200
200
500
500
450
450
208
208 100
100
400
400
105
60
51
40
40
100
100
200
200
190
190
150
150
105
105
60
60
In terms of tower count, Amrica Mvils spin off is

proving itself as a BTS force. In fact, it has added as
Ecuador
Unknown
many as 2,009 new sites since its creation. Grupo
Spain & Germany
TorreSur has added a healthy 200 new sites to its
count, closing at 6,500. Phoenix Tower International
continues its regional (and U.S.) expansion with the
40
40
40
40
addition of 545 Viva sites in the Dominican Republic,
Dominican Republic
Dominican Republic
and the other middle market towercos continue to
Ecuador
Ecuador
grow.
Unknown
Dominican Republic
51
51
M
ex
ic
ex P o T
ic ar ow
o tn e
Pa To e r
rt w rs
Ph ner er
oe s CS
I
Ph n n
S
t i
In oenern xCTSS
te ix at ow
rTn T io e
oart ow na r
To rioen er l
rr s aUl
es
ni
da
U
ni
s
**das
B*r *Q
*a*
M
Br
zQ
C
a C ilMT
**C zilom oCw
To pa e
o
*
m
** ** w n r
** Cpoa e y
*C
nn r
on tiyn
tin en
ta
e
** nta l
** ** l
** *N
*N M
T M S
To orr S
rr ec
o
e
C co m
Ce en m
Annt ten
An d en n
de ea ni ial
a n al
* nP T
** **P*a aTrot ow
** *r*t wne er
** Inne rs
I( nr
(T nTnoo osv
or rvr at
re eastt te
se eecl l
c) )
II IIM
M
H H T T
do diog igh
h
B
B l li
To To ra rinaes ne
rr rre sil il
e
I
In nt s s A
te el An n
lli li d d
Si Sit in in
te e a as
So So s
lu lu
tio tio
ns ns
Al Al
fa fa
Si Si
te te
To T
TO T
O
rrorr
es es CSACS
A
de d
e
Pa P
naan
To T
m am
rr or
a a
es re
Ons O
linnl
e ine
Sk S
ysky
Te T
itesi
le el
coec
s tes
mom
To T
rr o
esrr
es
600
600
65
193
65
901
901 753
194
753 690
600
194 400
555
690
600
400
555
150
de
Pa
na
To
m
rr
a
es
On
lin
e
Sk
ys
Te
ite
le
co
s
m
To
rr
es
480
400
600
ite
600
194
600
TO
CS
A
690
To
rr
es
650
200
ex
10,000
71
600
15,000
Ph
CS
In oen
S
te ix
rn T
at ow
i
on er
To
rr
al
es
U
ni
da
s
**
Br *Q
M
az
C
C il T
** om ow
p e
**
*C any r
on
tin
en
ta
l
**
**
*N
M
S
To
rr
ec
om
Ce
n
An ten
ni
de
al
an
** Pa To
** rt we
** ne r
r
I
(T nno s
or v
re att
se el
c)
II
M
T
H
do ig
Br hlin
To
as e
rr
il
es
In
An
te
lli
di
Si
na
te
s
So
lu
tio
ns
400
400
Source: TowerXchange
research, quarterly filings,
site lists
599 540 573 386 221 136
5,000
480
8001531
600
600
484
71132
400
1531
484
599 540 573 386 221 136
1203
600
1000
800
10,000
12,874
5,000
600
13223
1200
1000
8,852
Al
fa
S
1400
1200
1531
3,765
618
6,500
1000
800
8,852
1,212
13,350
12,874
328 5,000
7,032
6,500
Grupo TorreSur
1400
18,851
13,350
9006,500
7,032
SBA Communications71
Grupo
1200 TorreSur
23
599 540 573 386 221 136
328
Telxius 1,655
**Telesites
3,765
18,851
SBA Communications 900 7,032
Year
Country
Seller
2014
Brazil
BR Towers
2014
Brazil
Oi
2013
Brazil
Nextel
2013
Brazil
2013
Brazil
Unknown
Buyer
Tower count
Deal value US$
Cost per tower US$
Deal structure
American Tower
4630
$978,000,000
$211,231
Company acquisition
SBA Communications
1641
$527,000,000
SLB
American Tower
1940
$349,000,000
www.towerxchange.com
$321146
Z-Sites
American Tower
236
$129,000,000
$546,610
Company acquisition
Oi
SBA Communications
2007
$645,000,000
$321,375
SLB
Spain & Germany

* American Towers Brazil count is pro rata to the closing of the second tranche of TIM Brazil towers
Ecuador
Torresec
SBA Communications
Spain
& Germany
130
2015
Portfolio acquisition
31% remains subject to regulatory
** Creation of Telesites
approval. We understand Telesites has a BTS
contract from
Claro Costa Rica
34%
Mexico
sites as
Dominican Republic
Amzak/Teletower
Phoenix Tower
190 Tower Partners added almost 200 Company
2015
acquisition
Crownand
Castle
*** QMC has a portfolio of 901 towers across Brazil, Mexico, Colombia
Puerto Rico
Brazil Dominican Republic,
T4U
Phoenix Tower
529
2015
Company acquisition
**** Continental Towers owns a portfolio of ~690 towers, which their
website claims are distributed
across Mexico,
Jamaica,
American Tower
did
IIMT
in
Mexico.
Innovattel
grew
its
regional
Brazil
T4U
Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Colombia and Peru
Phoenix Tower
529
2015
Company acquisition
***** NMS has a portfolio of 600 towers across Nicaragua, Mexico,
Colombia
and Peru
SBA
Communications
Brazil
TIM
American Tower
6480
$1,200,000,000
$185,185
2014
SLB
portfolio
from
350
to
500
sites
and
Torrecom
added
****** Innovattel/Torresec owns a portfolio of 500 towers across Puerto Rico, Colombia, Ecuador,
Argentina,
Panama
and
Peru
Panama
American Tower
Phoenix Tower
60
2014
Subsidiary acquisition
Verizon
AT&T
XX | TowerXchange Issue 16 | www.towerxchange.com

Miscellaneous
4%
$179,897
SLB |
| TowerXchange
Issue 16
Empowering tomorrows connected world
effectively
cost-efficient
energizing
communities
empowering
communication
Connectivity is at the core of everything we do. Providing rst-of-its-kind regional accessibility,

our telecoms infrastructure reach enables us to touch communities and expand communication
businesses across Southeast Asia.
Enabling connectivity for the future
www.edotcogroup.com
Newest towercos in the CALA market
close to 100 sites to its portfolio across Nicaragua,

Guatemala and Mexico.
Name
Countries
Focus
Balesia
Colombia, Peru, Guatemala, El Salvador, Ecuador
BTS
Golden Comunicaciones
Colombia
BTS
MX Towers
Mexico
Small cells/rooftops
Telecomm. Partners
Peru
BTS
Telxius
Peru, Chile, Brazil (Germany, Spain)
Carve out
Selected estimated CALA tower counts
Chile
8,511
Peru
9,118
Caribbean Central
10,550
America
11,489
Colombia
15,353
Argentina
16,000
Mexico
27,084
Brazil
54,425
Estimated total towers in rest of South America: 17,400 (Venezuela, Ecuador, Bolivia, Paraguay, Uruguay, Surinam, French Guiana and
Guyana)
In the meantime, SBA Communications added

approximately 400 new sites to its CALA portfolio
and American Tower around 200. The U.S. publicly
listed giants may own the lions share of the existing
towers in CALA, but they are on an even playing
field when it comes to BTS, and the organic growth
is being liberally shared around, at least until the
Brazilian currency crisis settles.
Who is going to buy middle market towercos?
The CALA region is filled with middle market
towercos with portfolios ranging between 100 and
1,500 sites. In Brazil alone, TowerXchange reports
over a dozen entities purely focused on Build-toSuit activities, while in Mexico there are as many as
twenty.
As reported in a recent editorial on the status of the
Brazilian tower industry, most of these towercos are
private-equity backed and built on the assumption
that after a few years of BTS activity, theyd scale
their business enough to flip to one of the larger
towercos most likely American Tower or SBA
Communications. And not only theyd be acquired
but theyd be able to sell for multiples in the
twenties.
Amid current economic conditions, doubts
have risen as to whether these towercos can be
monetised, let alone at high multiples. The Brazilian
currency crisis alongside the saturation of the
FPS TOWERS IS FRANCES TOWERCO PURE PLAYER

WITH 2,400 TOWERS AND 20,000 ROOFTOPS
REACHING
YOUR
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FPS TOWERS / FRANCE / WWW.FPSTOWERS.FR / +33 (0)1 45 36 50 80
Major tower transactions in Latin America 2011/2016
*American Tower acquisition of 4,630 BR Towers includes2,530 towers plus 2,100 exclusive rights
**Totals and average exclude the GTP / American Tower deal as it was US-centric
Year
Country
Seller
Buyer
Tower count
2016
2016
2016
2016
2015
2015
2015
2015
2014
2014
2014
2014
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2013
2012
2012
2012
2012
2012
2012
2012
2012
2011
2011
2011
2011
2011
2011
Dominican Republic
Peru
Chile
Brazil
Ecuador
Dominican Republic
Brazil
Brazil
Brazil
Panama
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Mexico
Brazil
USA, Panama & Costa Rica
Brazil
Brazil
Brazil
Mexico
Brazil
Peru
Chile
Brazil
Brazil
Brazil
Brazil
Brazil
Chile
Mexico
Mexico
Colombia
Colombia
Brazil
Brazil
Viva
Telefnica
Telefnica
Telefnica
Torresec
Amzak/Teletower
Algar Telecom
T4U
TIM
American Tower
BR Towers*
Oi
Nextel
Z-Sites
Oi
Nextel
Nextel
Oi
GTP**
Oi
Oi
Telefnica
Axtel
Sitesharing
Telefnica
Telefnica
Telefnica
Oi
Telefnica
Telefnica
Telefnica
Telefnica
Telefnica
Telefnica
Telefnica
Millicom/Tigo
Telefnica
Sitesharing
Phoenix Tower
Telxius
Telxius
Telxius
SBA Communications
Phoenix Tower
Highline do Brasil
Phoenix Tower
American Tower
Phoenix Tower
American Tower
SBA Communications
American Tower
American Tower
SBA Communications
American Tower
American Tower
SBA Communications
American Tower
BR Towers
Grupo TorreSur
American Tower
American Tower
BR Towers
Torres Unidas
Torres Unidas
SBA Communications
Grupo TorreSur
American Tower
BR Towers
American Tower
American Tower
American Tower
American Tower
American Tower
American Tower
Grupo TorreSur
American Tower
545
900
328
1655
130
190
125
529
6480
60
4630
1641
1940
236
2007
2790
1666
2113
15700
2113
2113
93
883
100
350
400
800
1208
192
1912
1500
558
1554
584
125
2126
1358
666
Totals / average
42,822
Special thanks to Jonathan Atkin, Managing Director at RBC

Capital Markets for his contribution
Deal value US$
Cost per tower US$
$11,500,000
$214,000,000
$35,061
$129,305
$16,000,000
$128,000
$1,200,000,000
$185,185
$978,000,000
$527,000,000
$349,000,000
$129,000,000
$645,000,000
$413,000,000
$398,000,000
$343,000,000
$4,800,000,000
$251,000,000
$293,000,000
$18,000,000
$250,000,000
$211,231
$321146
$179,897
$546,610
$321,375
$148,029
$238,896
$162,328
$305,732
$118,788
$138,665
$193,548
$283,126
$178,000,000
$258,000,000
$33,000,000
$252,000,000
$225,000,000
$96,000,000
$323,000,000
$122,000,000
$18,000,000
$182,000,000
$206,000,000
$585,000,000
$222,500
$213,576
$171,875
$131,799
$150,000
$172,043
$207,851
$208,904
$144,000
$85,607
$151,694
$878,378
$8,288,000,000
$200,130
Deal structure
Company acquisition
SLB
Company acquisition
SLB
Subsidiary acquisition
Company acquisition
SLB
SLB
Company acquisition
SLB
SLB
SLB
SLB
Company acquisition
SLB
SLB
SLB
SLB
Partial acquisition
SLB
SLB
SLB
SLB
SLB
SLB
SLB
SLB
SLB
SLB
SLB
SLB
SLB
Partial acquisition
One of Africas leading

independent telecom
tower companies.
HTA acquires, builds, and manages
wireless telecom infrastructure,
leasing it to mobile network operators
to deliver network efficiency and
quality performance across Ghana,
Tanzania, Republic of Congo and the
Democratic Republic of Congo.
Find out more about our business at

www.heliostowersafrica.com
LatAm towerco breakdown by country

AMT
Andinas
Continental
Innovattel
QMC
SBA
Torrecom
Phoenix
Tower Int.
Torres
Unidas
Centennial
NMS
ATP
Balesia
Mexican market represent near-term barriers

to high valuation exits. And the Andean States namely Colombia and Peru - are getting pretty
crowded too, with lease prices being driven down
by fierce competition, which raises further concerns
with regards to the valuation of future successful
sales.
However some companies did manage to exit the
market, namely BR Towers which sold its 4,630 sites
across Brazil to American Tower for US$978mn, T4U
which was acquired by Phoenix Tower International
(PTI) in 2015 and Teletower Dominicana, again
bought by PTI in the Dominican Republic.
I believe that there are a couple of reasons why
towercos could achieve good exits. On one hand,
they might hold valuable and scalable portfolios,
with good locations, tenants and paperwork. Or
they could be hitting a sweet spot by being up for
sale at the right time, in the right country, hence
representing a good entry point for aspiring
towercos or to scale existing businesses.
Brazil
Mexico
El Salvador
Colombia
Jamaica
Chile
Honduras
Peru
Ecuador
Costa Rica
Panama
Puerto Rico
Nicaragua
Argentina
Guatemala
Dominican Republic
Towercos focusing on a single country

Brazil: GTS, Highline, CSS, Skysites, Telecom Torres, Torre Online, AlfaSite, Brazil Tower Company
Mexico: MTP, IIMT, Intelli Site Solutions, Telesites, MX Towers, Vialux, Rent-A-Tower
Panama: Torres de Panama
Uruguay: Uruguay Torres
Costa Rica: Catalina Inc., Tocsa
Peru: Telecommunications Partners
Colombia: Golden Comunicaciones
No matter where these towercos operate and the

scale of their portfolios, middle market entities
looking at a successful exit strategy should very
carefully follow the rules of the game in terms of
pricing, paperwork and permitting to ensure the
value of their portfolios is maximised upon exit.
Mexico
Shying away from Mexico is almost impossible.
TowerXchange is constantly drawn by its dynamics
11
Breakdown of ownership of CALAs 165,000 telecom towers, Q1 2016

33782
American Tower
Telesites
SBA Communications
Grupo TorreSur
Telxius
Other independent towercos
Operator-captive
12874
84971
9487
6500
14503
2883
Mexico - Estimated tower count 27,084

150
~2000
208 ~700
400
450
Telesites
American Tower
1450
IIMT
12874
Centennial
Torrecom
Intelli Site Solutions
Other independent towercos including Conex
8852
(QMC), NMS Towers and MX Towers

Estimated MNO captive towers
and changing scenarios, even if we consider the

tower market over populated.
The recent creation of Telesites, Amrica Mvils
spin-off, represents a new phase for the local
industry with two towercos, Telesites and American
Tower, leading the pack in the Build-to-Suit race
thanks to their alliances with respectively Amrica
Mvil and AT&T.
In spite of a relatively weak demand and a third
player - Telefnica - reluctant to commit to any
growth plan and uncertain plans from AT&T,
Telesites has managed to build as many as 2,009
new sites for its anchor tenant as of Q4 2015. And
Telesites is already expanding beyond Mexico.
Market analysts have been cautious at predicting site
needs in Mexico and have forecasted no more than
5,000 additional co-locations by 2020, a factor that
could dampen the tenancy ratio growth expectations
of Telesites, American Tower and the wide array of
middle market towercos including Mexico Tower
Partners, Torrecom, IIMT, Vialux and Intelli Site
Solutions.
The government is currently working on a US$7bn
shared 4G network - the Red Compartida - which
could be an additional factor dampening the demand
for new sites in the country. In fact, the shared
network would need around 12,000 new sites to
function but to date, the bidding process is being
delayed and local commentators remain cautious
with regards to the actual feasibility of the project.
While TowerXchange forecasts Telesites and
13
American Tower to maintain their moderated

expansion in Mexico, we also remain positive with
regards to the potential for consolidation among
towercos, especially since there are as many as
twenty middle market towercos operating in the
country.
Costa Rica - Estimated tower count 2,924

450
573
SBA
American Tower
Central America and the Caribbean

Costa Rica is the first country beyond Mexico where
Telesites is pursuing its expansion beyond Mexico.
In fact, Claro has recently assigned a 300-tower BTS
project to the Mexican towerco. Telesites will be the
sixth towerco in this 2,923 tower market, joining
market leaders SBA and American Tower, Continental
Towers, TOCSA and recent entrants PTI. Since
liberalising the market back in 2008, the Costa Rican
market has grown into a stable business environment
with relatively good growth potential and a modern
regulatory system. In a further attempt to improve the
local telecom sector, the Coordination Commission for
the Installation or Expansion of Telecommunications
Infrastructure (CCIAIT) has recently presented its first
Action Plan for Telecoms Infrastructure which aims,
among other goals, at creating a record of all telecoms
infrastructure of the country, which would be the
first of this kind in the region.
Cuba had a population of 11.3mn people and 2.6mn
mobile subscriptions at the end of 2014, giving a
mobile penetration of just 23%. Over the past twelve
months, diplomatic relations between the U.S. and
Cuba have been reinstated and there have been
an increased ability to transact between the two
countries.
Continental Towers
PTI
484
TOCSA
~1000
ICE
Claro
180
105 132
El Salvador - Estimated tower count 1,246

50
221
250
~25
SBA
Continental Towers
Tigo
Claro
Digicel
300
400
Telefnica
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Guatemala - Estimated tower count: 3,554

200
TowerXchange is keeping a close eye on the island

in light of its untapped market and undisputed
potential to become a target of international
towercos. In terms of towers, Cuba holds
approximately 500-700 sites which are currently
being shared by radio companies, TV stations and
ETECSA, which to date is the only operator active in
the country.
599
500
SBA
194
Torrecom
~100
Continental Towers
Tigo
Claro
Telefnica
~2000
Honduras - Estimated tower count: 1,200

~200
Operator captive towers

Continental Towers
~1000
Innovattel/Torresec has recently participated to

Informtica 2016, the IT and telecom forum held in
Havana, Cuba. Discussing with TowerXchange on
the potential of the Cuban telecom industry to open
up to new MNOs and, as a result, to towercos, they
commented that theres still quite a way to go before
the Cuban government makes a move towards
liberalising the market. However, the change is
likely to happen sometime over the next couple of
years.
The Dominican Republic has been the target of
Phoenix Tower International which grew its local
portfolio from zero to 735 sites in just five months.
PTI has first acquired local towerco Teletower
Dominicana and its 190 towers and lately added
545 sites by closing a deal with Viva, the third
carrier of the country, at the time owned by Trilogy
International Partners. Along with the transaction,
Trilogy sold Viva to local media company Telemicro
Group, owned by businessman Juan Ramon Gomez
Diaz.
At the end of 2013, the mobile industry became a
three-way game between Claro, Orange and Viva,
since Orange and Tricom were both acquired
17
by Altice, a cable and telecoms investor from

Luxembourg.
Given the presence of four creditworthy tenants, it
is perhaps surprising that El Salvador is the least
penetrated tower market in Central America at
17%. SBA Communications and Continental Towers
appear to be the only towercos active in El Salvador,
SBA having acquired the majority of Telefnicas
sites.
Guatemala is a complex country with a very
competitive tower industry. SBA Communications,
Torrecom, Balesia and Continental all operate
in the local market which is characterised by a
fairly strong regulatory environment and the
huge influence of local communities - Consejos
Comunitarios de Desarrollo Urbano y Rural
(COCODES) - in the approval of new deployments.
Local billionaire Mario Lopez owns substantial
equity in market leaders Tigo, and also owns most
of the land under their towers, which makes the
operator reluctant to participate in widespread
infrastructure sharing.
Honduras might soon see the entrance of a second
towerco, Balesia, which would be the second one
to operate in the country in addition to Continental
Towers Corp. For now, theres been little visibility
on the local industry and its potential with around
20% towerco penetration and the two carriers - Tigo
and Claro - still holding on to their tower portfolios.
Nicaragua is a country where the perceived
operational and country risks may be higher
Nicaragua - Estimated tower count: 1,004

50
386
300
SBA
Torrecom
NMS
Claro
Telefnica
75
193
Panama - Estimated tower count: 1,561

90
150
540
SBA
Continental Towers
PTI
Torres de Panama
Cable & Wireless
550
Claro
~100
60
Telefnica
71
19
Bolivia: fast facts
Economy
Population
10.8mn (Q4 2015)
Fitch rating
Poverty headcount BB/Stable

ratio 39.3% (2014) (July 2015)
Inflation 4.9% (2016E)
Mobile sector
98%
SIM penetration
(Q4 2015)
Connections 106mn
(Q4 2015)
$$$$$$$
$$$$$$$
$$$$$$$
Foreign investments
US$2.1bn (2014)
Carriers
23.1%
Entel
49.6%
30%
Tigo
Viva
this highly fragmented collection of markets,

and Phoenix Tower International with its recent
acquisitions and Innovattel with its eye on Cuba
seem ahead of the competition.
Bolivia Still a virgin market in terms of towerco
penetration, Bolivia is a complex country to do
business in. However, with three active operators
all planning to make considerable investments to
upgrade their networks and enhance the quality
of their infrastructure, BTS firms could consider
making a move in the near future.
Specifically, dominant player Entel has recently
announced a US$1bn five year investment plan
which will focus mainly on enhancing the quality
of mobile infrastructure and ensuring coverage
of rural communities. Tigo invested US$130mn to
expand its infrastructure across the country and
Viva committed to US$80mn in 2015.
The Andean States
than the actual ones. Four towercos including

SBA and Torrecom operate in the country and to
date, most of their activity is focused on BTS since
the inventory of available portfolios is scarce. In
fact, Telefnica has sold most of its assets to SBA
Communications, Claro retains approximately 300
towers which could be transferred to Telesites in the
future and the third operator Xinwei hasnt started
operating yet in spite of its announcements this past
January.
Panama holds its place in the regional tower
game since the acquisition by Phoenix Tower
International of 60 sites from American Tower.

SBA remain market leaders with smaller portfolios
held by Continental Towers and Torres de Panama.
According to GSMA Intelligence, Panama is a
fast grower market in Central America with four
active carriers (Cable & Vision, Claro, Digicel and
Movistar), 148% penetration rate and 5.9mn mobile
connections.
The rest of the Caribbean has been very quiet in
terms of towerco activity. I believe that Cuba and
the Dominican Republic could represent interesting
starting points for towercos looking at entering
In just over a year, TowerXchange came across at

least a dozen towercos operating in Colombia, the
most recent of which is a joint venture between
Innova Capital Partners and Goldman Sachs, Golden
Comunicaciones. Of the 15,353 towers in Colombia,
67% are still in the hands of carriers with Claro
owning approximately 6,500 sites and Telefnica
2,000.
Interestingly, both companies have created spin-offs
and its yet to be seen whether their portfolios will
eventually be transferred to Telesites and Telxius,
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Colombia - Estimated tower count: 15,353
hence reducing the chance of any further sale and

leaseback opportunity in the country.
American Tower
Centennial
3765
Torres Andinas
~1000
10300
65
200
23
Other independent towercos including

Innovattel, NMS, Continental Towers,
Balesia, Andean Tower Partners, Torres
Unidas and Golden Comunicaciones
Estimated MNO captive towers
Peru - Estimated tower count: 9,118

Telxius
900
2342
American Tower
618
600
1358
2500
600
Torres Andinas
NMS
Innovattel
Claro
Telefnica
Bitel
Entel
A National Law designed to ease permitting in

Colombia reportedly has not prevented local
government from closing sites. And Tigo, Movistar
and ETB are sharing their 4G rollout, with roaming
agreements in place, which will dampen tenancy
demand. However Avantel and DirecTV, with the
potential of AT&T investment represent significant
upside to tenancy ratio models.
Possibly the quietest of all Andean States,
Ecuador has seen the development of its tower
market considerably suppressed in light of
Claros dominant position. The recent acquisition
of Innovattel/Torresecs 130 towers by SBA
Communications hints that the latter might be
looking at developing its presence in the country
but to date, we are yet to see other towercos active
in Ecuador. In fact, Torres Andinas has so far been
focusing on Peru and Colombia while Andean
Tower Partners is planning a market entry during
Q1 2017.
Torres Unidas
100
50
50
The announced 700MHz auction is yet to take place

in spite of being announced back in Q2 2015 and to
date and local news outlets suggest that the process
should be completed before the end of 2016. And
while local carriers still perceive their towers as
a competitive differentiator, the lack of a strong
regulatory environment doesnt necessarily favour
the infrasharing model.
Peru is one of the most interesting countries in the

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Chile - Estimated tower count: 8,511
its requirements to invest in camouflage, at times

compensating local communities.
1212
American Tower
480
328
Torres Unidas
~120
6371
Telxius
Estimated MNO captive tower
entire CALA landscape, and is a market which is

being heavily colonised by towercos. With a total
tower count just under 10,000 sites, its also one of
the least penetrated tower markets in the region
with towercos owning 24% of sites. In Q1 2016,
Telefnica has transferred 900 sites to Telxius and
it would be interesting to see if Claro follows the
same path and opens the door to Telesites in the
country.
Perus Ministry of Transport and Communications

has called for an increase from their current 9,000
to 22,000 cell sites over the next three years, an
increase of almost 2.5x in tower stock. In order to
ease the notoriously complex permitting regime, the
Congress passed Law N. 29022 back in 2015 which
introduced, among other things, the tacit approval
of permit requests after thirty days from the initial
demand.
Local sources still suggest that the country might

be up for big changes which could considerably
reshape the dynamics of the tower industry. In
fact, Peru could be the first country to regulate
the towerco sector, hence reducing the freedom of
action of towercos in terms of prices, conditions
and overall business strategy.
Chile has seen its attractiveness to towercos

considerably reduced as a result of Law No.
20.599, also known as the Towers Law, which
has suppressed the local BTS market with its
onerous restrictions on building in saturated
or sensitive areas, its somewhat heavy handed
attempt to mandate infrastructure sharing, and
However, the country still presents a certain degree

of opportunity for acquisitive towercos. In fact,
of its 8,500 towers, less than 2,000 are currently
in the hands of towercos. It must be noted though
that with Telefnica and Claro both active in the
country, the possibilities for independent towercos
to acquire assets are limited to Entel. In fact,
Telefnica has already transferred its 328 sites to
Telxius during Q1 2016, although it is not clear
whether that figure represents all Telefnicas
towers in the country.
In 2015, Entel, Movistar and Claro all started using
the 700MHz frequency for their 4G LTE networks,
following the 2014 spectrum auction which
included with extra coverage obligations including
connecting 1,281 remote regions, leading BMI to
project that Chiles carriers would need three to
four times as many towers.
Brazil A deep recession combined with associated
forex crisis and a less than rosy political landscape
have dragged Brazil back into the news for
all the wrong reasons. No more talks about
BRICs, exploding GDPs, generous investment in
infrastructure for major sporting events, and a
flourishing economy any more. But we must always
keep in mind that Brazil needs thousands of towers
to bring its network up to par with other developed
markets. With close to 5,000 subscribers per site,
the potential for towercos to deploy hundreds of
greenfield projects in the country remains, but
25
Brazil - Estimated tower count: 54,425
currently there is very little new build going on in

the country, with carriers shying away from new
projects and investments.
1000
18851
American Tower
In the midst of this challenging phase, the market

might be up for some fundamental restructuring
with both TIM and Nextel reportedly being up for
sale. And while consolidation among carriers seem
more likely, the tower market is at a standstill, with
middle market towercos struggling to achieve an
exit that meets their investors ROIs expectations.
SBA Communications
Grupo TorreSur
Telxius
15000
7032
4387
Remaining big 4 operators

Other operators including Nextel, Sky Brasil,
Algar Telecom, Sercomtel and ON Telecom
6500
1655
Brazilian independent towercos

100
753
CSS
150 51
40
40
650
More insights into the Brazilian tower industry

and the current state of play can be found at this
analysis.
Phoenix Tower do Brasil
400
Brazil Tower Company

Centennial
Paraguay and Uruguay
Highline do Brasil
Paraguay and Uruguay are virgin markets but we

are keeping an eye on their potential to open up to
the tower industry.
AlfaSite
Torres Online
1000
1203
Skysites
Telecom Torres
Allowance for other small towercos
Carveouts seem more in fashion than SLB these

days and Telxius - via its subsidiary Towerco Latam
Brasil - has already acquired 1,655 sites from
Telefnica. And the real game changer could be
Amrica Mvil in the case it decides to transfer its
8,500 towers to Telesites, hence creating the second
largest towerco in the Brazilian market.
Specifically, Paraguay is host to four operators,

namely Millicoms Tigo, Telecom Argentinas
Personal, Amrica Mvils Claro and stateowned Copaco, trading as Vox, who are currently
committing to considerable investments to upgrade
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Paraguay baseline data (Q4 2015)
Connections
7.7mn
Source: GSMA Intelligence
Population
6.7mn
116%
SIM penetration
Uruguay baseline data (Q4 2015)
Connections
5.5mn
Source: GSMA Intelligence
Population
3.4mn
159%
SIM penetration
their networks, scenario which might create the

right conditions for towercos to make a move into
the country.
Uruguay offers another enticing telecom landscape
with state-owned Antel actively competing with
Movistar and Claro and could be another interesting
target for towercos looking at new markets to
colonise.
To date, TowerXchange is tracking one active
towerco in the country - Uruguay Torres - of which
we have very little information.
Argentina Last but not least, Argentina is the
next big thing and what a few months ago was
just speculation about its potential is now turning
into action. In fact, while the new Government
is pushing to put Argentina back on the map of

international relations, the country does present an
ideal scenario in terms of its telecom industry and
cell site densification needs.
positive factor for entrepreneurial towercos looking

at making their way in what could become the most
attractive new tower market in CALA.
Argentinas new government is committed to
making the country an attractive destination for
international investors, and local authorities within
the telecom sector are currently engaging with
TowerXchange to present Argentina and its market
potential to the tower industry.
It must be noted that to date, BTS firm Innovattel/
Torresec is the only towerco actively operating in
the country and has begun constructing sites in
several locations and have been assigned search
rings throughout Argentina. But we are likely to see
more towercos exploring market opportunities in
the near future, especially in terms of BTS activity,
while we might need a bit more time before the first
wave of sale and leasebacks takes place. But local
experts bet that its just a matter of time!
Local experts suggests that of the (less than)

16,000 towers built in the country, as low as 12,000
are actually active and with an average of 4,500
subscribers per site, Argentina needs as many as
40,000 but at least 20,000 new sites in the near term,
entailing investments of as much as US$3bn.
Conclusions: towercos keep penetrating CALA
The country still presents many challenges for

international businesses looking at making a move.
From inflation all the way to permitting, towercos
willing to enter the market do need to juggle many
challenges and contribute to the definition of rules
and regulations from scratch. But this could be a
With the creation of Telesites, weve witnessed

the saturation of the Mexican market and are
now assessing the potential disruptive effect of
its entrance of other countries where Claro is an
active player. In the meantime, Telefnicas carve
out, Telxius, is reducing the potential for sale and
In spite of the slowdown of the Brazilian market,

the CALA tower industry is continuing its mission
to conquer the market and to date, it has reached a
respectable 48.5% penetration rate.
29
Argentina: fast facts
35%
1,500-2,000
new sites needed
per year 2016-2018
US$7+
average
Income
tax rate
ARPU
active in
Argentina
(Innovattel)
VAT
1%
the market
of the three
top MNOs
1
the new
expected combined
MNOs investments
regulator
ENACOM
resulting
from the
merge of
AFSCA
Wealth and
tax
AFTIC
140%
share of each
$$$$
21%
1:
BTS firm
32-33%:
SIM penetration
US$9bn:
in the next five years
$$$$
16,000
existing towers
in Argentina
US$2.2bn:
Raised during the 2014
4G spectrum auction
The evolution of the CALA telecom tower industry 2013-2016

Year
Est. total towers
Towers owned by
towercos
Towerco penetration
2013
140000
46011
32%
2014
148000
61729
41%
2015
156000
69850
44%
2016 to date
165000
80029
48.5%
leasebacks in several CALA countries. It will be

interesting to see how quickly the two carve outs
scale up, how quickly they gear up to focus on
co-location sales, and whether third party tenants
buy in to them as genuinely independent business
partners. With a Telxius IPO to follow soon after
Telesites, well be able to gauge how investors rate
these moves also.
In the meantime, new markets generate much
excitement among the investment and tower
community. Argentina is in the spotlight and
could very well become the most attractive tower
market over the course of the next two years. And
Cuba, Paraguay and Uruguay all seem well aligned
to become future targets for towercos willing to
explore new opportunities.
TowerXchange originally estimated that the level
of towerco penetration could reach 75% by 2020, a
figure which might be challenged by current market
conditions hampering new deals and investments.
However, with both Telesites and Telxius in the mix,
we could see considerable assets being transferred
in the near future
If you want to find out more about the

evolution of the CALA telecom tower
industry, TowerXchange invites you to
join the third annual TowerXchange
Meetup Americas, which will be held
at the Boca Raton Resort & Club, 16-17
June 2016.
31
Latin America Heatmap
Meetup
Americas 2016
16-17 June, Boca Raton
Resort and Club, Boca Raton
Legend
Towercos have acquired the majority of towers from carriers
Towercos have acquired a significant proportion of towers
from carriers, but the majority remain carrier-owned.
Significant BTS towerco activity also present
Less SLB activity, but plenty of BTS towerco activity
Early stage market for BTS and/or SLB
Negligible towerco activity
A unique networking opportunity with 250 leaders

of the CALA telecom tower industry
www.towerxchange.com/meetups/meetup-americas
33
CALA news
A roundup of tower news across Central and Latin America
Argentina: Innovattel signed credit deal with
Albright Capital Management
Innovattel has signed a five-year credit facility with
Albright Capital Management for US$45mn. The
funds will be utilised for the deployment of build-tosuit projects in Argentina. Manuel Aviles, CEO and
Founder of Innovattel, commented that thanks to
this funding, the towerco is well positioned to make
history in the Southern Cone region.
Argentina, Brazil: Nextel Argentina sale
completed - Brazil up for sale?
Argentina: New President of Telefnica Argentina

appointed
Back in March, Federico Rava was appointed new
President of Telefnica de Argentina, taking over
Luis Blascos role. Blasco will continue to sit on the
companys Board of Directors.
Argentina: Telecom Italia and Fintech complete
Telecom Argentinas deal
NII Holdings concluded the sale of Nextel Argentina

after transferring the remaining 51% of its interest
to Grupo Clarin. Steve Shindler, CEO of NII,
commented: This transaction is consistent with
our strategy to concentrate our resources on our
operations in Brazil and improve our liquidity
position.
Recent speculation suggest thats Nextel Brasil might
be up for sale too, for an estimated US$300mn.
However, Nextel Brasil CEO, Francisco Valim, has
denied the rumours.
and the acquisition of broadband provider GVT.

During an analysts presentation, CEO Amos Genish
commented that nine months after the integration of
GVT, savings are aligned with expectations.
Brazil: TIM Brasil up for sale?
Vivendi is reportedly assessing the possibility to
sell its majority stake in TIM Brasil, after having
acquired it back in 2014 as part of the GVT sale to
Telefnica.
Brazil, Chile, Peru: Telefnica transfers sites to
Telxius in Chile, Peru and Brazil
Telefnica Peru announced the transfer of 900
towers to Telxius subsidiary, Towercom Latam. In
previous weeks, Movistar Chile published its plan to
transfer 328 towers valued at US$11.5mn to Telxius
and in Brazil, Telefnica Brasil (Vivo) has sold 1,655
sites to Towerco Latam Brasil, the local subsidiary of
Telxius for a reported US$212.6mn.
Brazil: Nextel leads 4G market in Rio de Janeiro
Nextel took over the 4G leadership in Rio de
Janeiro in 2015, scoring a market share of 27.4%
and surpassing rival Vivo. Nextel is planning its 4G
launch in So Paulo in 2016 and reported 2.5mn
customers in 2015 (+68.5% YOY).
Brazil: Vivos data surpasses voice
Brazil: Telefnica Brasil benefits from tower sale

Telecom Italia has finalised the sale of its stake in
Telecom Argentina to Fintech. The transaction was
valued at over US$960mn.
34 | TowerXchange Issue 16 | www.towerxchange.com
Telefnica Brasil has reported Q1 profits for

US$346mn, following the sale of its towers to Telxius
In 2015, Brazilian operator Vivo generated more

revenue with data than voice. Specifically, data
accounted for 51.4% of Vivos ARPU in Q4 2015.
XX
Brazil: Ois bonds downgraded as TIM merger

plans fall apart
In February 2016 TIM rejected a plan to merge
with Oi, which contributed to the fall of Ois bonds
(-15.7%). The investment firm LetterOne, which
holds the rights to the tie-up until May 23, stated
that L1 Technology has been informed by TIM that
... it does not wish to enter into further discussions,
about the facilitation of a merger between Oi and
TIM in Brazil.
In the absence of the merger, Ois bonds have been
downgraded to B by Fitch. Similarly, Standard &
Poors downgraded Ois global scale credit rating
from BB+ to BB- and the domestic scale credit rating
from brAA+ to brA-.
Brazil: TIM commits to Brazilian investments
TIM Brasil published its investment plans for the
biennium 2016-2018 and announced capex for
US$4.9bn, excluding spectrum. Along with the
investments, TIM is planning savings for as much as
US$280mn by 2017.
Colombia: Goldman Sachs and Innova Capital
fund Colombian towerco
Goldman Sachs and Innova Capital Partners have
launched a joint venture to provide financing
to Golden Comunicaciones, a Colombian tower
developer. According to Patricia Rodriguez, Innovas
head of Latin American Development Colombia
presents a unique opportunity for growth in the
telecom sector, among other industries, and we look

forward to developing additional opportunities in
the region.
their exploitation and the use of state resources to

develop greenfield projects.
Costa Rica: Telesites enters Costa Rica

Herman Torres, CEO of Golden, added that Golden
offers our wireless customers a significant footprint
of high quality tower assets across Colombia. Today,
the investment made by Goldman Sachs and Innova
will enable us to reduce the digital divide that exists
in our country and undoubtedly will enable us to
improve our current network infrastructure.
Colombia: Colombian regulator pushes for less
limitations for new towers
Colombian regulator CRC is liaising with mayors
of Colombian cities, namely Bogot, Cajica,
Cali, Ibague, Lorica, Monteria, Planeta Rica and
Popayan, to analyse their Land Management
Plans. Municipalities are being requested to
remove limitations to the deployment of telecom
infrastructure. The regulators recommendations
are likely to extend to other municipalities including
Cartagena, Palmira and Floridablanca.
Costa Rica: Costa Rica to review infrastructure
law
The Coordination Commission for the Installation
or Expansion of Telecommunications Infrastructure
(CCIAIT) has published the Action Plan for
Telecommunications Infrastructure, which outlines
several goals to be achieved in the tower sector. One
of the key aspects of the plan is the creation of a
comprehensive record of infrastructure to maximise
Telesites has been awarded a 300 BTS project by

Claro in Costa Rica. The project is Telesites first
outside of Mexico, where the towerco had already
built 2,009 new sites by Q4 2015.
Cuba: Cuba sets ambitious telecom goals for 2016
Cuba is expected to add as many as 500,000 new
mobile lines in 2016. In a recent plan published by
State-owned operator ETECSA, the company outlines
several goals to enhance the QoS in the country and
aims at reaching 46% penetration rate by the end of
the year.
Dominican Republic: PTI adds 545 towers in the
Dominican Republic
Viva, the third carrier in the Dominican Republic,
has agreed to sell 145 towers as well as marketing
rights of over 400 sites to Phoenix Tower
International (PTI). In parallel, Viva was sold by
Trilogy International Partners to Telemicro Group, a
local media company owned by businessman Juan
Ramon Gomez Diaz.
PTI has been aggressively pursuing growth
opportunities in Central and South America and
this is the second deal the towerco has struck in the
Dominican Republic after the acquisition of 190 sites
from Teletower Dominicana in November 2015.
35
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22
Dominican Republic: Costa Rica plans new

spectrum auction
The Costa Rican Telecommunications
Superintendence (SUTEL) is planning a spectrum
auction for the assignment of 1,800 MHz and 2,100
MHz spectrum. The terms of the auction are yet to
be published but the government aims at auctioning
a total of 70MHz of spectrum in these bands which
were left over during the 2011 tender. Both Claro and
Movistar have previously requested more spectrum
to further enhance their services.
Dominican Republic: Altice commits to
investments in the Dominican Republic
Following the acquisition of Orange and Tricom,
Altice plans to invest around US$138mn in 2016 in
the Dominican Republic to upgrade its network. The
company plans to increase its 4G presence in all
major cities and expand the 3G network to 90% of the
population.
Mexico: Mexican carriers could be fined for
dropped calls
Telcel, Iusacell (now AT&T) and Movistar are facing a
potential fine of US$250mn for service failures from
2010. The ruling comes after the collective action
promoted by the Consumer Protection regulator,
PROFECO, which declared that back in 2010, dropped
calls amounted to 3.6 billion.
Mexico: Telesites subsidiaries merge
Opsimex and Promotora de Sites, two of Telesites
subsidiaries, have merged in March 2016. Opsimex

was created back in January 2015 as a result of the
spin off of Telcel while Promotora de Sites was set up
after the spin off of Sercotel.
Mexico: Telcel and AT&T receive AWS blocks
IFETEL confirmed the allocation of AWS spectrum
blocks to Telcel and AT&T. The two carriers have
been awarded 15-year licenses back in February and
the Mexican government will generate as much as
US$2.5bn from the auction.
Mexico: Telesites announces 2015 revenue
Telesites reported revenues for US$244mn in 2015.
The Mexican towerco highlighted that 63.3% of its
revenue is generated by tower rental. Meanwhile, the
tariff price war, and increasingly competitive towerco
landscape in Mexico are combining to put downward
pressure on lease rates, which are now below the
CALA average.
Peru: US$1.1bn invested in Peruvian telecoms in
2015
The Supervisory Agency for Private Investment in
Telecommunications (OSIPTEL) has reported that
in 2015, Peruvian carriers invested as much as
US$1.1bn in infrastructure. The Agencys Chairman,
Mr Gonzalo Ruiz Diaz added that the number of
antennas in the country went up by 24.6% (15,072)
as of Q4 2015 as a result of the increased level of
investments by the carriers. But added that the
country still needs as many as 14,000 new antennas
to reach good level of coverage. TowerXchange
estimate there are currently 9,450 towers in Peru
Please feel free to contact the TowerXchange team

Kieron Osmotherly
Founder & CEO
E: kosmotherly@towerxchange.com
Jo Jefferies
Executive Assistant to CEO
E: jjefferies@towerxchange.com
For editorial & speaking enquiries regarding Americas:
Arianna Neri
Head of Americas
E: aneri@towerxchange.com
For editorial & speaking enquiries regarding Africa or Europe:
Laura Dinnewell
Head of EMEA
E: ldinnewell@towerxchange.com
For editorial & speaking enquiries regarding Asia:
Ian Ferguson
Head of Asia
E: iferguson@towerxchange.com
For editorial & speaking enquiries regarding China &
Myanmar:
Christie Liu
Head of China and Myanmar
E: cliu@towerxchange.com
For advertising opportunities & event participation:
Annabelle Mayhew
Chief Commercial Officer
E: amayhew@towerxchange.com
M: +44 7423 512588
Emma Jones
Business Development Manager
E: ejones@towerxchange.com
Toya Smith
Senior Operations Manager
E: tsmith@towerxchange.com
For media partnerships & to request additional subscriptions:
Harpreet Sohanpal
Head of Marketing
E: hsonanpal@towerxchange.com
The TowerXchange Journal is published by Site Seven Media Ltd.

2016 Site Seven Media Ltd. All rights reserved. Neither the whole nor any
substantial part of this publication may be re-produced, stored in a retrieval
system, or transmitted by any means without the prior permission of Site
Seven Media Ltd. Short extracts may be quoted if TowerXchange is cited as the
source. TowerXchange is a trading name of Site Seven Media Ltd, registered in
the UK. Company number 8293930.
37
Thursday 16 and Friday 17 June, Boca Raton Resort and Club, Boca Raton
Meetup Americas 2016

A unique networking opportunity with 250 leaders of the CALA telecom tower industry
TowerXchange is doing a tremendous job for the tower industry in Latin America. The opportunity to get together in one
location and exchange ideas over several days with all of the tower companies in our region is truly invaluable
- Jim Eisenstein, Chairman and CEO, Grupo TorreSur
To discuss your participation, contact Annabelle on +44 7423 512588 or email amayhew@towerxchange.com
Diamond sponsor:
Silver Sponsors:
Bronze Sponsors:
TowerXchange Meetup Americas Draft Agenda

Boca Raton | 16-17 June 2016
Day One | Thursday 16 June
8:00 Registration and coffee
9:00 TowerXchanges analysis of the CALA telecom
tower industry
Speakers: Kieron Osmotherly, Founder and CEO and
Arianna Neri, Head of Americas, TowerXchange
9:45 CXO panel part I: Brazil
< Moderator: Jonathan Atkin, Managing Director,
RBC Capital Markets
< Peter Bendall, Senior Vice President, Macquarie
Group
< Eric Crabtree, Chief Investment Officer, IFC
< Jim Eisenstein, Chairman and CEO, Grupo TorreSur
< Mauricio Giusti, CEO, Phoenix Tower do Brasil
< Andre T. Laloni, Managing Director, Head of Brazil
and Southern Cone, UBS
< Roberto Piazza, General Manager - Brazil, SBA
Communications
< Douglas Silva, Head of Operations - Brazil,
American Tower
< Chahram Zolfaghari, CEO, Brazil Tower Company
11:00 Strategic partners panel: remote monitoring
solutions
11:20 Networking coffee break
11:50 Roundtable session I
12:50 Networking lunch
14:00 CXO panel part II: Central America and the
Caribbean
< Moderator TBA
< Kurt Bagwell, President - International, SBA

Communications
< Jos F. Escobar, Director, Catalina Site Management
< Edgar Geidans, Group CTO, Trilogy International
Partners
< Dagan Kasavana, CEO, Phoenix Tower International
< Federico Lorenzana, Country Manager - Costa Rica,
Continental Towers Corp.
< Maria Scotti, CEO, Torrecom
15:00 Strategic partners panel: energy solution providers
11:10 CXO panel part IV: Mexico

< Moderator: Marco Cordoni, Senior Partner, Analysys
Mason
< Felipe de Antuano, Co-CEO, Intelli Site Solutions
< Mariano Gomez, Vice President, NMS
< William Ritchey, Executive Vice President, IIMT
< Maria Scotti, CEO, Torrecom
< Jos Sola, CEO, Mexico Tower Partners
< Alex Wright, Managing Director, Nau Securities
12:20 Roundtable session III
15:50 Roundtable session II
17:00 End of day one followed by drinks reception
14:30 Roundtable session IV
19:30 TowerXchange networking dinner
DAY 2 - Friday 17 June

8:30 Morning coffee
9:00 CXO panel part III: the Andean States
< Moderator TBA
< Manuel Aviles, President and Founder, Innovattel/
Torresec
< Eric Ensor, COO, Torres Andinas
< Fernando Garca lvarez, Construction and Network
Infrastructure Manager, Entel Peru
< Ryan Lepene, Senior Managing Director, Peppertree
Capital
< Estrella Zaharia, CEO, Andean Tower Partners
10:20 Strategic partners panel: access control and site
management platforms

16:00 The potential of Argentina (and a look at virgin
markets)
< Moderator: Arianna Neri, Head of Americas,
TowerXchange
< Miguel ngel Arrigoni, President, First Capital
Markets
< Juan Cueria, Vice President and COO, Innovattel
Torresec
< Clarisa Estol, Secretary of Investment Promotion,
Ministry of Telecommunications of Argentina
< Andre T. Laloni, Managing Director, Head of Brazil
and Southern Cone, UBS
< Guillermo Mulville, Head of TMT for Latin America,
IFC
17:00 End of Meetup
XX
TowerXchange Meetup Americas 2016 | Roundtable sessions

Country and regional focus:
Operational and financial focus:
< Country focus: Colombia - Mariano Gomez, Vice President, NMS
< Project management best practices: from site acquisition to licensing
< Country focus: Costa Rica - Federico Lorenzana, Country Manager - Costa
Rica, Continental Towers Corp.
< Country focus: Argentina - Guillermo Mulville, Head of TMT for Latin
America, IFC
< Country focus: Brazil I - Roberto Piazza, General Manager - Brazil, SBA
Communications
< Country focus: Brazil II - Jose Augusto Varela, VP Operations LatAm, Grupo
TorreSur
< Country focus: Peru - Eric Ensor, COO, Torres Andinas
< Country focus: Dominican Republic - Dagan Kasavana, CEO, Phoenix Towers
International
< Country focus: Guatemala and Nicaragua - Maria Scotti, CEO, Torrecom
< Country focus: Mexico - Carlos Tilac, COO, Torrecom
< Country focus: Bolivia - Edgar Geidans, Group CTO, Trilogy International
Partners
< Country focus: The role of the Ministry of Telecoms for the promotion
of the telecom and tower sectors in Argentina - Clarisa Estol, Secretary of
- Eduardo Martins Pedro, COO, AlfaSite

< How to build towers with maximum future sale value - David Porte, VP
International, SBA Communications
< Land aggregators: friend or foe? Michel Buhler, former VP Business
Development - LatAm, American Tower
< Ground lease management: maximising the value of land - Michel
Buhler, former VP Business Development - LatAm, American Tower
< How to successfully achieve scale in multiple CALA countries - Dagan
Kasavana, CEO, Phoenix Towers International
< Entering virgin markets - assessing risks and opportunities - Fernando
Rodriguez, VP M&A and Corporate Development, Innovattel/Torresec
< Investing in Brazil and beyond: opportunity or risk off? - Peter
Bendall, Senior Vice President, Macquarie Group
< What do analysts look at when they evaluate towercos and their
performance - Alex Wright, Managing Director, Nau Securities
< The investibility of Argentina - Miguel ngel Arrigoni, President, First
Capital Markets
Investment Promotion, Ministry of Telecommunications of Argentina

< Regional focus: Colombia and the rest of the Andean region - Estrella
Zaharia, CEO, Andean Tower Partners
< Regional focus: Central America - Ricardo Ruiz, International Operations
Director, SBA Communications
< North America best practices: How to evaluate U.S. towerco investments
versus CALA - Sachit Ahuja, VP, Business Development, Tillman Global
Holdings
< North America best practices: Inorganic growth: finding value in
maturing tower markets - Alex Gellman, CEO, Vertical Bridge
More roundtable topics and leaders to be announced shortly. If you

have a suggestion for a roundtable, please contact me at:
aneri@towerxchange.com
41
Tower Industry Value Chain
Who you will meet
Investors: private equity, DFIs, debt finance, infrastructure funds

Investment management advisors
Law firms
Strategic consultancy
Independent Towercos
Due diligence
Demand modeling
Asset register audits
Sell co-locations
Generate amendment revenue
Build-to-suit
Achieve SLAs
Efficiency programmes
Optimise supplier contracts
Group level strategists

C-suite & network planners at local OpCos
Mobile Network Operators
Transfer assets to
Outsource
to
Tier 1 OEMs
Subcontract
Managed service providers

Construction services
Static assets
Turnkey infrastructure rollout

Tower design & manufacture
Import, customs & delivery
Site acq, leasing & permitting
Installation of towers
Tower strengthening
Decommissioning
Towers & masts

Shelters
Brackets
Enclosures
Lighting
Fencing
Outsource
to
Subcontract
or in-house
Monitoring &
management
RMS
Intelligence/analysis
Site management
Job ticketing
Asset lifecycle platform
Access control
0&M services
Maintenance
Staffing
Spare parts
Security
Refueling
Energy as a service
Dynamic assets
Energy equipment
Diesel genset
Solar
Wind
Fuel cell
Batteries
Rectifiers
Inverters
Line conditioning
PIUs
Fibre, microwave, satellite backhaul
Air conditioning
Lightning protection
Controller
Voltage regulator
Alternator
Microcells, small cells & DAS
ESCOs
Opex models
Vendor finance
Distributed generation
Community power
Active equipment
TowerXchange Meetups bring together 250+

business leaders representing the entire telecoms
and broadcast infrastructure ecosystem.
TowerXchange engages with MNOs who retain
their passive infrastructure, and with 151
independent towercos and network sharing joint
ventures which between them have acquired or
built over 2,032,800 towers worldwide.
TowerXchange also maintains relationships with
over 500 investment and advisory firms who
facilitate tower transactions.
TowerXchange explores the implications of
tower transactions for the supply chain: from
tower designers and manufacturers to tower
construction and O&M firms. The TowerXchange
community engages with every major telecom
energy equipment and service provider worldwide,
including an emerging class of credible ESCOs.
We track over 30 different RMS and ILM solution
providers, as well as leaders in access control and
H&S solutions for cell sites. And we connect the
passive infrastructure ecosystem with innovations
in microcells, small cells and DAS as well as fibre,
microwave and satellite backhaul.
The TowerXchange community is brought
together by the renowned TowerXchange
Journal, circulated to 15,000 tower industry
leaders worldwide. The tower industrys leaders
gather annually at TowerXchange Meetups we
look forward to meeting you there!
XX
What is a Meetup?
Proven over seven past events attended by over 1,000 decision makers, TowerXchange Meetups
are unique executive retreats for the most influential men and women in telecoms infrastructure.
Held annually in Africa, Asia, CALA and Europe, we use small group round table breakouts to give
participants unique access to the key stakeholders in the telecom tower industry in each country.
Every TowerXchange expo has sold out
Laser beam focus on towers

Another problem with other telecom events is that
passive infrastructure is typically hidden away as an
under-appreciated small part of a broader show. The
huge audience of middle management, device and
VAS influencers at other events dilutes access to the
few tower decision makers present. In comparison,
TowerXchange has been described as a networking
club for tower geeks everyone you meet at
TowerXchange is focused on towers, and everyone you
meet is a decision maker.
Curated expo of proven suppliers
80-90% of the leading towercos and MNOs attend
Accelerate vendor selection
At other telecom events, a maximum of around 10-15% of the CXOs who lead tower strategy for MNOs and
towercos are in attendance. At TowerXchange we regularly attract multiple senior representatives from 8090% of the towercos active in any region, as well as the majority of MNOs. And thanks to our unique structured
networking round tables, everyone has access to these decision makers.
If you want to buy telecom tower structures and

accessories, energy equipment, energy services, RMS,
ILM, access control, H&S equipment, or if you want to
contract with tower construction and O&M firms, then
43
Unique round table breakouts
the private expo at the TowerXchange Meetup provides

a whos who of proven passive infrastructure
equipment and service providers.
examine ownership of energy assets and the prospects

for energy service providers.
DAS being rolled out?
Unique structured networking

And opportunities for your business tomorrow
Identify opportunities for your business today

TowerXchange introduces each Meetup with our
proprietary research, defining the size of the
tower market in each country, identifying who
owns the towers today and predicting the future
tower transaction pipeline. We also track network
consolidations, extensions and densification, and
We use MNO and towerco CXO panel sessions to

understand the future of the tower industry. What
has been the progress of tower transactions and of
portfolio integration? What future acquisitions are
planned? How is capex being deployed? What are the
priorities of efficiency programmes? Are opex-sharing
models being explored? Are microcells, small cells and
TowerXchanges renowned round table breakouts are

led by an expert moderator, but everyones opinions
and questions are welcomed. Each round table focuses
on a specific country, financial or operational issue.
You can attend three or four round tables at each
Meetup. Register now to secure your choice of round
table and tailor your agenda to meet your networking
objectives!
XX
Our sponsors and exhibitors

DIAMOND
SPONSOR:
201
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305
105
304
104
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103
102
302
101
301
Access to Main
Meetup room
Entrance / Camino Foyer
SBA Communications
SBA Communications Corporation is a first choice provider and leading owner and
operator of wireless communications infrastructure in North, Central and South America.
By Building Better Wireless, SBA generates revenue from two primary businesses - site
leasing and site development services.
In our site leasing business, SBA leases antenna space on our multi-tenant towers to a
variety of wireless service providers under long-term lease contracts. SBA owns and
operates over 24,000 towers across North, Central and South America. We build our
towers at the request of wireless carriers, leveraging our in-house experience in site
acquisition, zoning and construction. Our ability to offer carriers a comprehensive portfolio
of communication sites is complementary to our tower ownership business. Currently,
SBA manages approximately 5,000 communication site locations on behalf of third-party
landlords.
Through our site development services, SBA offers wireless service providers assistance
in developing their own networks. Our services include site identification and acquisition
as well as obtaining zoning approvals and permitting for networks representing all
technologies. SBA also provides a broad range of cell site equipment installation,
optimization and integration services. Our extensive site development experience includes
participation in the development of more than 45,000 communication sites.
www.sbasite.com or call 800.487.SITE

45
Our sponsors
SILVER SPONSOR:
SILVER SPONSOR:
SILVER SPONSOR:
Siterra, An Accruent Product

Acsys
Invendis
Acsys is a specialized towerco security and field service
Founded in 2007, Invendis Technologies India Private Ltd.
management software provider. Recognizing the telecom
is an M2M/IOT company based out of Bangalore. Invendis
industrys relentless drive to efficiency, we design
designs and delivers IOT technology-enabled business
solutions to accelerate you forward. Our software and
solutions for Telcos & Towercos to provide seamless
technically. Sixteen of the towercos and infracos that
mobile applications in combination with military-
services to their clients.
TowerXchange tracks are current Siterra customers,
Siterra, an Accruent Product, addresses the software needs

of tower companies to sell co-locations, upgrade capacity,
build-to-suit, maintain accurate asset registers, manage
maintenance, and collaborate with vendors operationally
as well as consolidate and integrate tower-related software
spanning 18 countries and five continents. The first version
grade access control hardware form a 4 tiered tool for:

Flexibility, Efficiency, Productivity, and Security.
Our core products and services include front end
equipment, sensors, transducers, business applications,
Our solutions are designed to improve your site
systems integration, product engineering, installation,
operations through the near elimination of theft, reduced
maintenance and 24X7 Global Monitoring & IT
inefficiencies, vendor and ticket auditing, and real-time
infrastructure services. Invendis also specialises in
remote control of field technicians. In the age of Big Data,
deploying complete range of Remote Monitoring &
Acsys gives you the intel you need to offer your tenants a
Energy Optimization services for the data sensitive
better experience while reducing your OPEX.
infrastructures.
of the Siterra site management platform was released in

2001. 100,000 users later, Siterra has become the industry
standard, must-have operating software for tower companies
today. Accruent works with its leading towerco customers
to jointly develop new features that are deployed regularly
through the SaaS platform to constantly improve customer
value. Accruent has developed global process standards
with local flexibility to pair with best-in-class software
functionality.
Our expert team of mechatronic security, software
Invendis pioneered customizable IOT enabled Front End
Accruents telecommunications division serves some of
development, and telecom professionals represent 14
Monitoring & Controlling equipment, which empowered
the worlds largest mobile network operators and service
nationalities and have combined their expertise to deploy
Towercos with access to real-time Monitoring & Energy
the Acsys solutions in nearly 50 countries around the
optimization solutions in shortest possible time.
globe. Acsys is ISO 9001 certified and a preferred supplier

of many of the biggest names in the telco industry.
In a span of 8 years, Invendis has set a global footprint
with over 1 lakh remote assets across Asia, Middle-East,
Acsys - solutions built to improve your bottom line.
Africa & Europe.
www.acsys.com
www.invendis.com
providers in addition to tower companies, helping link

employees from different organizations in the industry to
collaborate to projects. Accruent is the largest independent
provider of commercial property management software,
serving the telecom, retail, education, healthcare, and
corporate markets with over 4,400 customers in 120
countries.
www.accruent.com
XX
Our sponsors
Bronze Sponsor:
AUSONIA
Nexsysones all-encompassing software platform is used
drafting of sale and purchase, debt and equity financing,
by some of the largest technology upgrade roll-outs in the
master lease, build-to-suit, site management and service
USA, as well as some of the largest greenfield deployments
level arrangements; and have played a prominent role in
inAsia such as in Myanmar where operators and tower
complex fibre transactions.
companies use nexsysone to enable the sharing of network

AUSONIA provides specific power solutions for any typical
infrastructure.
telecom application (STANDBY GENSETS, OFF GRID BTS
POWER UNITS, HYBRID SOLUTIONS, MOBILE POWER
The nexsysones advance software module towerone
STATIONS, NO-BREAK POWER SYSTEMS, etc.), successfully
is specifically tailored to make easy the tower sharing
certified by 12 YEARS on FULL OPEX model.
process that tackles the typical technical, contractual and
www.velaw.com
Bronze Sponsor:
commercialcomplications that ultimately stop the common

Thanks to its unique technology, based on VARIABLE SPEED
objective of reducing operational costs via site sharing.
DC GENSETS with mechanical efficiency, AUSONIA offers

a wide portfolio of modular HIGH EFFICIENCY ENERGY
www.nexsysone.com
SOLUTIONS, specifically designed to power off-grid / bad-
Bronze Sponsor:
PHOENIX TOWER INTERNATIONAL and

PHOENIX TOWER DO BRASIL
Phoenix Tower International (PTI) and Phoenix Tower
grid BTS sites and totally monitored and controlled by
do Brasil (PTB) own and operate towers and other
remote through a dedicated web-based system. Such power
wireless infrastructure and related sites throughout Latin
solutions are designed to significantly reduce the OPEX and

TCO of the Telecom Operators and Tower Companies.
www.ausonia.net
Bronze Sponsor:
Vinson & Elkins RLLP
America, the Caribbean and the United States. PTI and
Vinson & Elkins is one of the oldest and largest
Costa Rica, Panama, the Dominican Republic, Colombia,
international law firms, with approximately 700 lawyers
the United States and Brazil.
PTB currently own and operate wireless infrastructure in
located in 15 offices around the world.

PTI and PTB are devoted to helping our wireless
nexsysone
Our global telecommunications team has extensive
infrastructure partnerscustomers, sellers, landlords,
experience advising on international telecoms and
and communitiesachieve their goals. Focused on the
telecoms infrastructure transactions. We have significant
principles of unwavering hard work and integrity, we
Nexsysone is your one-stop solution that harnesses the
industry experience, advising on telecoms transactions
demonstrate this mission every day through the fair and
power of its advance software modules through a single
in numerous countries. Our telecommunications advice
collaborative manner in which we deal with our business
unified interface to address the needs of operators and
includes acquisitions and disposals, debt and equity
partners and the dedicated operation of the wireless
towerowners in planning, efficiently maintaining and
financing, infrastructure development, operational
infrastructure sites we own and operate.
effectively sharing their infrastructure, thereby saving huge
arrangements, regulatory matters and dispute resolution.
operational costs and enhancing ROI on their CAPEX.
We also have significant experience in the negotiation and
www.phoenixintnl.com
47
Our sponsors and exhibitors

Bronze Sponsor:
Ascot International
HYBRID GENERATORS DESIGNED FOR TELECOM and TOWER
OPERATORS that want to enter into a multi-tenancy agreement
CAPEX & OPEX PACKAGES from 5 to 60 kW load. More
than 30 years of experience in the power sector and 34,000
installations in the Telecom Market worldwide make Ascot
Industrial a leader for tailor made solution to meet customer
needs. A field-proven, modular, flexible, and scalable plug &
play solution designed to guarantee cost-effectiveness and
reduce maintenance expense - maximizing customer uptime
and satisfaction.
Product Portfolio:
< High Efficiency Diesel / LPG / Natural Gas AC Generators 5
kW up to 2 MW
< Variable Speed and Scalable DC Generators 5 to 60 KW
< Full Hybrid Solution (Generator + Battery + Renewable
Energy Integration + Remote Monitoring)
www.ascotinternational.com
Exhibitor:
GS Yuasa
GS Yuasa is a Japanese company formed in 2004 by the merger
of two large 100 year old battery manufacturers, Japan Storage
Battery and Yuasa. AtUS$3.6Bin sales, GS Yuasa is one of the
worlds largest battery manufacturers.
GS Yuasa manufactures a full line of technologies including
lithium, lead acid, nickel metal hydride, and nickel cadmium

for the automotive, industrial, and specialty battery markets.
Especially for Telecom market, we have developed a 48V
lithium ion battery module that has outstanding cyclic life and
charge acceptance that can reduce the runtime of generators
and the total cost of ownership of telecom base stations.
With40affiliates in17countries, GS Yuasa has a worldwide
presence operating under the GS Yuasa, GS, and Yuasa brands
www.gs-yuasa.com
Exhibitor:
Abloy
ABLOY secures business operations on land, at sea, and in
the air in all circumstances. Abloy has a provenhistory of
telecommunication business for decades. Along with the new
technology in telecom business Abloyhas introduced new
methods and systems to create value and fast pay-back time
to telecom customers. Abloyprovides a complete solution
including project management. Combining mechanical and
electromechanicalfeatures ABLOY PROTEC2CLIQ offers
double security with wide internationally tested and approved
productrange. Remotely controlled PROTEC2CLIQ system
enables to control sub-contractors activities on sitesreducing
management costs and providing traceability. Several telecom
customers have chosen ABLOYsolutions to be leaders in fast
developing telecommunication world.
www.abloy.com
Exhibitor:
telecom cabinets. The company has state-of-the-art facilities in

the USA and Sweden, and their products are used in more than
120 countries worldwide. NorthStar premium thin plate AGM
batteries deliver long life at elevated temperatures, with faster
recharge and superior PSOC cyclic performance. NSB Blue
Batteries are today reducing 85% of diesel generator run time
in offgrid telecom applications. The newly launched NorthStar
Academy program will help customers to prolong their battery
life and save energy in their telecom network.
www.northstarbattery.com/1/2/3.php
Exhibitor:
Metalogalva
TELECOM TOWERS MANUFACTURER
Quality products at fair prices. Company with 42 years
experience. Young and flexible team. 400 employees; 30
engineers. 100 000 tons galvanizing capacity (year). 14 welding
and plasma robots. 6.6M Investment on new equipments.
Qualifications:
- QUALITY MANAGEMENT SYSTEM ISO 9001
- RDI MANAGEMENT SYSTEM CERTIFICATE NP 4457
- ENVIRONMENTAL MANAGEMENT SYSTEM ISO 14001
- MANAGEMENT SYSTEM CERTIFICATE
- OCCUPATIONAL HEALTH AND SAFETY OHSAS 18001
- SPECIAL CERTIFICATION FOR GALVANIZATION for German
- Norm DASt GUIDELINE 022
Verification:
- QUALIFICATION OFMANUFACTURES TO WELD STEEL
STRUCTURES according to DIN 18800-7 Level E <EC
NorthStar
NorthStar is an industry leader in designing and manufacturing
high performance lead-acid batteries and high efficiency
CERTIFICATE FACTORY PRODUCTION CONTROL (FPC) EN 1090

1/2 EXC3
www.metalogalva.pt/pt/
XX
Our exhibitors
Exhibitor:
Cotech Tower Services
Exhibitor:
Redflow
COTECH was incorporated in 2006. We specialize in the

provision of ROPE ACCESS Inspection Repair and Maintenance
Redflow Limited is an energy storage specialist that has
Services. Skills ideally suited to the vertical tower industry.
developed the worlds smallest flow batteries. Redflows
Our qualified, trained and highly skilled work force can
unique flow batteries are designed for stationary energy
address your next project with safety, practicality and speed
storage applications ranging from itsZCellhome battery to
to market. IRATA Industrial Rope Access * SPRAT -Rope Access
its ZBM battery range for commercial, telecommunications
Approved * Comtrain Approved.
and grid-scale deployment with installation globally. Redflow
* Rope Access- For Safety, Speed and Cost Effectiveness
is a publicly-listed company (ASX: RFX) that operates R&D
Meetup
Americas 2016
facilities in Australia, as well as offices in the US and Europe.
http://www.cotechtowerservices.com
Produced in North America by Flex, one of the worlds largest
Exhibitor:
batteries are sold, installed and maintained by a global
manufacturing companies, Redflows high energy density

network of system integrators.
Mer Group
www.redflow.com
MER Group is a global leader in wireless infrastructure.

We supply cutting edge turnkey projects for cellular sites,
from the design stage, tower manufacture and supply, site
commissioning and installation. MER Groups tailor-made
solutions meet all the needs of a modern operator, and
specializes in the growing need for rural low-cost sites
supporting hybrid solar energy.
Established in 1948 Mer Group (TASE: CMER), has a
substantial global footprint with approximately 30 subsidiaries
Does your company provide

products and services to the CALA
telecom tower industry
If youd like to find out more and request a
(10 in Africa), and over 1,200 employees. The Group maintains
bespoke proposal, please contact Annabelle
a diversified portfolio focusing mainly on telecom, security
on +44 7423 512588 or email
and the CleanTech sectors.
amayhew@towerxchange.com.

www.mer-group.com/solutions/wireless-infrastructure
49
TowerXchanges analysis of the

independent tower market in Africa
and the Middle East
Integration in SSA, transactions in MENA
Figure 1: Estimated number of towers owned or managed by towercos in MEA
804
IHS Africa
American Tower
2435
2408
2126
1927
1393
1400
1600
2000
500***
700
70
500
TowerCo of
Madagascar
1793**** 787
3582
1350**
4717
300
Eaton Towers
1964
15882*
394
Unknown Country
South Africa
DRC
Rwanda
Uganda
Nigeria
Cote dIvoire
Zambia
Tanzania
Ghana
Cameroon
Congo B
Kenya
Burkina Faso
Niger
Egypt
700
Madagascar
5000
10000
* Pending closure of the HTN acquisition (expected Q2 2016);

** Pending closure of the Airtel transaction (expected Q2 2016);
*** Airtel transaction expected imminently
****inclusive of Airtel deal just announced governing 950 towers
Africas first towerco consolidation

The African market is no stranger to tower
transactions with just under thirty deals of
significant scale having been completed in the
past six years. Whilst sale and leaseback (SLB)
transactions, management with a license to lease
(MLL) arrangements and the formation of joint
15000
20000
25000
ventures between towercos and operators have

been widely carried out, 2016 saw the continents
first significant towerco consolidation with IHSs
announced acquisition of Nigerias HTN Towers.
In Nigeria inorganic growth opportunities are
limited, with only Globacom and NATCOMs towers
remaining on MNO balance sheets, and Globacom
having shown little appetite to divest. The market

does however have a number of smaller towercos
but faced with competition from IHS and American
Tower, these companies have begun to be absorbed
by their larger competitors with HTN and then
subsequently Hotspot, being acquired by IHS.
Whilst IHS possesses plenty of opportunity for
organic growth in the market, with an estimated
40,000 additional towers needed to meet growing
data requirements, the acquisition of HTN and of
Hotspots portfolio helps to bolster their position as
Nigerias leading towerco. From HTN and Hotspots
perspective the acquisitions also make a lot of
sense. With little room for inorganic growth and
two sizeable competitors in the built to suit market
in the form of IHS and American Tower, the two
companies were being increasingly squeezed out of
the Nigerian tower market.
Whilst we dont expect any major wholesale
consolidation amongst the big four towercos in
the immediate future, this landmark deal could be
the start of the rolling up of mid-market towercos
or the sale of smaller towerco portfolios. In South
Africa, speculation has been growing as to whether
American Tower will acquire Eaton Towers
portfolio of 300 sites, while IHS has already acquired
what amounts to an MLL deal with SWAP in Nigeria
as part of the HTN deal.
Next round of SLBs imminent
Progress has been made in Airtels tower disposal
with their Tanzanian towers being awarded to
American Tower (adding a fifth country to the
AMTs African footprint), their towers in the DRC
XX
being awarded to Helios and the operators Niger

transaction all but closed with Eaton Towers.
Whilst few developments have been observed with
the Middle Eastern Mobily and Zain processes, Saudi
Tower Company, with a portfolio of 16,400 sites, is
now reportedly looking into a tower sale meaning
that all three of Saudi Arabias operator portfolios
could be coming to market. Sticking with the MENA
region, it is widely thought that further towers of
the recently rebranded Orange Egypt may come
to market following the sale of 2,000 sites to Eaton
Towers late last year. Eaton again in pole position to
close that deal. Meanwhile, in Algeria VimpelCom
are yet to appoint an advisory firm to oversee a
proposed sale of Djezzys ~6,000 sites, with priority
first being given to the divestments in Russia, the CIS,
Bangladesh and Pakistan.
In sub-saharan Africa, speculation is gathering
that Mozambiques state owned operator, mCel,
will launch a sale of its ~2,000 towers in the
coming weeks. Whilst in the much earlier stages
of discussion, competitor Viettel is reportedly also
looking at a potential sale of its assets and, with no
independent towercos yet in Mozambique, 2016
could see this about to change.
There have been some developments in the MTN fine
with MTN making a good faith payment towards
the NCCs US$3.9bn and dropping their court case.
A sale of their South African towers could well be
on the cards to help raise capital toward some of the
remainder of the cost.
In other operator news, Orange continues to extend
its presence on the continent, closing its takeover

of Tigo in the DRC and Liberias Cellcom, whilst its
acquisitions of Airtels subsidiaries in Burkina Faso
and Sierra Leone are expected to close shortly.
Tower owners examine new energy business
models to reduce opex and operational challenges
There is a growing appetite amongst operators
and towercos to explore the ESCO model to help
alleviate a significant proportion of their operational
challenges. Finding an ESCO with the operational
experience and balance sheet such that the towercos
feel confident they can deliver the uptime required
to meet stringent SLAs (or shoulder the MNO
penalties should they not) still presents a challenge.
Conversely ESCOs, taking on the operational
challenges and risks need to create healthy margins
to make the business bankable. With energy already
representing the most significant opex cost at cell
sites, whether ESCOs can make the model work
at a return that attracts investors, and a price the
towerco or operator would be willing to pay, remains
to be seen.
In Nigeria, a similar arrangement has been put in
place between IHS and Flexenclosure. Flexenclosure
have agreed an order to supply 1,000 eSite power
systems (hybrid solutions combining battery, solar
and genset power sources) for IHSs sites in Nigerias
Abuja region. Under the terms of the agreement,
IHS will provide a portion of upfront capex for each
installation and then pay a managed services fee
for the delivery of power to the sites. It marks a
significant step for Flexenclosure in their transition
from being an equipment supplier to a quasi-ESCO.
In Jordan, Orange have explored an alternative

business model, signing an agreement with an
energy consortium to build five solar PV plants,
totally 33.7MW, which will power the companys
operations in the country. The project will make
use of a wheeling arrangement in place in Jordan,
whereby the sites will be constructed at a remote
location and then use the grid (paying transmission
fees and absorbing distribution losses) to bring
power to cell sites, with excess power being sold to
the grid. Whilst such a model may not be suitable for
sub-Saharan African countries with underdeveloped
grid infrastructure or which lack the necessary solar
irradiation, the innovative approach is indicative of
the increased emphasis that the telecoms sector is
putting on find its way to reduce its energy costs and
thus TCO.
Alternatives to the reduce TCO of mobile
networks?
Speaking to Orange recently on their solar project
they underscored the message that the transferring
of sites to towercos represents just one option in
the drive to bring down the cost of their networks;
energy efficiency and measures such as RANsharing
are equally important considerations when looking
at TCO.
In the last edition of the journal we reported that
Ooeredoo and Tunisia Telecom had launched
a RANsharing programme to reduce the cost of
network rollout and maintenance, estimating savings
of over 50% through the move and just recently it has
been reported that Etisalat and du are exploring the
formation of a JV infraco in the UAE.
51
To w e r s a n d M o n o p o l e s
w w w. s e c c i o n a l . c o m . b r
sales@seccional.com.br
Te l . + 5 5 4 1 3 3 1 8 . 2 3 11
Technology for leading edge reliability
Figure 2: MEAs biggest tower transactions to date

Year
2016
2016
2016
2016
2015
2015
2014
2014
2014
2014
2014
2014
2014
2013
2013
2013
2012
2012
2012
2012
2011
2010
2010
2010
2010
2010
2010
2010
2010
2010
Country
Seller
DRC +
Airtel
Hotspot
Airtel ******
Nigeria
Tanzania +
Nigeria
Nigeria
Egypt
Rwanda & Zambia
Nigeria
Ghana, Burkina Faso, Kenya & Uganda ****
Nigeria
Nigeria
Congo B
Rwanda & Zambia
Tanzania
Kenya ***
Cameroon & Cote dIvoire
Cote dIvoire
Cameroon
Uganda
Uganda
Uganda
Tanzania **
DRC **
Ghana
South Africa *
Nigeria
Ghana
Nigeria
Nigeria
Ghana **
Buyer
HTA
IHS
American Tower
HTN Towers******
IHS
Etisalat
IHS
MobiNil
Eaton
Airtel
IHS
Airtel
American Tower
Airtel
Eaton
MTN
IHS
Etisalat
IHS
Airtel
Helios
MTN
IHS
Vodacom
Helios
Telkom Kenya
Eaton
Orange
IHS
MTN
IHS
MTN
IHS
Warid
Eaton
Orange
Eaton
MTN
American Tower
Millicom/Tigo
Helios
Millicom/Tigo
Helios
MTN
American Tower
Cell C
American Tower
Starcomms
SWAP
Vodafone
Eaton
Visafone
IHS
Multilinks
HTN
Millicom/Tigo
Helios
Totals / average
Tower
count
950
160
1,350
*****1,211
555
2,000
1,113
4,800
2,500
9,151
2,136
394
1,269
1,149
1,000
2,000
931
827
400
300
1,000
1,020
729
1,876
1,400
407
750
800
400
750
42,927
Cost per
tower US$
Deal value
US$
$179,000,000
$123,593
$131,150,000
$181,000,000
$1,050,000,000
$65,575
$162,624
$218,750
$882,000,000
$485,000,000
$196,700
$227,060
$75,000,000
$87,616
$141,000,000
$143,000,000
$151,450
$172,914
$89,000,000
$80,000,000
$45,000,000
$21,850,000
$200,000,000
$81,000,000
$174,510
$130,719
$102,881
$228,375
$142,857
$199,017
$67,000,000
$83,750
$54,000,000
$120,000
$3,945,000,000
$126,450
Deal structure
SLB
SLB
Company acquisition
SLB
SLB
SLB
SLB
SLB
Joint venture (IHS 49%, MTN 51%)
SLB
SLB
SLB
SLB with direct investment in HTT*****
MLL (Contract since cancelled)

MLL
SLB
SLB
SLB
SLB
Joint venture (AMT 51%, MTN 49%)
Joint venture (HTA 60%, Milicom 40%)
SLB with right to acquire 1800 more
SLB
MLL
SLB
MLL
* Cell C deal included 1,400 existing towers plus the option to acquire up to 1,800 more to be constructed. Cost of original 1,400 towers only included here ** Millicom restructured their equity in Helios operations
into a 24% stake at group level, which Millicom is now seeking to monetise *** Telkom Kenya-Eaton deal subsequently cancelled ***** Vodacom sold 100% of equity in towers but subscribed to acquire a 24.5%
interest in HTT **** Plus Niger deal expected to be announced imminently, ***** Plus HTNs managed services agreement governing 702 SWAP towers transfered to Helios, + deal announced, not yet closed
53
Figure 3: Forecast African towerco footprints

Eaton Towers
Congo Brazzaville
DRC
Kenya
Niger
Burkina Faso
Egypt
Ghana
Tanzania
South Africa
Uganda
Nigeria
American Tower
IHS
Cameroon
Cote dIvoire
Rwanda
Zambia
2016 will see operators and towercos continuing to

explore new models to improve connectivity across
the continent. In South Africa, small cells and DAS
are becoming increasingly important as data usage
in urban areas continues to grow. At last months
Europe Meetup small cells was a hot topic, with
many towercos looking to diversify into the field and
whilst we dont expect this to become a significant
portion of African towerco business models just yet,
it is an interesting trend to watch.
Country overviews
Algeria: TowerXchange are tracking the possibility
of ~6,000 Djezzy towers coming to market. Algeria
is one of several countries which currently limits
foreign direct investment (FDI) to 49%. Under
such circumstances, an international investor
or towerco considering putting capital into an
Algerian tower play, whether BTS or more likely
sale and leaseback, is limited to a minority stake
and must source a local partner in a market with
no pre-existing independent tower industry. The
formula is further complicated in the case of Djezzy,
recently reorganised so that the government owns a
controlling stake.
Burkina Faso: Congratulations to Eaton Towers
on closing their deal to acquire Airtels towers in
Burkina Faso, where Telemob (Onatel) and Airtel vie
for market leadership, with Telecel (Planor Afrique)
not far behind. It hasnt been an easy period for
Burkina Faso within days of Eaton announcing the
deal to acquire Airtels towers, a coup had toppled
the government, and there is now the looming threat
of terrorist action spilling over into the State. If that
55
Your safety
is our
mission
National Association of Tower Erectors
The industry leader in

tower climber safety
605-882-5865 888-882-5865 (U.S.)
www.natehome.com
Figure 4: Estimated tower counts

for selected countries in SSA
Nigeria 30,996
South Africa 25,000
Tanzania 8,800
Kenya 6,600
Ghana 5,983
Mozambique
5,000
DRC 4,350
Uganda 3,485
Senegal 3,350
Zimbabwe
1,400
werent enough to contend with, Airtel recently

agreed to sell their opco in Burkina Faso to Orange.
3G was launched in 2013 but mobile broadband
penetration remains just 4%*. SIM penetration is just
79%* in Burkina Faso, a country of some 18.4mn.
Cameroon: New entrants Viettels Nexxtel launched
in September 2014 and claimed to have 2mn
subscribers by Q2 2015, although their window of
3G exclusivety expired at the end of 2014. MTN has
launched 4G in four cities and committed to hang 3G
and 4G equipment on 700 sites during 2016. Stateowned CamTel has commenced rollout of their GSM
network, completing Cameroons transition from
a two to a four MNO market. YooMee are one of
several non-traditional MNO tenants on Cameroons
towers. Prior to Nexxtel and CamTels rollouts, IHS
owned and operated 90% of Cameroons towers,
having acquired 1,000 towers from MTN and secured
an MLL (Manage with License to Lease) deal with
Orange for a further 900 towers. IHS eventually
persuaded Nexxtel to co-locate on a limited basis,
but Viettel have also built hundreds if not thousands
of their increasingly familiar guyed-mast towers.
CamTel may leverage co-location more substantially,
and have engaged Huawei to deploy their GSM
network.
The GSMA Green Power for Mobile Best Practices
for Energy Provision in Telecoms: Francophone
Africa report, released in April 2014, suggested
there were 2,090 towers in Cameroon at that time,
of which 533 were off-grid, 34% of which were using
solar power (plus two on-grid grid-DG-solar hybrids).
According to Orange, fuel represents 52% and the
grid 48% of the total energy cost in Cameroon. IHS
provides a full service tower+power service in

Cameroon, and thus is the principle buyer of telecom
energy equipment and services.
SIM penetration stood at 93%* and mobile
broadband penetration at 5%* in Cameroon in
Q4 2015, up from 72% and 1% respectively a year
earlier.
Chad: Airtel cancelled their sale of passive
infrastructure in Chad to Helios Towers Africa,
who had until that points seemed poised to become
the first towerco in a country with less than 2,000
towers. One of the reasons for the collapse of the
HTA transaction was subsequently revealed as Chad
was identified as one of four countries for which
Airtel had entered exclusive negotiations to sell their
opco to Orange, but the deadline for that transaction
has since lapsed. SOTEL is Chads third MNO, with
YooMee heading a list of prospective non-traditional
tower tenants.
Although it is a relatively small market,
TowerXchange dont think weve heard the last of
potential tower deals in Chad whoever owns the
opco, Airtel or Orange may be motivated to re-open
dialogue (presumably with Helios Towers Africa) and
resume the process of transferring assets.
At the 2015 TowerXchange Meetup Africa, Millicom
hinted at having an appetite to partner with an ESCO
in Chad.
Congo Brazzaville: Helios Towers Africa is the sole
towerco in Congo Brazzaville, having closed a deal to
acquire Airtels 394 towers, representing around 44%
57
Figure 5: Adoption of the independent towerco model in SSA
huge impact in terms of shortcutting our to time to

market. Whereas previously we needed to negotiate
with landlords, secure permits and engineer power
solutions in order to get new sites up and running,
leveraging the independent towercos sites reduced
our lead time significantly.
150,000
120,000
90,000
60,000
30,000
10,932
(11%)
200 8,700
(<1%) (9%)
23,060
(27%)
16,661
(16%)
69,849
(54%)
49,149
(40%)
46,765
(39%)
Independent
towerco owned
towers
MNO-captive
towers
)
(f
15
Q
20
16
20
4
Q
14
20
Q
20
4
Q
13
12
20
4
Q
11
20
4
Q
10
20
4
Q
20
09
of the countrys towers. Negotiations to sell Airtels

Congolese opco to Orange recently lapsed, but MNO
consolidation is not a new phenomenon in Congo,
Airtel having acquired Warids operation in the
country in 2014 vaulting them over MTN to become
market leaders. BinTels Azur are ranked a distant
third.
more than two in three of the towers in Cote dIvoire,

androvides a full tower+power service. According to
Orange, fuel represents 36% and the grid 64% of the
total energy cost in Cote dIvoire.
SIM penetration climbed just 2% to 102%* and mobile

broadband penetration grew by the same percentage
to 9%* in Congo between Q4 2014 and Q4 2015.
Number three MNO Moov was part of a package of

assets transferred from Etisalat to Maroc Telecom.
The regulator has revoked the licenses of MNOs
Comium and GreenN and is now considering offers
from Monaco Telecom, LPTIC and Viettel for a fourth
license - Viettel is thought to be the front runner.
Cote dIvoire: While SWAP operates a handful of

towers in the country, IHS holds a dominant position
in the Cote dIvoire tower market having acquired
a total of ~2,000 towers from market leaders MTN
(under SLB) and Orange (MLL) in 2014. IHS owns
YooMee launched a TD-LTE network in Cote

dIvoire in 2014, prompting CEO Dov Bar-Gera to
tell TowerXchange We entered Cote dIvoire after
IHS had secured the rights to market MTN and
Oranges towers for co-location, and that has had a
There are 26.1mn* SIM cards among Cote dIvoires

23mn* citizens, with mobile broadband penetration
at 35%*.
DRC: The sale of Airtels 950 towers to Helios has
just been announced, further strengthening Helios
position in the market. Helios is the sole towerco
and has been delivering reliable service and strong
tenancy ratio growth in the DRC since entering the
market on the back of a US$45mn deal to acquire 729
towers from Millicom Tigo back in 2010 (Millicom
originally retained 40% equity in Helios Towers
DRC which they then restructuredinto a 24% stake
at group level - which Millicom is now seeking to
monetise). Helios Towers DRC provides full service
tower+power. Grid power is reasonably reliable in
Kinshasa, but less reliable in Lubumbashi and Goma.
Almost all sites outside these three cities are off-grid
and fuel costs can be 2.5x more expensive in rural
areas.
Infratel claims to have built over 800 rural sites for
Vodacom DRC.
With around 4,250 towers serving 48.75mn
connections, DRC has one of the highest number of
SIMs per tower in the world at 11,470, illustrating the
DRCs huge growth potential.
XX
Figure 6: Estimated number of towers in MENA
Tunisia
Kuwait 7,000
Yemen
Lebanon 3,900 5,100
2,000
UAE
Qatar
8,500
1,100
Bahrain Oman
Libya
1,700
3,200
5,000 Jordan
5,900
UAE
8,500
Iraq
12,300
Morocco
17,000
Algeria
17,500
Egypt
20,000
Saudi Arabia
30,600
Source: Delta Partners data, TowerXchange presentation
There are three leading MNOs in the market; Airtel,

Orange and Vodacom (following Oranges recent
acquisition of Tigo), while aggressive cut-price
operator Africell claimed to have 7mn subscribers
in DRC by the end of 2014. Africell leveraged colocations on over 200 Helios Towers DRC sites
to accelerate time to market, and the operator is
launching 3G. Smile plans to launch LTE in DRC in
2016. Raga Sat has launched broadband services
leveraging O3bs fibre from the sky MEO satellite
service.
SIM penetration was just 62%* and although 3G was
launched in 2012, mobile broadband penetration
remained at 11%* in DRC in Q4 2015.
Egypt: Eaton announced a US$131mn deal to acquire
100% of the equity in 2,000 towers from Mobinil
(recently rebranded Orange following Oranges
99% buyout) in April 2015, representing a third of

the MNOs towers and 10% of the ~20,000 towers
in the country. The towers Eaton will acquire are
concentrated in the Delta, Upper Egypt and Red Sea
regions, but notably do not include assets in the
rooftop-centric Cairo market. It is however expected
that further divestments could be on the cards from
the operator.
A raft of mega-projects, including the construction
of a new capital East of Cairo, the discovery of
offshore gas, and the enlargement of the Suez canal,
could drive economic prosperity and demand for
towers.
With SIM penetration of 102%* and mobile
broadband penetration of 42%*, plus an established
culture of infrastructure sharing in the country, the
potential for towerco profitability is good in Egypt.
While 3G coverage is currently fairly extensive, with

most operators focusing on capacity upgrades ahead
of a potential 4G auction once the political situation
is more stable, Egypt still has more SIMs per tower
than any other country in MENA (4,690 versus
the regional average of around 2,500), illustrating
potential for new tower builds.
Vodafone Egypt leads the market followed Orange
with Etisalat Nisr, the third operator, making three
credit worthy prospective tenants, each of which
could potentially divest further towers in Egypt.
Telkom Egypts long mooted mobile launch may
finally happen in 2016.
Grid connections for Egyptian tower sites are slow
and expensive, so DGs are widely used the business
case for renewables may be boosted if fuel subsidies,
which currently mean diesel is around a fifth the
cost of other African markets, are reduced.
Local tower manufacturer / service provider HOIMEA also operates a network of around 40 towers
in Egypt, with a vision to scale to 300 by 2018. HOIMEAs tenancy ratio is already approaching 1.5.
Gabon: The future of Airtels towers in Gabon is
uncertain. The operator had originally set out to
divest towers in all 17 African countries, but Gabon
seldom seemed to mentioned on the grapevine. For
now, we assume the towers will remain on Airtel /
Africa Towers balance sheets, meaning there will be
no independent towercos in Gabon.
Airtel is deploying LTE, but mobile broadband
penetration was still negligible in Gabon at the
59
end of 2014. Etisalats Moov subsidiary in Gabon

was acquired by Maroc Telecom. Libertis (Gabon
Telecom) and Azur (BinTel) make up the rest of the
MNO market.
Every industry was affected, and towercos struggled

to achieve SLAs, while EBITDA margins suffered.
However, Ghanas towercos have developed dynamic
processes able to get ahead of fuel shortages.
Oil and Gas wealth partly accounts for Gabons

soaring 164%* SIM penetration rate.
SIM penetration rose from at 113% to 121%* and

mobile broadband penetration from 24% to 30%* in
Ghana between Q4 2014 and Q4 2015.
Ghana: Eaton are adding Airtels Ghanaian towers

to the 750 Vodafone towers they are managing with
license to lease. There are three major towercos
active in Ghana, which have been snapping up
tenancies for over three years. Back in 2010, Helios
Towers Africa setup a joint venture towerco with
Millicom Tigo as minority partners, to which 750
towers were transferred. Shortly afterward Eaton
Towers closed their deal with Vodafone Ghana,
then American Tower set up another joint venture
with MTN to which 1,876 towers were transferred
(ATC Ghana now markets 2,052 Ghanaian towers,
representing around a third of the countrys tower
stock). All of Ghanas towercos now provide a full
service tower+power. With strict permitting and
environmental policies in Ghana, its tough to get
new towers built and towercos expect less than
100 new structures to go up in 2016. However, this
amplifies appetites for co-location: tenancy ratios in
Ghana are already around two.
MTN leads a crowded market for operators, followed
by Vodafone, Tigo, Airtel and Glo, with Expresso
struggling to establish a foothold.
The devaluation of the Ghanaian Cedi, compounded
by deregulation of fuel prices, led to spiralling
opex costs and crippling fuel shortages in 2015.
Kenya: Eaton Towers are integrating several hundred

towers recently acquired from Airtel Kenya into their
portfolio. Eaton is the sole towerco in Kenya and has
long coveted the market, having secured an MLL deal
with Orange that was soon cancelled after a change in
strategic direction by the operator, which culminated
in the announcement of the sale of Oranges 70%
stake in Telkom Kenya to Helios Investment Partners.
Eatons number one issue: how to engage with
Safaricom as a tenant and as a de facto competitor
Safaricom selectively leases their own towers to other
MNOs at attractive rates. Safaricom has a dominant
position in Kenya with 66.3% market share. Airtel has
19.1%, Telkom Kenya 11.8% and new entrant Equitel
2.9%, according to CAK statistics for Q3 2015.
Kenya has ~6,600 towers, grossly insufficient for
a country of 46mn people and with a land area of
570,000 sq km. SIM penetration is just 80%* with
plenty of room for mobile broadband growth, at 18%*
penetration at Q4 2015. Safaricom launched LTE at
the end of 2014.
Kingdom of Saudi Arabia: Zain is divesting ~5,700
towers, while Etisalat (Mobily) is divesting ~9,600
towers in KSA. American Tower, Digital Bridge,IHS,
Providence Equity, Quippo, TASC Towers, Towershare
and a number of local investors have allbeen linked

with the opportunity. Following the movements
of its competitors, Saudi Tower Company are
also reportedly looking at a sale of their ~16,400
towers.The KSA tower market offers a good volume
of potential BTS opportunities, and a surprisingly
large amount of off-grid towers for a country with a
reliable grid.
KSAs 3G network is mature and the rollout of LTE is
well under way. SIM penetration was at 181%* with
mobile broadband penetration at 71%* in Q4 2015.
Kuwait: Market leaders Zain are divesting 1,600
towers in Kuwait, representing around a third of
the countrys ~5,100 towers. Ooredoo and STCs Viva
are Zains competitors. With population coverage
at 100%, any organic growth for towercos entering
Kuwait must be driven by network densification
rather than extension. SIM penetration was at 192%*
with mobile broadband penetration at 81%* in Q4
2015.
Madagascar: TowerCo of Madagascar (ToM), initially
spun out of TELMA but now an independent towerco
in its own right, operates around 700 towers on the
island of Madagascar. The operational challenge of
operating a distributed tower network, particularly
during rainy season, is not for the feint hearted,
while the success of ToM has deterred other towercos
from bidding for Airtels Madagascan towers, which
seem set to be returned to the local Africa Towers
subsidiary. Orange is also active in Madagascar.
SIM penetration was just 31%* and mobile
broadband penetration 19%* in Q4 2015.
XX
Estimated tower ownership in Nigeria

550
IHS own and BTS towers

IHS towers acquired from MTN
2,970
6,000
IHS towers acquired from Etisalat

IHS towers to be acquired from HTN
SWAP Telecoms & Technology (management and
200
marketing agreement to be transferred to IHS)
500
700
8,850
IHS towers acquired from Hotspot Network

American Tower Assets acquired from Airtel
BCTek
Communication Towers Nigeria
4,716
160 702
Other small Nigerian towercos
1,211
2,691
Malawi: Eatons deal to acquire Airtels towers in

Malawi was cancelled in late 2015, but the assets
may be brought back to market. Mobile services
are among the most expensive in Africa in Malawi,
contributing to SIM penetration of just 38%*, and
mobile broadband penetration of 15%*. Airtel lead
a dupoloy with TNM. Efforts to inaugurate a third
operator have floundered with Expresso and Celcom
failing to launch the regulators latest pony to back
is Lacell, who were licensed in October 2015. Xinwei
has announced plans to rollout a low cost rural
network. Athonet is deploying an LTE service. There
are around 800 towers in Malawi.
Mozambique: State owned operator, mCel is
expected to launch a sale of its c. 2000 towers
in the coming weeks, targeting over US$300mn.
Globacom
NATCOM
With no towercos currently in the Mozambique

market, the move has piqued the interest of Africas
resident towercos. A potential driver may be the
governments drafting of a bill mandating the
sharing of telecoms infrastructure. We understand
there are around 5,000 towers in Mozambique,
including 1,500-1,800 guyed mast towers erected
by low cost new market entrant operator Viettel.
Indeed it is the turbulence caused by Viettels entry
that may have precipitated passive infrastructure
monetisation, both on the part of incumbent mCel,
which has seen market share eroded by both Viettel
and Vodacom, and indeed potentially by Viettel
themselves. Viettels Mozambique subsidiary Movitel
is co-owned by Viettel and a holding company run
by FRELIMO (Frente de Libertao de Moambique
the main political party in the country).
Niger: When Eaton Towers opens up the first

towerco in Niger when their deal with Airtel finally
closes, theyll need to be ready to engage with a
challenging energy logistics scenario, low population
density, and sub US$5 ARPU. Airtel has recently
secured a 3G license in Niger where it competes
with Orange, SahelCom and Moov (recently sold by
Etisalat to Maroc Telecom). SIM penetration is just
34%* in Niger, and mobile broadband penetration
2%*.
Nigeria: Nigeria is a benchmark tower market for
many reasons. Its the largest towers and largest
mobile market in SSA, with 154.3mn* connections
among a population of 184.6mn*. Its the oldest
growth independent towerco market in Africa;
towercos have been building towers in Nigeria since
2006. Almost half (24,746) of SSAs towerco-owned
towers (49,149) are in Nigeria, and over US$2.5bn has
been spent by towercos to acquire 79% of Nigerias
towers. Towercos have proved their ability to deliver
99.9% uptime in challenging grid conditions in
Nigeria. Nigeria is not just a benchmark for African
towers, its proof of the efficacy of the independent
towerco model in any emerging market.
Competition for BTS opportunities is increasing
among Nigerias three major and many middle
market towercos. While most commentators agree
Nigeria needs to double the countrys current stock
of towers, uncertainty created by the NCCs US$3.9bn
fine on market leader MTN (the legal challenge of
which has been adjourned until mid-March) makes
predicting capex budgets a fools errand.
Nigerian cell site energy efficiency programmes
61
are also becoming a benchmark for the rest of

Africa, with battery hybrids widely deployed and
solar being added, particularly in the north of the
country. In early 2016 Nigeria also saw the first
towerco consolidation in the African market, when
IHS acquired HTN Towers portfolio in the country.
IHS have subsequently acquired Hotspot Networks
portfolio of 160 sites.
by Millicom-Tigo on 22.8% and Expresso on 21.3%

(according to statistics from ARTP for September
2015). Expresso are seeking a towerco partner in
Senegal (and beyond) they are seeking to add
250-350 towers to their existing network of 450.
It remains to be seen whether Tigo, with around
1,100 towers in Senegal, might also be interested in
partnering with a towerco.
Rwanda: IHS has closed the acquisition of

Airtels 184 Rwandan towers, to be added to their
acquisition of 550 towers from MTN Rwanda in
2013. IHS Rwandas managing director Kunle
Iluyemi was quoted in The New Times as saying
IHS erected 34 towers across the country in 2014,
with plans to build further 50 towers in 2015.
TowerXchange estimate there are around 1,300
towers in Rwanda, of which IHS own 804.
There are around 3,350 towers in Senegal serving a

population of just over 15mn with SIM penetration
of 96%* and mobile broadband penetration having
increased 63% YOY to 14%*.
Rwanda is home to three tier one MNOs, so has no

shortage of credit worthy tenants. MTN leads the
market, followed by Tigo and Airtel. Korea Telecom
secured a joint venture with the Rwandan Ministry
of Youth and ICT to build a nationwide LTE network.
SIM penetration in Rwanda rose from 61% to 75%*
with mobile broadband rising from 28% to 35%*
between Q4 2014 and Q4 2015.
Senegal: Sonatel, in which Orange is a controlling
stakeholder, had been investigating the potential
sale and leaseback of their 1,800 structures in
Senegal, but the challenges aligning all stakeholders,
including powerful unions and government
shareholders, now suggest Sonatel will instead
seek a managed services provider. Sonatel is the
market leader with 55.7% market share, followed
South Africa: Amidst financial pressures by NCCs

US$3.9bn fine on MTN, most commentators expect
the MNO to divest their most valuable remaining
tower assets to raise capital and MTNs South
African towers would be top of many towercos
shopping lists! The South African tower market is
up for grabs: only 8.7% of South Africas estimated
25,000 towers are currently in towerco hands.
American Towers landmark acquisition of 1,400
towers from Cell C back in 2011 has since been
supplemented with BTS activity, giving ATC South
Africa 1,927 towers in their portfolio by Q4 2015.
Eaton Towers has built around 300 towers in
South Africa. American Towers tenancy ratio is
South Africa is 1.9, while Eatons has passed two.
Atlas Towers have build 120 towers, quadrupling
their portfolio in 12 months in South Africa and
positioning themselves to compete for any sale and
leaseback opportunities. Infratel, Eagle Towers and
Pro High Site Communications complete the map of
South African towercos. A major sale and leaseback
in South Africa could precipitate the rollup of one or
more of South Africas middle market towercos.

Recent reports in Bloomberg suggest that MTN has
19,000 sites to sell in South Africa; that total may be
inflated by counting sites instead of towers with
a prevailing tenancy ratio as high as 1.8 in South
Africa, and reducing the total to exclude rooftops,
TowerXchange reckon MTNs South African tower
count is nearer 10,000. Should MTN bring their
South African Towers to market, TowerXchange
counts at least five prospective strategic buyers,
supplemented by the usual array of infrastructure
fund bidders.
Most commentators rate IHS as the favourite to
secure MTNs South African towers. Africas largest
towerco has a track record of acquiring MTN towers,
are amenable to flexing deal structures to meet MTN
requirements, and the two parties hold each other in
high esteem. While IHS would benefit from adding
some lower risk ballast to their West Africa-centric
portfolio, it remains to be seen whether they would
have the appetite to acquire assets in KSA and SA,
should they emerge successful in bidding for Mobily
and Zains towers in Saudi.
Meanwhile, Telkoms stop-start tower monetisation
programme has stopped again. Telkom asked for
expressions of interest in a portfolio of around
6,000 shareable structures in South Africa, but that
process was discontinued. Whether MTNs towers
coming to market could restart that process remains
to be seen.
Vodacom South Africa, which operates their ~10,000
tower network as an internal towerco, and leases
XX
space to third parties, would seem less inclined to

monetise their towers.
Tanzania: Helios Towers Tanzania (HTT) owns
around 3,450 of Tanzanias ~8,800 towers, acquired
in a US$75mn deal with Vodacom in 2013 and a
US$80mn deal with Millicom-Tigo in 2010 for 1,149
and 1,020 towers respectively. Millicom recently
restructured their equity stakes in HTAs local
towercos to acquire a 24% stake in HTAs parent
company. Millicom are now looking to exit that
investment. In order to fund further infrastructure
expansion in the country, Helios Towers Tanzania
has just secured a US$95mn loan facility with
Standard Bank.
American Tower have now entered the Tanzanian
market following the acquisition of Airtels 1,350
sites, raising competition in the country for resident
towerco Helios Towers Tanzania
Vodacom and Tigo are supplementing their network
in anticipation of aggressive competition from new
market entrants Viettel, which launched on October
15 2015 under the Halotel brand. Viettel has 3,000
new towers in the air or under construction, and
has begun co-locating. Zantel (acquired by Millicom
from Etisalat), Smart, Smile and TTCL complete the
MNO landscape in Tanzania, which lends itself to
co-location as each of Tanzanias four main MNOs
is dominant in a different region of the country,
providing a strong incentive for co-location to
accelerate nationwide coverage. The sheer scale of
Tanzania amplifies maintenance costs, which can be
as high as US$7,000 per annum ten times the cost
in the US.
Uganda: Eaton Towers has added Airtels Ugandan

towers to the 700 towers they acquired from Orange
and Warid back in 2012. Airtel since acquired
Warid, while Orange sold out to Africell. Uganda
remains ripe for further in-market consolidation,
with seven licensed MNOs. American Tower is also
active in Uganda, where they have a joint venture
with MTN and currently market 1,388 towers.
TowerXchange estimate there are a little over 4,000
tenancies on 3,485 towers in Uganda, suggesting an
average tenancy ratio just under 1.2. Expect this
number to rise driven by the enthusiasm of new
entrant MNO Africell, which operates an asset-light
model and prefers to co-locate rather than build
thus accelerating time to market.
Organised crime compounds the effect of
administrative fuel theft in Uganda, making site
hardening a priority for towercos.
SIM penetration is just 72%* in Uganda, with multiSIMing meaning actual penetration is under 50%,
with mobile broadband penetration at 16%*.
Zambia: IHS have acquired the towers of market
leaders Airtel Zambia to supplement their 2014
acquisition of MTNs Zambian 719 towers, which
supplemented by new build gives them 1,964 towers
in this this ~2,300 tower market. Capital constrained
Zamtel is the third of three MNOs, although the
government is a fourth player in Zambias tower
market through towers built by the Universal
Service Fund. Whilst the announcement is yet to be
confirmed, it is rumoured that Vodafone has been
awarded the fourth operator license by the Zambia
Information and Communications Technology
Authority. The government issued an ultimatum

to the countrys three operators MTN, Airtel and
Zamtel in October 2015 to improve their service
or face the introduction of a new operator in the
market. A six month period was given to improve
their service and with the deadline imminent it is
reported that Vodafone have already appointed a
CEO for their Zambian operations.
SIM penetration is 72%* in Zambia, and mobile
broadband penetration 16%. ARPU is low: in the
US$2-3 range.
Zimbabwe:There are around 1,400 towers in
Zimbabwe of which clear market leader Econet
owns around 500. Grid availability is typically
around 12 hours per day, so effectively almost all
cell sites in Zimbabwe are on unreliable grids,
requiring line conditioning and CDC battery backup
- the market is therefore a key target for renewable
energy plays. Operational risk is compounded by
significant country risk, but currency risk has been
significantly reduced since dollarisation
*Statistics courtesy of GSMA Intelligence, Q4 2015.
TowerXchange are looking forward to once
again hosting the top 250 decision makers
in African towers at the 2016 TowerXchange
Meetup Africa, hosted in the prestigious
ballroom at the Sandton Convention Centre on
October 19 and 20 2016! Visit:
www.towerxchange.com/meetup/meetup-africa/
63
Africa and Middle East News
DRC: Airtel agree tower sale to Helios Towers

Africa
A roundup of tower news across SSA and MENA
Airtel have agreed the sale of 950 towers in the

Democratic Republic of Congo (DRC) to Helios Towers
Africa. The divestment also includes towers that
are currently under construction. The agreement
was announced on 5th May and is still subject to
statutory and regulatory approval from the relevant
authorities.
Technology Company (LPTIC) have been received,

with Viettel thought to be the front runner following
its successful entry into several African markets
including Mozambique, Burundi and Tanzania.
DRC, Ghana and Tanzania: Millicom to sell 24%
stake in Helios Towers Africa
Cote dIvoire: ARTCI strips Comium and GreenN

of GSM licenses and reviews offers for a new
concession
The Regulatory Authority for Telecommunications
in Cote dIvoire (Autorite de Regulation des
Telecommunications de CI, ARTCI) has revoked
the licenses of operators GreenN and Comium
after months of speculation. With three MNOs
remaining Orange, MTN and Moov, ARTCI is now
considering offers for a fourth operator. Offers from
Monaco Telecom, Vietnams Viettel Group and the
Libyan Post Telecommunications and Information
It has been reported that Millicom plans to sell its

24% stake in Helios Towers Africa. In 2010, Helios
Tower Africa acquired a portfolio of 2,450 Millicomowned towers in Ghana, DRC and Tanzania. At
that time, Millicom retained equity stakes in the
individual tower companies and in Q3 2015 those
interests were reorganised into a 24% stake in the
parent company to simplify the investment. The
value of the transaction will provide an interesting
benchmark valuation for African towers with it
being highly likely that the details of the transaction
will be disclosed.
DRC: Millicom closes the sale of its DRC
operations to Orange
Millicom has announced that it has closed the sale
of Tigo in the DRC to Orange. The proceeds of the
transaction will be used to invest into Millicoms
Latin American operations and other markets in
Africa. The move further strengthens Oranges
position in the DRC, which is the largest mobile
market in Central and Western Africa after Nigeria.
Ghana: MTN Ghana to invest US$96mn in network

upgrade plans
MTN Ghana, the countrys largest mobile network
operator by subscribers and winner of one lot
of 800MHz spectrum in the recent auctions, has
announced it will be investing US$96mn to upgrade
its network. It is reported that US$62mn million will
be spent on improving the operators traditional
network, US$16mn million on enhancing its IT
network, while US$18mn will be invested in the
rollout of 4G LTE services. MTN Ghanas 2,113 site
tower network is owned, operated and marketed for
co-location by a joint venture towerco owned 51% by
American Tower, 49% by MTN.
Jordan: Orange to build five solar PV plants
totaling 33.7MW to power its Jordanian operations
Orange has signed an agreement with a consortium
comprising Paris-based Neoen, Jordans Millennium
Energy Industries (MEI) and Catalyst Private Equity
to construct five solar PV plants which will power
the companys entire operations in the country. The
project will use a wheeling agreement whereby the
XX
PV sites - built at remote locations, will make use

of Jordans grid, with Orange paying transmission
fees. Construction of the solar facilities is expected to
commence in late 2016 and, when complete should
generate almost 61GWh a year and save 40,000
tonnes of CO2 emissions annually.
Liberia: Orange acquires largest operator for an

undisclosed sum
Orange has acquired Cellcom, Liberias operator
which held a 45% market share in the country
ahead of MTN subsidiary, Lonestar. With mobile
penetration sitting at 66% in the country, Orange
views Liberia as a high growth potential market and
a valuable addition to its growing footprint in the
market
Mozambique: mCel tower sale imminent; Viettel
to follow suit?
State owned operator, mCel is expected to launch
a sale of its c. 2,000 towers in the coming weeks,
seeking to raise over US$300mn. With no towercos
currently in the Mozambique market, the move has
piqued the interest of Africas resident towercos.
Competitor Viettel is reported to be considering a
monetisation of its assets although discussions are
believed to be in the very early stages. There are a
little over 5,000 towers in Mozambique.
Nigeria: MTN pays a proportion of US$3.9bn fine
and NCC reinstates regulatory services
The Nigerian Communications Commission has
reinstated regulatory services to MTN Nigeria after

they made a good faith payment towards a fine
for failing to meet a deadline to disconnect over five
million unregistered SIMs in the country. The initial
fine of US$5.2bn had been reduced to US$3.9bn
with MTN subsequently withdrawing its lawsuit
and the two parties hoping to reach a settlement out
of court. The reinstatement of regulatory services
will allow MTN to pursue the necessary approvals,
in accordance with the NCC regulatory process, for
new tariff plans and promotions as well as other
regulatory matters.
Nigeria: IHS acquires HTN Towers in Africas first
towerco consolidation
IHS has announced the acquisition of HTN Towers
portfolio of 1,211 sites in Nigeria in a landmark
deal signifying the first in-market consolidation
in the African towerco segment. When closed,
the transaction would take IHSs tower count in
Nigeria to 15,722 towers, 53.9% of the countrys
29,190 total. The deal also involved the transfer
of HTNs managed services and co-location
marketing agreement concerning SWAP Telecoms &
Technologies 702 towers to IHS. For further details,
check out TowerXchanges analysis of the deal later
in this Journal.
Nigeria: IHS acquires Hotspot Networks 160+ sites
and lease agreements with third parties
IHS have reached an agreement with Hotspot
Network Limited to acquire Hotspots 160+ towers
and additional lease agreements the company has
on third party sites (primarily billboard monopoles)
for just under a billion Naira (c. US$5mn). The deal

has been approved by the Nigerian Communications
Commission and the two companies are in the
process of integrating Hotspots sites into IHS
portfolio, including the addition of power as a service
to each site.Hotspot Network Limiteds focus will
now shift to rural broadband rollout and data centre
management.
Nigeria: NCC to issue remaining five InfraCo
licenses this year
Following the award of the first two concessions
to IHS and MainOne Cable (for the North Central
Zone and Lagos state respectively), the Nigerian
Communications Commission has announced that
it plans to auction off the remaining five regional
InfraCo licenses this year. IHS and MainOne Cable
have faced issues in the rollout of new infrastructure
but the commission is reportedly working with them
to alleviate their concerns.
Nigeria: Flexenclosure secures order to power
1,000 IHS sites
IHS have signed an order with Flexenclosure for
1,000 of its eSite systems to power IHS towers in
Nigerias Abuja region. The deal is the largest sale
of eSite systems that Flexenclosure has closed to
date and with the systems using solar energy, the
agreement will increase the sustainability of IHSs
footprint in the country significantly.
South Africa: Tata seeks new buyer for Neotel
after Vodacom calls off its planned takeover
65
Vodacom has called off its plans to takeover domestic

rival, Neotel after the High Court in Pretoria ruled
against Vodacoms acquisition of Neotels spectrum
and licenses. The original deal between Vodacom
and Tata was signed nearly two years ago amidst
strong protestations from other operators in the
market: MTN, Telkom and Cell C. Following the
collapse of the deal, Tata Communications are
reported to be seeking an alternative buyer.
Tanzania: Helios Towers Tanzania secures
US$95mn loan facility from Standard Bank
Helios Towers Tanzania (HTT) has arranged a
US$95mn syndicated loan facility, coordinated
through Standard Bank with Stanbic Bank Tanzania,
FMO, Investec Bank, National Micro Finance Bank
and the Emerging Africa Infrastructure Fund as
mandated lead arrangers. The funds will be used to
expand the Helios Towers operations in the country,
which is the companys largest market where they
possess a portfolio of 3,582 towers. Since HTTs
launch in 2011, approximately 5,500 base stations
have been added to Tanzanian networks, but only
2,900 new towers added thanks to sharing.
Tanzania: Halotel to install infrastructure in 1,800
villages by October 2016
Halotel, Viettels Tanzanian operation has announced
plans to install towers in 1,800 villages by October
of this year. The company launched in Tanzania in
October 2014 and has since covered 1,500 towns
and villages and reached 90% population coverage.
The planned additional infrastructure rollout
should take this figure to 95% by the end of the year.

TowerXchange understands Viettel has built ~3,000
towers, and co-located on 1,000 more since launch.
Tanzania: American Tower acquires 1,350 Airtel
sites
Bharti Airtel has reached a deal with American
Tower Corporation to sell their 1,350 Tanzanian
towers. The deal, which is expected to close in
H1 FY16, had a purchase price of US$179mn,
representing an average cost per tower of US$132.6k.
Under the terms of the agreement, Airtel will be the
anchor tenant on the towers with an initial ten-year
lease, with the deal potentially to be expanded to
include an additional 100 sites that are currently
under development. The move is the latest in Airtels
strategy to divest their assets across the continent
and helps to bolster American Towers African
portfolio, adding a fifth country to their footprint. For
further details, checkout TowerXchanges analysis of
the deal later in this Journal.
Uganda: MTN plans to spend US$65mn to upgrade

and expand its network
With strong data growth forecasted in the market,
MTN plans to invest US$65mn in upgrading and
expanding its Ugandan networks. Of the companys
5.4 million data customers only 9% are currently
covered by its 3G and 4G broadband networks; the
company aims to increase this figure to 15% and 20%
in 2016. The US$65mn will reportedly be spent on
the deployment of 200 additional 3G sites, a further
100 4G LTE base stations as well as 400km of fibre.
MTN Ugandas 1,393 site tower network is owned,

operated and marketed for co-location by a joint
venture towerco owned 51% by American Tower, 49%
by MTN.
Zambia: Vodafone rumoured to have been awarded
fourth operator license
Whilst the announcement is yet to be confirmed, it
is rumoured that Vodafone has been awarded the
fourth operator license by the Zambia Information
and Communications Technology Authority. The
government issued an ultimatum to the countrys
three operators MTN, Airtel and Zamtel in October
2015 to improve their service or face the introduction
of a new operator in the market. A six month period
was given to improve their service and with the
deadline imminent it is reported that Vodafone
have already appointed a CEO for their Zambian
operations. IHS owns and leases out 1,964 towers in
Zambia, representing 80-90% of the total inventory of
towers in the country, so co-location could accelerate
any prospective rollout by Vodafone.
Zambia: Airtel to invest US$48mn in infrastructure

upgrades and a further US$30mn in diesel
generators
Airtel Zambia has announced that it will be investing
US$48mn on infrastructure upgrades in the country
including the installation of a fibre network. With
the power situation in the country having impacted
on service provision, the company plans to spend a
further US$30mn on the procurement and installation
of generators to improve power supply. Airtel Zambia
recently sold their towers to IHS
XX
MENA news
Egypt: MobiNil rebrands as Orange Egypt and
plans US$318mn network expansion and service
improvements
Following the completion of Oranges 99% buyout of
the Egyptian MNO, MobiNil has rebranded to Orange
Egypt. The company has announced plans to invest
US$318mn on improving its network and service
delivery in the country, with a heavy focus on mobile
broadband. The company has also announced plans
to bid for a 4G license. These investments could
be partly funded by the sale of additional towers;
Orange sold 2,000 Egyptian towers to Eaton in 2015,
raising US$131mn.
Algeria: VimpelCom tower monetisation could see
Algerian towers sold
VimpelComs global tower monetisation process
could soon expand to Algeria. VimpelComs Global
Telecom Holding owns 45.57% of market leader
Djezzy, with 51% owned by the government and
3.43% by Cevital. Meanwhile, Algeria Telecom are
seeking to upgrade 70% of infrastructure in 2016,
and considering an IPO to raise capital. There are an
estimated 17,500 towers in Algeria, serving 248.3mn
subscribers.
Algeria: ARPT names three operators for the
first phase of the Universal Telecommunications
Service programme
Algerie Telecom (AT), Algeria Telecom Mobile
(Mobilis) and Optimum Telecom Algerie (OTA,
Djezzy) have been awarded authorisations by

Algerias telecoms watchdog the Regulatory
Authority for Post and Telecommunications (Autorite
de Regulation de la Poste et des Telecoms, ARPT) for
the provision of basic telecoms services (wireless
or fixed) and internet access at affordable prices to
underserved areas. The move is part of the countrys
Universal Telecommunications Service (UTS)
programme aimed at bringing coverage to a total of
97 communities in 28 wilayas (regions) in Southern
Algeria.
Saudi Arabia: Mobily reviewing offers for towers;
Saudi Telecom Company joins Mobily and Zain in
exploring a tower sale
Saudi Arabias Mobily is currently reviewing a
number of offers for its ~9,600 telecom towers
having announced its intention to sell, viewing
them as a non-core asset which are complicated
to manage. After competitor, Zain had expressed a
similar interest, rival Saudi Telecom Company is now
reportedly looking into a potential monetisation of its
assets in the country. IHS, Digital Bridge (reportedly
with the backed of Abraaj Group and Saudi Aramco)
and Providence Equity are believed to be leading
contenders for Saudi towers.
UAE: Etisalat and du explore JV infraco in UAE
Clear market leaders in the UAE Etisalat and du are
exploring the opportunity to create a joint venture
infrastructure company. Delta Partners estimates
there are around 8,500 towers in the UAE, while
GSMA Intelligence reports there are 8.5mn SIMs
(92% SIM penetration)

Kieron Osmotherly
Founder & CEO
Jo Jefferies
Arianna Neri
Head of Americas
Laura Dinnewell
Head of EMEA
Ian Ferguson
Head of Asia
Annabelle Mayhew
M: +44 7423 512588
Emma Jones
Toya Smith
Senior Operations Manager
Harpreet Sohanpal
Head of Marketing
For the designers of the TowerXchange Journal & brand:
Jon Whitty
Senior Designer & Brand Development
E: jon@blacklightdesign.co.uk

67
Who are the runners and riders in the

Saudi and Kuwaiti tower transactions?
By Laura Dinnewell, Head of EMEA,

TowerXchange
The first potential tower sale and leaseback in the Middle East
was mooted over a year ago, with Zain appointing Citigroup to
advise on a potential tower transaction in two Gulf countries
in early 2015. Mobily, Etisalats operation in Saudi Arabia was
next to come to follow suit, appointing TAP advisors to look
into a potential sale of their towers. Fast forward 12 months
and Saudi Telecom Company are now joining the party
potentially putting all operator owned towers in Saudi on the
market at the same time. TowerXchange take a look at the
portfolios potentially for sale, examine the latest developments
in the processes and explore who the likely bidders will be.
Keywords: Abraaj Group, Acquisition, Africa & ME, Africa & ME News, Al Rajhi Group, Al Zamil
Group, American Tower, ARPU, Carve Out, Co-locations, Country Risk, Cyan Capital, Digital Bridge,
Etisalat, First Mover Advantage, IHS, Infrastructure Sharing, Investment, Investors, Jordan, Kuwait,
Lawyers & Advisors, Masts & Towers, Middle East, MNOs, Mobily, Off-Grid, Ooredoo, Operator-Led JV,
Procurement, Providence Equity, Quippo International, Risk, Sale & Leaseback, Saudi Arabia, Saudi
Aramco, Saudi Telecom Company, TAP Advisors, TASC Towers, Tenancy Ratios, Tower Count, Towercos,
Towershare, Valuation, Viva, Zain
Read this article to learn:

<
<
<
<
What portfolios are coming to market in Saudi Arabia and Kuwait

The latest progress on each of the transactions
Potential proposed deal structures
Who the potential bidders are likely to be
The Saudi and Kuwait mobile markets

Both Saudi Arabia and Kuwait have developed mobile
markets with three mobile network operators and
almost complete population coverage. LTE
rollout is well underway, limiting the potential for
capacity enhancements, but with little bi-lateral
infrastructure sharing underway there exists
potential for increasing tenancy ratios on many
towers. Whilst there are only three operators in each
market, all are credit worthy; whats more Saudi
Arabia represents the biggest mobile market in the
Arab world whilst Kuwait has the highest ARPU in the
Middle East. In summary, both the Saudi and Kuwait
markets should be viewed as low risk, low growth
markets more akin to Europe than their African
counterparts.
Spotlight on the sellers

Zain
3
1
Market position:
Towers for sale: 5,000 in Saudi Arabia, 1,600 in
Kuwait
Zain has a footprint in eight countries in the Middle
East (Bahrain, Jordan, Kuwait, Lebanon, Iraq, Saudi
Arabia, Sudan and South Sudan). In Kuwait, Zain is
the market leader with 44% market share, whereas
in Saudi Arabia the company is the number three
operator and has long-term debts of US$2.95 billion
and is battling to compete against STC and Mobily.
Following an initial appointment of Citigroup to
examine a potential sale in two Gulf countries in
early 2015, Zain CEO Scott Gegenheimer confirmed
XX
Saudi Arabia
Kuwait
Population
31.8mn
3.9mn
GDP/ Capita
US$54.6k
US$72.2k
Connections
57.2mn
7.7mn
SIM penetration
180%
195%
Population coverage
98%
100%
30,600
5,100
30,600 (100-%)
1,600 (29%)
3 (+ multiple MVNOs)
Est. tower count

Towers coming to market
MNOs
Market share
20%
34%
the company was opening a process for a sale of both

their Saudi and Kuwait towers later in the year. In
March 2016 year it was announced that they were
in the process of narrowing down potential bidders
although no public announcements have yet been
made.
In Kuwait, 1,600 towers are up for grabs; in Saudi
Arabia some reports suggest the company to be
selling 5,000 towers, whilst others put the number at
7,000. Zain had originally looked at including South
Mobily saw its shares fall by more than 50%

following the discovery of accounting irregularities
over a year ago,. Following the news, Mobily
appointed Ahmad Farroukh (former CEO of MTN
South Africa) as its new CEO and Kais Ben Hamida
(former CFO of Egypts MobiNil, who recently sold
2,000 of their towers to Eaton Towers) as its CFO.
TAP Advisors, with a long standing history of running
tower transactions, are reportedly leading the Mobily
process which is thought to encompass 9,600 towers
Market share
STC
45%
Middle East. Etisalat has monetised their towers in

Nigeria, selling a total of 2,691 towers in two tranches
to IHS in 2014.
18%
44%
Mobily
Zain
Zain
38%
Ooredoo
Viva
Sudan towers in the process but given the political

instability in the country it seemed unlikely they
would attract a bidder and the process appears to
have been dropped.
Mobily
2
Market position:
Towers for sale: 9,600 in Saudi Arabia
Mobily is 27% owned by the UAEs Etisalat which
has a footprint in 15 countries across Africa and the
Saudi Tower Company

1
Market position:
Towers for sale: 16,400 in Saudi Arabia
Saudi Tower Company (STC) is the leading operator
within the Kingdom of Saudi Arabia, and has a
footprint in Kuwait, Lebanon, Jordan, Bahrain and
South Africa as well interests in India, Malaysia
and Turkey. As well as boasting 45% of the market
share in Saudi, STC owns over half of the countrys
estimated 30,600 towers.
In June 2011, STC entered into discussions with
number two operator, Mobily regarding the creation
of a captive tower company, but an agreement was
not reached. More recently a new round of rumors
circulated suggesting STC was advocating a joint
venture towerco between the KSA MNOs. It is now
rumoured that STC is once again considering the
monetisation of its ~16,400 towers.
69
What will be the potential deal structure?

Most observers feel that a sale and leaseback
structure will be the favoured model although to
what extent the operators would look to retain
equity is unknown. A further structure has been
thrown into the mix recently, with Saudi financial
news reporting in mid-March that Mobily and
STC have entered into talks to examine the option
of establishing a joint venture through which to
manage their towers. When questioned on the
matter, Zain, who are believed to be further along
in the sale process also revealed that they were
keeping their options open, with CEO Hassan
Kabbani stating that the company was also assessing
both strategies.
Spotlight on the potential buyers

The upcoming transactions are likely to have no
shortage of suitors. We take a run though who the
mooted leading contenders for the portfolios are.
Digital Bridge
Formed in 2013 through a partnership between
serial tower entrepreneurs Ben Jenkins and Mark
Ganzi, who sold Global Tower Partners to American
Tower. Digital Bridge have investments in towercos
Vertical Bridge, Andean Tower Partners and Mexico
Tower Partners as well as small cell player ExteNet
systems. The company has recently appointed Phil
Cooper as head of EMEA and are rumoured to be
one of the leading players in both the Zain and
Mobily processes. Their bid reportedly has the
backing of state owned Saudi Aramco and emerging
markets focused buy out firm Abraaj Group.
Providence Equity Partners

Providence Equity are a global private equity firm
specialising in media, communication, education and
information industries. They already have money
at work in towercos Indus Towers (India), Grupo
Torresur (Brazil) and KIN (Indonesia). Their bid
for the Mobily and Zain assets is believed to have
the backing of an as yet, unnamed Middle Eastern
investor.
IHS
IHS is Africas leading towerco with a portfolio
of over 23,000 sites across Nigeria, Cote dIvoire,
Cameroon and Zambia and have completed nine
transactions of scale across the continent. Their
portfolio is heavily biased towards West Africa,
and more specifically Nigeria which is where two
thirds of their towers are located. With the company
thought to be gearing up for an IPO, the acquisition
of assets in Saudi Arabia and/or Kuwait will provide
a more balanced portfolio which is likely to increase
its attractiveness to investors in a prospective IPO.
American Tower
As the worlds second largest tower company (behind
China Tower Company) and with a truly global
footprint, it is highly likely that American Tower
would be considering an acquisition in a new region
where there are no major towercos in the market.
Whilst the company likes to keep its cards close to
its chest, and has very clear investment criteria we
envisage they would have looked at the portfolios
closely.
Towershare
Towershare run Pakistans largest towerco with
a portfolio of 800 sites. Having re-located their

headquarters to Dubai, their focus now turns to the
Middle East, with an appetite to enter the market
rapidly. Raising US$100mn in private equity from
Cyan Capital and other regional private equity
investors, they are putting the capital in place to
participate in current processes.
TASC Towers
As one of the few towercos currently operating
in the MENA region, TASC Towers with their
Jordanian portfolio look a likely candidate to
participate in the Saudi and Kuwait processes
with Zain also having a presence in the Jordanian
market.
Quippo International
The ownership team behind Viom Networks
in India are now seeking new international
opportunities following their successful exit and
sale to American Tower. They are believed to have
an appetite for opportunities in Russia, although
are not believed to be among the shortlisted
bidders for the VimpelCom transaction, and are
also highly likely to have an appetite for the towers
in Saudi and Kuwait.
Local investors
Whilst lacking the expertise of the international
towercos, local family funds are known to have
expressed an interest in the upcoming transactions,
with Al Rajhi Group and Al Zamil Group amongst
the names reported. With both Digital Bridge and
Providence Equity known to have the backing of
local investors further investors may look at a
partnership
XX
Helios Towers Africas plans

for the 950 towers to be acquired
from Airtel DRC
An interview with HTAs Group Director of Sales and Marketing, Alex Leigh
On 5th May, Airtel announced the sale of 950 towers in the DRC
to Helios Towers Africa, signifying the operators eleventh tower
transaction and second with Helios. The deal further strengthens
Helios Towers Africas position in the DRC, where they are the sole
towerco in what is known to be a very operationally challenging
market. TowerXchange speak to Helios Towers Africas Group Director
of Sales and Marketing, Alex Leigh to discuss the transaction and why
the DRC is such an exciting market.
Alex Leigh, Group Director of Sales

and Marketing, Helios Towers Africa
Keywords: Acquisition, Africa, Africa & ME News, Airtel, Buildto-Suit, Change Management, Co-locations, Country Risk, DRC,
Energy, Energy Efficiency, Greenfield, Helios Towers Africa, HTA,
Infrastructure Sharing, Market Forecasts, Masts & Towers, MNOs,
Monitoring & Management, Network Rollout, News, Off-Grid,
Operational Excellence, Opex Reduction, Sale & Leaseback, Skilled
Workforces, SLA, Tower Count, Towercos, Unreliable Grid, Uptime

< Why the transaction and the DRC are of such importance to Helios Towers Africa
< Factors behind the the companys strong operational performance in such a challenging market
< What plans HTA has for the upgrade of the Airtel sites
< What strengths HTA brings to the market
On 5th May 2016, Bharti Airtel International agreed

the sale of 950 towers in the DRC (including sites
under construction) to Helios Towers Africa. The
deal marks the eleventh country in which Airtel has
divested their towers with transactions closed in
Nigeria (with American Tower), Rwanda and Zambia
(with IHS), Ghana, Burkina Faso and Kenya (with
Eaton Towers) and Congo Brazzaville (with Helios
Towers Africa) and deals announced in Niger (with
Eaton Towers) and Tanzania (with American Tower).
Helios Towers Africa, with a portfolio of over 6,500
towers (pro rata for the closure of the Airtel DRC
transaction) has a presence in four countries;
Tanzania (where American Tower have recently
entered as competitors), Ghana (with both American
Tower and Eaton Towers present) and Congo
Brazzaville and the DRC (where they are the sole
tower company operating). The transaction is
Helios second major acquisition in the DRC, having
acquired 729 towers from Tigo/Millicom back in
2010 and is the companys second deal with Airtel,
having previously acquired 390 towers in Congo
Brazzaville.
TowerXchange: Congratulations on the
announcement of the deal with Airtel in the DRC,
why is the transaction of such great importance
to the company?
Alex Leigh, Group Director of Sales and Marketing,
Helios Towers Africa: We already have a strong
presence in the market with the towers that we
have bought, reactivated or built and we see huge
potential for growth in the DRC. There is a lot of
71
foreign investment going into the country, including

the construction of a new multi-lane highway and a
new airport terminal in Kinshasa. As the city grows,
the requirements for mobile and data coverage are
going to grow. Dependent on which sources you
read, somewhere between 15 and 20 million new
mobile users will be coming online in the next five
years, and there is already an infrastructure gap in
the country.
We see our key customers having a strong
willingness to invest in the DRC to meet this demand.
As well as co-locating equipment on existing towers
we have also built new greenfield towers for most
operators in the country. Plus, with spectrum being
scarce in the market, there is a requirement for
lots of repeating infrastructure to meet demand. In
summary, it is a very exciting time to be in the DRC.
TowerXchange: The DRC is known to be a
particularly challenging market to work in from
an operational point of view, however Helios
subsidiary in the country has been performing
highly. What can you tell us about the companys
success on this front?
Helios Towers Africa: We have had strong
performance across the board in all our markets and
have implemented some key changes which have
driven this. We are working to define processes and
continuously improve them, in Africa we will always
encounter challenges but it is how we learn from
such occurrences and put in place systems to avoid
future failures.
We have a new management team in place, many

of whom are six sigma black belts hailing from the
power industry. These black belts are training local
talent to become green belts, developing skills and
competencies on the ground. Management and
training of partners as well as staff is also critical
in ensuring effective operations. Many companies
adopt a practice of putting in place service level
agreements and then penalising partners when
they under deliver - rather than helping them to
better deliver. Weve brought our maintenance
contractors in a lot closer to the business and
embedded them with the zonal managers in each
country.
A big focus has been on improving emergency
power; how should you put in generators, how can
you minimise failures and what lessons can you
take from failures? We have seen a reduction in
fuel outages at many sites from tens to zeros; even
at our worst performing sites we have managed to
get fuel outages down to zero - using monitoring
and data analytics to make informed decisions and
drive continuous improvement.
TowerXchange: What plans does Helios have in
place to upgrade the 950 towers acquired from
Airtel?
Helios Towers Africa: We very much adopted
a front loaded sales and operational planning
approach in the acquisition of towers and have
already identified key projects that need to be
completed to improve the sites.
Whilst the first important step of the transaction

is the release of capital to Airtel, the second step
is to be quickly delivering quality of service
improvement through operational improvements
to the towers. We aim to have all the upgrade work
completed within a 12-month timeframe and work
will commence immediately.
In parallel to the upgrade work that has been done
to deliver operational improvements to Airtel, our
focus is on getting additional tenants on the towers,
with a subsequent focus being on the rationalisation
of duplicate networks.
TowerXchange: Why is Helios Towers ideally
positioned to better manage Airtels network of
towers?
Helios Towers Africa: As well as having a strong
presence in the DRC already, with good relationships
in place with local suppliers and contractors we also
bring with us six years of working in the African
continent. In this time, we have obtained the battle
scars which enable us to put in place processes to
avoid downtime on sites. Added to this, our new
CEO, Kash Pandya as well as other members of our
management team, bring a wealth of experience
from the power industry which is hugely important
in a market such as the DRC where there is limited
grid connectivity. In addition to our operational
strengths, we also bring with us a strong balance
sheet which underpins the company and gives
operators the level of confidence they need in
trusting their networks to us
XX
19-20 October, Sandton Convention Centre, Johannesburg
Meetup Africa 2016

The 4th annual retreat for250 leaders of the African telecom tower community
To discuss your participation, contact Annabelle on +44 7423 512588 or email amayhew@towerxchange.com
Diamond
sponsors:
Silver Sponsors:
Bronze Sponsors:
TowerXchange Meetup Africa draft agenda

Sandton Convention Centre, Johannesburg | 19-20 October 2016
Day One | Wednesday 19 October
Day Two | Thursday 20 October
08:00 Coffee and registration
08:30 Morning coffee
09:00 TowerXchanges analysis of the African &

Middle Eastern tower industry
09:00 Keynote panel: Reducing network TCO - what

are the other pieces of the puzzle?
10:00 Keynote panel: Consolidation of Sub-Saharan

Africas towers
10:00 Strategic partners panel

10:20 Networking refreshment break
10:50 Finance and risk management
11:30 Roundtable session III
11:30 Roundtable session I

12:30 Networking lunch break
13:50 An emerging market in the MENA region

13:40 Roundtable session IV
15:10 Strategic partners panel: Energy
14:30 Roundtable session II

16:00 Achieving operational excellence
17:20 End of day one followed by drinks reception
19:00 TowerXchange Meetup Africa party and
dinner
Event at a glance
15:30 Solving the energy equation: new business

models and solutions
16:30 End of Meetup
< 4 years of welcoming the whos who of the African

tower industry
< SOLD OUT every year!
< New expanded exhibition with 60+ stands
< Increased operational focus and delegation
To enquire about panel opportunities or hosting a
roundtable please contact Laura Dinnewell, Head of
TowerXchange Africa: ldinnewell@towerxchange.com
Does your company provide products and

services to the African tower industry?
Now in its fourth year, the TowerXchange Meetup
Africa will gather an audience of 300+ tower
industry leaders. Leading turnkey infrastructure
service providers, tower manufacturers, RMS and
site management platform developers and energy
equipment providers have selected the TowerXchange
Meetup Africa as their preferred platform to showcase
their solutions and expertise. and expertise. If youd
like to find out more and request a bespoke proposal,
please contact Annabelle on +44 7423 512588 or email
amayhew@towerxchange.com
XX
TowerXchange Meetup Africa 2016 | Roundtable sessions

Regional focus roundtables:
Operational best practice roundtables:
< DRC
< Egypt
< Burkina Faso & Niger
< Optimising maintenance capex
< Mozambique
< Cameroon
< Saudi Arabia
< Operational best practices for the achievement of SLAs
< Algeria
< Cote dIvoire
< Kuwait
< Accelerating construction and build-to-suit rollout
< Nigeria
< Rwanda & Zambia
< North Africa
< Best practices from Asia
< Tanzania
< Uganda
< Angola
< Streamlining site acquisition, upgrading and integration
< Ghana
< Kenya
< Subcontractor performance management
< Congo Brazzaville
< South Africa
< Negotiation and management of lease agreements

< Managing and improving community relations
Strategic and financial roundtables:
< Excellence in procurement

< What is the low hanging fruit to improve TCO of power systems?
< What resources and capabilities can be centralised and shared by

multinational towercos?
< Can the ESCO business model work?
< How to manage active infrastructure sharing when towercos own a
significant proportion of passive infrastructure
< Microcells, DAS and IBS in Africa
< Reducing opex by leveraging synergies between passive and active network
management
< Integrating independent network providers (towercos and fibrecos)
< Refinancing debt
< Middle market towercos: Survival, growth and exit strategies
< Optimising solutions for urban areas
< How to build towers with maximum future sale value
< How to mitigate forex exposure
More roundtable topics and leaders to be announced shortly. If you

have a suggestion for a roundtable, please contact me at:
ldinnewell@towerxchange.com
75

independent tower market in Asia
(now Axicom) and its 1,772 towers is finalising the

restructuring and integration of the business. This
was the first major tower transaction to take place
in Australia for some time, but TowerXchange is
actively tracking more than one towerco with an
appetite to enter this market. Broadcast Australia
also operates a portfolio of 620 towers, some of
which are leased out to MNOs. There are a number
of smaller towercos in Australia which could
become acquisition targets in a rollup play.
Selected Asian tower market size comparisons, Q1 2016
New
Zealand
4,000
Afghanistan Myanmar Cambodia

Nepal 5,897
9,000
7,620
6,000
Malaysia
22,000
South
Korea
30,000
Laos Sri Lanka Australia

7,374 7,000
Philippines Bangladesh
9,000
Pakistan
21,000
27,700
28,000
Vietnam
55,000
Indonesia
76,739
Japan
220,000
India
453,500
China
1,180,000
Thailand
52,483
Bangladesh: edotco operates a network of 6,000

towers transferred from Axiatas Bangladeshi opco
Robi. The edotco portfolio is maturing fast with 11
different customers including six MNOs.
Bangalinks ~6,000 towers are believed to be
coming to market as part of VimpelComs passive
infrastructure monetisation process.
TowerXchange estimate that there are 1,966,663

towers in Asia and Oceania, making the region by
far the largest and fastest growing tower market
in the world. Towercos own 1,582,348, or 80.5%, of
Asias towers, but that statistic masks considerable
regional variation between virgin tower markets
with no towerco activity, such as Japan and the
Philippines, and mature tower markets like India
where towercos own 308,855 of 453,500 towers
(68%, which will rise to ~82% when BSNLs
towerco is formally carved out).
Afghanistan: There are five licensed 3G MNOs in
Afghanistan; Etisalat, MTN, Roshan, Aftel and AWCC.
Security obviously remains a key issue for local

towerco Frontier Tower Solutions, who have built or
manage around 1,200 towers for AWCC, while there
were rumors that MTN and Etisalat approached IHS
about operating a shared towerco in Afghanistan,
but the deal fell outside IHSs investors remit. There
are over 20mn subscribers and over 90% population
coverage in Afghanistan. The local MCIT shares
annual tower count data as seen in figure two.

Australia: TowerXchange understands there are
around 9,000 telecom towers in Australia, 74% of
which remain operator-captive. The Macquarie-led
consortium that acquired Crown Castle Australia
There are around 27,700 towers in Bangladesh,

with around 1,000 new towers going up each year.
Bharti Airtel and the Axiata Group have signed an
agreement to merge their respective operations
in BangladeshAirtel Bangladesh Ltd and Robi
Axiata Ltdto create the second largest telco.
The proposed transaction is subject to conditions
precedent including receiving applicable
approvals from relevant authorities and is
expected to complete in the first half of 2016. The
merger is likely to see Airtels Bangladesh towers
managed by edotco in the near future.
While the BTRC advocates infrastructure sharing,
XX
a proposed change of law that would prohibit

licensed MNOs from operating tower sharing
companies would restrict options for Axiataowned edotco.
Afghanistan tower counts, 2002-15
Source: MCIT, Afghanistan
Afghan calendar year
Western calendar year
Tower count
1393
2014-15
5897
Cambodia: With a crowded operator market of

seven operators serving a population of 15.5mn,
and a regulator that supports infrastructure
sharing, there is continued potential for the 9,000
site tower market in Cambodia to grow.
1392
2013-14
5383
1391
2012-13
5005
1390
2011-12
4350
1389
2010-11
3977
1388
2009-10
3184
There has been an influx of Chinese operators and

vendors prepared to invest heavily in this market.
Challenges still remain including 20% of sites
being off-grid and the risk of landmines in the
more remote areas.
1387
2008-9
2736
1386
2007-8
2091
1385
2006-7
1067
1384
2005-6
567
1383
2004-5
311
1382
2003-4
89
1381
2002-3
edotco operates a portfolio of 1,700 towers in

Cambodia. Local tower builder Cam Towerlink is
also in the process of setting up operations as a
towerco, and has secured its first contract to build
towers around the Angkor Wat temple UNESCO
World Heritage complex. Some operators in this
market, such as Mfone, have fallen victim to the
intense competition and price wars leaving some
infrastructure assets abandoned.
China: China Tower Company (CTC) is completing
the ingest of over 1mn towers from China Mobile,
China Unicom and China Telecom. Equity is
divided between Chinas three MNOs with China
Mobile holding 38%, China Unicom holding 28.1%,
China Telecom holding 27.9%, with 6% acquired
by China Reform Corporation, a State fund with
a particular focus on reforming state-owned
Estimated tower count for Bangladesh

4,100
7,800
Grameenphone
Banglalink
3,800
Axiata / edotco
Airtel
Teletalk, CityCell and non-traditional MNOS
6,000
6,000
Sources: TowerXchange research, edotco, Hardiman

Telecommunications
77
Tower deals in Asia 2008-2016 (excluding carve-outs)
Year
Country
Seller
Buyer
Tower count
Deal value US$
Cost per tower US$
Deal structure
2016
Indonesia
XL Axiata
Protelindo
2,500
$250,000,000
$100,000
SLB
2016
India
Viom Networks
American Tower
42,200
$1,180,000,000
$76,540
Acquiring 51% controlling stake
2015
Myanmar
Digicel MTC
edotco
1,250
$221,000,000
$176,800
Acquiring 75% controlling stake
2015
India
KEC International
American Tower
381
$13,000,000
$34,121
Company acquisition
2014
Indonesia
PT Telkom
Tower Bersama
4000
$904,000,000
$226,000
Equity swap
2014
Malaysia
KJS
YTL Power Intl
309
$15,000,000
$48,544
Company acquisition
2014
Indonesia
XL Axiata
STP
3500
$460,000,000
$131,429
SLB
2013
Indonesia
Hutchison
STP
300
$68,000,000
$226,667
SLB
2012
Indonesia
Hutchison
Protelindo
503
SLB
2012
Indonesia
PT Central Investindo
Protelindo
152
Company acquisition
2012
Indonesia
Indosat
Tower Bersama
2500
2011
Indonesia
Infratel
Tower Bersama
595
2010
India
Essar Telecom Infrastructure
American Tower
4450
$432,000,000
$97,079
SLB
2010
Indonesia
Hutchison
Protelindo
1482
$165,900,000
$111,943
SLB
2010
India
Aircel
GTL Infrastructure
17500
$1,800,000,000
$102,857
SLB
2009
India
Viom Networks
QTIL
18000
$2,407,000,000
$133,722
Company acquisition
2009
India
Transcend Infrastructure
American Tower
327
$23,000,000
$70,336
Company acquisition
2009
India
XCEL Telecom
American Tower
1730
$170,000,000
$98,266
Company acquisition
2008
Indonesia
Bakrie
STP
543
$34,000,000
$62,615
SLB
2008
Indonesia
Hutchison
Protelindo
3692
$500,000,000
$135,428
SLB
Totals / average
101,914
$8,257,900,000
$102,399
$519,000,000
$207,600
SLB
Company acquisition
XX
Estimated breakdown of towers owned by Indian towercos

Indus Towers
119,881
Bharti Infratel
38,458
43,379
Reliance Infratel
GTL Infrastructure
Ascend
50,350 42% equity stake in Indus Towers

57,561
American Tower
Tower Vision
associated rollout of 4G. Tower transaction deal

flow continues to pick up as towers worth an
estimated US$7bn are either under discussion for
sale, or moving between announcement and close.
29,432
8,400
4,843
20,000
40,000
60,000
80,000
100,000
120,000
State owned MNOs Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam retain 70,000 towers
enterprises. The MNOs have now confirmed the

value of the transferred assets, allowing them to
finalise the remaining elements of the transaction.
The consideration amount for the assets were
CNY102.74 billion for China Mobile, CNY54.66
billion for China Unicom and China Telecom,
CNY30.13 billion.
Whilst CTC gets up to capacity, a fragmented
but fast growing segment of independent tower
companies are bidding for and securing build
contracts scooping around 10% of the ~150,000
new towers constructed in 2015. TowerXchange
forecast that Chinas independent towercos could
own as many as 100,000 Chinese towers by the end
of 2017.
Reports have emerged from China that CTC has
discounted their lease rates by 10-20% under

pressure from their parent MNOs. Meanwhile
China Unicom and China Telecom may be nearing
an active infrastructure sharing agreement which
could lower the glass ceiling on tenancy ratios in
China to two.
For more insights into the Chinese market, see the
China tower market FAQ later this issue.
India: 68% of Indias 453,350 towers are owned
and operated by towercos, making the Indian
tower market second only to the U.S. in terms of
longevity, and second only to China in terms of
scale. The Indian tower market was adversely
affected by the restructuring of MNO licenses
in 2012, but has recovered and been boosted
by ongoing waves of spectrum auctions and the
American Tower completed its acquisition of

a 51% controlling ownership interest in Viom
Networks in April 2016. The remaining 49%
ownership stake will be controlled by the Tata
Group and several private equity firms. American
Tower paid INR 76 billion (approximately US$1.14
bn) in cash and assumed around INR 51 billion
of INR-denominated debt. Viom Networks
operates 42,200 towers, supporting nearly 100,000
tenancies, while American Tower already owned
15,361 towers in the country, with a tenancy ratio
approaching two, prior to the acquisition of Vioms
towers.
The planned sale of Indian Reliance
Communications (RCOMs) tower assets has
reportedly been delayed by a disagreement
over the valuation of the sites. TPG Capital and
Tillman Global Holdings (TGH) submitted a nonbinding offer for the towers in December last year,
reportedly offering INR215 billion (US$3.2 billion)
for the sites, which are currently held through
RCOM subsidiary Reliance Infratel. Apparently
many of the sites lack structural capacity for
additional tenants, leading to TPG being reluctant
to underwrite the initial offer, forcing TGH to
begin looking for another partner with which to
purchase the towers.
Bharti Airtel has been rumoured to be considering
79
Estimated tower count for Indonesia

14,737
11,389
7,770
2,185
5,500
8,500
1,000
1,000
450
208
1,000
18,000
4,000
selling 5% of their 71.7% equity stake in Bharti

Infratel to raise capital for spectrum and to pay
down debts. Bharti Infratel reported an increase
in tower count of almost 3,000 towers over Q1
2016, including their stake in Indus Towers,
together with an uptick in tenancy ratios from 2.12
to 2.20. Bharti Infratels market cap was then Rs
724bn, down from Rs 729bn the previous quarter.
EBITDA for FY15-16 stood at Rs 5,403 Crore, an 8%
YOY increase.
BSNL has received in-principle approval to carve
out its estimated 65,000 towers into a separate
towerco which could be valued up to US$3bn. A
government working group has been formed to
develop a capital and organisational structure
for the new entity. Analysts are excited by the
potential of these towers coming to market as
Towerco-owned
Mitratel
Tower Bersama
Protelindo
STP
IBS Tower
KIN
Persada Sokka Tama
Retower Asia
Balitowers
Others
Operator-captive
Telkom + Telkomsel
XL
Indosat
many are in prime locations with considerable
tenancy rate growth potential, having not been
proactively marketed before. BSNL has leased
out 6,505 of its towers to other telecom operators,
suggesting a tenancy ratio around 1.1. Out of
the 6,505 spaces that it has rented out, Bharti
Airtel accounted for 2,251 slots. It was followed
by Reliance Jio with 1,440 slots and Idea and
Vodafone with just above 900 towers each.
GTL Infrastructure, with just under 30,000 towers,
Tower Vision with 8,400 and Ascend Telecom with
4,843 complete the Indian towerco market. GTL
Infrastructure losses narrowed to Rs 92.75 crore
in their Q1 2016 update. Ascend Telecom investor
New Silk Road has announced that it will return
US$500mn to shareholders during 2016, leading to
speculation that it plans to exit the Indian towerco.
Indonesia: Indonesia remains one of the most

mature tower markets in the world, with solid
tenancy ratios, excellent organic growth, and
strong market caps boasted by three major
towercos; Protelindo (14,737 towers), Tower
Bersama (11,389) and STP (7,770). IBS Tower, KIN,
Retower, Persada Sokka Tama and Balitowers
all also have some scale in Indonesia. There
have been rumours that IBS Towers, which has
some ownership links with its number one
tenant Smartfren, could be coming to market.
TowerXchange has upwardly revised our
estimate of the total number of towers owned by
Indonesias 30 smaller towercos to 1,000.
The Indonesian market is seeing some large
investments in telecoms infrastructure in
the pipeline. Protelindos parent company
Sarana Menara Nusantara (SMN) is looking to
raise IDR4.18 trillion (US$316mn) through a
rights shares offering to fund expansion and
to strengthen capital structure. Protelindo will
use the funds to build new towers and invest in
supporting services companies; a small portion
will be used to repay Protelindos debts. At the
same time, Tower Bersama Infrastructure Group
(TBIG) is preparing up to Rp 2 trillion (US$145.72
mn) of capex this year to build between 1,500 and
2,000 new towers before year-end.
XL Axiata has agreed to sell 2,500
telecommunication towers to Protelindo for 3.56
trillion rupiah (US$250mn) in cash. XL has signed
a deal to leaseback most of the towers for ten
years.
XX
Estimated tower count for Laos
(au). DOCOMO has already started rolling out LTE-A.

Japans three leading MNOs are believed to have
each added up to 30,000 microcells and small cells
as infill sites. TowerXchange understand several
tower companies are trying to establish themselves
in the Japanese market, but that their penetration
remains negligible.
423
1,950
1,100
LTC
Unitel
ETL
Beeline (VimpelCom)
4,000
The future of Telkom-owned Mitratel and

their 5,500 towers remains uncertain with
the cancellation of the proposed share-swap
acquisition of Mitratel by Tower Bersama at the
behest of the commissioner. Telkom still has a
further 18,000 towers on their balance sheet,
of which 13,000 could potentially be sold at an
unspecified point in the future.
Protelindo and Tower Bersama are holding firm
against downward pressure on lease rates, which
are believed to average around US$1,150 in
Indonesia.
Meanwhile, the new battleground for competition
between Indonesias towercos seems to be
microcells and fibre, as illustrated by Protelindos
acquisition of iForte. STP also has substantial
fibre and microcell portfolios after its acquisition
of fibre company Bit, while Balitowers have also

added substantial stock of smaller sites to their
portfolio.
Japan: Japan is one of the most sophisticated
mobile markets in the world. Yet towers are still
seen as a source of competitive differentiation,
which perhaps explains why initial interest in
carving out a towerco a few years ago seems to have
tailed off, and why tower count data is so hard to
find readers should consider our estimate a very
rough guide. Japan is famous for having the fewest
number of subscribers per tower in the world
reportedly around 500 suggesting a staggering
tower count of around 220,000 for a nation of
127mn people and a landmass of just 378,000 sq km.
LTE was launched as long ago as 2011 by former
State owned monopoly NTT DOCOMO and in 2012
by the nations other MNOs, SoftBank and KDDI
Laos: The 7,473 towers in Laos all remain

operator-captive, but there are possible
opportunities to acquire towers from all but the
market leading MNO: Unitel has 4,000 towers,
and is a 51-49% joint venture between the State
and Viettel. The State also owns 51% of number
two operator LTC, whose co-investor Shenington
Investments may seek an exit. 100% State owned
MNO ETL is heavily indebted and needs cash for
4G rollout, while VimpelCom has long sought to
exit Beeline Laos, whose towers could potentially
be monetised by an acquirer.
Malaysia: Towercos own 31% of Malaysias towers,
led by edotcos 3,600 towers carved out of Celcom
/ Axiata. A further 3,200 towers are owned by 14
different State-backed and other independent
towercos.
There are around 22,000 towers now in Malaysia,
representing almost exactly 2,000 mobile
subscribers per tower. edotco aims to increase
their Malaysian tower count by around 1,000 in
2016, although many new sites will be special
structures such as lamp posts. A new ground
based tower in Malaysia costs around RM300,000
(US$69,000).
81
Estimated tower count for Malaysia

edotco
3,600
DiGi
3,400
Maxis
3,800
Telekom Malaysia
1,000
3,200
State backed towercos
5,000
YTL
2,000
Unaccounted for
1,000
2,000
3,000
4,000
5,000
Estimated state of Myanmar rollout, Q4 2015

3,000
0
As many as 8,000 new towers could be required

by the rollout of LTE, of which around 1,000 new
towers went up in 2015, with Celcom building
through edotco and Maxis and DiGi building
their own although DiGi has since signed a
collaboration agreement with edotco which
includes co-location and new BTS sites. The
State-backed towercos also continued to expand,
including through over 2,000 rural sites supported
by Malaysias Universal Service Provision Fund.
It has been estimated that an additional 8,000
structures may be needed in Malaysia for 4G,
although much of that demand will be met by
microcells, lamp-poles, DAS and IBS.
Myanmar: The Myanmar tower count had reached
7,470 by Q4 2015, approaching the halfway point
in the 17,300 tower rollout which is the total the
GSMA forecast the country would require to meet
Telenor and Ooredoos license obligations.
Built
2,500
Contracted, not yet built

2,900
2,000
1,500
1,827
2,400
1,000
1,650
1,100
1,500
1,250
1,220
900
KPT / KDDI
Summit
IGT for Telenor

and Oordeoo
Apollo
for Telenor
PAMEL for
Ooredoo
MTC for Ooredoo

now edotco
OCK for
Telenor
700
503
EFT for Telenor
MIG for
Ooredoo
Vietnamese military-backed MNO Viettel has

been granted the right to negotiate with a
local consortium. If the tie-up is approved, the
company will join a local group of 11 public
Myanmar firms and a subsidiary of militaryrun Myanmar Economic Corporation, Star High
Public Company, to form a joint venture that
should receive the markets fourth licence for
nationwide services. Star High Public Company
offers access to 1,000 towers and more than 13,000
kilometres of fibre, among other telecoms assets,
making the business case for the fourth operator
viable. If negotiations are successful, Viettel will
pay 49% of a US$300mn licence fee, equivalent to
XX
Estimated tower ownership in Thailand

5,000
800
its prospective holding in the company, and the

operator has promised to invest US$1.5bn into the
country.
1,500
Proposed DTAC-CAT towerco
11,000
DTAC towers built outside concession

AIS disputed towers built under CAT concession
12,000
AIS disputed towers built under TOT concession

AIS towers built outside concession
12,183
DIF (formerly TRUEIF)

True disputed towers built under CAT concession
10,000
Source: AEC Advisory and TowerXchange
Towerco penetration in Asia now and forecast for Q117

100
Current penetration
Forecast, Q1 2017
80
76%
85%
68%
63%
60
100%
40
34%
34%
20%
20%
26%
20%
19%
24%
18%
2%
n
ta
1%
is
si
a
Pa
k
Ru
s
et
na
a
Vi
di
bo
Ca
de
sh
ng
la
ai
la
n
Ba
ia
Th
al
tr
Au
s
an
ka
a
iL
Sr
es
on
al
ay
si
ia
a
di
In
d
In
m
ya
n
Ch
in
ar
6%
30%
an
31%
al
31%
20
Ze
34%
61%
CI
68%
79%
58%
49%
N
ew
69%
edotco has closed a deal to acquire a 75%

controlling stake in Digicel Myanmar Tower
Company (MTC). Yoma Strategic Holdings, part
of Burmese finance and real estate tycoon Serge
Puns empire, retained their minority stake. The
transaction values MTC at an enterprise value of
US$221mn. edotcos acquisition sets a benchmark
price per tower of US$176,800 in Myanmar, which
may be difficult to maintain given the high quality
of locations in MTCs portfolio and the lease up
rate approaching two. edotco has since stated its
intent to invest US$200mn into Myanmar over the
next five years, and is planning to construct 5,000
towers in the country in the next three years.
Phase three of the Myanmar tower rollout has
seen a re-alignment of towerco-MNO partnerships,
with IGT now building for Ooredoo when
we last checked in they had lit 1,500 of 2,900
contracted towers, making IGT Myanmars leading
towerco. IGT recently secured a syndicated loan
of US$122mn, forming part of the companys
US$230mn investment plan to deploy more than
2,000 towers in Myanmar. Apollo will be number
two, with around 1,100 of 1,827 contracted towers
for Telenor built by Q3 2015.
Malaysian managed service provider OCK has
secured a contract to build 920 towers for Telenor,
marking the companys debut as an independent
towerco. TowerXchange sources suggest OCK
83
Estimated tower count for Vietnam
US$1.365bn. There have been no tower deals in

Nepal to date, but this move by the Axiata Group
will likely pave the way for Axiatas towerco edotco
to enter the market in the near future.
10,000
20,250
4,750
Viettel
MobiFone
VinaPhone
Vietnamobile + GTEL Mobile
11,000
Towercos
9,000
Source: TowerXchange Research
are offering a disruptively discounted lease rate

of US$900pcm, inclusive of power, compared to
prevailing rates in the US$1,200-1,800 range.
The Asian Development Bank (ADB) and the
International Finance Corporation-IFC, a member
of the World Bank Group-are providing a loan
of $150 million each to Ooredoo Myanmar for
the rollout of a mobile telecommunication
network across Myanmar, which will help extend
affordable telecom services across the country,
boosting economic growth and job creation.
The restructuring of the Myanmar tower market
may continue with further towerco consolidation
at least one existing towerco is believed to be
seeking an exit.
All the towercos in phase three of the Myanmar

tower rollout are required to provide full service
tower+power, a departure from phases one and
two in which Ooredoo retained ownership of
power assets.
Tenancy ratio growth has been considerably
healthier at Myanmars urban sites than at rural
sites. Ooredoos increasing focus on urban 3G
may exacerbate that situation, although in other
markets Viettel has been strongly predisposed to
connecting rural communities, so their entry may
bring some much needed balance.
Nepal: Axiata Group has closed the acquisition of
a majority stake in Nepalese market leader Ncell
from TeliaSonera, in a deal believed to be worth
New Zealand: Weve heard two credible reports

of prospective towerco activity in New Zealand,
so dont expect this ~4,000 tower, 6mn subscriber
market to be dormant for long. 2degrees (Trilogy)
has around 1,000 of those towers, Vodafone
New Zealand and Spark about half each of the
remainder. LTE is offered by all three MNOs. New
Zealands US$175mn Rural Broadband Initiative
(RBI) has accelerated investment in towers,
targeting coverage in all communities with greater
than 300 inhabitants. Under the RBI Vodafone had
added 104 new towers and upgraded 305 others by
Q2 2015.
Pakistan: An agreement was reached between
VimpelCom (Mobilink), Global Telecom Holdings,
Warid Telecom Pakistan and Bank Alfalah to
merge their Pakistan telecom businesses and
creating a new combined entity with 15,000 towers
serving 45 million customers.
Telenor Pakistan reportedly has raised concerns
over the proposed Mobilink-Warid merger with
the countys Competition Commission, which
is reviewing the deal for regulatory approval.
Mobilink, and Warid Telecom filed a notification
of proposed change in substantial ownership
interest of Warid on 15 December 2015, and
made the request for permission of merger
between Mobilink and Warid before the Pakistan
XX
Telecommunication Authority (PTA). The closure

of the transaction may be contingent upon one or
both parties selling their towers to reduce debt.
With upwards of 50% overlap between Mobilink
and Warids networks (Mobilink has around
10,000 towers, Warid 5,000), the necessity of
decommissioning suggests the same towerco may
have to acquire both portfolios.
Etisalats Ufone are also believed to have
commenced a process to monetise their Pakistani
towers.
We have been unable to confirm speculation that
#2 MNO Telenor may bring their Pakistani towers
to market too, but they have recently reached an
agreement with China Mobile Pakistan (Zong) to
share their fibre-optic network assets.
There is some growth potential in a Pakistani tower
market with 3G only launched in late 2014, with
138mn subscribers and five competitive MNOs, but
there may also be some need for decommissioning
of parallel infrastructure.
Philippines: While the scale of The Philippines
100mn subscribers makes it an interesting market,
the current status of the mobile market as a virtual
duopoly between Globe and Smart (with a rough
estimate of a total of ~21,000 towers) would seem
to preclude the participation of an independent
towerco. Hope was offered by the prospective entry
of SMC as a third MNO, but their proposed joint
venture with Telstra recently collapsed (SMC has
reportedly commenced dialogue with Telenor as
an alternate partner). However, Philippine MNOs

seem increasingly inclined to outsourcing towers
to rid themselves of the challenge of securing the
consent of would-be tower neighbors (a NIMBY
mentality still prevails), while taxation of cell sites
is reportedly high and permitting complex.
South Korea: According to GSMA Intelligence,
SIM penetration was at 113% among a population
of 50.4mn in Q4 2015. South Korea boasts one
of the most sophisticated telecommunications
infrastructures in the world, cultivating an
insatiable demand for high speed mobile
broadband among its citizens. Mobile broadband
penetration in South Korea is above 99% and fibre
has been widely deployed. South Korea is a three
operator market featuring SK Telecom, KT and
LG Uplus, while the Ministry of Science, ICT and
Future Planning (MSIP) has announced intention
to license a fourth MNO. South Korea was the first
market in the world to migrate the majority of
users to LTE, with LTE-A rollout now well under
way. TowerXchange are starting to pick up the first
faint signals that towerco activity may be emerging
in South Korea.
Sri Lanka: Dialog has transferred 2,150 towers to
edotco, and Bharti Infratel are again believed to be
interested in entering the market. High levels of
bi-lateral sharing means tenancy ratios are closer
to two than one. 4G is driving need for cell site
densification. There are around 7,000 towers in Sri
Lanka.
Deal activity in the Sri Lankan tower market
may be picking up with Bharti Airtel reportedly

looking into selling its 2,500 towers. Bharti Airtel
has not confirmed the deal, but it would be in line
with their strategy of eliminating less profitable
operations.
Thailand: Thailand has a tower market unlike
any other in the world! Joint venture towercos are
being established as vehicles for the resolution
of long standing BTO (Build-Transfer-Operate)
disputes. Thailands three commercial MNOs were
due to transfer 2G infrastructure back to SOEs
CAT and TOT. The 2G equipment has little value,
but of course the towers do. CAT, which ran the
concessions for the 850 and 1,800 MHz bands, is
reportedly in the final stages of forming a 49-51%
JV towerco with majority stakeholder DTAC, into
which 11,000 disputed towers would be injected.
Negotiations to create a prospective 12,000 tower
JV towerco between AIS and TOT, which ran the
900 MHZ concession, were called off late in 2015.
We reckon there are 47,483 towers in Thailand,
of which 12,183 sit on the balance sheet of DIF,
formerly TRUEGIF, a towerco created by True
Corp and SCB Asset Management and successfully
listed on the Thai stock exchange. DIF has little
debt, a high leverage ceiling, and an appetite
to consolidate more Thai towers - especially if
True reduces their shareholding to increase the
perceived independence of the entity.
A further 10,000 towers were built by AIS and
800 by DTAC outside the concession for 3G usage.
Trues non-concession towers sit on DIFs balance
85
Asia heatmap
sheet It all gets very confusing! Read AEC

Advisorys excellent A guide to the Thai telecom
tower market in TowerXchange for a detailed
understanding.
The important question is: are Thailands telecom
towers investible? The steady leaseup of DIFs
towers is a good sign, as is the recent 2,000 site
infrastructure sharing deal announced between
AIS and DTAC - a culture of infrastructure sharing
is slowly emerging in Thailand. With 4G auctions
imminent, we are cautiously optimistic about the
investibility of Thai towers, as long as investors
have the stomach for politics and dont mind a 49%
FDI limit.
Legend
TowerXchange research has not revealed any infracos or
towercos to date
Towercos or infracos active in the market. No recent
transactions have taken place and none rumoured to take
place soon
Towercos or infracos active in the market. No current
transactions taking place but an attempted tower sale has
taken place in the last 3 years or there are unconfirmed
rumours of a deal in this market.
Towercos or infracos active in the market. Rumours of deals
confirmed in the market.
Towercos or infracos active in the market. Deals of significant
size have taken place in the last 5 years.
Towercos or infracos active in the market. Deals have taken
place in the last year and more imminent deals rumoured
Note: Russia is covered under Europe; we estimate it to have a 5% towerco penetration and we expect it to be a growth market
Vietnam: Towers are being built and co-locations

added more quickly in the 55,000 Vietnamese tower
market than in Myanmar! But its a complicated
ecosystem. A fragmented group of around 30 local
towercos own ~10,000 towers. Alcazar Capital and
ASEAN Towers Vietnamese subsidiary Golden
Towers is in the process of rolling up 5,800 towers
by consolidating existing independently owned
towers in Vietnam. Meanwhile the restructuring of
Vietnams Ministry owned #2 and #3 ranked MNOs
MobiFone and VNPT could unlock a decent sized
sale and leaseback opportunity in the mid-term at
the very least, VNPT will be even more incentivised
to co-locate as they had historically relied on
MobiFones network. Even market leaders Viettel
appear to have warmed to the idea of co-location.
4G spectrum in the 2.3 and 2.6 GHz bands, together
with refarmed 900MHz spectrum, is expected to be
auctioned in 2016
XX
Asia News
A roundup of tower news across Asia
China: Towers, cash and equity changes hands
Bangladesh: Airtel and Axiata merge

Bharti Airtel Ltd and Malaysia-based Axiata Group
Berhad have signed an agreement to merge their
respective operations in BangladeshAirtel
Bangladesh Ltd and Robi Axiata Ltdto create the
second largest telco in that country. Post-merger,
the combined entity operating as Robi will serve
approximately 40mn customers. The proposed
transaction is subject to conditions precedent
including receiving applicable approvals from
relevant authorities and is expected to complete in
the first half of 2016.
Axiata will hold a 68.3% controlling stake in
the combined entity, Bharti Airtel 25% and the
remaining 6.7% will be held by Japan-based NTT
DoCoMo, an existing shareholder.
China Mobile, China Unicom and China Telecom

have given an update on the transfer of their
tower assets to China Tower Company. The three
companies agreed in October 2015 to hand over
their entire tower portfolios to China Tower in
exchange for shares in the new company and, in
the case of China Unicom and China Mobile, a cash
consideration. The exact number of shares was to
be decided at a later date, but it was agreed that
the shareholding structure after the completion
would be as follows: China Mobile 38.0%, China
Unicom 28.1%, China Telecom 27.9% and China
Reform Corporation 6.0%. The companies have
now confirmed the value of the transferred assets,
allowing them to finalise the remaining elements
of the transaction. The consideration amount for
the assets were CNY102.74 billion for China Mobile,
CNY54.66 billion for China Unicom and China
Telecom, CNY30.13 billion.
American Tower completed its acquisition of a 51%

controlling ownership interest in Viom Networks in
April 2016. The remaining 49% ownership stake will
be controlled by the Tata Group and several private
equity firms. American Tower paid INR 76 billion
(approximately US$1.14 bn) in cash and assumed
around INR 51 billion of INR-denominated debt.
Viom Networks operates 42,200 towers, supporting
nearly 100,000 tenancies, while American Tower
already owned 15,361 towers in the country, with
a tenancy ratio approaching two, prior to the
acquisition of Vioms towers.
India: Viom Networks CEO to depart
Syed Safawi, chief executive officer of Viom
Networks, announced in a letter to the Board and
employees that he will be resigning by the end of
June. The move follows the recent completion of the
acquisition of Viom Networks by American Tower
Corporation. Safawi, an industry veteran with
close to three decades of industry experience with
leadership stints at Reliance Communication Ltd.,
Bharti Airtel Ltd. and Coca-Cola, and was brought in
as CEO of Viom Networks in 2012.
India: SREI raises capital
India: American Tower to invest a further

US$2bn into India
American Tower announced that it will invest
US$2bn in India, in addition to the US$879mn
being spent to acquire a controlling stake in Viom
Networks.
SREI Infrastructure Finance announced that its

board will consider a proposal to raise Rs 17,500
crore through issuances of securities, including
bonds and commercial papers, next financial
year. The company has proposed to raise money
through public issue of secured redeemable nonwww.towerxchange.com | TowerXchange Issue 16 |
87
convertible debentures (NCDs) aggregating up

to Rs 2,500 crore in one or more tranches during
2016-17. SREI also proposed to issue secured and/or
unsecured redeemable non-convertible debentures
(including Bonds) aggregating up to Rs 10,000 crores
outstanding at any point of time during 2016-17 on
private placement basis.
Hemant Kumar Ruia has been named CFO of Indus

Towers. Ruia joins Indus Towers from Reliance
Retail Ltd, where he was also CFO and played the
role of business partner across various brands
with Reliance Retail. Ruia has extensive experience
in business partnering, funds management,
information systems, legal and secretarial and other
aspects of the finance function.
India: Indus Towers connects Tamil Nadu

Indus Towers announced that it will provide
telephony network across Tamil Nadu by
connecting over 79.3 million wireless subscribers
across Indus Towers second largest telecom circle.
With more than 13,100 towers and over 28,700
tenancies in Tamil Nadu, comprising 2,800 towers
and 6,500 tenancies in Chennai, Indus now offers its
users continuous and uninterrupted connectivity
across the state. Through the new measure, the
company enables communication for more than
97% of the total addressable population of the state,
and employs 4,000 people (directly and indirectly)
in the state.
India: New CEO and CFO for Indus Towers
Bimal Dayal has taken on the role of CEO of Indus
Towers, Indias largest telecom tower company,
succeeding B.S. Shantharaju who retired on March
31. Dayal has been associated with Indus Towers
since 2010 as the COO, and will now take up the full
responsibilities of CEO. Bimal is a member of the
TowerXchange Inner Circle advisory board.
India: Dispute over permitting of Delhi towers

comes to a head
The Municipal Corporation of Delhi (MCD) is no
longer permitting operators to set up telecom
towers in the capital following a notification from
the Ministry of Urban Development banning
the installation of such sites in residential areas,
according to the Economic Time of India. Rajan
Matthews, the director general of industry group
the Cellular Operator Association of India (COAI)
was quoted as saying that: We have learnt that the
authorities are in the process of issuing notices
for pulling down the sites in residential areas.
These plans, if implemented, are expected to lead
to service outages in the capital, as an estimated
80%-90% of the citys 18,000 sites could be affected
by the order. Telecom Secretary JS Deepak wrote
to the Ministry of Urban Development to request
an amendment, and pointed out that the issue
falls under the jurisdiction of the Department of
Telecommunications (DoT). Municipal bodies in
several cities have reportedly been sealing mobile
towers, claiming that some had been installed
illegally.
India: Active infrastructure sharing permitted

The department of telecommunications of India
has allowed mobile operators to engage in active
infrastructure sharing, a move that will help
mobile operators reduce their capital expenditure
by 30-35%. Operators will also be able to reduce
their operating expenditure by around 5%.
Active infrastructure sharing also operationalises
spectrum sharing, which was allowed by the
government in September last year. The move could
also benefit towercos in India by opening another
revenue stream for them.
India: Reliance Jio closes in on roaming deal with
BSNL
Reliance Jio Infocomm (RJIL) is in advanced stage
of talks with state-run telecom company Bharat
Sanchar Nigam Limited (BSNL) to use latters
network and infrastructure largely for voice
operations across all 22 telecom circles under an
intra-circle roaming arrangement. BSNL confirmed
that while talks are on, the deal has not been
finalised as yet. Apart from fixed charges at 25
paise per minute for voice, BSNL has fixed 25 paise
per megabyte for data and 5 paise per SMS for any
telecom operator to share its network.
India: BSNL has leased up ~10% of its towers
BSNL has leased out 6,505 of its towers to other
telecom operators and leased in space on 15,113
third party towers. Out of the 6,505 spaces that it
XX
has rented out, Bharti Airtel accounted for 2,251

slots. It was followed by Reliance Jio with 1,440 slots
and Idea and Vodafone with just above 900 towers
each. The state-owned company had, for over a
decade, refused to allow private companies to put
up their antennas on its towers, fearing that doing
so would make them lose their competitive edge,
but now they are willing to do so for a fee. Many of
BSNLs towers are on its own property, including
telephone exchanges, often in locations where others
do not have any presence.
India: Bharti Airtel considers selling 5% stake in
Bharti Infratel
The Indian press was awash with rumour in April
2016 that leading MNO Bharti Airtel was considering
selling 5% of their 71.7% equity stake in Bharti
Infratel to raise capital for spectrum and to pay
down debts. Bharti Infratel reported an increase in
tower count of almost 3,000 towers over Q1 2016,
including their stake in Indus Towers, together with
an uptick in tenancy ratios from 2.12 to 2.20. Bharti
Infratels market cap was then Rs 724bn, down from
Rs 729bn the previous quarter. EBITDA for FY15-16
stood at Rs 5,403 Crore, an 8% YOY increase.
India: Alternate energy requirements under
negotiation
The Telecom Department of India (DoT) is urging
the sector regulator to review the rules relating
to running mobile towers on hybrid power amid
financial and technical challenges faced by carriers.
The green telecom policy was created four years ago

and requires mobile carriers to migrate 50% and
20% of their cell towers in rural and urban areas to
hybrid power respectively by December 2015, and as
much as 75% and 33% by December 2020. Telecoms
operators are citing difficulties that they are having
in generating the large sums of capital required
to generate alternate energy sources to meet the
targets. With the Telecom Regulatory Authority of
India (TRAI) re-examining the policy, indications are
that these targets could be recalibrated significantly.
The TRAI has so far declined to announce when the
amended recommendations would be submitted.
reportedly been delayed by a disagreement

over the valuation of the sites. TPG Capital and
Tillman Global Holdings (TGH) submitted a nonbinding offer for the towers in December last year,
reportedly offering INR215 billion (US$3.2 billion)
for the sites, which are currently held through
RCOM subsidiary Reliance Infratel. Apparently
many of the sites lack structural capacity for
additional tenants, leading to TPG being reluctant
to underwrite the initial offer, forcing TGH to begin
looking for another partner with which to purchase
the towers.
India: GTL Infrastructure net losses narrow 7%
India: New Silk Route seeks to exit Ascend

Telecom
Livemint reports that New Silk Route (NSR) are
seeking to return US$500mn to investors during 2016
as they gear up to create a second fund. The e-paper
speculates that this could mean the investor plans
to exit Indian towerco Ascend Telecom, which owns
just under 5,000 towers We have returned $200
million to our investors this year. We are knocking
on the door of 2016 and clearly we would like to
liquefy these investments and realize them and that
is certainly the biggest activity at NSR right now, the
paper quotes Parag Saxena, CEO of NSR as saying.
NSR is also a minority investor in Reliance Infratel.
India: Reliance Infratel sale hits valuation snag
The planned sale of Indian Reliance
Communications (RCOMs) tower assets has
GTL Infrastructure losses narrowed to Rs 92.75

crore in their Q1 2016 update. The company cited
improving trading conditions since the MNO market
was restructured, and claims to have secured a fair
share of incremental tenancies following the 2015
spectrum auction. Unfortunately the news did not
prompt a recovery in share price: GTLINFRA was
trading at 2.00 INR at time of press, down from a
high of 3.35 in January 2016, with the price of 34.8
INR prior to the MNO market restructuring now a
distant memory.
Indonesia: XL Axiata slashes debt with sale of
2,500 towers to Protelindo
Telecommunications provider XL Axiata is set
to halve its total loans this year through a share
offering and a tower sale, a move expected to push
the company back into profitability. XL is to hold a
89
rights issue to repay shareholder loans amounting

to US$500 million maturing in 2017, and has
agreed to sell 2,500 telecommunication towers to
local tower operator Profesional Telekomunikasi
Indonesia, or Protelindo, for 3.56 trillion rupiah
(US$250mn) in cash. XL has signed a deal to
leaseback most of the towers for ten years. The
move followed a sale of 3,500 towers to STP in
late 2014.. Both of the transactions, as previously
reported, are expected to conclude by the end of the
first half this year.
Protelindos tower count is now 14,737.
Indonesia: Protelindo parent raises capital
Protelindos parent company Sarana Menara
Nusantara (SMN) is looking to raise IDR4.18 trillion
(US$316mn) through a rights shares offering to fund
expansion and to strengthen capital structure. SMN
intends to release 1.02 billion shares at a price of
IDR4.105 per share and the company is expecting
to get shareholder approval for the offering by 20
May. The proceeds from the sale will be invested in
the groups subsidiary Profesional Telekomunikasi
Indonesia (Protelindo), which will use the funds to
build new towers and invest in supporting services
companies; a small portion will be used to repay
Protelindos debts.
Indonesia: TBIG to build 1,500-2,000 towers in
2016
Tower Bersama Infrastructure Group (TBIG) is
preparing up to Rp 2 trillion (US$145.72 mn) of

capex this year to build between 1,500 and 2,000
new towers before year-end. With telco operators
actively expanding into 4G networks, the company
expects to add 2,000 new tenants by year end.
As of Sept. 30 2015, TBI had 19,643 tenants and
12,292 telecommunication sites comprising 11,291
telecommunication towers, according to the
companys records.
next 12-18 months. Currently, edotco manages

and owns 16,450 towers across South-East Asia
and ASEAN, which generated an annual revenue
of over US$2.97mn last year. Axiata is adding new
units into the edotco group so the revenue figure
is not comparable on a year-on-year basis, with
edotcos recent expansion into Myanmar.
Malaysia: U Mobile to use Sacofa infrastructure
in Sarawak
Malaysia: edotco to build sites for DiGi

DiGi Telecommunications, Malaysias second
largest operator by subscribers, has signed a
collaboration agreement with infrastructure
provider edotco Malaysia. DiGi will gain access to
edotcos more than 3,600 sites, as well as new builtto-suit sites, to accelerate its network expansion
programme. The five-year agreement will also
allow the pair maximise the deployment of shared
sites, helping lower opex and lower their carbon
footprint. edotco and DiGi have been collaborating
since 2013, and they are both committed to
achieving optimised network efficiencies through
their partnership.
U Mobile Sdn Bhd, has reached an agreement

with Sacofa Sdn Bhd to assist with its network
expansion in Sarawak. The partnership will enable
U Mobile to leverage Sacofas telecommunication
infrastructure footprint of over 700 sites across
the state, and its fibre network to facilitate
network expansion and increase QoS. Sacofa has
exclusive rights to construct, own and manage
communication infrastructure in Sarawak, and will
deliver build-to-suit-sites and provide bandwidth
leasing services to U Mobile over a period of 10
years as part of the agreement.
Myanmar: Viettel wins right to negotiate fourth
operator consortium
Malaysia: edotco could IPO

Axiata Group Bhd is considering a plan to list its
telecommunication tower unit edotco Group Sdn
Bhd on the local bourse. The Axiata Groups head
of investor relations, Clare Chin Kit Ching said the
plan for an initial public offering (IPO) was subject
to a final decision, which could happen over the
Hanoi-based telecoms operator Viettel has

been granted the right to negotiate with a local
consortium. If the tie-up is approved, the company
will join a local group of 11 public Myanmar
firms and a subsidiary of military-run Myanmar
Economic Corporation, Star High Public Company,
to form a joint venture that should receive the
XX
markets fourth licence for nationwide services.

Star High Public Company offers access to 1,000
towers and more than 13,000 kilometres of
fibre, among other telecoms assets, making the
business case for the fourth operator viable.
If negotiations are successful, Viettel will pay
49% of a US$300mn licence fee, equivalent to
its prospective holding in the company, and the
operator has promised to invest US$1.5bn into the
country.
Myanmar: OCK enters towerco market, more

consolidation imminent
Malaysian managed service provider OCK has
secured a contract to build 920 towers for Telenor,
marking the companys debut as an independent
towerco. TowerXchange sources suggest OCK
are offering a disruptively discounted lease rate
of US$900pcm, inclusive of power, compared to
prevailing rates in the US$1,200-1,800 range.
The restructuring of the Myanmar tower market
may continue with further towerco consolidation
at least one existing towercos is believed to be
seeking an exit.
Myanmar: ADB and IFC loan US$300mn to
Ooredoo
The Asian Development Bank (ADB) and the
International Finance Corporation-IFC, a member
of the World Bank Group-are providing a loan
of $150 million each to Ooredoo Myanmar
for the rollout of a mobile telecommunication

network across Myanmar, which will help extend
affordable telecom services across the country,
boosting economic growth and job creation.
Nepal: Axiata closes acquisition of Ncell from
TeliaSonera
Axiata Group has closed the acquisition of a
majority stake in Nepalese market leader Ncell
from TeliaSonera, in a deal believed to be worth
US$1.365bn. Simon Perkins will be installed as
Ncells new Managing Director. Axiatas towerco
edotco could follow its parent company into the
country.
Pakistan: Telenor challenges Mobilink-Warid
merger
Telenor Pakistan reportedly has raised concerns
over the proposed Mobilink-Warid merger with
the countys Competition Commission, which
is reviewing the deal for regulatory approval.
Mobilink, and Warid Telecom filed a notification
of proposed change in substantial ownership
interest of Warid on 15 December 2015, and
made the request for permission of merger
between Mobilink and Warid before the Pakistan
Telecommunication Authority (PTA). The closure
of the transaction may be contingent upon one or
both parties selling their towers to reduce debt.
With upwards of 50% overlap between Mobilink
and Warids networks (Mobilink has around
10,000 towers, Warid 5,000), the necessity of
decommissioning suggests the same towerco may

have to acquire both portfolios.
Etisalat are also rumoured to be interested in
monetising their towers in Pakistan.
The Philippines: SMC and Telstra discontinue
their partnership
Local conglomerate SMC still plans to shake up the
Philippine market by launching a third MNO, but
it wont be in partnership with Australian MNO
Telstra after talks about a prospective joint venture
were discontinued in March 2016. Telenor have
been mooted as alternate joint venture partners
with SMC. Globe and Smart continue to split the
Philippine mobile market, with infrastructure
seldom shared and no tower companies active in
the market.
Vietnam: IFC considers investment in Golden
Towers
The IFC, which has around US$500mn invested
in eight towercos worldwide, is considering an
opportunity to invest US$20mn Alcazar Capital
and ASEAN Towers Vietnamese subsidiary Golden
Towers US$210mn project to roll up 5,800 towers
by consolidating existing independently owned
towers in Vietnam. There are around 55,000 towers
in Vietnam, around 10,000 of which are in the
hands of a fragmented ecosystem of local towercos,
including Golden Towers itself, which owns around
340 towers
91

independent tower market in Europe
Germany
27,000
Deutsche Funkturm
Spain
Germany
Italy
Spain
UK
Italy
Turkey
UK
Germany
Ukraine
Turkey
FranceSpain
Ukraine
Czech Republic
Italy
France
IrelandUK
Czech Republic
Russia Turkey
Ireland
Netherlands
Ukraine
Russia
PolandFrance
Netherlands
Denmark
Czech Republic
Poland
Slovakia
Ireland
Denmark
Finland
Russia
Slovakia
Kazakhstan
Figure 1(a): Europes

18 towercos
with >1,000 assets
16,000
RTRS
Deutsche Funkturm
Cellnex
7,709 27,000
7,410
16,000
14,000
RTRS
First Tower Company
7,410
11,000
Cellnex
Telxius
First Tower Company
INWIT
7,709
2,350
2,804
14,000
11,519
Deutsche Funkturm
Telxius
Arqiva
11,000
10,550
RTRS
GlobalINWIT
Tower
11,519
7,500
Arqiva
TDF
Cellnex
2,350
7,410
10,550
6,966
GlobalCompany
Tower
CETIN
First Tower
EI Rai
Towers
Way
7,709
1,181
14,000
7,500
4,800
TDF
EI Towers
Telxius
3,2006,966
CETIN
FPS Towers
4,800
INWIT 2,618
27,000
2,804
16,000
1,181
11,000
2,804
2,350
11,519
2,300
Arqiva 3,200
10,550
2,028
Global Tower 2,618
7,500
Wireless Infrastructure
RaiGroup
Way 2,300
TDF 1,900 50 506,966
Russian Towers
American
Tower 2,028
CETIN 1,800 4,800
Wireless InfrastructureVertical
Group 1,900
1,600 50 50
EI Towers
3,200
Russian Towers 1,800
5000
FPS Towers
2,618
Vertical 1,600
Rai Way 2,300
5000
American Tower
FPS Towers
American
Tower
2,028
1,181
10000
15000
20000
25000
30000
35000
10000
15000
20000
25000
30000
35000
Netherlands
Finland
Serbia
Poland
Kazakhstan
Austria
SerbiaDenmark
Greece
AustriaSlovakia
CALA
1,900 50 50
Figure 1(b):
Europes
telecom and broadcast towercos with <1,000
Russian Towers
towers
Vertical
1,800
GreeceFinland
1,600
1000
5000
10000
15000
20000
25000
30000
35000
CALA Kazakhstan
Serbia
800
1000
Austria
460
Greece
600
800
460
800
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The biggest news of 2016 so far comes from Spanish

giant, Telefnica. After months of speculation
surrounding a potential divestment of towers,
February saw the carve out of their 11,000 Spanish
sites (along with 2,883 towers in Latin America and
subsea cabling) into a newly formed infrastructure
business Telxius. In April, this was then followed
by the sale of their 2,350 German towers to
the entity for 587mn. It is not thought that
Telefnica Deutschlands ~12,000 remaining sites
(predominantly rooftops) will be transfered to the
subsidiary. The move comes as part of a strategy to
reduce the companys debt burden whilst optimising
the return on capital deployed in such infrastructure
- including increasing co-locations on sites. The
company has also indicated that they will potentially
look at the acquisition of towers from third parties
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The past few of months have seen big news in

the European market indicating a major shift is
underway in attitudes toward tower ownership. Of
Europes 600,000 towers (including Russia and the
CIS), 78,211 (or 13%) sit in the hands of independent
towercos; 43,684 of which are owned by companies
who have a significant footprint in the broadcast
sector. A further 74,920 towers (12%) are owned
by operator captive towercos and 67,125 towers
(11%) are managed by JV infracos - putting a total
of 35% in the hands of infrastructure companies.
TowerXchange forecasts that by the end of 2016
this number will increase to 40% with 18% being
owned by independent towercos, 11% by operatorled towercos and 11% by JV infracos. By 2020, 65%
of Europes towers are expected to sit in the hands of
infracos (see figure two).
40
33
XX
Following a similar restructuring ahead of a

proposed monetisation of assets, Turkcells
Ukrainian business, Lifecell transferred 811
towers to its wholly owned subsidiary UkrTower
for EUR47.8mn. UkrTower is part of Turkcells
infrastructure business Global Tower which owns
an estimated 8000 towers in Turkey, in addition
to its Ukrainian portfolio. Turkcell have recently
confirmed that they have initiated the process for an
IPO of a certain amount of shares in Global Tower,
although an IPO of the unit is somewhat complicated
by the Build-Operate-Transfer agreement in place
with the Turkish government onan estimated 60%
of their Turkish towers.
Negotiations continue around the sale of a stake
in INWIT, where decision is expected imminently.
Two shortlisted offers remain, one from EI Towers
and a second from Cellnex in conjunction with
infrastructure fund F2i. Mediaset-owned EI Towers
are thought to have bid to acquire a lower stake of
25% in the company, with the deal also including a
transfer of 1000 towers to INWIT. Cellnex and F2i
are known to be bidding for a 45-49% stake in INWIT
(which then would be followed with a takeover bid
Figure 2: Forecasted breakdown of ownership of Europes ~600,000

telecom tower and rooftop structures 2016-2020
600,000
Number of towers
thus creating a sizeable towerco positioned to

compete in major tower transactions in Europe.
Whilst the company has not released an official
statement, it has been reported thatTelefnica plan
for an IPO of Telxius on the Madrid Stock Exchange
in early July.Goldman Sachs and JP Morgan have
been reportedly appointed to join UBS in running
the process although it has not yet been revealed
what level of equity Telefnica plans to retain.
500,000
MNO Captive
400,000
300,000
200,000
100,000
307,726
379,744
67,125
72,570
74,920
Q116
275,226
49,125
49,125
30,968
67,125
51,968
244,681
65,968
191,181
357,726
237,226
59,125
212,226
69,125
30,968
30,968
272,681
287,681
JV infraco
Operator-led
infraco
Independent
towerco
109,181
Q416
Q417
Q418
Q419
Q420
for the rest of the capital). As to who the likely winner

will be decision is split. Some observers believe that
the Cellnex takeover will afford higher synergies
due to their stronger presence in the telecoms sector,
whilst others have suggested that the recent alliance
of INWIT and EI Towers shareholders, Vivendi and
Mediaset - could favour the Italian companys bid.
In Russia, the sale of VimpelComs 10,400 towers
is well underway, with three shortlisted bidders
Russian Towers, Vertical and the Russian Direct
Investment Fund in the running for the portfolio.
The deal is expected to close in Q2 2016, marking
Russias first major tower transaction. Following the
completion of the sale it is widely expected that

VimpelCom will then turn their attention to potential
divestitures across their CIS markets, in a bid to
further reduce their current debt.
Keeping our focus on the east, Russias Tele2 and
Megafon are also rumoured to be re-evaluating
their tower strategies with Megafon looking into
a potential sale of its infrastructure business, First
Tower Company.
In Germany Deutsche Telekom have reportedly
brought in advisors to look at an IPO of their
infrastructure assets while American Tower
93
European tower deals since 2008

Year
Country
Seller
Buyer
Tower count
Deal value
Cost per
tower
Deal structure
2016
Germany
Telefonica
Telxius
2350
587,000,000
249,787
SLB
2016
Ukraine
Lifecell
UkrTower
811
47,820,000
58,964
SLB
2016
Spain
Telefonica
Telxius
11000
SLB
2015
Ireland
Coillte
Cignal
113
2015
Germany
Telefonica
Deutsche Telecom/ Omega Towers
7700
Asset Transfer
2015
Italy
Tecnorad
EI Towers
134
17,000,000
126,866
2015
Italy
Wind (VimpelCom)
Cellnex
7377
693,000,000
93,941
SLB with 10% equity
2015
Italy
TowerCo
Cellnex
212
94,600,000
446,226
Company acquisition
2014
Spain
Telefonica/Yoigo
Cellnex
4277
385,000,000
90,016
SLB
2012
France
Bougyes Telecom
FPS Towers
2166
185,000,000
100,400
SLB with 15% equity
2012
Germany
KPN
American Tower
2031
393,000,000
193,501
SLB
2012
Netherlands
KPN
Protelindo
261
75,000,000
287,356
SLB
2012
Netherlands
KPN
Shere Group
460
115,000,000
250,000
SLB
2012
Spain
Telefonica
Cellnex
500
45,000,000
90,000
SLB
2010
Netherlands
KPN
Open Tower Company
500
SLB
2008
Netherlands
KPN
Open Tower Company
101
SLB
Totals / average
39,993
Germany may be seeking third party investors, and

in Poland, Orange are also rumoured to be looking
into a tower sale.
TowerXchange are currently tracking 68 towercos,
broadcast companies and JV infracos with tower
portfolios in Europe. With the exception of Cellnex
2,637,420,000
(active in Spain and Italy), Wireless Infrastructure

Group (with assets in the UK, Ireland and the
Netherlands), Shere Group (with towers in the UK
and Netherlands) and Shared Access and Britannia/
Hibernian (both with assets in both the UK and
Ireland), all other companies have a presence in just
one country.
128,161
Major tower transactions on the cards represent

an opportunity for Europes towercos to expand
into new geographies and also represent an
opportunity for major international players to gain
a footprint in Europe: #3 and #4 US towercos SBA
Communications and Digital Bridge both have an
appetite for European towers, for example. Whats
XX
Figure three: Estimated tower and rooftop counts for selected markets
in Europe
Kazakhstan Czech Republic
7,000
10,200
Germany Russia
Greece Nether- Poland France Spain Italy UK
45,052
22,000
117,100
45,000
47,517 53,000 69,635
12,000 lands
15,204
Ireland
4,000
Denmark
4,500
Finland
10,000
Ukraine
12,000
Further focus for Europes towercos resides

in decommissioning as the impact of MNO
consolidation (such as that of 3s acquisition of
O2 in Ireland and the proposed merger of 3 and
Wind in Italy) starts to filter through to their
infrastructure
more, such transactions are leading to the creation

of new domestic towercos. In such a fragmented
market, with independent tower ownership in
the hands of a number of mid-sized companies
and with investors having a growing appetite to
invest in European tower infrastructure, it often
seems that there is more capital seeking tower
opportunities than there are opportunities. A
domestic player with local expertise together
with the backing of a financial investor and the
presence of a strong management team could be
opportunities in the small cell and DAS markets.

With European MNOs accustomed to infrastructure
sharing, and urban infill to meet growing data
demand sitting as a top priority, there exists
significant potential for a third party infrastructure
provider to deliver more cost effective, neutral host
heterogeneous networks. The uptake of venue-DAS
is growing significantly and a number of city-wide
outdoor small cell projects are being rolled out. The
Small Cell Forum forecasts that by 2020 only 20%
of small cell infrastructure will be solely managed
by a single operator, the other 80% will be multioperator small cells with a third party involved,
whether thats other operators or a towerco.
well placed to make a significant play in upcoming

transactions. TowerXchange are tracking a lot of
towercos, infrastructure funds and PE firms with an
appetite for smaller portfolios, from BTS startups
to 100-2,000 towers. But the question remains: does
anyone have the appetite and digestive capacity to
compete with Cellnex for Europes largest sale and
leasebacks? Telxius could be one such company.
Moving away from macro-structures, an increasing
number of European towercos are tapping
TowerXchange Meetup calendar

< TowerXchange Meetup Americas, June 16-17, 2016
< TowerXchange Meetup Africa, October 19-20, 2016
< TowerXchange Meetup Asia, December 13-14, 2016
< TowerXchange Meetup Europe, April 4-5, 2017
95
European tower activity - the headlines

Azerbaijan: Infraco Azerconnect active in the country.
from TDF in 2014.
CIS:Logycom forms first independent towerco in

Kazakhstan, with an order to build just under 100
towers. Meanwhile, VimpelComs towers could come to
market across several CIS states.
Ireland:Towercom, ESB Telecoms, WIG,

Hibernian, Shared Access, Cellcom and Highpoint
active. Together with three state-owned entities,
they own 40% of Irelands 4,000 towers. 3s
acquisition of O2 disrupted network sharing
agreements and is leading to consolidation. Coillte
sold 298 sites including 113 towers to InfraVia
Capital Partners creating new towerco Cignal.
Czech Republic:CETIN, infrastructure business

carved out of O2 has 4,800 towers and 750 micro sites.
Also in infrasharing venture with T-Mobile.
Denmark:Infrasharing mandated by the state
TT-Network formed by Telia and Telenor. MNO
divestments expected in 2-4 years.
Finland:Digita sold by TDF to First State Investments
in 2012.
France:Towerco FPS active after acquiring towers
from Bougyes Telecom and 20,000 rooftop sites from
Loxel. TDF lead the market, ITAS TIM and Towercast
also active. Free Mobiles entry disrupting the market,
SFR-Numericable forced into merger; Bouygues
Telecom looking to exit? Could more towers become
available for sale and leaseback?
Germany:Towercos Deutsche Funkturm and
American Tower active in the market, ATCs towers
bought from KPN. Deutsche Telekom rumoured to
be looking at an IPO of their assets. ATC Germany
rumoured to be seeking investors. 2,350 Telefonica
sites sold to infraco Telxius for 587mn.
Greece:Infraco VICTUS Networks run by Vodafone
Greece and Wind Hellas. Initial rumors of potential
sale and leasebacks emerging. Broadcast towerco
Digea owns 156 towers.
Hungary:Antenna Hungaria acquired by the state
Italy:Cellnex/F2i and EI towers still battling out

for a stake in INWIT. EI Towers acquisition of
fellow broadcast towerco Rai Way initially halted
but discussions re-opened. EI Towers continue to
roll-up smaller towercos. Cellnex closed landmark
sale and leaseback with Wind in 2015.
Latvia:Bite Group brought towers to market in
2013 but no agreement reached.
Netherlands:Protelindo, Shere Group and Open
Tower Company acquired a total of 1,322 towers
from KPN. Rumours that T-Mobile may be looking
to sell its business.
Poland:Emitel (towerco) and NetWorkS! (infraco)
active in the market. Infraco NetWorkS! may
dissolve, may force tower sale by Orange or
T-Mobile.
Portugal:Portugal Telecom sold to Altice tower
sale rumour has gone quiet.
Romania:Orange and Vodafone sharing networks
through JV infraco Netgrid Telecom.
Russia:VimpelCom creates National Tower
Company with 10,400 towers, sale expected in

Q2 2016. MegaFon creates First Tower Company
with 14,000 towers, and expresses intent to sell the
towerco. MTS carves out 5,500 towers into MTS
Towers no apparent plans to monetise. Tele2
hints at potential SLB. Active towercos include
Russian Towers, Vertical, Link Development and
Service Telecom..
Serbia:Managed service provider Konsing Group
owns a portfolio of 47 sites.
Slovakia: Towercom, towerco acquired by
Macquarie in 2013 with a portfolio of 700 sites.
Spain:Telefonica carved out 11,000 towers into
new infrastructure business, Telxius. Towerco
Cellnex active after acquiring towers from
Telefonica/Yoigo. Axion towers rumoured to be on
the market.
Sweden:Several infracos including Net4Mobility,
3GiS and SUNAB
Turkey:Turkcells Global Tower manages over
16,000 sites including 7,870 macro towers. Turkcell
have initiated the process for an IPO of the unit.
UK:Towercos active in the market include Arqiva,
WIG, Shere Group and Shared Access, MBNL and
CTIL sizable infracos. Sale of O2 to Hutchison to be
blocked by the European Commission.
Ukraine:Towerco UKRTower active in the market,
recent acquisition of 811 towers from parent
company Lifecell. UkrTower to be included in the
upcoming IPO of Global Tower.
XX
European heatmap
Legend
TowerXchange research has not revealed any infracos or
towercos to date
Towercos or infracos active in the market. No recent
transactions have taken place and none rumoured to take
place soon
Towercos or infracos active in the market. No current
transactions taking place but an attempted tower sale has
taken place in the last 3 years or there are unconfirmed
rumours of a deal in this market.
Towercos or infracos active in the market. Rumours of deals
confirmed in the market.
Towercos or infracos active in the market. Deals of significant
size have taken place in the last 5 years.
Towercos or infracos active in the market. Deals have taken
place in the last year and more imminent deals rumoured
Note: For the purposes of our European coverage, Towerco describes an independent company which owns and operates passive infrastructure for commercial profit. Infraco incorporates MNO joint venture
organisations and carve outs which serve more than one entity or market their towers commercially
97
The unique characteristics and

projected future of the European
tower industry
Kieron Osmotherly, CEO, TowerXchange and Laura Dinnewell,
Head of TowerXchange EMEA
At the TowerXchange Meetup Europe, TowerXchange

opened proceedings with a run down of the key
characteristics, trends and transactions in the
European tower industry, examining key motivators
and forecasting how the shape of the market is set to
change. We summarise some of the main take home
messages and revisit key charts and figures presented
to provide a 101 on this rapidly evolving marketplace.
Keywords: Acquisition, American Tower, Arqiva, Broadcast, Capacity Enhancements, Carve Out, Cashflow
Finance, Cellnex, CETIN, Core Network, Backhaul & FTTT, DAS, Deal Structure, Decommissioning,
Densification, Deutsche Funkturm, EBITDA, EI Towers, Europe, Europe Insights, Europe News, First Tower
Company, FPS Towers, Global Tower, IBS, Infrastructure Sharing, Investment, INWIT, LTE, Market Overview,
MNOs, Operator-Led JV, Rai Way, Rooftop, RTRS, Russia & CIS, Russian Towers, Sale & Leaseback, Small Cells,
TDF, Telxius, Tower Count, Towercos, TowerXchange Research, UkrTower, Urban versus Rural, Valuation,
Vertical, Whos Who, WIG

< The different roles of JV infracos and operator-led, broadcast and independent towercos in the
European tower industry
< Who Europes key infracos and towercos are
< The mix of ground based towers and rooftop towers in the European market
< Key transactions and deal structures to date
< Motivators behind recent transactions
< How tower ownership is forecasted to change hands in the next five years
The current state and forecast future growth of

the European tower industry through 2020
In Europe (inclusive of Russia and the CIS), there
are a total of 600,000 cell sites. These sites are
comprised of towers, streetpoles, rooftops and inbuilding solutions by TowerXchanges definition,
we count any site that is potentially shareable. As a
mature tower market, that total of around 600,000
is staying fairly constant with new build being
more or less cancelled out by the decommissioning
of parallel infrastructure.
The structure of the European tower market is
quite unique, with joint venture infrastructure
sharing companies such as CTIL and MBNL in
the UK, VICTUS Networks in Greece, NetGrid in
Romania, Mosaic in Ireland and a host of others in
Scandinavia operating (if not always owning) 11.1%
of the continents towers (figure one). Theyre
a different breed from a commercial towerco
because they are typically created to serve solely
the needs of their parent MNOs, may price leases
solely at a chargeback level, and may not lease sites
to third parties.
A second unique characteristic of the European
market is the prevalence and scale of broadcasttelecom hybrid towercos. Broadcast infrastructure
is generally a different but parallel asset class
characterised by less growth than the telecom
towerco asset class. Hybrid broadcast and telecom
towercos represent around 9% of the 13% of
Europes towers owned by independent towercos;
XX
just 4% are pureplay telecom towercos for now!

Operator-led carve out towercos, where the
parent MNO retains >51% of the equity in the
towerco, account for 12.1% of Europes towers,
a segment supplemented by the addition of
Telefnicas Telxius, but from which INWIT may
be exiting upon completion of their sale: carve
out and monetise is becoming as popular as the
pure sale and leaseback model.
There is no European tower market per se, there
are 50 local tower markets, the size of some of
which are shown in TowerXchanges analysis of
the independent tower market in Europe. There
are also no pan-European towercos, in fact of the
61 European towercos and infracos identified
by TowerXchange, only six have a presence
in multiple countries, and most of those are
neighboring countries. However, we expect to see
the rise of multi-country towercos of scale in the
coming five years, led by Cellnex.
Towers versus rooftops and streetpoles
It is something of a misnomer to talk about a
600,000 tower European tower market, since in
several markets, rooftop structures significantly
outnumber traditional ground based towers
(GBTs), exemplified by Russia where only 36% of
telecom structures are GBTs, and Germany where
its only 23% (figure two)
Rooftop structures may be as investible or less
Figure one: Current ownership of Europes ~600,000 towers

13%
MNO captive
12.1%
JV infraco
63.7%
11.1%
Operator-led infracos
Independent towerco
Figure two: Towers versus rooftops and streetpoles

Russian example
42,100
75,000
GBTs
German example
16,381
53,604
Rooftops and streetpoles
99
investible than full GBTs as a function of their

structural capacity, rights of access and the
contractual relationship with the landlord.
A lot of the new build were seeing in Europe
consists of streetpoles and infill microcell sites,
rather than full scale GBTs.
5. Telxius, Telefnicas infraco manages a portfolio

of 13,350 sites in Europe 2,350 ground based
towers in Germany and an estimated 11,000 ground
based towers and rooftop sites in Spain. Telefnica
is considering an IPO of the unit on the Madrid
Stock Exchange in early July.
An introduction to Europes towercos
6. INWIT, Telecom Italias infraco with 11,519 sites

was listed on the Milan Stock Exchange last year
and a further stake in the company is being fought
over by Cellnex/F2i and EI Towers.
There are 17 towercos in Europe which possess

portfolios of over 1000 towers, rooftops and
streetpoles (see figure 1a in TowerXchanges
analysis of the independent tower market in
Europe).
1. Deutsche Funkturm is Deutsche Telekoms
captive towerco, and owns just under 40% of the
towers and rooftops in Germany.
2. RTRS is the Russian broadcast towerco with
16,000 towers.
3. Cellnex is the fastest growing towerco in Europe,
with 15,120 towers across Spain and Italy and an
appetite for further opportunities in their existing
markets plus Portugal, France, Germany, Austria,
Switzerland, Belgium, the Netherlands, the UK and
Ireland.
4. First Tower Company is Russian operator
MegaFons infraco and manages a portfolio of
14,000 towers. MegaFon has been open about its
intention to sell to a strategic investor in the next
12-24 months.
7. Arqiva, the UKs broadcast telecom hybrid with

10,550 towers, are currently restructuring their
balance sheet.
8. Global Tower, Turkcells infrastructure
subsidiary with ~8,000 towers in Turkey and a
further 1,181 in the Ukraine (managed under
UkrTower) is at the beginning of an IPO process.
9. TDF, the French broadcast/telecom hybrid
towerco has 6,966 towers, was recently refinanced
and is now owned by a consortium including
Brookfield and Arcus.
10. CETIN is a 4,800 tower infraco carved out
of O2 Czech Republic, which owns and operates
transmission, passive and active infrastructure.
11. EI Towers, the Italian broadcast towerco with
2,300 sites, also incorporates TowerTel with over
900 telecom towers. The company is one of the
shortlisted bidders for the INWIT equity stake
and is in talks regarding a takeover of rival Italian

broadcast towerco, Rai Way.
12. FPS Towers has 2,618 towers plus rights to
over 20,000 rooftops in France. It is rumoured
that the company may be sold by investors Antin
Infrastructure Partners.
13. Rai Way is an Italian broadcast towerco, less
aggressively seeking opportunities in the telecoms
sector than its rival EI Towers. There exists the
possibility that Rai Way and EI Towers may merge.
14. American Tower, the worlds largest
independent towerco American Tower has just a
2,028 tower portfolio in Germany. The company
is reportedly seeking a new minority investor,
potentially to fund expansion in Europe.
15. Wireless Infrastructure Group is the largest
pureplay independent towerco in the UK with over
2,000 sites, a few of which are in Ireland and the
Netherlands.
16. Russian Towers has built a portfolio of 1,800
sites in their home country Russia. As one of the
finalists to acquire VimpelComs 10,400 towers
in Russia and with an appetite for transactions
across the CIS, their portfolio may be set to increase
substantially.
17. Vertical, with a portfolio of 1,600 sites are
competing with Russian Towers in the ongoing
VimpelCom process in Russia and similarly have an
XX
appetite for further tower sales in the region.

Beyond this, TowerXchange track 27 telecom
towercos and smaller broadcast towercos with
less than 1,000 towers and 12 JV infracos, the
largest of which are the UKs CTIL and MBNL,
each managing portfolios of ~18,000 sites. Further
information on these players can be found in
TowerXchanges whos who in European towers
in the 15th edition of the TowerXchange journal.
European tower deals since 2008
Weve seen over 2bn deployed since 2012 to
transfer 25,000 towers from MNO-captive to
independent towercos (see the deal table in
TowerXchanges analysis of the independent
tower market in Europe). However, we think this
is the tip of the iceberg of an investment of more
than 10x that magnitude over the coming five
years.
The trend to monetise European towers was
initiated in the Netherlands where KPN sold 1,300
towers to three different towercos, then again
by KPN in Germany to American Tower, before
Bouygues Telecoms sale of over 2,000 towers to
Antins FPS Towers in France.
What really kick started the European tower
industry were large transactions by Cellnex in
Spain (with Telefnica and Yoigo) and 14 months
ago with Wind in Italy, bringing us up to the
current day with the VimpelCom process to sell
10,400 towers well under way in Russia.
A second trend is starting to emerge in the

monetisation of European passive infrastructure,
initiated by Telecom Italias strategy for their
infraco, INWIT. With a partial listing of INWIT on
the Madrid Stock Exchange now being followed
by a strategic sale of a further tranche of equity
in the infraco, other operators are considering
both options for their newly created captive
towercos. Turkcell have initiated the IPO process
for Global Tower, Deutsche Telekom have hinted
at a potential listing of Deutsche Funkturm,
Telefnica are rumoured to be planning an early
July IPO of Telxius, and MegaFon are looking for a
strategic buyer for First Tower Company.
Drivers of change
Why wasnt there a substantial pipeline of
European tower transactions and monetisations
when there is now?
Firstly, many European MNOs didnt need
the cash as urgently as did their counterparts
in Africa for example. But the efficiency
benefits of transferring assets to infrastructure
specialists, whilst focusing on selling minutes
and megabytes, remains common to MNOs
worldwide.
European towers is a sellers market, and with
relative valuation arbitrage so significant,
whether theyre considering selling and leasing
back or carving out and keeping their towers,
the monetisation of towers is creeping up the
boardroom agenda within MNOs across Europe.

Where is activity expected?
Looking at the heatmap presented in the article
TowerXchanges analysis of the independent tower
market in Europe in this journal, you can see that
the continent is awash with opportunities.
In this edition of the journal we take a detailed look
at the tower industry in Russia, Germany, Turkey,
Italy, Spain, UK and the CIS where known activity
is underway. We also examine emerging markets
including Romania, Poland and Greece and discuss
the potential for the creation of independent tower
markets in each country.
As stated earlier, of Europes 600,000 towers
(including Russia and the CIS) 36% are owned by
infracos and a third of which (13%) are owned
by independent tower companies. Examining the
transactions which TowerXchange are tracking
and the trends we are observing, we forecast the
percentage of towers to be owned by infracos
(independent towercos + operator-led towercos +
JV infracos) to increase to 40% by the end of this
year and 65% by 2020. In terms of ownership by
independent towercos, we forecast this to increase
to 18% by the end of 2016 and 48% by 2020.
Again, refer to the infographic in TowerXchanges
analysis of the independent tower market in
Europe to see how we anticipate that forecast
being realised
www.towerxchange.com | TowerXchange Issue 16 | 101
Europe News
fund acquisitions and extend their footprint of 2,028

towers in the continent.
The latest spate of tower carve outs, consolidation and transactions

has collapsed with parties failing to reach an
agreement regarding the consolidation. Bouygues
Telecoms revenues had been hit by the entrance of
FREE mobile into the French market which led to
a price war. The entrance of FREE had previously
also ben a factor in the takeover of Vivendis SFR by
Altices Numericable.
France: ARCEP proposes curtailment of network
sharing agreements
Eurasia: Turkcell submits a binding offer for
TeliaSoneras stake in FINTUR
TeliaSonera intends to divest its stake in FINTUR,
the mobile business it owns with Turkcell in
Kazakhstan, Azerbaijan, Georgia and Moldova.
With Turkcell already owning a 41.45% stake in
the company, it has submitted a binding offer
to acquire TeliaSoneras stake. In an interview
with TowerXchange, Turkcells CSO suggested the
company felt it could create more value for their
shareholders and customers if they took a bigger
role in the management of their subsidiaries in the
region.
France: Orange takeover of Bouygues Telecom
collapses
After entering into official negotiations in
January, Oranges takeover of Bouygues Telecom
French telecoms regulator, the Regulatory

Authority for Electronic Communications and
Posts (ARCEP) has proposed the curtailment of
network sharing agreements between Orange
and FREE mobile and between SFR-Numericable
and Bouygues Telecom. The move is designed
to stimulate what the regulator calls crucial
investments into telecoms infrastructure in the
country.
Germany: American Tower seeks minority
investor
Investors including Blackrock have been
approached regarding acquiring a potential 1020% stake in American Tower Germany. With
the European tower industry starting to open
up and sizeable portfolios potentially coming to
market, such investment could well be used to
Germany: Telefnica Deutschland sells towers to

Telxius
Following the restructuring of its Spanish and
Latin American assets into infrastructure business
Telxius, Telefnica has announced the sale of its
2,350 German towers to the subsidiary for a cash
price of 587mn (249,787 per tower). The are no
plans for a sale of the remainder of their estimated
12,000 sites the majority of which believed to be
rooftops to the entity.
Germany: Deutsche Telekom brings in advisors
to look at a spinoff or IPO of infrastructure
Deutsche Telekom has reportedly appointed
advisors to look into a potential IPO or spinoff of
their infrastructure assets. Deutsche Telekoms
27,000 towers (of which 8,000 are ground based
towers) are managed by their infraco Deutsche
Funkturm. Talks regarding a potential sale or IPO
are said to be in the very early stages and it has yet
to be clarified which assets may be included in such
a transaction.
Italy: EI Towers and Cellnex/ F2i still in the
running for INWIT
The sale of a stake in Telecom Italias INWIT is still
ongoing with Italian broadcast towerco EI Towers
and Spanish towerco Cellnex (in conjunction with
F2i) the two shortlisted bidders. EI Towers favour a
XX
smaller 25% stake with the deal thought to include

the transfer of 1,000 EI sites to INWIT, whereas
Cellnex prefers a larger stake - seeking the initial
45% of equity on offer and following this with a
takeover of the entire share capital. In addition to
the complexities of the bids, the deal process has
been further slowed by the resignation of Telecom
Italia CEO, Marco Patuano. Announcements are
expected in mid May. Both the Cellnex and INWIT
CEOs have intimated that a Cellnex takeover would
afford greater synergies; whilst other reports
suggest that the recent alliance of INWIT and EI
Towers shareholders, Vivendi and Mediaset - could
favour the Italian companys bid.
have voiced their concerns that it could lead to

higher prices, less choice and reduced innovation
for mobile customers in Italy.
Italy: INWIT finalises the acquisition of 76 towers
in Lombardy
INWIT has finalised the purchase of 76 telecom
towers in Lombardy, mainly located in the province
of Brescia. The transaction, was achieved through
the acquisition of three companies Gestione Due
S.r.l., Gestione Immobili S.r.l. and Revi Immobili
S.r.l. for a total amount of 7.9mn.
Orange and Telkom Romania have signed two

separate agreements governing fixed and 4G
networks in the country. Orange, which currently
does not have fixed internet infrastructure in
Romania, will gain access to Telkoms network, whilst
Telkom will be able to use Oranges 4G network
which is the most extensive in the country. The
deal is seen as win-win for both parties, as Orange
would have to invest massively to create its own
fixed broadband network while Telekom has a lot of
catching up to do on 4G data coverage.
Russia: VimpelCom and MegaFon sign RANsharing
agreement
Kazakhstan: Tele2 and Altel form joint venture

Italy: Rai Way and EI Towers merger talks to
reopen?
After the Italian government blocked EI Towers
attempted takeover of rival broadcaster Rai Way
amidst competition concerns, EI Towers have told
media that they have not given up on the possibility
of an acquisition. EI Towers continue to build their
infrastructure portfolio in Italy through the rolling
up of smaller.
Italy: EC competition authorities study Wind 3
Italia merger
Competition authorities at the European
Commission have launched a full investigation into
the proposed merger between VimpelComs Wind
and Hutchisons 3 in Italy. Such a merger would
likely put the new entity in poll position in the
Italian operator market but competition authorities
Swedens Tele2 and Kazakhtelecoms Altel have

announced that they will be joining forces in the
Kazakh market. The move is part of a strategy to
close the gap on number one and number two
operators Kcell and KaR-Tel (Beeline), although the
merger will still leave the new entity some 14-17%
short of its rivals market shares.
VimpelCom and MegaFon have announced a

partnership to construct, operate and share RAN
infrastructure across ten regions in Russia in a bid
to more cost effectively rollout their 4G networks.
The agreement will be the largest network sharing
partnership in the country and will involve the
deployment of over 1,300 additional base stations.
Russia: MTS creates their own towerco
Poland: Emitel seeks refinancing

Polish broadcast towerco Emitel, with a portfolio
of 370 sites, is reportedly seeking refinancing. The
company has recently invested capital to add fibre
to its towers, a strategy which other players in the
market are likely to follow.
Romania: Orange and Telkom sign agreements
for infrastructure sharing on fixed and 4G
networks
MTS has made 5,500 towers, approximately half their

portfolio, available for commercial lease through
MTS Towers. There is no indication that this is the
first step toward the monetisation of the assets. In
contrast, VimpelCom has consolidated their 10,400
towers into National Tower Company, in advance of a
sale and leaseback, the process for which is drawing
to a close. MegaFon has also carved out their 14,000
towers into First Tower Company, explicitly stating
their intent to sell to a strategic acquirer.
Russia: Russian Towers, RDIF and Vertical emerge

as frontrunners to secure VimpelCom towers
As the process to sell VimpelComs Russian
towers draws toward a close, two local towercos
and Government fund RDIF have emerged as
frontrunners. Russian Towers are backed by the
EBRD, UFG Private Equity, Macquarie (specifically
MRIF), ADM Capital, Sumitomo Corporation and the
IFC and have built over 1,800 towers plus hundreds
of lamp-post solutions in the country. Privatelyowned startup Vertical have raced to a portfolio of
1,600 towers and lamp-posts. It seems increasingly
unlikely acquiring investors will have an appetite
for VimpelComs rooftop sites, which may have been
included to boost the deal valuation VimpelCom
are thought to be holding out for a valuation north of
$600mn.
Spain: Zegona fail to secure funding for Yoigo
acquisition; MASMOVIL offer back on the table
UK based Zegona Communications has reportedly
failed to secure the funding required for a reported
630mn takeover of TeliaSoneras Yoigo. After
having been outbid by Zegona previously, Grupo
MASMOVILs 550mn offer is now reportedly being
reconsidered by TeliaSonera, although it is yet
unknown whether TeliaSonera will grant Zegona
additional time to secure the necessary funding to
support their higher offer.
Spain: Reports suggest Telxius could IPO in July
TMTfinance report that Telefnica will IPO Telxius in
July 2016, seeking a 4-6bn valuation. Over 16,000

towers have been injected into Telxius, which
makes 40% of revenue from the tower business and
60% from submarine cable. For more information,
see our detailed analysis of Texius later in this
Journal.
Turkey: Turkcell announces IPO of Global Tower
business
Turkcell has announced their intent to IPO its
infrastructure unit, Global Tower. Turkcell has a
portfolio of 23,000 sites including ~8,000 macro
towers in Turkey. An IPO of the unit is somewhat
complicated by the Build-Operate-Transfer
agreement in place with the Turkish government
on the original towers. See TowerXchanges Turkish
market analysis and Turkcell interview later in this
edition for further details.
UK: Hutchison takeover of Telefnicas O2 on the
brink of collapse
The European Commission is reportedly on the
verge of blocking Hutchisons planned takeover of
O2 amidst concerns about loss of competition in
the market. In spite of the numerous concessions
proposed by Hutch it is thought that they have
been unable to alleviate the concerns of the
competition authorities. With Telefnicas net debt
sitting at 50.2bn as of Q1 2016, they are thought
to be looking for new buyers, with cable company
Liberty Global and a number of private equity firms
thought to be interested parties.
UK: WIG secures investment from 3i

The UKs Wireless Infrastructure Group has secured
75mn in investment from 3i Infrastructure. 3i joins
Wood Creek Management as shareholders in the
company and takes WIGs total capital raised up to
1bn. The funds will be used to not only scale up
WIGs infrastructure footprint in the UK but also to
expand their present into other Western European
markets.
UK: Arqiva restructuring could re-open the door
to US strategics
The ongoing strategic review of Arqiva could reopen the door to previous owners Crown Castle, or
their competitors American Tower, to enter the UK
market. Arqiva has around 10,550 active towers and
a tenancy ratio of 2.5, but the consortium of current
owners, led by CPP and Macquarie, could use the
current balance sheet restructuring exercise as an
opportunity to exit. An IPO has also been rumoured,
with a valuation north of 2bn mooted.
Ukraine: lifecell sells 811 towers to infraco
subsidiary UkrTower
lifecell, Turkcells Ukrainian subsidiary, has
announced a sale and leaseback transaction of
811 towers to UkrTower, their wholly owned
subsidiary in the Ukraine for a reported US$52mn.
Whilst the transfer was made in part to improve
the management of their towers, it will also be
part of Turkcells broader strategy to monetise
infrastructure assets
XX
The evolution of Telefnicas

Telxius
With the O2-Three merger less likely, Telefnica considers tower IPO
By Laura Dinnewell, Head of

TowerXchange EMEA
The past 12 months have been an eventful period for Spanish

operator, Telefnica. After reaching an agreement with Hutchison
in March last year to sell their UK O2 business to help alleviate
debt, it now looks increasingly likely that the merger will be
blocked by the European Commission. Their plan B of raising
capital from the monetisation of their towers and subsea cabling
has sprung into action. Following the formation of Telefnicas
infrastructure business, Telxius, in February 2016 originally
incorporating the operators ~11,000 Spanish towers and 31,000km
of subsea cabling, further towers from the Chilean, Peruvian,
Brazilian and now German businesses have been sold to the unit.
On 28 April 2016 it was reported that Telefnica had appointed
banks to prepare Telxius for an IPO.
Keywords: Americas, Americas News, Argentina, Brazil, CETIN, CTIL, Carve Out, Central America,
Chile, Colombia, Decommissioning, Europe News, Exit Strategy, Germany, Investment, MNOs, Mexico,
Multi-Region News, New Market Entrant, News, Peru, Spain, Telefnica, Telesites, Telxius, Tower Count,
Towercos, UK, Valuation, Venezuela

< Key dates and milestones in the formation of Telxius
< The composition of Telxius portfolio of infrastructure assets
< The potential value of Telxius portfolio
< What may be next for the infraco including a potential listing on the Madrid Stock Exchange
Increasing financial pressures on Telefnica

Telefnica have been coming under increasing
financial pressure with weak Latin American
currencies and the performance of their opcos in
the region hitting the companys revenues hard. The
operator has amassed a significant amount of debt
following a number of acquisitions across Europe
and Latin America, including an 8.6bn takeover of
German rival E-Plus and the acquisition of Brazilian
broadband provider GVT for $9bn (7.9bn), resulting
in almost doubling of the companys debt over a
ten-year period. Telefnicas most recent financial
results show debts of 50.2bn.
The rise and fall of Hutchisons takeover of
Telefnicas O2 UK business
In March 2015, Telefnica reached an agreement
with Hong Kongs Hutchison Whampoa for the sale
of Telefnicas O2 for an initial 9.25bn with an
additional payment of 1bn once the cumulative
cash flow of the combined company in the UK
reached an agreed threshold. The deal was hoped
to go some of the way towards reducing Telefnicas
debt burden. However, in the face of concerns about
reduced competition in the UK mobile market, a
full scale review was launched by the European
Commission Competition Commission, with UK
regulator Ofcom, urging them to block the takeover.
Whilst a final decision has not been announced, the
April deadline set by the commission has passed and
reports that Hutchisons lawyers have been called in
to mount a challenge suggests that a negative verdict
has all but been reached.
With the collapse of the takeover so goes the

opportunity to knock 10.25bn (13.1bn) off
Telefnicas 50.2bn debt. In February, the company
announced a 2.9bn early retirement plan to help
cut its employment costs but further measures are
required to bring the debt back under control. Ever
since CFO Angel Vila hinted at a potential tower
sale during his Q3 2015 investor presentation,
monetisation of Telefnicas passive infrastructure
has been viewed as one of the key steps that the
operator would inevitably take - it just seemed a
question of when.
Figure one: Telxius portfolio of 16,154 towers

Spain 11,000
The towerco business model is becoming

increasingly popular as operators observe the
>12-18x EBITDA multiples publically listed
towercos currently trade at (versus the typical 3-4x
EBITDA of MNOs). Turkeys Turkcell has been the
latest operator to follow suit, announcing on 28
April that it has initiated the IPO process for its
infrastructure business Global Tower. In Germany,
Deutsche Telekom has also expressed an interest
in investigating a potential IPO of their infraco,
Germany 2,350
Brazil 1,655
Peru 849
Tower monetisations show their worth

With the carve out and IPO of a 40% stake in
Telecom Italias INWIT raising 875.3mn for the
business, and on the other side of the Atlantic, the
carve out and IPO of America Movils Telesites
raising north of 2bn for the the Mexican operator,
a precedent has been set. Telecom Italia have since
moved to monetise their tower business further with
an additional stake in the business being fought
over by Italian broadcaster EI Towers and towerco
Cellnex in conjunction with infrastructure fund F2i.
Deutsche Funkturm.
What do we know about Telxius assets and
Telefnicas plans for the unit?
The first infrastructure assets to be carved into the
business were ~11,000 Spanish towers and 31,000km
of subsea cabling. On 24 March Movistar Chile
(Telefnicas opco in the country) agreed the sale of
328 towers to Telxius for CLP7.85bn (10.4mn). This
was followed a week later by Telefnica Perus sale
of 849 towers to the unit and Telefnica Brasils sale
of 1,655 towers for BRL760mn (192.6mn). On 21
April, Telefnica Deutschland announced the sale
of 2,350 towers to the infraco for 587mn (the rest
of the German opcos sites, an estimated ~12,000
rooftops have not been transferred to Telxius). These
transactions bring Telxius total tower count to
16,154 (figure one) with the company also managing
Chile
328
a network of over 65,000km of submarine fibre optic

cables, of which ~31,000km are owned.
Telxius reports pro forma FY15 revenues of 600mn,
with 60% attributed to the submarine cabling
components of their business and 40% to towers. Of
that 40% from towers, 15% comes from their Latin
American towers and 85% from their European
towers (figure two). Calculating the average revenue
per tower we arrive at the figure of just under 17k
per site - in line with the revenues reported by
leading European independent towerco, Cellnex.
Alberto Horcajo, former CFO of Telefnica Brasil,
has been announced as Telxius new CEO. In a press
release it was stated that the formation of Telxius
was part of a strategy to optimise Telefnicas
asset portfolio, taking a more specialised and
focused approach. The group plans to increase the
number of services they provide to other operators,
XX
infrastructure Co.
improving their return on capital invested and
is looking at taking advantage of further growth
opportunities in the sector, including the possibility
of incorporating third party assets.
Table one: Telefnica asset sales to Telxius
formed by fiber-optic submarine cables and

mobile towers
Country
Whilst an IPO of the unit has not formally been

Spain
announced, TMTfinance report that Telefnica
International
network:
>65,000km
submarine
fiberhave hired Goldman Sachs and JP Morgan to join
opticthe
cables
(~31,000km
arelisting
owned)
Germany
UBS in running
process.
An early July
on
the Madrid Stock Exchange has been mooted and,
Brazil
given how quickly the process has moved to date, we
expect such time lines to be feasible.
~16,000 telecom towers in Spain, Germany and Peru

selected
What could
Telxius countries
be worth? in LatAm
Chile
Number of towers
sold
Deal Value ()
Price per tower

()
2,350
587,000,000
249,787
1,655
192,600,000
116,727
10,400,000
31,707
11,000
849
328
The valuations ascribed to injected assets are seldom

a good guide to the future value of the combined
entity - on the MNOs balance sheet towers are a
Sources: Press releases, Company reports
Balanced portfolio & exposed to mature and

depreciating asset with opex - theyre a cost centre,
emerging
markets
whereas the proposition Telxius represents to
Figure two: breakdown of Telxius
prospective investors is a set of robust long term
contracts deriving revenue from the leasing of
towers and subsea cable capacity to Telefnica and
to third parties.
revenue
Operations breakdown (2015PF)

Submarine Cables
Towers
Tower Revenues
~60%
Latam
~15%
~40%
Total Revenue
Europe
~85%
Source: Telefnica quarterly results

Only the values from the sale of towers in

Telefnicas subsidiaries in Germany, Brazil
and Chile have been disclosed and with widely
differing average tower prices it makes it difficult to
extrapolate values for their Spanish and Peruvian
transactions. Comparing Spain and Germany, the
German transaction is thought to be exclusively
composed of ground-based towers, whereas the
Spain number is thought to include rooftop sites.
As such, one would expect the average value of the
Spanish sites to be lower.
Perhaps the nearest equivalent with which

to benchmark might be CETIN in the Czech
Republic, which also carved out towers and other
infrastructure from O2 Czech Republic - although
availability of meaningful data is limited as O2 Czech
Republic had been sold to local investor PPF, who
drove the carve out and swiftly re-privatised it after
a brief listing on the Prague Stock Exchange.
In regards to what valuation Telxius could achieve
at IPO, initial press speculation has suggested that
they are targeting a range of 4-6bn, which seems
aggressive when compared to Cellnex; a more
mature towerco of similar scale valued at 3.34bn
(at the time of writing).
The listing of a 66% stake in Cellnex, Abertis
Telecoms infrastructure business, saw shares
Figure three: Timeline of the creation of Telxius

Pre March 2015
Telefnicas net debt

more than doubles
March 2015
Sept 2015
Telefnica reaches
CFO Angel Vila
an agreement with hints at a potential

Hutchison to sell
over the course of

a decade following
monetisation of
UK O2 business for Telefnicas towers
numerous acquisitions
10.25bn to help
in his Q3 investor
across Europe and
tackle escalating
presentation
Latin America
debt
Oct 2015
Dec 2015
Jan 2016
Jan 2016
The European
Bloomberg reports
Ofcoms Sharon White
News circulates that
Commission launches
Telefnica to be
meets EU Competition
Telefnica is carving out
an investigation
considering a carve
Commissioner
its ~11,000 Spanish towers
Hutchisons takeover
out of 60,000 towers
Margrethe Vestager to
into new infrastructure
of O2
into an infrastructure
urge her to block the
unit, Wireless Towers
unit
O2 takeover
Feb 2016
March 2016
March 2016
April 2016
April 2016
April 2016
April 2016
April 2016
Telefnica announces the creation of
Movistar Chile
Telefnica Peru
Telefnica Brasil
Telxius saying it will initially consist
announces
announces
announces the
Speculation
Telefnica
Telefnica Q1 2016
Reports circulate
mounting that
Deutschland
results presented
that Telefnica
of about 15,000 phone towers and
the sale of
the sale of
sale of 1,655
the EC will block
announces the
with net financial
plans to list
an international submarine-cable
328 towers
849 towers to
towers to Telxius
Hutchisons
sale of 2,350
debt sitting at
Telxius on the
network covering 31,000 kilometers
to Telxius for
Telxius
for BRL760mn
takeover of O2
towers to Telxius
50.2bn
Madrid Stock
with more assets being included
CLP7.85bn
(192.6mn)
as the deadline
for 587mn
gradually over coming months.
(10.4mn)
Telefnicas ~11,000 Spanish towers
Exchange in
early July
for their review

approaches
are known to be included. Alberto

Horcajo is announced as CEO
surge 12% on the first day of trading, valuing it at

3.5bn (US$3.8mn). The IPO of a 40% stake in INWIT
(Telecom Italias infrastructure unit) the following
month, saw shares rise more than 9% on its trading
debut on the Milan stock exchange, giving the
company a market cap of around 2.4bn, and raising
a gross 875.3mn (US$956.7mn) for Telecom Italia in
the process. INWIT has 11,519 towers on the balance
sheet, whilst Cellnex have 15,140, yet differences
in their market cap at their trading debuts can

largely be attributed to (amongst other factors)
Cellnex proven track record in the acquisition and
management of third party towers. Similar to INWIT,
the newly created Telxius does not come with this
experience and whilst multiple tenants do exist on
Telefnicas towers, we have generally seen that
it can take a full year for a new carve-out towerco
to genuinely start thinking and behaving like an
independent towerco.
Looking across the Atlantic to Mexico, the recent
carve out of America Movils 12,555 towers into
new infrastructure business Telesites may serve
as a cautionary tale considering the fall of its stock
(from Mex$13.38 to approximately Mex$11.00
during the third week of January) since its listing on
21 December. Its target price and overall financial
XX
Table two: A history ofTelefnica transactions up to the creation of Telxius

Year
Country
Buyer
Tower
count
Deal
value US$
Cost per
tower US$
Deal
structure
2015
Germany
Deutsche Funkturm
7700
Not disclosed
Not disclosed
Asset transfer
2014
Spain
Cellnex
4277*
419,650,000
98,118
SLB
2013
Brazil
American Tower
93
18,000,000
193,548
SLB
2012
Chile
Torres Unidas
400
Not disclosed
Not disclosed
SLB
2012
Brazil
SBA Communications
800
178,000,000
222,500
SLB
2012
Brazil
American Tower
192
33,000,000
171,875
SLB
2012
Brazil
BR Towers
1912
252,000,000
131,799
SLB
2012
Brazil
American Tower
1500
225,000,000
150,000
SLB
2012
Chile
American Tower
558
96,000,000
172,043
SLB
2012
Spain
Cellnex
500
49,050,000
98,100
SLB
2011
Mexico
American Tower
1554
323,000,000
207,851
SLB
2011
Mexico
American Tower
584
122,000,000
208,904
SLB
2011
Colombia
American Tower
125
18,000,000
144,000
SLB
2011
Brazil
Grupo TorreSur
1358
206,000,000
151,694
SLB
Total
21,553
1,939,700,000
162,536
*Includes an undisclosed quantity of Yoigo towers
goals for 2016-2020 have been considered bold

by analysts, especially if compared with its listed
competitors such as SBA Communications and
American Tower. TowerXchange would be inclined
to reserve judgement on Telesites; co-location
growth may not reach the aggressive targets set out
in Telesites IPO, but the towercos close relationship
with Telcel has enabled them to build over 2,000
new towers in their first year.

At present it is also unknown what sort of equity
Telefnica would look to retain in Telxius, should
they list the company on the Madrid stock exchange.
Considering the fierce competition for INWITs
assets between EI Towers and Cellnex (with
American Tower having reportedly been involved in
early bidding stages), leaving the door ajar to sell a

future stake in Telxius to a strategic investor could
certainly be attractive and so an IPO followed by a
later strategic sale may be an option that Telefnica
would consider.
Within the European market (where 85% of Telxius
revenues from towers are generated), Cellnex
represents the only sizeable independent towerco
with a presence in multiple markets. A portfolio
such as that of Telxius would offer an attractive
opportunity for not only Cellnex to extend its strong
hold but it would also present an opportunity for
a well capitalised European towerco to reach scale
or an international player to mark their entry into
the European market. Given the presence of a
number of major international players at the recent
TowerXchange Meetup Europe, we feel there would
be no shortage of interested parties!
What other towers could be incorporated into
Telxius?
Prior to the Telxius transactions,Telefnica had sold
21,553 towers to date, raisingjust under US$2bn
at an average of US$162,536per tower (table two).
TowerXchange estimate there are approximately
32,200 sites left on Telefnicas balance sheet,
excluding those already transferred to Telxius.
Telefnica retains around 12,000 rooftop sites in
Germany, but landlords make it difficult to co-locate
rooftop sites in Germany, so these assets are unlikely
to be transferred to Telxius.
Telefnica O2s UK towers now sit on the CTIL
balance sheet, a joint venture infraco with

Vodafone. Managed as an integrated portfolio,
with significant decommissioning continuing and
RANsharing being overlaid, extraction of the O2
towers would be a complex task, and would be
rendered moot if Telefnica persevered with their
plans to divest O2; if not to Hutch then perhaps
to a new entrant regulators would find less
objectionable, such as Liberty Global.
So if UK and further German assets are unlikely
to be included in Telxius, what else could be?
Telefnica has ~5,000 towers in Argentina, where
an independent tower market is just starting to
emerge. However, even though Argentinas new
government is making significant progress in
opening the market to international investment, it
may be too soon to test the resolve of the European
and U.S. pension funds who will ultimately buy
Telxius stock; Argentina remains a bit too frontiersy
to fit with the narrative of de-risked, long term
recurring telecom infra revenues.
However, we dont think Telefnica has injected
all their Peruvian and Chilean towers into Telxius,
nor any of their towers in Colombia, Venezuela,
Ecuador and Central America, nor the few
Telefnica has left in Mexico. The Telxius balance
sheet could be swelled by ~10,000 additional CALA
towers prior to IPO. Its not going to be the 60,000
tower giant speculated earlier this year, but Telxius
could be big, it could be valuable, and Telefnica
clearly think the time is right to monetise their
assets on the public markets. TowerXchange are
inclined to agree!
Thursday 16 and Friday 17 June, Boca Raton Resort and Club, Boca Raton
Meetup Americas 2016

A unique networking opportunity with 250 leaders of the CALA telecom tower industry
To discuss your participation, contact Annabelle on +44 7423 512588 or

email amayhew@towerxchange.com
DIAMOND
SPONSOR:
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XX
Global tower market maturation

Towercos and infracos now own 61.9% of the worlds 3.4mn towers
During Q1 2016 the proportion of the worlds
telecom and broadcast towers owned and operated
by towercos or specialist infracos rose from
60.3% to 61.9%. A new, parallel industry to retail
telecommunications, the tower industry is building
the vast majority of the worlds new towers. This 20
year old, US$192bn infrastructure asset class currently
owns 2,092,865 of the worlds 3,379,806 towers. In this
quarters global tower market overview, Id like to take
the opportunity to contrast the maturity of different
tower markets worldwide.
Keywords: Africa & ME, Africa & ME Research,
Americas, Americas Research, Asia, Asia Research,
Business Model, Carve Out, Deal Structure, Europe,
Europe Research, Infrastructure Sharing, Market
Overview, Multi-Region, Operator-Led JV, Research,
Russia & CIS, Sale & Leaseback, Tower Count,
By Kieron Osmotherly, CEO, TowerXchange
TowerXchange Research, Towercos

< The scale of the tower industry worldwide and by region
< When will the MENA tower market achieve launch velocity?
< Why and where tower transaction deal flow is accelerating in Europe
< Why Asia is currently the fastest growing tower market in the world
< How the increasing maturity of the SSA and CALA tower industries affects market dynamics
There remains a pronounced difference in MNOs

attitude toward passive infrastructure ownership,
ranging from North and Northeast Asia, where
operators cling to their towers as a primary source
of differentiation, to the US tower market, where
a significant majority of towers were long since
transferred from MNOs to independent towercos, a
critical evolution in vaulting the US mobile market
from laggard to leadership status.
Outside of Northern and Northeast Asia, MENA
is the least mature tower market, but a landmark
first transaction has already been closed (in Egypt
by Eaton Towers, who are closing in on a second
deal with counterparts Orange Egypt). A further
five decent scale MENA tower transactions are in
the pipeline: all three MNOs in KSA are at various
stages of bringing their towers to market, while
Zain are selling towers in Kuwait and VimpelCom
may soon turn their attentions to monetising
their Algerian towers. Weve even heard talk of
potential joint venture, operator captive towercos in
Bahrain and the UAE. Predicting when, or even if, a
MENA tower deal will close is a risky business, but
TowerXchange will stick our necks out and say we
anticipate towerco penetration in MENA reaching
around 14% by the end of 2016, exceeding 20% by
the end of 2017, by which time the region will have
matured to launch velocity status.
Our rating of Europes maturity as a launch
velocity tower market indicates both the high
quantity of prospective deals in the transaction
pipeline, and the relatively low penetration of
independent towercos to date, representing just
13% penetration. Penetration in Europe is topped

up to 37% by several large scale joint venture
infracos, and a growing trend favoring MNO-captive
carve out towercos and infracos, most recently
exemplified by Telefnicas Telxius. The other
concentration of carve outs is in Russia, where each
of the three leading MNOs has created their own
towerco, each with a different purpose: VimpelCom
with intent to sell and leaseback National Tower
Company as soon as their valuation is met,
MegaFon with intent to professionalise asset
management in First Tower Company before sale
to a strategic investor, while 5,500 towers have been
transferred to MTS Towers with the apparent
intention of retaining the value created by colocation.
The status of Europe as a launch velocity market
masks a variety of hot and cold regions of activity.
Region
Estimated tower count
Towerco penetration
Tower market maturity
North America
140,000
82%
Mature
India
453,500
68%
Mature
SSA
122,739
42%
Maturing
CALA
162,000
48%
Maturing
S & SE Asia (exc India)
318,263
29%
High growth
China
1,180,000
100%
High growth
Europe
600,000
36%
Launch velocity
MENA
139,800
1%
First movers
NE & E Asia (exc China*)
247,600
0%
Dormant
TowerXchange market maturity classifications

Dormant: negligible towerco activity, almost all
towers remain on the balance sheets of MNOs,
who still see the network as a primary source of
competitive differentiation.
First movers: early adopter MNOs are
considering the first transactions in the region,
but less than 10% towers have been transferred
from MNOs to towercos. First mover markets are
generally treated with caution by investors, but
on the other hand much of the low hanging fruit
assets may yet to have been picked.
Launch velocity: MNOs are seriously considering

monetising their towers, and the first four landmark
transactions have taken place, with over 10% of
towers in towerco hands. While towercos still dont
own a high proportion of towers, the pipeline of
future transactions is starting to fill up.
High growth: MNOs have bought in to the
principle of partnering with towercos, and there
are immediate drivers to monetise assets. Multiple
concurrent divestiture processes mean towercos are
equally busy raising and deploying capital.
Maturing: deal flow is starting to plateau an

increasing proportion of the investible towers
have been absorbed by towercos, whose attention
increasingly turns to the integration and leaseup
of acquired assets, and the drive to maximise
efficiency and profitability.
Mature: most of the MNO towers have been
acquired, towercos are able to focus their
attention on the last improvements to site level
profitability and tenancy ratio. Much of the M&A
in mature tower markets consists of consolidation
between towercos, while those who achieve scale
may consider an IPO
XX
Comparing towerco penetration worldwide

100%
China 1,180,000 /
1,180,000
towers
36%
Europe
216,538 /
600,000
towers
68%
India
308,855 /
453,500
towers
29%
0%
1.4%
48%
82%
USA
CALA
S & SE Asia N & East Asia
77,362 / 114,139 /
exc China
exc India
162,000 140,000
0 / 247,600
90,801 /
towers
towers
towers
318,263
towers
42%
18%
Oceania
SSA 2,692 /
MENA
51,332 / 14,900
2,040
/ 139,800 122,739 towers
towers
towers
* Europe includes JV infracos, broadcast towercos and operator-captive towercos as towercos. Independent towercos own 13%
Sources: TowerXchange, RBC, Delta Partners, Mott MacDonald
The aforementioned Russian activity creates a

hotspot to the east, which is warming neighboring
CIS countries, where tower transactions are forecast
from 2017. Another hotspot is in Southern Europe,
where Cellnex and EI Towers are battling for
control of TIMs INWIT in Italy, and in Spain where
Cellnex now has a peer in Telxius. Considered in
isolation, Spain and Italy are certainly maturing
markets. Other European tower markets to watch
in Q2 2016: Turkey, where Turkcell has stated
intent to list their carve-out towerco Global Tower
on the local stock exchange; and Germany, where
Telefnicas Telxius has recently taken ownership of
the MNOs 2,350 towers, where Deutsche Telekom

is considering monetising the 27,000 towers
in subsidiary Deutsche Funkturm, and where
American Tower Germany is raising third party
investment.
The rest of Northern Europe is a more static
market, perhaps because the MNOs of the UK and
Scandinavia have organised infrastructure sharing
through several joint venture infracos which
themselves have delivered some of the prospective
efficiency gains of partnering with independent
towercos.
It is strange to see a market 100% penetrated by

towercos classified only as high growth rather
than mature, but the transformation of China
to a co-construction and infrastructure sharing
model has happened almost overnight, with China
Tower Company (CTC) still building toward capacity.
Although over a million legacy towers have
been transferred from Chinas MNOs to CTC, our
categorisation of China as high growth stems from
the fervent new build market (currently 150,000+
new towers per annum), which is being fought
for by CTC and a growing band of independent
towercos. To learn more about the structure of the
61.9%
2,092,865 of the worlds

3,379,806 telecom and
broadcast towers are
now owned by towercos
towercos rather than MNOs led a rollout from the

outset, has been a bumpy ride for towercos and
MNOs alike, with towerco consolidation coming
earlier than some might have anticipated; those
who have built quality assets with a disciplined
approach to contractual terms will likely prosper.
The Indian tower market is almost re-maturing

after investors seemed to accept that valuations had
been recalibrated after four years of restructuring
in the wake of the cancellation of 122 MNO licenses.
With towers now changing hands for a more
palatable ~US$60,000-80,000 each, deal flow has
returned to India, again characterised by towerco
consolidation rather than sale and leasebacks. The
most eagerly anticipated tower deal in India would
be the inauguration of a BSNL tower company.
Brazil and Mexicos status as maturing markets,

with little left to acquire from MNOs, brings the
CALA region to an overall maturing level, yet
there is high growth to be found in the Andean
States (some would say too high growth, with
over 20 towercos putting sticks in the ground in
Colombia alone!) In this edition of TowerXchange
we take a closer look at the long-dormant
Argentinian tower market: has the blue touch
paper been lit? Could CALAs second largest
telecom market achieve launch velocity in the
next 12-18 months?
This variation of tower market maturity, and

variations in operator requirements, has created
a parallel set of variant towerco business models;
from steel and grass to full power as a service,
from huge operator-led infracos capturing value
for parents, to lean, fast build to flip independent
developers. Whether you have an appetite for high
growth, high return, high risk opportunities in
early stage or fast growth markets, or prefer a more
conservative exposure to risk and therefore growth
in a more mature market, there is something in this
asset class for everyone
Chinese tower market, check out the special feature

later in this edition.
The tower markets of Southern and Southeast Asia
are currently the most dynamic and fast growing
in the world. Within the region we still have
considerable variance of local market maturity,
from the old growth, mature tower market of
Indonesia, where most operator towers that can be
sold have been sold, and where three or four larger
towercos continue to rollup assets from as many
as 35 small independent developers. Then we have
high growth markets like Bangladesh and Pakistan;
in the latter country towercos own <1,000 towers
now, but rumors suggest almost every MNO tower is
coming to market (CM Pak notwithstanding).
Myanmar is increasingly a category of one; the
great towerco experiment whereby independent
The tower market in SSA is showing the classic

symptoms of maturing. Again, most of the investible
towers have been acquired, and this quarter weve
seen the first towerco consolidation in Nigeria with
IHS acquiring HTN Towers and Hotpsot Networks
Limited. For the three privately owned members of
Africas Big Four attention turns to the path toward
monetisation; integrating their last acquisitions,
driving tenancy ratio growth, and instigating
operational improvements to enhance site level
profitability.
XX
TowerXchange now tracks 185 towerocs and infracos who own

2,092,685 of the worlds 3.4mn telecom and boadcast towers
Rank
Towerco
Count
Countries
Rank
Towerco
Count
Countries
China Tower Company
1,160,000
China
15
Protelindo
14,737
Indonesia, Netherlands
American Tower
143,534
USA , Brazil, Chile, Colombia,
16
First Tower Company
14,000
Russia
17
NetWorkS!
13,000
Poland
Africa, Uganda, Nigeria
18
Telesites
12,874
Mexico
Peru, Mexico, Costa Rica,

Germany, India, Ghana, South
Indus Towers
119,881
India
19
DIF (formerly TRUEGIF)
12,138
Thailand
Reliance Infratel
43,379
India
20
CTIL
12,000
UK
Crown Castle
40,085
USA
21
MBNL
12,000
UK
Bharti Infratel
38,458
India
22
Tower Bersama
11,389
Spain
GTL Infrastructure
29,432
USA
23
INWIT
11,200
Italy
Deutsche Funkturm
27,000
Germany
24
Arqiva
10,550
UK
SBA Communications
26,522
USA, Canada, Brazil, Panama,
25
Global Tower / UkrTower
8,681
Turkey, Ukraine
Guatemala, El Salvador,
26
Tower Vision
8,400
India
Ecuador, Colombia
27
STP
7,770
Indonesia
Nigeria, Cameroon, Ivory
28
Eaton Towers
7,070
Ghana, Kenya, Uganda, South

Africa, Niger, Burkina Faso,
Egypt
29
Victus Networks
7,000
Greece
30
TDF
6,966
France
10
Costa Rica, Nicaragua,
IHS Towers
23,493
Coast, Rwanda, Zambia

11
edotco
16,450
Malaysia, Sri Lanka,

Bangladesh, Cambodia,
Pakistan, Myanmar
12
Telxius
16,233
Spain, Germany, Brazil, Peru, Chile
31
6,556
Tanzania, DRC, Congo B, Ghana
13
RTRS
16,000
Russia
32
Grupo TorreSur
6,500
Brazil
14
Cellnex
15,120
Spain, Italy
33
MTS Towers
5,500
Russia
*Bharti Infratel owns 42% of Indus Towers, making their total tower count effectively 88,808. Only fully owned towers shown here to avoid double counting
Rank
Towerco
Count
Countries
Rank
Towerco
Count
Countries
34
Mitratel
5,500
Indonesia
61
Torres Unidas
1,080
Chile, Peru
AT&T Towers
5,059
USA
62
Miteno
1,000
China
Ascend Telecom
4,843
India
63
Komet Infra Nusantara (KIN)
1,000
Indonesia
CETIN
4,800
Czech Republic
64
Persada Sokka Tama
1,000
Indonesia
38
US Cellular Towers
4,281
USA
65
Shere Group
960
UK, Netherlands
39
Vertical Bridge
3,700
USA
66
Central States Tower
921
USA
40
EI Towers
3,200
Italy
67
QMC Telecom
901
Brazil, Mexico, Colombia & Puerto Rico
41
FPS
2,618
France
68
TowerCo
900
USA
TT-Network
2,500
69
Tower Ventures
894
USA
Rai Way
2,300
70
Towershare
800
Pakistan
44
IBS Tower
2,185
Indonesia
71
esk Radiokomunikace
800
Czech Republic
45
T-Mobile Towers
2,157
USA
72
Open Tower Company
800
Netherlands
46
2,127
Brazil, Dominican Republic, Costa

Rica, Panama, USA, Colombia
73
Sacofa
765
Malaysia
74
Brazil Tower Company
753
Brazil
SWAP Telecoms and Technologies
702
Nigeria
BCTek
700
Nigeria
TowerCo of Madagascar
700
Madagascar
Towercom (Slovakia)
700
Slovakia
79
Continental Towers
690
Colombia, Costa Rica, Panama,

Nicaragua, Guatemala, Peru, El
Salvador, Jamaica and Honduras
80
Diamond Communications
636
USA
Industrial Communications
635
USA
Broadcast Australia
620
Australia
NMS
600
Nicaragua, Mexico, Colombia & Peru
Axion
586
Spain
Centennial
565
Brazil, Mexico, Colombia
Andean Tower Partners
555
Peru, Colombia
Peru, Ecuador, Colombia, Puerto Rico, Argentina
Malaysia
35
36
37
42
43
47
48
49
50
51
52
53
54
55
56
57
58
59
Italy
2,000
ASEAN Towers (IGT + Golden Towers)
1,972
SEATH (VinaCapital / VNI)
1,930
Russian Towers
1,800
Axicom
1,772
Australia
Vertical
1,600
Russia
1,531
Mexico
Frontier Tower Solutions
1,500
Varsity Wireless
1,288
Pan Asia Majestic Eagle
1,250
Cell Site Solutions
1,203
InSite Wireless Group
1,200
Message Centre Management /
1,131
Torrecom
60
Denmark
Apollo Towers
1,100
UK, Ireland, Netherlands

Myanmar, Vietnam
Vietnam
Russia
Afghanistan
USA
Myanmar
Brazil
USA
USA, Mexico, Guatemala,
75
76
77
78
81
82
83
84
85
86
Nicaragua
87
Innovattel (Torresec)
500
Myanmar
88
Touch Matrix
460
XX
Rank
Towerco
Count
Countries
Rank
Towerco
Count
Countries
89
CTI Towers
457
USA
119
2RN
150
Ireland
90
Shared Access
456
Ireland, UK
120
Hibernian / Brittannia Towers
140
UK, Ireland
Malaysia
91
Retower
450
Indonesia
121
Asia Space
137
92
IIMT
450
Mexico
122
Tocsa
130
Costa Rica
USA
93
Sprint Sites USA
435
USA
123
Communication Enhancement
124
94
ITAS TIM
420
France
124
Q Towers
120
China
95
Towercom
400
Ireland
125
Service Telecom
120
Russia
96
Highline do Brasil
400
Brazil
Desabina
118
Malaysia
97
ESB Telecom
377
Ireland
Cignal
113
Ireland
98
Emitel
377
Poland
Logycom Group
100
Kazakhstan
99
Dharmoni
346
CIE
100
Ireland
100
KJS
309
Melaka ICT Holdings
95
Malaysia
101
Subcarrier Communications
300
Falck
75
Denmark
102
Link Development
300
Saurava Towers
55
India
103
Torres Andinas
300
Torre Online
51
Brazil
104
Common Tower
260
HIGHPOINT (Obelisk)
50
Ireland
105
Skyway Towers
250
Sanyuan Tec
50
China
106
Branch Communication
226
USA
HOI-MEA
50
Egypt
107
Balitowers
208
USA
Konsing Group
47
Serbia
108
Infra Quest
201
Eagle Towers
45
South Africa
Yikedbina
200
Cellcom
40
Ireland
Senno Telcom
200
Skysites
40
Brazil
Intelli Site Solutions
190
Telecom Torres
40
Brazil
Grain Management
188
Stout & Company
38
USA
Digita
187
Alticom
33
Netherlands
Pegasus Tower
173
Fanasia
27
Iran
Atlas Towers
162
USA, South Africa
Pro High Site Communication
11
South Africa
Digea
156
Greece
Perak Integrated Networks
150
Malaysia
Alfa Site
150
Brazil
109
110
111
112
113
114
115
116
117
118
Malaysia
Malaysia
USA
Russia
Colombia, Peru
Malaysia
USA
Malaysia
Malaysia
China
Mexico
USA
Finland
USA
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
Meet the towerco CXOs, their investors and their

partners at your next TowerXchange Meetup!
Undisclosed counts
TowerXchange MeetupAmericas 2016

June 16-17, Boca Raton, FL
3GIS, Sweden
Norkring, Norway
Antenna Hungaria, Hungary
Norkring, Belgium
AWAL Telecom, Pakistan
OCK, Myanmar
Azerconnect, Azerbaijan
OIV, Croatia
Balesia, Colombia, Peru,
Radiocom, Romania
Guatemala, El Salvador, Ecuador
RTP, Portugal
Catalina Inc, Costa Rica
Secured Towers, Nigeria
Cam Towerlink, Cambodia
Shared Networks Tanzania,
Communication Towers
Tanzania
Nigeria, Nigeria
Square1 Infrastructure, Chile,
Eco-Friendly Towers, Myanmar
Nigeria, South Africa, Myanmar
ETB, Serbia
Staghorn Infrastructure, USA
EuroTower, European remit
Summit LatAm, tbc CALA
Golden Comunicaciones,
SUNAB, Sweden
Colombia
Swisscom, Switzerland
TowerXchange's famous global towerco league table provides a simple comparison of
Infratel, South Africa
Tarpon Towers, USA
the scale of towercos by tower count. We have derived tower counts for the category's
Levira, Estonia
TASC Towers, Jordan, UAE, Lebanon
Media Broadcast, Germany
Teracom, Sweden, Denmark
frequently, while we have offer no guarantee that the counts they provide are accurate:
Mosaic, Ireland
Telecommunications Partners,
we ask for a count of complete macro towers, but inevitably some towercos inflate
MXTowers, Mexico
Peru
Myanmar Infrastructure
Towercast, France
estimates. As the product of proprietary market research, TowerXchange asserts
Group, Myanmar
Uruguay Torres, Uruguay
copyright over this table and the data listed herein. If you want to use data in your own
Net4Mobility, Sweden
Vialux, Americas
Netgrid Telecom, Romania
TowerXchange MeetupAfrica 2016

October 19-20, Johannesburg
TowerXchange MeetupAsia 2016
December 13-14, Singapore
TowerXchange Meetup Europe 2017
April 4-5, London
For agenda information and to register, visit:
www.towerxchange.com/meetups/
TowerXchange tower count research methodology
13 listed entities from quarterly statements, where available, while the other counts are
drawn from qualitative market research. Smaller towerco's count may be updated less
their tower count by including works in progress, neutral host DAS, lamp-posts and
other special structures. As such, TowerXchange's tower count should be considered
analysis, you need to request our permission.

If you wish to suggest a correction, please email Kieron Osmotherly at
kosmotherly@towerxchange.com.
XX
RANsharing: the search for an

equitable deal for MNOs and towercos
Heated debate helps MNOs and towercos appreciate one anothers perspective
Heated debate at the RANsharing roundtable
RANsharing is always a controversial

topic at TowerXchange Meetups.
The RANsharing roundtable at the
was tremendously useful because MNOs
and towercos both put their cards on
the table, the discussion got a little
tense, but ultimately all parties left
better understanding a little more about
what was at stake for one another. We
summarise the debate here
Keywords: Active Equipment, Active Infrasharing, Asia, Bankability, Best of TowerXchange, C-Level
Perspective, CTIL, Deal Structure, EBITDA, Europe, Europe Research, Greece, Infrastructure Sharing,
Lease Rates, MBNL, MLA, Project Finance, RANsharing, ROI, Research, Single RAN, Tenancy Ratios,
TowerXchange Research, UK, Valuation, Victus Networks

The different permutations of RANsharing which must be anticipated in MLAs
Three example RANsharing case studies: the UK, Greece and an Asian example
Understanding MNO and towerco perspectives on this contentious issue
The search for the magic number: what is a fair price, and fair contractual terms, to ensure a
win-win outcome from RANsharing?
< How the potential for future RANsharing affects tower valuations and divestitures
<
<
<
<
Introduction
If RANsharing is an exciting potential source of
efficiencies for MNOs, its an equally daunting
potential dampener of revenue for towercos. With
so much at stake, it is perhaps unsurprising that
negotiations between MNOs and towercos can get
a little heated where RANsharing is concerned.
Provision for the treatment of RANsharing must be
negotiated into towercos Master Lease Agreements,
so what is the magic number how should
RANsharing be priced, if at all?
RANsharing 101
There are already several permutations of
RANsharing, with the potential for still more to
evolve in the future. The foremost of these are:
< MORAN (Multi Operator RAN where antennae are
shared but not spectrum)
< MOCN (Multi Operator Core Network, in which
both antennae and spectrum are shared)
< GWCN (Gateway Core Network, where both RAN
and core network are shared)
These are illustrated in figure one, taken from
Analysys Masons excellent essay in a issue nine
of the TowerXchange Journal: RANsharing:
opportunity or threat?
With so many brands of RANsharing, it is difficult
for a towerco to know what it is seeking to protect
itself against.
RANsharing joint ventures in Europe
Europe has one of the worlds least mature tower

industries in part because instead of selling passive
infrastructure, in many instances Europes MNOs
dived straight into active infrastructure sharing joint
ventures. The continent is home to the worlds most
mature RANsharing ecosystems, with several deep
RANsharing partnerships in prominent markets.
These RANsharing partnerships have generally been
successful for MNOs, driven by a principle that if
youre an MNO with your own estate into which
you invest 100mn you get 100mn back, whereas if
sharing the same network costs two parties 50mn
each (or you still put in 100mn each and rollout
faster). The benefits are obvious before one even
considers the savings from sharing opex.
In order for independent towercos to take root in
markets where RANsharing is taking place, or may
take place in the future, towercos must adapt their
contracts, business models and expectations. When
the independent towerco business model took root
in the U.S., India and even more recently in SSA,
RANsharing was not prevalent. The balance of
power is different in Europe, and the contractual
provisions concerning RANsharing can be critical
to ensuring a win-win outcome for MNOs and
towercos.
Lets compare three examples; from a market where
RANsharing is widespread and where towercos
are active; another market with a RANsharing
joint venture (JV) where towercos may enter in
the medium term; and a market where there is
currently little or no RANsharing but where several
MNOs are seeking to monetise their towers.
Figure one: RANsharing models as identified by Analysys Mason

MORAN
MORAN
Service Service
Service Service
platforms
platforms
platforms
platforms
HLR
HLR HLR
HLR
MOCN
MOCN
GWCN
GWCN
Service Service
Service Service
platforms
platforms
platforms
platforms
HLR
HLR HLR
Service Service
Service Service
platforms
platforms
platforms
platforms
HLR
HLR
HLR HLR
HLR
MSC/ MSC/
MSC/ MSC/
SGSN SGSN
SGSN SGSN
MSC/ MSC/
MSC/ MSC/
SGSN SGSN
SGSN SGSN
M
MS
SC
C// M
MS
SC
C//
S
SG
GS
SN
NS
SG
GS
SN
N
B
BS
SC
C // B
R
RS
N
NC
C
C // R
B
S
C
RN
NC
C
B
BS
SC
C // B
R
RS
N
NC
C
C // R
B
S
C
RN
NC
C
B
BS
SC
C // B
R
RS
N
NC
C
C // R
B
S
C
RN
NC
C
B
BT
TS
S// N
NB
ee// B
BN
BooT
TddS
S
Nooddee B
B
B
BT
TS
S// N
NB
ee// B
BN
BooT
TddS
S
Nooddee B
B
B
BT
TS
S// N
NB
ee// B
BN
BooT
TddS
S
Nooddee B
B
Backhaul
Backhaul
Backhaul
Backhaul
Backhaul
Backhaul
First stage
active
stage ofstage
active
Firstofstage
ofRAN
active RAN SecondSecond
of active
sharingsharing
where spectrum
where where
where spectrum RAN sharing
RAN sharing
is not shared
spectrum
is
also
shared
is not shared
spectrum is also shared
Legend
Legend
O p e r a tO
o rpA
erator A
Third stage
active
Thirdofstage
of active
RAN sharing
where CS
RAN sharing
where CS
and PSand
corePS
elements
core elements
are alsoare
shared
also shared
O p e r a tO
o rpB
e r a t o r B S h a r e dSehl ae rmeednetl e m e n t
Source: Analysys Mason
RANsharing and towercos co-existing: the UK

example
Beacon, Vodafone and O2s joint 4G rollout,

underpinned by RANsharing.
The management and operation of UK telecom

networks is unlike anywhere else in the world,
largely thanks to two deep infrastructure sharing
joint ventures, CTIL (Vodafone+O2) and MBNL (EE +
Three) which between them operate over half of the
countrys ~50,000 towers.
Another JV, MBNL is one of the deepest integrated

RANshares in the world, wherein EE and Three
share sites, power and security under a mixed
MORAN business model sharing everything except
spectrum. MBNL manages RAN for EEs 2G and
4G network, and for Threes 4G, and also runs a
MORAN equivalent model for transmission. The JV
was envisaged in 2007 when the strength of market
leaders Vodafone and Cellnet (now O2) forced
Three and T-Mobile (now EE, and being acquired
CTIL owns and operates the networks of Vodafone

and O2 (Telefonica) in the UK. Structured along an
East-West divide, CTIL is programme managing
XX
around 7,000 of the countrys towers.
RANsharing looks scary, but the worst thing a towerco can do is fight
its customers. Weve got to get in front of these changes and consider
how to create value for our customers in ways which also creates value
for your towerco
by BT) to consolidate assets, decommission parallel

infrastructure, and reinvest savings and rollout to
achieve 99%+ coverage. An estimated ~1bn has
been saved over each of the initial seven years of the
joint venture.
RANsharing looks scary, said one UK towerco,
but the worst thing a towerco can do is fight its
customers. Weve got to get in front of these changes
and consider how to create value for our customers
in ways which also creates value for your towerco.
For example, look at some of the non-core assets
in shared networks; perhaps the RANsharing joint
venture identifies parallel infrastructure they no
longer need but on which there are still third party
tenants perhaps a towerco can acquire or manage
such sites?
We restructured relationships with the UKs JV
RANsharing companies, and were able to protect
our business, continued the towerco. Remember
that network sharing isnt about reducing footprint,
its ultimately about increasing points of presence

(PoPs). Through the creation of MBNL, for example,
EE would have increased from around 8,000 to 1819,000 PoPs.
RANsharing in a market towercos may enter
soon: the Greek example
Economic turbulence has created a scenario where
at least one Greek MNO may monetise their towers
in the next 12-24 months. Towercos interested in
this 12,000 tower market will have to decode the
implications of the current RANsharing agreement
in the country between Vodafone Greece and Wind
Hellas, operated Victus Networks, which manages
Victus Networks is a 50/50 JV formed in 2014 by

Vodafone and Wind to help them challenge the
dominant market share and larger spectrum
holdings of Cosmote, 100% owned by OTE, itself
now majority owned by Deutsche Telekom.
Victus Networks manages the Radio Access and
Transmission Networks of its parent companies
and, in parallel, is implementing a partial active
radio network sharing (MORAN) for 2G and 3G
technologies in rural and selected urban areas of
Greece. Victus networks claims to have delivered
~100mn in savings across capex and opex.
If the network is a factory, our objective is to reduce
unit production cost and enable reinvestment, said
one of the stakeholders in the Greek RANsharing
venture.
When inaugurating a RANsharing JV, MNOs need to
consider a checklist of soft issues, continued the
same Greek stakeholder. The corporate matchup
(people and management) is important in this
instance it was easier for two challengers to agree
terms. It requires a lot of management effort to
make these partnerships happen, and the first year
is tough you need commitment, focus and drive,
How do MNOs compete when RANsharing?

Competition is through a raft of factors beyond the network: brand, handsets, price, channels, distribution
and the customer experience all create a brand halo, and those are todays competitive differentators.
However RANsharing doesnt prevent competition at the network level: if one MNO has more spectrum
they still have more capacity. Sharing partner MNOs can still deploy at totally different rates
but weve ultimately found it to be a fruitful

journey.
Preparing for RANsharing in a market where
none exists, and where MNOs are seeking to
monetise their towers: an Asian example
There is currently little or no RANsharing between
the MNOs in this next example country, but
negotiations are ongoing for the sale of towers by
multiple MNOs.
The MNOs proposed terms and conditions
leave the door wide open for RANsharing, while
the interested towercos would prefer to see
RANsharing prohibited, or at least priced in the
MLA. The issue has become contentious as it
is potentially highly value destructive for the
towerco at a time when the MNO is seeking to
realise a valuation equivalent of 8-12x EBITDA
when selling their towers.
I need to achieve a tenancy ratio of 1.7 to build
an investible business case to acquire the towers.
Given that if two parties engage in RANsharing
it could eliminate 60% of potential tenancy
ratio growth, I need to negotiate some form of
contractual protection against RANsharing, said
one of the towercos bidding for the assets.
Mitigating the risk of RANsharing by extending the towerco business model

If you cannot fight against RANsharing you have to lead it, suggested one towerco. Vendors
forecast network densification may require 10x as many base stations as we have today, so perhaps
it is incumbent upon towercos to build sites designed for RANsharing, and to build value for MNOs.
Were building 1,000 light poles per year, on which we own the base stations. Outdoor DAS is a similar
opportunity.
Another towerco suggested: were talking about telecom infrastructure sharing at a country level rather
than speaking to MNOs. When smaller countries prove the model of sharing networks from the outset,
that will change the model.
Theres only one power distribution network, and one rail network, in many countries, suggested an
MNO. Deep network sharing is a natural extension of the dynamics of infrastructure consolidation.
A UK towerco disagreed: The UK regulator clearly wants to see infrastructure competition. I feel were
decades away from a single network. We still need differentiation on quality of network to incentivise
innovation and investment were a long way away from telecoms networks becoming a utility.
RANsharing already exists, towercos have to live
with it. If RANsharing doesnt exist, MNOs need to
be mindful of the potential of RANsharing to lower
the glass ceiling on tenancy ratios, so they need to
manage their valuation expectations accordingly
or afford the towerco some degree of contractual
protection against the potential future impact of
RANsharing.
Contractual protection: what price RANsharing?
The balance of power depends largely on how

embedded active infrastructure sharing is
within the network at the time a towerco enters
Its a simple question with an important answer:

how many tenancies does a towerco lose when their
clients agree to share RAN?
These three examples illustrate a simple truth: if
If a towerco is well protected by their contracts,
they may lose very few tenancies. When two of our

clients agreed to 2G, 3G and 4G RANsharing in rural
areas only, representing around 60% of territory, we
were barely affected, said one towerco. However,
another towerco in the same country lost almost
10% of their tenancies.
Theres virtually no active infrastructure sharing
in Africa, said another towerco. But the biggest
argument we have with our clients today still
concerns RANsharing because we sign 10-15 year
agreements. All our agreements have active sharing
provisions, and we generally agree an extra fee
to share RAN, but its difficult to come up with
one economic model to cover all the different
RANsharing models.
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MNO perspective
Towerco perspective
RANsharing must be permitted to maximise

the efficiency of my business
RANsharing must be controlled to protect the

investibility of my business
RANsharing protects me against lease price

increases and protects long term EBITDA
Charging for RANsharing protects the

investibility of the towerco business model
I dont even know what the network will look

like in the future I need to be protected
I dont even know what RANsharing will look

like in the future I need to be protected
If I sell my towers, I want to protect the right

to share RAN while maximising valuation
If I buy towers, RANsharing could lower

the glass ceiling on lease up growth, which
suppresses valuation
Theyre my antennae!
Theyre my towers!
We can unlock new efficiencies through

RANsharing we just need to get our fair
share
We can unlock new efficiencies through

RANsharing we just need to get our fair share
I just want to ensure we have a strong

position at the negotiating table in future
I just want to ensure we have a strong position

at the negotiating table in future
An MNO countered: but it is better to share our

networks there are efficiency gains through
sharing costs this is the main argument you use to
make us partner with towercos: the more you share,
the more you gain. There are economics if you can
share passive infrastructure, even more if you can
share active equipment or MORAN.
MNOs are generating economics from RANsharing,

the towerco needs to have some too they are our
sites after all! Said another towerco. We might
charge 10,000 per year without RANsharing, or
16,000 with RANsharing. Alternatively RANsharing
might simply be forbidden to force a discussion it if
and when it appears.
Another towerco took a different stance: It cant

always be just about the tenant paying more money
the tariff might be defined by additional capacity,
additional radio units, additional ground space,
more activity on site. Its not like nothings changing
onsite; there is more infrastructure on site for
RANsharing.
It seems some towercos are seeking a mutually
beneficial, long term partnership, while others
are talking about protecting their business in the
short term by forbidding RANsharing or charging
incremental fees, said one MNO representative.
You cant stand in the way of efficiencies; you need
All our agreements have active

sharing provisions, and we
generally agree an extra fee to
share RAN, but its difficult to
come up with one economic
model to cover all the different
RANsharing models
Contrasting perspectives on RANsharing
Growing pains:
how to scale a towerco
Every deal has to make sense
The Growing and scaling a towerco roundtable
As the participants in the Growing and scaling

a towerco roundtable gathered at the recent
TowerXchange Meetup Europe, it was soon evident we
were in for a treat. The experience and international
mix of participants was remarkable: moderator Peter
Egbertsen shared experience as a Director at Protelindo
(with a footprint in Indonesia, Myanmar, and the
Netherlands), we had contributions from Towershare in
Pakistan, Towercom in Ireland, Brittannia / Hibernian
Towers / Ulstercom in the UK and Ireland, Eaton Towers
in SSA, NOVEC in the Netherlands, Digital Bridge in
the Americas and China, and American Tower in 13
countries and counting! These views were supplemented
by several debt, private and public equity investors with
experience in the asset class. Heres what we learned
Keywords: Africa & ME, Americas, Asia, Bankability, Best of TowerXchange, Build-to-Suit, Business Model,
C-Level Perspective, Cashflow Finance, Deal Structure, Debt Finance, Decommissioning, ESCOs, Europe,
Exit Strategy, Fixed Price, Investment, Lease Rates,MLA, Multi-Region, Pass-Through, Private Equity,
Research, Site Level Profitability, Small Cells, TowerXchange Research, Towercos, Valuation

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The discipline required to scale towercos organically and inorganically

The importance of negotiating and defending a good MLA
The risks of deep discounts on lease rates and cutting corners on permitting and quality
The different appetites of different sources of capital
Is there a minimum tower count to realise economies of scale?
Discipline: every tower has to make sense

Discipline is critical when scaling a towerco; every
investment every individual tower has to make
sense. With growing competition in this sector, you
have to be very wary of making stupid deals. Its
important to remember the cautionary tales; even
in the U.S. lots of towercos went bankrupt when the
bubble burst in the early noughties; even American
Tower and SBA Communications lost huge market
cap youve got to manage your leverage so you can
survive tough times.
Dont grow for the sake of growth. You can retire
on the cash flow from five towers, or you can buy
towers, but every deal has to make sense, said
one towerco. For example, we made an 80mn
acquisition in a European country, funded half from
cashflow, half with bank debt. That deal looks good
now, and weve recovered the acquisition cost, but
if the debt was twice the price the deal would look
pretty average. If you dont have access to low cost
capital you have to be even more disciplined. Your
deals have got to be futureproofed.
The temptation for less disciplined inorganic growth
is substantial as there arent many businesses you
can scale as quickly as a towerco. Hypothetically
you can achieve scale in a tower company from a
standing start with your first deal; given sufficient
upfront capital, and assuming you can find an MNO
who will trust a prospective partner with little or no
operational track record, a towerco can scale quickly
and put capital to work under a business model with
which investors are increasingly comfortable. But
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One simple piece of guidance: put enough of your

own money at stake that you walk away from
deals you dont like. Investors will always be more
inclined to back a management team with skin in
the game. Ive personally said no on occasions
when the board says yes, said one towerco CEO.
It pays to be boringly rational every deal has to
make sense, tower by tower, country by country.
If thats a good guiding principle for inorganic
growth, theres a parallel principle for organic
growth: dont issue stupid MLAs!
Towercos have got to get the contractual terms
right, and that means theyve got to get the
relationship with the MNO right. It might be
tempting to slash lease rates to secure a big BTS
contract, but if you need almost two tenants
per tower and 5,000 sites to achieve scale, your
investors may run out of patience and you may
run out of cash before you get to scale and whats
your exit strategy? No-ones going to want to buy
a portfolio with a deeply discounted lease rate. Its
also not in MNOs interests to work with towercos
who may be here today, gone tomorrow. Disciplined
towercos negotiate and defend a good MLA. In the
words of one towerco: the capital value is in the
contract, not in the steel.
Dont assume the scale and co-location revenue will
come just because your leases are cheaper than
the other guys and dont cut corners on permits
and quality again, no-one going to want to buy

a portfolio in which they need to invest tens of
thousands of dollars or euros retreading permitting
processes or upgrading structures.
Again the lesson is simple: only do deals where you
see the returns. Dont give away too much value in
the pursuit of scale. There is a time to sit back and
not do anything. Another business clich tower
entrepreneurs hold dear: you dont need to be the
biggest, just be the best.
Todays low interest rates can be an anathema to
discipline. If you trim the margin too thin on a
tower acquisition or tower build, todays interest
rates can only go up. You need to have a really good
M&A team and access to smart capital which makes
sense in the future as well as today.
Sources of capital
With Europe a zero interest rate environment,
towers are increasingly interesting as an
investment opportunity in long term contracts
with proven cash flow streams. Putting money in
towers makes more sense than putting money in
the bank. Whether its pension funds gravitating
toward infrastructure investments, or strategic
investors such as American Tower with access to
low cost capital from their own cash flow, there is
no shortage of prospective sources of funding for
European towers, although still not the same depth
of investor pool as in the U.S. when it comes to
institutional capital, private equity growth funds,
and pension funds with account mandates.
It pays to be boringly
rational every deal has to
make sense, tower by tower,
country by country
just because you can grow quickly, doesnt mean to

say you should.
Theres a natural tendency to look at the towercos

listed in the U.S., plus the likes of Cellnex as
examples of what liquidity looks like in this asset
class, said one investor, but dont lose sight of the
cost of capital to scale a business. Towercos need
discipline in terms of their cost of capital. For firms
like us with a remit to invest across multiple sectors
its about comparative valuations. Im nervous that
everyone is so excited about the tower business.
Even high teens valuations in the U.S. still seem
high to me, so were looking for low double digit
multiples, and seeking an exit through sale to a
strategic or aggregator. Given the vintage of 4G in
Europe, and the development of a market in which a
significant proportion of MNOs retain towers, clearly
some stakeholders think theres more value to be
found in the future than now.
As ever, different breeds of capital have different
appetites. Many private equity investors dont
see the same magnitude of growth opportunity in

Europe to deliver their targeted 20%+ annualised
returns, and thus have a preference for emerging
market towers where the ongoing 3G and subsequent
4G rollout and the associated growth in data demand
mean tower networks are still being extended as
well as densified, thus organic growth can be more
substantial. The relatively high operational, country
and currency risk associated with emerging market
towers has meant the pension funds have been less
keen on such opportunities to date.
Is there a minimum tower count to realise
economies of scale?
In a mature tower market like Indonesia, where the
majority of acquirable operator towers have been
sold, the principle remaining path to scale is through
organic growth and lease up a towerco might need
at least 2,000 Indonesian towers to achieve scale.
Europe is a different story; one towerco cited an
example where they have just 260 towers under
management, which they run with just two fulltime
employees, plus backup from their corporate HQ.
Another towerco in the same European country has
20 staff managing 800 towers. A third towerco has
30 staff managing 2,000, whereas a fourth towerco
reported a significantly higher headcount managing
2,000 towers, but in a context where the company
was deploying more aggressively.
minimum scale for entry into a market has dropped.

Its all about how you structure and manage the
business. We can be profitable more quickly when
focusing on organic growth. But African towerco
operations arent as lean as European towercos; we
need more people for logistics half our time and
money spent on power.
We buy few portfolios with less than 1,000
sites unless we already have a footprint in the
country, said a representative of a large, listed
towerco. What adds value for us is any steps
the seller has taken which compresses the time
it takes to integrate a new portfolio. A seller will
attract a premium valuation if they have all their
documentation in order.
Value drivers
Value drivers vary across different tower
markets. For example, while consolidation and
decommissioning of towers is a big issue in Europe,
most delegates at the U.S.-centric tower summit
at the CTIA were unfamiliar with the concept of
decommissioning. However, the U.S. market is
host to a thriving ecosystem of independent tower
developers building and selling towers half a dozen
or a dozen at a time thats not a phenomenon we
see in Europe yet.
Rollup
We used to think we needed 1,000-2,000 towers per

country to have scale, said the CEO of an African
towerco. But then we built a portfolio of 300 towers
in South Africa and its been very profitable, so our
Build to flip tower entrepreneurs also feed another

tier of the towerco ecosystem; rollup plays. The
most renowned of these was Global Tower Partners
(GTP), backed by Blackstone and built by Marc Ganzi

and his team, largely on the back of over 300 small
acquisitions, most with independent developers
and Mom and Pop operations. GTP scaled to over
15,000 towers, and was sold to American Tower for
US$4.8bn. That roadmap is being played out again
by Ganzi and former Blackstone Partner Ben Jenkins
in their latest venture, Digital Bridge, albeit this time
with a more global and diverse footprint, extending
beyond macro towers into data centres and small
cells Digital Bridges biggest acquisition to date
being the acquisition of ExteNet Systems from SBA
Communications for US$1.4bn.
Expansion across borders
Opinion differed as to the opportunity for multicountry tower plays in Europe. One investor
made the comparison that it was easier to cross
jurisdictions in the U.S. tower market where
one remained under common rule of law with
leasing frameworks and tax structures largely
institutionalised, whereas in Europe has disparate
tax regimes, disparate landlord freehold/leasehold
relationships, and differing MNO requirements. The
investor concerned felt European towercos needed
to walk before they run to scale across multiple
countries.
In contrast, a towerco contended that scaling any
business was about hiring and backing the right
management team, and towercos are no different.
If you have people that can execute a towerco
business plan in one market, you can you spread
that overhead across adjacent countries. Another
XX
towerco concurred: while each country needed local

management, there are many functions a towerco
can centralise rather than replicate in every country.
How to persuade operators to sell their towers
Its a push and pull process, said one towerco. We
have to educate MNOs but there needs to be a need.
One investor recalled the then CEO of American
Tower Steve Dodge touring European MNOs in the
late nineties, advocating the monetisation of towers
or the creation of joint ventures. As we know, few
European towers changed hands outside of Crown
Castles foray into the United Kingdom, but with
subscriber and revenue growth plateauing, debt
rising and pressure to maintain dividends to prop
up stock, European MNOs have greater incentive
to monetise towers than ever, particularly given
the relative valuation benchmarks established by
Cellnex and INWITs IPOs.
Top ten tips for scaling a towerco

1.
2.
3.
4.
5.
6.
7.
8.
Have the discipline to walk away from deals that dont make sense
Manage your leverage so you can survive tough times interest rates can only go up!
Be prepared to take the time to rollup smaller tower portfolios
The capital value is in the contract not in the steel
Dont discount leases excessively no-one will want to buy your portfolio!
Dont cut corners on permitting and structures youll harm valuation
You may not need 1,000+ towers to achieve scale build smart, build organically
Investors are more interested in the people they invest in than the assets the credibility of your
management team is critical
9. If MNOs try to retain too much value, they risk making their towerco partners uninvestible
10. Be wary that a towerco providing power as a service is a fundamentally different animal to a
pureplay steel and grass towerco pick a business model and stick to it
giving them? Suggestions ranged from improving
cycle times for co-location to easing tower
transactions: the transition of a portfolio from MNO
to towerco is always a painful process.
The independent towerco business model is

increasingly proven outside the U.S.; there are
towercos building trust by creating efficiencies
on every continent now, and those towercos are
increasingly prepared to offer more flexibility on
deal structures.
Towercos cant survive if we give MNOs everything

they want, contended another towerco. Valuations
are high, opex is high in the markets were targeting.
Its a challenge to convince MNOs in the Middle East
that they need to leave something on the table if
MNOs retain too much of the value, the towerco may
not have the opportunity to create sufficient value to
raise capital.
How can we accelerate Europes transition from

a market where 87% of towers remain operatorcaptive, or on the balance sheet of operator-led
towercos and JVs? Towercos need to start giving
the MNOs more of what they want, proposed one
towerco CEO. More pertinently, what arent we
We were recently negotiating with an MNO who

also have their own towerco, said another towerco.
We found ourselves negotiating about pockets of
value we sometimes hadnt realised existed yet! But
MNOs who have run their own towerco appreciate
that independent towercos work the assets harder
than MNOs. Weve worked with some demanding

customers and sellers over the last ten years,
but weve found that there is enough value from
co-location growth to make it worthwhile for all
parties.
The operational challenges of building and
scaling a towerco
The operational challenges for towercos are
amplified when the business model calls for
provision of power as a service, as opposed to
markets like the US and Indonesia where power is a
pass through.
Theres no one thing the supply side that makes a
transformational difference to opex and thus the
bottom line performance of a full service towerco
its a hundred little things, which therefore requires
huge attention to detail, said the CEO of an African
towerco whose lease prices are inclusive of power.

The structure of your outsourcing partnerships
becomes critical, as does the management of people
and the power supply chain. I dont want to be in
the power generation industry but at the moment
theres no one stop shop solution each vendor
provides incremental benefits, but I dont see a clear
structure for provision of power as a service across
all emerging markets, and its still not clear which
model will prevail.
The operational challenges of power management
are magnified in Myanmar, where there was no
endemic no tower industry, and no distributed power
generation industry either. We didnt encounter any
partner we could trust to take whole power problem
away, said another towerco representative. Wed
be interested to buy power as a service, or buy power
by the kWh, but we remain unconvinced that the
ESCOs have access to the necessary capital, nor have
the proven execution capability from delivery to
installation and running the sites.
MNOs are inclined to wash their hands of their
principle operational challenges and risks, said
another towerco. Towercos must stay disciplined
and focus on the core model.
Another towerco agreed: in one country the MNO
was trying to make us take responsibility for power
provision but still tell us what DG to put on a site.
They cant have it both ways, but unfortunately
this creates just another opportunity for cowboy
towercos to sign bad deals to the detriment of all
concerned.
See you at our future events!
Meetup
Americas 2016
Meetup Africa
2016
16-17 June,
Boca Raton
19-20 October,
Johannesburg
Meetup Asia
2016
Meetup
Europe 2017
13-14 December,
Singapore
4-5 April,
London
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International highlights from American

Towers Q1 2016 earnings call
On April 29, American Tower (AMT) released its Q1
2016 results and hosted an earnings call with James
Taiclet, Chairman, President & CEO, Thomas Bartlett,
CFO & EVP and Leah Stearns, SVP, Treasurer and IR.
portfolio will be merged with AMTs existing legacy

business over the next year to eighteen months. With
regards to future steps, the company plans to take
the ownership interest of Viom up from the current
51% to somewhere in the mid 60s.
Commenting on the companys strong growth rate,

the executives highlighted that over the last year,
AMT built, leased or acquired more than 25,000 sites
across various markets, including Verizons, Airtels
Nigerian and TIMs Brazilian portfolio, plus 3,700
sites worldwide that the towerco built by itself.
AMTs goal remains to eventually own 100% of

Viom, cooperating with partners such as TATA and
Macquarie, but the process could take up to four
years. In the meantime, merging the two businesses
is the top priority.
With regards to AMTs overseas operations, Bartlett

commented that Our international markets
generated organic growth over 600 basis points
higher than the U.S. and over 350 basis points higher
than it generated in Q1 of 2015 at over 13% on a
consolidated basis, the highest rate in the last two
years.
AMT is currently integrating multiple MLAs across

the two portfolios. A process that might take up
to eighteen months to consolidate. In terms of
its lease ability, Taiclet added that most of the
documentation and systems are already there, since
Viom was already operating as an independent
towerco.
Specifically, here are some of the highlights of each

of AMTs international markets as discussed during
the earnings call.
For 2016, American Tower anticipates core growth

around 14% in India.
Mexico and Brazil
India
Organic core growth in India reached 12% thanks
to local operators being particularly involved in the
deployment of new technologies and networks.
In 2016, the company forecasts revenues up to
US$555mn from Viom, whose recently acquired
American Tower scored organic core growth over

13% in Central and Latin America, with Mexico
around 10% and Brazil at 13%. AMT commented
that in spite of some macro-economic challenges,
network rollouts in the region are still strong.
While Mexico is undergoing what AMT defined
aggressive 4G rollouts, Brazil is still in the process

of augmenting its 3G network.
Taiclet discussed the Mexican dynamics by adding
that the country is undergoing a shift that has
already happened in the U.S. with the adoption of
4G and the resulting changing dynamics in service
pricing and handset pricing.
In-building
With regards to in-building, Bartlett commented that
American Tower is a technology pioneer especially in
CALA and is looking at transferring this knowledge
into new markets such as Africa.
Mexico and Brazil are very strong in-building
markets and in India, thanks to the acquisition of
Viom, American Tower added around 200 in-building
sites, which is more than ATC India previously
owned.
EMEA
EMEA is the fasted growing region in AMTs portfolio
with organic core growth over 14%, which goes up to
18% by excluding Germany which is a more mature
hence a less performing market.
M&A
Asked about potential new deals, Taiclet concluded
that if the asset prices are too high you are not
going to see us active, if asset prices are within our
investment criteria you will see us move very quickly
to move forward.
International highlights from

SBA Communications Q1 2016
earnings call
On May 2, SBA Communications hosted its Q1
61 were in international markets where SBA
2016 earnings call. Representing the towerco
reports cash revenue growth around 13% and solid
were Jeffrey Stoops, President, CEO and Director,
leasing activities.
Mark DeRussy, CFA, VP of Finance and Brendan

Cavanagh, CFO and EVP.
Brazil
SBA reported net organic international cash
Brazil still delivers results with SBA reporting
leasing revenue growth of 12.1%, inclusive of 0.9%
its best same tower gross organic growth YoY, at
of churn, and organic growth in Brazil at 13.5%.
approximately 14%. And Stoops added that they

expect solid long-term growth for our business
Brazil accounted for 6.6% of cash site leasing
in Brazil. Carrier networks in Brazil significantly
revenue, excluding pass-through revenues, and
lagged those here in the U.S. 4G deployments are in
9.6% of the total leasing revenue for Q1 2016. The
the early stages. The deployment of 700MHz is still
actual tower cash flow for SBAs international
largely to come in Brazil, and the demographics of
portfolios decreased 6.1% YoY (US$37mn). But
the population heavily support expanding wireless
the figure represents a 14.8% increase without
consumption.
taking into account the impact of foreign currency

exchange rates. SBA reported a small decrease in
SBAs new builds dropped by sixty towers and the
international tower cash flow margins (68% vs
reduction is mostly in Brazil although SBA is still
69.1%) in the year-earlier period.
confident that some of these projects might slip

into 2017.
During the first quarter of 2016, the company

added 188 new sites to its portfolio, of which 117
When asked about the market situation in Brazil,
were acquired and 71 built. Out of the new builds,
Stoops added that in spite of new builds slowing
down, the leasing activity is still positive and that

should the economy improve, the market could be
much better and that SBA is performing in spite of
a very tough economy.
With regards to Oi and its potential debt
restructuring, the CEO noted that the carrier is
currently looking at an extra-judicial form of
restructuring, which would have no effect on
existing contracts and is the preferred option SBA
hopes for. Alternatively, Brazil offers two different
types of judicial bankruptcy which, Stoops added,
are very similar to U.S. Chapter 7 and Chapter 11.
Stoops continued with regards to the judicial
solutions by adding that a restructuring process
in court would still leave the contracts untouched
whereas the equivalent of a Chapter 7 liquidation
would cause the loss of all leases, but SBA doesnt
foresee that happening.
M&A
SBA highlighted its commitment to investing
in high quality assets in and out of the U.S. and
added that there are still a number of interesting
opportunities in several markets which are being
evaluated.
Stoops concluded that if we do not believe those
opportunities are at the right price or terms, were
quite comfortable using our leverage capacity to
buy back our own stock when we believe the share
price is below intrinsic value.
XX
Regional coverage:
CALA features
In this issue of the TowerXchange Journal we update our research on Brazil
in light of the economic challenges the market is currently facing. Interviews
with UBS, AlfaSite and Abrintel as well as an updated Share Square from Mott
MacDonald will offer some clarity on what is happening in the Brazilian telecom
tower industry.
TowerXchange continues to analyse the evolution of new markets and their
likelihood to open to the tower industry. In this issue, we interviewed First
Corporate Finance Advisors and spoke with Guillermo Mulville from the IFC for
insights on Argentina. Additionally, weve discussed with Innovattel/Torresec
to find out how the first towerco in the country are progressing in Argentina, as
well as hearing some details about their recent trip to Cuba.
Finally, we analyse the performance of Telesites against its announced goals and
offer an overview of Bolivia, a virgin market yet to be penetrated by towercos.
Dont miss:
132 An updated analysis of the Brazilian telecom tower industry
148 Argentina: First Corporate Finance and IFC
152 Entrepreneurial towercos: Innovattel on Argentina and Cuba
157 Virgin markets: Bolivia
163 Is Telesites a force to be reckon with?
Brazilian tower industry is

facing its toughest year yet
Why organic and inorganic growth has slowed, and what it means for investors
in Brazilian towers
Back in 2013, TowerXchange estimated that independent
towercos owned around 32% of the 140,000 towers in CALA.
By 2014, those figures rose to 41% of 148,000 towers. Although
estimated, these figures showed an impressive growth both in
terms of towerco penetration and portfolio growth across the
region. In 2015, the percentage went up just 1% to 44% (over
156,000 total sites) and to date, almost at the end of Q1 2016, we
think that towercos own approximately 45% of CALAs 165,000
sites. In 2013-14, inorganic growth of the tower industry in
CALA was driven by Brazil. In 2015, organic growth in CALA was
driven by Brazil. Both have slowed. Why?
Keywords: American Tower, Americas, Bankability, Brazil,
Build-to-Suit, Editorial, Exit Strategy, Market Overview,
Nextel, Oi, Private Equity, Phoenix Tower International,
By Arianna Neri, Head of Americas,
TowerXchange
SBA Communications, Sale & Leaseback, South America,

Telefnica, Towercos

< The slowdown of the Brazilian tower industry in context
< 2011-2016: what changed in the Brazilian industry and why
< Is it possible to find an exit strategy during the crisis?
< What are BTS firms doing when there are no towers to build?
Brazil was crowned queen of the CALA tower

market thanks to its balanced carrier market, high
site densification and rollout requirements, and
sheer size. Towercos rushed to start operating in
the country, invested in local teams and know-how
in spite of Brazils tough tax regime and uncertain
political situation. Investors bet high on its
potential returns and everyone enjoyed a few years
of tremendous successes.
However Brazil is currently facing the deepest
recession since the 1930s and its effects are
spreading across all industries including the tower
sector.
Did Brazilian towercos underestimate the risks?
2011-2013 were phenomenal years for the CALA
tower industry, especially thanks to Telefnica, Oi
and Nextel which all divested several thousands
towers in Brazil, Colombia, Mexico and Chile. We
all knew that at one point the pace of sales and
leaseback (SLB) transactions would slow down as
the inventory of acquirable portfolios was reduced.
But that didnt stop - and if anything it helped
promote - the proliferation of towercos especially
thanks to the potential of the Build-to-Suit (BTS)
market in the region.
This trend contributed to the creation of a new
layer of middle market towercos, with less
acquisitional buying power but specific knowhow, regional connections and capabilities which
made them the perfect partner for carriers with
aggressive densification plans and reduced budget.
XX
To date, there are at least a dozen BTS-focused

towercos in Brazil, as many as twenty in Mexico
alone, around ten in Peru, and a mid-teen count in
Colombia.
Most of these towercos are private-equity backed
and built on the assumption that after a few years
of BTS activity, theyd scale their business enough
to flip to one of the larger towercos most likely
American Tower or SBA Communications. And not
only theyd be acquired but theyd be able to sell for
multiples in the twenties.
The first glimpse of consolidation among towercos
happened back in 2014, when American Tower
bought BR Towers and its 4,630 sites across Brazil
for US$978mn. A transaction many saw as the first
of many, but which to date has few sequels.
The trend of towercos entering the region, reaching
a certain scale and succeeding at their exit strategy
with high multiples seemed achievable until not
long ago. Amidst this rush to scale, a growing swell
of complaints could be heard that a complete set
of paper and structural quality wasnt always a
priority in Brazil, with projects being awarded
to the cheapest bidder regardless of the overall
engineering standards.
The evolution of the CALA telecom tower industry 2013-2016

Year
Est. total towers
Towers owned by
towercos
Towerco
penetration
2013
140000
46011
32%
2014
148000
61729
41%
2015
156000
69850
44%
2016 to date
165000
73975
45%
growth was the year when finally the word crisis

started to creep into the news.
Theres no need to revisit the recent story of
troubled Brazil, whose economic stagnation,
recession, inflation and political corruption
allegations have all been widely discussed in
recent news. However, 2015 was still a relatively
good year for the Brazilian tower industry with an
estimated 2,000 new sites being built in the country,
the majority by the BTS-centric middle market
towercos.
Is 2016 going to be the quietest year ever?

Until 2013, Brazil made the headlines as one
of the poster children of economic growth and
industrialisation - the BRICS - but its GDP was
already in decline. But 2015, with its -3.5% in GDPs
However, 2016 has started under a cloudier sky and

is likely to become the toughest year to date for the
local telecom and tower industry. There are very
few BTS projects being developed in Brazil and
most of those that remain are just backlogs from
2015. And although scenarios can vary depending

on the towercos and their position in the market,
not many can enjoy American Towers predictions
of 11% organic growth in 2016.
If its true that towercos can invest some of their
free time in cleansing their paperwork, reviewing
underlying contracts, amending their revenues
and marketing their towers to new tenants,
this proposition isnt as valid for towercos with
relatively small portfolios hence unable to leverage
their scale. And Id doubt that their investors would
be satisfied with a quiet year of paperwork.
On the other hand, whereas middle market
towercos could still long for a high valued exit in
the future, its unlikely that their potential buyers
will want to cultivate a narrative to their investors
The recent nomination of Mr da Silva, former

President, as Chief of Staff to current President
Ms Rousseff to protect him from the investigation
related to the Petrobras scandal has just
contributed to throwing the country into a black
hole. Not even the upcoming Olympics are looking
good with tickets on sale for as low as US$18 and
commentators noticing how the sales campaign is
falling considerably behind.
Under these conditions, I doubt anyone feels bold
enough to buy in Brazil, but even if Who would
commit to a multiple higher than the multiple at
which their own stock currently trades?
Although I am no expert in finance, I am left
wondering whether the cheeky plan - which many
seem to have adopted - of building towers in Brazil
at whatever price, under whatever conditions
to one day flip at high multiples is now shaking
under the reality of these less than prosperous
times.
Todays conditions dont help any towerco
to function, whether theyve been diligently
following market rules or cutting some corners
and working below market prices. But whereas
whereas some towercos can afford to keep their Brazilian capital in

the country, reinvest it or simply wait for better days to come, privateequity backed towercos - no matter how high quality their work is are often under the pressure of a stringent investment lifecycle which
rarely exceeds eight-nine years
some towercos can afford to keep their Brazilian

capital in the country, reinvest it or simply wait for
better days to come, private-equity backed towercos
- no matter how high quality their work is - are
often under the pressure of a stringent investment
lifecycle which rarely exceeds eight-nine years.
Long are gone the times when a tower with one
tenant was already worth a premium!
I think everyone still interested in doing long term
business in the country is likely to welcome this
tough but much needed wave of rationalisation.
And I do hope well see more towercos diligently
following the rules, compiling a complete set of
permitting paperwork, working at market rates
and spending time leasing up their towers.
If some towercos are just taking the foot off the gas
and waiting for better times to come while focusing
of expansion and acquisition in Brazil under the

current circumstances. The combination of the
Brazilian foreign exchange crisis, its internal
political and economic situation alongside the less
than rosy outlook of the U.S. - and international
- stock exchange dont really call for bullish
investments in Brazil or elsewhere.
their attention on their existing portfolios, some

others really dont have this luxury and werent
created on the premise that the local industry
would at any point get to such a deadlock.
The only option is to wait and see, if investors can
be persuaded to have patience. For better times,
more favourable conditions and an upswing able to
instil a sense of confidence firstly into carriers. In
fact, only a renewed wave of investments from the
mobile network operators could revamp the BTS
market in the country.
Will there be rationalisation and consolidation
in the Brazilian tower industry? Probably not at
the prices many investors had hoped for. There
is a wildcard in the pack: could Phoenix Tower
International rollup to scale whilst American Tower
and SBA Communications are reluctant to re-invest
in Brazil?
XX
Mobile market overview
Share Square: Brazil
248.3 million mobile subscriptions by the end of 2015, giving a

penetration rate of 119%
Brazil
The 4G market in Brazil is expanding rapidly and is expected to

reach 50mn subscribers by the end of 2016
Passive
The Brazilian tower market has been a lucrative market for

investors since the early 2000s which has led to multinational
towercos establishing a large presence. American Towers,
Grupo Torresur and SBA Communications own over 50% of
Brazils estimated 60,000 towers
Brazils major operators, aside from Claro, have sold sizable
pieces of their tower portfolios to towercos in the last five years
in an effort to reduce debt and free-up capital for network
investment
The market is advanced and competitive; towerco opportunities
likely to be mainly from the increasing demand for 4G
consolidation and a relatively low mobile penetration. Risks
lower due to established, multinational operators that service
the market
None
Current Sharing
Active
7 MNOs: Vivo, TIM, Claro, Oi, Nextel, Algar Telecom and

Sercomtel
3G
4G
Opportunity for Outsourcing

by MNO to towercos
Limited opportunity for new

entrant towercos
Mobile subscriptions- market share
24.82%
26.17%
18.91%
27.8%
1.75%
0.52%
0.03%
Vivo (Telefnica)
Nextel (NII)
TIM (Telecom Italia)
Algar Telecom
Claro (America Movil)
Sercomtel
Oi
There are seven mobile network operators (MNOs)

serving the Brazilian market, with four large
operators serving more than 45mn subscribers
each and three smaller operators with a combined
subscriber base of less than 6mn. Vivo (Telefnica)
currently holds the largest market share with 69.0mn
subscribers closely followed by TIM (Telecom Italia)
65.0mn, Claro (Amrica Mvil) 61.6mn and Oi with
47.0mn subscribers. The smallest operator Sercomtel,
had fewer than 65,000 subscribers at the end of 2015.
Key mobile developments
Technology Deployment
Opportunity for towercos entry with
focus on high Lease Up Rate (LUR)
Brazil had an estimated population of 208.7mn

people and 248.3mn mobile subscriptions at the end
of 20151, giving a mobile penetration of 119% - the
fifth highest level of penetration in South America.
Around 74% of subscribers have a pre-paid account,
which ranks 7th amongst the South American
countries. Peru ranks the lowest with 65% pre-paid
subscribers.
Brazil has an average mobile penetration for the

South American region, surpassed by Suriname
(175%), Uruguay (159%), Chile (146%) and Argentina
(144%). Brazils national subscriber base has grown
rapidly in recent years, doubling since 2008 to reach
a record high of 275.5mn in Q1 2015. However,
subscriber numbers reversed as the year developed
and an estimated 10% reduction in subscribers
was observed across the Brazilian market, with the
reduction felt relatively evenly across the four large
operators in relation to their market share. The fall
in subscribers is reportedly a result of the operators
efforts to disconnect inactive or non-paying users,

as well as a tightening of the credit policies available
to customers. The subscriber numbers of the three
smaller operators were reportedly unaffected in
2015. Subscriber numbers are expected to remain
stagnant through 2016 before increasing in 2017.
3G services were first rolled out in Brazil in Q4 2007
when Vivo and Claro introduced the technology
into a small number of key states. Following the
official 3G auction in December 2007 for the rights
to offer UMTS services in the 2100MHz band, TIM,
Algar, Sercomtel and Oi rolled-out a 3G service
offering within a year of purchasing the licenses.
The remaining operator, Nextel waited until 2010 to
purchase the required licences and began offering
a 3G service in the second half of 2012. Vivo, Claro
and TIM expanded aggressively into the 3G market
and the three operators held 95.6% of the 3G market
share after 4 years (Q4 2011). This figure has fallen to
82.8% following the growth of Oi in this area.
Rollout of 4G
The announcement of plans to auction licences for
4G frequencies in the 450MHz and 2.5GHz bands in
June 2012 was met with significant resistance from
the incumbent operators who believed the auction
was premature. The auction went ahead nonetheless
and Vivo, TIM, Claro and Oi all successfully
purchased licenses at the auction, however desire
for the 450MHz band was significantly less than
anticipated by the regulator. In response to this, the
regulator stated that the winners of the lucrative
2.5GHz bands were also required to take the 450MHz
bands for deployment in rural areas.
The four operators faced new competition in the 4G

market in the major cities of So Paulo and Rio de
Janeiro from pay-TV and Video-on-Demand service
providers Sunrise Telecomunicaes and Sky Brasil
Servios who also successfully acquired 4G licences,
as well as from Nextel who rolled-out their service
offering in Q2 2014. As of the end of 2015, GSMA
estimates that there were 25.4mn 4G subscribers in
Brazil, with Vivo and TIM leading the way in terms of
subscribers with 9.5mn and 7.1mn respectively.
Operator activity
Vivo (Telefnica) launched its mobile service offering
in Brazil in 2003 as a 50-50 joint venture between
Portugal Telecom (PT) and Telefnica Mviles and
was the largest mobile operator in the country at the
time with a subscriber base of 17mn. Vivo was the
first operator to reach 1mn 4G subscribers and has
continued to maintain the largest subscriber base in
the 4G market (Q4 2015).
TIM (Telecom Italia) is Brazils second largest mobile
operator by subscriber number and has featured
in the mobile market since 2002. TIM has struggled
to withstand intense market competition in recent
years, and since 2013 increasing reports of merger
and acquisition activities involving TIM have been
recorded.
Claro (Amrica Mvil) entered the Brazilian market
through the joining of five companies owned by
parent company America Movil in 2003. Claro
currently services the highest number of 3G
subscribers in Brazil at 49.7mn (Q4 2015) and the
third largest number of 4G subscribers - 4.5mn.
Oi entered Brazils mobile market in June 2002 as the

countrys first GSM operator. Oi has grown mainly
through acquisition, most noticeably acquiring rival
telecoms group Brasil Telecom (BrT) in 2008, to
achieve the fourth largest market share by mobile
subscribers.
Nextel, Algar Telecom and Sercomtel service
the remaining 2.1% of mobile subscribers in the
Brazilian market. Algar Telecom and Sercomtel have
diversified their service offering by also supplying
pay-TV services whereas Nextel, the largest of the
three operators, is reportedly up for sale following its
parent company NII Holdings experiencing financial
difficulties in 2014 and 2015.
Regulation
Following Constitutional Amendment 8/1995, which
removed exclusivity in the operation of public
services to state managed companies, and General
Telecommunications Law 1997, Agncia Nacional de
Telecomunicaes (Anatel) was formed to regulate
the Brazilian telecoms market in 1997. Anatel is
entirely independent from the Brazilian government,
both financially and administratively. Anatel
regulates the entire telecommunications industry,
including radio spectrum, merger and acquisition
activity, conflict resolution amongst operators,
violation prosecution and product certification.
The Agencys aim is to support the development
of Brazilian telecommunications and bridge the
regional inequalities.
Brazils telecommunications infrastructure fell
behind the U.S. and Europe in the 1990s due to a
XX
lack of investment, however investment has steadily

improved and the main cities now boast comparable,
modern technologies. This vacuum of investment
towards the larger cities has left regional imbalances
across the country with the north and north-west
regions lacking even basic telecommunications
systems in some areas. Anatel has attempted to combat
these inequalities through a number of initiatives
including packaging together the purchase of 450MHz
spectrum with sought after 2.5GHz spectrum to help
drive rural coverage.
The tower sharing market
The Brazilian tower market has been a lucrative
market for investors since the early 2000s which has
led to multinational towercos establishing a large
presence. Approximately 35,000 of the estimated
60,000 towers in Brazil are owned by towercos, with
the vast majority of these towers owned by three
towercos: American Tower, Grupo TorreSur and SBA
Communications.
American Tower first entered the Brazilian towerco
market in 2000 and has grown largely through
acquisition, including the purchase of 6,400 towers
from mobile operator TIM in 2014, to reach its current
total of just under 19,000 towers. SBA Communications
entered the market in 2012 after an acquisition of 800
towers from Vivo. SBA has since rapidly developed
a significant presence in Brazil and today own 7,000
towers. Grupo TorreSur is the third largest towerco
in Brazil by number of towers (6,500) which includes
1,641 towers acquired from Oi in 2014.
The remainder of the towerco owned infrastructure
in Brazil is shared between towercos of varying

size and global presence. Telxius, a global company
created by Telefnica in Q1 2016 to manage selected
infrastructure assets, owns 2,500 towers. Highline
do Brasil owns just under 200 towers after initially
starting out as a build-to-suit company in 2013 and
an estimated 3,387 towers are owned by a number of
small independent towercos.
The prominence of towercos within the Brazilian
market has been assisted in recent years by a shift
from operators who no longer see the ownership
of their tower portfolio as a core element of their
business. Brazils major operators, aside from Claro,
have sold seizable pieces of their tower portfolios to
towercos in the last five years in an effort to reduce
debt and free-up capital for network investment.
failed to bridge the regional imbalances across the

country leaving certain regions lacking even basic
telecommunications systems. Increasing reports
suggest that the market structure may change as the
fourth and fifth largest operators, TIM and Nextel, are
reportedly up for sale.
After a period of concentrated tower transactions
which has seen many of the large MNOs significantly
reduce their tower portfolio and a number of
towercos establish a significant presence in the
market, both the MNOs and towercos are now
expected to consolidate their positions leading to a
reduction in the number of tower transactions
1. GSMA
Guest columnist Marcus Dowdeswell
Conclusions
With the largest population in South America
(208.7mn people) and the fifth highest mobile
penetration (119%), there is considerable room for
subscriber growth in the Brazilian mobile market. 4G
services have been launched and consumer appetite
is growing rapidly with 4G subscribers expected to
reach 50mn by the end of 2016.
The presence of four multinational MNOs within the
market has encouraged competition and innovation
and subsequently ensured that the Brazilian market
has matched the roll-out of speeds and technologies
seen in equivalent developed countries. There are
also three smaller operators that concentrate their
services mainly within the larger cities of Brazil.
Nonetheless, the current market structure has
Marcus Dowdeswell is a Consultant in Mott

MacDonalds Digital Infrastructure practice,
working with telecommunications operators,
vendors and investors across the Middle East and
Africa. Marcus has analysed tower markets across
three continents and has recently been working as
a Market Analyst on multi-million dollar mobile
tower transactions in Africa and the Middle East,
covering tens of thousands of tower assets. Marcus
graduated with a BA in Business Finance and is an
Associate Member of the Institute of Consulting
Guest columnist Ed Siegle
Ed Siegle is a Principal Consultant in Mott

MacDonalds Technology & Communications
Division. He has 20 years of experience
as a consultant, primarily focused on the
telecommunications industry, working for
operators, vendors, investors, regulators and
public sector organisations. His particular
expertise lies in market analysis, commercial
due diligence, product and market strategy
development, demand forecasting and business
case production.
In the course of his career he has worked for

clients in the UK, Europe, the USA, Africa and
Latin America. He has spent over 2 years living
and working in Latin America, including 18
months in Brazil where he helped establish
new offices for two consultancies. Over the past
3 years he has been part of a Mott MacDonald
team commissioned to execute a series of
advisory projects for towercos looking to invest in
developing markets
Visit the TowerXchange.com website

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in passive infrastructure
< Independent analysis and commentaries on the
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< The latest industry emerging market tower industry
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Tower
Xchange
XX
Being small and local could

be a plus in Brazil
Insights into the BTS market, and the realities of site acquisition and permitting in Brazil
AlfaSite might be a small entity in the Brazilian tower
landscape but is able to leverage its ownership by a larger
local holding, Grupo Alfa, which incorporates a managed
service provider, an energy equipment company, a tower
manufacturer and a tower company. Thanks to its local
expertise and easy access to materials and manpower,
AlfaSite has been able to win build-to-suit (BTS) projects
in 2015 and has bold goals for 2016, in spite of the current
challenging conditions the market is facing.
Eduardo Martins Pedro, COO, AlfaSite
In this interview, TowerXchange discuss with the

companys COO, Eduardo Martins Pedro, what it means
to do business in Brazil today; technical and operational
challenges as well as opportunities.
Keywords: Alfa ERB, Alfa Energa, AlfaSite, Americas, Americas Insights, Brazil, Build-to-Suit, C-level
Perspective, Grupo Alfa, Insights, Leasing & Permitting, Private Equity, Regulation, Site Acquisition,
Skilled Workforces, South America, Tower People
TowerXchange: Eduardo, please tell us about

yourself and your professional background.
Eduardo Martins Pedro, COO, AlfaSite: I am
a civil engineer and I started working in the
telecom infrastructure sector back in 1996, at the
very beginning of the digital era here in Brazil.
Specifically, I worked as a site hunter, as a field
engineer in various telecom plants and as site
acquisition coordinator until 2009, when I joined
Alfa ERB. In 2012, I founded AlfaSite along with
other partners.
TowerXchange: Can you share some details about
AlfaSite, its activities and footprint in Brazil?
Eduardo Martins Pedro, COO, AlfaSite: AlfaSite is
part of Grupo Alfa which includes Metal Alfa, which
is a tower manufacturer, Alfa ERB, a managed
service provider and Alfa Energa, a power
generator rental and electrical panels designer.
AlfaSite owns and operates 150 sites in major cities
and we focus on build-to-suit activities as well
as offering co-location services. AlfaSite is 100%
Brazilian and is owned and funded privately by us.
TowerXchange: What is the status of the buildto-suit market in Brazil? How many towers did
AlfaSite build in 2015 and how many are being
planned for 2016?
< AlfaSite, its footprint and activities in the Brazilian build-to-suit market
< A late start for 2016 BTS projects in Brazil
< How the Lei das Antenas is being implemented at a local level
< The challenges of site acquisition in Brazil
Eduardo Martins Pedro, COO, AlfaSite: The Brazilian

build-to-suit market is indeed affected by the
current economic instability but weve seen some
opportunities coming up at the beginning of March.
I am talking about a very small number of projects

that have come to market relatively late, at the end
of Q1.
In 2015, AlfaSite built fifty-eight new sites and we
are hoping to build more than one hundred during
2016. Being a local, privately funded company is
definitely a challenge, especially when competing
against large companies with foreign investments.
This year is being extremely tough and BTS
opportunities were only assigned to towercos
that presented some sort of financial or technical
innovation to their customers.
TowerXchange: From a technical perspective, is
it hard to build towers in Brazil, and to source
partners and materials?
Eduardo Martins Pedro, COO, AlfaSite: Being part
of Grupo Alfa is actually one of our strengths as
this allows us to utilise products manufactured
by companies within our group. Specifically, from
towers to electrical panels, skids for installation or
even construction manpower, we are able to source
everything in-house. Therefore, sourcing isnt an
issue for us. The licensing process is the tricky part
for us!
TowerXchange: What has been the impact of the
Lei das Antenas for towercos seeking permits?
Eduardo Martins Pedro, COO, AlfaSite: When
applied correctly, the Lei das Antenas does
accelerate the process of obtaining licenses.
However, the analysis on the viability of a license
within each municipality isnt always done by

specialised technical teams which often results in
dubious interpretations of the Law and a lack of
understanding of the project itself. This is where
the process becomes lengthy and licenses hard to
accomplish.
TowerXchange: Which characteristics should
the perfect tower portfolio have?
Eduardo Martins Pedro, COO, AlfaSite: I think that
an ideal portfolio consists of sites structurally
able to host at least three tenants. Having all the
licenses and permits in place is another key point
as well as having constant availability of power
and a good level of security to protect equipment.
TowerXchange: How challenging is site
acquisition in Brazil?
Eduardo Martins Pedro, COO, AlfaSite: Site
acquisition is definitely a challenging activity
in Brazil. Training capable professionals is
a key component of this process as we need
experts who are able to select good sites,
negotiate competitive deals and analyse property
documentation.
Planning an optimised deployment project is
critical as well, especially since it affects the speed
of the licensing process. Being able to present all
necessary documents does increase the chances of
a fast response from the municipality and in any
case, a professional team does need to constantly
keep monitoring the status of the application.
One of AlfaSite towers
The underlying relationship with landlords

is another key aspect. We need to deal with
transparent landlords and most of all, ensure
that sites are leased or sold with all the property
documentation otherwise obtaining licenses is
virtually impossible
XX
How ABRINTEL, the Brazilian

towerco association, is working to
ease the permitting of new cell sites
In spite of the new Lei das Antenas, easing the regulatory framework is still key
for local towercos
Z/Ed>
^^K/KZ^/>/Z/E&Z^dZhdhZWZd>KDhE/O^
The Associao Brasileira de Infraestrutura para as

Telecomunicaes (ABRINTEL) was created back in 2013 with the
goal to gather and represent tower companies across the country.
Its members include top executives from Brazilian towercos
with the common goal to give a strong voice to the industry and
strengthen its position in the country.
I have recently spoken with Loureno Pinto Coelho, the President
of the Board of the association, who shared with TowerXchange
insights into ABRINTELs role in Brazil, commented on the Lei das
Antenas and on the overall status of the Brazilian tower industry.
Keywords: ABRINTEL, American Tower, Americas Insights, Brazil, Cell Site Solutions, Greenfield, Grupo
TorreSur, Insights, Lei das Antenas, Lei de Uso e Ocupao do Solo, Market Overview, Phoenix Tower
International, QMC Telecom, QoS, Regulation, SBA Communications, South America, So Paulo

< The organisation and role of ABRINTEL in the Brazilian tower industry
< The Lei das Antenas: its status and implementation challenges
< Financial crisis vs regulatory hurdles: which one do investors fear the most?
< ABRINTEL and its technical advisory role: limitations at a local level
TowerXchange: Please tell us about ABRINTEL,

its mission and current organisation
Loureno Pinto Coelho, President, ABRINTEL:
ABRINTEL has the mission to educate regulatory
bodies, the government as well as the civil society
on the importance of a stable and transparent
regulatory environment. Our goal is to create
strong foundations for international and local
investors able to contribute to the expansion of
the telecom infrastructure sector, which is vital
in order to boost mobile penetration across the
country.
ABRINTEL is organised with an Administrative
Council as well as a Board of Directors of
which I am currently President. To date, the
association includes members from top towercos
active in Brazil including American Tower, SBA
Communications, Grupo TorreSur, Phoenix Tower
International, Cell Site Solutions and QMC Telecom.
TowerXchange: What is the status of the Lei das
Antenas? And is it proving useful?
Loureno Pinto Coelho, President, ABRINTEL: The
law is approved and it is helping towercos seek
permits to a certain extent. In fact, the problem is
that municipalities still hold their own autonomy
when it comes to regulating the use and occupation
of the ground. We still face the opposition of
certain cities to the launch of greenfield projects
and the installation of sites.
We are promoting the alignment of municipalities
TowerXchange: Is ABRINTEL working as

technical advisor to municipalities or other
local entities? Is it useful and why?
local regulatory hurdles concern investors more than a temporary

phase of economic turmoil
and their local regulations to the federal law

(Lei das Antenas) in order to smoothen and
expedite the authorisation process as well as
the installation of new towers. Additionally, by
complying with the Lei das Antenas, pending
authorisations for already installed sites should be
resolved rapidly.
investment in the country, hence guaranteeing a

deeper level of penetration and an overall positive
impact on the speed of data, capacity, coverage and
quality of service.
TowerXchange: How many towers are being

built in Brazil each month/year?

Much depends on the elimination of barriers to
construction and installation in municipalities
such as So Paulo, among others.

There are approximately 2,000 new sites being
built each year and weve calculated an estimated
70,000 sites already in place, between towers,
monopoles and rooftops.
This number isnt low and represents quite a
substantial growth achieved in a few years.
However, a friendlier regulatory environment
would still contribute to enhance the level of
TowerXchange: How do you foresee the tower

industry shaping up in the next 12-18 months?
We believe that the key problem is the excessive

time required for licensing and the lack of a clear
regulatory framework for greenfield projects. The
telecom industry is one of the main catalysts for
the creation of digital cities and digital nations and
its a top priority to ensure that local authorities
enable this process by providing clear and
straightforward rules and regulations.

Since its creation, ABRINTEL has been supporting
different regulatory bodies and key stakeholders
in the understanding of the tower industry and
its challenges. For example, over the past few
years, weve been working with the So Paulo
administration and City Council to present and
discuss the Lei de Uso e Ocupao do Solo (Law for
the Use and Occupancy of Soil).
Unfortunately, our technical recommendations
arent always translated into specific actions and
sometimes the rationale behind a certain decision
is political rather than technical. In any case,
we are working together with local and federal
authorities to improve the national and local
telecom regulatory framework. This process isnt
only useful, its necessary!
TowerXchange: How is the Brazilian economy
affecting the tower industry?
I believe that local regulatory hurdles concern
investors more than a temporary phase of
economic turmoil. And this is one of the key
reasons why we are so involved in working with
and advising local and national authorities.
Anyone interested in finding out more about
ABRINTEL can visit www.abrintel.org.br
XX
How investible is the CALA

telecom tower industry?
An analysis of the current conditions of the regional market and its potential for growth
Andr Laloni, Managing Director, Head of Brazil

and Southern Cone Investment Banking, UBS
Investment banker Andr Laloni is now Head of Brazil

and Southern Cone Investment Banking for UBS. He has
been covering the telecom sector for almost seventeen
years and has been a key contributor to shape the tower
industry in the country, advising most of the transactions
in the sector. In this interview, Andr shares with
TowerXchange his views on Brazil, the likelihood of
new markets including Cuba, Argentina and Paraguay
opening up and key factors that determine the decision
for carriers to sell or carve out their tower portfolios.
Keywords: American Tower, Americas Insights, Amrica Mvil, Antel, Argentina, Brazil, Build-to-Suit, Capex,
Chile, Claro, Co-locations, Copaco, Crown Castle, Cuba, Debt Finance, ETECSA, Exit Strategy, Grupo TorreSur,
IDT Telecom, Infrastructure Funds, Insights, Investment, Investors, MLA, Millicom, Movistar, Network
Rollout, Nextel, Oi, Paraguay, Personal, Peru, Phoenix Tower International, Regulation, SBA Communications,
South America, T4U, TIM, Telecom Argentina, Telecom Italia, Telefnica, Telesites, Tenancy Ratios, Tigo, UBS,
Uruguay, Valuation, Verizon, Vox

< The rationale behind divesting or carving out passive infrastructure
< Perspectives on Telesites, its performance and site demand in Mexico
< The status of the Brazilian telecom tower industry: troubles ahead for middle market towercos?
< Which countries could drive future sale and leaseback transactions
< New markets: Argentina, Paraguay, Uruguay and Cuba
< Key components of the perfect towerco
TowerXchange: Andr please tell us about

yourself and your experience in the telecom
investment arena.
and Southern Cone Investment Banking, UBS: I have
been an investment banker for almost seventeen
years, specifically since 2000 when I started
working with UBS in New York in their global
industrial group. In 2003, I moved back to Brazil
where I joined Telecom Italia for a few months to
then go back to investment banking with Unibanco,
Goldman Sachs, Barclays and then again with UBS,
where I now run their investment banking division
for Brazil and Southern Cone.
Telecoms is one of the sectors I have always been
covering throughout my career. Its one segment
where I have always been involved. I have
participated in the majority of the transactions
that shaped the tower industry in Brazil, more
frequently advising carriers in divestiture
processes, negotiating with towercos.
TowerXchange: Why are certain MNOs
increasingly inclined to carve out and keep their
towers rather than sell and leaseback? What are
the relative merits of each model?
and Southern Cone Investment Banking, UBS: This
is a very relevant and hot topic at the moment and
I see that most carriers take one direction or the
other as a function of three key underlying motives.
Capital needs: if and when a carrier does need
financial support as a result of its capex outlook and/

or indebtedness, it will compare the cost of a sale
and leaseback operation with the cost of other funds
available in the market for them. Not every carrier
can easily access capital, so the decision behind
selling towers will depend on the cost of alternative
funding.
Regulatory environment: weve seen this
happening in Mexico last year, contributing with
the creation of Telesites. In this instance, theres
no need for upfront cash hence a spin-off is a good
alternative. On the pro side, the carrier will still
retain a certain degree of control on its portfolio and
there is an upside in terms of value as towercos tend
to trade around 15-18x while carriers trade within
5-8x. On the downside though, theres always the risk
of being perceived as not completely independent
from the parent carrier company which could
hinder the attractiveness of the portfolio to potential
tenants. This could result in a lower degree of growth
than originally expected.
Unlocking value: as I mentioned, towercos trade at
higher multiples than operators so creating a spin-off
gives an opportunity to generate considerable value.
Whether the spin-off is a result of regulatory demand
or elected to create value, the new entity will face
the same challenges and will need to prove itself as
truly independent and focused on maximising the
potential of the tower portfolio.
TowerXchange: Why do you think Telesites made
an underwhelming debut on the stock exchange?
Andr Laloni, Managing Director, Head of Brazil and
Southern Cone Investment Banking, UBS: Telesites

is a young company and I wouldnt necessarily call
its debut underwhelming. I believe the company has
great potential and its the beginning of a new story
with very strong DNA.
Telesites did have some price drop after its IPO
during the first few weeks of operations and I believe
its now trading at about 10-15% discount to the likes
of AMT, CCI and SBA. But again, this is the normal
evolution of a young organization.
However, Id say there are a couple of factors to be
taken into consideration with regards to Telesites
future outlook. First, their forecasted demand
from the carriers might not be as high as originally
expected.
IFT did estimate that Mexico would need 70,000 sites
on top of the existing 25,000 to densify the network
and bring it to mature market standards. However,
there are various factors that might reduce this
forecast. Specifically, according to research analysts,
AT&T originally planned to add around 3,000 new
sites by 2018 but theyve now found that the sites
acquired from Nextel have greater potential of
utilisation than originally thought. So they might
actually be up for less co-locations and less new
builds than predicted.
Telefnica doesnt have a great narrative of
investments in Mexico and wont necessarily become
a major tenant on Telesites sites. And lastly, the
Government is currently working on the 4G shared
network and for now, theyve estimated that 12,000
new sites will be built in Mexico by 2023. If thats

the case, this could further reduce and dampen the
demand for Telesites portfolio.
Some of the global investment funds have
restrictions to invest in emerging markets and
sometimes their investment mandate comprises
ETFs, index, overall broad equity-linked instruments
instead of a single ticker only. Since Telesites didnt
issue ADRs, some of these funds, former investors
of AMX, wouldnt be allowed to be a shareholder of
Telesites. (At the time of the spin-off, Amrica Mvil
shareholders received one Telesites share for every
twenty Amrica Mvil shares held, consequently
AMX investors became also investors of Telesites)
TowerXchange: And with regards to the company
itself, do you think it will expand its operation
beyond Mexico and into Brazil and other LatAm
states?
Southern Cone Investment Banking, UBS: Telesites
did announce theyd expand into other LatAm
countries and they have recently announced new
towers to be built in Costa Rica through their buildto-suit contract with Claro Costa Rica.
With regards to Brazil, the situation is a bit different
in light of the presence of large and very established
independent towercos - American Tower, SBA
Communications and Grupo TorreSur - and due to
the competitiveness of the local market. That said,
theres definitely room for growth and Telesites could
leverage Claros portfolio by putting it up for share.
XX
Claro has about 8,000 sites in Brazil which could

serve the market and Telesites could definitely
look into that. Current market conditions dont
necessarily help the move though.
In Brazil, the number of subscribers per tower is still
much higher than in developed markets such as the
U.S. - 4,500 vs 1,000 - and the average tenancy ratio
is around 1.2/1.3 while it reaches 2.5 in the U.S. so
theres definitely still a lot to be done.
TowerXchange: What is your perception of the
status of the Brazilian telecom tower industry
in light of the countrys economy? Are towercos
progressing towards consolidation?
Southern Cone Investment Banking, UBS: Brazil is
going through very tough times both economically
and politically but I hope that the situation can be
defined once and for all and finally improves. The
international and local investment community
definitely needs more clarity on the direction of the
country.
With regards to towercos, high interest rates
combined with inflation pressure and difficult access
to credit do have a direct impact on the industry,
especially on smaller companies that see their
margins and ROIC compressed.
In the past M&A activity has been intense in Brazil
with Telefnica, Oi and TIM all divesting most of
their assets as a solution to fund their capital needs.
To date, the only intact portfolio is Claros which has

no intention to sell so Id say that on the carrier side,
most transactions have already taken place beside
some residual assets which could get sold in the
future.
On the other hand, weve also seen some degree
of consolidation happening among towercos with
BR Towers being acquired by American Tower and
T4U which was recently bought by Phoenix Tower
International. So yes, Id say there is the potential for
consolidation among towercos.
However, the mismatch in terms of currency is
affecting international players and their capital
returns. Investments made in Brazil in U.S. dollars
return cash in Reais and the exchange is obviously
hurting companies so this is a very delicate financial
phase for everyone. In spite of the current situation,
Id still say that Brazil is up for a lot of growth with
stronger companies well positioned to ride through
these volatile times.
Id also add that smaller towercos such as family
businesses and privately funded entities could
do relatively well in spite of the crisis. In fact,
they can still generate significant profits for their
shareholders no matter how small their portfolio is.
The hard place to be right now is in the middle I
am referring to those towercos purely focused on
build-to-suit that havent reached enough scale to
be relevant targets to larger towercos but whose
investors do have certain expectations in terms
of growth rates to be achieved exclusively via BTS
rather than with acquisitions.

These companies hardly have any competitive
advantage to win BTS projects over larger, more
structured organisations. So I am not sure what
kind of multiples they can expect if they were to
be acquired today. I think some of these towercos
could potentially be acquired but for the value of
their portfolios rather than their value as ongoing
businesses hence taking into consideration their
specific know-how. Or they could get sold and
become platforms for new entrants but considering
there isnt much else to acquire in Brazil, I am not
sure theyd serve as a good entry card to significantly
grow a new portfolio.
TowerXchange: Is Argentina the next big thing
for the tower industry? We know of one BTS firm
(Torresec) that got into the country in 2015, do
you think we are likely to see any other towercos
entering Argentina?
Southern Cone Investment Banking, UBS: Argentina
is definitely an interesting place which is now
presenting some positive conditions for towercos and
in general, for the investment community.
On the telecom side, the market is quite big, seizable
and with lots of competition. Claro, Telefnica and
Telecom Argentina all share similar proportions of
the market ranging between 30% and 35%, rising
and falling year to year. Nextel (Cablevision) is the
fourth largest player with over 3% of market.
The country has so far lacked significant investments
so theres lots of room for growth in virtually every

industrial segment. To date, Torresec is the only
firm operating in Argentina and there isnt any large
towerco yet.
Brazil - Estimated tower count: 54,425
The industry is lacking education Theres no

pattern, no rule, no precedent. Everything has to be
created from scratch just like in Brazil eight years
ago. I participated in shaping up the industry here
in Brazil and I can see the same history repeating
in Argentina. Theres an increased appetite for its
assets not only in terms of towers but as a potential
investment destination across multiple industries
since the change in government.
18851
On the financial side, there are extremely high

interest rates and lending is very expensive which
represent a positive factor for potential M&A as
carriers will find it more convenient to sell their
towers rather than to source alternative ways
of funding their businesses. However, there are
crucial issues related to land agreements, leases
and permitting as the country lacks any kind of
regulation over it.
The other challenging factor is that contracts cannot
be indexed with inflation which is really high. In
Brazil, MLAs do factor in inflation but the same
cannot be done in Argentina for now. As a solution,
contracts could potentially be dollarised but, even
when contracts are stipulated in U.S. dollars, this has
proven really hard to enforce.
So Id say that there is a legal framework that needs
to prove itself but this has to be done during an
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American Tower
SBA Communications
Grupo TorreSur
Telxius
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7032
4387
Remaining big 4 operators

Other operators including Nextel, Sky Brasil,
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actual negotiation rather than theoretically. Once the
opportunity presents itself, players will look into it
and sit down to negotiate terms that are beneficial
for the telecom tower industry as a whole.
In terms of timeline, I think that although the
industry is showing an interest in Argentina, no
one is ready to act just yet. There are some ongoing
conversations and well need to wait to see how they
go over the next few months.
TowerXchange: The sale and leaseback scenario
has been extremely quiet Where do you foresee
the next deals to happen (we are keeping a close
eye on the Andean States)?
Algar Telecom, Sercomtel and ON Telecom


Southern Cone Investment Banking, UBS: Theres
the potential for transactions in a number of Andean
countries and it all depends on their economic and
political stability really Carriers across all countries
need to invest in their networks and the cost of debt
is high in most countries beside Chile.
The attractiveness of any local market depends on
various factors including the competitive landscape
among carriers, prospects for network investments
and the cost of lending. As said, where lending is
expensive, sale and leaseback is usually a more
economically viable option. Legally speaking, having
XX
Four must-haves of a tower portfolio
Assets
Client base
whether contracts stipulated in Cuba can really be

enforced before making any move.
MLA
Management
a strong framework for contracts and some degree

of protection against inflation do help towercos to
invest more comfortably.
country definitely helps capital investments and

the development of a strong tele-com sector so I do
foresee some towerco activity there in the future.
Id say that Peru, Paraguay, Uruguay and Argentina

all present interesting conditions but are at very
different stages of market development.
In Uruguay, Antel is the state-owned incumbent

which does have a monopoly of landline telephony
and broadband but it does compete with Movistar
and Claro in the mobile market. Thanks to the
countrys competitive landscape, Uruguay could also
be a target for towercos.
TowerXchange: How about Paraguay and

Uruguay? Are they likely to experience any
towerco activity in the near future? Although out
of your geographical coverage, we are looking at
Cuba as well, any opinion about that?
and Southern Cone Investment Banking, UBS:
In Paraguay, there are four operators - namely
Millicoms Tigo, Telecom Argentinas Personal,
Amrica Mvils Claro and state-owned Copaco,
trading as Vox.
Tigo has recently announced its plans to invest
as much as US$2.5bn over the next few years
and usually once a carrier announces this kind
of investment plans, the others follow The
stable economic and political environment of the
Cuba is a completely different ballgame. With

just over 20% mobile penetration rate, the
telecom industry is massively behind any other
state in Central America. There are some signs
of development but the entire legal, political and
industrial framework has to be designed from
scratch.
Back in February 2015, IDT Telecom and ETECSA
closed a deal to provide long distance calls and in
September 2015, Verizon won the contract to offer
roaming services. So its clear that there are quite a
few movements and much to be done in the country
but the challenges remain when it comes to its
legal system, local financing and we all need to see
TowerXchange: If you were to pick a towerco

to invest in and could draw its top four
characteristics, what would they be (geo-spread,
tower count, management, clients, tenancy ratio,
liquidity, debt et cetera)?
Southern Cone Investment Banking, UBS: I would say
there are four key components that determine the
success of a towerco.
Portfolio: the companys portfolio needs to have a
good size, strategic locations, solid tenancies and
infrastructure available for co-location
Client base: a growing, credit-worthy clientele is key
to drive the profitability of the portfolio
MLAs: the quality of contracts, their duration,
structure and guarantees are absolutely
fundamental. An MLA needs to secure cash-flow to
the towerco and the same portfolio could give very
different returns depending on the structure of the
underlying contract
Management: as an overarching element, towercos
need to have very strong and competent expertise,
especially local one. In fact, although there are
common denominators to the industry, the specifics
of the business differ region by region and local
expertise and management is a very relevant factor
Investment opportunities
in Argentinian towers
Chairman and CEO of Argentinas first investment bank on the countrys
investibility and financial outlook
Financial advisors, bankers, securitisation experts and strategic
consultants, First Corporate Finance is riding the wave of Argentinas
newly found openness to international investors. Miguel Arrigoni, its
Chairman and CEO, has a long standing experience in the financial sector
and is now ready to launch the very first investment bank in Argentina.
Miguel Arrigoni, Chairman & CEO,

First Corporate Finance
Just over twelve months ago, Arrigoni flew to Boston to meet with
investors who asked him about the tower industry in Argentina, about
which there was then very little to say. After a year of in-depth analysis
and studies, he spoke to TowerXchange about trading conditions in the
country, its readiness to open doors to international investors and the
prospects for international investment in Argentinian towers.
Keywords: Americas Insights, Argentina, Best of TowerXchange, Build-to-Suit, Business Model, Carve
Out, Country Risk, Debt Finance, Deloitte & Touche, EY, First Capital Markets, First Corporate Finance,
Insights, Investment, Investors, Market Overview, Network Rollout, Private Equity, Regulation, Sale &
Leaseback, South America

< First Corporate Finance and its role in the Argentinian financial landscape
< Key data about the Argentinian telecom tower industry
< The carrier landscape: poor QoS in spite of high demand
< What should investors expect from the Argentinian financial market
< A look at Argentinas investibility, legal threats and currency mismatch
TowerXchange: Miguel, please introduce yourself

and your professional background.
Miguel Arrigoni, Chairman & CEO, First Corporate
Finance: I started working in finance forty years
ago, when I was just seventeen. I worked within
BDO, one of the largest audit firms in the world
and then created Arrigoni y Asociados whose
team became part of Ernst & Young in 1997 and
subsequently Deloitte & Touche. I ran the corporate
finance division for Latin America for EY and then
Deloitte until 2013, when we decided to separate
our entity and create First Corporate Finance.
The core team of First has been together for over
twenty-five years and to date we number ninety
experts, making up the largest corporate finance
office in Argentina.
Back in 2013, we decided to create our separate firm
because we were expecting certain economic and
political changes to happen and wanted to be able
to serve the market independently. To date, these
changes are indeed happening under the Macri
presidency and we are able to serve our clients in a
variety of financial fields.
First Corporate Finance is specialised in
investments, M&A, raising debt through the capital
markets in securitisation we own 80% market
share in Argentina. In fact, weve performed around
1,400 transactions without one single default which
is quite impressive by Argentinian standards!
Recently, weve created First Capital Markets, which
XX
person in the country. We are talking about 144%

SIM penetration rate and 62.7mn connections for
about 43.6mn inhabitants.
Last year, we visited some investors in Boston
and were asked questions about the passive
infrastructure business. At the time, we really had
no idea that the lack of investment in the telecom
sector was so deep.
Our studies show that to reach decent quality
of service (QoS) in Argentina, wed need about
30-40,000 towers and to date, we can count on
approximately 15,000 sites. We are talking about
20,000 new towers and an investment in the short
term of US$2bn, if not US$3bn.
Buenos Aires
is specialised in brokerage and trading, putting

us on the way to become one of the first local
investment banks in Argentina.
Our goal is to serve local and foreign investors. You
see, back in the nineties, the international financial
community was very involved in Argentina whereas
now 80% of all financial activities are performed at
a local level. We all know the history of Argentina
and its closed economy but right now, things are
changing and the market is definitely opening up to
foreign companies.
TowerXchange: When did you first start looking

at towercos and their business model?
Finance: We are very active in the infrastructure
sector as a whole. Argentina is an underdeveloped
country with plenty to do in all fields including
energy, mining, highways et cetera. And this
definitely includes telecoms and telecoms
infrastructure.
To date, there are about 1.5 mobile phones per
With 4,000 subscribers per site, we are miles away

from the U.S. standards and although we know that
many countries in the region have similar averages,
I dont think the QoS is as bad as in Argentina.
Especially if we consider that certain areas arent
underserved but literally disconnected, such as
many villages in Patagonia with 1-2,000 inhabitants.
TowerXchange: How do you foresee the
Argentinian tower market shaping up? And
when?
Finance: I think the biggest change that needs to
happen is in the way operators do business. So
far, weve been used to the traditional model of
each operator owning their towers but the sharing
concept does need to be adopted not only to
improve efficiency but also to, hopefully, respond to

new regulatory requirements.
In fact, the government is definitely pushing
for a new telecom regulation to come into play
and we hope this will mandate infrastructure
sharing. Argentina has a long way to go to become
competitive - I foresee at least ten years from now
- and only a strong push from the government can
speed things up.
From its side, the government is now assessing ways
to use state-owned real estate for telecoms. In fact,
finding locations for telecom sites has historically
been a problem for the telecom industry and the
government is now experimenting alternative ways
to find suitable spots, also by utilising public land.
TowerXchange: Do you think that Argentinian
carriers are inclined to sell their towers?
Finance: Maybe they arent inclined yet but its
the logical move they should aim for. The level of
investment by operators has been quite low over
the past few years, with the exception of perhaps
Claro.
When the new telecom regulation will come into
force, it will push for network enhancement,
improved QoS and cell site densification so carriers
will have to invest. Selling towers is a logical
solution to finance network rollout.
The QoS in Argentina is so poor that if you travel
from downtown to any centric neighbourhood in

Buenos Aires - I am talking about a five mile ride
- your call will drop at least four times. Even in
Buenos Aires, call drop rates are very high. Black
holes in the city are everywhere!
Finance: The legacy from the past governments

isnt all negative. In fact, Argentina enjoys very
low level of debts. Specifically, we are talking
about less than 15% foreign debt compared to the
national GDP.
With regards to towers, the recent spin-offs of

Telefnica and Claro might not call for pure sale
and leaseback operations but my point is that
one way or the other, operators have to improve
their service and invest in the country. The tower
business is clearly not the core activity of operators
but they do have options. They can sell, spin off or
start sharing Whatever works!
On the downside, this has corresponded to very

little or zero investment but right now, we have
the ability to easily increase the level of debt.
The question is how do we use that money. If
used wisely and spent on infrastructure projects,
Argentina has all the potential to become a leading
force in the CALA and global economic landscape.
TowerXchange: And how many towers are we

talking about? Who owns what in Argentina?
Finance: Operators say that there are as many as
15,000 towers in Argentina but weve analysed the
status of the market and believe that there are no
more than 12,000 active sites in the country. I am
referring to sites that actually work!
Interestingly enough, the top three operators have
very similar market shares (around 30-33%) and
each of them owns one third of all existing towers.
And in spite of its really bad service, charges have
been quite high from all three operators.
TowerXchange: How investible is the Argentinian
telecom industry? What are its threats?
As we all know, the past government restrained

the freedom to move capital out of the country and
this has contributed to the countrys crisis. In fact,
weve lost two third of capital resources as a result
of this imposition.
Now we just need to become normal. Technically
speaking, investors are already free to take their
money out of the country but obviously the
market is cautious. The image of Argentina has
been poisoned by nationalisations that took place
between 2008 and 2013 but many facts were
misinterpreted.
In fact, the Argentinian government did pay Repsol
US$5bn to compensate for the expropriation and,
talking about our national airline, Aerolineas was a
disaster under the management of Grupo Marsans,
with as many as 80% of flights being cancelled on
a daily basis. So the government takeover wasnt a
negative move, if you ask me.
XX
I think it will take the whole year for international

companies to reassess the status of things here in
Argentina, before making any more investments.
Investments are more likely in 2017. But with
regards to towercos, it could be that some players
- also in light of the entrance of Innovattel - look
at the industry and decide to go for some smaller
investments. This could also be pushed by a very
good local offer in terms of labour and suppliers.
TowerXchange: From a legal standpoint, many
fear it might be difficult to enforce contracts.
Whats your take?
I believe towers can fall under the REIT (Real Estate Investment Trust) model
and the securitisation legislation does help to guarantee those investments.
Additionally, foreign entities investing in a trust such as a REIT arent
taxable according to local law, which helps considering our levels of taxation
can be quite high
taxation can be quite high.

TowerXchange: And with regards to currency,
how would you advise international companies
looking at investing in the country?

Finance: The securitisation law was created
back in 1996 (Trust Law N. 24,441) and is quite
sophisticated. In fact, its an exact replica of the U.S.
securitisation law. Its a strong weapon that has
been used a lot in the country; specifically, 90% of
the financing we do is developed using it.

Finance: There are several financial tools that
protect investors from inflation and currency
fluctuation. There are some new rules that allow
indexing and inflation adjustments for example.
And if you bring US$ into the country, you could
purchase a swap insurance here in Argentina to
protect your investment.
I believe towers can fall under the REIT (Real Estate

Investment Trust) model and the securitisation
legislation does help to guarantee those
investments. Additionally, foreign entities investing
in a trust such as a REIT arent taxable according
to local law, which helps considering our levels of
Additionally, contracts now can be stipulated in US$

but Id also like to remind international investors
that local banks hold very high level of liquidity to
leverage investments made in Argentinian pesos.
There is quite a lot of local capital that is just
waiting to be invested in the country!
Dont get me wrong; Argentina has a negative

track record in many areas but also a very bad
brand whose image is possibly worse than reality.
Its reputation needs to be restored to boost the
confidence of investors and the international
community as a whole.
TowerXchange: Do you have any advice

for towercos now assessing a move into
Argentina?
Miguel Arrigoni, Chairman & CEO, First

Corporate Finance: I think Argentina represents a
wonderful opportunity for towercos and I believe
it all depends on timing. My advice would be
to start studying the market sooner rather than
later, especially since I believe 2017 will be a
great year for various local industries, including
telecommunications.
Id also like to remind foreign investors that
Argentina has a long history of highly productive
and successful overseas businesses. The many
national crises did erase much of its memory but
now Argentinians are ready to embrace progress
and this is an unmistakable signal for the telecom
industry to start investing to boost its presence
and level of service in the country
Innovattel/Torresec on Cuba
and Argentina
The Puerto Rico based towerco on its entrepreneurial venture into new markets
Jose Arana, VP of Operations and Fausto Leon, Director of

Sales,Innovattel/Torresec with a guest at Informtica 2016
Over the past year, Innovattel/

Torresec has announced its
entrance in the Argentinian
market. Since then, the towerco
has participated in a telecom fair
in Cuba as one of the very few
U.S. companies invited to join.
In this interview, TowerXchange
catches up with its COO, Juan
Cueria, for an update on the
status of things in Argentina
and to find out the real potential
of the much discussed Cuban
telecom market.
Keywords: Americas Insights, Argentina, Build-to-Suit, Business Model, C-Level Perspectives,

Caribbean, Central America, Country Risk, Cuba, Ecuador, Innovattel, Insights, Leasing & Permitting,
Market Entry, Market Overview, New License, New Market Entrant, Peru, Puerto Rico, Regulation,
South America, Tax, Torresec

< Views on the path to an open telecom market in Cuba
< What challenges may lie ahead when doing business in Cuba?
< How are things going for Innovattel/Torresec in Argentina?
TowerXchange: Please reintroduce Innovattel/

Torresec for any readers unfamiliar with your
company.
Juan Cueria, VP & COO, Innovattel/Torresec: Innovattel/
Torresec is a Puerto Rico based tower company active in
Ecuador, Peru, Colombia, Puerto Rico and Argentina.
TowerXchange: Tell us about your recent experience
in Cuba.
Juan Cueria, VP & COO, Innovattel/Torresec: Jose
Arana,our VP of Operation and Fausto Leon, our Sales
Director have recently participated in Informtica
2016, the IT and telecom forum held in Havana,
Cuba. Innovattel/Torresec was one of a few U.S. firms
approved to exhibit at the event and we were able to
showcase our business model, meet several government
officials and various executives from the local telecom
industry.
TowerXchange: What do you think about the
potential of the Cuban market? Is it likely to open to
carriers and towercos? And when?
Juan Cueria, VP & COO, Innovattel/Torresec: There is
a lot to be developed in the Cuban telecom sector and
the tower industry will be the next to follow. Cuba is
entering a crucial phase with many changes happening
at all levels. And at this stage, the pace of things still
suggests that it will take some time for the Government
to give access to new carriers and, as a consequence, to
towercos.
< Permitting, regulatory conditions and contracts in Argentina

Our view is that it will take about three to five years for
XX
TowerXchange: Has the Government expressed

any interest in awarding spectrum to foreign
companies and opening up the mobile industry?
Juan Cueria, VP & COO, Innovattel/Torresec: We
dont think that the Cuban Government is interested
in awarding spectrum to international operators
for the time being. This is a crucial step that will
completely reshape the telecom industry and we
believe it will require some time to materialise.
TowerXchange: Do you know how many towers
are in the country right now? Are they suitable
for sharing or how many could be needed by a
new entrant?
Juan Cueria, VP & COO, Innovattel/Torresec: Our
first studies indicate that there are approximately
500-700 structures installed in the island of Cuba.
We are talking about towers that are shared by
radio companies, TV stations and ETECSA, which to
date is the only operator active in the country.
These sites are currently being shared so they could
potentially be used by multiple telecom tenants.
However, we dont even know how many additional
sites are needed as there arent any actual plans
for additional spectrum to be assigned or anything
alike.
TowerXchange: If you were to enter Cuba today,
what would be the top three challenges to solve
and deal with?
Juan Cueria, VP & COO, Innovattel/Torresec: To

date, accessing the Cuban telecom market is a very
hard task. There arent well defined commercial
agreements with the U.S. as of now and local
telecom regulations as well as property laws do
need to be amended and modernised. Having
said that, these are changes that tend to happen
relatively quickly once things pick up momentum.
Some key challenges of doing business in Cuba
under present conditions relate to how to register
a corporation and how to complete all the required
paperwork, how to import steel structures and
other construction materials as well as how to
ensure security at sites.
TowerXchange: How are you doing in
Argentina?
Juan Cueria, VP & COO, Innovattel/Torresec: We
are making progresses every day. Construction
has begun in several locations and weve been
assigned search rings in many different areas of
the country. We are now working very closely
with municipalities and other entities across each
territory to ensure our sites are deployed timely.
TowerXchange: Do you foresee carriers
divesting towers anytime soon in Argentina?
Juan Cueria, VP & COO, Innovattel/Torresec: This
is a crucial discussion in Argentina but it does
present considerable tax implications for the seller.
At this time, this is definitely a hurdle for operators
in their decision making process.
any real change to happen and for any new carrier

to enter and start operating in Cuba.
In Argentina, more than 80% of

existing sites dont have permits
TowerXchange: How are you dealing with issues

such as permitting and land management in
Argentina? How challenging is it to obtain
permits and negotiate with landlords?
Juan Cueria, VP & COO, Innovattel/Torresec: In
Argentina, more than 80% of existing sites dont
have permits. The new government is working
on a telecom regulation that should considerably
improve things in the very near future. However,
today we are building on a pre-feasibility basis.
These are very challenging conditions and we are
moving ahead with precautions and trying to avoid
very high risks but dealing with landlords is no
harder than in any other country where we operate.
TowerXchange: In terms of currency and
inflation, how are contracts being negotiated?
Juan Cueria, VP & COO, Innovattel/Torresec:
Currently, we are negotiating contracts in
Argentinian pesos with adjustment factors to be
calculated twice a year
IFC on the Argentinian

Improved investibility of the countrys telecom sector in light of the new Presidency
IFCs Head of TMT for Latin America,
Guillermo Mulville is based in Buenos Aires
and has an in-depth knowledge of Argentinas
dynamics. Much has changed since President
Macri came into office and his attempts to
re-open doors to international investors are
being positively perceived. However, the
country still has to prove itself and in this
analysis, Guillermo shares with TowerXchange
readers insights into its telecom sector, MNOs
investment plans and potential for the creation
of an independent tower market.
Keywords: 3G ,4G, ARPU, Americas Insights, Argentina, Build-to-Suit, Capex, Carve Out, Country
Risk, Debt Finance, IFC, Infrastructure Sharing, Insights, Investment, MLA, Market Forecasts, Market
Overview, Network Rollout, New License, Opex Reduction, Private Equity, QoS, Regulation, Risk, Sale &
Leaseback, South America, Tax

< How Argentina is changing under the new Presidency
< Investments and divestments ahead for MNOs
< The new telecom regulator and its key role in promoting infrastructure sharing
< The growth potential of the local telecom sector
< What is in it for towercos? Assessing risks and opportunities
Argentina has the fourth largest population in

Latin America and is the third largest economy
after Brazil and Mexico, representing around 10%
of Latin Americas GDP. The local mobile telecom
sector accounts for less than 4% of the countrys
GDP, indicating that there is strong growth potential.
The new Government is actively working to improve
the business environment and to re-build external
relations. In just a few months, President Macris
administration has liberalised the foreign exchange
market, devalued an appreciated currency, and
reached an agreement on the long-standing dispute
with sovereign debt hold-outs, opening up the
international capital markets to the corporate
sector.
However, resumed economic growth is only
expected for the second half of the year. Inflation
remains stubbornly high and the Government
is taking a gradualist approach to addressing
the huge fiscal deficit it inherited from the
prior administration. In the telecoms sector, the
Government has appointed very professional and
committed teams at the ministerial and regulatory
levels in order to tackle the challenges ahead.
At IFC we are very bullish on the country and its
telecoms sector. The recent spectrum auctions,
added to the new political and economic
environment, provide the ingredients for a new
phase for the sector following a long period of
underinvestment. Approximately US$9bn of
investments are now expected by MNOs in the next
five years.
XX
Carriers - whats changing and why?

The new authorities took the immediate decision
to merge the sectors two regulators, AFSCA and
AFTIC, into the National Entity for Communications
(ENACOM). And last month, ENACOM received
congressional approval to begin a reform of the
Digital Argentina Law which was passed in 2014.
The new context is expected to promote convergence
and competition, and eliminate discretionality.
MNOs had been starved for spectrum for many
years. Economic mismanagement under the
Kirchners affected investments, resulting in serious
QoS issues as MNOs were ill-equipped to deal with
increased traffic.
The allocation of 4G spectrum in 2015 was wellreceived by MNOs, which ended up paying a total
of US$2.2bn, 13% above the base price. While
capacity and QoS are improving, the new phase
of infrastructure deployment has only recently
commenced. Mobile broadband investments will
be key. According to GSMA, current 3G and 4G
subscriber penetration will increase from 37% to
56% by 2020. This context provides for a favorable
outlook for infrastructure sharing business models.
Argentinas mobile market has a structure which
should also favor infrastructure sharing. SIM
penetration is around 140%, with 90% of unique
subscriber penetration and over 28mn mobile
broadband connections. Blended ARPUs, even after
the recent devaluation, stand above US$7. Market
share is evenly distributed between the three main
35%
1,500-2,000
new sites needed
per year 2016-2018
average
Income
tax rate
21%
1:
BTS firm
active in
Argentina
(Innovattel)
US$7+
VAT
1%
ARPU
32-33%:
the market
share of each
of the three
top MNOs
$$$$
the new
expected combined
MNOs investments
regulator
ENACOM
resulting
from the
merge of
AFSCA
Wealth and
tax
AFTIC
operators: Claro (Amrica Mvil) with 33% of market

share, Movistar (Telefnica) with 32% and Personal
(Telecom) with 32%. Nextel, recently bought by
Grupo Clarins Cablevision, has a 3% market share
but is expected to become more prominent once
it invests beyond iDEN. But for this it will require
additional spectrum.
Are towercos likely to enter Argentina anytime
soon?
Argentina has over 16,000 cellular towers, the
third-largest tower count in the region after Brazil
and Mexico. However, practically all towers are
MNO-owned. Historically, there have been many
140%
SIM penetration
US$9bn:
in the next five years
$$$$
16,000
existing towers
in Argentina
US$2.2bn:
Raised during the 2014
4G spectrum auction
inhibitors to the development of an independent

tower model. These included long periods of
macro instability, limited long term financing,
high inflation coupled with inadequate inflation
adjustment indices, regulatory uncertainty
and an interventionist government policy and
high levels of perceived corruption (Argentina
ranks 107th among 168 countries ranked by
Transparency International). In particular,
foreign exchange restrictions meant that MNOs
accumulated substantial Peso-liquidity, which
in a high inflationary environment with FX
constraints prompted them prioritise capex
over opex.Local MNOs, previously skeptical of
infrastructuresharing, now seem open to embracing
In our view, the outlook has changed completely

in just a few months, but this will not imply an
avalanche of new independent tower operators until
the new landscape is assimilated. So far, there have
only been few announcements of signed master
lease agreements, Innovattel/Torresec being the first
independent tower operator to announce that they
have secured BTS contracts with two of the leading
wireless operators in Argentina, for which they have
raised financing from Albright Capital Management.
Interestingly, the Ministry of Telecommunications
and ENACOM are working with the city of Buenos
Aires to make available public building rooftops
for mobile antennas, helping improve capacity in
one of the highest populated areas of the country.
Furthermore, they are in negotiations with other
municipalities to improve the tower permitting
process.
The development of the sector will also depend
on the continued improvement in the overall
business environment. High inflation rates and still
unreliable indices imply that leases will likely be
US$-denominated over the medium term, which is of
course beneficial for towercos but which constitutes
currency mismatch risks that MNOs typically
want to avoid. Also, while restrictions on future
repatriation of funds has in theory been addressed,

banks are wary of such risks and still require
political risk mitigation, such as that provided by
multilateral financiers like IFC. Taxation is another
issue which may delay a faster development of
infrastructure sharing. An income tax rate of
35% is particularly hefty in Sale-and-Leaseback
transactions, in which the towers have been carried
in MNO books at cost in an accounting context of
no adjustment for inflation. Also, operational taxes,
such as 21% VAT for any lease operation, a wealth
tax of 1% on the book value of assets, added to gross
income tax, corporate income tax and various stamp
taxes, are obstacles to faster sector growth.
Finally, while we see strong interest in Argentina
from many middle market towercos, the market is
watching closely the decisions of Amrica Mvil and
Telefnica of creating their own infra-cos.
Country risk vs opportunity
Country risk is evidently high on investors
minds. However, having been an outcast from the
international markets for such a long time does
provide interesting investment opportunities now
that the Government is undertaking market friendly
policies through credible and highly committed
technical teams.
Agreement with the debt holdouts [Note of author:
this is expected mid-April, so we assume already
achieved by the time this article is published] was
arguably the last impediment in terms of allowing
Argentina to graduate from an exotic market to
Local MNOs, previously skeptical of

infrastructure sharing, now seem
open to embracing the model. MNOs
face accelerated build-out needs, for
which they need built-to-suit partners.
Without considering Nextel, we
estimate that the three large MNOs
will pursue a combined 1,500-2,000
new sites per year in the next couple
of years alone
themodel. MNOs face accelerated build-out

needs,for which they need built-to-suit partners.
Withoutconsidering Nextel, we estimate that the
three largeMNOs will pursue a combined 1,5002,000 new sitesper year in the next couple of years
alone.
an emerging market once again. Presently, we

see a short window of opportunity in which equity
and debt investors can expect to obtain high riskadjusted returns.
High inflation, high fiscal deficit and the perceived

risk of repatriating funds are still worries for
international investors but in our mind these risks
are offset by the sectorial opportunities arising after
a decade of underinvesting.
At IFC we have a long history of investing in
Argentina. Our current portfolio amounts to over
US$1bn, while we have mobilised additional third
party funds in excess of US$550mn. The bulk of such
portfolio is in infrastructure projects, with financial
markets, agribusiness and technology accounting for
the balance
XX
Virgin towerco markets: Bolivia

Are towercos going to enter Bolivia in light of its complicated past?
Build to suit (BTS) tower companies tend to be
attracted by densification plans, and the launch
of 4G LTE usually entails substantial investments
by carriers to enhance their network capacity.
However, in spite of all three active operators
having commenced their 4G rollout across Bolivia,
the country has so far failed to attract independent
towercos, possibly as a result of a history of
nationalisation of key international organisations.
In this editorial, TowerXchange takes a look
at the countrys mobile market, its promising
growth pattern as well as its troubles to attract
international towercos.
Keywords: 4G, Americas, Bolivia, Build-to-Suit,

Editorial, Entel, LTE, Market Entry, Market
Overview, Millicom, Nuevatel PCS, QoS, South
America, Tigo, TowerXchange Research, Trilogy
By Arianna Neri, Head of Americas, TowerXchange
International Partners, Universal Access, Viva

< The challenges of doing business in Bolivia
< Improved economic conditions trigger international investments
< The mobile sector: investments and expansion plans
< Could BTS towercos enter Bolivia?
Back in May 2008 Bolivian President Evo Morales

decided to re-nationalise the Empresa Nacional
de Telecomunicaciones (Entel), after months of
disputes with its majority shareholder Telecom
Italia. The move was in line with Morales plans to
nationalise key sectors including telecoms, gas and
power. Negotiations with Telecom Italia became
tense when Morales demanded a payment from
the Italian telco of US$60mn to cover unpaid taxes
and fines for failing to provide good service in rural
areas and complying with coverage obligations.
Telecom Italia brought the case before the World
Banks International Centre for Settlement of
Investment Disputes (ICSID) in spite of the Bolivian
government threatening to withdraw from it due
its perception of ICSID often taking the side of
international companies rather than governments.
The controversy settled a few months later when
the Bolivian government agreed to pay US$100mn
to Telecom Italia and the parties signed an
agreement to cease any further demands.
Telecom Italia isnt the only international
organisation that Morales Administration decided
to nationalise. Over the following couple of years,
Morales celebrated International Workers Day
- May 1 - by nationalising key companies in the
hands of international investors such as Air BP, Pan
American Energy, ELFEC, Rurelec and GDF Suezs
subsidiary Corani.
Back in 2013, the President did threaten to
nationalise the other two mobile network operators
active in Bolivia; Trilogys Viva and Millicoms Tigo.

Specifically, Morales accused the two companies of
avoiding cooperation with criminal investigations
by providing useful information in a timely
manner when requested by the police. While
insisting that the operators were obliged to help
the authorities, Morales never mentioned specific
cases or referred to actual investigations. To date,
both Viva and Tigo are active players in the mobile
market.
Positive signs from the Bolivian economy
In spite of its natural resource wealth, Bolivia
is still to date Latin Americas poorest country.
However, its per capita GDP has risen by 25% since
2005 and is expected to grow by 4.5% in 2016 (vs
3.7% regional average).
In July 2015, Fitch upgraded its outlook on Bolivia
to BB/Stable thanks to its improvements to the
sustainability of its hydrocarbons production
and its overall regulatory framework while the
countrys inflation has been consistently below
regional average (2016E: 4.9% vs 7.3% regional
average).
Morales nationalisation strategy did limit the flow
of international investments but since 2011, such
investments have more than doubled (US$0.9bn
in 2011 vs US$2.1bn in 2014) and, according to
Fitch, the risks of nationalisation have considerably
eased since 2013. Its also important to note that the
government has paid US$690mn in compensation
to expropriated international companies.
Bolivias fast facts
Economy
Population
10.8mn (Q4 2015)
Fitch rating
Poverty headcount BB/Stable

ratio 39.3% (2014) (July 2015)
Inflation 4.9% (2016E)
Mobile sector
98%
SIM penetration
(Q4 2015)
Connections 106mn
(Q4 2015)
$$$$$$$
$$$$$$$
$$$$$$$
Foreign investments
US$2.1bn (2014)
Carriers
23.1%
Entel
49.6%
30%
Tigo
Viva
Sources: TowerXchange, Economist Intelligence Unit 2015, Fitch Country Report, GSMA Intelligence, the World Bank
Although still the poorest country in the region,

according to the World Bank the percentage of
people living below the poverty line decreased
from 51.3% in 2009 to 39.3% in 2014.
No country for independent towercos?
Since its nationalisation, Entel has focused
on granting universal access to the Bolivian
population under its Territory with Total
Coverage initiative which has been pushing to

enhance the role of mobile networks rather than
fixed lines.
The lack of commitment to technological
innovation has resulted in the level of service being
considerably behind regional standards, network
capacity being insufficient and SIM penetration
being the lowest in the region at 98% (source: GSMA
Intelligence).
XX
Economy
Ease of doing
business
rank
Starting a
business
Dealing with
construction
permits
Getting
electricity
Registering
property
Getting
credit
Protecting
minority
investors
Paying
taxes
Trading
across
borders
Enforcing
contracts
Resolving
insolvency
Bolivia
157
178
150
101
143
126
144
189
124
136
92
Source: World Bank Group - Doing business report
The overall inadequacy of the Bolivian network

has recently resulted in fines against the three
operators. In fact, this past February, the national
regulator, Autoridad de Regulacin y Fiscalizacin
de Telecomunicaciones y Transportes (ATT), has
sanctioned each of them US$4.5mn for bad service
and call drops during the year 2015.
As a measure to improve its offering, dominant
player Entel has recently announced a US$1bn
five-year investment plan which will focus mainly
on enhancing the quality of mobile infrastructure
and ensuring coverage of rural communities. Tigo
invested US$130mn to expand its infrastructure
across the country and Viva committed to US$80mn
in 2015.
The emphasis on mobile infrastructure would
usually have attracted BTS-focused towercos
to enter Bolivia to support mobile network
operators in their coverage extension and network
densification plans. It should also be noted that one
of Bolivias operators towers have been offered for
sale on several occasions in recent years. However,
there are still no international towercos in Bolivia,
perhaps because doing business in the country isnt
easy.
In fact, Bolivia ranks 157th (out of 189) in the

World Banks ease to do business chart and it has
so far failed to leverage its richness in natural
resources, especially since nationalising gas and
power companies. To date, the countrys GDP stands
at US$6,500 or 156th out of 230 worldwide, which
places Bolivia among the poorest countries in the
American continent.
The ease to do business chart reports aspects such
as starting a business and dealing with construction
permits - which can take more than 200 days to
expedite - for which Bolivia ranks in 178th and
150th place. These positions could well scare off BTS
firms looking at doing business in the country, while
the ability to enforce contracts isnt one of Bolivias
strength either.
The threat of nationalisation combined with a less
than favourable business environment, especially
in the construction sector, has so far hindered the
development of the telecom sector and the entrance
of independent towercos, although TowerXchange
still feels that that the Bolivian market could present
interesting opportunities for towercos seeking to
acquire assets, especially since the launch of 4G
LTE.
Bolivian telecom sector still poised for growth

The Bolivian telecom market is indeed growing fast
and generated revenues of up to US$1bn in 2014
which could rise to US$1.5bn by 2019 according to a
2015 report by Pyramid Research.
As of December 2015, Bolivia had 10.2mn
subscribers out of approximately 10.7mninhabitants
with Entel leading the market share(46.9%),
followed by Tigo (30%) and Viva (23.1%). Entel
started offering 4G LTE services back in April
2014 and was soon joined by Tigo (July 2014). Viva
announced its 4G LTE launch in July 2015.
With all three MNOs now rolling out 4G LTE
across the country, cell site densification is a top
priority and the entrance of BTS firms in Bolivia
could positively impact the growth and overall
modernisation of the local telecom sector.
Beyond the dynamics of the telecom industry and its
growth projections and in spite of Fitchs improved
outlook on Bolivia, international tower companies
might still seek a certain degree of reassurance
before committing to any level of investment in the
country. And that might be tricky to obtain
American countries. Guyana ranks the highest with

96% pre-paid subscribers.
Share Square: Bolivia

Bolivias national subscriber base grew significantly between
2007 and 2013, almost tripling in size from 3.6mn subscribers
to 9.8mn in the six years
Passive
The 4G market in Bolivia is expanding rapidly due to a trend of

increasing smartphone and tablet usage across the country
In recent years operators have invested heavily in lengthening
the countrys fibre infrastructure as well as improving Bolivias
connectivity with international submarine cables. Rural
coverage is also expected to significantly benefit from the
deployment of Bolivias first telecommunications satellite
The market is heavily monitored by the Bolivian government
who also have substantial market influence as the majority
shareholder of the largest operator
None
Current Sharing
Active
3 MNOs: Entel, Tigo and Viva
Bolivia
No towercos currently operate within Bolivia. A lack of market

stability is thought to have discouraged towercos from entering
the market
3G
4G


by MNO to towercos

23.1%
Entel
46.9%
30%
Tigo (Millicom)
Viva (Trilogy)

entrant towercos

Bolivia had an estimated population of 10.8mn
people and 10.4mn mobile subscriptions at the
end of 20151, giving a mobile penetration of 96%
- the third lowest level of penetration in South
America ahead of only Guyana (84%) and Ecuador
(80%). Around 90% of subscribers have a pre-paid
account, which ranks 2nd highest amongst the South
There are three mobile network operators (MNOs)

serving the Bolivian market (See figure 1). The largest
operator, Entel, serves 4.9mn subscribers which
equates to a market share of 46.9%. The second
largest operator by subscriber numbers is Tigo
(Millicom) which has 3.1mn subscribers (30.0%) and
VIVA, the smallest of the three operators, serves the
remaining 2.4mn (23.1%) subscribers.
Bolivia has low mobile penetration for the South
American region when compared with the highest
performing countries of Suriname (175%), Uruguay
(159%), Chile (146%) and Argentina (144%). However,
Bolivias national subscriber base grew significantly
between 2007 and 2013, almost tripling in size from
3.6mn subscribers to 9.8mn in the six years. Since
2013 subscriber growth appears to have stagnated
somewhat, only increasing by 0.6mn in the two
years to the end of 2015. Forecasts predict that the
subscriber base will reach 13.2mn by 2020.
Entel first launched 3G services in Bolivia in Q3 2008
and enjoyed monopoly status for two years until
Tigo joined the market, shortly followed by Viva in
the first half of 2011. The uptake of 3G subscribers in
Bolivia was initially slow however the market quickly
developed and the number of new subscribers per
quarter reached 244,000 at its highest point in 2013.
This number has since fallen, averaging 133,000 new
subscribers per quarter in 2015 and this number is
expected to remain relatively constant up to 2020.
XX
Bolivias first telecommunications satellite was

launched in December 2013 and came online in
April 2014 with the purpose of providing internet
and mobile connections to Bolivians in areas not
currently covered by the operators infrastructure.
Rollout of 4G
Entel first launched 4G services in Q4 2012 and was
the sole provider within the market until Q4 2013
when the regulator, ATT (Autoridad de Regulacin y
Fiscalizacin de Telecomunicaciones y Transportes),
assigned 4G LTE spectrum in the 700MHz band to
Tigo and Entel following successful bids at auction.
The third operator, Viva, chose not to participate in
the auction.
Entel first offered 4G services in the cities of La
Paz, El Alto, Santa Cruz and Cochabamba in April
2014. The market responded well to the service
offering and reports stated that Entel signed up to
2,000 subscribers in its first week of operation. Tigo
quickly followed Entel to the 4G market launching
its services in July 2014, citing that demand was
clearly present as demonstrated by a trend of
increasing smartphone and tablet usage across
the country. Viva launched its 4G services exactly
one year after Tigo in the 1700MHz and 2100MHz
frequency bands.
Entel leads the way in terms of market share in
4G with 0.37mn (68.3%) of the total 0.55mn 4G
subscribers. Tigo holds 24.8% market share with
0.14mn subscribers and the smallest 4G provider,
Viva, serves 0.04mn subscribers, a market share of
6.9%.
As the 4G market matures and coverage begins to

reach the more rural areas, operators are investing
in physical infrastructure, in order to improve their
service offering to subscribers. In the last two years
Tigo and Entel have invested heavily in lengthening
the countrys fibre infrastructure as well as
improving Bolivias connectivity with international
submarine cables.
MNOs activity
Entel (Empresa Nacional de Telecomunicaciones),
Bolivias largest mobile operator by market share
was state owned until 1995 when it was acquired by
Telecom Italia (TIM). Entel operated as a subsidiary
of TIM for thirteen years until the Bolivian President
decided to re-nationalise a number of the countrys
energy services and the government reclaimed the
operator through a contentious supreme decree.
Entel has posted a positive financial performance in
Q1 2016 and has recently announced a significant
investment plan to increase the countrys fibre-optic
backbone by 4,000km.
Tigo (Millicom) first entered the Bolivian
telecommunications market in 1991 under its
previous guise of Telecel which launched Bolivias
first analogue cellular network. In 2006, with a
market share of 23%, the company rebranded to use
the more recognised Tigo name, whilst remaining a
subsidiary of Luxembourg-based Millicom.
Viva (Trilogy) is the market name for the mobile
operator NuevaTel PCS de Bolivia which was
acquired by U.S. holding company Trilogy
International Partners in 2006. Following an
investment of US$100mn, which included the

deployment of 200 new antennas, Viva reached 75%
coverage by geographical territory in 2012.
Regulation and the tower sharing market
Telecommunications in Bolivia was regulated by
SITTEL (Superintendencia de Telecomunicaciones),
until 2009 when the Bolivian government
decided to consolidate the regulatory authorities
of three sectors: transportation, post and
telecommunications. The resulting regulator is
ATT (Autoridad de Regulacin y Fiscalizacin de
Telecomunicaciones y Transportes).
ATT regulates the entire telecommunications
industry, including radio spectrum, merger
and acquisition activity, coverage and service
agreements and price competition. A major initiative
of the ATT in recent years has been to encourage
all subscribers to reregister their phones with their
operators in order to switch off unregistered devices,
in an attempt to decrease the amount of mobile
phone related crime in the country - which has been
on the rise.
No towercos currently operate within Bolivia,
eventhough market developments, including the
three operators rolling out 4G and prioritising cell
site densification, could favour the entrance of
infrastructure investors.
Reports suggest that a lack of market stability is a
significant factor driving the lack of towercos within
the Bolivian market. In 2008, following months of
disputes, the Bolivian president Evo Morales decided
to re-nationalise the countrys largest operator Entel,

purchasing a 50.9% stake from majority shareholder
TIM. This move coincided with the re-nationalisation
of major oil and gas companies through a mixture of
decrees and acquisition, as part of an initiative by the
president to reclaim the countries basic services.
In 2013, Morales is reported to have threatened Tigo
and Viva with re-nationalisation following claims that
the operators were not communicating with police in
a timely manner during investigations surrounding
the countries rising mobile phone related crime.
Government interference is likely to have influenced
the poor ranking Bolivia received from the World
Bank in its 2015 ease of doing business indicator
Bolivia was given a ranking of 157th out of 189
countries.
increase the service offerings available to the

10.4mn mobile subscribers.
The market remains heavily monitored by the
Bolivian government who also have substantial
market influence as the majority shareholder of
the largest operator. Reports suggest that potential
towercos are dubious with regard to government
interference and the volatility displayed during the
re-nationalisation of Entel, and are only likely to
enter the market when a more stable environment
is evident
1. GSMA
Despite the increasing favourability of the market, it

is reported that towercos require further convincing
before seeking to acquire infrastructure within the
market.
Conclusions
With the 8th largest population in South America
(10.8mn people) and the third lowest mobile
penetration (96%), there is considerable room for
subscriber growth in the Bolivian mobile market.
4G services have been launched and consumer
appetite is growing rapidly with all three operators
now providing a service in the country. Major
advancements in fibre infrastructure as well as rural
coverage in the form of satellite deployment have
been witnessed and are expected to significantly
Guest columnist Ed Siegle

Ed Siegle is a Principal Consultant in Mott

MacDonalds Technology & Communications
Division. He has 20 years of experience
as a consultant, primarily focused on the
telecommunications industry, working for
operators, vendors, investors, regulators and
public sector organisations. His particular
expertise lies in market analysis, commercial
due diligence, product and market strategy
development, demand forecasting and business
case production.
In the course of his career he has worked for

clients in the UK, Europe, the USA, Africa and
Latin America. He has spent over 2 years living
and working in Latin America, including 18
months in Brazil where he helped establish
new offices for two consultancies. Over the past
3 years he has been part of a Mott MacDonald
team commissioned to execute a series of
advisory projects for towercos looking to invest in
developing markets
XX
Is Telesites a force to be
reckon with?
My views on the Mexican towerco and its growth potential
By Arianna Neri, Head of Americas, TowerXchange
Telesites isnt just a new entity in the Mexican tower

market, but a towerco evolved from the genes of one of
the strongest mobile network operators in the Central
and South American telecom landscape. A towerco
which started trading with close to 11,000 towers in
the unique Mexican tower market. Analysts have been
underwhelmed with Telesites, and the companys IPO
was followed by a swift devaluation. However, closer
analysis reveals a good reason for the volume of post IPO
sales, while Telesites build volume has been impressive.
The key challenge remains achieving the companys
bullish forecast of a tenancy ratio of 1.5 by 2020.
Keywords: AT&T, American Tower, Americas, Amrica Mvil, Build-to-Suit, Carve Out, Co-locations,
Editorial, IFETEL, Investment, MLA, Mexico, Regulation, Telefnica, Telesites, Tenancy Ratios, Towerco,
UBS, Valuation

< Expectations versus reality: Telesites growth pattern to date
< Is 1.5x a realistic tenancy ratio by 2020?
< How many towers are needed in Mexico by 2018?
< Towerco KPIs applied to Telesites: papers, assets, permits, rates and growth
Necessity is the mother of invention and Carlos Slim

had to create Telesites to address the regulators
concerns about the dominant position of Amrica
Mvil in the Mexican telecom market. The story is
well known to everyone but since its debut on the
Mexican Stock Exchange, back in December 2015,
Telesites shares have failed to impress and many
jumped to the conclusion that the towerco was
nothing but a financial exercise and a mechanism
for the Mexican giant to keep operating and avoid
IFETELs further restrictions.
The companys trading debut was met with
lukewarm reactions from the market and many
analysts recommended selling as early as two days
after its IPO on 21 December 2015. Another factor
that drove the initial sale of shares was the initial
assignment of Telesites shares to Amrica Mvils
shareholders as a condition of the spin-off. A fact
that forced many investors to sell their shares to
meet composition requirements for their portfolios.
Many investors sold their shares within one month
of trading to re-balance their positions and drove
the initial valuation of the stock down. In fact,
Telesites started trading at MX$12.9 and is now
stable in the 10s, with some analysts forecasting
further drops within this year.
Telesites performance in the stock market received
plenty of media coverage due to its link to Carlos
Slim, the second richest man in the world with an
estimated net worth of US$77.1bn, and the relative
speed at which the spin-off came to life, mostly due
to the pressure of the Mexican regulator.
Organic growth and tenancy ratio: expectations

vs reality
Telesites tower count
15,000
But if we look beyond the dynamics of the financial

market, how is Telesites doing as a towerco
in Mexico? Did Mexico need it and if so, is the
company likely to meet the goals it set for itself?
Telesites originally forecasted organic growth
plans ofas many as 1,000 new towers per year,
exclusivelyfor its anchor tenant Amrica Mvil.
A planned growth considerably higher than the
expectation of any other listed towerco in the
CALA market. Along with its organic growth plans,
Telesites shared tenancy ratio goals of 1.5x by 2020.
In terms of organic growth, in 2015 the company
has been overachieving and grew its portfolio from
10,865 (Q1 2015) to 12,874 (Q4 2015), adding 2,009
new sites in less than twelve months of operations.
Its original plan to reach 18,000 new sites by
2020 seems more achievable now than when first
announced.
If Telesites was to maintain this growth pattern,
we would see its tower count surpassing 20,000 by
2018. However, beside Amrica Mvils expansion
plans, I am not sure the other carriers are likely to
greatly contribute to the towercos growth.
On one hand Telefnica doesnt have a history of
high investments in Mexico and isnt likely to bring
seizable business to Telesites, particularly given
that Telefnica is currently creating its own carveout towerco, Telxius. And the remaining player in
12,555
12,874
12,000
10,865
9,000
Q1 2015
Q2 2015
Q3 2015
Q4 2015
the market, AT&T, is reportedly reducing its new

build plans having audited assets acquired from
Nextel and Iusacell.
by 2018 but this number could be reduced since

sites acquired from Nextel have greater potential of
utilisation than originally thought.
In 2015 American Tower renewed a 14-year global

MLA with AT&T which covers the U.S. as well as
Mexico and referred to expectations for doubledigit organic growth in the country, which hints
that the alliance between AT&T and American
Tower could include the carriers new sites in
Mexico.
The governments planned shared 4G network (Red

Compartida) could further dampen the demand
for new sites but for now the project is still up
in the air. In fact, the bidding process has been
postponed to give more time to the Secretariat of
Communications and Transport (SCT) to deal with
the requests for clarification submitted by the
contestants. In order to function, its been estimated
that the Red Compartida will require around 12,000
new sites at a cost of US$7bn. But to date, many
seem sceptical with regards to the likelihood of this
As said, AT&T isnt likely to build aggressively in

Mexico. In fact, they originally forecast around
3,200 new sites (between swaps and new builds)
XX
(x)
1.5
22,000
20,000
1.4
18,000
1.3
16,000
1.2
14,000
1.1
12,000
2015e
2016e
Total towers
2017e
Tenants
mega-project ever reaching scale.

In terms of tenancy ratio, Telesites outlook to
bring it up to 1.5x by 2020 seems bold. First of all,
Amrica Mvils new builds - which are likely to be
100% developed by Telesites - will dilute its tenancy
ratio and, as previously discussed, Telefnica and
AT&T may contribute only marginally to its growth.
Experts at UBS have forecasted the demand for new
sites to reach 5,000 by 2020 and commented that
2018e
Tenancy ratio
2019e
Experts at UBS have forecasted

the demand for new sites to reach
5,000 by 2020 and commented that
even with Telesites taking 80%
share we believe this will drive
its tenancy ratio to only 1.24x by
2020. This scenario is created on
the premise of AT&T/American
Tower alliance which would cut
out Telesites from any BTS project
assigned by the U.S. operator
2020e
Source: UBS Estimates
even with Telesites taking 80% share we believe

this will drive its tenancy ratio to only 1.24x by
2020. This scenario is created on the premise of
an AT&T/American Tower alliance which would
exclude Telesites from any BTS project assigned by
the U.S. operator.
Telesites value considerations
Tenancy ratio to expand: 2015-2020
Looking at critical considerations to maximise the

valuation of a towerco, Id like to compare them
against Telesites.
PAPER
As previously mentioned, Telefnica has a history

of low investments in Mexico and many Mexican
players have confirmed that to date, the Spanish
operator hasnt announced any change of strategy.
Amrica Mvils dominant position in the telecom

sector has spread its effects on to Telesites, which
is subject to peculiar rules aimed at de-risking its
Five critical considerations to maximise towerco valuations
real estate, media, retail and financial services.

Its unclear whether these oasis have been
transferred to Telesites but in any case I am
convinced that the towerco will meet high quality
standards and excel at building sites.
PERMITS
Paper
Assets
Permits
preponderance in the Mexican market. Specifically,

Telesites must offer equal terms and prices to all its
customers and publicise the terms and conditions
as well as prices.
Additionally, Telesites is subject to ad-hoc
regulatory inspections which are a definite
incentive for the company to ensure its paperwork
is always up to date and in order.
ASSETS
At the time of the spin-off, Amrica Mvil didnt
transfer all of its assets to the new entity and
possibly retained the core of its portfolio to avoid
having to share it with its competitors. However,
with close to 13,000 sites (or 50% of all sites in
Mexico) in its portfolio, Telesites has much to offer
to its customers.
Its important to highlight that Amrica Mvil didnt
Rates
Growth
only build towers but added so-called telecom oasis

to its portfolio. These sites are highly remunerative
commercial centres filled with stores, restaurants
and services, where cables are turned into works of
art and towers become much more than steel and
grass.
An example is the Green Corner, located in a
building owned by Carlos Slim. It hosts a massive
telecom switch on the last floor and has a tall
telecom tower on top. There is a restaurant on
the top floor whose rooftop is entirely covered
by solar panels. Instead of hiding cables and
equipment, they became part of the design, along
with a monitor showing how many kW are being
generated by the site.
This reminds us that Telesites isnt just a towerco.
But a towerco created by a King Midas whose
empire encompasses virtually every industry in
Mexico, including telecoms, education, health care,
Permitting is one tricky business in most countries

in CALA. And obtaining municipal permits in
Mexico isnt easy.
Having been in the business for decades, I am sure
Amrica Mvil knows its way around the complex
local permitting system and Telesites can count
on the experience of its parent company on this
matter.
RATES
As previously mentioned, Telesites is forced to
publicises its terms and conditions and offer fair
prices to its customers by IFETEL, in light of its
preponderance in the market.
Telesites rent prices are aligned with the typical
lease rates charged by Mexican towercos. In fact,
in 2015, the average net monthly rent per tenant
in 2015 was MX$18,600 (~US$1,050) plus land rent
pass-through of around MX$10,000 (~US$570).
GROWTH
Growth is indeed the most thorny aspect of
XX
Even with the Red Compartida actually happening,

we are talking about thousands of new sites needed
to bring Mexicos mobile services in line with the
rest of OECD countries. And in my view, there is
only one mobile network operator - for now - able
to satisfy the cell site densification needs of the
country. And that is Amrica Mvil.
Far from the - sometimes abstract - dynamics of the
stock market, Telesites is a tower company. And its
business is to build towers in Mexico (and beyond).
So far, Telesites has added 2,009 sites in Mexico in
less than a year, which seems quite an impressive
result to me.
What we like about Telesites

Telesites may outperform their own forecast
build volumes, but that will only make their
So far, Telesites has added

2,009 sites in Mexico in less
than a year
all. In fact, if on one hand Telesites might have

overestimated its tenancy ratio growth as well as
the demand for new sites by Telefnica and AT&T,
we need to remember that Mexico still needs
as many as 70,000 new sites to reach its desired
coverage and enhance its capacity.
beyond Mexico, with 300 sites being built on behalf

of Claro in Costa Rica and the potential to start
operations in fourteen other countries in CALA, a
move which could turn the towerco into the largest
and most regionally widespread towerco in the
region.
target tenancy ratio of 1.5 by 2020 even more

difficult to achieve. There are few precedents
of carve-out, operator-led towerco driving
tenancy growth of that magnitude over their
first four years of existence, in fact none that
TowerXchange are aware of. There are simply
not enough tenancies up for grabs in Mexico to
achieve that number, and those are available
will be keenly fought for in this crowded
towerco market.
But this doesnt mean to say that we think the
Telesites is a bad idea or a bad investment. A
towerco adding 0.05 tenants per tower per year
in investible markets can still be a bankable
There is much uncertainty about Telesites growth

potential but I would argue that the CALA tower
industry as a whole is an uncertain business,
as shown by the hard times faced by Brazilian
towercos after years of excitement. And Mexico is
simply no different. With as many as twenty-three
towercos ranging from Mom and Pop shops to listed
companies such as Telesites and American Tower,
the country is a complex place to do business
and growth forecasts are unpredictable just like
anywhere else in the region.
It must be added that Telesites is already expanding
Telesites is likely to face several challenges along

its path towards success. Regulatory limitations,
competition from the best in class such as
American Tower, Mexico Tower Partners and SBA
Communications (outside of Mexico), scarcity of
new business from the second and third operators
in Mexico However, its DNA tells me that the
company has a clear strategy in mind, in spite
of what analysts think. And Telesites is poised
to expand way beyond Mexico, even if the terms
of its growth arent those that the stock market
necessarily expects
proposition. By 2020 Telesites could have a

tenancy ratio over 1.2 and a footprint in half a
dozen or more CALA countries. Amrica Mvil
is the most credit worthy tenant in CALA, and
Telesites are optimally positioned to become
their supplier of choice. The fundamentals of
the tower business hold true: this is a growing
infrastructure business, built on a proven
business model, with long term contracts
securing recurring revenue over a ten-plus
year horizon. Whats not to like?
Regional coverage:
Africa and the

Middle East features
The past quarter has seen some notable transactions in the African tower industry
with Airtel agreeing the sale of their towers in Tanzania and the DRC and IHS
completing Africas first towerco consolidation of scale. Read TowerXchanges
analyses of two key deals - American Towers acquisition of 1,350 Airtels sites in
Tanzania and IHSs takeover of HTN Towers in Nigeria.
Hotspot Networks COO Charles Iyoha, who have also just sold their Nigerian portfolio
to IHS shares some of the challenges faced by middle-market towercos in surviving
in an increasingly competitive marketplace whilst BMIs Amy Cameron compares the
strengths and weaknesses of Africas big four towercos.
Plus, as interest in Algeria ramps up with the possibility of Djezzy towers coming to
market, Mott MacDonald shed some light on key dynamics at play in the countrys
telecoms sector.
Whats more, dont miss TowerXchanges definitive guide to the African tower
industry with our 12-page whos who in African and Middle Eastern towers
Dont miss:
169 TowerXchange whos who in African and Middle Eastern Towers
182 BMI industry trend analysis: African towercos comparing the Big Four
186 TowerXchanges analysis of American Towers acquisition of Airtels Tanzanian Towers
191 TowerXchanges analysis of IHSs acquisition of HTN Towers 1,211 towers
196 Challenges for African middle-market towercos and Hotspots tower sale to IHS
199 Share Square: Algeria
XX
TowerXchange whos who in

African and Middle Eastern Towers
TowerXchange presents an A to Z of MNOs, towercos, investors and advisors who are key
stakeholders in the tower industry in SSA and MENA
TowerXchange takes a deep dive into the African tower industry, providing the most comprehensive
directory to date of the key MNOs, towercos, investors and advisory firms active in the market.
Keywords: Africa, African Infrastructure Investment Managers, Africell, Africa Mobile Networks, Airtel, Albright
Capital Management, Algeria, American Tower, Analysys Mason, Atlas Towers, BCTek, Blackstone, Burkina
Faso, Cameroon, Capital Group Private Markets, The Carlyle Group, Cell C, Central African Republic, Chad, Cote
dIvoire, Citi, Communication Towers Nigeria, Congo, Connect Africa, Convergence Partners, Credit Suisse, Delmec,
African Infrastructure Investment Managers:

Joint venture between Macquarie and Old Mutual
with capital at work in IHS.
Africell: One of Africas new entrant MNO success
stories, Africell have used a low cost, rapid rollout
strategy, favouring co-locations over new tower
build. When last we spoke to them, in the DRC
Africell has not built a single tower but has captured
20% market share by co-locating on 180 Helios
towers. With a presence in the DRC, Sierra Leone,
Gambia and Uganda, Africell have not conducted
any tower sales to date but have inherited a
network from Orange in Uganda where towers had
been sold to Eaton Towers.
Development Partners International, Digital Bridge, Djezzy, DRC, Eagle Towers, Eaton Towers, Econet, Egypt,
Emerging Capital Partners, Ernst & Young, Etisalat, Ethos Private Equity, Expresso Telecom, Fanasia, FMO, Gabon,
Ghana, Globacom, Goldman Sachs, Guinea, Guinea Bissau, Hardiman Telecommunications, Helios Investment
Partners, Helios Towers Africa, HOI-MEA, Hotspot Network, HTN Towers, IFC, IHS Towers, International Finance
Corporation, Infratel, ING Bank, Intrepid Advisory Partners, Investec Bank, Iran, J.P. Morgan, Jordan, Kenya, KPR
Consult, Kuwait, Lap GreenN, Lazard, Liberia, Liquid Telecom, Macquarie Group, Madagascar, Malawi, Mali, Maroc
Telecom, mCel, MENA Towers, Millicom/ Tigo, MNOs, Mobinil, Moov, Mott MacDonald, Mozambique, MTN, Niger,
Nigeria, Ooredoo, Orange, Pro High Site Communications, Providence Equity, RIT Capital Partners, Safaricom,
Saudi Arabia, Saudi Telecom Company, SBA Communications, Senegal, Sierra Leone, Smile, Sonatel, Soros, South
Africa, Standard Bank, Standard Chartered, Sudan, SWAP, Tanzania, TAP Advisors, TASC, Telkom Kenya, Telkom
South Africa, Tigo, Towerco, TowerCo of Madagascar, Towershare, TowerXchange Research, Tunisia, UAE, Uganda,
Unitel, Viettel, Vodacom, Vodafone, Wendel, Whos Who, Yield Capital Partners, Zain, Zambia, Zimbabwe

< Details of Africas independent towercos
Africa Mobile Networks: Rural towerco with an

interesting business model that targets either tier
one or tier two anchor tenants with a proposition
that combines active and passive infrastructure and
which focuses on rural areas of countries with less
mature coverage. AMN broke ground in Benin in
2014, is now in four countries and expects to have
a footprint in seven countries by the end of 2016
including Cameroon, the DRC, Ivory Coast, Nigeria
and Guinea.
Airtel: The worlds third largest mobile network
operator, Airtel has a footprint in 14 African
countries.
< The footprints of Africas leading MNOs and their attitudes towards tower divestments and
infrastructure sharing
< An introduction to some of the most credible current and prospective investors into European towers
< An introduction to the TMT advisory firms with experience of tower transactions
Tower sale and leasebacks are a strategic priority

for Airtel in Africa and to date, the operator has
closed tower transactions in eight countries; Nigeria
(with American Tower), Rwanda and Zambia (with
IHS), Ghana, Uganda, Burkina Faso and Kenya (with

Eaton Towers) and Congo Brazzaville (with Helios
Towers Africa). Airtel has also announced, but not
yet closed, the sale of their towers in Niger (to Eaton
Towers), Tanzania (to American Tower) and the DRC
(to Helios Towers Africa). In total Airtel has now
sold, or agreed to sell, 11,100 African towers across
ten countries, raising over US$2bn.
Figure one: Airtel African tower sale - what has closed, and who is
buying what?
Airtel still retains towers in Malawi, Chad, Gabon,

Seychelles and Madagascar. Transactions in Malawi
and Chad had been cancelled. Rumours have
also emerged of a potential tower sale in Gabon.
Whether the Malawi and Chad transactions will
come back to market remains to be seen. Airtels
recently agreed the sale of their operations in
Burkina Faso and Sierra Leone to Orange, whilst an
initial agreement regarding a sale of their opcos in
Chad and Congo has lapsed.
Albright Capital Management: Chaired by former
US Secretary of State Madeleine Albright, Albright
is an investor and advisory firm dedicated to the
emerging markets and an investor in Helios Towers
Africa.
American Tower: The worlds largest independent
commercial towerco with a tower count of over
140,000, American Tower have a portfolio of
10,163 towers in Africa spread across Nigeria,
Ghana, South Africa and Uganda and when their
transaction with Airtel in Tanzania closes this
number will increase to 11,513.
Sold to Eaton Towers (Niger announced, all

others closed)
Sold to American Tower (Tanzania
announced, all others closed)
Sold to Helios Towers Africa (DRC announced,
all others closed)
Sold to IHS
Currently retains towers
No opco present
Favouring markets with relatively stable political

XX
A history of American Towers acquisitions in Africa
Year
Country
Seller
Tower
count
Deal value
(US$)
Cost per
tower (US$)
Deal Structure
2016
Tanzania*
Airtel
1,350
179,000,000
132,600
SLB
2014
Nigeria
Airtel
4,700
1,090,000,000
231,915
SLB
2011
Uganda
MTN
1,000
89,000,000
174,510
2010
Ghana
MTN
1,876
21,850,000
228,375
2010
South Africa**
Cell C
1,400
200,000,000
142,857
SLB with right to acquire 1800 more
*deal expected to close H1 FY16 **Cell C deal included 1,400 existing towers plus the option to acquire up to 1800 to be
constructed. Cost of only original 1,400 towers only included here
and macroeconomic environments, the company

has declined participate in certain processes because
of concerns in these areas but remains likely to
be a contender for key tower transactions across
the continent. In addition to closing the Tanzanian
deal, the company is focused heavily on integrating
the 4,700 towers acquired from Airtel in Nigeria,
including the upgrade of power management
systems across most sites.
to build up to scale to bid for MTNs South African

towers, Atlas Tower is an interesting company to
watch.
BCTek: Nigerian towerco with a 20 year contract
to manage and market a portfolio of 700 towers
originally built as a surveillance network, over 80%
of which are police compounds.
Blackstone: Serial towerco investor currently

working with Phoenix Tower International in CALA.
American Tower now provides full power as a
service across their entire African portfolio except in Recently evaluated investment opportunities in one
South Africa, where power remains a pass through. of Africas privately owned towercos.
Capital Group Private Markets: Private equity fund
Analysys Mason: Marco Cordoni and his team at
Analysys Mason are among the go-to-guys for tower focus on emerging markets with a diverse portfolio
market analysis and due diligence on a global basis. including investments in Eaton Towers.
Atlas Towers: US towerco, starting up operations
in South Africa. A build to suit towerco, Atlas had
built 120 towers in South Africa by Q1 2016. Trying
The Carlyle Group: Private equity and alternative

asset management firm with money at work in
Indonesian towers. Yet to invest in Africa.
Cell C: South African operator who monetised their

towers back in 2010 with a sale to American Tower.
Cell C maximised upfront capital in their deal with
the towerco in order to raise capital for rollout
and to grab market share, but in doing so agreed a
high leaseback rate which some commentators feel
distorts the South African tower market to this day where Cell C remain the only MNO to have divested
their assets.
Citi: One of the worlds leading tower transaction
advisory groups can be found within the TMT team
at Citi.
Communication Towers Nigeria: Nigerian
towerco which claims to have 500 cell sites
across all 36 states. Given the current appetite for
Nigerian towers, they could represent an attractive
acquisition target.
Connect Africa: Company focussed on bringing
connectivity to rural areas in Africa. Most recently
Connect Africa has deployed a series of Wi-Fi
hotspots in rural areas across Zambia. These base
stations costs less than $10,000 and are partly
funded by advertising. Connect Africa has over 200
sites deployed successfully with three operators.
Convergence Partners: Firm focussed on earlystage investments in the African TMT sector. Had
looked at an investment in the tower industry a few
years ago.
Credit Suisse: Debt providers playing a key role in
the African tower industry.
A history of Eaton Towers acquisitions in Africa
Year
Country
Seller
Tower
count
Deal value
(US$)
Cost per
tower (US$)
Deal Structure
2015
Egypt
MobiNil
1,350
179,000,000
132,600
SLB
2014
Ghana, Burkina Faso, Kenya
Airtel
2,500
SLB
& Uganda*
2012
Uganda
Warid
1,000
89,000,000
174,510
SLB
2012
Uganda
Orange
1,400
200,000,000
142,857
SLB
2010
Ghana
Vodafone
750
MLL
* Eaton acquisition of Niger tower expected to close imminently
Delmec: The tower experts in consultation and

engineering, providing global solutions to operators,
towercos and regulators on standards, guidance and
due diligence for portfolio management. Engaging
audit, assessment and analysis for structural
enhancement, capacity and maintenance as
individual activities or by way of managed services.
Development Partners International: Private
equity fund focussed on Africa with money at work
in Eaton Towers.
Digital Bridge: Serial tower entrepreneurs Mark
Ganzi and Ben Jenkins are building another empire
having sold their last venture, GTP, to American
Tower for US$4.8bn. Digital Bridge is an investment
vehicle through which stakes are invested in
towercos around the world. Digital Bridge recently
appointed Phil Cooper as Managing Director

EMEA and are known to have an interest in the
ongoing Mobily and Zain transactions in Saudi (and
doubtless would be interested in the STC towers if
they come to market).
Djezzy: Algerian MNO owned 51% by the State, 49%
by VimpelCom. With VimpelCom having a much
publicised strategy to divest their tower portfolio, the
operator has initiated the process in Russia with the
sale of 10,400 towers expected to close imminently.
Whilst a sale of their CIS towers is thought to be next
on the cards, it is widely expected that their c. 6,000
Algerian towers will come to market in the near
future.
Eagle Towers: Private towerco with a portfolio of 50
towers in South Africa.
Eaton Towers: Well on its way to reaching its

goal of having a portfolio of 10,000 towers across
a diverse set of markets, Eaton Towers owns and
operates over 7,000 towers in Ghana, Uganda,
Egypt, Burkina Faso, Kenya, and South Africa,
with a transaction to acquire Airtel Nigers towers
imminent, plus a substantial supplementary
acquisition in Egypt.
As a mature business, the companys focus has
switched from acquisitions to the integration and
improvement of operational efficiency of their
towers.
There has been speculation that American Tower
might have an interest in acquiring Eatons South
African towers. Currently with Capital International
as majority investors, Eaton Towers are thought to
be building the company for an eventual sale to a
strategic.
Eaton provides full power as a service, except in
South Africa where power is a pass through.
Econet: The leading MNO in Zimbabwe, Econet
has been under pressure from the government to
share its towers. Econet owns ~500 of Zimbabwes
1,400 towers. To date, Econet has not partnered with
towercos in any of its jurisdictions.
Emerging Capital Partners: Private equity fund
focussed on Africa; investors in IHS.
Etisalat: Etisalat has monetised their Nigerian
towers, selling a total of 2,691 towers in two
tranches to IHS. The company has a process under

way in KSA, with Mobilys 9,600 towers up for
grabs. The company has a presence in 15 countries
across Africa and the Middle East, also operating
under the names MOOV, ONATEL, Mauritel,
Sotelma and Canar and owning a 53% stake in
Maroc Telecom. Maroc Telecom runs its own tower
strategy.
Etisalats footprint and history of tower sales
Ethos Private Equity: Private equity firm with

money at work in Eaton Towers since May 2015.
Expresso Telecom: Tier two MNO Expresso
has sought BTS and SLB counterparts in several
markets but has not yet consummated a deal.
Currently has a footprint in Sudan, Ghana, Guinea,
Mauritania and Senegal.
EY: TMT strategy and corporate finance advisory
team with extensive experience of advising on
tower transactions.
Fanasia: Iranian tower builder with experience of
building over 400 sites. Has recently become the
first independent telecom tower company in Iran
with 27 operational sites.
FMO: Dutch development bank 51% government
owned, 49% by commercial banks and financial
institutions. Have invested in African towercos.
Globacom: Operator which has to date been
disinclined to sell towers and has yet to widely
share their assets. A sale by Glo could be highly
attractive for towercos, if they did come to market
Sold to IHS
Tower sale underway
Etisalat retains towers
Maroc Telecom (53% owned by Etisalat)
retains towers
No opco present
Estimated tower count, Expresso Telecom

Sudan
1600
Senegal
Mauritania
Guinea Conakry
Ghana
450
300
raised US$95mn in funding from Standard Bank

to continue building new sites in the country,
where they will soon have competition from
American Tower. Joint venture partners Millicom
restructured their equity in Helios Tanzania, DRC
and Ghananian operations into a 24% stake at group
level, which Millicom is now seeking to monetise.
Helios Towers Africa provides full power as a
service.
150
300
500
with the company having a footprint in key markets

including Nigeria, Ghana and Cote dIvoire where
towercos already have a presence. While a tower
divestiture remains unlikely, trying to predict Mike
Adenugas next move is a fools errand!
Goldman Sachs: Experienced advisors on tower
transactions and lenders to towercos. Investment
arm has a minority stake in IHS.
1000
1500
2000
a primary focus on the sub-Sahara region. Helios

portfolio companies operate in 35 African countries
across a range of industry sectors, with telecom
infrastructure and services playing an important
part. Founder investors in Helios Towers Africa.
Exiting their investment in HTN Towers.
Helios Towers Africa: Following a challenging

2015, marred by operational difficulties and three of
four deals with Airtel falling through, Helio Towers
Hardiman Telecommunications: A unique
Africa enters 2016 with a new management team
consultancy equally capable advising on engineering at the helm. The company, possessing a portfolio of
and operational issues as they are on commercial
6,556 towers in Tanzania, the DRC, Ghana and Congo
strategy and corporate finance. Extensive experience Brazzaville. has put a heavy focus on improving
advising on both the buy-side and sell-side in tower
operational efficiencies, with new CEO Kash Pandya
transactions.
coming with experience from the diesel genset
industry. Helios Towers Africa announced the
Helios Investment Partners: Investment firm
acquisition of 950 Airtel DRC towers in May 2016.
making private equity investments in Africa, with
Local subsidiary Helios Towers Tanzania recently
HOI-MEA: Egyptian managed service provider and

tower manufacturer which also owns a portfolio
of 50 towers in the country built for Vodafone and
Etisalat.
Hotspot Network: Nigerian towerco which built a
network of 160 sites through build to suit contracts
with Airtel and Etisalat. Their tower portfolio
has recently been acquired by IHS for just over
US$5mn and the company will now focus on rural
broadband and data centre management.
HTN Towers: One of the oldest towercos in Africa,
HTN Towers (formerly Helios Towers Nigeria)
built a portfolio of 1,211 towers with a tenancy
ratio per live tower of 2.2, turning over US$73.3mn
with EBITDA of US$31.7mn in FY2014 before their
announced sale to IHS.
IHS Towers: Towerco with the largest African
portfolio, totaling 23,493 towers (pro rata for
the completion of the HTN acquisition) across
Nigeria, Cote dIvoire, Cameroon, Zambia and
Rwanda. Highly acquisitive, having completed ten
XX
A history of Helios Towers Africas acquisitions in Africa

Tower Deal value
Cost per
count
(US$)
tower (US$)
Year
Country
Seller
2016
DRC
Airtel
950
2014
Congo B
Airtel
390
*58,027,671
*148,789
SLB
Vodacom
1,149
75,000,000
87,616
SLB with direct investment in HTT**
1,020
80,000,000
130,719
Joint Venture (Helios 60%, Millicom 40%)***
2013 Tanzania
2010 Tanzania Millicom/ Tigo
Deal Structure
SLB
2010
DRC
Millicom/ Tigo
729
45,000,000
102,881
2010
Ghana
Millicom/ Tigo
750
54,000,000
120,000
* TowerXchange estimates, transaction values and tower counts not disclosed

** Vodacom sold 100% of equity in towers but subscribed to acquire a 24.5% interest in Helios Towers Tanzania
***Millicom/ Tigo restructured stake into a 24.5% stake at group level, now looking to monetise
transactions of scale in the continent, and currently

in the process of closing Africas first in market
consolidation.
IHS remains a private company (with Wendel as
primary investors with a 35% stake in the company)
which has raised a huge amount of capital for
African telecom infrastructure. IHS are widely
expected to be gearing up for an IPO since their scale
probably creates a barrier to a strategic sale. IHS
are rumoured to now be pursuing towers in Saudi
Arabia and MTNs South African towers, as well as
further in-market consolidation in Nigeria.
extensive experience in towers, including some of

the landmark European transactions.
billion dollars in debt and equity into eight towercos

across emerging markets, with an objective to
double that total investment by 2018.
KPR Consult: Renowned tower doctors goto guys for structural / technical due diligence,
improvement capex planning, decommissioning
and just about anything to do with tower design
and maintenance.
Lap GreenN: Operator who has tried to monetise
towers in Uganda but has been hindered by trading
restrictions placed on the Libyan owned parent.
The company also has a presence in Cote dIvoire,
Sierra Leone and South Sudan.
Lazard: Investment advisory firm with extensive
experience in the tower industry. Has represented
Orange in most tower transactions.
Infratel: Rural infraco in the DRC whose equipment

is on 800 cell sites.
Liquid Telecom: Leading independent data, voice

and IP provider in Eastern, Central and Southern
Africa.
ING Bank: Leading Dutch bank with considerable

experience of providing debt finance to the tower
industry.
Intrepid Advisory Partners: Advisory firm
established by Daniel Lee, the Rainmaker of the
African tower industry Dan advised on 11 of the
first 13 deals to close in Africa.
Macquarie Group: Serial towerco investors, with

capital at work in Arqiva, Russian Towers, Axicom
(formerly Crown Castle Australia), Mexico Tower
Partnersand Viom Networks (soon to be part of
ATC India). Macquarie also has an excellent TMT
advisory practice with experience of advising on
tower transactions.
Investec Bank: South African based bank providing

debt and advisory services to the tower industry.
Maroc Telecom: Etisalat injected their Atlantique

Telecom assets while acquiring 53% equity in
Maroc Telecom, which has a footprint in Morocco,
Benin, Burkina Faso, CAR, Cote dIvoire, Gabon,
IHS provides full power as a service.

International Finance Corporation (IFC): The IFC
is a member of the World Bank Group, the worlds
leading DFI. The IFC has invested around half a
J.P. Morgan: Leading TMT advisory team with
Mali, Mauritania, Niger and Togo. Maroc Telecom

has not yet monetised any towers.
mCel: Former fixed line incumbent, mCel has about
1,200 of Mozambiques 4,800 towers. The former
market leader is under huge pressure from the
aggressive network rollout investments of Vodacom
and new entrant Viettel, and may respond my
monetising their towers.
MENA Towers: Early stage towerco with offices in
the UAE, Cote dIvoire and Pakistan.
Millicom/ Tigo: Millicom / Tigo undertook the first
pioneering tower transactions with Helios Towers
Africa in Ghana, DRC and Tanzania from 2010-11,
but the group hasnt done a SSA tower deal since.
With IHS acquiring #1 and #2 ranked operators MTN
and Airtels towers in Rwanda, if Millicom is ever
going to part with their Rwandan towers, its going
to be sooner rather than later. In Senegal it is also
thought that if the Sonatel (Orange) towers come to
market, it is highly likely that Millicom would look to
follow suit. Millicom owns, and is in the process of
selling, a 24% stake in Helios Towers Africa.
Mobinil: Orange opco in Egypt. See Orange.
Mott MacDonald: Digital Infrastructure team
has extensive experience of advising on tower
transactions and investments.
MTN: MTN, with a presence in 20 African countries,
has monetised their towers in seven representing
the majority of their most attractive portfolios.
A history of IHS acquisitions in Africa
Tower Deal value

Cost per
count
(US$)
tower (US$)
Year
Country
Seller
2016
Nigeria
Hotspot
160
Company acquisition
2016
Nigeria*
HTN
1,211**
Company acquisition
2015
Nigeria
Etisalat
555
SLB
2014 Rwanda & Zambia
Airtel
1,113
181,000,000
162,624
SLB
2014
Nigeria
MTN
8,850
882,000,000
196,700
Joint Venture (IHS 49%, MTN 51%)
2014
Nigeria
Etisalat
2,136
485,000,000
227,060
SLB
MTN
1,269
SLB
MLL
2014 Rwanda & Zambia
Deal Structure
2013
Cameron & Cote dIvoire
Orange
2,000
2012
Cote dIvoire
MTN
931
141,000,000
151,450
SLB
2012
Cameroon
MTN
827
143,000,000
172,914
SLB
2010
Nigeria
Visafone
800
67,000,000
83,750
SLB
* Transaction expected to close Q2 2016

**Plus HTNs managed services and co-location marketing agreement concerning SWAP Telecoms & Technologies 702
towers will be transferred to IHS following completion of the transaction
The company has raised around US$2.5bn to

date and retained equity in selected markets.
MTN commenced their passive infrastructure
monetisation strategy in 2010-11 with the formation
of joint venture towercos with American Tower in
Ghana and Uganda, in which MTN retained 49%
equity. This was then followed up with sale and
leasebacks of 100% of the equity in their towers
in Cameroon, Cte dIvoire, Rwanda and Zambia this time with IHS as the counterparty. Their most
recent transaction was a sale of 49% equity in their

Nigerian towers to IHS, with MTN retaining a noncontrolling 51% stake with protective rights in the
new entity.
Whilst the remainder of their opcos on the content
are relatively small entities with modest tower
portfolios - their 9,000 South African towers
represent one attractive target for acquisition.
Whilst the company stepped back from a potential
XX
Millicoms footprint and history of tower sales
South African tower sale to American Tower back

in 2013 (still viewing their towers as a source of
competitive advantage), the recent fine in Nigeria
(US$5.2bn reduced to US$3.9bn) may be a motivator
for them to once again consider monetisation.
Ooredoo: Ooredoo with a presence in Algeria, Iraq,
Kuwait, Oman and Tunisia has preferred to retain
towers but has been exposed to deep partnerships
with towercos in Myanmar which may influence
their strategy as the MENA tower market starts to
open up. Back in early 2016, Ooredoo launched a
RANsharing agreement with Tunisia Telecom to
minimise the costs of their network rollout.
JV with Helios Towers Africa

JV with Helios Towers Africa, Millicom
opco subsequently sold to Orange
Millicom retains towers
No opco present
Orange: Orange may have only agreed deals with

towercos in three markets (Cameroon, Cote dIvoire
and Egypt), but they represent three of their most
investable markets. In Cameroon and the Cote
dIvoire, Orange entered into an MLL agreement
with IHS, whilst in Egypt, MobiNil sold one third of
their towers to Eaton Towers (to whom Orange had
also sold towers in Uganda prior to the operation
being transferred to Africell). In terms of future
potential transactions, Mobinil may not be done
monetising Egyptian towers, with a few thousand
still retained by the company. Orange towers in
Senegal (Sonatel) had been rumored to be coming to
market under an MLL deal structure, bundled with
less attractive portfolios in Mali and the Guineas,
but that transaction seems to have gone cold,
possibly because of the opposition of entrenched
Union interests in Senegal. Orange has recently
acquired Millicoms local opco in the DRC (whose
towers had previously been sold to Helios Towers
Africa) and Liberias Cellcom, their acquisitions of

Airtels opcos in Sierra Leone and Burkina Faso are
expected to close imminently.
MTNs footprint and history of tower sales
[PURPLE] - Cancelled tran

[YELLOW] - MTN retains t
[GREY] - No opco present
Pro High Site Communications: South African

towerco with a portfolio of eleven towers.
Providence Equity: Communications and media
investment specialists with capital at work in Indus
Towers (India), Grupo Torresur (Brazil) and KIN
(Indonesia). Believed to have an interest in the
Mobily and Zain processes in the Middle East.
RIT Capital Partners: Chaired by Lord Rothschild,
RIT Capital Partners is an investment trust, listed on
the London Stock Exchange with a widely diversified
portfolio, including an investment in Helios Towers
Africa.
Safaricom: Kenyan MNO, possessing Vodafone as
a shareholder, dominates its the Kenyan mobile
market. Whilst the company considers its towers
too strategic to sell, Safaricom has for some time
been swapping or leasing their tower portfolio, by
far Kenyas largest and most extensive, to MNOs and
other tenants.
Saudi Telecom Company: Market leading operator
reported to be considering the sale of their ~16,400
towers in KSA. Has previously explored forming a JV
towerco with competitors Mobily and Zain.
Sold to IHS
JV with IHS
JV with American Tower
Cancelled transaction looking likely to return
MTN retains towers
SBA Communications: Publicly listed US towerco

with over 25,000 towers in North and South America.
Has a potential interest in Africa.
No opco present
XX
Oranges footprint and history of tower sales
Smile: LTE pioneer, Smile, with a presence in

major cities in the DRC, Nigeria, Tanzania and
Uganda rely primarily on co-location on third
party towers in order to rollout their network.
Sonatel: See Orange
Soros: Quantum Strategic Partners (QSP) is a
private investment vehicle, managed by Soros
Fund Management LLC. QSP focuses globally on
investments in several strategies, including capitalintensive start-ups, buyouts, and growth equity
transactions. Investors in Helios Towers Africa.
Standard Bank: Bank with a presence in 20 subSaharan countries, Standard Bank has extensive
experience in the tower industry, most recently
completing a US$95mn equivalent upsizing of the
syndicated term loan facilities for Helios Towers to
finance its next phase of expansion in Tanzania.
MLL with IHS

1/3 of towers sold to Eaton, sale of remaining
towers on the cards
Standard Chartered: South African bank with

extensive experience providing debt and advisory
services to the telecoms sector.
Opco acquired from Millicom who previously

sold towers to with Helios Towers Africa
Orange retains towers
SWAP: Another claimant to the title of Africas

first towerco, SWAP owns 702 Nigerian towers
which were being managed and marketed by
HTN Towers, the agreement for which will
be transferred to IHS upon completion of the
acquisition.
Orange present with non controlling interest

Orange presence pending closure of
acquisition of Airtel local opco
No opco present
Sold to Eaton Towers, operation subsequently
sold to Africell
TAP Advisors: Boutique M&A and investment

advisory firm with long history of advising on
tower deals.
TASC: Towerco with an undisclosed number of sites

in Jordan.
Vodafone, Vodacom and Safaricoms African footprint
Telkom Kenya: Orange recently announced the

sale of their 70% stake in Telkom Kenya to Helios
Investment Partners. Telkom Kenyas 2013 Manage
with License to Lease (MLL) arrangement with Eaton
Towers governing 1,000 towers was subsequently
cancelled.
Telkom South Africa: South African MNO with just
2.9% mobile market share in the country. Telkom
have had an on/off tower sale of with estimates
suggesting their portfolio includes around 3,500
sites. The regulators recent rejection of a network
sharing deal with MTN could further motivate the
operator to look at monetisation of their passive
infrastructure
Tigo: See Millicom
TowerCo of Madagascar: Present solely in their
domestic market, TowerCo of Madagascar has built
an impressive reputation in the African tower
industry. Originally carving towers out of MNO
TELMAs portfolio and subsequently building new
towers, TowerCo of Madagascar has established a
portfolio of 700 towers. A challenging market, with
poor infrastructure and annual floods, TowerCo
of Madagascars performance in Madagascar is
made even more impressive and their track record
is thought to be one of the reasons why Airtel has
struggled to sell their Madagascan towers.
Sold to Helios Towers with 24.5% stake

acquired in Helios Towers Tanzania
MLL with Eaton Towers
Vodafone retains towers
Vodacom retains towers
Safaricom retains towers
No opco present
Towershare: Towerco with a portfolio of 800 sites in

XX
Tower portfolios of Africas big four towercos

IHS Africa
15882*
2435
2408
1964
Republic of Congo, Mozambique, Nigeria and

Lesotho whilst Vodafone is present in Egypt and has
a controlling stake in Safaricom in Kenya. Vodacom
South Africa runs what is effectively an in-house
tower company, with around 9,500 towers and a
tenancy ratio of around 1.8.
Wendel: Family fund, leading investor in IHS.
804
American Tower
Eaton Towers
1400
2126
1927
1393
4717
2000
1600
300 700
500 500 70
***
1350
**

1793****
3582
787
394
Unknown Country
South Africa
DRC
Rwanda
Uganda
Nigeria
Cote dIvoire
Zambia
Tanzania
Ghana
Cameroon
Congo B
Kenya
Burkina Faso
Niger
Egypt

****Pending closure of the Airtel DRC acquisition
Pakistan known to be interested in transactions in

the MENA region.
Zain: Operator with a process under way to

sell 5,200 towers in Saudi Arabia and a further
1,600 towers in Kuwait, Zain is also rumoured to
be looking at a tower sale in South Sudan. The
company also has operations in Iraq, Sudan,
Bahrain and Jordan but has sold most of their
African operations to Airtel
Who have we missed?
network of guyed masts in Mozambique may be

coming to market, although the structural capacity
of the towers is uncertain.
Advance apologies: were bound to have
Vodafone/ Vodacom: Apart from an early manage

with license to lease (MLL) deal in Ghana with
Eaton Towers and the sale of 1,149 Tanzanian
towers to Helios Towers Africa in 2013 (where
Vodacom acquired a 24.5% stake in Helios Towers
Tanzania), Vodacom and its parent company,
Vodafone consider their tower assets too strategic to
divest. Under the Vodacom brand, the company has
a presence South Africa, Tanzania, the Democratic
mission to assemble everyone at the 4th Annual
Unitel: Largest of Angolas MNOs.

Viettel: Africas most aggressive new entrant,
Vietnamese military backed Viettel had initially
seemed reluctant to accelerate time to market
by leveraging co-location. However they have
since reached co-location agreements with IHS in
Cameroon and Helios Towers in Tanzania, the latter
of whom attracted ~1,000 co-locations. Meanwhile
rumours suggest that Viettels rapidly deployed
Yield Capital Partners: Investment advisors

involved with Helios Towers Africa.
missed one or two key stakeholders in African

towers if so wed like to know as were on a
TowerXchange Meetup Africa on October 1920 in Johannesburg! If you feel your company
should be profiled in the TowerXchange whos
who in African towers, please email Laura
Dinnewell, Head of TowerXchange Africa, at:
ldinnewell@towerxchange.com
BMI industry trend analysis:

African towercos comparing the Big Four
Amy Cameron, BMI Reasearch
BMI View: IHS Towers and

American Tower Corporations
acquisition of Nigerias towers
has enabled them to cement their
positions as the leading players
among Africas big four tower
firms. If Helios Towers Africa and
Eaton Towers cannot outbid their
larger rivals for new assets in the
remaining attractive markets, they
may seek scale through a merger
or become acquisition targets.
Keywords: 3G, 4G, Acquisition, Africa, Africa & ME Research, American Tower, BMI Analysis, Burkina
Faso, Cameroon, Co-locations, Cote dIvoire, Country Risk, DRC, East Africa, Eaton Towers, Egypt, Exit
Strategy, Ghana, Helios, Helios Towers Africa, HTA, Kenya, Logistics, LTE, Market Forecasts, Masts &
Towers, Multi-Region, Network Rollout, Niger, Nigeria, North Africa, Regulation, Risk, Rwanda, Sale &
Leaseback, South Africa, Tanzania, Tower Count, Towercos, Uganda, Unreliable Grid, Urban vs Rural,
Valuation, West Africa, Zambia

< The influence of macroeconomic and regulatory factors in key African tower markets
< The difference in operational risk exposure between Africas big four towercos
< The strengths and weaknesses of each of the big four towercos geographic profiles
< What the implications of such factors are on the future of IHS, American Tower, Eaton Towers and
Helios Towers Africa in sub-Saharan Africa
In order to gain a true understanding of the

strengths and weaknesses of each of Africas big four
tower firms, we have used our telecoms forecasts,
macroeconomic forecasts and operational risk
data to assess the size and growth outlook across
each companys footprint in the region. In this
comparison, we include all markets where tower
firms own or manage at least 500 towers, estimating
that a smaller presence in any market is too little to
reap the benefits or be exposed to the risks.
Looking at the comparative data in the Big Four
Macro And Operational Comparison, 2016 table,
Helios Towers Africa is in a weaker position
than its three larger rivals. Although the average
urbanisation rate across its markets is slightly
higher than other tower operators footprints, the
total population and therefore total addressable
telecoms market is the smallest of the four, and
less than half the size of American Towers total
addressable market.
On the operational risk side, Helios Towers Africa
also faces a more challenging environment than its
peers, in large part owing to the poor operational
risk profile of the DRC. BMIs Operational Risk
Index is a combined assessment of the trade and
investment, logistics, labour market and crime
and security environments. Owing to a volatile
political and security climate and underdeveloped
infrastructure, the DRC has an overall Operational
Risk score of 23.4 for 2016, compared with the
regional average of 35.4 for sub-saharan Africa.
XX
Drilling down, it has a score of just 4 out of 100

for the business cost of crime, highlighting the
considerable challenges Helios Towers Africa faces in
one of its largest markets.
Table: Big Four Macro And Operational Comparison, 2016
IHS
Number Of Countries
However, there are bright spots for Helios Towers

Africa. Its portfolio of markets has the strongest
mobile subscriptions growth outlook over the five
years to 2020, and the second strongest growth for
3G/4G subscriptions. This is in large part boosted
by the DRC, where Helios Towers Africa has thus
far held a monopoly in the tower market. Strong
subscription growth is also accompanied by one of
the brightest macroeconomic profiles, with robust
average annual GDP growth of 6.2% to 2020 across
its markets. These circumstances will drive rising
demand for capacity and coverage from its tenants,
providing attractive organic growth prospects.
Total Mobile Subscriptions

(mn)
Mobile Subscriptions 5-Year
CAGR (%)
Total 3G/4G Subscriptions
(mn)
3G/4G Subscriptions 5-Year
CAGR (%)
GDP Per Capita (USD)
Average Real GDP Growth
2016-2020 (%)
Operational Risk Index
Total Population (mn)
Average Urbanisation Rate (%)
Helios Towers
Africa
American Tower
Eaton Towers
228.133
354.92
139.106
221.464
5.3
4.5
6.4
3.3
60.758
108.74
36.966
57.759
24.9
19.3
21.5
13.0
1,366
2,054
1,475
1,316
6.2
4.9
6.2
5.7
40.2
43.1
34.6
37.6
262.8
365.5
167.6
248.3
45.9
43.5
49.0
31.7
Eaton Towers
Although Eaton Towers also has a small presence in
South Africa with 300 towers, by TowerXchanges
estimate, the number of towers is too small for the
company to truly benefit from the market and have
therefore excluded South Africa from its footprint in
the comparative analysis. Nevertheless, its presence
across six populous countries in Africa means its
addressable market of mobile and 3G/4G subscribers
is similar to that of regional giant IHS.
The main factor putting Eaton in a weaker position
is the significantly weaker growth outlook for basic
and advanced mobile services across its footprint. We
forecast mobile CAGR of just 3.3% and 3G/4G CAGR
All forecasts by BMI. Source: BMI, National Sources, Regulators, Operators
of 13.0% across Ghana, Uganda, Burkina Faso, Niger,

Like Helios Towers Africa, Eaton Towers also
Kenya and Egypt between 2015 and 2020. There are
benefits from being the only tower player in a
HTA
a number of factors underpinning this weak growth
handful of risky markets, namely Egypt, Burkina
outlook. While Ghana and Egypts voice mobile
Faso and Niger. While we believe weak economic
Looking
at
the
comparative
data
above,
Helios
Towers
Africa
is in
a weaker
position
itscountries
three larger
markets are already highly penetrated, leaving less
outlooks
will
curtail
growth
in than
these
room for growth,
also expect
slow urbanisation
subscriptions
telecoms
sectors
during
ourthan
forecast
period, over
rivals.we
Although
the average
rate across
its markets
is slightly
higher
other tower
growth in landlocked and predominantly rural
the long term their large, underserved populations
operators' footprints, the total population and therefore total addressable telecoms market is the smallest of
markets of Burkina Faso, Niger and Uganda. Of
present good opportunities. Egypt in particular
the
four,
and
less
than
half
the
size
of
American
Tower's
addressablepotential
market. owing to is location
Eatons six main markets, the urbanisation rate
holds total
considerable
was above 50% only in Ghana, while in Niger and
between the Middle East, Europe and North Africa,
Uganda less than
20%
of
the
population
lived
in
but
we do not
expect it to
reach
its potential
On the operational risk side, HTA also faces a more
challenging
environment
than
its peers,
in large part
urban areas, making it more costly to reach many
until it recovers from current macro pressures
owing to the poor operational risk profile of the DRC. BMI's Operational Risk Index is combined
including currency depreciation, and high
consumers with advanced networks.
assessment of the trade and investment, logistics, labour market and crime and security environments.
Owing to a volatile political and security climate and underdeveloped

infrastructure,
the DRC hasIssue
an overall
| TowerXchange
15 |
Operational Risk score of 23.4 for 2016, compared with the regional average of 35.4 for Sub-Saharan
183
Operational risk profile of the top five markets (by population size)
Opera/onal Risk
70
60
50
40
30
Trade & Investment
20
Crime & Security
South Africa
Nigeria
10
Tanzania
Egypt
DRC
Logis/cs

Labour Market
Source: BMI
unemployment and security risks.

The Big Two
IHS and American Tower stand out as the
companies with the strongest growth outlook in
Africa because of their presence in the regions
two most significant markets, Nigeria and South
Africa. American Tower benefits from a presence in
both countries, resulting in the largest addressable
mobile and 3G/4G markets among the four tower
firms, while South Africa offers a significant boost
to the average GDP per capita across its footprint.
to all operators. In Nigeria, tight SIM registration

regulations, MTNs fine and postponed license
auctions are dampening investment and growth,
while the South African governments inability to
agree on spectrum licensing policy is preventing
mobile operators from deploying full scale LTE
networks.
IHS draws its strength from its dominance of
the Nigerian market, having acquired MTN and
Etisalats towers and announced the acquisition
of rival HTN Towers in March 2016. It has further
solidified its presence in Nigeria through its
acquisition of the broadband infraco licence for the
North Central Zone in 2015, for which it will roll out
wholesale fibre optic networks in the region around
capital city Abuja. Despite the regulatory challenges
noted above, Nigerias huge population makes it
the most exciting market in the continent, with the
3G/4G subscriber base expected to more than triple
to 108mn between 2015 and 2020, by our forecasts.
As the biggest tower operator present in the South

African market, combined with its strong financial
position owing to its global reach, American Tower
is in a good position expand its presence in South
Africa when towers come to market.
While IHS currently has no footprint in South

Africa, the company has cultivated a deep
partnership with MTN, which would make them
strong contenders, alongside American Tower,
should MTN SAs towers come to market.
However, American Towers presence in Nigeria

and South Africa, both of which are dealing with
severe macroeconomic issues that are unlikely to
be resolved in the short term, weighs on the GDP
growth outlook across its footprint. Moreover,
both markets also have difficult telecoms
regulatory environments, posing additional risks
IHS also benefits from being the sole tower operator

in countries with rapidly growing telecoms markets
and bright economic prospects. BMIs country
risk team forecasts Cote dIvoire to be the fastest
growing economy in Sub-Saharan Africa over the
five years to 2020, which we expect to have positive
knock-on effects in demand for more advanced
XX
Nigeria By Far The Most Attractive Market

Nigeria By Far The Most3G/4G
Attractive
Market
Subscriptions
Forecast (000)
3G/4G Subscriptions Forecast (000)
150,000
100,000
50,000
2015e
2020f
Meetup
Africa 2016
19-20 October, Sandton
Convention Centre, Johannesburg
Nigeria
South Africa
Egypt
Tanzania
Ghana
Congo (DRC)
Cote d`Ivoire
Kenya
Zimbabwe
Uganda
Cameroon
Zambia
Burkina Faso
Rwanda
Congo-Brazzaville
Niger
e/f = BMI estimate/forecast. Source: BMI, National Sources, Operators
telecoms services from consumers and enterprises

pursue other options in order to remain competitive
alike. Meanwhile, Viettels entry into the Cameroon
against their larger rivals. One possibility is that
= BMI estimate/forecast. Source: BMI, National Sources, Operators
market has sparked strong competition and opened
the two smaller players will merge to form a larger
regional player. Airtel is still under discussions
demand for data services.
to sell its towers in the DRC, and should a second
What Next?
tower player acquire them then Helios Towers
Africa will be faced with competition in all of its
markets, which could accelerate a move towards
IHS impressive footprint across many of Subconsolidation. More likely, they will become
Saharan Africas most promising markets make it
acquisition targets for IHS or American Tower, or a
a highly investible company, positioning it well for
third player, such as SBA, looking to enter Africas
its touted IPO over the next two years. By contrast,
high growth telecoms markets
Eaton Towers and Helios Towers Africa will have to
The 4th annual retreat for250 leaders of the

African telecom tower community
www.towerxchange.com/meetup/meetup-africa/
TowerXchanges analysis of
American Towers acquisition of
Airtels Tanzanian Towers
American Tower joins Helios Towers Africa in one of Africas most investible tower markets
Breaking news!
On 5th May 2016, Airtel agreed the sale of 950

towers in the Democratic Republic of Congo
(DRC) to Helios Towers Africa. The divestment
also includes towers that are currently under
construction. The agreement is subject to
statutory and regulatory approval from the
By Laura Dinnewell, Head

of EMEA, TowerXchange
On 21 March, Bharti Airtel announced they had reached a deal with American
Tower Corporation to sell their 1,350 Tanzanian towers. The deal, which is expected
to close in H1 FY16, had a purchase price of US$179mn, representing an average cost
per tower of US$132.6k. Under the terms of the agreement, Airtel will be the anchor
tenant on the towers with an initial ten-year lease, with the deal potentially to be
expanded to include an additional 100 sites that are currently under development.
The move is the latest in Airtels strategy to divest their assets across the continent
and helps to bolster American Towers African portfolio, adding a fifth country to
their footprint. TowerXchange take a detailed look at the transaction, what it means
for both companies and how it affects the dynamics in the African tower industry.
Keywords: 3G, 4G, Acquisition, Africa, Airtel, American Tower, Burkina Faso, Chad, Co-locations, Congo
Brazzaville, Country Risk, Deal Structure, East Africa, Eaton Towers, Ghana, IHS, Insights, LTE, Madagascar,
Malawi, Masts & Towers, Millicom, MNOs, Network Rollout, Niger, Nigeria, Rwanda, Sale & Leaseback,
Seychelles, Tanzania, Tower Count, Transfer Assets, Uganda, Valuation, Viettel, Vodacom, Zambia
relevant authorities.
In a statement to the press Helios Towers

Africa CEO Kash Pandya said HTA is proud
to be chosen by Airtel as its partner for the
ownership and management of its existing
infrastructure. This is a ground-breaking move
for HTA, and Airtels decision is a significant
endorsement of HTAs reputation, management
team and operating track record.
Christian De Faria, Executive Chairman, Bharti

Airtel International Netherlands BV (BAIN),
added: We are pleased to strengthen our
partnership with HTA in Africa. The agreement
is in line with our stated philosophy of

Airtels history of selling towers in Africa
Growth projections for the Tanzanian mobile industry
Who owns Tanzanias 8,800 towers?
Details of the recent tower sale in Tanzania including deal value, tenancy ratios and forecasted
revenue for American Tower
< How the transaction will affect the countrys build to suit market
<
<
<
<
divesting passive infrastructure and promoting

sharing of towers to enhance operational
efficiencies that will further the growth of
telecom services. Airtel remains committed
to DRC and will continue to invest in its
operations and serve customers with worldclass services.
XX
Table one: Airtel tower sales in Africa
Country
Buyer
Tower
Count
Deal Value
(US$)
Cost per
Tower (US$)
Deal
structure
Tanzania*
American Tower
1350
179,000,000
132,593
SLB
Rwanda & Zambia
IHS
1113
181,000,000
162,624
SLB
Nigeria
American Tower
4700
1,090,000,000
231,915
SLB
Ghana, Burkina
Eaton
2,500**
371,972,250**
148,789**
SLB
390**
58,027,671**
148,789**
SLB
Faso, Kenya &

Uganda**
Congo Brazzaville
* Transaction expect to close H1 FY16 **TowerXchange estimates. Transaction values and tower counts not disclosed.
Sale of Niger towers with Eaton expected imminently
Airtels appetite to divest towers in Africa
tower portfolio and US$1.88bn.
To date, Airtel has closed tower transactions in eight

countries; Nigeria (with American Tower), Rwanda
and Zambia (with IHS), Congo Brazzaville (with
Helios Towers Africa);Ghana, Uganda, Burkina Faso
and Kenya (with Eaton Towers, although Airtels
opco in Burkina Faso is in the process of being sold
to Orange)when closed, the Tanzanian transaction
will represent the ninth (see table one).In a media
statementin October 2015, Airtel confirmed that
a total of 8,300 towers (representing 60% of their
total tower base) had been sold across the eight
countries, raising US$1.7bn for the company the
Tanzanian transaction will take this to 73% of their
In the same 2015 statement the MNO noted that

tower sales and leaseback shall continue to remain
a strategic priority for Airtel in all its operating
countries across Africa and accordingly the balance
of towers will be disposed over a period of time.
Airtel still retains towers in Malawi, Chad and the

DRC and whilst transactions in these markets had
been cancelled, it appears that a DRC tower sale is
very much back on the table, with Eaton Towers and
Helios Towers Africa battling it out for the portfolio.
Whether the Malawi and Chad transactions will
come back to market remains to be seen but we
can expect a healthy appetite from Africas big

towercos if they do. Eaton are expected to close the
acquisition of ~500 Airtel towers in Niger shortly.
Whilst Airtels initial tower strategy had been
to carve out their passive infrastructure into an
operator owned towerco, Africa Towers (in line with
the strategy they had followed in India with the
successful creation of Bharti Infratel), the company
changed direction in 2014 and commenced a
process to divest their African tower assets. In an
interview with TowerXchange in 2015, Christian De
Faria, CEO of Airtels African Operations explained
the change in tack We found that some African
operators were not always keen to lease towers
from a company with one competitive operator as
the sole shareholder. As the monetisation of the
assets was always one of the options we considered,
we were motivated to monetise our tower assets
sooner rather than later, as other African MNOs
have done. Monetising passive infrastructure also
provided an opportunity for Airtel to strengthen
our capital structure. We were frequently being
approached by companies interested in acquiring
our towers. There was huge appetite from Africas
towercos, which were already well established in
Africa at that time
The African independent towerco landscape and
American Towers footprint
Tower ownership in Africa is dominated by the big
four towercos; IHS, American Tower, Eaton Towers
and Helios Towers Africa (see figure two). The
worlds largest independent commercial towerco
with a tower count of over 140,000 (pending closure
Figure one: Airtel African tower sale - what has closed, and who is
buying what?
of the Viom Networks acquisition in India), American

Tower have a portfolio of 10,163 towers in Africa
spread across Nigeria, Ghana, the DRC and Uganda.
The Tanzanian transaction, when closed, will take
this count up to 11,513 and whilst only making a
small indentation on IHS market lead, it adds a fifth
country to the organisationss tower portfolio.
1
2
American Tower has typically 3
favoured markets
with relatively stable political and macro-economic
4 largest economies in
environments, and as one of the
Sub-Saharan Africa with a population of 54.3mn and
5
a GDP growth of 6-7% YOY in 2009-2015, the country
fits the bill.
6
Why are the Tanzanian towers a good acquisition
for American Tower?
The transaction, with an initial ten-year lease

agreement with Airtel as anchor tenant provides
long term stability to cash flows and with three credit
worth tier one MNOs supplemented by an aggressive
new market entrant and several niche operators
(see figure three) a wireless penetration forecasted
to grow from 70% in 2015 to 90% by 2019, and 3G
and 4G penetration expected to grow at a nearly 50%
CAGR in the same period the co-location potential
on the sites is high.
Sold to Eaton Towers (Niger announced, all

others closed)
Sold to American Tower (Tanzania
announced, all others closed)
Sold to Helios Towers Africa (DRC announced,
all others closed)
Sold to IHS
Currently retains towers
No opco present
The average tenancy ratio on Airtels towers is

1.35 and American Tower forecast the portfolio to
generate year one property revenue of US$50mn with
an expected gross margin of US$21mn. American
Tower forecast growth in line with their benchmarks
laid out for the African market.
XX
Figure two: Estimated number of towers owned or managed by towercos in MEA

804
IHS Africa
American Tower
2435
2408
2126
1927
1393
1400
1600
2000
1350**
4717
300
Eaton Towers
500***
700
70
500
1793**** 787
1964
15882*
3582
394
Unknown Country
South Africa
DRC
Rwanda
Uganda
Nigeria
Cote dIvoire
Zambia
Tanzania
Ghana
Cameroon
Congo B
Kenya
Burkina Faso
Niger
Egypt
Madagascar
5000
10000

****inclusive of Airtel deal just announced governing 950 towers
How does the transaction change the Tanzanian

tower market?
Tanzanias number one and number two operators,
Vodacom and Millicom, have both divested their
tower portfolios, with Helios Towers Africa scooping
both portfolios (see table two) giving Helios Towers
39% ofTanzanias towers. TowerXchange estimate
that the Helios Towers Tanzania (HTT) tenancy
ratio now exceeds 1.5, and would be higher had
it not been for their high volume of new builds.
The divestiture by number three operator, Airtel,
to American Tower brings a second independent
towerco to the Tanzanian market and places a
further 15% of Tanzanias estimated 8,800 towers
into towerco hands.
15000
20000
25000
With strong growth forecast in the Tanzanian

mobile market, along with continued rollout of 3G
and 4G, and with the aggressive entrance of Viettel
prompting renewed investment in networks by
incumbents, a number of build to suit contracts
are up for grabs in the county. The entrance
of American Tower into Tanzania introduces
competition for Helios Towers Tanzania (who had
also previously agreed to acquire the Airtel portfolio
before the transaction was cancelled) but with such
substantial growth forecast, the country should
easily accommodate two towercos.
Tanzania remains an ideal market for the
independent towerco model. With three strong
incumbent operators and an aggressive new market
entrant, none of which has dominant market share,

Tanzania still has relatively low penetration, so
there is a lot of growth potential. The regional
nature of Tanzanias mobile networks, with each
operator dominant in a different part of the country,
creates a perfect environment for infrastructure
sharing as each operator seeks a broader footprint
across the country. Recently acquired by Millicom,
Zantel is strong in Zanzibar; Millicoms own brand
Tigo is dominant in coastal areas, Vodacom in the
Arusha area, and Airtel is strong in the Lake zone.
Tanzania is also host to several other licensed MNOs,
ISPs and WiMAX operators further raising the glass
ceiling on prospective tenancy ratios.
With regards to future tower transactions by MNOs,
it is estimated that 4,000 are held by operators in the
country. New market entrant Viettel have built 3,000
towers in an aggressive network rollout (and are
believed to also be co-locating on an additional 1,000
Helios Towers sites) and a further 300 tower are
estimated to sit in the hands of Tanzanias smaller
operators. Following the acquisition of Zantel by
Millicom, Millicom have acquired the companys
~700 towers (having previously sold all their own to
Helios Towers Africa) and a decision has yet been
reached as to whether the company will also look to
sell these towers. Whilst the former Zantel towers
are likely to represent an attractive acquisition
target, whether a Viettel towers sale would pique
the interest of towercos American Tower of Helios
Towers Africa remains to be seen, with rumor in
the market suggesting that the structural capacity
of many of these sites may not be sufficient for colocation
Table two: Tower transactions in Tanzania
Tower
Cost per
Year
Country
Seller
Buyer
2016
Tanzania
Airtel
American Tower
1,350
179,000,000
132,593
SLB
2013
Tanzania
Vodacom
1,149
75,000,000
87,616
SLB with direct investment in HTT
2010
Tanzania Millicom/Tigo Helios Towers Africa
1,020
80,000,000
130,719
Joint venture (HTA 60%, Millicom 40%)
Figure three: Tanzanian mobile

network operator subscriber
market share
1%
28%
count
Deal value US$
Deal structure
tower US$
Figure four: Ownership of Tanzanias c.8,800 towers
700
300
1,149
Helios Towers Africa sites acquired from Vodacom
3%
4%
1,020
32%
Helios Towers Africa sites acquired from Millicom

Helios Towers Africa built sites
Airtel sites to be acquired by AMT
3,000
28%
Viettel sites
1,281
4%
Former Zantel sites, now owned by Millicom

Sites owned by smaller operators
Vodacom
Airtel
Tigo / Millicom
Halotel / Viettel
Smart Zantel TTCL
1,350
XX
TowerXchanges analysis of
IHSs acquisition of HTN Towers
1,211 towers
An in depth analysis of IHSs pioneering first African towerco consolidation

TowerXchange
On 10 March 2016 IHS, Africas largest towerco, announced the

acquisition of HTN Towers portfolio of 1,211 sites in Nigeria in a
landmark deal signifying the first in-market consolidation in the African
towerco segment. When closed, the transaction would take IHSs tower
countin Nigeria to 15,882 towers, 54% of the countrys 29,250 total (figure
one). In addition, HTNs managed services and co-location marketing
agreement concerning SWAP Telecoms & Technologies 702 towers will be
transferred to IHS following completion of the transaction (expected in
Q216) rendering further Nigerian towers under their control.
Keywords: Acquistion, Africa, Africa & ME Insights, Africa & ME News, Airtel, American Tower, BCTek, Buildto-Suit, Capex, Deal Structure, EBITDA, Etisalat, Globacom, Hotspot Network Towers, HTN, IHS, Investment,
Lease Rates, Market Forecasts, Masts & Towers, MNOs, MTN, NATCOM, Nigeria, News, Operational Excellence,
RMS, Site Level Profitability, SLA, Solar, SWAP Telecoms & Technology, Tenancy Ratios, Tower Count, Uptime,
Urban vs Rural, Valuation, West Africa

< The estimated valuation of the IHS-HTN acquisition
< HTNs revenue, EBITDA, tenancy ratio and TCF
< What degree of improvement capex is expected to be invested in integrating HTNs towers
< Why Nigeria represents an important growth market for IHS
< Whether further tower transactions could be on the cards in Nigeria
What do we know about the valuation and deal

structure?
Under the terms of the transaction, IHS will acquire
HTNs entire issued share capital from investors
Helios Investment Partners, Pembani Group,
First City Monument Bank and other minority
shareholders. Whilst IHS have declined to comment
on the deal value, a look at the history of tower
transactions in Nigeria (table 1a) gives an average
cost per tower of US$208,548 and puts an estimate of
the HTN portfolio at US$252.6mn. IHSs transaction
history in Africa over the past six years (table 1b)
shows a lower average cost per tower of US$192,195,
valuing the HTN deal at US$232.7mn. One must note
however that average cost per tower represents
an imperfect way to estimate transaction value as
numerous factors pertaining to tenancy ratios, lease
rates and location come into play.
What do we know about the health of the HTN
Towers portfolio?
In the financial year ending 31 December 2014,
HTN Towers achieved US$73.3mn revenue and
US$31.7mn EBITDA, rising to US$36mn revenue and
$19.8mn EBITDA for H1 2015 (a growth in EBITDA
margin from 43% to 55%).
HTN Towers boast one of the highest tenancy
ratios in Africa at 2.2 tenants per live tower, having
increased roughly 0.25 every year from 2010 to 2014
(any tenancy ratio growth above 0.2 per annum is
considered very healthy). Monthly TCF (tower cash
flow) per live HTN site sat just under US$4,500.
In the first half of 2015, 65% of HTNs adjusted

revenues came from three credit worthy, tier one
GSM operators: MTN, Airtel and Etisalat with a
further 16 broadband and telecommunications
customers sitting as tenants on HTN towers, joined
by broadcasting, transmission and corporate
tenants (figure two). Over 70% of HTN Towers
adjusted revenue now comes from the big three
Nigerian MNOs.
What degree of improvement capex do IHS
anticipate?
Given IHSs excellent reputation and strong SLA
results, we asked the amount of improvement
capex anticipated to bring the towers up to IHSs
standard. We are purchasing quality assets and
as such, the capex required is targeted at replacing
equipment at the end of its life explained our
source. HTN has implemented hybrid battery
solutions across over three quarters of its tower
sites and the majority are connected through
remote management. Going forward HTNs towers
will be further enhanced with alternate solar
optimisation and seamlessly integrated into our
portfolio to ensure the tower uptime continues
to match our industry standard of over 99%. All
tower sites will also be connected to our state-ofthe-art network operating centres so that we can
effectively monitor them 24/7.
What do we know about the location of HTNs
sites and their overlap with IHSs existing
portfolio?
Figure one: Who owns 29,250 Nigerias towers?

550
IHS own and BTS towers

IHS towers acquired from MTN
2,970
6,000
IHS towers acquired from Etisalat

IHS towers to be acquired from HTN
SWAP Telecoms & Technology (management and
200
marketing agreement to be transferred to IHS)
500
700
8,850
IHS towers acquired from Hotspot Network

American Tower Assets acquired from Airtel
BCTek
Communication Towers Nigeria
4,716
160 702
Other small Nigerian towercos
1,211
2,691
HTN has a complementary, attractive urban-centric

portfolio with significant coverage in Lagos and
Abuja and almost half its towers in Nigerias top 10
cities. The exact amount of overlap between the two
portfolios is unknown but HTNs IPO documentation
suggested that just under 10% of their sites were
within 100m of an IHS tower.
Why does Nigeria represent an important market
for IHS?
Nigeria is Africas largest economy and is the largest
market in Africa in terms of mobile consumption
with 151.2mn mobile connections. It has a healthy
competitive MNO environment with six operators
Globacom
NATCOM
and new data providers entering the market as data

usage in the country continues to grow apace, with
37% YOY growth in mobile broadband usage. There
is still potential for substantial amendment revenue
for towercos with 3G still being rolled out and LTE
being piloted.
In the press release announcing the HTN Towers
acquisition, Issam Darwish, IHS Executive Chairman
and Group CEO said We remain committed to the
Nigerian tower market where coverage levels are
yet to mature and explosive data growth continues.
The growing data traffic and increased smartphone
use presents an exciting market opportunity for
IHS, with the potential for up to 40,000 more towers
XX
Table 1a: Tower transactions in the Nigerian market
required to meet this demand.
Year
Country
Seller
Buyer
Tower
count
Deal value
US$
Cost per
tower US$
2016
Nigeria
Hotspot
IHS
160
$5,020,000
$31,375
2016
Nigeria
HTN Towers
IHS
1211
2015
Nigeria
Etisalat
IHS
555
SLB
2014
Nigeria
Airtel
American Tower
4700
$1,090,000,000
$231,915
SLB
2014
Nigeria
MTN
IHS
8850
$882,000,000
$196,700
Joint venture (IHS
Deal structure
49%, MTN 51%)

2014
Nigeria
Etisalat
IHS
2136
$485,000,000
$227,060
SLB
2010
Nigeria
Starcomms
SWAP
407
$81,000,000
$199,017
SLB
2010
Nigeria
Visafone
IHS
800
$67,000,000
$83,750
SLB
2010
Nigeria
Multilinks
HTN
400
MLL
Could we see any further acquisitions by IHS in

Nigeria?
Table 1b: IHS transactions in the African market

Year
Country
Seller
Buyer
Tower
count
Deal value
US$
Cost per
tower US$
2016
Nigeria
Hotspot
IHS
160
$5,020,000
$31,375
2016
Nigeria
HTN Towers
IHS
1,211
2015
Nigeria
Etisalat
IHS
555
SLB
2014
Rwanda & Zambia
Airtel
IHS
1,113
$181,000,000
$162,624
SLB
2014
Nigeria
MTN
IHS
8,850
$882,000,000
$196,700
Joint venture (IHS
Deal structure
49%, MTN 51%)

SLB
2014
Nigeria
Etisalat
IHS
2,136
2014
Rwanda & Zambia
MTN
IHS
1,269
SLB
Orange
IHS
2,000
MLL
2013 Cameroon & Cote dIvoire
$485,000,000
$227,060
2012
Cote dIvoire
MTN
IHS
931
$141,000,000
$151,450
SLB
2012
Cameroon
MTN
IHS
827
$143,000,000
$172,914
SLB
2010
Nigeria
Visafone
IHS
800
$67,000,000
$83,750
SLB
IHS was born in Nigeria and already has a

substantial presence in the country with 600 staff
on the ground and an existing portfolio, prior to
the proposed HTN Towers acquisition, of 14,511
towers following sizeable acquisitions from MTN
and Etisalat in the past two years. The company
has also just acquired Hotspot Networks portfolio
of 160 sites. Nigeria is IHSs largest market in terms
of tower ownership, accounting for 68% of their
total portfolio of 23,493 towers (figure three) and
the acquisition further strengthens IHSs position
as the leading mobile infrastructure provider in the
country.
Inorganic growth opportunities are limited in

Nigeria, where only Globalcom and NATCOMs
towers remain on MNO balance sheets. There exists
some potential to absorb portfolios of some of
Nigerias smaller towercos in a country where 79%
of towers are held by independent towercos, the
most recent acquisition of Hotspot Networks 160
sites being an example of this.
With, however, a potential 40,000 additional towers
needed to meet growing data traffic and smartphone
usage in the country, significant growth can be
expected in the countrys build-to suit market which
remains a critical focus for IHS following their
acquisition of HTN Towers
Figure two: HTN Towers customer mix H1 2015
35%
27%
MTN
Kieron Osmotherly
Founder & CEO
Etisalat
Jo Jefferies
Airtel
Others, primarily broadband customers
21%
17%
Figure three: IHSs African tower counts, pro rata for the completion of
the HTN Towers deal
Nigeria 15,882
Cote dIvoire 2,435

Arianna Neri
Head of Americas
Laura Dinnewell
Head of EMEA
Ian Ferguson
Head of Asia
Annabelle Mayhew
M: +44 7423 512588
Emma Jones
Toya Smith
Cameroon 2,408

Harpreet Sohanpal
Head of Marketing
For the designers of the TowerXchange Journal & brand:
Jon Whitty
Senior Designer & Brand Development
E: jon@blacklightdesign.co.uk
Zambia 1,964
Rwanda 804
XX
Commentary on IHSs acquisition of HTN Towers, by Kieron Osmotherly, Founder & CEO, TowerXchange
This makes sense. After the music stopped on the
now coming from tier one GSM operators. Factors
Africa / Nigeria-centric towerco play of substantial
game of who will buy Nigerias towers, HTN
limiting value: uncertainty surrounding the
scale before this deal, they still will be afterward.
Towers was left without a proverbial chair to sit
NCC fine on MTN and its implications for capex
The characteristics of the business, through the
on as IHS scooped the Etisalat and MTN towers
spend in 2016 and beyond; the presence on HTNs
lens of investors in a prospective future IPO,
(the latter in a joint venture with their anchor
balance sheet of a residual ~300 of an initial 491
would be far more substantially affected by a
tenants), and American Tower entered Nigeria
zero tenant towers acquired from Multi-Links;
substantial acquisition in Saudi Arabia or South
through the acquisition of Airtel Nigerias towers.
and the simple fact that HTNs towers are the most
Africa, which may or may not happen later this
Apart from an on-off deal to consolidate HTN
leased up in Africa insofar as there is a glass
year.
and SWAP, HTN had little prospect of inorganic
ceiling on tenancy ratios, this portfolio is closest to
growth, and two fierce competitors for organic
it. How much value can IHS add?
Does this transaction mark the start of in-market

consolidation of SSA towercos? Maybe, but I
growth, with IHS and ATC Nigeria poised to split

the BTS market between them. No wonder Helios
This is where IHS is the most logical consolidator
doubt it. We could see a few more middle market
IP and other HTN Towers backers had been
of HTN. IHS has scale, and an excellent track
towercos rolled up; HTN Towers agreement
seeking an exit for over a year, culminating in
record of delivering on client expectations.
to manage and market SWAP Telecoms &
coming to the brink of an IPO in Q4 2015.
Their sites have been extensively modernised,
Technologies 702 towers transfers to IHS as part
as have HTNs, while IHS can readily integrate
of this deal, and could be a precursor to a full
Before readers ask, no we dont know the value
HTN Towers portfolio into their state-of-the-art
acquisition. But do I expect IHS to acquire Helios
of the IHS-HTN deal. Within the main body of
NOC. This integration should proceed swiftly and
Towers Africa or Eaton Towers in 2016? No. Never
this article, weve hinted at a US$232.7-252.6mn
smoothly, once the deal is closed.
say never, but we think those assets will come to

market in 2017-18.
range. Factors driving value: HTN has been

EBITDA positive since FY2012 (making US$37.1mn
While the deal is pending approval, the presence
adjusted EBITDA on US$78mn adjusted revenue in
of the worlds largest independent towerco,
IHS has consolidated their position as the leading
FY14), has a high tenancy ratio at 2.2, and a strong
American Tower, in Nigeria should calm any
tower company in Nigeria, and in SSA. Whilst
operating history against SLA and MTTR KPIs.
regulatory concerns about IHSs market share in
we dont know the economics to comment on
HTN Towers has also largely recalibrated their
terms of tower count creeping toward 54%.
value, in terms of fit, this is such a no-brainer that
revenue mix away from an initial reliance on
What are the implications for IHS? This is not a
the only question is why the deal didnt happen
CDMA operators, with over 70% of their revenue
transformational transaction. IHS were a West-
sooner
Challenges for African middlemarket towercos and Hotspots tower

sale to IHS
An interview with Hotspot Network Limited COO, Charles Iyoha
Charles Iyoha, COO, Hotspot Network Limited
Hotspot Network Limited established itself as one of

Nigerias larger middle-market towercos, developing
a portfolio of 160 sites in urban areas through build
to suit agreements with Airtel and Etisalat. The
company has just announced the sale of their tower
portfolio to leading Nigerian towerco IHS. We speak
to Hotspot Network Limited COO, Charles Iyoha to
discuss the challenges towercos face in the Nigerian
market, the motivations behind their recent tower
sale, and what the future has in store for Hotspot.
Keywords: Access Control, Acquisition, Africa, Africa Insights, Africa & ME, Airtel, American Tower,
Anchor Tenant, Build-to-Suit, C-level Perspectives, Co-locations, Deal Structure, Energy, Etisalat, Hotspot,
Hotspot Network, IHS, Insights, Leasing & Permitting, Managed Services, Masts & Towers, MNOs,
Monitoring & Management, MTN, Nigeria Network Rollout, Novation of Leases, Passive Equipment, Tax,
Tower Count, Towercos, Urban vs Rural, Valuation, West Africa

<
<
<
<
<
The origins of Hotspot Network and how they grew their portfolio to 160 sites
Issues surrounding taxation and challenging community relations in the Nigerian market
The difficulties for a middle-market towerco competing with Africas big four towercos
Motivations behind and details of the sale of Hotspots tower portfolio to IHS
What the future has in store for Hotspot Network Limited
TowerXchange: Please introduce Hotspot

Network Limited.
Charles Iyoha, COO, Hotspot Network Limited:
Hotspot Network Limited was established in 2008
as an engineering services company focused on
services which included telecom managed services,
wireless solutions, satellite solutions, microwave
solutions, engineering support service and colocation services.
In 2013, we turned our full focus to co-location
services and signed an agreement with Etisalat and
Airtel in Nigeria to provide specialised co-location
and infrastructure sharing services to them. At this
time, we didnt have any towers of our own in place,
rather we signed an agreement with billboard
companies to use their giant monopole billboards
for telecom purposes and then shared the profits
from the operator lease payments.
Later in the same year, we decided it would be
wiser to also build our own structures to help our
competitiveness and growth. As such, we started
building disguised towers and water stanchions
and acquiring redundant billboards from billboard
owners. By the end of Q1 2016 we had developed an
infrastructure base of over 160 sites.
We have never been involved in providing power
as a service to the tenants on our sites, rather
we leased the ground and tower space and the
operators brought their own power equipment.
Our sites are primarily located in urban areas
XX
TowerXchange: How did the dramatic growth

of IHS and entrance American Tower into the
Nigerian market in 2014 affect dynamics and
the growth opportunities for middle-market
towercos such as Hotspot?
Whilst we had rapid growth between late 2013
and 2015, growing our infrastructure base from
zero to 160+ sites, the entrance of American
Tower and IHS had a significant impact on our
business. The sale of Airtel, MTN and Etisalat
towers to the two players in 2014 and 2015
created two significant competitors in the
Nigerian tower industry. With the operators
having sold their assets to the two towercos, their
appetite to use our infrastructure was greatly
reduced. We found that operators wanted to use
the sites owned by American Tower and IHS and
as such, the role for middle market towercos was
brought into question. Whilst I am a big advocate
of competition and the merits that it brings to an
industry, the size of the two companies made it
very difficult for us to compete.
After careful analysis, we realised we had to be
smart about the entrance of American Tower
and IHS into the Nigerian market. We decided
the smart thing to do was to align with one of
the big players and so we reached out to them
We realised we had to be smart about the entrance of American Tower

and IHS into the Nigerian market. We decided the smart thing to do
was to align with one of the big players and so we reached out to them
where it is typically been challenging for

operators and towercos to get a license to build
new infrastructure. We developed a handful of
sites in other scattered locations.
both. Having worked with IHS in the past and with them having an
appetite to roll-up smaller tower portfolios, we eventually decided to

go with them
both. Having worked with IHS in the past and with

them having an appetite to roll-up smaller tower
portfolios, we eventually decided to go with them.
TowerXchange: What can you tell us about
the details of the transaction with IHS and
the integration of Hotspot towers into their
portfolio?
Under the new arrangement with IHS, they will
acquire all our infrastructure and all existing lease
agreements on third party sites (e.g. billboard
sites) and we will now work together with them
to grow their middle market, helping them

with specialised tower rollout. We finalised
the agreement with IHS about two months
ago and received approval from the Nigerian
Communications Commission three weeks ago.
We are now in the process of changing over all
the landlord agreements (which always takes
a long time in the Nigerian market), as well as
getting consent from the operators. The Etisalat
consents are pretty much complete and we expect
to have the Airtel consents finalised within the
next couple of weeks. IHS will upgrade the sites to
their specification, a key element of this will be in
bringing power to the sites.
management. We will also continue to work with

IHS to help them with specialised tower rollout.
TowerXchange: Do you think that the acquisition
of middle-market towercos by the larger players
in inevitable?
In some states towercos have

as much as three different
licenses for the same tower
and the government and the
regulator need to step in here
TowerXchange: Whats next for the Hotspot

team?

Having adopted an outsourced model, the number
of permanent employees at Hotspot at the time of
the transaction is about 30. We will continue to
work with IHS to ensure the seamless integration
of our sites into our portfolio and then some of the
team will be integrated onto IHS payroll.
Hotspot Network Limited as a company will
continue to operate, however our focus is going to
shift to rural broadband rollout and data centre

As mentioned previously, in as much as I love
competition and the benefits it brings to an industry
I see a limited future for smaller towercos. Their
acquisition is inevitable, in the most immediate
future by IHS, but then also by American Tower as
their appetite to roll-up smaller towercos grows.
Within the next two to three years I foresee major
consolidation in the market by IHS and American
Tower.
Operators want to rid themselves of the overheads
and operational burdens associated with the
management of portfolios of 3,000+ towers on
a daily basis, especially in Nigeria with all the
problems that come with business here. They have
done the smart thing by partnering with reputable
and financially stable towercos to manage their
network rollout so that they can focus on their
primary business of selling airtime.
TowerXchange: Beyond competition from other
towercos, what do you see as some of the biggest
challenges facing towercos in the Nigerian
market?
There are lots of issues that towercos have been
facing since the telecoms boom started in 2001.

Some of these issues have been curbed or reduced
thanks to the regulator, but we do still have major
problems.
One of the problems is the issue of double taxation.
In some states towercos have as many as three
different licenses for the same tower and the
government and the regulator need to step in here.
Towercos are ready to pay their fair share of taxes
but instances where we have to pay federal, state
and local government taxes all for one tower should
be looked into. Federal, state and local governments
see the telecoms sector as a hugely profitable
industry and view it as an opportunity from which
they can obtain revenues. Such high taxation is
however seriously affecting towerco bottom line
and so there needs to be some harmonisation to
better manage this. The introduction of a single
body to which towercos pay taxes would help
alleviate the problem and this is something that it
currently being looked into.
Another major challenge in the Nigerian market
relates to the the issue of community relations
which affects everything in Nigeria. Youth
unemployment is high and the telecoms sector is
viewed as a rich resource they can tap. Whilst it is a
complicated issue, it can be addressed by enabling
laws to protect tower companies. Recently the
Inspector General of Police has stated that the police
will ensure free and unhindered access to all base
stations in the country. Whilst this is a step in the
right direction, we are waiting to see how his men
will enforce this
XX
the North African countries.
Share Square: Algeria

The auction for 3G licences was severely delayed by the
incumbent regulator, licences were eventually awarded in Q4
2013. 4G licences are expected to be launched in Q4 2016
Passive
There is good population coverage of 2G and MNOs are

currently expanding their 3G service offering to reach the
uncovered areas
No towercos operating at present; only small scale local sharing
agreements between Mobilis and Djezzy
North Africa remains one of the last regions uncharted
by towercos, however a stabilising political and economic
environment is expected to encourage investment in the near
future.
None
Current Sharing
Active
3 MNOs: Djezzy, Mobilis and Ooredoo
The towerco market is currently non-existent however it is

expected to emerge, especially if the political and economic
stability in Algeria continues. The largest risk in the market is
the heavy government presence within two of the three MNOs
Algeria
3G
4G


by MNO to towercos
28.7%
37.5%
Djezzy
Mobills (Algerie Telecom)
Ooredoo
33.9%

entrant towercos

Algeria had an estimated population of 40.0mn
people and 45.4mn mobile subscriptions at the end
of 2015, giving a mobile penetration of 113% - the
second lowest level of penetration of the six North
African countries, only higher than Egypt (101%).
Around 90% of subscribers in Algeria have a prepaid account, which ranks second lowest amongst
There are three Mobile Network Operators (MNOs)

serving the Algerian market, each holding a
substantial share of the subscriber base. Djezzy
currently holds the largest market share with
17.0mn subscribers closely followed by Mobilis
(Algerie Telecom) with 15.3mn and Ooredoo
(NMTC) who serve 13.0mn subscribers.
Algerias mobile subscriber base has grown rapidly
in recent years, increasing by just less than 30mn
in the last 10 years. Estimates suggest that the
increase will begin to slow marginally with the
subscriber base expected to reach 52.5mn in 2020.
The tender for 3G licences was first announced
in Algeria in Q2 2008, however it took until Q4
2013 for the auction to take place and the licences
to be awarded. Postponements were reportedly
due to the Algerian government completing
the acquisition of local mobile operator Djezzy.
The three main operators, Djezzy, Mobilis and
Ooredoo, all successfully acquired licenses through
the auction process and began to roll-out their 3G
service offerings almost immediately. By March
2014, Ooredoo had extended its network to reach
70% of the population which provided the operator
with a commanding 71.7% share of the market.
As the other two operators established their 3G
networks they quickly eroded the market share of
Ooredoo - culminating in the market share split
shown above.
Developments in 4G
In January 2016, the Algerian regulatory authority
(Autorite de Regulation de la Poste et des Telecoms,
ARPT) invited interested parties to submit proposals
for participation in the countrys 4G auction.
Successful bidders are expected to be notified in
May 2016 with the launch of the licences officially
taking place in Q4 2016. A stipulation attached to
the purchase of the 4G licences is believed to be
expansion into the Southern regions of the country
within the first three years.
Algeria is generally in line with the 4G
developments of its North African neighbours.
The Tunisian regulatory authority has accepted
proposals for 4G licences which are expected to be
allocated in April 2016, the Sudanese regulatory
authority awarded its first 4G licence to MNO
Zain in February 2016 and reportedly the most
advanced 4G market in North Africa is Morocco
where all three incumbent MNOs were granted 4G
licences at auction in March 2015. Egypt and Libya
are reportedly less advanced in the roll-out of 4G
services however promising regulatory and market
activities have been observed.
Operator activity
Mobilis (Algerie Telecom) is a subsidiary of the fixed
telephony, internet and satellite communications
provider Algerie Telecom which is solely owned by
the Algerian government. In a bid for independence
Mobilis unveiled plans in 2015 to acquire its own
fibre optic network infrastructure which has
caused a dispute with its parent company which

currently provides Mobilis with fibre capacity on
its own infrastructure. Orange and Vodafone have
expressed interest in acquiring a stake in Mobilis
in recent years, however reports suggest that a
listing of a 20% stake of Mobilis on the Algiers Stock
Exchange is most likely.
In Q1 2015 the Algerian government purchased a
51% stake in Djezzy from Global Telecom Holding
(GTH), a holding company of the Russian-backed
VimpelCom group. GTH maintains a 45.57%
share and the remaining 3.43% is owned by
private conglomerate Cevital. In Q4 2014 Djezzy
commissioned Alcatel-Lucent to upgrade its GSM
network, using a microwave solution to upgrade its
backhaul architecture.
Ooredoo rebranded from Nedjma in 2013 and is
part of the Kuwait based Ooredoo Group. Ooredoo
is the smallest operator in Algeria by total market
share, however it sits very closely behind market
leader Mobilis when considering the number
of 3G subscribers, 6.1mn to 6.7mn subscribers
respectively. In 2014, Ooredoo and Alcatel-Lucent
built a 400Gbps backbone in order to support
the countrys growing 3G market and in order to
deliver improved speeds and capacity to Algerias
main towns and cities.
Regulation
ARPT is an independent institution with separate
legal and financial operations from the Algerian
government. ARPT oversees a number of postal and
telecommunication matters, including spectrum

licensing, promoting competition, dispute resolution
and supply regulation.
Although ARPT is managed separately from the
Algerian government, instances have been reported
which suggest cooperation between the two parties.
The most noticeable of these instances was the
five year delay in auctioning the 3G licences which
caused significant frustration for the incumbent
mobile operators. The delay is reported to have
been due to the 51% stake acquisition by the
Algerian government of the MNO Djezzy.
ARPT is governed by a board and designated
CEO which are chosen by the Algerian President.
The board is provided with the powers required
to manage its operations and the board uses a
majority voting system where the Chairman has the
casting vote.
The tower sharing market
North Africa remains one of the last regions
uncharted by towercos. Reports suggest that
instances of political instability, such as the Arab
Spring in 2011, and unpredictable regulatory
involvement have caused investors to stay away
from the region to date. Analysts advise that as the
region stabilises politically and economically, the
countries will benefit from improved outsourcing
readiness and more passive infrastructure deals
are expected. Algeria follows the same trend as the
other North African countries and the estimated
17,500 towers in Algeria currently belong to the
three operators.
XX
Although independently managed tower sharing

is yet to develop within Algeria, Mobilis and
Djezzy signed a sharing agreement in Q1 2014
with the main aims reported to be a reduction in
environmental impacts and expenditure whilst
improving the network coverage of both operators
across the country. This sharing agreement came
less than six months after an agreement was signed
by Mobilis with the tower construction company
Tubprofil to erect future towers on Mobilis behalf.
Conclusions
With the second highest population in North Africa
(40.0mn people) and one of the lowest mobile
penetrations (113%), there is considerable room for
subscriber growth in the Algerian mobile market.
There is a good population coverage of 2G and the
incumbent MNOs have recently been authorised to
complete the roll-out of 3G services to the remaining
uncovered areas of the country. To date, Algeria
has matched the technology developments of the
other countries within the region with 4G licenses
expected to be awarded to successful bidders by the
end of 2016.
The three MNOs have a similar market share
which encourages competition. The three MNOs all
successfully acquired 3G licences and are reported
to have submitted proposals for 4G licences which
will help to ensure a continuation of competitive
pricing within the market. Concerns have been
raised about the regulatory authoritys involvement
and influence within the market in recent years,
especially considering the links with the Algerian
government and its financial interest in two of the

three MNOs (Mobilis and Djezzy).
Algeria has a good 2G population coverage and
a largely developed 3G coverage, however the
mobile penetration remains relatively low for the
region which would suggest a suitable environment
for growth. As the growth potential is realised,
future rollout is expected to be largely driven by
4G deployments and expansion. In combination
with stabilising political and economic conditions,
the Algerian market is expected to entice passive
infrastructure investment in the near future
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Regional coverage:
Asia features
TowerXchange CEO Kieron Osmotherly visited Beijing and Shanghai
on a tour of stakeholders in the new Chinese co-construction and
infrastructure sharing regime, including meeting the MIIT and three of
the countrys leading independent towercos. Two reports from that trip:
our FAQs and a look at the independent towerco sector.
Meanwhile, we flew Ian Ferguson the Head of TowerXchange Asia out
to Jakarta to meet Indonesias leading towercos and MNOs and report
on his findings. Ian recently relocated to KL, so he also spent some time
this month with our friends at edotco, including learning about their
operations in Sri Lanka and Myanmar, and touring their echo NOC.
Dont miss:
203 China tower market FAQs
215 Chinese independent towercos
220 edotco 360: Sri Lanka
223 edotco 360: echo NOC
226 edotco 360: Myanmar
228 Efficient tower markets
236 MNOs perspective: Indonesia
239 Moodys on XL-Protelindo
242 Cam Towerlink in Angkor Wat
245 TowerXchange study Laos
248 BMI on Indian tower market
252 Indus Towers on SCM
XX
China tower market FAQs

What we know, and what we still dont know, about Chinas new tower market
By Kieron Osmotherly, CEO, TowerXchange and Christie Liu, Head of China & Myanmar
Kieron Osmotherly, Founder and

CEO of TowerXchange, recently
completed a whistle stop tour of
several important stakeholders
in the emerging Chinese telecom
tower industry, taking fourteen
meetings in Beijing and Shanghai.
With deep gratitude to my
meeting counterparts for their
input and for their generous
hospitality, heres what I learned.
Keywords: 4G, ARPU, Air Conditioning, Asia, Asset Register, Bankability, Batteries, Best of
TowerXchange, Build-to-Suit, Carve Out, China, China Mobile, China Telecom, China Tower Company,
China Unicom, Construction, Country Risk, Debt Finance, Exit Strategy, Guodong, IBS, Infrastructure
Sharing, Lease Rates, Leasing & Permitting, MIIT, Market Forecasts, Market Overview, Masts & Towers,
Miteno, New Market Entrant, O&M, On-Grid, Operator-Led JV, Outdoor Equipment, Pass-Through, Q
Towers, RMS,Regulation, Research, Rooftop, SASAC, Shelters, Stakeholder Buy-In, Tax, Tenancy Ratios,
Tower Count, TowerXchange Research, Towercos, Transfer Assets, Valuation

<
<
<
<
<
What is China Tower Company? What does it own and how fast is it growing?
What is the scale and forecast growth of the independent towerco sector in China?
How does a new tower get built now?
What are the economics of the tower business in China? How do they compare to the US?
How investible are Chinese towers, and what opportunities are there for FDI?
Market context
What are current levels of mobile / SIM
penetration and ARPU?
According to Q4 2015 GSMA Intelligence statistics,
there were 1.3bn connections in China, representing
95% SIM penetration.
Blended ARPU ranges from RMB 40-56 (US$6-8.50)
depending which operators annual results you are
reading.
What is the status of Chinas 4G rollout?
Chinas three MNOs added 1.02mn 4G base stations
to their networks in 2015.
After deploying 1.1mn 4G base stations in the last
three years, China Mobiles 4G coverage is virtually
equal to their 2G GSM coverage, so expect their rate
of build and co-location to slow in 2016, adding
perhaps a further 200,000 base stations. China
Telecom and China Unicom are approximately
a year behind in 4G rollout, so expect sustained
growth levels from both in 2016 and the first half of
2017, slowing thereafter depending on the timelines
to 5G.
How many new towers were built in China in
2015?
Most interviewees agreed that a total of ~150,000
new towers had been built in 2015, with some
suggestion that total demand could have been for
1000
800
826.2
822.9
817.2
815.4
Source: Quarterly and annual reports,

TowerXchange presentation
Who owns Chinas telecom towers? What is the

current size and forecast growth of the Chinese
telecom tower industry?
600
400
200
294.8
289.3
188.8
191.4
Q115
287.6
Q215
China Mobile
China Unicom
286.7
194.3
197.9
Q315
Q415
In November 2015 China Mobile, China Unicom and

China Telecom transferred (most) of their towers to
China Tower Company.
Nobody knows exactly how big China Tower
Company (CTC) is yet, including CTC as they are
deeply embedded in the process of auditing and
China Telecom
Chinas 4G base station rollout, FY15

China
Mobile
China
Unicom
1,100,000
380,000
310,000
China
Telecom
400,000
510,000
330,000
200,000
400,000
600,000
Build before FY15
800,000
1,000,000
1,200,000
Source: MNO quarterly and annual reports, TowerXchange presentation

as many as 400,000. With over a million 4G base

stations rolled out in 2015, over 80% must have been
co-located on existing sites: tenancy ratios will have
risen sharply.
In 2015, China Telecom

installed 80% of their new
4G base stations on towers
formerly owned by China
Mobile, avoiding significant
expense
Chinas MNO subscriber numbers (mns) FY2015
XX
integrating assets. It seems like at least one, if not

more, of Chinas MNOs are or were delaying the
transfer of the last 10% of the most strategically
located towers.
Consensus of opinion was that Chinas total tower
and rooftop count was in the 1.2-1.3mn range.
TowerXchange have used 1.18mn in our models to
err on the side of caution, inclusive of the ~20,000
towers owned by Chinas highly fragmented market
of 200+ independent towercos. Further detail on
the structure, scale and forecast growth of Chinas
independent tower companies is provided later in
this report.
What is the vision behind creating CTC?
The Ministry and other government stakeholders
have been promoting a culture of efficient
infrastructure sharing in China for eight years.
CTC was formally created in November 2015 to
consolidate and share existing towers, to construct
shared additional towers, and to save land and
tower resources.
One of the goals of CTC is to improve the customer
experience from, in some cases, a few hundred KB
per second, to as much as 20MB per second once 4G
is fully deployed.
CTC is also seen as a mechanism for reducing
the gap between competing MNOs by providing
China Unicom and China Telecom with access to
China Mobiles vast tower network, enabling them
to accelerate and catchup their 4G rollout. If 4G
Research methodology and contextual notes

This report is a result of primary market research; conversational interviews structured upon a selection
from a standard set of questions that form the section headings in this FAQ.
The anxiety of my generous Chinese hosts to help, their justifiable pride in their achievements, and
their resultant reluctance to say I dont know, combined with a complex landscape of overlapping and
conflicting interests, means I must caution that the source material for this report is subjective in nature,
and no stakeholders had access to all the facts. TowerXchange have neither the language skills, nor is
there information available, to verify much of what was said. Or, to put it another way, we asked the same
questions 14 different times and got 14 different answers!
If youre interested in investing in China, drop me an email and well schedule a chat. Ill be happy to make
further introductions. But you need to do your own research; this document should not be used as the basis
for any investment decisions. kosmotherly@towerxchange.com
coverage were complete, using VoLTE could enable

refarming of valuable spectrum.
IBS are widely deployed in China, but there are not

many DAS.
Opportunities to diversify CTC into other shared

infrastructure, and the sheer scale of the business,
means the vision is less to create the worlds largest
and most valuable towerco, but to create one of the
worlds largest and most valuable infrastructure
companies.
We did hear of one towerco with a substantial

streetlamp project in one of Chinas major cities
they called them information poles and spoke of
how they were supporting the Smart City vision.
Does CTC also own assets beyond the macro

network, such as rooftops, IBS, DAS and
transmission infrastructure?
CTC has absorbed most, if not all, Chinas legacy
towers, monopoles and rooftops. There is an
appreciation at CTC that the co-construction
and sharing model can extend beyond towers to
transmission infrastructure, but that does not seem
to have been incorporated yet.
Does China Tower Company only own and lease

up the towers, or do they undertake O&M too?
The current incarnation of CTC is primarily an asset
management company. Although CTCs estimated
30,000 employees sounds like a lot, its a drop in the
ocean compared to the ~1.5mn employees of Chinas
three State owned MNOs.
Whilst CTC continues to recruit and scale up,
at present most of the O&M work remains
subcontracted.
Who are the principal stakeholders in China

Tower Company who are they answerable to?
Further to a recent investment by China Reform
Corporation, which has been likened to a
sovereign wealth fund with a particular focus on
reforming State-owned Enterprises, China Mobiles
shareholding has been diluted to 38%, China Unicom
to 28.1% and China Telecom to 27.9%.
While the MIIT (Ministry of Industrial and
Information Technology) defines policy, CTC is
effectively answerable to SASAC, the State-owned
Assets Supervision and Administration Commission.
Shareholders in China Tower Company

China Reform
Corporation
6%
China
Telecom
27.9%
China
Mobile 38%
China Mobile
China Unicom
China Telecom
China Reform Corporation
China Unicom
28.1%
What is the organisational structure of China

Tower Company, including the autonomy of
provincial subsidiaries?
Mr Jilu Tong is the President / General Manager of
CTC.
There are three levels of CTC management:
headquarters in Beijing; branches of CTC have been
established in all 31 Provinces, with a further 3-4,000
at city / municipality level.
As O&M and some oversight capabilities come inhouse, expect junior satellite offices at county level.
Does CTC have some kind of right of first refusal
to build new towers for the three State owned
MNOs?
Some sources told us that all build to suit (BTS)
processes were supposed to be open. Other sources

told us that the official structure of the Chinese
tower market is that the MNOs are no longer
building their own towers, and all the work is being
undertaken by CTC. While MNO builds have more
or less halted, the reality is that CTC currently lacks
the capacity to meet 100% of MNO demand, which in
a practical sense means in some cases third parties
are contracted to build sites which are then are
transferred to CTCs balance sheet.
In other instances it seems that the independent
towerco steps in as a fallback option if CTC lacks
the capacity, or gets too bogged down in process, to
meet MNO demands on time. Chinas private tower
companies are often more energised and faster to
market, said one interviewee.
In other instances it seems the independent
towercos simply undercut CTC, as a function of

lower management costs. On still other occasions
it seems that independent tower companies might
have better local site hunters, and are able to
leverage relationships with MNO network planners
at provincial or municipality level to secure direct
orders.
CTC has a scale advantage from the legacy towers,
but no significant advantage when competing for
new BTS contracts, said one interviewee.
In some provinces the carriers are more open to
new entrants as they dont feel its in their interests
to have a monopolistic towerco, whereas in other
provinces CTC are more entrenched, said another
interviewee.
TowerXchange dont think a Right of First Refusal
type arrangement is the primary risk to the
XX
What is the mix of GBTs versus rooftops in China,

and how has CTC affected tower design?
certainly lower the glass ceiling on prospective

tenancy ratios in China, and would be value
destructive to both CTC and independent towercos.
CTC has standardised tower design.
There might be 8-10 bidders for

a tower build contact, but in one
recent instance there were 34
bidders for a contract for around
1,000 towers. However the short
deadline created barriers to entry
for new entrants and underfunded small towercos
independent sectors organic growth potential

rather the single biggest risk might be that the
current window of opportunity for independent
towercos to build may close if CTC reaches full
capacity, particularly if accompanied by a shift in
policy toward a more protectionist attitude toward
State-owned entities like CTC.
Is it easy to get a new tower built?
While Chinas citizens once welcomed towers and
coverage, over the past five years there has been
a growing NIMBY (Not In My Back Yard) mentality
that has actually helped the independent towerco
sector as it has enabled Chinas MNOs to improve
community relations by putting a third party
between themselves and local residents.
Around two thirds of Chinas ~1.18mn sites are GBTs

(Ground Based Towers mostly monopoles), the
other third are rooftops.
Approximately how many of Chinas towers are
currently shared? What are the tenancy ratios?
Tenancy ratios are difficult to quantify without
hard data from the CTC portfolio. What we do know
is that there was little bi-lateral sharing before
the creation of CTC, an agreement between China
Unicom and China Telecom notwithstanding.
However, with 1.02mn new base stations added in
2015, as many as 80% co-located, we would forecast
the current tenancy ratio to be in the 1.7-1.9 range.
In the independent sector, it was suggested a
tenancy ratio of around 1.5 was average, but
TowerXchange heard of decent sized independent
portfolios with tenancy ratios as high as 2.8.
What is the typical capital outlay for a new tower
in China?
RMB 250-350,000 (US$35-50,000).
What would be the impact of consolidation from
three to two MNOs?
Consolidation from three MNOs to two would
While there has been rumor of MNO consolidation,

the governments current strategy appears to be
to accelerate China Unicom and China Telecoms
4G rollout by providing access to China Mobiles
towers, and in doing so start to even out the
competitive imbalance. If the creation of CTC does
not have the desired effect in terms of competitive
rebalancing, only then would the issue of MNO
consolidation return to the agenda.
The scope of a China Unicom-China Telecom
merger would likely be limited to their wireless
businesses, given that a combined entity would
have 80-90% share of the wireline market.
Are there any significant non-traditional
tenants on Chinas telecom towers?
The usual mix of MVNO, enterprise industrial
communications equipment, traffic monitoring,
first responder networks and Wi-Fi equipment
are all prospective additional tenants. However,
Chinas tower companies did not seem bullish
about the revenue potential of this category. When
we asked if non-traditional tenants could make up
as much as 0.2 of a tenancy ratio on a well leased
up portfolio of towers, they thought that number
sounded high.
Is there any prospect of active infrastructure
sharing in China?
The only infrastructure sharing agreement of

scale in China before CTC was China Telecom and
China Unicoms deep collaboration to share 4G
and transmission to improve economics in low
utilisation, remote areas.
Regulation
Are Chinas independent towercos licensed?
No, there is no licensing regime for towercos in
China, and no immediate prospect of a licensing
regime being introduced.
Does the Ministry of Industrial and Information
Technology (MIIT), regulator or National
Telecommunications Infrastructure Coconstruction and Sharing Office have the right to
define the pricing of lease rates?
State stakeholders insist that lease rates will be
defined by the market, and that they have no right to
intervene in lease pricing enshrined into regulation.
Now there is a board of Directors in place to create
more separation between CTC and their parent
MNOs, CTC lease price negotiations are likely to
conclude. While it may be tempting to imagine that,
when 94% owned by their tenants, CTC would agree
to a cost plus very low markup margin, it must
be borne in mind that China is trying to create an
infrastructure powerhouse with an RMB 280bn+
(US$40bn+) valuation!
What is the status of rural coverage in China?
Despite the huge land area, rural coverage in

China may be better even than the US; even in
low population density areas of Tibet you will see
coverage signs.
subways, railways, highways, airports, railway

stations and other public transportation key sites
and large venues and multi-owner commercial
buildings, government office buildings and other key
sites.
How are tower companies taxed?

There was no reported special tax status for tower
companies in China, meaning they would be subject
to VAT at 17%, 6% tax on the service business, 11%
as tower owners.
State owned enterprises have sometimes been
affording special tax treatment, enabling them
to consolidate. There was no clear indication yet
whether this might apply to CTC.
Is document number 586 (2014) the latest
regulation governing co-construction and
sharing? Is it now fully enforced?
This is the most recent document, and it has
been fully implemented. But document 586 is an
agreement not a regulation. It was proposed by
the MIIT and agreed with Chinas three MNOs to
improve resource utilisation; reducing occupation
of land and improving the appearance of the
landscape.
A couple of excerpts from document 586 (please
forgive any translation imperfections):
From January 1, 2015, in principle, the three basic
telecom carriers shall no longer build towers and
other base facilities themselves, as well as IBS in
The MIIT, SASAC or the province

telecommunication authorities will severely punish
the three basic telecom carriers, if the following
behaviors were found. Basing on severity such
punishment could be recommended to upper level
unit to fire the related management. Such dismissed
staff shall not be engaged within three years.
i. Without the approval of the provincial
coordination agencies, construct towers and other
ancillary facilities, as well as IBS in public transport
and construction of buildings and other key areas
ii. Without the consent of the provincial
coordination agencies, refuse to open sharing when
the existing telecommunications infrastructure is
suitable for sharing
iii. Without the approval of the provincial
coordination agencies, build parallel infrastructure
iv. Independently build new infrastructure when
joint construction should be carried out
v. Violation of requirement of infrastructure
sharing in key areas (key areas including key public
transportation sites, key buildings, scenic parks and
other places identified by local communications
administration, and inter-province key fiber
cable construction, and the domestic extension of
international transmission)
vi. Violate national standards on optical fiber ToHome construction
XX
vii. Sign exclusivity agreement with the third

parties in the construction of telecommunications
infrastructure (including leasing)
the National Land Ministry to resolve these issues.
Clause vii. above calls attention to the fact that

MNOs would appear to not have permission to sign
exclusive agreements with third parties (towercos),
suggesting a degree of limitation on deep build to
suit partnerships
Who are the independent tower companies in

China? How much market share do they have?
How fast are they growing and what is the top
end for their potential market share?
Who owns the land under Chinese towers and on

what basis is tenure granted to infrastructure
firms to build towers on that land?
All land in China belongs to the government, but
Land Use Rights can be secured for a 15 year term
for industrial use, usually at a reasonable cost. As
renewal fees cannot be defined up front, there is
some exposure to risk of lease escalations when
renewing after 15 years, but in general it was felt
that escalations would be fair in a market where a
State owned Entity was dominant.
Above ground level, the telecom structures
themselves belonged to Chinas MNOs and now
belong to CTC, or they belong to the independent
towerco.
How complete is the paperwork on Chinas
towers?
It was widely acknowledged that not all the towers
in China, whether CTC or independently owned, had
a complete set of licensing, permitting and leasing
paperwork. CTC are reportedly in discussions with
Tower market
The creation, scale and growth of CTC has already

inaugurated a culture of infrastructure sharing
in China and, especially whilst CTC gets up to
capacity, independent towers are springing up and
prospering in regions where local relationships
enable them to build quicker than the State owned
CTC.
At the end of 2014, China may have had as few as
10-20 independent towercos owning ~5,000 towers.
By the end of 2015, those numbers had increased
to ~20,000 towers among as many as 200 towercos.
Independent towercos built ~10% of Chinas
new towers in 2015, a proportion which bullish
commentators feel could reach 30% within a year.
It is axiomatic to say, but readers must be reminded
of the sheer scale of China; an independent
tower sector can still thrive even with less than
2% market share, especially when one considers
TowerXchanges forecast that that market share
will rise to 6.5% over the next three years.
TowerXchange have spoken to a few bullish tower
industry leaders who feel the glass ceiling on the
scale of the independent tower sector in China
could be as high as 20% within five years - that
could represent 400,000 towers, the equivalent scale
of the entire tower market in the European Union!

While there are independent towercos active in
Chinas largest cities, Shanghai, Beijing, Tianjin,
Guangzhou and Shenzhen, perhaps the highest
penetration of independent towers can be found
in Provincial capitals, tier two and tier three
cities in some of which TowerXchange has heard
unconfirmed reports that independent towercos
have a market share significantly in excess of 50%.
With the exception of four or five towercos with
quadruple digit tower counts, Chinas independent
towerco market is highly fragmented and localised,
with five to ten towercos in each of Chinas 31
Provinces. There could be more than 200 towercos
in China.
Are there any valuation benchmarks set by
towerco financing or tower sales?
One source suggested that Chinese towers with an
average tenancy ratio of 1.5 were changing hands
for an average of RMB 450-500,000 each (US$6570,000 each). Another source put the figure at RMB
700,000 (US$100,000) with a tenancy ratio of 2.0. A
third source suggested a 51% stake in a portfolio of
several hundred towers with a tenancy ratio above
2.0 had been acquired at a valuation again of RMB
700,000 (US$100,000) per tower.
Guodong, which is probably Chinas largest
independent tower company with 6,000 towers,
secured a RMB 700mn (US$100mn) investment
reportedly at a high teens valuation they were very
proud of.
Chinese tower industry dashboard, 2015-17
China tower market end FY17

1.7%
3.6%
Estimated tower and
rooftop count, end
FY15: 1,180,000, of
which independent
sector owned ~20,000
98.3%
China Tower Company
96.4%
6.5%
Forecast tower and
rooftop count, end
FY16: 1,400,000, of
which independent
sector will own 50,000
Strategic sites MNOs are rumored to have not yet transferred
Forecast tower and

rooftop count, end FY17:
1,550,000, of which
independent sector will
own 100,000
93.5%
Independent towercos
Detail on the independent towerco segment

Independent tower market
end FY15, ~20,000 assets
8,000 towers
spread across
4 Tier one
towercos
8,000 towers
spread across
35 Tier two
towercos
Forecast independent tower market

end FY16, forecast 50,000 assets
41,000 towers spread
across 10 Tier one
towercos
92,000 towers spread

across 15 Tier one
towercos
6,500 towers spread

across 30 Tier two
towercos
1,500 towers spread across 500 Onesies
and twosies
25 Tier three towercos
2,100 towers spread across 30

Tier three towercos
Tier one, 1000+ towers subdivided into three classes:

Forecast independent tower market end FY17,

forecast 100,000 assets
400 Onesies
and twosies
5,000 towers spread across

25 Tier two towercos
2,700 towers spread across 35 Tier three towercos
300 Onesies
and twosies
Organic growth play

Rollup play
Graduating tier twos achieve scale
Tier two: 100-999 towers
Tier three: 10-99 towers
"Onesies and twosies" <10 towers
XX
The transfer of China Mobile, China Unicom and
In conclusion, it seems increasingly apparent
China Telecoms towers to CTC reportedly yielded
that CTC is a prospective acquirer of independent
an average of just US$22,000 per site, significantly
towers, if the price is right, but that CTC and the
below replacement cost. But an asset transfer
independent sector can co-exist.
between entities all fundamentally State owned

(and owned by each other) is a poor valuation
Is there a risk of State Nationalisation of
benchmark. The low acquisition cost reflects the
independent towers?
depreciation of an inventory of ten plus year old

towers, towers which were built to gain market
Some sort of compulsory purchase order of
share and with less of a view toward longevity and
independently owned towers, at an unfavorable
structural capacity, so significant improvement
valuation, or independent towercos simply
capex will be required. The low price point also
finding CTC building towers adjacent to theirs,
reflects the mixed bag of assets being transferred,
is the Armageddon scenario for Chinese tower
inclusive of everything from substantial ground
entrepreneurs and their investors.
based towers, a great many monopoles, rooftops,

and even small Wi-Fi offload sites.
It must be acknowledged that nationalisation

of assets is a risk hanging over several thriving
Is China Tower Company a potential buyer of
independent tower markets in other nations. Is that
independent tower companies towers?
risk present in China? Yes. Did it seem like that was

a concern whilst the independent sector had a single
TowerXchange were unable to verify that SASACs
digit market share? No.
original vision was for CTC to acquire all Chinas

telecom towers, both from the three MNOs and
The impression TowerXchange got from the MIIT
from independent towercos. There seems to be an
was that, while their initial vision for CTC was
increasing realisation that independent towercos
to to create a State-owned natural monopoly to
play a helpful role in accelerating rollouts.
maximise efficiency, a pragmatic view was now
Nonetheless, while they have not yet completed
being taken on the independent tower sector,
any acquisitions of scale, CTC were believed to
appreciating the positive role of market forces in
have made an offer to acquire Chinese towers
setting a fair lease price, and appreciating that
at ~US$80,000 each. Whether that valuation is
the supplementary capacity and hunger of an
still current remains unclear, and whether such
independent tower sector could accelerate the
a valuation may be attractive to current owners
achievement of the Ministrys ultimate goals:
depends on tenancy ratio, TCF and uniqueness of
to support efficient sharing of resources, and to
location.
accelerate the rollout and adoption of 4G.
China is progressing and promoting

entrepreneurship, said one interviewee, with
reference to the risk of asset seizure. The China
Dream as proposed by President Xi is built on an
open, competitive market.
Do Chinas tower companies have much appetite
for International opportunities?
Chinas tower sector seems largely pre-occupied with
their huge and changing domestic market. However,
for the handful of Chinese towercos with appetite
for opportunities overseas, capital may be accessed
for opportunities within the One Belt, One Road
footprint through associated investment firms such
as the Silk Road Fund and the Asian Infrastructure
Investment Bank.
What are typical lease rates and terms in China?
Lease rates are a complicated formula based on
height and weight of equipment, desirability of
location et cetera. Most interviewees agreed that a
range of RMB 4,500-6,000 pcm was common (US$650900). The lowest we heard was RMB 3,500 (US$500)
in less developed cities, rising to RMB 11,000 in (over
US$1,500) on high rental cost sites in major cities.
TowerXchange would recommend using an average
lease rate of RMB 6,000 (US$900) pcm for models.
Like India, when additional tenants are added
to Chinese towers, existing tenants leases are
discounted.
Lease terms are typically 10+10 years.
Down payments for new sites have been reduced

to a single year since the advent of CTC, adversely
affecting independent towerco cash flows.
How do the economics of a single tower in China
compare to the USA?
Russia
Europe
See U.S. versus China macro tower build

economics. Note that when an additional tenant is
added, lease rates are discounted for both the new
and original tenant in China. This is not the case in
the US.
Central Asia
Middle
East
South Asia Southeast
Asia
Mediterranean Sea
We must emphasise that you must treat this table

with a pinch of sale China data is averaged based
on multiple sources but all sources are subjective.
South China Sea
Indian
Ocean
South Pacic
Who owns Chinas broadcast towers are MNOs colocating on them too?
China Broadcasting and Media Group has the 700
MHz license and owns most of Chinas broadcast
towers. TowerXchange have not yet been able to
ascertain if these towers are offered for co-location
by Chinas MNOs.
The blue route is the 21st Century Maritime Silk Road, and the red routes are the Silk Road Economic Belt
U.S. versus China macro tower build economics

One tenant US
Two tenants US
One tenant China
Two tenants China
Construction costs
$275,000
$50,000
Tenant revenue
$20,000
$50,000
$12,000
$20,000
How can early stage towercos in China access

capital?
Opex
$12,000
$13,000
$7,000
$10,000
Gross margin
$8,000
$37,000
$5,000
$10,000
China offers a challenging path to scale for local

tower entrepreneurs. Raising debt from Provincial
financial institutions is complex, time consuming
and expensive. While private, domestic investment
Gross margin %
40%
74%
42%
50%
ROI
3%
13%
10%
20%
Investment
Source: U.S. illustration drawn from of American Tower presentation, June 2015, does not reflect any American Tower financial data.
China data from TowerXchange research
XX
is gradually becoming more available to debt-funded

infrastructure firms with contracted long term
cash flows, like towercos, Chinese capital markets
have historically been predisposed to invest only
in profitable companies, at the expense of business
models like telecom towers that naturally lend
themselves to a degree of leverage. Small tower
companies in particular struggle with the fact that
towers are not securable.
State and provincial level investment funds may not
be inclined to invest in entities which compete with
State-owned CTC.
Please explain the latest rules regarding foreign
ownership of, or investment in, communications
infrastructure?
mechanism for foreign direct investment in China

via an international holding company, a WOFE
(Wholly Owned Foreign Enterprise), in which USD,
EUR or other currency could be invested, which could
be registered in the Caymans, Delaware et cetera,
and which could be listed on the NASDAQ or other
international stock exchange.
The VIE structure was apparently first used in this
sector over 20 years ago to facilitate investment in
China Unicom, with subsequent VIE investments in
Alibaba, Tencent and Baidu.
A critical question when leveraging a WOFE to invest
in China is where the IP sits, at holding company
or local subsidiary level? If the latter, international
investors could be exposed to risk.
potential IPO or trade sale.

CTC may be a prospective trade sale counterparts,
although management attention appears to be
focused on integrating newly acquired legacy towers
in the near term. At least one of the Indonesian tower
companies is believed to have an appetite to invest
in China, while TowerXchange has learned of two
domestic rollup plays.
Could a major international strategic investor be
interested in acquiring Chinese towers? Probably not
at the current scale of the independent market, where
the largest independent towerco claims to have 6,000
towers, but if an independent towerco could build
or rollup 30-50,000 towers, they may attract interest
from some of the more acquisitive international
towercos.
TowerXchange understand, but have been unable

to confirm, that passive infrastructure is not
considered a sensitive asset class, so FDI may be
possible into Chinese joint ventures, particularly
those in free trade areas, or through VIEs. We have
heard unconfirmed reports of one foreign investor
acquiring a 51% stake in a towerco.
A VIE would be a viable but suboptimal route to

investing in a Chinese tower company, said one
interviewee. yes you can do it, but it may adversely
affect valuation.
An interested investor called attention to the

VIE (Variable Interest Equity) structure, which
enables foreign investors to invest in sensitive
infrastructure, do investors still need to use this
or is more direct investment now permitted given
the recognition that passive infrastructure is less
sensitive?
In the event a foreign investor was seeking exit from

a listing entity, they might seek to sell their equity to
the domestically listed entity, releasing capital at an
agreed exchange rate.
What are the potential exit strategies for investors
in Chinese towers?
Some sources suggested that entities listed on that

stock exchange can only accept investment in RMB,
meaning foreign investors would have to exit at the
time of listing, or setup a new entity. More recently it
seems that qualified international investors can invest
in companies listed on the Shanghai stock exchange.
One TowerXchange source defined VIE as a
As in any market, exit strategies tend to focus on
There is one listed tower company on the Shenzen
What would foreign investors options be to

repatriate capital?
When considering exit through IPO, the perception

remains that Chinese companies need three years of
profitable trading history to list as an A share on the
Shanghai stock exchange. There was some suggestion
that unprofitable companies might soon be allowed to
list, but apparently that potential reform will not take
place imminently.
stock exchange, Beijing Miteno Communication

Technology Company Limited (300038), with at least
one planning to list in Shanghai in 2016. It should
be noted that there is approximately a two year wait
to list on the Shanghai stock exchange.
While the Shanghai stock exchange opens access
primarily to domestic investors, a listing, or dual
listing, on the Hong Kong stock exchange offers
more exposure to international liquidity and
an increased level of transparency with which
international investors are more comfortable. Most
of Chinas large infrastructure entities are listed in
Hong Kong.
Most stakeholders TowerXchange spoke to assumed
a better valuation would be achieved on the
Shanghai stock exchange (the P/E multiple in
Shanghai might be 30-50x compared to 10x in Hong
Kong), but there are precedents where higher
valuations were realised in Hong Kong (e.g. in the
insurance industry), while the current appetite
of international investors for towers as an asset
class, and the valuation of natural comps, may also
contribute to a potential healthy valuation of a tower
company on the Hong Kong stock.
A stock market listing of CTC in 2017-18 is openly

discussed and widely anticipated as a means of
repaying Chinas three MNOs the full value of injected
legacy assets.
Who is responsible for site modernisation and air

conditioning, towercos or MNOs?
Unconfirmed reports suggest CTC is responsible for
While those closest to CTC would not speculate

which stock exchange might be used, the widespread
assumption would be that Hong Kong would be the
logical choice. One analyst we spoke to suggested
around 30% of the equity in CTC could be floated.
shelters AND air conditioning.
Power
Is there any formal mechanism favoring or
While most new sites are built with outdoor

equipment, few legacy sites have been modernised
with, for example, free cooling.
requiring a degree of local content from suppliers
Are power costs passed through from China Tower

Company to the MNOs?
to CTC?
Apart from the need for vendors to be certified
Power is a pass through, sometimes paid up front.
by the MIIT, we could find no formal mechanism

favoring local content, but anecdotally it seemed that
What proportion of the cell sites are on-grid, on

unreliable grids or off grid?
a significant majority of CTCs procurement was from

Chinese companies such as Huawei, ZTE and China
ComService
Almost all on reliable grid connections.

What backup power solutions are typically on cell
sites? Are towercos or MNOs responsible for them?
Towercos have recently been required to provide
Will it be possible to invest in CTC? Is there a

plan to list China Tower Company on the stock
market in future?
backup battery banks, typically with 4-8 hours float.
While it is widely believed that more third party

investors will be afforded an opportunity to buy in
to CTC prior to IPO, it is not clear whether foreign
investors will be able to participate.
Are remote monitoring systems typically deployed
considering making RMS a National standard.
Most batteries are lead-acid. There are very few

backup DGs.
on cell sites?
RMS is deployed on some, not all cell sites. CTC is
Special thanks
TowerXchange are grateful to the Ministry of
Industrial and Information Technology, and to Miteno,
Guodong, Q Towers, China ComService (STUDPI),
Capital Associates, Decode China, Nicholas Shao,
Cartesian Capital, PowerHF and the IFC for their input
and for their kind hospitality in Beijing and Shanghai.
We are also grateful to the many prospective
international investors whose input into defining
these questions shaped this report.
China Tower Company has graciously offered to
meet us upon our next visit, and we look forward to
updating this report at that time
XX
How to achieve scale in the

Chinese independent towerco
market: Build or buy?
What constitutes scale in a fragmented, million tower market?
What is the size and structure of the independent towerco
market in China? How investible are those towercos? What
will be the role of independent towercos as China continues
its evolution toward a philosophy of shared infrastructure,
injecting 1mn+ legacy towers into China Tower Company
(CTC); can independent towercos compete with CTC?
TowerXchange recently visited the leaders of several
independent Chinese towercos in Beijing and Shanghai:
heres what we learned.
Keywords: Asia, Asia Research, Bankability, Build-to-Suit,

China, China Tower Company, Construction, Country
Risk, Exit Strategy, Guodong, Lease Rates, MIIT, Q Towers,
Market Overview, Miteno, ROI, Regulation, Research,
Risk, SASAC, Sinonetstone, TowerXchange Research,
Towercos, Valuation, Whos Who

< The structure of the independent towerco market in China
< What constitutes scale in a million tower market?
< The risks of competing with China Tower Company
< Organic versus inorganic growth
< Three towercos to watch in China
Its 4pm in Beijing but 9am back home Ive just

effectively worked through the night again and the
jet lag has kicked back in. I havent slept much on
my week-long tour of the Chinese tower industry,
but Ive learned a lot from 14 face to face meetings
and meals in which Ive drunk a lot of tea, drunk
rather too much wine, and decided TowerXchange
needs to expand our research practice to cover the
highly investible, exciting, massive new Chinese
tower market.
Independent towercos own just 1.7% of Chinas
~1.18mn towers. TowerXchange forecast
independent towerco penetration in China to rise to
6.5% by the end of FY17.
If that sounds small, consider this: by the end
of 2017 we forecast that independent towercos
will own 100,000 towers in China, and the largest
independent towerco in China will probably be one
of the top ten largest towercos in the world by tower
count.
The structure of the independent towerco market
in China
In 2014, as few as 5,000 towers were owned by
independent towercos in China, with the balance,
and most the new build, remaining on the books
of the countrys three State-owned MNOs. With the
advent of CTC came a moratorium on MNOs building
their own towers, but whilst CTC gets up to capacity,
there is a window for local tower builders and real
estate entrepreneurs to build towers for the MNOs.
Of the ~150,000 new towers built in 2015, around
Hundreds of new independent towercos have

been created to exploit this new and potentially
expanding window of opportunity, creating a
highly fragmented market of ~200 independent
tower companies. A handful of 1,000+ towercos
(exemplified by Guodong, Miteno and Sinonetstone)
represent ~40% of the independent tower market in
China, a further ~35 regional towercos with tower
counts between 100 and 999 (for example China
Victory, Q Towers and Senno Telecom) represent
the next 40%, with the final 20% represented by
~25 towercos with double digit counts (for example
Sanyuan Tec) and the usual assortment of onesies
and twosies.
How does an MNO get a new tower built in China
since the creation of CTC?
While the original vision might have been for
Chinas MNOs to discontinue building their own
towers and for all new build to go through CTC (the
MNOs do seem to have stopped building, and the
majority of new builds are going through CTC), the
reality is that new towers are commissioned through
a variety of different formal and informal processes
as you move across Chinas vast territory, and there
are ample opportunities for third parties to secure
business.
dont assume CTC will build all the new towers under the new coconstruction regime in China: there are opportunities for independent
tower companies to cultivate local relationships, to be lean and agile, to
build towers faster or cheaper than CTC can
10% were built by independent towercos. Some of

the more bullish estimates I heard in China were for
that proportion to rise as high as 30% within a year.
And with China Telecom and China Unicom racing to
catchup China Mobiles 4G rollout, China is building
a lot more towers!
Before TowerXchange came to China, we had heard

reports of a formal Clearing House type system
through which MNOs commissioned new towers.
While that may be the case in some regions, its
not something we encountered. Where the local
network planner has a good relationship with CTC,
and where CTC has the capacity, CTC will generally
build and own the tower. Where CTC lacks the
capacity, their preference is to contract a third party
purely as a tower builder the third party makes
a modest margin, but the tower ends up on CTCs
balance sheet. But we heard of plenty of instances
where independent tower companies were able to
step in and build their own tower in the absence
of CTC capacity. And we heard of instances where
independent tower companies were able to undercut
CTC sometimes by as little as 3%, sometimes by a
double digit percentage.
was normal, one interviewee said they participated

in a process with 34 bidders!
Open processes are used to attract bidders for tower

build projects in several parts of China we heard
reports that competing with eight different bidders
Id like to propose three different definitions of scale

when discussing the Chinese tower market. One, at
what scale can a tower company be a meaningful
So dont assume CTC will build all the new towers

under the new co-construction regime in China:
there are opportunities for independent tower
companies to cultivate local relationships, to be lean
and agile, to build towers faster or cheaper than CTC
can. While CTC will still build the majority of new
towers, how large a majority may depend on how
long it takes CTC to get up to capacity.
Whilst this window exists for Chinas independent
tower companies to get to scale, what does success
look like?
What constitutes scale in a million tower
market?
XX
stakeholder within a regional market, for example

within one of Chinas 31 Provinces? Two, at what
scale do an independent Chinese tower companys
options increase in terms of access to capital?
And three, at what scale could a Chinese tower
company consider an IPO or trade sale at a scale
necessary to meet private-equity-type return
expectations?
A tower company doesnt have to have a double
digit market share in a million tower market to
still be an interesting and investible business.
Dont think about China as one country of a
million towers, but as a collection of 31 Provinces,
each with differing network investment needs,
and each with its own set of local stakeholders.
There are over 180 cities in China with over one
million inhabitants in their urban area and 32
cities with over 3mn inhabitants. TowerXchange
heard report of one of those top 32 cities where
two independent tower companies share over 80%
of the towers between them. If an independent
towerco has great local site hunters, can cultivate
relationships with local network planners, can
cultivate relationships with local city planners, and
can build a significant footprint in a dense urban
area, thats one definition of scale, whether it takes
a few hundred towers or a few thousand!
Our second definition of scale concerns access
to capital. Access to capital is the principle
growing pain for Chinese independent tower
companies seeking to reach scale. Chinese banks
do not yet recognise towers as securable assets
and, even where a dialogue can be established
with a financial institution, accessing debt is time

consuming and expensive. While internationally
telecom tower companies are accepted as operating
a business model which naturally lends itself to a
degree of leverage, the investment culture in China
strongly favors investment in profitable companies.
While tower entrepreneurs worldwide are used to
the challenge raising capital for a portfolio of less
than 1,000 towers, the definition of scale insofar as
it concerns access to capital is determined less by
site count and more by bottom line profitability in
China.
International tower companies have visited to China

to meet with the countrys local tower companies,
indeed more than one international tower company
already has capital at work in Chinese towers. But to
provide a meaningful exit, an international strategic
investor is going to need more scale than there is
currently to be found among Chinas independent
tower companies. Appetite and interest might
increase for a portfolio of 25,000+ Chinese towers, a
scale which TowerXchange forecast Chinas largest
independent tower company could reach by the end
of FY2017.
Our third definition of scale naturally follows the

last: if they can raise capital, how big does a Chinese
independent tower company have to become in
order to realise the kind of exit which would satisfy
a private equity investor looking to deploy RMB
300mn+ / US$50mn+?
In summary; if you define scale as a function of the

importance a towerco has attained in a regional
market, the road to scale for Chinas independent
tower companies may be shorter than you think. If
you define scale as a function of access to capital, its
a long and painful march to scale. And if you define
scale as having the option to exit via IPO or trade
sale, you may need 5,000+ towers and RMB 500mn+
TCF to realise the former option, 25,000 towers and
RMB 2.5bn+ TCF to realise the latter.
A Chinese independent towerco of scale has a

range of options, from single or dual IPOs on the
Shanghai, Shenzen or Hong Kong stock exchanges,
to realising an exit through a trade sale. There is
one listed tower company in China, Beijing Miteno
Communication Technology Co. Ltd (Miteno),
but Miteno is an imperfect benchmark for scale
because the company has a substantial tower design,
manufacture and installation business in addition
to their 1,000 tower portfolio. A pureplay tower
company might need to be approaching Tower
Cash Flow (TCF) of RMB 500mn (US$175mn), and
might need to be profitable, before an IPO became a
realistic option. And there is a long queue to list on
Chinas domestic stock exchanges.
A fourth question about scale: at what scale might an

independent tower company be seen as a challenge
to the realisation of the vision and valuation of
China Tower Company, such that this State owned
entity might be prompted to take action?
The risks of competing with China Tower
Company
We can identify the risks of Nationalisation
of independent tower companys assets, but
TowerXchange are not qualified to quantify those

risks. What we can say is that CTC is currently
preoccupied with auditing and ingesting over a
million cell sites, and has an order book in excess
of 100,000 towers per year. CTC is also following a
roadmap to an IPO within around 18 months. So
CTC are very busy. Aggressively competing with, or
acquiring, independent tower companies does not
appear to be a near term priority for CTC.
Any sound approach to risk management will
tell you that even if the risk has low probability,
if its prospective impact is great it must be taken
seriously, and this certainly applies to the risk of
Nationalisation of independent towers in China.
When TowerXchange speaks to international
investors about China, this is one of the first
questions they ask.
So if they wanted to, how could CTC apply pressure
to the independent sector in the Chinese tower
market? One, the State could increase the pressure
on Chinas three MNOs to order all new towers
through CTC. Chinas infrastructure sharing
guidelines already prohibit signing exclusive
agreements with third parties for the construction
or leasing of communications infrastructure, but
to date hasnt precluded individual build projects
being assigned to independent towercos. Even if the
MIIT, or more likely SASAC, tightened up restrictions
on use of third parties, there would likely be a time
lapse between policy change and enforcement. That
said, I would characterise the attitude of the MIIT
toward independent towercos as progressive, so this
paragraph represents exploration of one scenario,
and is a scenario I currently feel is unlikely to be

played out.
The second way CTC could apply pressure to
independent towercos is a more commercial
strategy; simply build parallel infrastructure
alongside independent towerco sites, or aggressively
undercut independent towerco prices. Neither
seems a likely course of action for a company that is
both struggling to build up build capacity, and at the
same time seeking to build an attractive valuation
for IPO. Chinas aforementioned infrastructure
sharing guidelines explicitly prohibit the building of
parallel infrastructure (on pain of dismissal!), so this
scenario is even less likely.
A third course of action might be some sort of
compulsory purchase order of independent
infrastructure, presumably at a price favoring
the State owned entity. This kind of open
Nationalisation of assets would seem to fly in the
face of The China Dream proposed by President Xi
Jinping, built on an open market system driven by
competition.
While Nationalisation undoubtably scores high
impact risk, whilst the independent towerco sector
in China represents <10% of the total market, my
feeling is that Nationalisation risk scores low on
probability.
Organic versus inorganic growth
Lets establish a few baseline numbers before
considering the relative merits of building versus
buying towers in China. The economics of an

individual Chinese tower are more comparable to
Indian than to the U.S. tower market, with capital
outlay per Chinese tower of 250,000-350,000 RMB
(US$37,500-52,500) and lease rates in a RMB 4,5006,000 pcm range (US$650-900). It should be noted
that a significant proportion of Chinese ground
based towers are monopoles, which reduces both
steel and land costs.
There hasnt been enough transaction volume to
set a reliable benchmark for the acquisition of an
existing tower, but TowerXchange has heard reports
of valuations from RMB 350-600,000 per tower
(US$52,500-90,000). We were told that at one point
CTC had a standing offer to buy existing independent
towers for around US$80,000 each, but that intel was
not repeated during our visit so it either had little
effect, or the offer is no longer on the table.
I spoke to some very smart tower entrepreneurs in
China who favor organic growth; theyre building
fast, and think they can achieve scale without paying
a premium for inorganic growth whilst the market
is under-supplied. I also spoke to some equally
smart and respected tower entrepreneurs who
enthusiastically evangelised the rollup of small to
mid-sized independent Chinese tower portfolios to
accelerate the path to scale.
From Brazil to Myanmar, from Nigeria to Indonesia,
most tower entrepreneurs will tell you the return
on capital invested (ROCI) to build a new tower
will generally comfortably exceed ROCI in an
acquisition. Many of those entrepreneurs also
XX
bemoan the escalating premium to be to acquire a

tower once valuation benchmarks are known, and
once aggressive competition drives those valuations
up.
So it seems with China, one thing will be the same
as in any other tower market; if you build smartly,
you create value; and if you acquire towers with
discipline, you can also create value. But you need
to have the discipline to walk away from bad deals.
Perhaps some of the excitement about Chinese stems
from the fact that valuation benchmarks havent yet
been established; and perhaps valuations havent
been inflated yet.
Three towercos to watch in China and a dark
horse international contender!
We currently believe that Guodong is the
largest independent tower company in China.
TowerXchange met with Guodongs management
team at their Shanghai head office, and were
impressed with the clarity of their vision. One of
Chinas first independent tower companies, Guodong
was established in 2008, claims to have been
profitable since 2013, and at time of writing had a
portfolio of ~6,000 towers spread across 25 of Chinas
31 provinces, with a particular concentration in
densely populated coastal cities.
As Chinas only listed tower company (300038),
Miteno raised RMB 598mn when they listed on the
Shenzhen Stock Exchanges Growth Enterprises
Market. Founded in 2004 as a tower designer
and manufacturer, supply of steelwork remains
a key part of the business, and CTC is a key client
Kieron meets Mr Lu Jie, Chairman of Guodong
of Miteno. Meanwhile, Miteno has built up a

portfolio of their own 1,000+ towers, the majority
of which are in Jilin Province in the North of
China, and is working on a rollup strategy which
is both ambitious and which has international
precedent. While Miteno represents a potential
platform for international investors to participate
in the Chinese tower market, Miteno also has
their own international ambitions, with appetite
for opportunities across the One Belt, One Road
footprint.
Q Towers was one of the first bona fide independent
tower companies in China and, while they dont

boast a tower count as substantial as Guodong or
Mitenos, their vision is equally big, and equally
credible and there is plenty of room in China for
all three and more!
A dark horse, international tower company, who
shall for now remain nameless, already has secured
a substantial stake in at least one, perhaps as
many as half a dozen Chinese tower companies.
This international investor has a track record of
rolling up tower companies, and has the capital and
credibility to drive to scale rapidly
edotco 360: Our first look

at the tower market in Sri Lanka
TowerXchange: This is our first interview with

edotco focussed on your operations in Sri Lanka;
can you give us an overview of this market and
your recent projects?
Mohan Villavarayan, MD of edotco Sri Lanka shares detailed insight into the
countrys rapid telecoms growth
Mohan Villavarayan, MD, edotco Sri Lanka: The

telecom market consists of seven operators; the
two large constellations are Sri Lanka Telecom,
which owns Mobitel, and Dialog. Both players are
essentially into quad-play. In terms of market share
Dialog is number one at the moment. Additionally,
we have Etisalat, Airtel, Hutchison and Lanka Bell
who have relatively lower market share in terms
of subscribers and revenue. The tower sharing
market largely consists of these seven operators,
broadcasters and the armed forces.
Sri Lanka is one of the smaller telecoms markets in Asia, but

one where the tower sharing business model has been in play
for several years already. We spoke with Mohan Villavarayan,
Managing Director of edotco Services Sri Lanka Ltd. to hear
about the steady ongoing development taking place there. Mohan
has spent the last twenty years in senior positions within the
telecommunications industry. Since 2010 he has led the passive
infrastructure business for Dialog Axiata PLC and was responsible
for establishing strong relationships with all operators and
broadcasters within the country and for achieving a tenancy ratio
of two plus. In February 2016 he assumed the position of Country
Managing Director of edotco Services Lanka (Pvt) Ltd.
Mohan Villavarayan, MD, edotco Sri Lanka
Keywords: 3G, 4G, Airtel, Asia, Asia Insights, Axiata Group,

Dialog, edotco, Etisalat, Hutchison Whampoa, Lanka Bell,
Licensing, Market Overview, Mobitel, Off-Grid, Power,
Regulation, Tower Count, TRCSL, Sri Lanka, Insights

< An overview of the Sri Lankan telecoms market
< A history of infrastructure sharing inSriLanka
< Tower counts and projected tower builds in Sri Lanka
< The regulatory situation in Sri Lanka
Tower counts are generally estimated as we

dont have access to accurate information. In
our estimation Dialog has the largest base at
approximately 2,100 towers (excluding IBS) followed
by Mobitel, Airtel, Etisalat, Hutch and Lanka Bell.
Dialog started sharing towers six years ago, and have
engaged in unrestricted sharing. Most of the smaller
operators have now stopped building their own
towers, its only the two market leaders that build
out new sites, and if the smaller operators want to
increase their coverage they share with one of them.
Sri Lanka still has no specific license for towercos
and at present we have established edotco Services
Lanka (Private) Limited which can provide all
towerco specific services with the exclusion of
owning a tower (for which a license is required).
ESLL also manages Dialog Towers, which is
the business unit within the Dialog Group that
XX
TowerXchange: We have an estimate that you

have around 4,000+ tenants on approximately
2,000 towers. Is this the case? Are there plans to
build or acquire more?
Mohan Villavarayan, MD, edotco Sri Lanka: At
present, we have 2,100 towers in Sri Lanka, and the
tenancy ratio is approximately 2.13. M&A will be a
major part of edotcos strategy, but naturally we will
be selective; it all depends on which towers become
available in this market and what the terms are.
TowerXchange: Roughly how many towers are
there in the country in total?
Mohan Villavarayan, MD, edotco Sri Lanka: Our
estimate is that there are total of approximately
7,500 8,000 towers in Sri Lanka. Most operators
dont share these numbers, but this estimate is
based on our knowledge of the market and reports
submitted to the regulator.
TowerXchange: What are conditions on the
ground like in Sri Lanka compared to other
markets that edotco operates in? What are the
main challenges and risks?
Mohan Villavarayan, MD, edotco Sri Lanka: Sri
Lanka is an island with a relatively small land
mass with 95% of the territory already covered.
Compared to other markets in the edotco footprint,
Fundamental infrastructure is critical to nation building; and we
houses the tower portfolio. We report into the

edotco headquarters in Kuala Lumpur, and have
commercial independence to provide services
within this market.
have to participate and invest in this and become a true partner to

the country, not just a foreign investor
the geographical and environmental conditions

are not a problem. The biggest challenge for Sri
Lanka at present is that the country is reaching
saturation where new tower requirements are
concerned. All the operators have completed their
2G and 3G roll-outs and 4G spectrum is available
only with Dialog and Mobitel; any of the operators
that want to provide 4G services will need to engage
in RAN sharing with them. There will be further
requirement for new towers for in-fills et cetera, but
this number is estimated at a further 1,500 2,000
towers or special structures.
TowerXchange: What are the grid conditions, and
what proportion of sites are on/off grid?
Mohan Villavarayan, MD, edotco Sri Lanka: The grid
conditions in Sri Lanka are not as good as Malaysia,
but better than those in Bangladesh by comparison,
and they are improving every year. At present, we
have fewer than 75 sites off grid. Overall grid is
at acceptable levels and as improvements to grid
uptime continue they will result in reduced use of

DGs.
TowerXchange: There have been some recent
regulatory developments in Sri Lanka; can you
share your perspective? Is the government
mandating infrastructure sharing or network
development?
Mohan Villavarayan, MD, edotco Sri Lanka: As of
now the regulators interpretation does not recognise
tower companies and licenses to build and manage
towers are only issued to operators. Several lobbies
have been made to the regulator and key decision
makers to enable the issue of a tower specific license.
Fundamental infrastructure is critical to nation
building; and we have to participate and invest in this
and become a true partner to the country, not just a
foreign investor. In the past, tower model has been
perceived as just a good deal, but now customer
demand is shifting and governments are asking what
were doing for the country.
TowerXchange: Will the regulator interfere in

market pricing of lease rates?
Mohan Villavarayan, MD, edotco Sri Lanka: When
licenses are issued there will most probably be
terms included where the regulator could make
determinations on lease rates like they do in the
case of operators. The regulator lets the market
play out but reserves the right to step in and make
determinations.
SriLankan tower market
7,500-8,000
towers
38%
Mobile broadband
penetration
TowerXchange: Is there some form of protection

against towers being built too close to each
other?
present there is a process in place but no strict
mandate. However, the approval process to
erect towers involves applying to the TRCSL
(Telecommunications Regulatory Commission of Sri
Lanka) and there are multiple layers of approval.
The database of sites is checked, the requested
position is compared to the location of other sites,
and in some cases tower sharing may be mandated.
However, if these particular towers are over loaded
or if the operator concerned does not permit
sharing, approval is granted for the construction of a
new tower.
Ten to fifteen years ago it was common to see towers
within a few metres; now there are far fewer. There
arent strict regulations on tower locations, but in
some cases the regulator will listen to objections.
Some of the local concerns include radiation,
proximity to population centres and the potential for
lightning strikes.
125%
95%
Coverage
SIM penetration
Challenger MNOs
Etisalat, Airtel,
Hutchison &LankaBell
2 market leaders
with 4G spectrum:
Dialog, Mobitel
Population edotco: 2,100 towers with
Further
and <75 off grid
towers needed
21mn
a tenancy ratio of 2.13
TowerXchange: Is foreign direct investment in

telecom infrastructure / real estate permitted or
capped?
present there are no regulations preventing FDIs
in telecom infrastructure. Non-nationals are not
permitted to purchase of real estate but can lease to
the required extent; in general foreign investment is
permitted and encouraged.
TowerXchange: Are taxation regimes fair
1,500-2,000
regarding tower transfers, lease sales and

equipment import?
present there are no taxes that are specific to the
tower sector. At the point of transferring towers VAT
would be payable on the purchase consideration.
Most operators have duty free exemptions when
importing tower and energy equipment. Within the
telecommunications sector the present regime
exempts VAT when operators invoice each other for
services including passive infrastructure sharing
XX
edotco 360: echo NOC tour

How edotcos echo remote monitoring solution is optimising site efficiency
edotco NOC, Kuala Lumpur
TowerXchange recently paid

a visit to edotcos NOC at their
headquarters in Kuala Lumpur
to see the nerve centre of echo,
edotcos remote monitoring
solution. echo enables edotco to
pro-actively monitor and gather
data on the performance of all
passive infrastructure elements
at sites across its footprint and
transmit the information in
real-time to the NOC. We were
curious to find out more about
the system and see firsthand
how it is enabling operational
excellence.
Keywords: 3G, 4G, Asia, Asia Insights, Batteries, Capex, edotco, DG Runtime, Dimensioning, Energy
Efficiency, Energy Storage, Fuel Security, Invendis, Loading, Logistics, Monitoring & Management,
NOC, O&M, Off-Grid, On-Grid, Operational Excellence, Opex Reduction, Outdoor Equipment, Risk,
RMS, Shelters, Site Level Profitability, Site Management System, Site Visits

< How echo is increasing operational efficiency across edotcos footprint
< Combatting fuel theft and unauthorised site access
< Optimising grid connections and identifying faulty equipment
< Creating new dashboards to streamline data usage
The echo NOC has an elaborate dashboard view

over the workstations and four large screens
that provide data on individual clients across the
footprint with a series of sensors on each site that
measure a range of systems including AC and DC
power levels, real-time temperature data if there is
a cabin, and cell levels for batteries. These sensors
provide a host of data that ground crews can refer
to and act on when necessary. echo also includes
an automated alarm system that can automatically
escalate to the appropriate level in the hierarchy
when there is an incident, depending on the issue
(e.g. site breach, fuel level drop, fire alarm).
The site managers in each country have access to
the same dashboards, but only for their specific
sites as access is profile-based. The field managers
can view the dashboard on their computer or
phone, and receive alerts via an app. Some markets
such as Bangladesh capture a lot of different data;
edotco offers a full end-to-end O&M service there
so there is more data and more complexity, but
this provides more opportunities for optimisation.
Currently there are 2,100 sites with echo in
Bangladesh, 3,000 in Malaysia and 44 in Sri
Lanka; the plan is to roll out RMS across the whole
footprint. edotco met its target of 5,000 in last years
rollout, and this process is continuing in phases.
The team in the NOC is primarily focussed
on data crunching and analytics, and they
create dashboards based on the incoming raw
transactional data. For example they can track
energy usage patterns, how the site is behaving,
If a site is on-grid but is receiving low frequency

power, they can see all three phases of power
and identify when they are out of balance or
insufficiently powered and receiving power on
only one phase. On a lot of legacy sites the grid
connection isnt set up in the optimal manner,
or hasnt taken into account the increased
requirements of new 3G or 4G equipment and
the three phases need to be rebalanced. The data
on grid and battery usage and charge cycles can
help to identify sites that are less efficient, and
determine how much can be saved over a certain
time frame by servicing them, and how long it
would take to recoup the cost of servicing. In
many cases up to US$300 per month can be saved
if the phases are balanced and the right level of
grid, battery and generator usage is achieved.
In Bangladesh there were 700 to 800 sites where
this approach was applied and the savings can
definitely be seen over time. Optimisation like this
can also have a potentially positive impact on the
lifespan of equipment, but this would be over at
least a ten year period and so is hard to qualify at
this stage.
echo also provides new data on parts of the site
that had previously been overlooked including DG
batteries. These batteries are needed to start the
In many cases up to US$300 per month can be saved if the

phases are balanced and the right level of grid, battery and
generator usage is achieved
and how much money is being spent operating it.

The NOC has a group level view of all echo sites
in the edotco footprint, and it can spot trends and
situations where individual sites are operating
inefficiently, or even spot outright fuel theft.
generator when it needs to go into action, much

like a car. In the past the charge on these batteries
wasnt typically tracked and low battery levels
often werent detected until the battery failed.
edotco have been successfully tracking DG batteries
and have identified batteries that needed to be
replaced, which has a direct impact on uptime.
In addition to this, echo also has the capability to
track the performance of individual batteries. In
the past when one battery was faulty the whole
back of batteries would often be replaced. The data
that echo now provides means they can identify
individual faulty batteries and deal with them,
which also helps improve uptime and reduces
capex.
with the amount that energy providers bill for. In

the past they didnt have the data to dispute bills
and generally had to go along with the charges
from the utility providers. Now with a full range
of data on energy consumption across all sites
in the region, edotco are in a position to identify
discrepancies and dispute bills. In Bangladesh
there was a case where 600 sites were billing a
consistently higher amount, and thanks to the
data on hand the utility company agreed to look
at the metres and discovered that they needed
servicing. They also find there are situations where
the bill is based purely on an estimate which can
also be disputed; these adjustments can lead to
considerable savings.
Another major area where echo makes a difference

is in providing data to compare actual energy use
Fuel theft is a challenge edotco faces in several

markets, and echo is already enabling a rapid
XX
The smart locks use the same system as a banking pass,

providing a unique code each time the door is accessed, as
well as a tracking mechanism. Since the installation of smart
locks in Bangladesh there have been no thefts
response; theyve identified twelve to thirteen cases

of fuel theft since last August, and there was one
in Malaysia as recently as last month. The grid in
Malaysia is good and the generators dont generally
run except for certain extreme circumstances; in
this case the sensors detected a sudden drop in the
fuel level at 3am and the field team was able to
respond within 24 hours. In the past theft like this
might have gone unnoticed for two to three months
between site visits. All of the energy and fuel data
can also be used to understand the basic patterns of
each site, and introduce new efficient policies, such
as providing just enough fuel for up to two days
of uptime instead of always having the maximum
amount of fuel on site. Maintaining excess fuel

on site costs more, and can contribute to loss via
theft. Sometimes local maintenance teams have
agreements that dont include specific guidelines
on the number of trips, and this may result in
inefficiencies. The edotco footprint is spread
across several countries, and each market has its
own problems, so there are definitely benefits to
monitoring each holistically at group level.
The risk of theft means that security is a major
issue, and the introduction of smart locks with
digital keys purchased from Acsys has been very
successful, especially in Bangladesh where 1,000 of
these smart locks have been installed. These smart

locks have replaced the old padlocks which had
keys that could be easily copied so that if a theft
occurred the perpetrator couldnt be identified.
The smart locks use the same system as a banking
pass, providing a unique code each time the door
is accessed, as well as a tracking mechanism. Since
the installation of smart locks in Bangladesh there
have been no thefts. Ultimately no system is foolproof, and in some cases entire cabins are stolen
with industrial equipment, as has happened even
here in Malaysia in the past; but the real-time data
on site access has proven effective in stopping
small-scale thefts.
edotco is using the data collected from echo to build
dashboards to help management make decisions on
tower operations. Last year was mostly focussed on
rolling out the systems, but now that these are in
place the data has already been put into use and is
having a strong impact. edotco have worked closely
with supplier Invendis to add an analytical layer
to the platform, and they have discussed what they
would like to see in the next releases of the OS, and
shared a lot of input on which datasets should be
built in to streamline use. Their wish list of tools for
the next release includes Excel integration, and the
ability to generate a list of sites based on specific
issues such as battery or fuel consumption. Flexible
and dynamic reporting that allows a focus on, for
example, a specific area like grid, by month, and
by region instead of a dump of all of the data will
help to make the system even more effective going
forward
edotco 360: An update on

edotcos operations in Myanmar
Oliver Coughlin shares insight the development plans of edotco Myanmar
edotco has been busy
consolidating its new footprint in
Myanmar since the acquisition of
MTC last December. We caught up
with Oliver Coughlin, MD of edotco
Myanmar for an update on how
the merger was progressing, and
what new developments we can
expect to see over the next few
months.
Keywords: Asia, Asia Insights,
TowerXchange: How have things progressed since

the acquisition of MTC in December?
Oliver Coughlin, MD, edotco Myanmar: By virtue
of the detailed planning that took place pre the
acquisition the transition has been very smooth,
professional and very positive. The dynamics have
changed somewhat due to the fact that Digicel was
more of an operator and edotco is a pure towerco.
I think that Digicel spotted a great opportunity in
Myanmar, and edotco spotted a great company in
MTC.
The acquisition has been extremely positive for our
customers, staff and the future of company. edotco
is investing in this market for the long haul with the
goal of being the largest towerco and were happy
to be a part of it. edotco also brings a lot of value
including the capacity to monitor sites with echo;
their methods are very useful and well proven in
other markets.
Build-to-Suit, Co-location, Digicel,

Digicel MTC, edotco, Energy, M&A,
MTC, Myanmar, New License,
RMS, Telenor, Tenancy Ratios,
Oliver Coughlin, MD, edotco Myanmar
Towercos, Viettel, Whos Who

< How the acquisition of MTC has progressed since December
< Which services edotco plans to offer in Myanmar
< edotco Myanmars plans for organic and inorganic growth
< When to expect further consolidation in the Myanmar tower market
TowerXchange: Do you have any further updates

on whether edotco will be providing co-locations,
build-to-suit, transmission, fibre and operations
and maintenance in Myanmar?
Oliver Coughlin, MD, edotco Myanmar: All operators
in Myanmar are aggressively seeking co-location due
to both the speed of rollout and the savings gained.
From a co-location perspective edotco Myanmar
continues to have the highest tenancy ratios in
Myanmar, currently at 1.84 and heading for 2. This
is mainly due to the quality and location of our 1,250
tower portfolio, and 98% of our infrastructure is
XX
With regards to build to suit, we are in discussions

with a number of operators with a view to
providing BTS solutions. edotco Myanmar has a
great track record of building quality infrastructure
in Myanmar, therefore we have the capability,
the resources, expertise and the financial backing
to expand our portfolio and this is our absolute
intention. The time-frame will depend on successful
conclusion of contract negotiations in the coming
weeks.
edotco also has a proven track record of providing
services such as transmission fibre and O&M in a
number of markets in Asia and it is our intention to
offer these services across Myanmar in the coming
months as well.
TowerXchange: How is edotco adapting its power
provision model for the Myanmar market?
Oliver Coughlin, MD, edotco Myanmar: edotco
Myanmar clearly understands that the provision
of power is a pre-requisite to receiving an order
for BTS in Myanmar; accordingly we are at
the advanced stages of discussions with power
providers and system integrators and should
finalise these within the coming weeks. It is

important to note that edotco provides power to
operators as standard practice in a number of
existing markets such as Bangladesh and Malaysia,
therefore we in will benefit hugely in Myanmar
from our colleagues experience in these other
markets.
TowerXchange: Telenor continues to build new
sites at a steady pace; how will this affect demand
among towercos?
Oliver Coughlin, MD, edotco Myanmar: Telenor have
been very successful in Myanmar and I am pleased
to say that we have a very successful co-location
agreement in place with Telenor. We obviously
hope to expand the services we provide Telenor
and indeed all operators in Myanmar in the coming
months.
TowerXchange: How will the arrival of the fourth
operator impact the market in Myanmar?
Oliver Coughlin, MD, edotco Myanmar: From a
consumer point of view, competition is good. edotco
Myanmar is ideally suited to provide any new
entrant with rapid access to approximately 34% of
the population by virtue of the location and quality
of our existing portfolio; considering our proven
track record in building high volume rollout across
the Union of Myanmar we look forward to any
future opportunities with new entrants, although
we understand this is a major undertaking for the
regulators and the applicants and will take time to
finalise.
edotco has clearly stated that

its intention is to aggressively
increase its portfolio in
Myanmar, and this will be
achieved by organic and
inorganic growth opportunities
specifically designed for multi-tenant occupancy;

we have successfully co-located all of the operators.
We can give each client immediate access to
approximately 34% of the population as we have
built towers in all of the main cities and large towns
in Myanmar, and we have also built on the main
transit routes between the commercial centres
across the country.
TowerXchange: We predict that there will be at

least one towerco acquisition by the end of 2016;
what are your thoughts on this? Are there some
opportunities for inorganic growth?
Oliver Coughlin, MD, edotco Myanmar: edotco has
clearly stated that its intention is to aggressively
increase its portfolio in Myanmar, and this will
be achieved by organic and inorganic growth
opportunities. We do expect the towerco landscape
to change in the coming years and we will evaluate
every opportunity on its merit. Myanmar is a tough
market and requires a lot of capability, resources
and financial backing from those that would like to
remain competitive. I have seen other companies
enter this market with high aspirations, but the
realities on the ground dictate that some will be
looking for exit strategies in the short to mid term
Analysys Mason on the

characteristics of efficient tower markets
An edotco-commissioned report isolates the keys to tower market success
Analysys Mason recently produced
an independent study to investigate
the structures and characteristics of
efficient tower markets, commissioned
by edotco Group. Through investigating
a wide variety of tower markets, and
identifying the common characteristics
of the efficient markets they isolated
a subset which are thought to be most
efficient.
Keywords: Africa, Americas, American
Tower Corporation, Analysys Mason,
Asia, Bharti Infratel, Eaton Towers,
Definition and identification of efficient tower

markets
Towercos traditionally improve the efficiency
of mobile markets by increasing the sharing of
passive infrastructure between mobile network
operators (MNOs). Thus, we define efficient tower
markets as markets where towercos have achieved
a high degree of tower sharing. Such markets are
characterised by:
< High proportion of towers owned by towercos
(instead of MNOs)
< High tenancy ratio of towers owned by towercos
We have benchmarked 20 countries where
towercos are active. The markets are evaluated for
the share of towers owned by towercos and the
tenancy ratio achieved by those towercos.
We identified six countries where more than 50%
of towers are owned by towercos and with tenancy
ratios of 1.5x and above for towers owned by
towercos, namely the United States, Nigeria, Ghana,
India, Indonesia, and Germany.
edotco, Energy Management, Europe,

Helios Towers, IHS, Indus Towers, JV
Towercos, Market Overview, MNOs, STP,
Towercos, Viom Networks
In the following sections, we will look at the tower

market structure and regulations in these six
selected markets to understand common traits,
based on which we will then suggest best practices
for encouraging the formation of efficient tower
markets.
< Tower ownership models in efficient tower markets

< Foreign ownership of towers in efficient tower markets
< Moving beyond passive infrastructure sharing
< Licensing of towercos in efficient tower markets
Tower ownership models in efficient tower

markets
In the past, MNOs owned, built, and operated their
towers. However, increasing competition and
XX

declining mobile revenue have forced MNO to
focus on their core business. Networks are often
viewed as non-core and non-differentiating, leading
to more and more MNOs divesting their towers.
There are a few ways MNOs can divest its towers,
including by spinning off to a subsidiary, forming a
towerco joint venture with other MNOs, or selling to
independent towercos.
We have defined four key groups of tower
owners:
< MNOs: MNOs which still own some or all of their
towers
< MNO-owned towercos: Towercos which are
wholly-owned subsidiaries of an MNO
< Towerco joint ventures (JVs): Towercos which are
partly-owned by one or more MNOs
< Independent towercos: Towercos which are not
affiliated to any MN
Scale, often through foreign ownership, increases towercos operational efficiency
Figure 1: Key trends and characteristics of efficient tower markets and key conclusions [Source: Analysys
Figure 1: Key trends and characteristics of efficient tower markets and

Mason, 2016]
key
conclusions
Source: Analysys Mason, 2016
Figure 2: Identification of efficient tower markets [Source: TowerXChange, tower company reports, press
2 Introduction
releases, Analysys Mason, 2016]
The six efficient tower markets allow for different

tower ownership models. In all six markets,
some MNOs still own some or all of their towers.
MNOs which divested their towers do so by
forming a towerco subsidiary, forming a JV with
other MNOs or third parties, or selling the towers
to independent towercos. All markets appear to
have grown organically with towercos entering
the markets at a wide range of times and market
circumstances, based on market opportunity.
Figure 2: Identification of efficient tower markets

Source: TowerXchange, tower company reports, press releases, Analysys Mason, 2016
Analysys Mason has undertaken an independent study to investigate the structures and
characteristics of efficient tower markets, commissioned by edotco Group.
Through investigating a wide variety of tower markets, we have identified markets which are
thought to be most efficient. Section 3 provides details on how we have defined and identified
efficient tower markets.
All towerco ownership models can be efficient in

promoting tower sharing. In India, for example,
Bharti Infratel (an MNO-owned towerco), Indus
We identified six countries where more than 50% ofwww.towerxchange.com

towers are owned| by
towercosIssue
and16 with
TowerXchange
| 229
tenancy ratios of 1.5x and above for towers owned by towercos, namely the United States, Nigeria,
Figure 3: Ownership models of towercos in efficient tower markets [Source: TowerXchange, tower company
Figure
3: Ownership
models
of towercos in efficient tower markets
reports, press
releases, Analysys
Mason, 2016]
Source: TowerXchange, tower company reports, press releases, Analysys Mason, 2016
Indonesia, and the United States) can easily achieve

scale without having to expand internationally,
many towercos in smaller markets expand to other
markets to achieve scale. This is illustrated in the
chart in Figure 5. For example, leading African
towercos, such as IHS, Helios Towers, and Eaton
Towers, are all present in multiple African markets.
Markets which are open to foreign ownership can
benefit from transfer of knowledge and expertise
from the worlds largest towercos.
Figure 4: Foreign ownership of

towercos in efficient markets
Source: TowerXchange, tower company reports, press releases,
Analysys Mason, 2016
Towers (a towerco JV between 3 MNOs), and

such as American Tower Corporation, Eaton
The six efficient tower markets allow for different tower ownership models. In all six markets,
Viom Networks (an independent towerco), all have
Towers, and Helios Towers have full ownership
some
MNOs
still
own
some
or
all
of
their
towers.
which divested
their towers
do so by
tenancy ratio of above 2.0x.
of MNOs
their subsidiaries.
In Indonesia,
it is possible
forming a towerco subsidiary, forming a JV with other
MNOscompanies
or third parties,
the towers
for foreign
to hold or
fullselling
ownership
Key
finding: Markets
have grown
organically
into
of publicly-listed
towercos
at least one
to independent
towercos.
All markets
appear
to have
grown organically
withand
towercos
entering the
a range of tower ownership models, all of which
towerco is estimated to be majority foreign
markets at a wide range of times and market circumstances, based on market opportunity.
can be efficient.
owned. The only partial exception would
be in the United States, where the Federal
All towerco
ownership
modelsincan
be efficient
promoting towerCommission
sharing. In (FCC)
India,restricts
for example,
Foreign
ownership
of towercos
efficient
tower in Communications
Bharti Infratel (an MNO-owned towerco), Indus Towers
(aindirect
towerco
JV between
3 MNOs), and
markets
direct and
investments
in telecom
Different
markets (an
adopt
different policies
to 20 and 25%
Viom Networks
independent
towerco), all haveinfrastructure
tenancy ratiocompanies
of above 2.0x.
regarding foreign ownership of towercos. Most
respectively. However, the US also permits this
efficient tower markets allow for 100% foreign
cap to be waived should the FDI be coming
Key
finding:
Markets
have
grown
organically
into
a range of tower ownership models, all of
ownership on towercos, as shown in the table in
from a country that typically permits similar
which
can
be
efficient
Figure 4.
investments in their markets.
In Nigeria, Ghana, India, and Germany, towercos
While towercos in large markets (e.g. India,
XX
In Nigeria, Ghana, India, and Germany, towercos such as American
Figure 5: Leading towercos by their number of towers and countries

Source: Tower company reports, press releases, Analysys Mason, 2016
over network QoS management, ensuring high

network uptime by offering remote monitoring
solutions as well as disaster recovery.
Figure 5: Leading
Figure 5: Leading
towercosManagement
by
their by their
towercos
Local market conditions affect
the
type of
initiatives
number of
towers
and
number
of
towers
and that towercos undertake.
Energy and network QoS management are

typically offered by towercos that are present
Tower company
Tower company
in markets with poor grid power, especially in
reports,
press releases,
less
developed
areas. Examples of these markets
reports, press
releases,
India,
Nigeria,
Analysys
Mason,
2016]and Ghana. ICT solutions
Analysysinclude
Mason,
2016]
such as network planning, small cells, and fibre
backhaul are typically offered by towercos that
are present in more developed markets where the
above solutions are required to keep up with ever
increasing demand for bandwidth, such as in the
United States, Germany, as well as urban areas in
Indonesia.
countries [Source:
countries [Source:
Towercos that are most active in investing in these

new areas, as well as their initiatives, are listed in
Figure 6.
These initiatives tend to be undertaken by
Initiatives in new areas undertaken by towercos
energy model with MNOs and invest in initiatives
towercos with scale, i.e. towercos with a large
Key
finding:
Most
efficient
markets
allow
100%
foreign
ownership
which
lets towercos deliver
with scale
to reduce energy costs, particularly by reducing or
number of towers. To undertake the above
the
advantagestheir
of scaleeliminating
even in smaller
markets
Leading towercos
evolvedMost
and extended
diesel foreign
and reducing
energy usage
initiatives,
towercos often require substantial
Keyhave
finding:
efficient markets
allow 100%
ownership
which lets towercos
deliver
business models
undertake initiatives
newin smaller markets
investments.
thetoadvantages
of scale in
even
areas beyond passive infrastructure sharing. The
ICTsolutions: Towercos are well-positioned to
three key areas where towercos are expanding into
offer MNOs, their existing customers, solutions to
Larger towercos typically have better ability to
are:
help extend coverage and capacity such as network
raise necessary funding for these initiatives than
planning, small cells (including in-building
smaller towercos. They are also better suited to
Energy management: Towercos can take over
as well as fibre backhaul.
trial new
ideas and
Leading towercos havesolutions),
evolved and
extended their business models to undertake
initiatives
intake
newlonger-term decisions
energy management by negotiating for a fixed
Network QoS management: Towercos can take
and risks as compared to smaller towercos.
6 Initiatives in new areas undertaken by towercos with scale
6 Initiatives in new areas undertaken by towercos with scale
areas beyond passive infrastructure sharing. The three key areas where towercos are expanding
XX |
Leading towercos
in new
into have
are: evolved and extended their business models to undertake initiatives
TowerXchange Issue 16 | www.towerxchange.com
areas beyond passive infrastructure sharing. The three key areas where towercos are expanding
| TowerXchange Issue 16 | 231
in Figure 6.
Figure 6: Known initiatives by towercos in new areas [Source: Tower company reports, press releases,
Figure 6: Known initiatives by towercos in new areas

Analysys Mason, 2016]
Source: Tower company reports, press releases, Analysys Mason, 2016
will be awarded the licence.

Auction: Limited number of licences, parties
that bid the highest will win the licences. An
auction may or may not have pre-qualification
requirements.
Beauty contest: Limited number of licences,
parties that are most qualified will be awarded the
licences.
Efficient markets may or may not require prequalification, but none restricts the number of
licenses. Our findings are illustrated in Figure 7.
They also have the scale to build in-house teams of

awarding licences to towercos. We look into the
These
initiatives
tend
to
be
undertaken
by
towercos
with scale,
i.e.oftowercos
engineers to design, develop and implement their
following
aspects
licensing:with a large number
of tower. To undertake the above initiatives, towercos
often in
require
a of
substantial
initiatives.
< Restriction
number
licences investments.
< Requirement
for pre-qualification
of applicants
Larger towercos typically have better ability to raise
necessary funding
for these initiatives
than
Particularly for cost-saving initiatives, a larger
smaller towercos. They are also better suited to trial new ideas and take longer-term decisions and
tower portfolio also allows for greater economies
In awarding any type of telecommunications
risks as compared to smaller towercos. They also
have the scale to build in-house teams of
of scale.
licence, there are broadly four different methods
engineers to design, develop and implement that
theircaninitiatives.
be adopted:Particularly for cost-saving
Key
finding:aTowercos
withportfolio
scale are evolving
to for greater economies of scale.
initiatives,
larger tower
also allows
increase efficiency in other areas, such as offering
Open registration: No limit on number of licences,
energy management, ICT solutions, and network
any party that registers will be awarded the
Key finding: Towercos with scale are evolving to increase efficiency in other areas, such as
QoS.
licence/ allowed to operate
offering energy management, ICT solutions, and network QoS
Licensing of towercos in efficient tower markets

Different markets adopt different policies in
Competency-based licensing: No limit on number

of licences, any party that meets pre-qualifications
7 Licencing of towercos in efficient tower markets

There is no limit on number of licences for

towercos in the six efficient tower markets. In
fact, we are not aware of any market which limit
number of licences for towercos.Limiting number
of licences may be detrimental to both mobile and
tower markets. In general, numbers of licences
are limited only when it concerns the use of a
scarce resource, e.g. wireless spectrum, for which
licences are typically awarded via auction or
beauty contest. This is not the case for licences
for towercos. Limiting the number of licences
for towercos will thus create artificial scarcity,
which may lead to licensees being able to charge
monopolistic pricing. This, in turn, may lead to
MNOs lowering their investment in improving
their network coverage and capacity and less tower
sharing.
Pre-qualifications are required in Nigeria, Ghana,
XX
licenses. Our findings are illustrated in Figure 7.
and Indonesia. To obtain a licence in these markets,

parties are required to demonstrate financial and
technical capabilities. In Nigeria, for example,
the Nigerian Communications Commission (NCC)
require licence applicants to submit their business
plan, technical plan, and organizational plan along
with relevant legal documents.
Figure 7: Approach to licencing of towercos in efficient tower markets [Source: Regulators websites, tower
Figure
Approach
to licencing
of towercos
in efficient tower markets
company7:
websites
and reports,
Analysys Mason,
2016]
Source: Regulators websites, tower company websites and reports, Analysys Mason, 2016
The NCC will evaluate these plans and award

licence to applicants that it deems to be competent.
Pre-qualifications are not required in the United
States, Germany, and India. In United States
and Germany, there is no separate licensing for
towercos but there is a need to register certain
types of tower infrastructure. In India, towercos
are required to register with the Department of
Telecommunications under the Infrastructure
Provider Category-I (IP-I) category but no licence
will be issued.
Pre-qualification requirements ensure that
licence holders have the technical and financial
capabilities to promote tower sharing based on
global best practices, invest in increasing the
quantity and quality of its towers, and invest
in initiatives in new areas (such as energy
management, ICT solutions, and network QoS
management). While this requirement results in
a more complex process than open registration,
it ensures that only competent towercos enter the
tower market.
There is no limit on number of towerco licences in
Competitive dynamics in efficient tower markets

efficient tower markets or in any market that we
We look at the current competitive dynamics of
are aware of. Limiting number of towerco licences
There is no limit on number of licences for towercos in the six efficient tower markets. In fact, we
towercos that arise as a result of the licensing
may be detrimental to both mobile and tower
are
not
aware
of
any
market
which
limit
number
of licences
foroftowercos.
policy
in each
the efficient tower markets. In
markets as it creates an artificial scarcity, leading
particular, we look at market share of towercos
to monopolistic pricing that deters MNOs network
Limiting Pre-qualifications
number of licences
may be detrimental
to both
mobile
and tower
In general,
based
on their
ownership
modelmarkets.
and the time
of
investment.
are required
in half
their
entry
into
the
market.
ofnumbers
the efficient
tower
markets
but
not
required
in
of licences are limited only when it concerns the use of a scarce resource, e.g. wireless
the other half. Requiring pre-qualifications adds to
spectrum, for which licences are typically awarded via auction or beauty contest. This is not the
Lack of restriction in number of licences for
the complexity of the process but ensures that only
case
for
licences
for
towercos.
Limiting
the
number
fortower
towercos
will
towercosofinlicences
all efficient
markets
hasthus create
competent towercos enter the market.
attracted
with at least three
towercos
artificial scarcity, which may lead to licensees being
ableinvestment,
to charge monopolistic
pricing.
This, in
presentin
in improving
each market.their
We observe
a range
of
Key
finding:
with efficient
towertheir
markets
turn,
may Countries
lead to MNOs
lowering
investment
network
coverage
and
competitive dynamics across the six efficient tower
award network infrastructure licences to any party
capacity and less tower sharing.
markets, as shown in Figure 8.
that registers or meets qualifications.
Figure
8: Market
share of share
towercos of
in efficient
tower markets
[Source:tower
TowerXchange,
tower company
Figure
8: Market
towercos
in efficient
markets
reports,
press releases,
Analysys
Mason,
2016]
Source: Regulators
websites, tower
company
websites
and reports, Analysys Mason, 2016
attractive for other towercos to enter the market.

There are towercos that entered a market late but
were able to capture a large share of towers than
earlier entrants.
Key finding: A clear licensing policy which
encourages investment will attract multiple
towercos and create a more competitive tower
market.
Conclusions
Having analysed market structures and
characteristics of the six efficient tower markets,
we find three key conclusions
< Efficient tower markets accommodate a range of
tower ownership options
< Scale, often through foreign ownership,
increases towercos operational efficiency
< Open markets with fewer restrictions have
proven to be the most efficient
The presence
with
a substantial
being
the does
largest.
example,
American
The
presenceofofa atowerco
towerco
with
a substantial market
share
notFor
seem
to make
it lessTower
attractive
market share does not seem to make it less
Corporation is not the first entrant in most of its
for other towercos to enter the market. For instance, the presence of IHS, which started in Nigeria
attractive for other towercos to enter the market.
markets but it has managed to gain larger market
in
did the
notpresence
deter American
Tower
Corporation
to than
entertowercos
much later
in 2014.
Theearlier.
creation of
For2001,
instance,
of IHS, which
started
share
that entered
years
Indus
Towers,
which
wasdeter
formed
as a JV
that combine towers from three large MNOs in India in
in Nigeria
in 2001,
did not
American
Tower
Corporation
enter Viom
much later
in 2014.
The entering the
We observe
a range
2007,
did nottodeter
Networks
from
market in
2009.of competitive dynamics in the
creation of Indus Towers, which was formed as

six efficient markets, but differences in
a JV that combine towers from three large MNOs
competitive dynamics do not seem to have any
Towercos that entered early into the market do not always end up being the largest. For example,
in India in 2007, did not deter Viom Networks
correlation to the efficiency of tower market. In
American
Tower
Corporation
is
not
the
first
entrant
in most
its markets
but it with
has managed
from entering the market in 2009. Towercos that
addition,
theof
presence
of a towerco
substantialto
entered
early
into the
market
not always
endentered
up
market
does not seem to make it less
gain
larger
market
share
thandotowercos
that
years share
earlier.
We
observe a range of competitive dynamics in the six efficient markets, but differences in
Efficient tower markets accommodate a range

of tower ownership options. All efficient tower
markets have grown organically into a range of
ownership models. Towers are owned by MNOs,
independent towercos and combinations of both
in all markets. Towercos have entered markets at
a wide range of times and market circumstances,
based on market opportunity.
All of these tower ownership models can be
efficient in promoting tower sharing among MNOs.
Scale, often through foreign ownership, increases
towercos operational efficiency in new areas
XX
Efficient tower markets accommodate a range of tower ownership options

Scale, often through foreign ownership, increases towercos operational efficiency
Open markets with fewer restrictions have proven to be the most efficient
Figure 9: Key trends and characteristics of efficient tower markets and

key conclusions
Figure 9: Key trends and characteristics of efficient tower markets and key conclusions [Source: Analysys
Source: Analysys Mason, 2016
Mason, 2016]
Meetup Americas
2016
16-17 June, Florida
Meetup Africa 2016

19-20 October, Johannesburg
Meetup Asia 2016

Efficient with
towerscale
markets
accommodate
range
ownership
Towercos
are actively
investinga in
new of tower
There
is no limitoptions
on number of towerco licences in
areas, offering energy management, ICT solutions,
efficient tower markets or in any market that we
All
efficient
tower
markets
have
grown
organically
into
a range
of ownership models.
Towersinare
and network QoS. Compared to smaller towercos,
are
aware
of. Pre-qualifications
are required
larger
are better
able to raise
funding,
some of the
tower
markets.
While it may
ownedtowercos
by MNOs,
independent
towercos
and combinations
of efficient
both in all
markets.
Towercos
have
conduct trials, and make long-term decisions and
add to the complexity of the licence award process,
entered markets at a wide range of times and market circumstances, based on market opportunity.
risks.
pre-qualifications requirement ensures that only
All of these tower ownership models can be efficient
in promoting tower sharing among MNOs.
competent towercos enter the market.
Most of the six efficient markets allow 100%
foreign
on towercos,
which lets foreign
Clear and operational
flexible licensing
policyin
which
Scale, ownership
often through
foreign ownership,
increases towercos
efficiency
new areas
towercos deliver the advantages of scale even
encourages investment will attract multiple
in
smaller markets.
Openare
markets
with investing
fewer
towercos
the market,
creating
an efficientICT
and
Towercos
with scale
actively
in new
areas,intooffering
energy
management,
restrictions have proven to be the most efficient.
competitive tower market
solutions, and network QoS. Compared to smaller towercos, larger towercos are better able to raise
funding,
conductIssue
trials,
make long-term decisions and risks.
XX
| TowerXchange
16 |and
13-14 December, Singapore
Meetup Europe 2017

4-5 April, London
MNOs perspective on
competition and shared
infrastructure in Indonesia
Redefining mobile networks for the 4G era
The Indonesian telecoms sector has been expanding

fast for over a decade; growth in subscriber
numbers, data services and revenues have been
strong, and recent changes in regulation are
helping the industry to evolve. According to GSMA
Intelligence, Indonesia has 341.8mn subscribers,
making it the fourth largest mobile market in
the world. Its population of 259.1mn has a SIM
penetration of 132%, and the GNI per capita is
US$4,000. As a result of this high penetration
rate, MNOs are increasingly shifting their focus to
arresting the decline in ARPU.
Keywords: 3G, 4G, ARPU, Asia, Asia Insights, Axiata Group, Fibre, Hutchison 3G, Indonesia, Indosat,
Internux, M&A, MNOs, Protelindo, RANsharing, Regulation, Sampoerna Telekomunikasi, Smartfren,
Spectrum, Telkomsel, XL Axiata

< The demands placed on network infrastructure by Indonesia leapfrogging from 2.5G to 4G:
investing in fibre, microcells and small cells
< The prospects for mandated infrastructure sharing
< The prospects for further consolidation among Indonesias ~35 towercos
< From RANsharing to a possible joint venture towerco
The fact that prepaid is the dominant payment

model with 98% of the market adds to price
competition. The practice of subsidising mobile
devices by bundling their purchase with service
operation contracts remains largely unexplored
in Indonesia, which makes it easy for customers
to switch providers as soon as a better offer comes
their way. Moreover, many Indonesians have
multiple SIM cards in active use, allowing them
to take advantage of lower call rates to specific
numbers, free texts or bonus data volumes at
certain times of the day. It can be challenging to
generate revenue under these conditions and this
partly explains why average revenue per user
(ARPU) is low in Indonesia when compared to other
countries in the region.
Indonesia has a young population that moved
straight to mobile and has embraced data services;
mobile broadband penetration is at 37% and
climbing, and handheld devices are the preferred
method of accessing the Internet. Indonesia is still
predominantly a 2.5G market, and leapfrogging
from there to 4G is a huge task that will require
substantial investment in infrastructure and
equipment.
While the mobile market in Indonesia has
experienced tremendous growth for several years,
it is becoming more and more competitive and
margins have been shrinking. MNOs have been
bracing for change as growth rates have levelled
off and pricing wars have intensified. The market
is still dominated by Telkomsel with its 45% share,
XX
but the landscape has changed with the addition

of a number of newer operators backed by foreign
partners: Indosat, XL Axiata, and Hutchison 3G.
The market is rounded out by several other local
players: Internux, Sampoerna Telekomunikasi
and Smartfren, making a total of seven MNOs.
Telkomsel was the first to launch 4G in December
2014, followed shortly by XL Axiatas launch in
three cities later the same month. Indosat received
a 4G concession in the 800MHz, 900MHz and
1800MHz bands in early 2015.
Estimated tower count for Indonesia

Towerco-owned
14,737
11,389
7,770
2,185
5,500
The MNOs in Indonesia are employing different
strategies to deal with their competitive
environment. For the most part they are very
focussed on interconnection, spectrum and
network sharing, and the recent introduction of
SIM card registration last year. Telkomsel holds the
dominant position in the market and has the most
comprehensive coverage of the country, and as a
result they limit the amount of network sharing
they do and are very choosy about which sites they
share with their competitors. At this point tower
sharing isnt mandated by the government, but
there are indications that the regulator is serious
about network sharing and it is thought that this
will be enforced at some point. If this happens
there is a possibility that when there are two or
three towers close together the one with the lowest
tenancy would have to be decommissioned, which
would of course have a major impact on the owner.
In addition to the main towercos, there are up to 35
independent companies that partner with MNOs in
8,500
1,000
1,000
450
208
1,000
18,000
4,000
Indonesia to provide towers. Although dominated

by three large independent towercos, Protelindo,
Tower Bersama and STP, plus Telkoms Mitratel,
many of the rest are extremely small organisations
with fewer than fifty towers and in some cases only
single digit tower portfolios. Already subjected to
considerable rollup, there may be the potential for
further consolidation in the market, but many of
these smaller companies have existing contracts
with the MNOs that offer extremely favourable
conditions that would make it nearly impossible for
a larger towerco to make profitable. In general the
MNOs in Indonesia are happy with the status quo
and wouldnt want to see too much consolidation
Mitratel
Tower Bersama
Protelindo
STP
IBS Tower
KIN
Persada Sokka Tama
Retower Asia
Balitowers
Others
Operator-captive
Telkom + Telkomsel
XL
Indosat
of the tower industry as it could limit their options

and their negotiating power.
Indonesia is a large country with population
centres spread out across several smaller islands;
achieving coverage of the whole country requires
the MNOs to have partnerships with some of the
small local towercos in some cases, and close
relationships with the local governments. There are
thirty smaller cities across the country that have
their own local government, and they reserve the
right to approve or reject proposed developments.
MNOs are also preoccupied with changing
collaborate on rollouts, especially in areas with

lower population densities outside Java. Some
towercos are responding to the increased demand
for fibre to support the growth of data by acquiring
companies with fibre assets. Protelindo acquired
iForte in mid-2015, and STP acquired a company
named Bit which also owned fibre assets.
Indosat and XL Axiata have been engaged in RANsharing for some

timeAnother possible step in terms of partnership would be
the creation of a joint venture towerco to pool and optimise their
tower assets
technology and the impact it has on their business.

Demand for smaller, more efficient towers in
urban population centres is growing, as well as
smaller base stations, and there is increasing
pressure to provide more efficient energy solutions.
Indonesia is also promoting the development of
smart cities initiatives, creating opportunities for
all the countrys MNOs and towercos. The demand
for connectivity in urban centres continues to
increase, and the number of cells is growing as a
result. However, the cost of building new towers,
especially in urban centres, is very high, and rents
in some locations are becoming prohibitively
expensive. This leads to MNOs increasingly trying
to get more out of existing sites with equipment
upgrades instead of new builds, while Indonesia

is also home to some of the most expansive and
impressive microcell and small cell deployments by
towercos.
In terms of fixed services, for those operators that
provide this in addition to wireless, competition is
also increasing. There are some small, agile fibre
providers that have had some success identifying
blank spots in coverage and making strategic land
purchases. They then quickly roll out fibre in the
area to provide connectivity for future occupants.
Some operators, such as Indosat and XL Axiata,
have joined forces to pool their fibre resources to
support backhaul for their wireless services, and
RANsharing is another form of partnership

between MNOs that is becoming increasingly
common. Indosat and XL Axiata have been
engaged in RANsharing for some time, and this has
also been extended to include co-operation on the
rollout of some sites for LTE services. Partnerships
like this can greatly reduce opex and help smaller
operators to remain competitive, and keep
shareholders happy. The model is so successful that
Indosat and XL Axiata are in the process of creating
a separate entity to manage their networks outside
of Java; the process is underway and it should be up
and running in 2016.
Another possible step in terms of partnership
for Indosat and XL Axiata would be the creation
of a joint venture towerco to pool and optimise
their tower assets. At this stage, however, the
tower industry in Indonesia isnt open to foreign
companies, and both Indosat and XL Axiata are
both controlled by foreign companies, Ooredoo and
the Axiata Group respectively. While there have
only been unconfirmed rumors of the prospective
opening of the tower industry to foreign ownership,
if this were to change it could have a huge impact
on the market
XX
Moodys perspective on the latest

XL tower sale to Protelindo
XL Axiatas US$270mn tower sale to Protelindo will strengthen Protelindos
competitive position and improve XL Axiatas leverage
Keywords: Acquisition,
Anchor Tenant, Asia,
Asia Research, Axiata,
Bankability, Cashflow
Finance, Deal Structure,
Debt Finance, Indonesia,
Lease Rates, MNOs,
Moodys Investors Service,
Protelindo, Research, STP,
Sale & Leaseback, Tenancy
Ratios, Third Party Reports,
Tower Bersama, Towercos,
Valuation, XL Axiata
By Nidhi Dhruv, VP & Senior Analyst, Moodys Investors Service

< The profile of Protelindo and the benefits of the deal for them
< The impact on Protelindos tenancy mix
< The financial profile of XL Axiata, and the impact of the sale
< The projected timeline of the deal
The sale of 2,500 telecommunications towers

owned by mobile operator, XL Axiata Tbk (Ba1
stable), when consummated, will strengthen
Profesional Telekomunikasi Indonesias
(Protelindo, Ba1 stable) position as the largest
independent tower company in Indonesia by
towers and tenants.
Post-acquisition, Protelindo will operate about
14,700 towersrepresenting a 19% share of the
Indonesian tower marketwith about 24,700
tenants. By comparison, the second largest
independent tower company, Tower Bersama
Infrastructure (Ba3, stable), had about 11,389
towers at 31 December 2015 that were leased to
18,796 tenants.
Exhibit 1
Acquisitions help tower companies achieve scale
and give them a competitive edge by expanding
their geographic footprint. For example, Solusi
Tunas Pratamas (STP, unrated) acquisition of 3,500
towers from XL in December 2014 cemented STPs
position as a strong, third largest independent
tower operator in Indonesia.
Acquisitions have been central to the growth
strategies of Indonesian independent tower
companies, with more than 35% of each
independent tower companys portfolio comprising
assets obtained from acquisitions. In Protelindos
case, the acquisition of XLs towers will increase
to 58% its proportion of acquired towers to total
towers.
Exhibit 1: Protelindos market share will increase to 19% from 16% postXL Tower acquisition
After XL Tower sale to Protelindo
Before XL Tower sale to Protelindo

8%
16%
8%
5%
15%
8%
19%
15%
32%
32%
9%
9%
12%
Protelindo
Tower Bersama
12%
STP
Others
Telkorn & Telkornsel
XL
Indosat
Source: Company reports, industry reports and Moodys investors service estimates
Exhibit 2: Indonesias three largest independant tower opertators

acquired more than 35% of their tower portfolios
100%
80%
60%
40%
20%
STP
Acquired
Protelindo
Built
TBI
Source: Company filings, Moodys investors service estimates
Exhibit 2
The acquisition will also improve Protelindos
tenancy mix, because 2,432 of the 2,500 acquired
towers will have XL as their anchor tenant. Pro
forma for the acquisition, Protelindo expects its
share of revenue from mobile operators with
meaningful market shares to increase to about 51%
(including Netherlands towers) from 49% for the
quarter ended December 2015.
The tower transaction is structured as a sale and
leaseback agreement, whereby XL will lease back
2,432 towers under a ten year agreement. XL has
agreed to pay a monthly lease rate of IDR10 million
per tower, of which, IDR2 million is subject to an
annual inflation escalator equaling the lower of 7%
or Indonesias official inflation rate.
Over the last two years, Protelindo has significantly
improved its scale and credit profile. Its leverage has
strengthened through EBITDA growth, supported
by a significant increase in the number of tenancies
on its towers. Protelindo increased its total tower
tenancies to about 21,000 at 31 December 2015
compared to about 14,800 at 31 December 2012. As
a result, adjusted EBITDA doubled to IDR3.8 trillion
during this period.
Hence, Protelindos financial metrics are resilient
and can easily accommodate this acquisition.
Protelindo will fund the acquisition primarily
through a IDR3.0 trillion (US$227 million) bank loan.
The remaining IDR568 billion (US$43 million) will
be paid with internal cash. The companys strong
financial profile, and the EBITDA-accretive nature of
4.0x
Negative
Adjusted leverage
3.5x
Positive
Adjusted cross debt / EBITDA
Exhibit 3: Protelindos can maintain leverage within its current rating

threshold despite tower acquisition
2.5x
Upward rating trigger

<2.5x
3.0x
2.0x
2014
Downward rating trigger

>3.5x-4.0x
2015
2016F
the tower business, means that the additional debt

will not materially weaken Protelindos leverage or
interest coverage metrics.
2017F
2018F
Source: Company filings, Moodys

investors service estimates
region, which increases the marketability of these

towers to the larger, more creditworthy mobile
operators. This will help Protelindo grow the tenancy
ratio on the acquired towers.
Exhibit 3
Protelindos own tenancy ratio stands at 1.7x.
The acquired towers will also boost Protelindos
pro-forma revenue and EBITDA by about IDR490
billion and IDR390-IDR400 billion. Given Protelindos
growing EBITDA from a higher number of tower
tenancies, we expect the companys leverage to
gradually improve.
The acquired towers have a tenancy ratio of about
1.5x, where the majority of colocation (multiple
mobile operators leasing space on the same tower)
contracts are with Hutchison 3 Indonesia (H3I,
unrated), an indirect 66%-owned subsidiary of CK
Hutchison Holdings Limited (A3 stable).
About 65% of the acquired towers from XL are
located in the more densely populated Java/Bali
Higher tower tenancy ratios indicate a tower

companys effectiveness in adding co-locations;
thereby driving higher EBITDA margins. Protelindos
ability to increase co-locations on its towers is
therefore critical in its ability to deleverage quickly
following the acquisition.
As for XL, the sale will improve the companys
reported leverage, because XL plans to use the
IDR3.57 trillion (US$270 million) proceeds from the
sale of its non-core assets to repay debt. In addition,
XL has also announced a rights issue to repay its
US$500 million shareholder loan from parent
company, Axiata Group Berhad (Baa2 stable), which
will further reduce its adjusted debt to about IDR31.5
trillion from IDR40.5 trillion as of December 2015.

To XLs benefit, the rental costs for leasing back the
towers from Protelindo will be below prevailing
average tower rental rates in Indonesia. However,
the lease deal with Protelindo will increase its
consolidated rental expense, which we capitalise
and add to gross adjusted debt under our standard
adjustments.
Still, even after factoring in our operating lease
adjustment, we expect a net reduction in adjusted
debt following the tower sale and rights issue, and
expect XLs pro forma leverage to improve to about
2.6x from 3.3x as of December 2015
Both Protelindo and XL expect to complete the
transaction by 30 June 2016. The deal is subject to
certain conditions, including a joint audit of the
towers under consideration, and the reassignment of
the co-location tenancy agreements to Protelindo from
XL.
Any imminent ground lease renewal risk for
Protelindo is mitigated by XLs agreement to renew
all ground leases coming due over the next 12 months
on these towers. There are no remaining regulatory
approvals required, and XL will not require any
consent solicitation from its banks, because these
towers are not pledged as collateral on its bank loans.
XL is unlikely to dispose of any more of its towers,
because the company believes its remaining towers
are strategic in nature
www.moodys.com
Cam Towerlink: Increasing

connectivity in Cambodia
Yusoff Zamri discusses Cam Towerlinks ground-breaking project to connect
Angkor Wat
Continuing our coverage of the Cambodian tower
market, we recently caught up with Yusoff Zamri, CEO
of Cam Towerlink, a new entrant to the Cambodian
tower market, and discussed their first project providing
wireless connectivity to the Angkor Wat temple grounds,
a UNESCO World Heritage site, for the first time. With
over 23 years of telecoms experience covering both the
operator side with Celcom, Hello Axiata and Uzmacom,
and the vendor side with Lucent Technologies,
Schlumberger Network Solutions and ZTE, Yusoff is now
responsible for launching Cam Towerlinks services in
this competitive telecoms market.
Yusoff Zamri, CEO, Cam Towerlink
Keywords: Asia, Asia Insights, Build-to-Suit, BTS

Hotel, Cambodia, Cam Towerlink, Cootel, edotco,
Emaxx, Fibre, Market Overview, Qb, RAN sharing,
Regulation, Seatel

< Cam Towerlinks project to provide connectivity at Angkor Wat
< Cam Towerlinks future plans for expansion in Cambodia
< The impact of the recent telecoms law passed in Cambodia
< The next opportunities in the Cambodian tower market
TowerXchange: Please tell us about Cam

Towerlink and its background.
Yusoff Zamri, CEO, Cam Towerlink: We came to
Cambodia in 2014, focusing on the tower business,
providing services including tower rollouts,
power solutions, IBS, COW (Cellular on Wheels)
and BTS hotels. We have a staff of ten all based
in Cambodia, and we are founded by a group of
three shareholders in Malaysia, which also created
an IT company called Mutiara Teknologi, which
was responsible for rolling out the 999 emergency
service in Malaysia. After the success of this large
project the shareholders wanted to explore other
opportunities outside of IT and in other markets,
and decided to invest in the tower industry.
TowerXchange: What can you tell us about your
recent project to provide connectivity at Angkor
Wat?
Yusoff Zamri, CEO, Cam Towerlink: Companies
have been trying to provide coverage within the
restricted area of Angkor Wat since 2007, and noone has succeeded until now. I know this as I was
the CEO of Hello Axiata from 2007-2009 and I was
not successful back then. For Angkor Wat we are
rolling out camouflaged tower structures around
the temple site to provide a good signal for visitors.
We have approval to deploy six towers to start
with on the temple grounds, and then our plan is
to expand into the surrounding area and provide
coverage within the temple itself. More than likely,
this will require a camouflaged BTS hotel solution.
Weve started the initial deployment now and this
XX
should be up and running by June. The project also

includes 30km of fibre, which will connect all of
the sites into a ring. Were talking to six potential
tenants, and we expect to have an average of four
tenants per tower once the expansion takes place.
We plan to add a common antenna for all tenants
on the towers; this would be the ideal scenario but
it would depend on all operators agreeing to have
the antennae pointing in the same directions. We
expect to have this finalised and operational by June
as all of the operators are keen to start providing
coverage on this new site. I believe this is a good
start for Cam Towerlink.
Were talking to six potential

tenants, and we expect to have
an average of four tenants
per tower once the expansion
takes place. We plan to add
a common antenna for all
tenants
Angkor Wat, April 2008, pre-coverage!
TowerXchange: What will be the next project for

Cam Towerlink?
Yusoff Zamri, CEO, Cam Towerlink: We have
started initial surveys into the surrounding Angkor
Wat area; were looking at over twenty potential
sites which are spread over a wide area, but we
need approval from the authorities managing the
temple. Were engaged in ongoing discussions
with the authorities, and with the operators
that are interested. We are of course looking at

areas covering the whole of Cambodia as well.
Concurrently we are looking into acquiring any
tower assets we can in Cambodia, and there are
assets available around the country.
TowerXchange: What can you tell us about the
telecoms regulation that was passed in Cambodia
recently? What has the impact on the market
been so far?
step forward that it has finally been implemented.

TowerXchange: How is the tower market in
Cambodia? Do you see demand increasing?
Yusoff Zamri, CEO, Cam Towerlink: edotco and
Cam Towerlink are the only towercos in Cambodia
at this point; edotco is the leader with over one
thousand towers. Cam Towerlink is just getting
into the market with the Angkor Wat project, and
the plan is to expand into other areas soon, and
also to acquire assets. We have been in talks with
Viettel who have some assets to dispose of, as a
result of their takeover of Beeline last year.
There are also three new Chinese operators in
Cambodia, Seatel, Cootel and Emaxx, that are all
in expansion mode. Some of them are building
towers and we are in discussions with them about
potential partnerships. We are of course talking
to the rest of mobile operators (Viettel, Mobitel,
Smart and Qb) to see how we can support them in
Cambodia.
Coverage Angkor Wat style!
Yusoff Zamri, CEO, Cam Towerlink: The new

telecoms law was passed in January of 2016. Its
generally perceived as good news, and it gives the
government guidelines for managing telecoms
in Cambodia. Now the government can properly
regulate this industry and can levy fines or jail
terms for non-compliance, so its being taken quite
seriously.
The Cambodian government is actively promoting

tower sharing and wants to see it implemented
like in Malaysia, and to have the collaboration of
the operators and towercos. There is a lot of legacy
infrastructure in urban areas, and the government
is pushing with this new law to have this updated or
replaced and to reduce overlaps. The New Telecom
Law had been discussed since 2007, so its a major
TowerXchange: What do you expect to happen

next in the Cambodian market?
Yusoff Zamri, CEO, Cam Towerlink: It depends how
the implementation of the new law progresses
and remains to be seen how the regulator wants
to proceed. It will take time but the regulator is
definitely more gung-ho since the law was passed.
Its not perfect, but now they have a real platform
to regulate the telecoms industry in Cambodia
which can only be an improvement
XX
TowerXchange market
study: Laos
4G is being rolled out and more than one MNO has incentive to monetise towers,
but government involvement and slow growth disincentivise investment
The mountainous, landlocked country of Laos is

has the lowest population density in the ASEAN
region, with a population of just under 7mn spread
across 238,800 sq km. There are just under 7,500
towers in the market, all remaining MNO-captive.
Four MNOs, three of which are majority Stateowned, participate in a relatively slow growing
market. However, 4G deployment has begun, and
3G coverage is already widespread. With possible
windows of opportunity to invest in the #2, #3 or
#4 operators towers, its time for TowerXchange to
examine the tower market in Laos.
Keywords: 4G, ARPU, Asia, Asia Research, Batteries, Beeline, Country Risk, Decommissioning, ETL,
Infrastructure Sharing, Investment, LTC, Laos, Market Overview, Masts & Towers, On-Grid, QoS,
Regulation, Research, Skilled Workforces, Tower Count, TowerXchange Research, TowerXchange
Research Asia, Unitel, Viettel, VimpelCom

< The mobile market in Laos and impact of government stakeholdings
< The prospects for tower divestitures in Laos
< The culture of infrastructure sharing in Laos
Mobile market in Laos

The mobile market growth in Laos had been
slowing, but SIM penetration climbed 11.3%
between Q4 2014 and Q4 2015 to 78%, according to
GSMA Intelligence.
The two clear market leaders are LTC, 51% State
owned, which has money from Shenington
Investments, and Unitel, also 51% State owned,
which has money from Viettel. Unitel invested
heavily in tower building and has by far the
countrys largest network.
ETL is controlled by Ministry of Defence and have
been in financial difficulties for some time, with the
government increasingly seeking to arrest the bleed
of money. Interest from China in acquiring ETL
reportedly floundered on concerns about payroll
and pensions. Subsequent management changes and
allocation of spectrum for 4G has put ETL on a path
toward IPO. LTC and Unitel are already listed.
Number four MNO Beeline, from which VimpelCom
have been seeking to exit, recently successfully
arrested a decline in subscriber base. Having sold
their opcos in Cambodia and Vietnam, Laos remains
an anomaly on the VimpelCom balance sheet. The
Russian parent company has been through at least
three rounds of trying to divest Beeline Laos, but no
party has so far met their valuation. Beeline is cash
flow positive, so the company is under no pressure
to accept a low bid.
< Current status of 4G rollout

< Power generation and cell site energy in Laos
A fifth MNO Sky Telecom, also owned by the

military, own spectrum but dont have a network.
With a population of around 7mn and GDP per

capita of US$5,400 (Source: CIA Factbook, 2015), by
most metrics Laos should be a three MNO market,
and a merger between Beeline and Unitel or ETL
might be one way of creating a more rational
market.
How many towers are there in Laos and who owns them?
423
1,950
1,100
LTC
Prospects for tower divestiture
Unitel
Unitel dont need cash with Viettel behind them, and

their 4,000 towers give them a genuine coverage
differentiator. LTC seem similarly disinclined to
monetise towers, although rumours that Shenington
Investments may be seeking an exit could create a
window of opportunity.
ETL
Beeline (VimpelCom)
4,000
ETLs IPO could slip further in the future, and the

company is heavily indebted, so may be receptive
to an offer to buy their towers. An approach may be
best directed to the government, with the incentive
that the cash from monetising towers could be
reinvested in upgrading networks.
Beeline currently has 711 sites, 423 sites for which
Beeline holds the lease, plus 288 sites co-located on
shared towers. At the end of 2014 Beeline owned 444
sites, but they removed BTSs from 21 non revenue
generating tower sites in 2015, as the operator only
had a handful of towers in these areas so not enough
coverage to generate customer demand.
VimpelCom is in the process of monetising towers
worldwide, but may prefer a full sale of their Beeline
opco in Laos. Much depends on who the new owners
of Beeline might be moentising their towers
could provide a nice cash injection to enable a 4G
launch, and the Beeline towers are generally in good

condition.
Infrastructure sharing to date
There are currently no independent towercos in
Laos, although TowerXchange are tracking at least
one interested party. There are third party TV and
radio towers, and the Ministry of Defence own a few,
but most tower structures remain operator-captive.
There is quite an active market for bi-lateral
infrastructure sharing swaps with no money
changing hands. One MNO reportedly tried to
instigate a lease price of US$150 per month, but
other operators were reluctant to pay. LTC share
quite extensively, ETL and Unitel also share. As the
smallest network, 40% of Beelines base stations are
co-located on third party towers.
Coverage and profitability

Laotian MNOs make most of their margin in
Vientiane (the commercial capital with a population
of 760,000), Savannakhet (population around
120,000, the second city and manufacturing hub),
Pakse (population 88,000, where there are tea and
coffee plantations), and in Luang Probang in the
Northeast (population 55,000, a cultural and tourist
centre). It is difficult to find enough ARPU to provide
economic coverage outside these areas.
4G
LTC has launched 4G, primarily in the largest
city Vientiane, while Unitel also rolled out 4G in
Savannakhet. ETL has a loan to roll out 4G, while
Beeline seem inclined to focus on provision of high
quality 3G in Vientiane. With ARPU is just under
XX
US$5, and not much disposable income, there is little

demand for premium 4G handsets, so the business
case to invest US$100mns in 4G is weak for the
challenger MNO.
Regulatory environment
There is a risk of conflicts of interest given
government majority stakes in three MNOs: ETL are
100% State owned, Unitel and LTC are 51% Stateowned the government even owns 22% of Beeline.
This was exemplified in 2011 when a price floor
was introduced in response to a disruptive new
market entrant (Millicom, whose majority stake
was later acquired by VimpelCom) undercutting
the tariffs of government owned incumbents. After
a stand-off on pricing and promotions, Beelines
interconnect with the other three MNOs was denied
for several months, with the government supporting
the incumbents. The so-called Beeline Crisis (201112) slowed mobile growth and continues to cast a
shadow over the investibility of the Laotian telecom
market.
Access to the Ministry and other government
stakeholders in Laos is reportedly good, and there
have been signals of intent to take a more liberal
approach to the regulation of telecommunications.
Ease of doing business
Doing business in Laos is difficult. Laotians are a
friendly, incredibly laid back people, but projects
require close supervision to keep on time. In a
telecoms context this means it can be difficult to
get high quality I&C work done on time, and much
must be done in-house. There are few proven

infrastructure companies to provide support.
Similarly it can be challenging to motivate and
retain staff; one MNO reported staff turnover as
high as 30% annually, and head hunting can be
a problem. There is a shortage of experienced,
well educated prospective employees, and salary
expectations can be high. The opening of the ASEAN
employment market should help, making it easier
for foreign workers to take jobs in Laos.
Chinese investment
Chinese investment in Laotian infrastructure is
widespread. Laos is known as the battery of Asia,
and there are hundreds of hydropower schemes
planned, many Chinese backed, with some increase
in Thai investment.
Huawei is by far the biggest telecom investor
in Laos, with a substantial team on the ground
supported by good warehouse infrastructure.
Power
Laos has a surplus of power generation which they
export, so grid availability is good in the country,
and new sites can be connected to the grid quickly
and efficiently. There are still unannounced outages,
so backbone sites have DG and battery backup: 4-6
hours battery backup is standard.
Network investments
Network performance is generally acknowledged to
be poor in Laos.
Most network investments are in the upgrading of
sites for 4G; there are very few new sites in Laos,
and most of those are urban infill concrete poles.
Beeline built just six sites last year, less than a fifth
of the total they were building back in 2012.
What do towers cost in Laos?
Cost per site depends on what you are building
of course, but for example a 60m guyed mast
tower with capacity for two operators and four
microwave dishes would cost approximately
US$24,000, including foundations, tower, and
electrical equipment. O&M works out at around
US$900 per site per year, inclusive of the
maintenance of both passive and active equipment.
Given the deficiency of high-rise structures in Laos,
it is perhaps unsurprising that less than 5% of
urban sites are rooftops. Most sites are guyed mast
towers, a few are free standing.
Conclusions on the investibility of Laotian
towers
While there may be an opportunity for a tower
company to invest in Laos, they would have to
be comfortable with the level of government
involvement in telecoms in the country. The
deficiency of local steel may also be an issue, with
towers having to be imported from Vietnam or
China. China may indeed be the most likely source
of investment in Laotian towers, with the country
being eligible for One Belt, One Road funding
BMI Research:
A look at the Indian tower market
Telecoms demand growth eclipses challenges in an evolving market structure
Changes to telecoms regulations and
market conditions in the past year
will impact the towers market in India
in various ways. Weighing the positive
impacts of 3G and 4G proliferation
against the risks of evolving telecom
regulation, we believe that growth
prospects for towers market are
bright, with greater opportunity in
diversification into other areas of
mobile network support.
Keywords: 3G, 4G, Aircel, Asia, Bharti
Airtel, Bharti Infratel, BMI Research,
BSNL, Facebook, India, Infrastructure
Sharing, M&A, Market Overview, KPIs,
QoS, Regulation, Research, Tenancy
Ratios, Third Party Research, TRAI,
Videocon, Xiaomi

< The impact of advanced networks on consolidation
< Forecasted subscriber growth in India until 2020
< Regulatory changes in spectrum and network sharing
< Potential challengers for rural coverage
Consolidation and advanced mobile networks

The pressing need for operators to establish scale
in order to rationalise investments into advanced
networks and services has spurred rampant
consolidation in the private telecoms sector. If
the motive of the M&A is to liberalise the target
companys spectrum holdings and integrate the
operators networks, then the number of mobile
sites in demand will diminish. However, as we
believe acquisition targets will be smaller players
with limited geographical footprint and financial
capability, the risk to tower companies will not
be too great. A few recent examples are Reliance
Communications forthcoming mergers with
SSTL and Aircel, and Bharti Airtels acquisition of
spectrum from broadband wireless access (BWA)
operator Augere Wireless.
Conversely, major long-term tenants will be rolling
out advanced mobile networks to capitalise on
rising smartphone affordability and demand
for broadband connectivity, which will improve
sharing revenues and tenancy ratios.
3G and 4G networks, a major source of growth
for the Indian towers sector, are being rolled out
aggressively as operators seek to recoup their
investments in spectrum. The speed of 3G/4G
rollouts is also driven by factors such as anticipated
demand, operators strategies, and heated
competition resulting from market consolidation.
According to the Department of Communications
(DoT), operators rolled out 14,751 3G sites in H215.
One such factor driving demand is Prime Minister
XX
BMI is bullish on growth in 3G/4G and the ICT

industry for several reasons. Firstly, India
outperforms the region in real GDP growth, which
our Country Risk team forecasts to reach 7.2% in
FY2016-2017 (year-ending March). In particular,
we are bullish on the countrys manufacturing and
services sectors, to which the aforementioned Make
in India initiative plays an integral role. India also
continues to implement Pro-business reforms, as
exemplified in the governments FY2016/17 union
budget for corporate tax rates for small enterprises
Mobile phone subscribers, 000
1,200,000
3G & 4G phone subscribers, 000
1,000,000
800,000
600,000
400,000
200,000
f
20
20
f
19
20
f
18
20
f
17
20
f
16
20
15
20
14
20
13
20
20
12
11
We forecast strong 3G/4G subscription growth of

85.6% in our current five-year forecast period, from
173.7mn at end-2015 to 322.3mn by end-2020. While
this growth rate factors in the positive effects of
operators subsidised data and smartphone bundles,
as well as the rising middle class, we highlight
that our end-2020 forecast figure represents a
population penetration of just 23.2%. Keeping
in mind that initial rollouts are focused on the
wealthier and more densely populated and urban
cities, this means there is still plenty of room for 2G
to 3G/4G subscriber migration to take place through
the medium-to-long-term, particularly from rural
regions.
f=BMI forecast. Source: BMI research, Operators, COAI, TRAI
1,400,000
20
Modis Make in India campaign, which will expect

to compress the average selling price (ASP) of
smartphones - the most popular device for internet
access. Market leader Bharti Airtel increased its
number of 3G sites by 85.3% in 2015, a growth rate
which we believe can be sustained at least into the
medium term and will be the key upside to towers
lease rates and tenancy ratios.
Regulatory developments: Spectrum, active

infrastructure and network sharing guidelines
Recently implemented active infrastructure and

spectrum sharing guidelines mean that entering
into such sharing agreements could eliminate the
need for operators to have their own transmission
equipment such as antennas and Node B in areas
where they are sharing spectrum, reducing the
number of operators demanding tower sites and
consequently, the potential sharing revenue tower
companies could gain.
Indias telecoms sector has witnessed a series of

regulatory reforms led by the Telecoms Regulatory
Authority of India (TRAI) and the DoT that, we
believe, could further accelerate the speed of 3G
and 4G network rollouts.
The DoT has also recently approved regulations

that will allow Mobile Virtual Network Operators
(MVNOs) to launch in the market. While we believe
current market conditions leave MVNOs little room
to make a substantial impact, there will be no lack
(with turnover less than INR50mn in FY2014/15)

and new manufacturing companies (incorporated
on or after March 1) to be lowered to 29.0% and
25.0%, respectively (from 30.0%), while start-ups
set up from April 2016 to March 2019 will enjoy tax
exemptions.
of interest from companies hoping to establish new

verticals by entering the mobile business.
Rising middle class to lift 3G/4G adoption
Small-scale mobile operators, being able to gain

from spectrum monetisation, will be able to
broaden their network sites in circles where they
hold spectrum. For example, Videocon, a minor
operator with just a 0.7% market share, recently
disclosed plans to purchase new 2,100MHz 3G
spectrum in Punjab with the INR44.28bn it received
from selling its 1,800MHz 4G spectrum to Airtel
earlier this month. Revenue-sharing agreements
with MVNOs and more efficient spectrum utilisation
will incentivise such operators to raise their site
counts to optimise network coverage.
3,000,000
Competition and opportunities in services

The governments instructions for operators to
address the prevailing call drop issue could improve
tenancy ratios and lease rates in new areas. Noida
2,500,000
2,000,000
1,500,000
1,000,000
500,000
Less than USD 1,000 (000)
USD 1,000-1,500 (000)
USD 5,000-10,000 (000)
USD 10,000-25,000 (000)
f
20
20
f
20
19
f
18
20
f
17
20
f
16
20
e
15
20
e
14
20
e
13
20
e
12
20
11
20
Xiaomi, for one, could be interested in this prospect

to boost its value proposition in India. Leveraging
its experience of operating as an MVNO in China,
the smartphone manufacturers recent US$25mn
investment in local online content publisher
Hungama Digital Media Entertainment suggests
that the company is hoping to pursue more than
a hardware strategy, adding to its footing in the
Indian market. By bundling telecom services
together with mobile devices and value-added
services, companies such as Xiaomi can provide
competitively-priced packages and build customer
loyalty.
India - household income (2014-2020)
e/f=BMI estimate/forecast. Source: National Statistics, World Bank, BMI Calculation
XX
Revenue growth prospects avail
Mobile towers play key role in

national broadband connectivity
Bharti Infratel - key operating metrics (Q312-Q415)
39,000
2.15
Indias broadband subscriber market (Q415)
0%
2.10
38,500
2.00
38,000
12%
1.95
1.90
37,500
1.85
37,000
1.80
36,500
1.75
1.70
36,000
1.65
41
5
Q
31
5
21
5
11
5
41
4
31
4
21
4
11
4
41
3
31
3
21
3
Q
11
3
41
2
31
2
35,500
Sharing revenue (per sharing operator per month) (INR) (LHS)
Tenancy ratio (RHS)
districts Mobile Tower Installation Policy-2013, for
example, previously banned telecoms towers from
being situated in residential areas, but was revised
following the DoTs guidelines. Private operators
were mandated by the DoT to install 29,000 new
mobile towers, while BSNL installed 4,500 and
MTNL installed 28 in Delhi. As investments into
advanced services continue to force towers that
are still held operator-captive to be released into
the market, we believe that directives to address
telecoms quality of service (QoS) issues will
Source: Bharti Infratel
88%
Fixed
Wireless
Fixed wireless
Source: TRAI
translate to a booming towers market.
technological trends.
A new minor risk to tower companies in India is

the rise of independent players, such as Facebook
through its Express Wi-Fi project, which are
building up their own custom networks and
infrastructure in the country. However, this is
limited to rural regions where lease rates and
tenancy ratios are generally lower, and will
not eliminate the need for traditional telecoms
towers which can be better adapted to evolving
We believe these changes in the telecoms sector

could impact the nature of towers companies as
well. While the changing regulatory landscape
could be interpreted as a boon for mobile operators,
but a bane for the tower industry, we highlight the
opportunity for tower companies to leverage heavy
mobile network traffic to diversify their businesses
in anticipation of growing demand for fibre
backhaul and small cell network solutions
Indus Towers on supply chain

management and operational excellence
Supply Chain VP Deepak Sharma shares some insights into how his company improved
business partner satisfaction and set new industry standards for efficiency
Deepak Sharma, Vice President Supply

Chain, Indus Towers
The worlds largest and most renowned joint-venture towerco,

Indus Towers has been hard at work efficiently providing passive
infrastructure on a non-discriminatory basis to Indian telecom
operators and wireless broadband service providers since its
founding in 2007. The company has consistently achieved high
rankings among other industry leaders in India for the efficiency
of its operations. We spoke with Deepak Sharma, VP Supply Chain
to learn some of the methodology driving these achievements.
With over 23 years of experience managing end to end supply
chain & logistics including sourcing and operations for companies
including GE, Schneider and Aditya Birla Group, Deepak now
handles services sourcing, business partner relationship
management, demand and supply planning, warehouse & logistics,
SCM process design and pan India SCM operations at Indus Towers.
Keywords: Asia, Asia Insights, Energy Efficiency, India, Indus Towers, KPIs, Opex Reduction, Spectrum,
Supply Chain Management, Towercos

< The roadmap that Indus Towers developed for supply chain management
< The importance of working with clients and vendors as partners
< How Indus Towers achieved highest ever score of 4.33 out of 5 in Partners ( vendors )
Satisfaction survey
< How Indus Towers optimised the operation of its warehouses
TowerXchange: Since you joined Indus Towers

in 2012 the company has achieved some of the
highest standards for efficiency in the industry;
can you share some detail on how you achieved
this?
Deepak Sharma, Vice President Supply Chain,
Indus Towers: Shortly into my new role at Indus
Towers, management conveyed to me that I had to
take my team through a complete transformation
to keep pace with the breakneck speed with which
Indias telecom industry has been moving. Thanks
to the support and guidance of the Management
Committee of Indus Towers, we have carried out all
that we set out to do.
In early-2013, we embarked on a three-year
transformation journey with the team. We met at
an offsite location in Goa to chalk out the vision,
the mission, and the journey roadmap. The goal
was to achieve global-best KPI benchmarks, and to
meet all internal and external stakeholder needs
and expectations by providing effective, flexible,
proactive, cost-effective and extended supplychain and logistics models through technology,
innovations, value-added services and collaborative
efforts, all within a period of three years.
Team SCM coined the slogan One Team One
Dream for the first year, 2012-13, Go Beyond for
2014-15 and Go Global for 2015-16. A slogan is a
great communication and accountability tool which
reminds you of your target and the heights to be
achieved.
XX
As part of its roadmap, the SCM team designed a

programme that it termed as 5P People, Partner,
Process, Price, and Performance. The team decided
that thereafter, everyone would only use the term
Partner for all vendors and suppliers in all the
communications.
We strongly believe in People First and hence
we prioritised People over Performance, as great
performance can be achieved only when people
are happy. Satisfied people will be encouraged to
improve partner satisfaction and together they will
work to deliver customer satisfaction.
The team decided on the following as parameters
of success. For People: in two years the company
would work on the issues of the SCM departments
employee satisfaction survey (ESAT) results and
ensure that it is the highest in the telecom industry.
For Partner: the partner (vendor) satisfaction
results should be the highest in the telecom
industry. For Price: substantial capex savings,
implementation of innovative sourcing processes.
For Process the team would generate value through
Process Excellence and undertake an overall
warehousing and logistics transformation. And for
Performance, they would win global awards for the
company.
As part of Mission People, the team set for itself the
target of becoming the number one in the industry
by achieving the following bold targets of:
< Employee Satisfaction Survey (Achieving >4.5 out
of 5)
< Partner Satisfaction Survey (Achieving 100th
percentile in telecom)
< Improve the Functions KRA to L5 (Outstanding)
level, and
< Contribute to Customer Satisfaction Survey
(Achieving 100th percentile in telecom)
Another major objective of the programme was

to create a gender-balanced team. The ratio of
women in the SCM team was very low to begin
with, so concerted effort was made to hire more
women into the department.
To enhance peoples performance a 4D-virtuous

cycle was initiated with the following goals.
< Set a Direction
< Skill Development (including professional,
interpersonal and excellence training through
collaboration)
< Performance-based Delivery
< Distinguish
A Womens Forum was also formed for women

employees across the county where they could
connect over video conference and discuss the
challenges faced by them at work. The Circle SCM
Heads took the responsibility of addressing these
challenges. All such initiatives led to creating
a productive and happy workforce across the
ranks.
Direction: Together we crafted a Vision for

themselves as Excellence thru Collaboration. The
entire SCM Value stream was studied, and necessary
improvement projects were undertaken to set the
right direction of movement. The team also digitally
documented the complete work process, guidelines,
and job description; and urged everyone to study
and follow the steps as recorded in the document.
Delivery: We started conducting monthly and

quarterly reviews and started giving constructive
feedback. Team was tracked against clearly
defined parameters and KPIs.
Development: We facilitated many in-house and

external training programs along with the Process
Excellence team. Another initiative called Coffee
with Boss was launched which gave an opportunity
to all the managers to meet one-to-one with their
subordinates and discuss everything which the
subordinate wanted to share, whether personal or
professional. The aim was to meet each subordinate
every quarter and ensure that every single concern
raised by the subordinate was addressed within that
quarter.
Distinguish: Drawing from my past experience

where I had organised cultural shows to connect
the workforce, I along with my team initiated
a pan-India SCM Meet in April 2014, where
rewards and recognitions were introduced for all
subsequent years.
Now all the supply-chain team members get
together once in a year to celebrate their success.
They organise shows like stage plays, fashion
shows, and dance performances that bring out
the fun and creative side of all the team members.
For one particular mega event, the team invited
members of the top managementthey were
Critical to quality
Structured
communication
on platform with
partners
Voice of business
Business issues
Critical business
requirements
Simplification /
standardisation of
processes
Circle to circle
variation
Process
standardisation across
circles
Improve partner
performance
Low performance on
Indus KPIs
Meet Indus KPI

requirements
Improve partners
agility
Critical partner
requirement
Partner issues
Voice of partner
Standard / formalised
review mechanism
Delays in issue
resolution
No structured
platform to discuss
issues
Clarity of business
requirements &
update contact
No structured
mechanism
No future visibility /
contract review
On-time payment
Higher TAT and

payment delays
Payment irregularies
Critical for
processes
Design and
implement contract
governamce
Higher TAT for change Quick in adapting the

implementation
change
amazed to see all the companys employees

participating with much aplomb in all such funfilled and creative events such as fashion shows and
stage plays. The spirit of the team was infectious.
The idea behind such initiatives is that when people
are happy, they will focus on their jobs and will
keep the partners and customers happy. We saw a
complete turnaround in their approach to customer
service and they took care that there were no

integrity issues.
With all these initiatives as part of Mission
People, the team has been able to achieve an SCM
Employees E SAT Survey Score of 4.54 which is the
highest ever in the history of the organisation for
SCM.
TowerXchange: You emphasise the importance

of working with vendors as partners; can you
explain some of the benefits of this approach?
Deepak Sharma, Vice President Supply Chain, Indus
Towers: A healthy partnership is key to the success
of not just a project, but of the entire business. The
partner relationship needs to go beyond being just
XX
Ye
ar
ly
Mo
nth
ly
Qu
ar
ter
ly
Bia
nn
ua
l
Apex
level
contract
governance
CEO CSCMO &

Corporate SCM
Head
Corperate contract
governance
Circle contract
governance
Department Head,
Fucntional Vertical
Heads
Circle CEO, Circle
Function and SCM
Head, Buyer + user
group
Basic - performance &

administration (KPI review)
transactional to become a long-term relationship.

The partner relationship also has to include making
their resources available to you to expedite a critical
path project effort or to help test out a strategic
concept.
Becoming a trusted partner means that one of
the best calls of the week from an organisation is
unexpected and begins with the words, Do you
have a minute? Id like to bounce something off you
and get your reaction. Its when an organisation
invites the partner to the office or dinner and wants
User group
< Top level relationship governance

< New business initiatives
< Process governance
< Senior relationship governance
< Setting strategic direction,
buinsess objectives, timeframes
< Innovation
< Partner liaison, problem resolution,
continuity
< Partner development - improving
performance and capability
< Negotiation of changes, new terms,
new services
< Risk assesment & managment
< Performance reviews (service
delivery, SLA, KPI, people
< Feedback and communication
< Capturing change and reqmt
< Contact administration
< Payments, incentives/penalties
these key parameters were evaluated, we found the

scenario to be gloomy and unexciting. Not living upto the customers expectations lead to low customer
satisfaction.
To overcome the challenges, brainstorming sessions
and gap analysis were conducted in a CFT (including
Partners). Here we kept the Low Customer
Satisfaction (C-SAT) score against the Partner
Satisfaction (P-SAT) Survey Report. We realised that
for the last 3 years the P-SAT score had been almost
stagnant.
Further study of the voice of the partner
highlighted following set of concerns: there was no
platform for dispute resolution, KPI sign offs were
delayed, payments were late, POs were delayed, and
issue resolution was slow.
The voice of the partner was studied and compared
with the voice of the business which clearly
identified the missing communication between the
partners and Indus.
to get their reaction to a new growth strategy.

At Indus Towers our major work is outsourced and
dealing with over one hundred major infrastructure
equipment partners and more than five hundred
and fifty managed services partners. Our KPIs are
delivered through all of these critical partners.
Our customers evaluate our services on the
following key parameters: the quality of
implementation (FTR, first time right), the build time
of sites, and the network uptime. In 2012 13 when
As the outcome it was decided to devise an

Effective Contract Management Programme to
ensure effective contract delivery and to monitor
its effectiveness through a scorecard to increase
partner satisfaction and improve our KPIs.
An elaborate platform was formulated and
implemented a Four Tier Contract Governance
across India.
Contract Governance was rolled out to the majority
of the partner categories, and for each category of

partner detailed key focus areas were identified.
Partner issues were clearly identified and
prioritised based on the risk exposure. Necessary
course corrections and procedural changes were
implemented to sustain the benefits of the actions
taken and avoid repetition.
Over three years a total of 4,000 meetings were
conducted with over 10,000 concerns raised and
resolved; partners were happy as their concerns
were being noted and monitored for resolution.
These meetings have helped to identify major and
long pending areas of improvement which were
directly linked to organisation performance. Some of
the concerns having a major impact include:
On-time payment to partner
< Concern: Delayed payment to a partner was
leading to dissatisfaction in that partner due to
difficulties in the management of working capital
and constraints on business expansion.
< Our action: A focus group was formed to
achieve on-time payment. Todays we are paying
our partners on-time on ~95% of occasions, a
considerable improvement over 53% in 2012. To
ensure its sustainability we pay interest on delayed
payments.
PO delays
< Concern: Delay in providing the PO to partners
even after work completion which clearly impacts
their payments and work reconciliation.
Historial
jump
3.99
Best in Telecom
industry
Best in B2B
industry
4.33
4.1
3.36
2009-10
2013-14
< Our action: Clear guidelines to partner and team

were circulated not to work without a PO. Complete
value stream analysis of the P2P (Procure to Pay)
cycle was put in place, formulated to ensure the
availability of the PO on time.
Delayed KPI sign off
< Concern: Huge gap and delay in KPI sign off
leading to partner payment deduction and delay
in the payment. The major reason identified for
the delay was lack of clarity on the field and asset
tracking.
2014-15
2015-6
2015-6
Significant improvement in Indus Towers KPIs

helped us to achieve a historic Customer Satisfaction
score of 91%
For P-SAT Indus Towers is at the 100th percentile in
the Indian telecom industry ( IMRB Surveyed ) and
the 100th percentile in the B2B Segment in India
(IMRB Surveyed).
Our transformed partners have not only made us
best in the telecom industry but among the best
companies in B2B industry; I appreciate them and
thank them on behalf of Team SCM!
< Our action: System automation implemented

through i-Map and WMS and improved TOC which
clearly provided the field data leading to a reduction
of KPI sign off pendency.
TowerXchange: You encourage high levels of

teamwork in your company; what are some of the
ways you support this?
Through the Contract Governance Platform we

eliminated transformed vendors into partners. This
not only lead to a turnaround in partner satisfaction
but also defined deliverables to map performance.

Towers: I am deeply connected to Indus values and
believe that these values have helped us realise all
the goals that we had set for ourselves. We have a
XX
catchy acronym, EXCITE, for the companys value

system. These values are:
Excellence - Ensure best-in-class processes and
a continuous improvement culture that provide
scalability and the highest quality at an optimum
cost.
FY 15-16
Customer - Be the preferred partner to our

customers with the highest levels of responsiveness
and agreed services, consistently.
Go global
Integrity - Maintain and promote the highest

standards of professional conduct by being fair,
honest and transparent in all actions and decisions.
Teamwork - Think and work together beyond self,
functional boundaries, hierarchies, businesses and
geographies. Actively encourage mutual respect,
sharing and collaboration.
Environment - Be responsible and sensitive toward
the environmentand the communitieswhere we
work. Uphold the highest standards of health and
safety at all times.
I strongly believe in teamwork, and the
achievements of Team SCM would not have been
possible without it.
We are spread across fifteen circles covering fifteen
states of India which brings huge diversification
from state to state and culture to culture. Other
than the corporate office which consists of around
27 team members, every circle team consists of six
Be a global face. Win global

recognitions and become a
benchmark for the rest of the
world.
FY 14-15
Go beyond
Dream big, set big targets beyond the industry and prove that
even sky is not the limit for One team.
FY 13-14
One team, one dream
Formation of team rather than working as individuals. Dream as one team,
understand pain areas of internal and external customers and set relative
targets and roadmap with Milestones. Work together and achieve the same.
Create credibility and respect.
team members. This team is headed by CSCMO of
Indus Towers.
recognition, and a lack of consideration for team

SCMs constraints within the organisation.
In year 2012-13, there was a lack of interconnectivity

between the team members, leading to work
being done in the isolation. Other demotivating
factors included low performance, no rewards or
These were indications of a lack of teamwork; we

also realised that while all other functions used to
meet to communicate with their team members and
set the work in the right direction, it was unheard
of in Team SCM. There was a clear need to set the

right direction for the team and communicate the
expectations clearly with them.
implemented for people development and team

building in which I was directly involved to ensure
the team was connected together:
It was in the year 2012 that the SCM heads of all

the circles met together for the first time. All of us
decided to set directions for the team and plan the
strategy to work together. The India SCM Head meet
was planned where inputs were given by all the
team to formulate the strategy by setting the vision
for Team SCM
Forum For Female (F3)

< Induct Female team members to have gender
balance
< Providing an open, safe, healthy and growthdriven atmosphere
< Launched Forum For Female where people can
listen every Quarter
Considering the four major stakeholders of SCM

function (employees, internal customers, external
suppliers and internal suppliers), the team came up
with Excellence through Collaboration as the teams
vision. In addition, we set three annual slogans to
communicate to the teams.
We completed the value stream mapping of
our function and identified several areas of
improvement. Multiple initiatives and projects were
rolled out to improve the efficiency of the teams
working on:
< Relevant and innovative product development
< New material requirement forecast process
rollout
< Purchase requisition automation
< Material requirement planning process roll out
< Warehousing process manual
< Site return process locking in the ERP
< Scrap disposal process
Furthermore, other programmes were initiated and
Coffee with Boss

< One to one structured but informal discussion
with reporting heads
< Resolution of professional hurdles at the office
and if possible personal
< Giving and getting constructive feedback on a
quarterly basis
< Indicating training requirements
Individual and Team Development
< Quarterly individual performance / KRA review
< Monthly Circle SCM Heads review
< Weekly team reviews and knowledge sharing
sessions
Support and Training
< Identification of individual training needs and
arranging with the help of HR. Job skill and soft skill
related training programmes
< Development of refresher and handy training
modules
Collaborate and Celebrate Success as One Team
< Team and family get-togethers. Team building

exercises
< Bouquet and chocolates to each employee spouse
on individual and team success. Birthday and
wedding anniversary wishes to family members
We started organising the pan-India SCM Meet
which was never conducted in the organisation
where we focus on team building and the review of
our initiatives and our mission.
Today we proudly say that we are part of Team
SCM and happy to work together, win together and
celebrate together.
TowerXchange: Can you share any specific
success stories to share some detail on the
process?
Towers: In 2012-13 we had 55 warehouses where
major concerns were identified in operations
including non standard processes, compliance
issues, multiple service providers, reverse
logistics, inventory in-accuracy, security issues,
conflicting ownership, redundant transporters,
resource capability issues, and poor environmental
standards.
To transform these warehouses we initiated a new
mission and commitment specifically focussed
on warehouse operations called World Class
Warehousing and Logistics. We committed to
creating safe, automated, process driven, productive,
cost effective and green warehouses with the highest
XX
Results
ESH
< Fire safety training for all partners and the team
< Security briefing to all visitors and employees
< Mock fire drills
< Medical check-ups for the team
< Other various safety related training
< CCTV implementation for surveillance and theft control
< Sensitive location protection
< Initiatives towards vehicle transaction in the warehouses uses carbon neutral vehicles
< MBRC discharge energy used for office and repair centre electricity
< Use of natural light/ Solar energy / LEDs
Process
People
Partner
< Warehouse layout using ergonomics
< Team building
< Partner management
< Pallet standardisation
< Skill development
< Compliances management
< Site return material management
< Individual review
< Partner changeover
< Scrap disposal
< Reward and recognition

< Recreation
< Retention
levels of standardisation and innovation to serve

our customers with best in class experience. It
was agreed that the key features would include full
automation, a best-in-class distribution network
to provide on time delivery in forward and
reverse logistics, optimal inventory management,
accessibility and security of stock, and value added
services for our clients.
To initiate transformation we gave the project the

success mantra of:
We implemented our 5P approach for warehouse
transformation keeping EHS (Environment, Safety
and Health) first. We identified missing processes
and other requirements for mapping business and
quality.
Our seven warehouses were certified, licensed,

and awarded the industrys first and highest
warehouse certification, by CII for WAREX The
Warehouse Excellence Certification. Indus Towers
is a part of the first highest number platinum
certification in a first attempt in India. This
certification exemplifies our value of excellence. It
is an honour for us to be recognised as above, not
only as the first in the telecom industry, but also a
first amongst all industrial sectors!
As part of our transformation journey, we had
applied for seven warehouses which were audited
by the CII Team. Out of seven warehouses audited
by CII, four have achieved platinum and three
gold.
The certification proves our robust, core
warehousing functions, facility and processes. We
competed with industry leaders, including TAFE,
Lucas TVS, Aditya Birla and Tata Steel amongst
many others. Other companies that have applied
for WAREX and are under assessment are Maruti
Suzuki Spare Part Division at Bangalore and
Mahindra Logistics.
Also our Warehouses are awarded as Green
warehouse of the Year in ELSC Leadership award.
I would like to give a special thanks to the
following people who helped make these
achievments possible: Mr Shantha Raju- Ex CEO;
Mr Bimal Dayal CEO; Mr Mandeep Sachdevawww.towerxchange.com | TowerXchange Issue 16 | 259
Description
Before transformation
March 2016
Reduction
Warehouses (in Nos)
55
18
69%
Areas in lakhs (Sq ft)
39
22
44%
Cost (INR Crores)
XX
XX
28%
CSCMO ; Mr Vivek Kumar CHRO; All CCEOs, RDs,

Functional Heads and each member of Team SCM.
lot over the past few years; what are some of the
next changes that you anticipate?
TowerXchange: How are you and your

team keeping up with the pace for telecoms
development set by the Indian government?

Towers: There has been a conspicuous growth
and enhancement of the telecom infrastructure
in the recent past. For instance, there has been a
change in profile of consumers characterised by
a large young population and rising middle class
with increasing spending capability and higher
adaptability to technology.

Towers: As Indias leading telecom infrastructure
company, it is our responsibility to service the
community we work in with utmost perseverance.
We believe that a robust telecommunications
infrastructure is a precursor to a countrys sustained
socioeconomic growth, with benefits permeating
across sectors, citizens and geographies. Therefore,
our efforts are always backed by directions set
by the Indian government, be it allocation of
spectrum resources for residential and enterprise
intra-telecommunication requirements or
recommendations on improving telecom services in
underdeveloped or developing regions.
TowerXchange: The tower industry has changed a
Additionally, in a recent, International

Telecommunication Union (ITU) forum, there
were discussions around building a case for four
new spectrum bands as part of its 2025 vision.
With the recent push by government of India for
renewable energy, more specifically solar power,
the ecosystem is likely to get a stronger impetus.
The telecom industry is looking at solar power
becoming more viable as a result and there is
likely to be more adoption of such sources by the
industry
Participate in the
TowerXchange
community
Tower
manufacture
& installation
Investors &
advisers
Tower
Independent
towercos
Xchange
Decision
makers
at
operators
Regulators
& policy
makers
Equipment
& managed
services
XX
Regional coverage:
Europe features
In this edition were excited to share a whole host of insights gleaned from the inaugural
TowerXchange Meetup Europe. The executive teams of 36 tower companies were joined by 13
different MNOs and 28 investment firms from over 20 countries, giving a wealth of dimensions
and perspectives to discussions. We look at activities in Russia, Germany and the UK where
established towercos are in place, examine opportunities in new regions including Greece,
Romania and Poland and look at synergies that can be achieved with the broadcast sector.
In addition, we have two great interviews for you to read Cellnex CEO Tobias Martinez
divulges the strategy and vision behind Europes largest independent towerco; and Turkcell
CSO, Ilter Terzioglu discusses the operators plans for their infrastructure, including the recently
announced IPO process.
Dont miss:
262 TowerXchange Meetup Europe post event report
272 Cellnex CEO Tobias Martinez on the companys ambitions in the European market
275 Infrastructure expansion, infraco management and a Global Tower IPO at Turkcell
282 Tower transactions, carve outs and IPOs in the German tower market
289 The unique structure of the UK tower market
296 Tower divestments, carve outs and M&A in the European market
299 What are the synergies between broadcast and telecom towers?
302 TDF on MNO consolidation, 4G rollout and broadcast synergies in France
305 Digita on infrastructure sharing in Finland
308 Greek tower market opens up
311 Russia and CIS FAQs
319 A first look at the CIS tower markets, particularly Kazakhstan and the Ukraine
324 Potential tower divestitures in Poland within 12-24 months
327 Romanian MNOs retain control over infrastructure
TowerXchange Meetup Europe 2016 post event report

228 leaders of the European tower industry gathered at the Business
Design Centre, London for the inaugural TowerXchange Meetup Europe
in April 2016. Amongst the attendance were 81 executives representing 36
tower companies and infracos which manage a total of 174,049 sites on the
continent. They were joined by 26 MNO executives representing 13 different
operators and 39 investors representing 28 investment companies as well as
leading advisors, strategic consultants and supply chain companies. Whats
more, towercos from across Asia, Africa and the Americas, between them
managing a portfolio of over 150,000 towers, brought a global perspective to
the discussions at Europes most high profile industry gathering to date.
Over 40 roundtable discussion groups opened debate and tackled issues on such topics as decommissioning,
opportunities in small cells and DAS, how to scale a towerco, RANsharing, tower valuations and deal
structures whilst country focus tables assembled the whos who in prominent European tower markets.
Supplemented by keynote panels and questioning of leaders of the European tower sector, including an
in depth interview with Cellnex CEO, Tobias Martinez, the Meetup also featured a showcase of leading
access control systems, remote monitoring software, site management systems and energy equipment
whereby executives could meet with key suppliers to the European market. Concurrent with the Meetup,
the inaugural TowerXchange Investors Club facilitated private conversations between investors, investible
towerco platforms and their suppliers.
An evening of caipirinhas and Brazilian barbeque set the stage for some informal networking and relaxation
after a hard days meetings and helped to solidify the relationships built over the course of the two days.
I would like to take this opportunity to thank our speakers, sponsors and delegates who helped make the
inaugural Meetup Europe a resounding success and I look forward to welcoming new faces and old friends
to the 2017 event on 4-5 April 2017 at the Business Design Centre, London.
Kind regards
Kieron Osmotherly
Founder and CEO
TowerXchange
XX
TowerXchange Meetup Europe 2016 at a glance

In just its first year, the SOLD OUT TowerXchange Meetup Europe welcomed
228 delegates including 52 CXOs

industry breakdown
Amongst the delegation were:

36 towercos
managing 174,049 European towers
26 executives
from 13 MNOs
11%
39 investors
representing 28 investment firms
6%
35%
9%
2 days of intensive discussion and networking included:
40 interactive
roundtables:
15 country focus
8 operational best
practice
11%
11%
17 strategic and
financial
17%
Towerco Investor MNO

7 expert panels
1 keynote interview
One-to-one Investors
Club meetings
Lively cocktail and

dinner party
Energy
Strategic consultancy
RMS/ Site monitoring system/ Access control

Other
13 sponsors and exhibitors benefited from:
Seniority of the TowerXchange

Meetup Europes 228 delegates
21%
Executive industry
interviews
Exposure to a database of
16,000 tower industry leaders
Extensive on-site
branding
Thought leadership panel

and roundtable roles
And 100% of sponsors and exhibitors confirmed their intent to return next year!
Join us on 4-5 April 2017 for next years Meetup!
23%
CXO
SVP, VP, Partner
Director
35%
21%
Senior Manager
Feedback from TowerXchange Meetup Europe 2016 attendees

I personally found the Meetup very useful in
terms of valuable information about the current
developments in the tower market in Europe and
meeting new potential clients in person. It was
also a good experience for preparation of our
participation in Africa - Elena Gatcheva, Vice
President, Business Development, IPS
One of the best sessions I have come across over the
years. Innovative and very informative. High quality
attendees - Joris Fleerackers, European Sales,
Deltanode Solutions
Thank you for inviting Russian Towers to be on

your opening panel at the TowerXchange Meetup
Europe 2016. I thought it was an interesting
panel and that the event overall was excellent.
We at Russian Towers found it very useful.
Congratulations. I look forward to making it next
year - Peter Owen Edmunds, Chairman of the
Board of Directors, Russian Towers
Congratulations on a very successful conference,
the organisation was amazing and I only heard
positive comments from attendees - Peter
Egbertsen, Director, Protelindo
A very high quality event which provided significant

current knowledge sharing and the ability to
network effectively I would say this was arguably
the best run and structured event I have ever been
to - Justin Speake, President & COO, EuroTower
A unique meeting point for investors, MNOs

and tower CXOs to understand and exchange
information - Torbjorn Teigen, CEO, Norkring AS
The unique meeting focused on wireless
infrastructure. It exceeded expectations - Paolo
Crocetti, Director of Institutional Affairs, EI
Towers
36% said the event met expectations with

64% stating it exceeded expectations
An impressive 100% rated the event
value for money!
82% of attendees plan to attend next
year (with the remaining 18% waiting to
see how the market evolves)
XX
2nd Annual TowerXchange Meetup Europe

4-5 April 2017, Business Design Centre, London | www.towerxchange.com/meetup/meetup-europe
Ten reasons you cant afford to miss the 2017
TowerXchange Meetup Europe
1. Europes most focused gathering of towerco CXOs and MNO tower
How can I get involved?

To register your interest or to discuss sponsorship and exhibition opportunities
at the TowerXchange Meetup Europe, contact:
strategists network with executives holding ultimate responsibility for

the continents ~600,000 cell sites
2. MNO tower strategy evaluation is progressing rapidly discover
whats next for carve outs, sales and IPOs and learn from the
experiences of first movers
3. Towers will have changed hands understand the improvement capex
that will be required to integrate new portfolios into existing operations
Annabelle Mayhew, Chief Commercial Officer

T: +44 (0) 7423 512588
2017 sponsors and exhibitors
4. Experience in DAS and small cells is growing hear further insights

on the successful deployment by independent infrastructure providers
5. New regions covered explore opportunities arising across Eastern
and Western Europe and into Central Asia
22
Private
meeting
room
6. Towerco strategies are evolving examine company YOY growth
Reserved Reserved
Reserved Reserved
Private
meeting
room
Reserved Reserved
statistics and how they have achieved this
Exit
7. Enhanced operational focus the Meetup is set to open up beyond

14
CXOs and welcome those at the heart of engineering and purchasing
Reserved
decisions
16
Reserved
8. Bigger public and private investor base increased attendance from a

broader spectrum of investors bringing new money and insights
9. The co-located exhibition is expanding with a larger space visit an
increased number of suppliers helping to improve tower operations
Access to main
Meetup room
10
15
Reserved
12
17
Reserved
Reserved
18
19
20
11
Reserved
13
Reserved
Disabled
access
21
Entrance, exit &
washrooms
10. With phenomenal feedback from the 2016 Meetup, 2017 dates are
already firmly marked on the calendars of the sectors most influential
figures and with all previous Meetups having sold out be sure to book
early to avoid disappointment!
How we promote TowerXchange Meetups

TowerXchange are grateful for the support of our
media and association partners for Africa:
< The core of our promotional campaign is TowerXchanges proprietary database of the top 16,000
decision makers in the global telecom tower industry
< The TowerXchange database includes the management teams of 169 towercos who between them own
over 2mn of the worlds 3.3mn towers
< We also maintain relationships with over 3,000 CXOs and Heads of M&A, Network Planning,
Procurement and Tower Strategy at MNOs worldwide
< TowerXchange is read by 1,082 individuals at 511 investors, of which 116 have capital deployed in
towers and is followed by 842 investment bankers and advisors
< TowerXchange also maintains the worlds most exhaustive database of telecom infrastructure
suppliers, from tower manufacturers, managed service providers, to RMS, site management
platforms, access control and energy equipment and service providers
< Every month TowerXchange adds an average of 700 new highly qualified members to our community
through a combination of pull marketing via TowerXchange research, and P2P introductions and
research within the tower industry
< A total of 33 personalised emails with industry specific messaging were sent to our database to
promote the TowerXchange Meetup Europe
< Our email campaign is supported by a direct mail campaign to 660 selected VIPs, and by a courtesy
calls to over 1,000 key target attendees
< A key component of our promotional campaign is the TowerXchange Europe Dossier this annual
publication collates and updates critical baseline data and the best interviews with key European
tower industry stakeholders
< We use Google Adwords to amplify the findability of the dossier, and other selected industry news and
analyses, attracting new, qualified members to our community
< European Wireless Infrastructure Association

< Analysys Mason
< BMI Research
< Hardiman Telecommunications
< Inside Towers
< The National Association of Tower Erectors
< Small Cell Forum
< Telecom Finance
< ABI Research
XX
European towerco and infraco league table

Tower count Countries
Independent pureplay telecom
Deutsche Funkturm 27,000 Germany
towerco
CTIL 18,000 UK
MBNL 18,000 UK
Towerco with substantial
RTRS 16,000 Russia
broadcast component
Cellnex 15,127 Spain, Italy

First Tower Company 14,000 Russia
Telxius 13,893 Germany, Spain (count exc sites in CALA )
INWIT 11,519 Italy
Arqiva 10,550 UK
Global Tower / UkrTower
8,681
Turkey, Ukraine
Victus Networks 7,000 Greece

TDF 6,996 France
CETIN 4,800 Czech Republic
Mosaic 4,000 Ireland
EI Towers 3,200 Italy
JV infraco
Operator-led infraco
Companies represented at the

2016 are shown in bold
*count excludes sites in CALA
FPS Towers 2,618 France

Rai Way 2,300 Italy
Germany (count exc 13 other countries outside Europe)
American Tower 2,031
2,000
UK, Ireland, Netherlands
Russian Towers 1,800 Russia

Vertical 1,600 Russia
Shere Group 960 UK, Netherlands
Tower count Countries
Independent pureplay telecom
Ceske Radiokommunikace 800 Czech Republic
towerco
Towercom AS 700 Slovakia

Open Tower Company 684 Netherlands
Towerco with substantial
Axion 586 Spain
broadcast component
Shared Access 460 Ireland, UK

ITAS TIM 420 France
Towercom Ltd 400 Ireland
ESB Telecom 377 Ireland
Emitel 377 Poland
Link Development 300 Russia
Protelindo BV 260 Netherlands
Digita 187 Finland
2RN 150 Ireland
Hibernian / Brittannia Towers
140
JV infraco
Operator-led infraco
Companies represented at the

2016 are shown in bold
UK, Ireland
Service Telecom 120 Russia

Cignal 113 Ireland
Logycom 100 Kazakhstan
CIE 100 Ireland
Falck 75 Denmark
Highpoint / OBELISK 50 Ireland
Konsing Group 47 Serbia
Cellcom 40 Ireland
sterreichischer Rundfunk 40 Austria
Alticom 33 Netherlands
Notes: several other towercos and infracos exist

in Europe whose counts have not been disclosed,
estimates of which are included in our analysis.
These include Azerconnect (Azerbaijan), Digea
(Greece), ETB (Serbia), EuroTower, Media Broadcast
(Germany), NetWorkS! (Poland), Net4Mobility
(Sweden), Norkring (Norway and Belgium), OIV
(Croatia), Ovidu (Romania), Radiocom (Romania),
RTP (Portugal), SUNAB (Sweden), Teracom (Sweden,
Denmark), and Towercast (France).
XX
Final attendee list for the TowerXchange Meetup Europe 2016
Mobile Network Operators

Deutsche Telekom, VP M&A
Dialog Axiata, Director
Etisalat, Vice President, Costing and Business Analysis
MegaFon, CTIO
NTT Docomo, Manager
TalkTalk, Director of Small Cell Technology
TDC, Category Manager, Mobile Infrastructure
Telefonica, Head of Infrastructure Efficiency
Turkcell, Merger and Acquisition & Investor Relations
Member at Tu
Vimpelcom, Business Development Executive
Vimpelcom, Chief Business Development & Portfolio
Officer
Vimpelcom, Group Director, Business Development
Vodafone, Marketing Manager, SCM Sales
Vodafone, Principal Category Manager, Property
Vodafone, Head of Sales
Vodafone, VP Global SCM Services

Vodafone, Principle Category Manager, Networks SCM
Technology
Vodafone, Senior Category Manager, Network Site
Infrastructure
Towercos, Broadcast Towercos and JV Infracos
American Tower, VP Business Development, Europe
American Tower, VP Business Development, EMEA
American Tower Corporation, Senior Strategic
Implementation Lead
American Tower Germany, CEO
Arqiva, Product and Technology Director
Arqiva, Managing Director - Telecoms Division
Axion, President
Cellnex, CEO
Cellnex, International Business and Marketing
Director
Cellnex, M&A Manager, Business Development

Direction
Cellnex, Corporate and Public Affairs Director
CETIN, Strategy Director
Cignal, Managing Director
Cignal, Chairman
CTIL, CEO
CTIL, Finance Director
CTIL, General Counsel
Deutsche Funkturm, Head of Geodata Management
Digita Oy, CEO
Eaton Towers, CEO
edotco, Director of Business Development
EI Towers, Chairman
EI Towers, Director of Institutional Affairs
EmiTel, CFO
EmiTel, Vice President
EuroTower, President
FPS Towers, COO
FPS Towers, CFO
FPS Towers, CEO
FPS Towers, Commercial Director
FPS Towers, Strategy Director
Helios Towers Africa, Executive Chairman
Hibernian Towers, Company Director
Hibernian Towers, Company Director
Inwit, CEO
Inwit, Investor Relations
Konsing Group, CEO
Konsing Group, CTO
Link Development, CEO
Link Development, Co-founder
Link Development, Investment Advisor
Logycom Group, Commercial Director
MBNL, Managing Director
MBNL, Finance Director
Norkring AS, CEO

NOVEC, Managing Director
NOVEC, Commercial Director
Open Tower Company, General Counsel
Open Tower Company, Managing Partner
Protelindo, Director
Protelindo, Corporate Finance
Rai Way, Business Development Manage
Russian Towers, Co-Founder
Russian Towers, Commercial Director
Russian Towers, Investment Director
Russian Towers, President
Russian Towers, Chairman
Russian Towers, Marketing Director
SBA Communications, International Business
Development
Service Telecom, Lawyer
Service Telecom, CEO
Shere Group Ltd, Managing Director
Shere Masten BV, General Manager
TDF, Group Deputy CEO/Group CFO
TDF, Strategy & Development Director
Towercom Ltd, Chief Executive Officer
Towercom Ltd, General Manager
Towercom Ltd, New Business Development
Manager
Towershare, President & CEO
Towershare, CTO
Towershare, CFO
Towershare, General Counsel
Towershare, Sales Director
UkrTower, General Manager
VICTUS Networks, CEO
Wireless Infrastructure Group, CEO
Wireless Infrastructure Group, COO
Wireless Infrastructure Group, Corporate Finance
Manager
Wireless Infrastructure Group, Director
Investors
3i Infrastructure, Director, Infrastructure
4M Investments, Principal
4M Investments, Principal
Alinda Capital Partners, Director
Alinda Capital Partners, Managing Director
AMP Capital Investors, Investment Director
AMP Capital Investor, Investment Manager
Antin Infrastructure Partners, Managing Partner
Alinda Capital Partners, Partner
Arcus Infrastructure Partners, Partner
Arcus Infrastructure Partners, Senior Investment
Director
Bank of Tokyo Mitsubishi, Director, TMT
BNP Paribas, Director
Brookfield, Senior Vice President
Capital Group, Associate
Capital Group, Partner
Citi, Global Communications Group
Communication Infrastructure Fund, Managing
Partner
Credit Suisse, Director
Crescent Park, Associate
Digital Bridge Holdings, Managing Director, EMEA
Goldman Sachs, Executive Director
Goldman Sachs, Senior Representative
ING Wholesale Banking, Managing Director
ING Wholesale Banking, Managing Director
International Finance Corporation (IFC), Chief
Investment Officer
International Finance Corporation (IFC), Head of
Telecom, Media & Technology, EMEA
Macquarie, Managing Director, TMT
Macquarie Infrastructure and Real Assets,
Managing Director
Och-Ziff, Managing Director
Oddo Seydler Corporate Finance, Managing Director
Providence Equity, Managing Director

RBC Capital Markets, Managing Director
Rothschild, Managing Director
Tillman Global Holdings, VP Business Development
UFG Asset Management, Managing Director, Partner
Wood Creek, CEO
Wood Creek, Vice President
Other
Abloy Oy, Managing Director
Abloy Oy, Business Development Manager
ACSYS, COO
ACSYS, Head of Marketing Strategy
Airsys, VP, Sales & Marketing, EMEA
Analysys Mason, Principal
Analysys Mason, Senior Partner
Bladon Jets, CEO
Bladon Jets, VP Market Development
Caterpillar, Global Accounts Manager
Cihan Nazmi Biyilki Education & Consultancy,
Executive Business Management
XX
Coslight India Telecom Pvt Ltd, Director

Delmec Engineering, Business Development
Delmec Engineering Ltd, CTO
Delmec Engineering Ltd, CEO
Delmec Engineering, Managing Director
Dialight, Director Sales
Electronic Control Systems, President
EnerSys EMEA, Director - Reserve Power EMEA
EnerSys EMEA, VP Sales & Marketing - Reserve Power
EMEA
Enertika, Business Development Director
Ericsson AB, Strategic Product Management Energy &
Enclosure
Hardiman Telecommunications, Managing Partner
Hardiman Telecommunications, Managing
Consultant
Consultant

Consultant
Heliocentris, VP Sales and Marketing
Huawei Technologies, Senior Marketing Manager
Huawei Technologies, Vice President, Global
Marketing and Sales Support
Inaccess, Sales & Business Development Manager
International Power Supply, Vice President
Intrepid Advisory Partners, Managing Director
Invendis, CTO
Invendis, COO
Jabil Inala, Managing Director
Jabil Inala, Senior Director, Corporate Investment
KPR Consult, Co-Founder & Chairman
Medipower, CEO
Medipower, Vice President
Metalogalva, Business Unit Manager
Moelis & Company, Vice President
Mott McDonald, Technical Director, Digital Consulting

Nomura, Executive Director
NorthStar, President, EMEA
NorthStar, Director, Solution Engineering
ORION, Commercial Manager
PA Consulting, Managing Consultant
PA Consulting, Member of Management Group
Radio Innovation Sweden, CEO
Redflow, Sales Manager Europe
Rethink Technology Research, CEO & Co-Founder
Siterra, An Accruent Product, RVP Telecom Sales
Siterra, An Accruent Product, Senior Manager,
Product Management and Marketing
Small Cell Forum, Chairman, Multi-Operator &
Neutral Host Working Group
Tarantula, Founder & Director
Tarantula, Sales Director, Europe
Threefold Project Management, CEO
Vinson & Elkins, Partner
Willkie Farr & Gallagher, Partner
Zamil Infra, CEO
Zamil Infra, Vice President, International Sales
Cellnex CEO Tobias Martinez

on the companys ambitions in the
European market
Insights from Cellnexs keynote interview at TowerXchange Meetup Europe
Tobias Martinez, CEO,

Cellnex
The entrance of Cellnex into the European telecoms sector has had a transformational
impact on the market. Purveyors of the two largest transactions that Europe has seen
to date (4,377 towers acquired across three phases from Spains Telefonica and Yoigo,
and 7,377 towers from Italys Wind in 2014 and 2015 respectively), the company set
a new benchmark in the sheer scale of tower deals and has amassed a portfolio of
15,120 towers in Spain and Italy. Perhaps even more significant than the scale of their
acquisitions was their listing on the Madrid stock exchange valuing the company at
3.5bn - 15x EBITDA (versus the typical 3-4x EBITDA of an MNO). This crystallised the
value of towers in Europe and also equipped Cellnex with a multi-billion war chest
with which to fund acquisitions across the continent. TowerXchange were delighted
to welcome Cellnex CEO, Tobias Martinez to the TowerXchange Meetup Europe where
Enda Hardiman interviewed him in front of a packed auditorium.
Keywords: Acquisition, Business Case, C-Level Perspective, Cellnex, Capex, Carve Out, Co-locations, Core Network,
Backhaul & FTTT, DAS, Decommissioning, Densification, EBITDA, Europe, Europe Insights, IBS, Investors, INWIT,
Italy, LTE, MNOs, Multi-Region, Operational Excellence, Opex Reduction, Opex Sharing, QoS, ROI, Russia & CIS, Site
Level Profitability, SLA, Spain, Tenants Perspective, Tower Count, Towercos, Valuation

<
<
<
<
<
<
How Cellnex have reached where they are today

Cellnexs views on how relationships with MNOs should be managed
Why the INWIT portfolio is an important acquisition target
Cellnexs plans for international expansion
The role for towercos in MNO consolidation and decommissioning
Cellnexs plans on small cells, DAS and fibre
Breaking news: In its recently announced

Q1 2016 results, Cellnex reported that Q1
revenues were up 41% YoY with first quarter
EBITDA growing 26% YoY to 63mn. Recurring
free cash flow was up 14% to 66mn and
Cellnexs tenancy ratio across Italy and
Spain rose from 1.50 (at the time of the Wind
acquisition) to 1.54.
The emergence of Cellnex and the European
tower industry
Cellnex (formerly Abertis Telecom) originated in
the Spanish broadcasting sector. They entered
the telecoms sector through their acquisition of
Telefonica and Yoigo towers in Spain and then
to took their first step into Italy with the 2014
acquisition of TowerCo, which managed a portfolio
of 300 towers across the Italian motorway network.
Whilst a relatively modest investment, the deal
gave Cellnex the opportunity to understand the
market dynamics in Italy and how this differed to
Spain.
Commenting on the differing dynamics Martinez
noted that when one looks at the European market
it is important to realise it is not a single market,
there are 28 countries, 28 antitrust authorities
and a multitude of other differences. Getting to
know the Italian market provided Cellnex with
the skills and know how to participate in their
most important transaction, the acquisition of
of 7,377 towers from Wind. Reflecting on the
challenging process of the transaction, Martinez
noted that Cellnex was managing the acquisition in
XX
Capturing efficiencies and developing long term

partnerships
Customer focus has remained central to the
Cellnex business model. Martinez emphasised that
capturing efficiencies on behalf of operators has
to be part of the value proposition of a towerco.
It is simply not enough to just deliver co-location
and be creative with small cells and DAS, towercos
must work as a long term partner, looking at ways
to reduce costs, contribute to growth, and aid the
operator in achieving a competitive advantage.
This involves making huge investments and
working with operators on their future strategies.
As a company, Cellnex plan to remain a neutral
and independent party that doesnt enter into
competition with their customers.
INWIT
Cellnex has 7,708 sites in Italy, 7,412 in Spain

Countries Martinez mentioned Cellnex is targeting for expansion
Other countries Cellnex mentioned as expansion targets in their IPO materials

parallel with their IPO process, whilst facing stiff
competition from US companies. He put Cellnexs
success down to their ability to really understand
the objectives of their customer, tailor making a
solution for them, adding that the offering is not a
pure sale and leaseback transaction, nor is it a pure
real estate infrastructure service play - it is really
a long term partnership. He feels that this attitude

and approach was why they were successful even
though they only had a portfolio of 300 towers
in Italy at the time. Up until the acquisition and
just before their IPO, Cellnex were very much an
unknown entity, now they are one of the biggest
names in telecoms infrastructure.
Cellnex are in the final round of the process to

acquire a stake in INWITs 11,519 towers in Italy in
conjunction with F2i. From an industrial point of
view, Martinez felt that the acquisition made a lot
of sense. With Cellnex already running a portfolio
of almost 8,000 towers in the market, there are
huge synergies to be achieved by combining the
two portfolios, which will lead to significant cost
reduction.
Whilst Cellnex are fighting hard for the towers,
Martinez added that the company does have its
own red lines in terms of financial discipline
with returns to shareholders needing to be at the
forefront of their mind. The negotiations are also
complex, Cellnex are bidding to acquire 100% of

the available stake in the company which also
means taking care of minority shareholders as well
as the controlling shareholder. The Italian market
currently accounts for 35% of Cellnexs revenues
but should the transaction go ahead, this figure will
increase to around 55-60%.
existing infrastructure (whilst also increasing

the requirements for densification in urban
areas). Towercos, Martinez added, are the perfect
partners for the execution of these sorts of
mergers, partnering with operators to dispose of
certain assets, reallocate services and increase the
efficiencies of their networks.
International expansion
With a history in the broadcast sector, managing

both passive and active infrastructure, Cellnex
brings a strong degree of engineering expertise
to this area. Decommissioning of assets needs to
be a way of capturing efficiencies and delivering
them to customers, and it needs to be profitable
for both customers and towercos. With regards to
payback for towercos there is no golden rule, it is
different to a site youre continuing to operate and
increase tenancy ratios on, however Cellnex see
significant growth opportunities for them in the
rationalisation of sites and it will form a key part of
their business strategy going forward.
Beyond Cellnexs joint offer with F2i for majority

control in Telecom Italias INWIT, the companys
plans for growth also include expansion into new
markets. After consolidating what they can in
existing markets, Cellnex have an international
strategy in place with the most immediate priorities
being in France, the UK and Germany where the
markets are largest. Whilst at present Cellnex
plans to focus on countries within the European
Union, Martinez added that they wouldnt rule out
exploring partnerships within countries outside the
EU should the business case be right.
Diversification of the towerco business model

MNO consolidation and opportunities in
decommissioning
When you look at the European market, Martinez
commented, you will see 50 or so MNOs; in the US
market there are five or six key players. In order
to have a well functioning telecoms industry,
Martinez believes that further consolidation in
Europe will be necessary.
Rationalisation of the market to around 10-12
key players will create a lot of redundancy of
Martinezs vision extended from towers to fibre

and other pieces of the HetNet puzzle. The future of
services will need the combination of all different
types of infrastructure in order to deliver the
bandwidth and service that mobile customers
have come to expect. Optical fibre makes sense
to connect towers and it will become a critical
component of all networks. For an infraco there
is the opportunity to get involved in fibre to the
tower, however fibre to the home, Martinez felt,
would remain an operator play.
With regards to small cells, DAS and public WiFi this is something that Cellnex are already
involved in. In Italy, they have deployed DAS
networks inside tunnels, along motorways and on
provincial state and regional roads and they have
on going projects with MNOs to install systems in
specific areas like football stadiums, malls and
other high traffic places. In Barcelona, Cellnex
are rolling out the first 4G small cell network
together with Orange and with the support of the
local council. Orange owns the small cells whilst
Cellnex deploys and manages them, including
connecting fibre to the backbone. The agreement
also provides the opportunity for the small cells to
be shared with other operators, further deepening
the potential for infrastructure sharing and cost
reduction.
To round up the interview, Martinez emphasised
the critical role of telecommunications
infrastructure operators as a vehicle for enabling
society to enjoy all the possibilities that technology
currently offers, combining rationalised macro
and micro networks with improved connectivity
to meet the uplink and downlink needs of a large
number of simultaneous users.
There is still a long way to go and all of us
infrastructure operators, customers who provide
their services, content and applications, to end
users and local authorities must work together
to achieve a fast and efficient roll-out so that such
infrastructure can provide service to various
network suppliers, promoting the sharing
concept rather than the ownership concept.
XX
Infrastructure expansion,
infraco management and a Global
Tower IPO at Turkcell
An interview with Turkcell Chief Strategy Officer, Ilter Terzioglu
Ilter Terzioglu, Chief Strategy Officer, Turkcell
Turkcell, with 68.9mn subscribers and revenues of

TRY12.8bn (4bn), possess a footprint in nine countries
across Southeastern Europe and the CIS. The company
recently acquired the largest spectrum in Turkeys 4.5G
auctions and their subsidiary, lifecell became the first
GSM operator to launch 3G in the Ukraine. We speak to
Turkcell Chief Strategy Officer, Ilter Terzioglu to discuss
the companys plans for infrastructure expansion,
their offer for TeliaSoneras stake in FINTUR and what
the future has in store for their infraco Global Tower
including the recently announced IPO.
Keywords: 3G, 4G, Acquisition, Azerbaijan, Belarus, C-Level Perspectives, Carve Out, Co-locations,
Cyprus, Deutsche Telekom, Europe, FINTUR, Georgia, Global Tower, Infrastructure Sharing, Kazakhstan,
KKTCell, life:), lifecell, LTE, Masts & Towers, MNOs, Moldova, Network Rollout, Regulation, Russia & CIS,
TeliaSonera, Turkcell, Turkcell Europe, Turkey, Ukraine, UkrTower, Valuation

< Turkcells geographical footprint, plans for infrastructure expansion and appetite for infrastructure
TowerXchange: Please can you introduce

Turkcells footprint and market share in the
countries in which it operates.
Ilter Terzioglu, Chief Strategy Officer, Turkcell:
Turkcell was founded in 1994 as Turkeys first
GSM company. Today we are a converged
communication and technology services provider.
Our offerings vary from mobile telecommunication
to fixed, cloud, TV and OTT services.
In addition to our home country Turkey, we
operate in eight countries through subsidiaries and
partnerships. In the Ukraine, our wholly-owned
subsidiary lifecell is the first GSM operator to have
introduced 3G to the market. We are the majority
owner of life:) in Belarus, sole owner of KKTCell in
Northern Cyprus, and partner of Deutsche Telekom
in Turkcell Europe. Through our subsidiary FINTUR,
in which we partner with TeliaSonera, we operate
in four countries in the CIS region: Azerbaijan,
Georgia, Moldova and Kazakhstan.
TowerXchange: We understand Turkcell
acquired the largest spectrum in the recent 4.5G
auctions. What level of new infrastructure build
out is required to deliver this? What level of
infrastructure expansion is required in other
markets that Turkcell operates?
sharing in the markets it operates

< The rationale behind the creation of infracos Global Tower and UkrTower
< Plans to acquire TeliaSoneras stake in FINTUR
< Challenges surrounding fibre regulation in Turkey
< Drivers behind a potential IPO of Global Tower
Ilter Terzioglu, Chief Strategy Officer, Turkcell: For

the past few years, Turkcell Turkey invested in its
network with the vision that technology evolves
constantly and that Turkey would eventually move
into LTE era. With the spectrum auction held on
Another big step for infrastructure expansion in the

Turkcell Group was the launching of 3G in Ukraine
following a long-anticipated auction. Our subsidiary
lifecell became the first GSM operator to launch 3G,
on 19th May 2015 in Lviv and on 4th June 2015 in a
number of other cities including Kiev. We are going
through a very speedy roll-out, and have covered 16
regional centres and 300 settlements as of 1st April.
lifecell offers 3G+ with its 3-carrier technology,
which adds a further dimension to its technology
leadership as the Ukraines communication
landscape goes through a major change.
TowerXchange: Turkcells towers are managed
by their wholly owned subsidiary Global Tower.
What was the rationale behind the creation
of Global Tower and what do you see as the
advantages of having Turkcells infrastructure
managed by such an entity?
Global Tower was established in 2006. It serves
not only Turkcell but other telecommunications
operators (including Turkcells competitors), TV
& Radio broadcasters, ISPs and public institutions

as well. We always look for new tenants on our
existing towers which enable efficiency for us and
for our customers.
The main goal of Global Tower is to increase cost
efficiency by sharing sites and services. Global
Towers site sharing business model eliminates
the initial investment costs of its clients, decreases
environmental impacts and promotes efficient
use of resources. In other words, it provides an
independent platform for the telecoms industry and
adjacent sectors to optimise costs through passive
Global Tower also helps Turkcell manage its tower
business more efficiently, while having a more
realistic view of its core business as an operator
that provides connectivity and services built on top
of that layer.
TowerXchange: Do Turkcell use any third
party towers? Is there generally a culture of
infrastructure sharing in the markets that
Turkcell operates or are they relatively new to
the concept?
Ilter Terzioglu, Chief Strategy Officer, Turkcell: A
small amount of the towers used by Turkcell Turkey
are from third parties. We could say that in Turkey,
the Ukraine, Belarus and Northern Cyprus, passive
infrastructure sharing strategies are generally wellestablished.
However, there is always room for improving the
Global Tower also helps Turkcell

manage its tower business more
efficiently, while having a more
realistic view of its core business
as an operator that provides
connectivity and services built
on top of that layer
August 26th, we acquired 172 Mhz, 47% of all

spectrum auctioned, reaching 234 Mhz. Following
the auction, we accelerated the network upgrade
to deliver LTE in Turkey on April 1st with our
infrastructure investments including spectrum,
we have secured the next ten years of Turkcell as
a converged company that delivers technology in
the highest standards. The fact that the spectrum
auction was technology-agnostic gives us greater
flexibility as we plan ahead.
efficiency of the models and practices. Technology

evolves constantly, and the roll-out of 4.5G in
Turkey and 3G in the Ukraine may also provide
additional opportunities for more efficient passive
TowerXchange: Would Global Tower look to
acquire any third party towers? What degree of
new build is being done by the company?
Currently, Global Tower focuses on the Turkcell
Group. However, we are always open to evaluating
any viable and profitable opportunities that may
arise.
TowerXchange: In February 811 towers were
transferred from lifecell to UkrTower, what was
the motivation behind the restructuring?
XX
Ilter Terzioglu, Chief Strategy Officer, Turkcell: Our

goal is to manage our business in the Ukraine more
efficiently by consolidating the tower business
under UkrTower. We believe that this consolidation
will help create additional synergies in the Ukraine.
We are also keen to make sure that our assets are
recognised and valued properly by the market
this move is a step that will help UkrTower and its
parent company Global Tower realise their real
valuation, creating shareholder value in return.
TowerXchange: What is the relationship between
Global Tower and UkrTower how closely do the
two management teams work?
UkrTower is a wholly-owned subsidiary of Global
Tower. Business development and sales teams work
closely together in order to ensure product and
service upgrades and enrich customer portfolio.
There is also cooperation in terms of strategy and
transfer of know-how: for example, UkrTower
expanded into broadcasting sector soon after the
Global Tower experience in the Turkish market.
TowerXchange: We understand Turkcell to be
submitting a binding offer for TeliaSoneras
stake in FINTUR what can you tell us about
Turkcells reasons for the offer?
Turkcell owns 41.45% of FINTURs shares so
we already exist in four of the countries that
TeliaSonera intends to withdraw from: Kazakhstan,
Azerbaijan, Georgia and Moldova. As a result
of our partnership, we already have a stake in

the outcome of the process and we cannot stay
indifferent. We believe that we can create value for
our shareholders and customers if we take a bigger
role in the management of our subsidiaries in these
four countries where we already have a footprint.
TowerXchange: Do you foresee the creation of
infrastructure subsidiaries in these markets?
Ilter Terzioglu, Chief Strategy Officer, Turkcell: It is
too early to talk specifically about our plans in these
countries.
TowerXchange: We understand there are some
challenges relating to regulations surrounding
telecoms infrastructure in Turkey, whereby
spectrum licenses are attached to specific
infrastructure does this prevent the transfer
of assets and is the regulator looking to address
this problem?
Ilter Terzioglu, Chief Strategy Officer, Turkcell: As
previously mentioned, the latest spectrum auction
that was held on 26th August was technologyagnostic. It is a very positive and visionary
approach on the part of the government not
necessarily for the transfer of assets but more
importantly for our investments as it gives us, the
operators, the flexibility to plan ahead for future
technologies.
The bigger debate, in our view, is the fibre
regulation in Turkey. Fibre penetration in Turkey
remains at levels lower than half the OECD
average. A new model that would encourage

investments should be introduced. Our proposal is
the establishment of a joint venture which brings
together all of the fibre resources of operators and
serves everyone. This would remove the current
obstacles to investment, improve efficiency and
create a new incentive structure. Not only the
operators but the national economy as a whole can
save billions of dollars while millions of households
and businesses get connected.
TowerXchange: TowerXchange: We have heard
that Turkcell have commenced an IPO of the
Global Tower business. What can you tell us
about this?
Our Board has taken the decision to initiate the
process for initial public offering of certain amount
of shares of Global Tower. With this decision, our
Companys management is now authorised to
perform all actions as required, including amending
the existing articles of association of Global Tower.
As you know, we have expressed, on various
occasions, our interest in achieving efficient
management of our businesses, and in ensuring the
correct valuation and positioning of our assets by
the market. We have been evaluating the options
for creating the highest shareholder value and this
decision was taken as a part of those deliberations.
As stated in our announcement, we are now
evaluating the possibilities for a potential IPO in
Turkey and/or in international markets.
Global Towers IPO and the

Turkish mobile market
On 28 April 2016, Turkcells
Board of Directors announced
that the company was initiating
the process for an IPO of an
undisclosed amount of equity in
its infrastructure business Global
Tower. Drawing upon discussions
held at the Turkey roundtable at
Aprils TowerXchange Meetup
Europe, we examine the Turkish
market and Turkcells freshly
announced IPO process.
Keywords: 3G, 4G, Acquisition, Asia, Avea, Capex, Co-locations, Construction, Densification, EBITDA,
Energy, Europe, Europe News, Global Tower, Infrastructure Sharing, IPO, LTE, Masts & Towers, MNOs,
Network Rollout, On-Grid, Tenancy Ratios, Tower Count, Turkcell, Turk Telekom, Turkey, Ukraine,
UkrTower, Unreliable Grid, Valuation, Vodafone

< Key dynamics of the Turkish mobile market including MNO market shares, spectrum allocations,
LTE rollout and new build capex
< Disputes surrounding fibre regulation in the country
< How Turkeys build operate transfer arrangement governing towers impacts the market
< Tower ownership and infrastructure sharing in the country
< The estimated size of the Global Tower portfolio and the implications of an IPO
The Turkish mobile market

As of December 2015 there were 73.6mn mobile
subscribers in the Turkish mobile market,
representing a penetration rate of 93.5%. On 9th
April 2016, the Turkish Ministry of Transportation,
Communication and Maritime Affairs announced
that all villages in Turkey now have mobile
coverage following the rollout of the governments
Universal Service Fund NetworkMobile network
which brought coverage to underserved populated
rural areas.
Turkeys mobile operators
There are three mobile network operators in the
Turkish market - Turkcell, Vodafone and Turk
Telekom. With both Turkcell and Turk Telekom
active in both fixed line and TV, and Vodafone
looking to go the same way, the companies are
better described as converged communication
and technology services providers than pure-play
mobile network operators.
Turkcell are Turkeys incumbent mobile operator,
boasting the largest market share with 34mn
mobile subscribers (47%). Turkcell Turkeys Q1 16
revenues were TRY2.9bn, up 10% on the previous
years performance. In 2006 Turkcell founded
Global Tower, a 100% owned subsidiary which is
the countrys only telecom infrastructure operator
and which is responsible for managing Turkcells
infrastructure. Whilst Turkcell have not confirmed
the size of their tower portfolio, they are believed
to have approximately 24,000 sites of which an
XX
Mobile subscriber market share

23%
47%
Turkcell
Vodafone
Turk Telekom
30%
estimated 8,000 are ground based towers.

Multinational player Vodafone are the markets
number two operator with 30% of the market share.
The company entered the country in 2006 and, after
a turbulent first couple of years, have seen their
revenues grow continuously.
Whilst leading the fixed-line market, Turk Telekom
is number three in terms of mobile market share,
with 17.7mn mobile subscribers as of Q1 2016
(adding 1.1mm subscribers in the past 12 months).
The Turkish government has a 35% stake in the
company, whilst 55% is owned by Oger Telecom
and 15% is listed on the Istanbul Stock Exchange.
Previously operating their mobile business under
the brand Avea, January 2016 saw the company
rebrand the unit as Turk Telekom.
The launch of 4.5G and LTE rollout
On 1st April, Turkey launched LTE services with
LTE population coverage currently sitting at 66%.

Smartphone penetration stands at 68% of which
42% of smartphones are 4.5G enabled, while 22%
of data traffic currently uses 4.5G networks. In the
26 August 2015 4.5G spectrum auction, Turkcell
acquired the largest share, acquiring 47% of all
spectrum auctioned, whilst Turk Telekom acquired
30% and Vodafone 23%. The spectrum was
technology neutral, giving operators more flexibility
in their network planning.
Fibre penetration and the establishment of a
joint venture
Fibre penetration levels in Turkey are less than half
the OECD average. Turk Telekom has by far the most
extensive network in the country, having invested
over US$7bn in the past decade in developing their
infrastructure. The operator has laid 213,000km of
fibre, approximately six times more than mobile
incumbent Turkcell which has an estimated
35,000km. Turk Telekom effectively sets the rates at

which it charges its competitors to use the network,
and both Turkcell and Vodafone are calling upon
the government to ease the burden on investment
and introduce tighter regulation of wholesale fibre
access prices, whilst proposing a joint venture
which brings together all of the fibre resources of
the three operators. Whilst Vodafone and Turkcell
are strongly behind the notion of a joint venture,
estimating that it will save operators around
US$12.5bn, Turk Telekom are less than keen having
already deployed a significant amount of their own
capital in establishing a network.
Tower ownership in Turkey
Most of the towers in the Turkish market were
constructed under a build-operate-transfer (BOT)
model with licenses for 2G spectrum set to end
in 2023 and licenses for 3G by 2029. At this time,
applicable active and passive infrastructure must
be returned. Exactly how this will play out is yet
unclear with it thought that a tender process will
be introduced for the operators to buy back the
towers, although reference prices have not been
determined.
Not all of Turkeys towers were constructed under
the BOT agreement. Global Tower is Turkeys first
and the single tower operator offering professional
tower and infrastructure services. Since the
establishment of the company in 2006 Global Tower
has erected their own towers and has a revenue
share model with the tower owners. This unique
position gives Global Tower the opportunity to
grow its business at the end of the MNOs BOT time

period.
Infrastructure sharing
1,200 RANshared base stations belong to the
governments universal service network which was
designed to bring connectivity to rural communities
where the population of the community is
under 500. As mentioned previously, under the
arrangement each of the mobile network operators
must take it in turns to manage the network
for a three year period, without no financial
remuneration from the other parties or the
government.
Beyond the RANsharing agreement put in place
under the universal service network, there is a
degree of passive infrastructure sharing between
the operators. Turkcell have confirmed they use a
small number of third party towers in the country,
whilst around 25% (~2,000) of their towers are
thought to be used by Turk Telekom and Vodafone.
Assuming most of the co-locations are on ground
based towers rather than other sites (e.g. rooftops),
this suggests Global Tower might have a tenancy
ratio of around 1.25 on their greenfield towers.
3 MNOs:
23%
Global Tower
has 8,000 towers,
of which ~5,000
under BOT
BOT arrangement:
2G towers returned 2023;
3G towers returned 2028
Turk Telekom SIM penetration
100%
Fibre regulation
mobile network
coverage in towns
and villages
66% LTE
population
73.6mn mobile coverage
subscribers
connections from the electricity grid. Electricity

costs in Turkey are thought to account for 30% of
total site costs.
What is the rate of new build and what does it
cost to build a tower?
The average cost to build a tower in Turkey
is thought to be US$30-50k which is low by
international standards, perhaps reflecting the
strong local steel tower manufacturing industry.
Last year approximately 500 towers are thought to
93.5%
Vodafone
30%
Power supply to Turkeys towers

Nearly all of Turkeys towers are thought to be
connected to the grid, although in the eastern part
of the country, some issues exist with the reliability
of the grid. In order to bring power to sites quickly
some of the operators have paid to build the
Turkcell
47%
and JV fibreco
proposed
4.5G launched
April 2016
68%
smartphone Global Tower
penetration IPO initiated
have been erected in the country, with about 50% of
these built to replace existing towers. New towers
built by the operators, or their towerco, will not
need to be returned to the government when those
built under the BOT scheme are.
The commencement of an IPO process for Global
Tower
On 28 April Turkcell announced that its Board of
Directors had decided to initiated the process for an
IPO of a certain amount of shares in Global Tower.
Global Tower is thought to possess a portfolio of
XX
approximately 8,000 towers in Turkey, while they

also have a wholly owned subsidiary, UkrTower,
with an additional 1,181 towers in the Ukraine. Both
the Turkish and the Ukrainian assets are held under
the Global Tower business unit, putting the portfolio
at just over 9,000 towers. This number is complicated
by the fact that an estimated 60% of their Turkish
towers are held under a BOT arrangement with the
Turkish government, with those erected as part of 2G
rollout reaching the end of their license and needing
to be returned in 2023; and those under 3G by 2028.
Negotiations are ongoing between the operators and
government to reach an agreement on how this will
be managed, however it is an uncertain variable to
any potential valuation of the Global Tower portfolio.
With regards to the motivations behind the IPO,
Turkcell Chief Strategy Officer Ilter Terzioglu
stated in an interview with TowerXchange, that the
company wanted to ensure that the true value of
their assets was understood and appreciated by the
market. He added that the evaluation of different
options to create shareholder value was key and
that managing our business more efficiently and
achieving a more accurate positioning of our assets
are among our priorities for the entire Turkcell
Group. With Turkcell currently trading at 6.2x
EBITDA and most listed towercos trading at >12x
EBITDA, it is likely that Turkcell will stand to benefit
from transferring its assets from their balance sheet
to that of a listed towerco. Then known as Avea, Turk
Telekom tried to monetise their towers around five
years ago, but the process was aborted. That Turkcell
is now listing their towerco, Global Tower, illustrates
the maturation of the Turkish market
Meetup
Americas 2016
Meetup Africa
2016
16-17 June,
Boca Raton
19-20 October,
Johannesburg
Meetup Asia
2016
Meetup
Europe 2017
13-14 December,
Singapore
4-5 April,
London
Tower transactions, carve

outs and IPOs in the German
tower market
A look at recent and rumoured activity in Europes biggest telecom market
The German tower market has become the subject of much interest
withTelefnica Deutschlands recent sale of 2,350 towers to infraco
Telxius and a mooted early July IPO of the unit; whilst market leader,
Deutsche Telekom has reportedly opened discussions on a part
listing of its German portfolio. Meanwhile, could American Tower be
soliciting third party investment into its German business? We speak
to Jonathan Dann, Managing Director of Telecom Research at RBC
Capital Markets to better understand the landscape in the German
tower industry and discuss how the market looks set to evolve.
Jonathan Dann,
Managing Director, Telecom
Research, RBC Capital Markets
Keywords: Acquisition, American Tower, Co-locations, Decommissioning,

Deutsche Funkturm, Deutsche Telekom, E+, Europe, Europe Insights,
E Plus, Germany, Infrastructure Sharing, KPN, Lease Rates, Leasing &
Permitting, MarketWatch, Masts & Towers, New Market Entrant, Rooftop,
Telefnica , Telefnica Deutschland, Telxius, Tenancy Ratios, Tower
Count, Towercos, Transfer Assets, Valuation, Vodafone

< Who owns Germanys c.70,000 telecom sites
< What percentage of sites are ground-based towers versus rooftops and how this compares to
other European markets
< Typical tenancy ratios and ground lease rates
< The implication of the proposed part listing of Deutsche Telekoms tower portfolio
TowerXchange: Please give a short introduction

to yourself and the work that you do at RBC.
Jonathan Dann, Managing Director, Telecom
Research, RBC Capital Markets: I have been a
telecom and related industries analyst for 20 years
and with RBC for the last two years. I work with
a team of five covering European and Emerging
Market Telecoms, Towers and Satellite operators.
Tower companies are relatively new in European
equity markets. Currently, the market is
particularly focused on looking at how the listed
operators expand beyond their current Spanish/
Italian roots. M&A permutations and also future
tower spin offs take up the majority of investor
interest; while the organic side of the tower story
has tended to take a back seat.
TowerXchange: Please can you tell us a little
about the German telecom market, who are the
main operators and what is their market share?
Research, RBC Capital Markets: There are three
mobile network operators in Germany, following
consolidation in 2014 of Telefnica Deutschland
and KPNs E+; Telefnica Deutschland, Deutsche
Telekom and Vodafone. There are also a large
number of MVNOs, with each of the main mobile
operators also owning and selling via a variety
of sub-brands. Each of the operators has c30%
subscriber market share (figure one). The operators
are all backed by strong and large internationally
Figure one: Subscriber market share in Germany
it seems unlikely that a new entrant will emerge.

Telefnica Deutschland has recently announced
plans to transfer 7,700 tower sites (mainly rooftops)
to Deutsche Telekom which will be managed under
a newly created subsidiary, Omega Towers.
100.0%
90.0%
80.0%
70.0%
18.2
19.6 20.7 20.7
21.6
14.7 15.8 16.1

16.7 17.1 16.6
37.4 38.2 37.9

TMO
60.0%
50.0%
40.0%
33.3 33.5 32.2
29.9 28.0 27.4 27.0 26.7 26.6
TEF DE
30.0%
20.0%
10.0%
VOD
TowerXchange: How many towers do each of

the operators own and which other companies
possess portfolios of towers in Germany? What
percentage of these towers are ground based
versus rooftop and how does this compare to
other European markets?
E-Plus
34.3 31.5 31.0 31.5 33.0 33.7
34.6 35.3 35.7
1Q10A
2Q10A
3Q10A
4Q10A
1Q11A
2Q11A
3Q11A
4Q11A
1Q12A
2Q12A
3Q12A
4Q12A
1Q13A
2Q13A
3Q13A
4Q13A
1Q14A
2Q14A
3Q14A
4Q14A
1Q15A
2Q15A
3Q15A
4Q15E
1Q16E
2Q16E
3Q16E
4Q16E
0.0%
Source: Company reports, RBC Capital Markets estimates. TEF DE includes adjustment aft
diversified parents, although the balance sheets of

some are stretched compared with historic levels
making potential tower spin-offs or sales attractive.
TowerXchange: At the end of 2014, Telefonica
Deutschland bought E-Plus, how did this affect
both Telefonica and the German mobile market
and could we see any further consolidation? Is
there any possibility of a new market entrant?

Research, RBC Capital Markets: The merger
created a strong third operator with around 39,000
mobile sites in use, compared with peers Deutsche
Telekom and Vodafone who are using around 2526,000 sites each. One of the remedies was for a
certain number of towers (around 8,000) and some
high frequency spectrum to be held back for five
years for a potential new fourth entrant. Currently,

Research, RBC Capital Markets: Currently on our
estimates, Deutsche Telekom and Vodafone use
25-27,000 tower sites and own approximately
8,000 and 4,000 macro towers, respectively (table
one). Telefnica Deutschland has recently sold
their 2,350 macro sites to their infraco, Telxius and
currently uses 32,000 total sites (adjusting for the
7,700 transferred to Deutsche Telekom). Telefnica
Deutschland has plans to continue to decommission
to a Golden Grid of 25,000 sites over the coming
years. Beyond the MNOs, American Tower owns
2,031 tower sites acquired from E+/KPN in 2012.
Germany is rare, in that around 75-80% of sites
are rooftops and only 20-25% ground based towers
compared to most European countries where two
thirds of sites are typically ground based towers
and only a third are rooftops.
TowerXchange: What indication do you have of
Table one: Tower ownership in the German market
Source: RBC Capital Markets
Deutsche
Telekom*
Vodafone
Telefnica
Deutschland
American Tower
Total
Rooftop sites owned
23,636
18,000
11,968
53,604
Ground based towers owned
8,000
4,000
2,350*
2,031
16,381
Total owned
31, 636
22,000
14,318*
2,031
69,985
3rd party rooftops
-7,700
1,500
22,700
16,500
3rd party towers
3,000
2,000
2,031
7,031
Total used (Jan 2016)
26,936
25,500
39,049*
2,031
93,516
*Telefnicas ground based towers sold to their wholly owned infraco, Telxius
On our estimates the lease up ratio on towers is

1.3x which is still low by European standards and
very low by US standards.

Research, RBC Capital Markets: The 7,700 sites
transferred appear to be mostly rooftops, with
no financial compensation paid. Telefnica
Deutschland will be vacating the sites over time
whilst Deutsche Telekom will be taking over any
ground lease obligations as well risks around
decommissioning, or retention. We estimate that
typical ground leases are in the 4,000-5,000 per
year range making the costs relatively modest.
TowerXchange: Telefonica recently transferred

7,700 sites to Deutsche Telekom, what do you
know about the details of the transaction
and what are the implications of any
decommissioning?
TowerXchange: Apart from Telefonicas sale of

2,350 macro sites to Telxius and transfer of 7,700
sites to Deutsche Funkturm, and the sale of 2,031
E Plus towers to American Tower in 2012, have
there been any other transactions of note in the
tenancy ratios on German sites?

Research, RBC Capital Markets: Tenancy ratios
appear to be low at just over 1.1x, but this is also
due to high proportion of single tenancy rooftops.
German market?
Research, RBC Capital Markets: Deutsche Telekom
sold its broadcast transmission towers T-Systems
Media & Broadcast to TDF in 2007 for 850mn.
The bulk of this business (now Media Broadcast
Group) was sold to Freenet for 295mn (around
12x EBITDA) in March 2016.
We estimate that Telefnica Deutschlands 2,000
towers would be worth at least the 400mn based
on the transaction between American Tower
and E+/KPN in 2012 and more likely higher
given recent transactions and the potential for
competitive tension between Telxius (Telefnicas
towerco) and American Tower to reach scale in
Germany. Additionally, the owned rooftops could
have value depending on the structure of the
sale-leaseback offered by Telefnica Deutschland.
TowerXchange: What other activity could we
expect to see in the German tower market?
Research, RBC Capital Markets: Deutsche Telekom
has discussed a part listing of its German tower
portfolio. With around 8,000 owned towers
and as a market leader they could potentially
accelerate lease up rates on their portfolio. One
caveat is ground leases in Germany appear to be
in the 4,000-5,000 per annum range, limiting
the financial benefits for second tenants of colocating
Hamstrung rooftop co-locations

and potential tower monetisations in
the German market
Insights from the Germany roundtable at the TowerXchange Meetup Europe 2016
The German tower industry, whilst considered a
relatively stable, low growth market, has started to
see a spate of activity that could alter dynamics in the
country with a potential monetisation of one tower
portfolio, a carve out of another and new investment
raised for a third. At the 2016 TowerXchange Meetup
Europe, key actors in the country met to examine
the substance behind such speculations, whilst
discussing growth opportunities in the market
and the challenges presented by the countrys
proportionally high number of rooftop sites.
Keywords: 4G, Acquisition, American Tower, American Tower Germany, Capacity Enhancements, Colocations, Decommissioning, Deutsche Funkturm, Deutsche Telekom, Europe, Europe Insights, Germany,
Infrastructure Sharing, Investment, Lease Rates, Masts & Towers, MNOs, Network Rollout, Rooftop,
Sigfox, Site Level Profitability, Telefnica, Telxius, Tenancy Ratios, Tower Count, Towercos, Vodafone

<
<
<
<
The breakdown of tower ownership in the German market

Expected growth in new build and co-locations
Why tenancy ratios on rooftop sites are so low in the country
How a potential monetisation of Deutsche Funkturm and carve out of Telefnica sites could
affect market dynamics
Who are the key players?

Germany has three mobile network operators
following Telefnicas acquisition of E+ in 2014.
Telefnica now boasts the largest market share
sitting just under 38%, Deutsche Telekom has just
under 36% and Vodafone just under 27% (figure
one), the remainder of the market is accounted for
by a number of MVNOs.
Each of the operators retain their assets with
Deutsche Telekoms subsidiary Deutsche Funkturm
managing their portfolio of 27,000 sites and
their subsidiary Omega Towers owning the
7,700 sites transferred from Telefnica following
the E+ acquisition (predominantly rooftops, of
which approximately 50% are expected to be
decommissioned). The fourth owner of towers
in the German market is independent towerco
American Tower, which owns a portfolio of 2,031
towers in the country (table one). [Editors note:
Since the Meetup it has been announced that
Telefnica has sold their 2,350 ground-based towers
to subsidiary, Telxius].
What degree of infrastructure sharing is there in
the market?
There is an established culture of infrastructure
sharing between each of the operators, with all
three using third party towers and leasing space
on their towers to third parties. It is estimated that
Deutsche Funkturm have approximately three times
as many tenants on their sites than the number of
third party sites they use.
What percentage of sites are ground based

towers versus rooftop towers?
As discussed in our recent German market analysis
(see Tower transactions, carve outs and IPOs in
the German tower market), the German market is
characterised by an unusually high proportion of
rooftop sites - Of the estimated 70,000 sites in the
country, 77% are thought to be rooftops (table one
and figure two).
Deutsche Funkturms portfolio contains 8,000
ground based towers (of which 500 are high towers)
and Vodafone has ~4,000 ground based towers.
Telefnica Deutschland has recently sold their 2,350
ground based towers to their infraco Telxius and as
such the operators portfolio is thought to be solely
comprised of rooftop sites (~12,000 sites). American
Towers portfolio, akin to that of Telxius, is solely
comprised of macrostructures.
What demand is there for new structures and
Figure one: Subscriber market share in Germany

100.0%
90.0%
80.0%
70.0%
18.2
19.6 20.7 20.7
21.6
14.7 15.8 16.1

16.7 17.1 16.6
37.4 38.2 37.9
TMO
60.0%
50.0%
40.0%
33.3 33.5 32.2
29.9 28.0 27.4 27.0 26.7 26.6
TEF DE
30.0%
20.0%
10.0%
VOD
34.3 31.5 31.0 31.5 33.0 33.7
34.6 35.3 35.7
E-Plus
0.0%
1Q10A
2Q10A
3Q10A
4Q10A
1Q11A
2Q11A
3Q11A
4Q11A
1Q12A
2Q12A
3Q12A
4Q12A
1Q13A
2Q13A
3Q13A
4Q13A
1Q14A
2Q14A
3Q14A
4Q14A
1Q15A
2Q15A
3Q15A
4Q15E
1Q16E
2Q16E
3Q16E
4Q16E
Taking into account the use of third party assets,

Deutsche Telekom and Vodafones networks make
use of approximately 25-27,000 sites each, whereas
Telefnicas are estimated to use close to 39,000.
Telefnica is on the record as saying they plan to
consolidate their network to a golden grid of a
similar size to the other two operators and when
asked whether 25-27,000 sites represented the
optimum size or whether increased data usage
would necessitate more - feeling amongst the table
was that 30-32,000 sites would be the theoretical
maximum that operators would need.
Source: Company reports, RBC Capital Markets estimates. TEF DE includes adjustment aft
new co-locations?
Participants at the roundtable saw little demand
for new macrostructures to be built. Whats more,
participants felt that the number of tenancies
on structures would remain relatively constant.
The entrance of new entities such as Sigfox help
contribute to increasing tenancies but using smaller
antennae, such companies usually demanded lower
lease rates and so were not comparable with MNO
tenants. With broadcasters also existing as a tenant
on some of the higher structures, unless there was
a new evolution with terrestrial TV it was thought
that some of the taller concrete towers could be at
risk of decommissioning in the future due to loss in
revenues.
The network rollout in rural areas for the more

recently auctioned 700MHz band is still ongoing
and will present some opportunity for growth for
the next 12 months, similarly there is a need for
new build along railways and highways. Looking at
urban sites, whilst the number of tenancies was not
expected to increase, there continues to be changes
in equipment being hung on sites as operators
continue to rollout 4G.
Limitations with the rooftop masts in Germany
Perhaps one of the biggest topics of conversation
at the table related to the limited co-location
potential on Germanys rooftop masts with the vast
majority being single tenant sites. Tenancy ratios
XX
on Deutsche Funkturms ground based towers sit

around 2.5, whilst the average tenancy ratio on
their rooftop sites is around just 1.1; American
Tower Germany, whose portfolio is comprised solely
of ground based towers, has an estimated average
tenancy ratio of 1.8 - much higher than that of the
resident operators with rooftops in their portfolios.
Whilst regulations surround electromagnetic
radiation to some extent limit the co-location
potential of rooftop masts in populated areas,
the real hurdle is the additional rental payments
demanded by landlords. The majority of building
owners are aware of the extra revenue that can
be generated by additional tenancies and as such,
look to levy extra lease payments from the mast
owner. Such a strategy compromises the business
case surrounding co-location and has hampered
the development of effective rooftop infrastructure
sharing in the country. It was commented that the
hard negotiations of rooftop owners have led mast
owners threatening to cancel their leases in order to
avoid escalating costs.
It was commented by participants that whilst
operators had seen infrastructure sharing on
rooftop masts as a strong potential business
opportunity in earlier days, the rooftop model
doesnt work in the German market. American
Tower with their portfolio of ground-based towers
is unlikely to make any move into the rooftop sector
given the economics that the operators are seeing,
and similarly it is not expected that Telefnica
Deutschlands rooftop sites will be transferred to
Telxius.
Figure two: GBTs vs rooftops and streetpoles in Germany

16,381
GBTs
53,604
Rumours and news: Monetisation of Deutsche

Funkturm assets, a carve out of Telefnica
towers and expansion by American Tower
It had been publically announced earlier in 2016
that Deutsche Telekom was looking into a potential
monetisation of their infrastructure business,
Deutsche Funkturm. Whilst it is early days in the
discussions and not something the company is
able to publically comment on, the founding idea
of Deutsche Funkturm was that the assets would
eventually be sold. With the company keeping
most of their operations in house (with a large
payroll to support this) - the assets are thought
to have been well managed and maintained,
with robust management processes effectively
developed. With ongoing broadband expansion

and requirements for fibre rollout, monetisation of
Deutsche Funkturm would provide working capital
to Deutsche Telekom to support this and with no
debt, such a monetisation would also provide an
attractive multi-million dividend for shareholders.
Since the Meetup, Telefnica Deutschland has sold
their 2,350 ground based towers to infraco Telxius.
The move follows in the footsteps of their Spanish,
Brazilian, Peruvian and Chilean subsidiaries with
over 16,000 sites now having being sold to the
entity. Whilst Telefnicas plans for Telxius have
yet to be announced, it has been reported that an
early July IPO on the Madrid Stock Exchange could
be on the cards. Given the expected news that
Table one: Tower ownership in the German market
Source: RBC Capital Markets
Deutsche
Telekom*
Vodafone
Telefnica
Deutschland
American Tower
Total
Rooftop sites owned
23,636
18,000
11,968
53,604
Ground based towers owned
8,000
4,000
2,350*
2,031
16,381
Total owned
31, 636
22,000
14,318*
2,031
69,985
3rd party rooftops
-7,700
1,500
22,700
16,500
3rd party towers
3,000
2,000
2,031
7,031
Total used (Jan 2016)
26,936
25,500
39,049*
2,031
93,516
*Telefnicas ground based towers sold to their wholly owned infraco, Telxius
the European Commission will block Hutchisons

takeover of Telefnicas O2 in the UK, monetisation
of their assets is looking increasingly likely. Should
an additional stake in Telxius be offered in a strategic
sale (akin to Telecom Italias two stage divestment
of equity in INWIT), one can expect interest from a
number of parties.
It was posed that the coming to market of either
Deutsche Telekom or Telefnica towers could be an
ideal opportunity for American Tower to expand
their footprint in the market - suggesting that it
would be the optimal time for American Tower to
decide whether they were going to double down
or quit in Europe. As to whether the Telefnica or
Deutsche Funkturm portfolios were complementary
to that of American Towers, it was assumed that they
most likely would be largely additive, enhancing the
Meetup Americas
2016
16-17 June, Florida
Meetup Africa 2016

potential value of such an acquisition.

It is known across the industry that investors
including Blackrock have been approached
regarding a potential 10-20% stake in an
international towerco with a presence in Germany.
As the only independent towerco with a footprint in
the German market, one can easily deduce that this
is American Tower looking to raise capital - as to
whether this is to fund a potential acquisition in the
market it remains to be seen.
Concurrent with their global strategy, it was not
expected that Vodafone would look to sell their
assets or acquire those of third parties, however it
was suggested that it may make sense for Deutsche
Funkturm to absorb Telefnica towers, should a
strategic sale be offered
Meetup Asia 2016

Meetup Europe 2017

4-5 April, London
XX
The unique structure of the

UK tower market
Business as usual in the increasingly likely event of the O2-Three merger collapsing
UK roundtable moderator Malcolm Collins, CEO, CTIL
Joint venture infrastructure companies CTIL

(Vodafone + O2) and MBNL (Three + EE / BT)
operate parallel yet subtly different siteshare
businesses, and operate more than half the
UKs ~40,000 active towers. Each has different
models of sharing and asset ownership. CTIL
and MBNL each has around 20,000 sites, around
two thirds of which are their own, the rest colocated on a variety of independent towers. The
UKs leading independent towerco Arqiva has
10,550 towers, Wireless Infrastructure Group
has 2,000, Shere Group 500, and a variety of
smaller towercos and other stakeholders make
up the other ~1,450 sites.
Keywords: 4G, Active Infrasharing, Arqiva, Best of TowerXchange, BT, CTIL, Decommissioning, Densification,
Consolidation among UK MNOs; implications for

the tower industry
The spectre of a third major restructuring of the UK
tower landscape within the past few years seems to
be receding, with increasing indications that the O2Three (Telefnica -Hutch) merger will be blocked by
Brussels. At time of writing the formal announcement
was expected on May 19, 2016. However, with
significantly reduced dialogue about remedies, many
designed to foster the introduction of an alternate
fourth operator, the likelihood of the merger being
approved appears increasingly remote. Speculation
has already commenced that Telefnica may seek an
alternate counterpart through whom to exit the UK,
with Liberty Global almost inevitably mentioned.
In the increasingly unlikely event that O2-Three
was permitted, there was a growing view that
regulators might force the divestiture of O2s towers,
giving a prospective new entrant third operator an
opportunity to hit the ground running by acquiring
a network.
EE, Europe, Europe Research, Hutchison, Infrastructure Sharing, MBNL, MNOs, Market Overview, Masts
& Towers, O2, Operator-Led JV, Regulation, Research, Shere Group, Telefnica, Three, Tower Count,
TowerXchange Research, Towercos, UK, United Kingdom, Vodafone, Wireless Infrastructure Group

< What are CTIL and MBNL? How do their business models differ
< The implications of MNO consolidation (or not!) for the UK tower industry
< The need for greater transparency into MNOs network capex
< Lessons learned trying to drive uncommercial coverage
< Leveraging rail infrastructure
Weve looked at being a fourth entrant MNO in

the UK, and there is a model that we think works,
said one participant in the UK roundtable at the
recent TowerXchange Meetup Europe. We know
the number of towers we need, it is doable. But any
new entrant would have to make it economically
advantageous they would have to reduce capex
and opex relative to incumbents which implies a
need for different business models like some of those
weve seen at the TowerXchange Meetup over the
past two days.
Another participant concurred: New market

entrant options to compete and differentiate on
price may be limited, given the finite room to
maneuver offered by handset prices. This would
suggest any four to three consolidation include
remedies so severe that the cost base for a fourth
entrant is discounted, otherwise the experiences
of Three, which struggled to achieve profitability,
suggest the cost base is unsustainable.
Parallels were draw with the Irish tower market,
where Three was also the fourth operator, where
they struggled to compete with Vodafone, Meteor
(Eir) and O2, and where eventually Three had to
acquire O2 to achieve scale. The parallels were even
more apt given that O2s partnership in NetShare
with Vodafone had to be broken up as a condition
of the merger. While in Ireland the merger was
permitted, in the UK it seems less likely.
Whether the UK MNO landscape consolidates from
four to three or remains at four, some roundtable
participants suggested it was interesting that
the CMA opposed O2-Three when BT-EE passed
relatively seamlessly. Perhaps as a vertical merger,
in which spectrum holdings didnt materially
change, there was less immediate cause for concern,
even though the transaction will leave BT in a
very strong position. BT acquiring EE introduced
a maverick new operator, whereas O2-Three was
a contraction affecting both the primary and
wholesale markets.
Whilst MNO consolidation remains uncertain, the
principle for business operation in the UK tower
Tower ownership and co-location

in the UK
Co-locations
Independent
towercos
14,500
CTIL
12,000
MBNL
12,000
500 500
Shared
market has been and shall remain business as

usual.
What does business as usual look like in the UK?
The structure of the UK tower market is unique
because the two joint venture infracos, CTIL
and MBNL, are both the primary clients of the
UKs independent towercos, and are sitesharing
businesses in their own right.
Back in 2009, Vodafone and O2 established a
joint team called Cornerstone to share passive
infrastructure. Cornerstone evolved into CTIL in

2012 and now programme manages Beacon, the
parent companies joint 4G rollout. CTIL are
currently focused on acquiring sites for Beacon to
meet the license obligations of our parent MNOs by
2017. Ofcom requires that O2 cover at least 98% of
the UK population with 4G by 2017.
CTIL is a passive share, said UK roundtable
moderator and CTIL CEO Malcolm Collins. We
manage telecom property and real estate; we own
assets of both our parent operators, whereas MBNLs
parent operators own their assets, but MBNLs
model extends to active equipment and transmission
sharing.
While CTIL is an AssetCo, the UKs other joint
venture siteshare business, MBNL, is a ServiceCo
MBNL dont own the assets. Both joint ventures
have yielded significant network consolidation,
decommissioning and cost reductions, while
accelerating 3G rollout.
MBNL was envisaged in 2007. Its a RANshare using
the MORAN model between Three and EE (becoming
BT). MBNL claims to have enabled ~1bn savings
each over their initial seven years and that has been
realised.
CTIL and MBNL have a good relationship each other
and share around 500 of each others towers.
CTIL has over 11,000 of their own structures,
including streetworks and rooftops, with a total
network approaching 20,000 sites, including third
XX
party sites, which they use for reasons of speed,

cost and quality. MBNL has similar tower numbers.
We still have to build a bunch of towers for 4G,
said one of the UK siteshare businesses. We take
the independent tower companies maps and work
out where they arent we have to build such sites
ourselves. While there is some new build in the UK,
both JV siteshare businesses have undertaken a deep
process of network rationalisation; TowerXchange
estimate there a little over 40,000 active towers in
the UK, and a little over 50,000 towers in total.
A call for greater transparency into MNOs
network capex
While five or ten years ago the UKs MNOs were
keen to deploy their own network capex, their
ability to invest in their networks is now reduced,
said one UK independent towerco. Yet despite this,
there isnt much transparency into their plans.
Towercos have capital to spend tell us where to
spend it!
Another towerco concurred: Especially as UK
networks extend into rural areas, MNOs are going
to need taller towers, and to get transmission out to
them. While towercos like us have such sites, were
not seeing footprints disclosed were desperate to
find a way to better engage.
Rail infrastructure
The UK is one of several European markets where existing and potential new trackside masts could be
very valuable both for coverage in adjacent communities, and potentially for coverage on trains.
We use network rail infrastructure in a big way, but were very restricted in frequencies and power if
we put sites on their land, said one participant.
Theres often a degree of engineering inertia when dealing with rail and other State or former State
infrastructure, said a towerco. No-one knows the assets are worth anything.
Delivering free Wi-Fi on trains requires near complete transmission, said one participant.
Id anticipate increasing use of LTE relay technology for localised coverage, suggested another. It
wont work at that speed. We use a wide band repeater on each car for this in other European markets,
countered a third
doesnt come until late in the day, said one towerco.
If we get a batch of nominal (search ring), we
respond almost overnight, but then well often not
hear about that for a long period of time. When
communication is patchy, we dont know if the
requirements is real enough to resource it, added
another.
West divide was felt to represent a challenge to this

kind of partnership model. Similar split country
models have been used in Sweden and Spain, one
participant suggested the approach had worked well
in the latter because the project managers from the
partnering MNOs were cousins!
What would the tower industry ask of MNOs in

terms of understanding projected demand over a
longer period?
Towercos and siteshare businesses in the UK

appealed for progression toward more of a
partnership model, wherein MNOs would share
their forward requirements. It seemed no one was
seeing even one year forecasts of site demand from
MNOs, let alone five years a time horizon some felt
unrealistic as too much would change.
Its all about trust, said one participant. You sit

down and define the value chain starting from the
MNOs own patchy information, to the siteshare
business seeking to serve an ill-defined demand.
They in turn ask towercos for help the towerco
makes money, the siteshare business saves time,
the MNO saves money Theres enough pie for
everyone to have a slice!
I can get coverage demand, but the site specificity
The fact that UK networks are shared along an East-
Even in Myanmar, where towercos build
Uncommercial coverage
Were talking about uncommercial coverage,
driven by regulation, countered a towerco. So the
environment is different.
The current 98% coverage requirement would
need 1,000 extra sites in our network, said another
participant, so were digging through spreadsheets
finding out whats there, and what we need.
The MIP (Mobile Infrastructure Project) had noble
intentions to provide coverage where there wasnt
even 2G, but it hasnt been particularly successful,
added another participant. Under the MIP, the
UK government provided 150mn to fund the
connection of not-spots and partial not-spots, yet
when it concluded at the end of March 2016, the
project was expected to have delivered just 60 of the
600 masts identified in the original plan.
MIP failed because of lack of transmission
infrastructure microwave is expensive so the
per site cost went through the roof, said one
participant. The MIP programme came in the
middle of the 4G rollout, and the reality is that the
MNOs never wanted it. It should be revisited in
three to four years when theres more fibre. But if
the government wants to make the infrastructure
free in uncommercial rural areas, they need to fund

transmission as well as towers.
One of the outcomes of MIP is an increasing
government appetite to permit taller masts. the
regulators relaxation of planning laws to allow
higher masts will accelerate site acquisition, possibly
as soon as Summer 2016, said one participant.
New build volumes in the UK
One towerco estimated there were around 2,000
new points of presence (PoPs) per year being added
by the UKs four MNOs via CTIL and MBNL.
CTILs remarks suggest an upward revision of that
estimate: Well add 700-800 rural sites this year,
500 in London, a couple of hundred infills in other
cities; maybe 1,500 total. We prefer existing tower
structures to accelerate time to market in rural
areas, but sometimes we see the site on a tower
companys database yet when we get there its a
green field!
A towerco added: We expect more demand to
upgrade structures than build new sites. Many
MNOs built smaller structures, some of which are
upgradeable, others will have to have foundations
and/or towers replaced.
Declining NIMBY concerns
Whilst the battle to provide rural coverage and
urban capacity continues to be a challenge, one side
effect is a reduced NIMBY (not in my back yard)
mentality on the part of Joe Public.
if the government wants to

make the infrastructure free in
uncommercial rural areas, they
need to fund transmission as
well as towers
everything, there is more disclosure of where the

MNOs need the sites, said another roundtable
participant. Towercos transparently facilitate
rollouts in other markets, but we havent achieved
that degree of integration in the UK.
The concerns of the British public are apparently

now more focused the implications of coverage for
the value of their real estate (and the importance
of getting good coverage on the toilet!), than they
are concerned about the health implications of cell
tower proximity
UK mobile coverage, by % of premises

All MNOs
Any MNO
2G
93%
>99%
3G
88%
99.3%
3G
46%
90%
Source: Ofcoms Connected Nations Report, June 2015
XX
What is the future of the

European tower industry?
WIG, Russian Towers, Arqiva and FPS Towers share their projections at the opening
of the inaugural TowerXchange Meetup Europe
News surrounding MNO tower divestitures, carve outs and joint ventures is starting to secure more
inches in European telecom press, suggesting that the European tower industry is very much at an
inflection point in its growth curve. On the opening morning of the TowerXchange Meetup Europe, four
prominent towerco executives were invited to share their perspectives on what the future has in store
for the market. Joining the panel was Scott Coates, CEO of Wireless Infrastructure Group and Chair of
the newly formed European Wireless Infrastructure Association; Peter Owen Edmunds, Chairman of the
Board of Directors at Russian Towers, being closely watched regarding their shortlisting for VimpelComs
10,400 towers; Nicolas Ott, Managing Director of Telecoms at broadcast-telecom towerco Arqiva which
owns over 10,000 towers and has a growing presence in small cells and DAS; and Frederic Zimer, CEO
of FPS Towers who have experienced 40% YoY growth following an ambitious strategy to realise the
potential of Frances rooftops.
Keywords: 4G, Active Equipment, Active Infrasharing, ARPU, Arqiva, Business Model, C-Level
Perspectives, Capacity Enhancements, Carve Out, Cellnex, Co-locations, EBITDA, Europe, Europe
Insights, European Wireless Infrastructure Association, EWIA, FPS Towers, France, IBS, Infrastructure
Funds, Infrastructure Sharing, INWIT, LTE, Masts & Towers, MNOs, Multi-Region, Network Rollout,
Regulation, Rooftop, Russia & CIS, Russian Towers, Tenancy Ratios, Towercos, UK, United Kingdom,
Urban vs Rural, Valuation, Wireless Infrastructure Group

< Towerco CXO perspectives on the maturity of the European tower industry
< Whether regulation of the sector is of concern
< Tower carve outs, sale and leaseback and IPOs: which business model will prevail?
< Where towerco growth opportunities exist
Motivating factors surrounding the recent spate

of European tower activity
TowerXchanges analysis of the size and growth of
the European tower industry was presented at the
opening of the TowerXchange Meetup Europe. Of
Europes 600,000 cell sites (including Russia and
the CIS), 36% are in the hands of infrastructure
companies, with 13% being owned by independent
towercos and by 2020, we forecast these numbers
to reach 65% and 48% respectively. Considering
the recent surge in activity and tower transaction
pipeline projected, the panel were asked for their
views on the factors affecting these dynamics.
The success of the towerco business model
internationally has paved the way for the European
market and the subsequent IPOs of Inwit and
Cellnex were then the catalyst in bringing the model
to the attention of European MNOs. Such healthy
valuations demonstrated to operators that the value
of their towers could be crystallised and as such, had
the potential to serve as an effective means to reduce
pressure on balance sheets as they looked to invest
further capital into next generation networks, whilst
maintaining dividend payments.
Whist panellists agreed that many of Europes
operators are not as capital constrained as their
international counterparts (many of whom have
completed sale and leaseback transactions), they
did feel operators had come to realise the added
incentives to monetise their towers. In times of
reduced margins, operators are starting to feel
that time and money are better spent focussing on
quality of service and customer retention plans
than on retention and management of their passive

infrastructure.
All panellists felt that we were past the point where
MNOs see their towers as a source of competitive
advantage, similarly past the point where engineers
were sceptical that third parties could effectively
manage their networks. The decision to divest
infrastructure assets ultimately comes down to
balance sheet drivers; when is the right time to
monetise? Ultimately, the panel felt that all operators
will be drawn into considering alternative options
for management of their passive infrastructure.
The IPOs of Cellnex and INWIT have also put
another force at work in the market. Bringing
awareness of the independent tower sector to
the public markets has fuelled the appetites of
institutional investors who have been struggling
to obtain the returns they are looking for in
conventional investments. Amidst low interest rates
across the continent, the stable, long term yet higher
yielding returns offered by tower lease contracts
represent an attractive alternative investment.
Competition amongst investors for a piece of the
asset class continues to prop up valuations and
further motivate operators to examine carve outs
and IPOs or strategic sales.
Panellists were keen to point out that the attitudes
of operators are, however, not homogenous with
Peter Owen Edmunds using the different attitudes of
Russian operators as an example. Within the Russian
market, three distinct business models can be
seen: VimpelCom have chosen a sale and leaseback
structure, with 10,400 towers on the market and an
TowerXchange Meetup Europe 2016 panel
appetite to follow a similar strategy across their CIS

portfolios; MegaFon have favoured the creation and
potential strategic sale of their own towerco - First
Tower Company, which manages the companys
14,000 towers; whilst MTS prefer to retain their
passive infrastructure, seeing the management of
their services end to end as a source of competitive
advantage (Editors note: MTS has since announced
the creation of MTS Towers through which they
propose to lease up 5,500 towers, around half their
portfolio).
As to which business model was the optimum choice
for an operator and which model would prevail, the
panellists commented that this very much depended
on the strategic agenda of each MNO. The different
paths answer to different business goals and whats
more, are not mutually exclusive.
Panellists felt that momentum has however started
to build in the sector, further fuelled by the activities
such entities such as the European Wireless
Infrastructure Association and TowerXchange which

are helping to focus the spotlight on the industry.
Regulation
At present, the tower industry is largely unregulated
yet it sits in a precarious position between the
regulation governing active infrastructure and the
regulation governing the land on which towers
sit. Authorities are often confused about where
the boundaries are - what is passive, what is active
and what is land. As a relatively new industry,
it sits upon the shoulders of towercos to educate
and communicate with authorities to clarify such
definitions and ensure that the market is able to
develop effectively. In the eyes of many operators,
over-regulation has hampered the development of
the European telecoms industry, and panellists felt
it was critical that the tower industry did not go the
same way.
The European Wireless Infrastructure Association,
XX
as an advocacy group representing the interests of

the sector, plays a critical role in this. The telecoms
industry as a whole is undergoing a major overhaul
and it is important that the tower industry is
involved in putting in place the new framework. The
association has already established itself as a voice
in Brussels, working closely with key commissioners
to influence their vision for the European telecoms
sector.
for Russian Towers to focus on. The first was the

building of new sites in urban environments where
much of the focus for operators currently sits. Less
keen to deploy sites using rooftops due to fragmented
building ownership in Russia, Russian Towers has
been working on a strategy using street lighting, and
anticipated that this would continue to eclipse work
in the rural sector, where the company had originally
focussed.
All panellists felt that there was no need for

regulation of the tower industry, with it being a
highly competitive and well functioning sector.
Its ability to improve the quality of telecoms
infrastructure whilst bringing new investment to the
sector and lowering costs was helping to improve
connectivity across the continent. Panellists felt
that the tower industrys value was appreciated
by regulators and as such, they did not expect a
heavy hand from authorities. By contrast, panellists
anticipated that the tower industry and regulators
would work hand in hand to modify policies in such
a way that it helped alleviate bottlenecks, tackling
challenges in key areas such as permitting which
have hampered the cost effective rollout of new
infrastructure.
The second area of growth Edmunds mentioned was

the layering of additional offerings and services on
top of the provision of passive infrastructure. This
includes diversification into DAS, fibre to the towers
and possibly even small cells, areas in which the
company is currently running trials to take more of
proactive, service driven approach. Going forward
Peter felt that towerco revenues in Russia would be
less dependent on tenancy ratios and increasingly
driven by delivering extra layers of service to the
operators.
Amidst changing market conditions, the latter part

of the panel focussed on where each of the towerco
panellists saw growth opportunities for their
companies.
Nicolas Ott commented that he saw strong growth for

Arqiva. Due to expanded coverage obligations, the
UK market requires more sites in rural areas whilst
the overlay of additional equipment in urban areas
will be critical to meet capacity requirements. Arqiva
are already taking a front seat in the deployment of
small cells (rolling out networks for two operators),
while also playing a role in indoor DAS and Wi-Fi as
the challenges of deep indoor coverage increase. In
a world where we are short of spectrum, Ott added,
operators and infracos will need to deploy a range of
solutions to meet connectivity requirements.
In Russia, Peter Owen Edmunds saw two key areas
FPS Towers CEO, Frederic Zimer commented that
Where are the growth opportunities for

European tower companies?
the French market was similarly busy with major

growth potential for towercos - FPS recently
reported 40% YOY increase in revenues. The rooftop
market, which is a core focus for FPS, is becoming
increasingly important for cell site densification in
France; the rollout of FREE mobile is still ongoing,
presenting significant opportunities for towercos;
and the deployment of RANsharing between SFR and
Bouygues and the rollout of the Internet of Things
for each of the operators provide extra avenues of
business.
Wireless Infrastructure Groups Scott Coates
suggested that in the nine years they have been
running WIG, now is definitely the most exciting
period. In the UK, they are seeing an expansion
in network footprints involving macro sites,
which they havent seen for a long time, as well
as huge opportunities in DAS. When it comes to
outdoor small cells, Scott felt that whilst there
was an obvious opportunity, the strength of the
business model must first be closely evaluated.
Further exciting opportunities exist for towercos
in geographic expansion. Whilst to date they have
tended to confine their activities to their home
market, Coates saw this as changing. With new
investors in place, WIG themselves are now focussed
on M&A with other middle market towercos across
the UK and Western Europe, creating opportunities
to extend their footprint further.
With all four panellists seeing such strong
opportunities for growth the session provided an
upbeat start to the inaugural TowerXchange Meetup
Europe, providing insights from some of the sectors
most exciting towercos
Tower divestments, carve outs

and M&A in the European market
Cignal, CETIN and Russian Towers share their insights at the TowerXchange
Meetup Europe
Left to right: Colin Cunningham, Colin Shea and Alexander Chub
Keywords: 4G, Acquisition, Active Infrasharing,

Business Case, C-Level Perspectives, Capacity
Enhancements, Cashflow Finance, CETIN, Cignal,
Construction, Czech Republic, Deal Structure, Debt
Finance, EBITDA, Europe, Infrastructure Funds,
Infrastructure Sharing, Investment, Investors,
Ireland, Market Entry, MNOs, Multi-Region, O2,
Opex Sharing, Passive Equipment, Regulation,
Russia, Russia & CIS, Tax, Towercos, Valuation
The second day of the TowerXchange Meetup Europe took a closer look at the motivations behind
tower carve outs and sales by operators and asked where else we may see tower portfolios changing
The tower transaction pipeline

Alexander Chub commented that the
infrastructure market in Russia was undergoing a
period of fundamental transformation. Three out
of the four operators in the country are looking at
monetisation of their towers, albeit through two
different strategies with VimpelCom and Tele2
looking into a sale and leaseback deal structure
and MegaFon having carved out their assets into
infraco First Tower Company, for which they will
reportedly seek a strategic buyer (Editors note:
MTS subsequently announced that they would
rent space on 5,500 of their towers around half
their portfolio through new entity MTS Towers,
although there has been no indication that they
would consider selling those assets). Professional
towercos, such as Russian Towers, are playing an
important role, firstly in constructing new sites on
behalf of the operators to assist in 4G rollout, and
secondly by participating in large transactions
when the operators decide to monetise.
hands through M&A. Joining the panel were Alexander Chub, President of Russian Towers who are
closely monitoring any towers coming to market in Russia and the CIS; Colin Shea, Strategy Director of
CETIN, who was was heavily involved in the companys carve out from O2 Czech Republic; and Colin
Cunningham, Managing Director of Irish towerco Cignal which came into existence in 2015 following
the acquisition of the communication assets of the State forestry company, Coillte.

< MNO attitudes towards tower divestments in key European markets
< Financial motivations for divestitures amongst well capitalised operators
< The rationale behind O2 Czech Republics infrastructure carve out
< The potential for consolidation among Europes towercos
Across the CIS, Chub also anticipated a

transformation of market structure and whilst
he forecasted that 2017 would be the year that
we would see major movements in the region,
he also anticipated that 2016 would see at least
one key development in the market. Questioned
on whether Russian Towers would likely be
participating in such a process should one
arise Alexander Chub mentioned that Russias
neighbouring markets were a priority for the
company and would be a key discussion point at
their upcoming board meeting, with the company
XX
considering opportunities in the region very

seriously.
capitalised MNOs, both in Europe and overseas

would look to list or sell their towers.
In the Balkans and CEE, where CETIN are

interested in opportunities, Colin Shea commented
that they had observed a lot of network sharing
agreements from the leading MNOs but felt there
wasnt much appetite for tower disposals, adding
that most of the tower divestitures that we have
seen in Europe to date have been from companies
who needed to re-engineer their balance sheet
operators in his region werent under the same
financial pressure.
In the US market, where operators only own

18% of the countrys towers, it was observed that
divestitures had primarily been driven by tax
reasons, with towers being reorganised into REITs
(Real Estate Investment Trusts).
Cignals home market, Ireland, has to date only

seen one operator tower sale, with a relatively
modest divestment of 340 sites from a cash
strapped Eircom back in 2007. At present, Colin
Cunningham thought it looked unlikely that there
would be any imminent sales from operators but
these would certainly be the transactions that
Irelands numerous towercos would be watching
for closely.
Financial motivations for well capitalised
operators
Whilst Europes operators may not be as
cash-strapped as some of their international
counterparts, we are still seeing some of the
more financially stable operators considering
monetisation of their passive infrastructure, with
Deutsche Telekom, for example, examining a part
listing of their tower business. We questioned the
panellists on the potential drivers behind why well
In Europe, it was proposed that moves such as that

of Deutsche Telekom may be less about raising
cash and more about value actualisation - making
the value of their assets a bit more explicit to try
and support their overall market capitalisation.
A second motivation is the improvement of debt
ratios and thus the credit rating of the company,
with credit ratings under pressure for almost
all operators. Undertaking a sale and leaseback
transaction is a means of extracting cash which
can be used to undertake share buybacks or to
reinvest in the business, without raising straight
debt or impacting on the companys debt ratio.
The treatment of a sale and leaseback from a
ratings perspective is more favourable today
under current IFRS than it is for debt. Whilst this
exists as a motivator for operators today, it was
noted that if the IFRS changes being mooted are
implemented this could significantly impact the
business case.
The rationale behind O2 Czech Republics carve
out of CETIN
Having been acquired by local private investor
PPF, O2 Czech Republic didnt need cash but

their carve out of their infrastructure assets
into separate entity, CETIN has been hailed as
resounding success for both O2 and CETIN. Strategy
Director Colin Shea explained the motivations
behind the move which was fundamentally for
three key reasons. The first was in regards to the
focussing of the business - the retail and network
sides of the business have different priorities
and different investment horizons. As separate
entities, decision making can be optimised for
each side of the business. The second reason was
in regards to regulation; regulation was impacting
on the retail business heavily but by separating
out the two businesses, most of the regulation
now applies solely to CETIN, enabling O2 to more
freely make decisions on pricing and services. With
CETIN not active in the retail sector, fulfilment
of the companys regulatory obligations is now
easier. The final motivation was financial, with
the separation increasing the companys financial
flexibility by revaluing their assets and altering the
debt.
The whole process of separation was realised in
less than a year, whereas attempts by operators to
make similar (although not such total) separations
in other countries have taken much longer. The
most challenging element was the complete
separation of the IT systems of the two businesses
but the two entities now operate as two completely
separated businesses, linked only by their
common shareholder, PPF. The move has been
well received by both the regulator and the market
and the number of inbound enquiries that CETIN
is receiving from other operators is suggestive of

others considering such a move.
Questioned as to whether the incorporation of
other infrastructure assets including 38,000km of
optic cable led to an undervaluation of the tower
component of the business, Colin Shea commented
that it was difficult to determine as PPF was the
sole owner of both businesses. With network
sharing presenting a threat to a pureplay tower
company however, the decision to create an infraco
rather than a towerco was a key strategic decision
in order to ensure the long term future of the
company.
To learn more about CETIN, read Carving out O2
Czech Republics infrastructure businessin journal
Issue 15.
M&A to expand towerco geographic footprint
As discussed earlier in the panel, each of the
towercos would have an appetite for international
expansion - Russian towers into the CIS, CETIN
into the Balkans and CEE, and Cignal, with
pan-European infrastructure fund InfraVia as
shareholders, have a mandate to examine other
markets on the continent.
Pan-European operator tower portfolios coming
to market would represent the most attractive
opportunity to enter new geographies but at
present transactions are very much undertaken
country by country rather than group level. As
soon as an operator makes a decision to monetise
towers across multiple markets at a group level,

it will present a real opportunity for towercos to
extend their footprint and may also trigger panEuropean consolidation between towercos.
Asked to whether they would consider the
acquisition of smaller tower portfolios outside of
the Czech Republic, Colin Shea commented that
it very much depended on the assets. Whilst they
would consider small transactions, if it was a
portfolio which came with substantial operational
complexity it would probably need to be a more
sizeable deal to make the acquisition worth it.
In terms of whether we would see the
consolidation of smaller towercos it was
anticipated that this would start to happen. In
Ireland, where there are eight private towercos
and three state-owned players, some of the
smaller towercos are coming under pressure
from MNO consolidation. In particular, when
faced with the complexities created by MNO
consolidation, the state owned entities which have
grown organically over the years have begun to
look at handing over their assets to professional
companies equipped to deal with the market
restructuring. The sale of State forestry company
sites to Cignal was the first of such transactions
but we could potentially see more both in Ireland
and other European markets. As competition and
complexity increases and with tower valuations
at an all time high (buoyed by the IPOs of Cellnex
and Inwit), panellists thought it likely that even
towercos who were not forced to sell may consider
a strategic exit
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XX
What are the synergies between

broadcast and telecom towers?
Examination of the opportunities and limitations of hybrid business models
With broadcast towercos
representing Spain, Italy, the
UK, France, Poland, Norway and
Finland in attendance at the
TowerXchange Meetup Europe,
we hosted a panel session
and roundtable to explore the
synergies between the two
sectors. Heres what we learned.
Keywords: Acquisition, Active Equipment, ARPU, Axion, Broadcast, Business Case, Capacity
Enhancements, Cellnex, Co-locations, Core Network, Backhaul & FTTT, DAS, Densification, EBITDA,
EI Towers, Europe, Fixed Price, Infrastructure Sharing, Lease Rates, Masts & Towers, MNOs, Passive
Equipment, Rai Way, Regulation, Site-Level Profitability, Small Cells, TDF, Tenancy Ratios, Towercos,
Urban vs Rural, Valuation

< The importance and strategic fit of broadcast infrastructure in provision of backhaul and as
network hubs
< To what extent the telecoms sector can effectively de-risk broadcast towerco revenues
< Does the merger of telecom and broadcast assets make financial sense?
< How broadcast engineering expertise can bring strengths to the diversification of the towerco
business model
< Differences in regulation of the two sectors
Of the 78,000 towers owned by independent

infrastructure providers in Europe, almost 48,000 are
owned by companies which also generate significant
revenue from the broadcast and radio sectors. Each
European country has at least one broadcast towerco
and some markets (such as Spain and Italy) have two,
often heavily regulated, many with significant State
ownership. The attitudes of broadcast towercos to the
telecoms sector varies with some companies actively
pursuing opportunities in the sector (Frances TDF
reports that 40% of their revenues come from the
telecom industry; Italys EI Towers is one of the two
front runners to acquire a stake in Telecom Italias
INWIT), whilst others have adopted much more of a
passive approach.
The principal difference between a broadcast tower
and a telecom tower is their height. Requiring
a direct line of site for transmission, and with a
broader signal propagation, broadcast towers are
advantageously positioned on high land. This very
feature makes them ideal for providing microwave
backhaul services the telecoms market (which also
requires a direct line of site). MNOs have looked
into alternatives to broadcast towers for backhaul
but currently the usage of such towers remains a
central part of their network. Whats more, with
requirements for 100% uptime, these sites usually
possess significant power backup and as such
represent ideal sites to serve as network hubs for
telcos.
Broadcast towers for at the heart of telecom
networks
With the broadcast sector coming under threat
from internet TV and reduced advertising, many

stakeholders believe a big question mark hangs
over the long term revenues stream for broadcast
towercos. This creates a serious concern for the
telcos that areusingthe sites as the core backbone of
their backhaul network.
Speaking to one broadcast towerco, however, they
remain confident that these tall towers will remain,
a position backed by various statistics; in Italy still
95% of the population watch TV for more than four
hours a day; the over 50s still rely on TV (in place of
the Internet) as their primary source of news and
that population will still be around for over 20 years;
a large proportion of cars can only receive FM radio
and so a switch off of radio broadcast is unlikely any
time soon; increased data usage can be correlated
with significant television events such as football
matches and talent shows all indicating that
growth and demand for broadcast and telecom data
and infrastructure remains synergistic.
Generation of extra revenue streams for
broadcast towercos
Nonetheless, it would seem prudent that broadcast
towercos look to diversify into the telecoms
market as a means protecting themselves against
any decreases in demand and revenue from
their broadcast tenants, sweating the assets, and
effectively de-risking their business model.
Telecom antennae can typically be hung at lower
heights, minimising the direct competition for space
between the broadcast and telecom equipment. In
addition to mobile network operators as tenants
there are further niche markets for which broadcast

infrastructure can provide backbone capacity - the
football league in Italy being one. The Internet
of Things also presents significant opportunities.
Sigfox are using many broadcast towers and, with
their network being the inverse of a broadcast
network (several smaller points converging on one
receiving point to be transmitted to the cloud versus
one central point transmitting to multiple), the two
markets are very complimentary.
Sticking with the example of EI Towers and INWIT,

it is also interesting to note that INWIT CEO, Oscar
Cicchetti, has been quoted as believing that greater
synergies exist between the company and Cellnex,
than do between the company and EI Towers. It
must however be noted that there is a Chinese
wall between INWITs management and that of
parent company Telecom Italia and so Cicchettis
comments cannot be taken as indicative of thinking
within the Italian MNO.
M&A between the broadcast and telecom sectors
Management of active equipment
Having an established presence in the broadcast

infrastructure sector also serves as a strong base in
which to grow through acquisitions, including into
parallel markets like telecom. EI Towers is perhaps
the most notable example of this. EI Towers are one
of two shortlisted bidders for the INWIT portfolio,
while they have also created a business rolling
up the infrastructure assets of smaller telecom
towercos in the market. Whilst they see strong
synergies in the acquisition of telecom assets, their
competitors in in Italy, Rai Way have chosen to stay
out of the telecom market beyond promoting their
sites for co-location. WIth telecom towercos trading
at higher multiples than broadcast towercos it puts
telecom towercos in a stronger position to bid for
assets more aggressively. At the same time, the
synergies between two telecom tower portfolios are
higher than that between a telecom and broadcast
portfolio and as such, the telecom towercos have a
stronger motivation to bid more aggressively. With
these two factors in mind, most broadcast towercos
have chosen not to play in telecom infrastructure
transactions.
With broadcast towercos typically keeping

their engineering capabilities in house, often
managing the active as well as passive equipment
for the clients, it was commented that broadcast
companies are ideally positioned to play a role
in small cells and DAS, possessing the technical
expertise that may currently be lacking amongst
many of Europes steel and grass only telecom
towercos. A critical strategy of towercos brought
up at this years TowerXchange Meetup Europe
was their desire to diversify their business
model and one could argue that in this instance,
broadcast companies may be ahead of the curve in
their experience managing active infrastructure
components.
In regards to the upgrade and maintenance of
active equipment that is hung on sites however,
it was commented that the broadcast market
was generally a lot more stable - with antennae
typically only needing to be changed once in a
decade. Within the telecoms sector, there are a
huge number of equipment swaps that need to be
XX
completed which makes it less attractive to lease

space on a fixed capacity.
Regulatory differences
Further differences between the telecoms and
broadcast sector appear when we talk about
regulation. The two businesses are managed by
separate authorities and codes of conduct, with
the broadcast sector generally being more highly
regulated. One example being that when it comes
to infrastructure sharing, many broadcasters are
mandated to allow their competitors access to their
towers. In the telecoms sector, there still exists a
degree of choice in refusing access to some strategic
sites. Such differences in regulation and technology
has led some broadcast towercos to manage the
broadcast and telecom parts of their business
separately, viewing them as different entities.
Whilst indisputably broadcast towers are critical to
the backhaul network for telecom tenants, whether
much growth in tenancy from MNOs would be seen
on such sites created differences in opinion. Some
saw stronger growth in the telecoms than broadcast
sector, whilst others didnt expect any significant
increases in telecom tenants on their towers - citing
the fact that most broadcast towers were located in
rural locations and the current focus for Europes
operators was on densification in urban areas.
However, with most broadcast towers attracting
telecom tenants, whether or not the company
is actively pursuing such business, the natural
synergies that do exist between the two sectors
cannot be overlooked


how to guides)
Tower
Xchange
MNO consolidation, 4G rollout and

broadcast synergies in the French tower market
TowerXchange: Please introduce TDF for

readers less familiar with the European telecom
and broadcast tower landscape.
An interview with leading infrastructure provider, TDF
Olivier Huart, CEO, TDF: We are the largest

independent provider of telecoms infrastructure
solutions, television and radio broadcast networks
and media platforms in France. We provide
mission-critical services for MNOs telecom
equipment site hosting and for digital and analogue
TV and digital radio.
Olivier Huart, CEO, TDF
TDF, the French broadcast company own and operate a

portfolio 6,500 ground based towers in France with commercial
agreements in place covering an additional 3,000 rooftops. As
Frances largest telecoms infrastructure provider, TDF hosts
8,500 PoPs putting its market share at 14%. Refinanced in March
2015, its shareholders now comprise Brookfield Infrastructure
Group, Public Sector Pension Investment Board, APG Asset
Management, Arcus Infrastructure Partners and Credit Agricole
Assurances. In this interview TDF CEO, Olivier Huart discusses
his thoughts on where growth opportunities lie in the French
market, and explains the potential impact of a merger between
Orange and Bouygues Telecom.
Keywords: 3G, 4G, Active Infrasharing, Arcus Infrastructure Partners, Best of TowerXchange, Bouygues Telecom,
Brookfield, C-Level Perspective, Capacity Enhancements, Co-locations, DAS, Debt Finance, Densification, Europe,
Europe Insights, Finland, France, Free Mobile, Germany, Hungary, Infrastructure Sharing, Insights, Investors,
LTE, Market Forecasts, Market Overview, Masts & Towers, MNOs, Network Rollout, Netherlands, New Market
Entrant, NOC, Opex Reduction, Orange, Regulation, Rooftop, SFR Numericable, Site Level Profitability, SLA, Small
Cells, Spain, Tenancy Ratios, Tower Count, Towercos, Urban vs Rural

< The size of TDFs infrastructure portfolio and how TV, radio and telecoms contribute to their revenues
< Factors affecting the growth of the French telecoms market including the shortening of Frees network
sharing agreement with Orange, the appetite for small cells and DAS, and the rollout of 4G and 5G
< How a merger between Orange and Bouygues Telecom would affect dynamics in the French market
< How TDF have created synergies between their broadcast and telecoms businesses
< TDFs strategy for the HetNet and Internet of Things
We serve all four French MNOs - Orange, SFRNumericable, Bouygues Telecom and Free - and
French leading media - TF1, M6 Group, France
Televisions, Canal+, NextRadioTV et cetera - backed
by a unique chain of high-quality connected sites,
with highly attractive locations and outstanding
territorial coverage: our DTT network covers over
97% of the French population. As at September
2015, we owned and operated over 6,500 active
sites in mainland France, approximately 300 sites
in French overseas territories and have signed
commercial agreements covering up to 3,000
additional rooftops in France. We own around 90%
of our active towers and we either own or lease the
land for our sites under long-term contracts.
In addition, we own 5,000 km of optical fibre,
a high capacity national backbone which
interconnects sites, our four data centers and our
online video platforms. This network is used by all
our businesses.
On March 31, 2015, an investor consortium www.towerxchange.com | TowerXchange Issue 16 |
XX
Brookfield Infrastructure Group, Public Sector

Pension Investment Board, APG Asset Management
N.V., Arcus Infrastructure Partners, and Credit
Agricole Assurances through its subsidiary Predica
- bought TDF. These new shareholders are backed
by large, well-established infrastructure platforms
which employ conservative, investment-grade
capital structures, and have a very long-term
investment horizon.
18,600 rooftops and other structures.
TowerXchange: What have been the drivers

behind TDF restructuring to focus on your
domestic business in France?
TowerXchange: What trends determine the

potential growth of the French tower industry?
Is there a lot of demand for new towers and high
points as a result of 4G?
Olivier Huart, CEO, TDF: Before TDF was taken

over in April 2015, its debt was very high. As a
result, in order to cut debt, we decided to sell
off our businesses abroad including those in
the Netherlands, Finland, Spain, Hungary and
Germany.
TowerXchange: Can you give us an idea of how
the French tower market breaks down? How
many towers are there in France and what role
does TDFs portfolio play in the market?
Olivier Huart, CEO, TDF: As of December 2015 the
four French MNOs are estimated to have 60,000
PoPs (Points of presence), located on approximately
40,000 different sites including towers, rooftops
and other structures (e.g. water towers, churches et
cetera), as well as sites that MNOs own.
These PoPs break down as follows: 14,200 towers
provided by MNOs, 27,300 outsourced towers and
With more than 8,500 PoPs hosted on TDFs towers

and rooftops, our market share exceeds 14%.
We also provide site hosting services to
governmental and public operators, such as
the French Ministry of Interior (police forces,
firemen), the French Ministry of Defence, blue-chip
companies and machine-to-machine operators.
Olivier Huart, CEO, TDF: We believe that the

telecom site hosting markets growth will be driven
by urban PoPs (rooftops, indoor sites), new rollouts (IoT, 5G) and additional coverage (non-urban
areas, black spots, motorways, railways).
In France, 4G coverage obligations (laid down
under the licence awarded by the French
Regulatory Authority ARCEP) are more stringent
than 2G/3G coverage obligations and require
further infrastructure in addition to the current
network. The 800MHz licence requires the
MNO to cover 99.6% of the population and
90% of non-urban regions in each French
dpartement (French county) which exceeds
the MNOs current 2G/3G coverage. The recently
awarded 700MHz licence even tightens these
obligations: 95% in each dpartement, 97.7% in
each priority rollout area, 90% along national
railways and 80% along regional lines.
TDFs estimated breakdown of

French MNOs 60,000+ PoPs
18,600
14,200
27,300
Outsourced towers
Operator-captive towers
Rooftops and other structures
Source: TDF
Competition also drives growth.Free, the fourth

MNO, is racing to catch up to the coverage of the
others. Free currently has a roaming deal with
Orange, under which it can use Oranges existing
very large network, but the Regulatory Authority
is attempting to shorten the duration of this
agreement. SFR will probably seek to compete on
service quality with Orange, especially in nonurban areas where recent studies showed Orange
still has a lead. Furthermore, focus is increasingly
turning to indoor coverage, which requires both

concentrated sites and new solutions, like small
cells, DAS and other IBS.
Development of4Gand later5G (very high
speed mobile)will require networks to be rearchitected around many more antennae with
systematic fibre-optic threads connecting all
radiostations.Very high speed mobile networks
will converge withvery high speed fixed
networks.Our telecom operator customers
will have to invest, and we will be focussed on
delivering not only optical fibre connected
towers but also FTTH rollout solutions to help
them meet their coverage commitments.
TowerXchange: How is potential MNO
consolidation affecting the French market?
Olivier Huart, CEO, TDF: Orange and Bouygues
Telecom have begun public discussions. For the
two companies to merge in practice they would
require approval from the government authorities,
(the State is a shareholder of Orange) and the antitrust authority. The regulator will most probably
also be involved in the discussions.
Such a merger would probably require former
Bouygues Telecom assets to be sold, which could
shake up the existing market. In the short term,
the effect of cutting the number of operators from
four to three would reduce demand for sites. In
the longer run, market growth will depend on how
determined the authorities are to enforce coverage
obligations to for example improve high-speed
mobile coverage of the country and competition

between the operators.
Rumours abound that a merger would most likely
stop or mitigate the impact of the RAN sharing deal
between Bouygues Telecom and SFR, which ARCEP
approved under strict conditions. But the antitrust
authorities will have to decide what is best for
market competition between a merger and RAN
sharing.
TDF works with all four MNOs on a daily basis to
enhance their sites and network.
TowerXchange: How would you describe
synergies between the management of broadcast
and telecom towers?
Olivier Huart, CEO, TDF: At present, telecoms
accounts for some 40% of our revenues. Among our
6,500 active sites in France (an active site means
a site with at least one tenant or hosted activity),
28% of sites are shared between at least two of
TDFs three businesses (TV, Radio, Telecom). If we
consider the occupancy ratio on our towers (i.e. no.
of PoPs over number of active towers),this ratio is
equal to 2.9 in the telecom market, and exceeds five
if we include TV, radio and telecom markets.
Using our sites for all three of our businesses
results in cost synergies (e.g. power, maintenance,
design, radio planning et cetera), that ultimately
benefit customers.
Over the last 40 years TDF has partnered with TV
and radio operators under very demanding service
requirements where continuity of service is an

essential criterion. TDF as an NOC operator is very
well placed to provide hosting and transmission
services to satisfy requirements for the telecoms
industry and operate both mobile and fixed very
high speed networks.
TowerXchange: What is TDFs strategy in terms
of HetNet solutions and Internet of Things?
Olivier Huart, CEO, TDF: TDF has been involved
from the very outset in the rollout of M2M
networks. Several players in France have
developed turnkey solutions meeting the needs
of companies and local authorities. We have no
preferred technology and our customers can access
all our sites. We help them deploy their nationwide
network rapidly. Those M2M customers include
Orange, Bouygues Telecom, Sigfox, M2OCity and
Qowisio.
TowerXchange: How do you view TDF and the
French tower industry in the future?
Olivier Huart, CEO, TDF: We forecast that the
French tower market will continue to grow on
the back of increased demand for urban sites (in
particular rooftops), indoor coverage and outdoor
coverage needs (in particular transport corridors,
touristic zones, and black spots). And at a later
stage 5G might also require more sites. TDF is
improving its sites portfolio to address those needs
on a daily basis. We are also ready to play an active
role in any market consolidation and do look at
opportunities beyond France
XX
Coverage, infrastructure
sharing and tower ownership in
the Finnish market
An interview with Digita CEO, Juha-Pekka Weckstrm
Digita, Finlands only broadcasting infrastructure company, owns
a total of 27 high masts and uses an additional 480 smaller masts,
of which approximately a third are owned. With Finland boasting
some of the best network coverage in Europe, TowerXchange spoke
to Digita CEO, Juha-Pekka Weckstrm, who brings with him twenty
years of experience at TeliaSonera Group, to better understand
Finlands tower industry and culture of infrastructure sharing.
TowerXchange: Please can you tell us a little

about yourself and your experience in the
telecoms sector.
Juha-Pekka Weckstrm, CEO, Digita: Prior to joining
Digita in January 2015, I spent nearly twenty years
working for TeliaSonera Group during which I
held several executive positions including CEO of
TeliaSonera Finland, SVP, Strategy for the Eurasian
Region and SVP for Products & Services for
TeliaSonera Finland.
I have also held board positions in several
international public listed and private companies
within telecom sector including Eesti Telecom AS
(Estonia), Elion AS (Estonia), Tilts Communications
AS (Denmark), SIA Lattelecom (Latvia) and
TeliaSonera Finans AB (Sweden).
Keywords: 4G, C-Level Perspective, Co-locations, Denmark, Digita,

DNA, Eesti Telecom, Elion, Elisa, Estonia, Europe, Finland, First State
Investments, Infrastructure Funds, Infrastructure Sharing, Latvia,
TowerXchange: Please can you provide readers

with a short introduction to Digita?
Lease Rates, Masts & Towers, New Market Entrant, Operator-Led JV,
Regulation, Scandinavia, SIA Lattelecom, Sonera, Sweden, TDF, Telenor,
Juha-Pekka Weckstrm, CEO, Digita
TeliaSonera, Tilts Communication, Tower Count, Urban vs Rural, Yle

< Digitas ownership structure, annual revenues and tower portfolio size
< How the broadcasting sector is evolving in Finland
< Digitas presence in the telecoms sector
< The extent of 4G rollout in the Finnish market
< Who owns Finlands 10,000 towers, what culture of infrastructure sharing exists in the country,
and whether any tower divestitures could be on the cards in Finland
Juha-Pekka Weckstrm, CEO, Digita: Digita is a

spin off from Yle, the national public broadcaster
in Finland. The spin off was done in 1999 then in
2005, Digita became 100% owned by the French
group, TDF before being sold in 2012 to First State
Investments, a European financial institution which
forms part of the asset management division of the
Commonwealth Bank of Australia.
Digita is the only broadcasting tower infrastructure
company in Finland, and has 210 employees with
revenues of 80mn. We own 27 very high masts
(over 200m tall) and use 480 smaller masts, the
majority of which are ground based, with roughly

one third owned by Digita and the rest rented
(typically from telecom companies). Our network
covers 100% of the population.
TowerXchange: How healthy is the broadcasting
sector in Finland and could we see any
consolidation in the market?
Juha-Pekka Weckstrm, CEO, Digita: The industry
has had a relatively big hit in revenues, primarily
because of internet TV which has taken a significant
portion of broadcasting company advertising
revenue which most of the commercial companies
live on. Yle is state funded and as such, its revenues
have been very stable.
I dont however see consolidation happening.
The companies are generally very large and are
either family owned or part of major international
companies such as Discovery and Fox. Rather than
the number of broadcast companies in the market
decreasing, we could see some new entrants with
the emergence of some smaller, niche channels such
as Russian speaking channels as the population
diversity increases.
TowerXchange: We understand the Finnish
government to have recently reallocated
broadcast licenses with Telenor securing three
of the licenses that Digita had previously held.
What was the rationale behind the governments
decision to do this? How has this affected Digita?
Juha-Pekka Weckstrm, CEO, Digita: The Finnish
government made the decision to promote

competition - they felt Digita had a very strong
position in the market, even though the market in
financial terms is not very large. The government
wanted to open up the market so that the new
player, Telenor in this case, could use our
infrastructure for the provision of broadcasting
services. They will lease space for antennae and
equipment from Digita but Telenor (rather than
Digita) would have the end customer relationship.
Our view is that the Finnish market is too small a
market for that many network players, however
Telenor, if they start their operations, will become a
major customer and will guarantee a major revenue
stream for us going forward. It is still up in the
air however as to whether Telenor will enter the
market as negotiations with broadcasting service
companies are still ongoing and to our knowledge,
Telenor are yet to secure any customers.
TowerXchange: What would the typical lease
payments be from Telenor?
Juha-Pekka Weckstrm, CEO, Digita: Infrastructure
rates for our masts are regulated by a government
agency and as such, they dictate the prices, although
there is a big discussion going on about what is
the right rate to charge. Lease rates vary widely
dependent on a number of factors including what
equipment is being added and at what height, each
station is different.
TowerXchange: Does Digita have a presence of
many telecom tenants on its towers?
Juha-Pekka Weckstrm, CEO, Digita: There are

approximately 10,000 towers in Finland, of which
we own less than 200, and as such, our presence
in the telecom sector is limited. We tend to focus
more on tenants for the high masts as are they are
the rare infrastructure in the country. I would say
that all of the operators are leasing something from
us but it is relatively limited. We do see tenants
with requirements for higher towers - for example
those with mobile broadband coverage needs on
the 450MHz or 700MHz band and if more of such
players come to the market we would look to invest
more in this area.
TowerXchange: Who owns Finlands 10,000
towers and is there a culture of infrastructure
sharing?
Juha-Pekka Weckstrm, CEO, Digita: There are
three equally strong MNOs in the Finnish market.
Sonera, who used to be the incumbent operator and
currently has 35% of mobile subscription market
share, owns most of the masts (approximately
5,000). The other two MNOs, Elisa and DNA own
less than 3,000 masts each. In addition, there are
some very small players that have masts for other
purposes which are leased by the operators.
It is very competitive market and there are a lot of
cross deals where the operators lease from each
other, primarily on a commercial basis. There is
however one joint venture being formed between
Sonera and DNA in the northeastern part of the
country where the population is sparse. With so few
subscribers, the region is unattractive financially
XX
any signs of divesting towers and would an

acquisition of these be interesting for Digita.
4G rollout is about half way

completed - most of the urban
areas, airports, harbours, roads
are covered as well as most of
the rural areas in the south.
Finland is one of the countries
where prices are the lowest but
coverage is the best
and so the joint venture has been formed as a more

efficient way to meet the two operators coverage
obligations in the area. The operators will compete
on service level rather than their network coverage.
TowerXchange: Is 4G rollout completed across
Finland?
Juha-Pekka Weckstrm, CEO, Digita: 4G rollout is
about half way completed - most of the urban areas,
airports, harbours, roads are covered as well as
most of the rural areas in the south. Finland is one
of the countries where prices are the lowest but
coverage is the best.
TowerXchange: Are any Finnish MNOs showing
Juha-Pekka Weckstrm, CEO, Digita: I dont think

the MNOs are looking to divest their towers but if
they did we would definitely be interested. We are
a tower infrastructure company and so expanding
our portfolio is in our strategy.
TowerXchange: Why do you think that Finlands
MNOs havent shown an interest in divesting
their towers?
Juha-Pekka Weckstrm, CEO, Digita: Its hard to say
but the three MNOs that own the infrastructure
are relatively profitable and stable and the tower
infrastructure is a relatively profitable and stable
part of their business. None of them are in such a
crisis that they would be forced to divest to raise
funds.
TowerXchange: Could other towers be coming to
market in the region?
Juha-Pekka Weckstrm, CEO, Digita: There are other
players in the market with significantly smaller
tower portfolios who may be interested to sell, but
to be honest as we already have 100% coverage
and we are talking such a small number of towers,
such an acquisition would probably not make sense
strategically.
When looking at the Scandinavian and Baltic region
as a whole, there may be some bits and pieces
coming to market in the near future
Meetup Americas
2016
16-17 June, Florida
Meetup Africa 2016

Meetup Asia 2016

Meetup Europe 2017

4-5 April, London
Greek tower market opens up

Macroeconomics and the dominance of market leaders Cosmote creates an
incentive for Greeks challenger MNOs to monetise their towers
Greek roundtable moderator Nikos Babalis, CEO, Victus Networks
Greeces telecoms market has been subject to

some very tough economic conditions in recent
years, leading to lower sector revenue and
investment. Operators across the board have
seen gross profits tumble year after year, and
the continuing economic turmoil will make
market conditions particularly tough during
the next few years. At the Greece roundtable
at the TowerXchange Meetup Europe 2016,
the parlous state of the Greek economy was
extensively discussed. The general consensus
amongst the participants was that the telecoms
market had reached a tipping point, making
the entry of an independent tower company a
distinct possibility.
Keywords: 4G, Bankability, Cosmote, Country Risk, Cyta, DG Runtime, Debt Finance, Decommissioning,
Deutsche Telekom, Digea, Europe, Europe Research, Greece, IFC, Infrastructure Sharing, LTE-Advanced,
MNOs, Market Overview, OTE, Off-Grid, On-Grid, Operator-Led JV, Research, Sale & Leaseback, Tax,
Tenancy Ratios, Tower Count, TowerXchange Research, Victus Networks, VimpelCom, Vodafone,
Vodafone Greece, WIND EHellas, Wind

<
<
<
<
<
About the joint venture between Vodafone Greece and WIND Hellas
Why Greek MNOs may be open to carving out or selling their towers
Drivers for the monetisation of Greeces broadcast towers
How Greek operators are preparing for LTE-Advanced
Why VAT is such as big issue in the Greek telecoms sector
Greek mobile market

Greece has a well developed mobile market
with SIM penetration of 163% (Source: GSMA
Intelligence, Q4 2015). The biggest player in
the market is Hellenic Telecommunications
Organization S.A., the former state monopoly, which
is now majority owned by Deutsche Telekom. Since
September 2015, the company has been trading
under the Cosmote brand name. The other two
major operators are Vodafone Greece and WIND
Hellas, which trades both under the name WIND
and Q Telecom (following a 2006 acquisition of the
number four operator) plus MVNO Cyta, launched
in 2014. Any further M&A in the mobile market
has been postponed due to current economic
uncertainties.
The Greek economy is still reeling from a financial
crisis and massive austerity measures required by
three international bailouts since 2010. It has the
highest unemployment rate in the European Union,
and its economy is 25% smaller than it was in 2009
(Source: The Huffington Post). These economic
factors, together with increased regulation and
intense price competition, have had a corrosive
effect on operators margins. Between 2008 and
2015 the revenue of the top three MNOs in Greece
declined by 53%.
Victus Networks, a Vodafone and WIND joint
venture
Driven partly by cost considerations, Vodafone
Greece and WIND Hellas formed a 50/50 joint
XX
venture (JV) company called Victus Networks

to share 2G and 3G mobile access network
infrastructure in March 2014. The companys
main objective is to manage the Radio Access
and Transmission Networks (RAN) of its parent
companies and, in parallel, implement a partial
active radio network sharing (MORAN) for 2G and
3G technologies in rural and selected urban areas of
Greece.
Whilst infrastructure sharing is significant between
Vodafone Greece and WIND Hellas, incumbent
Cosmote has less of an appetite to share their
towers.
The Greek tower market
There are around 12,000 towers and rooftop
structures now in Greece, representing around 1,500
SIMs per tower, indicative of a relatively mature
network. At present, no telecom tower companies
have a foothold in the country the MNOs own all of
the assets.
Broadcast infraco Digea has 156 sites and also
leases capacity from the MNOs in the market, as
well as ~80 sites owned by States TV and Radio
provider ERT. Digea is owned by seven different
private broadcasters, each possessing a temporary
nationwide broadcast license. One of these
seven private broadcasters is already defunct,
most the others are deeply in the red. Greeces
new government wants to restructure broadcast
licensing, auctioning off four permanent nationwide
licenses. This could create an incentive for the
Economy MNO revenue

contracted
Greece has by 25%

12,000 towers
down 53% in
the last 7 years
Cosmote dont
need cash
1,500 SIMs
156
SLB
Broadcast towerco
imminent? Digea has 156 sites
per tower
163%
SIM penetration
Victus Networks
has 200 off-grid sites
50-50 JV
Victus
Networks between WIND
and Vodafone
Victus Networks
tenancy ratio 1.5
At present, only 30% of the MNOs towers are

located in urban areas, where licensing, landlords
and official bureaucracy is are hampering further
densification.
being utilised for network sharing. The tenancy

ratio on Victus Networks towers and rooftops is 1.5
but is expected to go up as the MNOs increase their
network sharing. A decommissioning programme
is under way which is expected to result in the
Victus Networks tower count falling to 6,000 and
the tenancy ratio increase in tandem.
Vodafone Greece and WIND Hellas currently own

7,000 tower and rooftop sites between them. Prior
to the establishment of the JV, several hundred sites
had been set up for co-location; these sites are now
Victus Networks report that around 200 sites

(primarily in mountainous regions) in their
portfolio are off-grid, with the majority running
24/7 on hybrid, energy efficient DGs.
current seven stakeholders to monetise and exit

Digea.
Prospects for tower divestitures
Preparing for LTE-Advanced
Market leaders Cosmote, 100% owned by OTE

which in turn is 40% owned by Deutsche Telekom,
whose passive infrastructure assets were inherited
from a former fixed services incumbent monopoly,
were historically not amenable to co-location by
other MNOs or broadcasters. As a result Cosmote
may consider spinning off their towers into a fully
owned subsidiary, partly to reduce the risk of
being classified a dominant player by the regulator.
While Cosmote have little incentive to monetise
towers with net debts of just 859.8mn compared
to revenues of around 4bn per annum (74% from
Greece), a carve-out towerco in Greece could be
part of a larger group-level strategy implemented
by Deutsche Telekom.
Vodafone Greece and WIND Hellas joined forces

in part to fend off competition from Cosmote,
which currently has a market share of 50%. Given
its market dominance, Cosmote is well placed to
deliver LTE-Advanced services, which were made
available in parts of Athens and Thessaloniki in Q3
2015. Cosmotes 4G population coverage is believed
to be around 80% at time of writing.
The two Victus Networks partners have differing

levels of motivation to monetise towers. Vodafone
Greece has zero debt and a strict capital intensity
KPI which means there is no incentive to release
cash from a tower sale, whereas Wind Hellas are
significantly more cash hungry.
In common with many other cell site portfolios
in Europe, the cell site portfolios most likely to
come to market in Greece consist of relatively
few greenfield ground based towers; a degree
of parallel infrastructure which may need
decommissioning (particularly in urban areas);
and may require that substantial work be
undertaken to prepare the assets for monetisation,
including updating maintenance, licensing and
permitting.
To prepare for LTE-Advanced, Victus Networks will

be extending coverage into rural areas and sharing
more assets between the operators in major towns
and cities.
Considering the current economic conditions
in Greece, investment in 4G in the country is
overwhelming.
Opportunities for tower companies
Victus Networks was formed, the MNOs asked to be

exempt from the tax but their request was refused
by the government. As a result, Vodafone and
WINDs Greek towers still sit on the MNOs balance
sheets, not on Victus. Any tower company entering
the Greek market would need to have the capital
available to pay the tax prior to actually acquiring
the assets. The ability of the DFIs to now invest in
Greece for a limited period of time however opens
up another line of investment for a prospective
towerco in the market.
Secondly, tower sites in Greece need to be licensed
and the whole process is very bureaucratic. The
active equipment on every single site has to be
licensed and permits need to be acquired for forklift
trucks and other equipment. MNOs also have to
re-apply for licenses every time they add a new
frequency to a tower. Any tower company choosing
to enter the Greek market will need to have the time
and patience to deal with these issues.
There is a high probability that a tower company

will enter the Greek market within the next two
or three years. Greek MNOs are under pressure
to invest in the revenue generating side of their
businesses and let someone else take care of the
infrastructure. In the case of Victus Networks, it is
public knowledge that one of the MNOs is open to
selling some of the JVs towers to a third party.
Conclusion
There are two obstacles to a tower company

entering the market. The biggest obstacle revolves
around VAT. VAT is at 23% in Greece and must
be paid to the state prior to any purchase. When
The potential exists for at least one, if not two

leading operators to divest their tower portfolios,
which makes it likely that a tower company will
enter Greece in the near future
The joint venture between Vodafone Greece and

WIND Hellas has allowed both companies to pool
their production costs and invest more capital
into their networks. Cost cutting will continue to
be a priority for Greek MNOs as long as consumer
spending stays stagnant.
XX
Russia and CIS FAQs

(updated May 2016)
Over 25 questions and answers to help you understand the tremendous
opportunities within the Russian and CIS tower markets
By Frances Rose, Head of

EMEA, TowerXchange
As the largest country on the planet, Russian telecom networks are made up of
~42,100 towers and ~75,000 rooftops across its populated regions, most of which
remain operator-captive. In a fiercely competitive MNO landscape with relatively
few shared sites, only Russian Towers, Vertical and a couple of other smaller
towercos are steadily creating an independent towerco market in the country. That
may all be about to change. Each of Russias three leading MNOs has carved out
their own towerco: VimpelCom has created National Tower Company which they
intend to sell and leaseback the towers if their valuation can be met, Megafon has
carved out First Tower Company with a view to a future sale to a strategic buyer,
while MTS has injected 5,500 towers into MTS Towers. Even Tele2 Russia are
rumored to be selling their towers. This update combined TowerXchange research
with insights gleaned from the Russia roundtable at our recent European Meetup.
Keywords: Editorial, MNOs, Towercos, Russia & CIS, Europe, Russia, Ukraine, Kazakhstan, Russian Towers,
ESN, Tele2, Megafon, Vimpelcom, MTS, Acquisition, Market Overview, Valuation, 4G, LTE, Deal Structure,
Transfer Assets, Urban vs Rural Co-locations, Infrastructure Sharing, Risk, Build-to-Suit, First Mover
Advantage, Country Risk, Rooftop, Sale & Leaseback, Private Equity, Infrastructure Funds

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The creation of the three leading Russian MNOs towercos and their plans for monetisation
The independent towercos and investors bidding to acquire Russias towers
The relative value and complexity of management of towers versus rooftops
The prospects of Russian towerco business models extending beyond towers to fibre and power
Forecasts for new tower builds and for the percentage of towers that will be owned by towercos
by 2017
Russian telecoms infrastructure

How many towers are there currently in Russia?
TowerXchange estimates that there are around
42,100 ground based towers (GBTs) in Russia.
Megafon has the most extensive network with
~14,000 towers, MTS and VimpelCom each have
around 10,400 towers, while Tele2 has around
3,500. Russian Towers owns a further 1,800 towers,
newer entrants Vertical claim to have 1,600 sites,
and a handful of smaller towercos including Link
Development and Service Telecom account for a
few hundred more.
How many rooftop and streetpole masts are
there in Russia?
TowerXchange estimates there are around 75,000
urban mast solutions in Russia, mostly rooftops
and streetpoles. However this number is hard
to pinpoint as asset registers and contractual
documentation is often incomplete as far as these
assets are concerned.
What is the current situation for urban masts?
A lot of the urban capacity in Russia is currently
provided by rooftop and pole solutions. MNOs
find it easier to secure licensing for streetpoles
and are subsequently more inclined to put points
of service on existing high buildings. However
there is no standard for agreements on rooftop
space and dealing with multiple private landlords
across urban areas is a logistical nightmare for
operators. There are also a lot of question marks
over the legality of new and existing rooftop masts
and the permitting situation is not always clear.

Although rooftops and streetpoles would probably
not be included in a potential tower divestment,
TowerXchange believes there may be room in
the market for a standardised and legal solution
provider for Russian rooftop points of service.
How extensive is current LTE coverage?
LTE population coverage in Russia is now
significantly in excess of 50%. MTS reportedly
has coverage in 83 Russian regions, MegaFon 77
regions and VimpelCom 58 regions.
Politics, economy and business environment
How has the recent decline of the rouble
affected the Russian telecoms market?
On one hand the unstable currency and resulting
economic turbulence is causing operators to
reassess their capital expenditure, but on the other
hand devaluation of the rouble is a disincentive
for divestiture of passive infrastructure assets as
MNOs wont want to sell if they cant get full value.
Russian tenants would pay their bills in roubles
and although raw materials and rent for towers
are bought in roubles, and Russia has plenty of
domestic energy resources, technology tends to
be bought from overseas and is thus effectively
building and maintaining towers becomea more
and more expensive as a function of devaluation.
With at least the first Russian tower transaction,
and possibly subsequent transactions, priced in
roubles and with lease revenue in roubles, this
Estimated GBT count, Russia

MTS
10,400
MegaFon/
First Tower Company
14,000
10,400
VimpelCom
3,500
Tele2 Russia
Russian Towers
1,800
Vertical
1,600
Other independent
towercos
500
3,000
Breakdown of Russias 117,100

sites: GBTs versus rooftops and
streetpoles
6,000
9,000
12,000
15,000
Mobile subscribers of Russias top

four MNOs, Q4 2015 (mns)
35.5
75,000
77.3
59.8
42,100
76.8
MTS
GBTs

MegaFon
VimpelCom
Tele2
Source: Annual Reports, note that most recent figure for Tele2
dates from Q3 2015, the other subscriber numbers from Q4 2015
XX
narrows this field of prospective investors.

What is the current status of the Russian mobile
market?
A competitively balanced market between MTS,
MegaFon and VimpelCom has been shaken up by
the consolidation and refinancing of Rostelecom
and Tele2, whose investment in infrastructure
(leveraging co-location where possible) and launch
in Moscow has shaken up the market. A further
new entrant, LTE-only Antares, is scheduled for
launch in the second half of 2016.
SIM penetration sits at a whopping 173%

among Russias 140mn+ population, but mobile
broadband penetration is still only 38% (statistics
courtesy of GSMA Intelligence, Q4 2015 and the
World Bank). ARPU sits in the 220-290 rouble range
(US$3.20-4.20).
The status of potential tower transactions in
Russia and the CIS
What is the status of the VimpelCom tower

divestiture?
The process, led by BAML, has been ongoing since
2015 and is nearing conclusion. An initial shortlist
of eight bidders has reportedly been whittled down
to three: Russian Towers, Vertical and a consortium
led by the Russian Direct Investment Fund also
including Mubadala and Baring Vostock Capital.
At the core of the process is the sale and leaseback
of VimpelComs 10,400 Russian GBTs. The portfolio
could be supplemented by up to a further 19,000

rooftop and streetpole sites, or through the
addition of as many as 40,000 VimpelCom sites
in CIS countries. However, it seems increasingly
likely that any CIS deal may be closed subsequent
to a Russian tower sale.
Whilst there may still be a gap in valuation

(TowerXchange latest intel suggests that the latest
round of bids are believed to be in the US$550mn
range, while VimpelCom drives for a $600mn+
valuation), we feel there is a strong probability
this deal will close. VimpelCom has placed tower
monetisation at the heart of a global strategy to
reduce debt, with parallel processes under way
in Pakistan and Bangladesh, with a new process
mooted in Algeria, and with 693mn already
pocketed from the sale of 7,377 Wind towers in
Italy.
What is the status of the MegaFon carve out

towerco?
In November 2015, Megafon carved out their
~14,000 towers into a captive towerco, First
Tower Company. Motivated by the high valuation
multiples commanded by towercos relative to
their MNO parents, MegaFon CEO Ivan Tavrin has
since explained his intention to have an SPV with
a service agreement, properly executed towers
and management. Were absolutely convinced
that this will enable us to get the best price and a
high quality buyer. People will see that they are
investing in a well-managed business and not just
in a collection of steel towers.
More recently Tavrin provided further hints as to

the potential means and timelines for monetising
MegaFons towerco: We are not going to put our
tower company on the bourse. It seems that a
partial or complete sale to a strategic investor may
be the more likely outcome: It primarily depends
on conditions, on how the tower company works
with your towers, from the financial climate and
other factors, said Tavrin. We dont think that if
we are the first to sell our towers, we will be able
to earn the most money and sign the best deal.
We believe that if we thoroughly prepare, well
manage to pocket a high-quality investor and win a
high-quality future operating history.
Could the other Russian MNOs also monetise

their towers?
Russian publication Vedomosti reported in
February 2016 that Tele2, Russias #4 MNO, was
seeking to raise US$500mn through the sale of
10,000 towers. While TowerXchange has not been
able to verify this report, it would seem logical for
Tele2 to monetise their tower assets before they
became stranded on their balance sheet, although
reports that Tele2 is selling 10,000 towers may be
erroneous our intel suggested Tele2 had a little
over 2,000 towers a year ago and, although they
are building fast, TowerXchange estimate Tele2 has
~3,500 GBTs with their rooftop count bringing the
total to 10,000.
As recently as November 2015 MTS indicated that

they saw no business case to sell their towers:
Tower companies enjoy profitability of 6070%
in other markets. A question arises: who creates

this profitability for tower companies? Asked
MTS President Andrei Dubovskov. It is created
by lessees, and the lessees are cellular companies.
For the latter, it will be a constant, stable, huge
and always growing expense. However, at the
end of April 2016, MTS announced the carve out
of 5,500 towers (around half their network) into
MTS Towers, with intent to lease those towers
to other MNOs and third parties. While it seems
MTS has decided to participate in the towerco
business, there is no indication that this carve out
is the first step toward a divestiture. Further assets,
potentially including fibre, may be injected into
MTS Towers: By the end of 2016 and beyond, MTS
may gradually offer to rent additional towers and
antenna support structures to meet potential rental
demand said MTS VP Andrey Ushatsky.
Where is the capital to finance one or more

Russian tower transactions going to come from?
The combination of forex challenges and trade
sanctions make it difficult, if not impossible, for
US or Western European investors to participate in
the current round of Russian tower transactions.
However, that will not significantly reduce the
number of credible bidders at the table as a
significant local operational footprint was always
likely to be required.
Russia has no shortage of its own investors with

an appetite for telecoms and/or infrastructure
assets. Foremost of which the RDIF has been
linked with Russian tower transactions since last
mooted in 2012 (when a prospective joint venture

towerco between Russias leading MNOs failed
to materialise). Middle Eastern and Far Eastern
investors could also be attracted to invest in Russian
towers, as well as smart money investors who have
achieved good returns from Southern Asian towers.
Urban versus rural Russian tower markets
What is the most important market in Russia?
Moscow is the biggest market in Russia, with by
far the greatest population density and the highest
ARPU, however there are still significant coverage
gaps in the area and MNOs are keen to add capacity
to improve their quality of service to Muscovites.
Which regions are the hardest for Russian
operators to cover?
Due to a much lower ARPU and population density
than the rest of the country, the far east is the
hardest area to cover and sustain operationally
and MNOs are much more open to infrastructure
sharing in this area to try and minimise opex. All
operators are under pressure from the government
to provide service to rural areas and 4G licenses
require that Russias MNOs cover all areas with a
population of 10,000+. Leveraging the Rostelecom
network then delivering the last mile helps them to
do this.
The current status of tower sharing in Russia
How has the Russian tower market evolved?
As mobile penetration has exploded in Russia over
the last ten years, the three major MNOs engaged

in something of an arms race in order to gain
competitive advantage through better network
coverage. However MNOs are now being more
cautious about this kind of capital expenditure
and over the last couple of years Russias operators
have started to focus on bilateral swaps and
leasing space where possible, and only built new
infrastructure where there was a clear revenue
stream. A large MNO in Russia told us they
currently spend around US$1bn per annum (a
figure quoted before the rouble crashed) on their
network to develop coverage and capacity.
Where is tower growth needed in Russia?
The main priorities for operators in the short term
is the LTE roll out and infill in Moscow.
In sparsely populated parts of Russia offering
network coverage is commercially unattractive,
however MNOs are able to use Rostelecoms fixedline infrastructure and focus on providing the
last mile of network connection in order to fulfil
license obligations.
What does sharing look like now?
Currently tower sharing does take place to a
limited extent in the form of bilateral swaps. Tele2
is generally excluded from this, particularly in
Moscow where the most value is to be found, as
they are unable to offer attractive tower locations
to the most established MNOs.
There are substantial network sharing agreements
XX
between VimpelCom and MegaFon, to cover ten

Russian regions and over 1,300 4G base stations,
and between VimpelCom and MTS, with MTS
deploying in 19 regions and VimpelCom in 17.
What is the current tenancy ratio and how
many towers are shared?
TowerXchange sources suggest that less than 30%
of towers are currently shared, typically through
bilateral swaps and some through existing
towercos such as market leaders Russian Towers.
Existing tenancy ratios on independent towers are
thought to be around 1.2.
Who are the most likely prospective tenants on
Russias towers?
Tele2 have the most to gain from a tower
transaction, provided the MLA does not prohibit
them from co-locating on many sites. Tele2 would
not take on tenancies on the towers wholesale
they would pick and choose according to when
the towers became available, their locations and
local competition. Nonetheless, Tele2s appetite to
rollout represents a potential near-term spike in
tenancy ratio growth.
In Q3 2015 Russian publication Vedomosti

reported that Russian Towers received 37.6% of
its revenues from Tele2 compared to 19% from
VimpelCom, 17.7% from MTS and 13.1% from
MegaFon.
The oft-delayed entrance of LTE-only MNO
Antares into the Russian market could add a
further MNO hungry to accelerate time to market

through co-location, particularly in Moscow.
What is the current state of asset registers in

Russia?
A year ago, the majority of asset registers were
blighted by poor maintenance, poor record
keeping, complex legislation and unclear
information about land ownership. Since then a
significant amount of work has been undertaken to
prepare Russian tower portfolios for monetisation,
certainly by VimpelCom, whose asset register has
already been exposed to the rigors of several due
diligence processes, and likely at MegaFon as they
professionalise their management of towers under
the First Tower Company entity, in advance of a
potential trade sale in the next 6-18 months.
Whos who: the shortlisted bidders for

VimpelComs towers (in alphabetical order)
Russian Direct Investment Fund (RDIF)

RDIF, a US$10bn government fund established in
2011 to make equity investments in their domestic
market, heads up a consortium of investors
believed to include Mubadala and Baring Vostock
Capital. RDIFs ideal deal size is US$50-500mn, with
up to 50% ownership. RDIF was previously linked
with investing in a Russian joint venture towerco,
mooted by MTS and VimpelCom in 2012.
Russian Towers
Russian Towers was established in 2009 by
both Russian and Western professionals with
substantial telco experience in Russia.

Russian Towers is backed by both Russian and
international investors, including ADM Capital,
EBRD, IFC, Macquarie Russia & CIS Infrastructure
Fund, Sumitomo Corporation and UFG Private
Equity.
Russian Towers current portfolio of around

1,800 towers are spread across 50 regions of
Russia, counting all MNOs as tenants. Leveraging
relationships with key partners including
Russian Railways, the business grew over 90%
YOY organically, adding 950 towers in 2015. The
company are also deploying light poles with
capacity for two to three tenants, particularly as an
urban infill solution.
Russian Towers appetite for acquisitions extends
to the CIS in the immediate term, and beyond
thereafter.
Vertical
Formed in 2013, Vertical experienced rapid growth
in 2015, adding the acquisition and refurbishment
of 500 street poles to scale to a portfolio of 1,600
sites. Their assets primarily consist of 30-35m
street poles in Moscow and the surrounding
region.
Vertical has developed in-house tower building
capability to accelerate time to market, and
now has around 250 staff. Serial entrepreneur,
Vertical Founder and owner Georgy Chumburidze
is also a Director of Massive Multiplayer

Online Games company 4game and content
distribution management company Pladform.
Strategy Director Egor Bykov has a background
investing in telecommunication infrastructure at
Macquarie.
Other interested parties

Other parties which could be interested in future
Russian tower opportunities, either as direct
bidders or participants in a consortium, include
local Russian towercos Link Development and
Service Telecom, one or more Chinese towercos,
and Quippo International, the international
investment subsidiary of SREI Infrastructure,
which recently agreed the sale of their stake in
Viom Networks to American Tower India.
TowerXchange dont expect Cellnex, American
Tower or any of the other listed U.S. towercos to
be direct bidders for Russian towers in the near
term.
TowerXchange forecast for the Russian tower

market
Towerco penetration could reach 100% of GBTs
by 2017
It is not difficult to foresee a Russian tower
market where independent and operator-captive
towercos might own 100% of Russian ground
based towers by 2017, with independent towercos
owning 75%. Such a forecast would depend on
the closure of the current VimpelCom process,
CIS towers
While the Russian market gains momentum
MegaFon has only one CIS subsidiary, in Tajikistan.
toward the adoption of the independent towerco
It is not known whether their towers are included
model, its earlier days for the tower industry in
in First Tower Company. MTS also operates in
the CIS. However, TowerXchange still anticipate
Ukraine, Belarus, Armenia, Uzbekistan and
tower deals in the CIS within the next 12-18
Turkmenistan, but seemingly has little appetite to
months.
monetise towers.
VimpelCom has made no secret of their interest in
TeliaSonera and Telenors appetite to exit their CIS
divesting tens of thousands of towers in Armenia,
investments may precipitate transactions which
Kyrgyzstan, Uzbekistan, Tajikistan, Kazakhstan,
could be part financed by tower divestitures.
Ukraine and Georgia during or, more likely,
following their Russian tower sale process.
While there is little towerco activity in the CIS

at present, there are a couple of interesting
VimpelCom as an entity is now looking across its
exceptions. Turkcell has transferred 811 towers
networks for divestitures, so any place where they
from its Lifecell subsidiary in Ukraine to its
have a presence therefore becomes a potential
Ukrtower subsidiary in the same country, for
market where we will next see independent
US$52mn. Ukrtower now has ~1,200 towers,
towercos emerging, said the IFCs Eric Crabtree
representing 11% of the countrys total tower
in a recent TowerXchange interview. VimpelCom
stock. Turkcell are known to be exploring
will drive the creation of the industry as they
the monetisation of their tower assets, so the
move, they are quite serious about the divestiture
restructuring of their Ukrainian assets could
process and its not just going to be Russia, its
precede a sale or IPO. Meanwhile, Logycom
going to be others in the region and so thats
has secured a contract to build 77 towers in
where to place your bets on anything happening.
Kazakhstan
XX
the sale of MegaFons First Tower Company to a

strategic buyer, the injection of MTS remaining
towers into MTS Towers, and the continuing
organic growth of Russias existing tower
companies. The level of towerco penetration could
only reach 100% if a Tele2 Russia tower sale were
also completed. One of Russias tower companies
will be among Europes largest towercos by 2017
although which one, were not sure!
Expect upwards of US$1.5bn (100bn roubles) to

be spent transferring Russian towers from MNOcaptive to independent towercos in the coming
18 months. Weve seen Russia get to the brink
of tower deals before, only to step back, but the
process has gone farther than before, the drivers
are real, the assets are ready, the buyers are ready,
the capital is there. Its an exciting time for Russian
towers!
Tenancy ratio growth could approach 0.2 per

year
Given Tele2s ongoing need for network expansion,
and the continuing rollout of 4G, the tenancy ratio
in Russia could achieve a healthy annual growth
rate near 0.2, and eventually exceed two, although
would be unlikely to go beyond three. We would
expect a substantial difference, in the order of 0.5
or greater, between the potential tenancy ratios
in major urban cities compared to smaller towns
exceeding 10,000 population. Infrastructure
sharing in rural areas may be more likely to be
facilitated by RANsharing that by substantial
involvement of independent towercos.
Insights gleaned from the Russia roundtable at

the TowerXchange Meetup Europe
Extending infrastructure sharing beyond towers
to fibre
There has been growing discussion in the market

that selling towers is the first step toward the
integration of end to end approach to telecom
infrastructure management, with some experts
suggesting well see fibre optics and active
equipment divested, leaving only spectrum control
and customer relationship management to the
operator, with the rest outsourced.
Fibre backhaul is seen by many as a natural

extension of the towerco business model towards
being a netco model, but the majority opinion
at the Russia roundtable seemed to be that fibre
represented a new challenge that we were unlikely
to see independent towercos engaging with for the
next 5-10 years in Russia. Fibre is less relevant for
towercos now than new macro tower and infill site
builds, said one towerco.
I can see Russian towercos getting into microcells

and DAS, but I cant see them getting any more
involved in active equipment than that, said
another participant. Fibre can cannibalise revenue
from existing microwave dishes, so its not as easy
as just adding another set of infrastructure to share
the whole business model has to be re-examined.
We are less interested in owning the cabling, but
are more interested to control the last mile,

added the towerco.
The value of Russian rooftop sites
It is believed that 60-65% of Russian MNOs active

equipment is based on rooftops while the rest is
on towers. Rooftops were reportedly transferred
to a towerco for free in Germany does this set
a precedent. Will rooftops attract a similar
valuation to regular towers, or be given away for
free in Russia?
The rooftop business has been shunned by

towercos in Russia due to the complexity of
dealing with landlords, suggested one towerco.
We dont have any rooftops in our portfolio,
said another Russian towerco. MNOs are moving
away from using rooftops toward using towers
due to these problems, said a third towerco,
who continued: Frequently the landlords are
individuals, not even companies, and there are
a lot of complaints from residents on residential
buildings.
In India this isnt an issue, contributed another

participant. Once a site is operating no one can
stop it. Apparently Indian rooftop sites attract a
different price tag but still have a positive value:
rooftop sites are also shared and can be as
productive as towers. In urban areas the problem
isnt about securing extra structures, its about
getting another lease from a landlord in prime
territory.
How do MNOs achieve coverage at low signal

propagation spectrum bands if they dont have
rooftops? Asked one participant.
The MNOs have thousands of rooftops, but its a

very labour intensive part of the portfolio. While
tower contracts are for 20 years, the duration of
the rooftop contract might be only 11 months,
which generates a huge amount of paperwork.
In India the rooftop contracts are the same as for

towers 15 years. In India the problem is that the
key rooftop sites have already gone. Light poles
and camouflaging are growing trends in India. So
the old rooftops are a prize catch as they have a
long lease already agreed.
When comparing we should bear in mind

different nature of proprietary rights, said
another towerco from the Russia and CIS region.
In Kazakhstan rooftops represent about 20%
of the network. Towers are movable property
and rooftops have a different legal status. Could
towercos change the legal status of rooftops to be
more similar to towers, establishing longer term
contracts for five to ten years? As towercos we can
propose very good service because rooftops are a
headache to MNOs.
On the operational and legal side theres a lot

which would make that impossible, said an
experienced tower transaction advisor. On the
other hand I love rooftops if there is a way to
make the rooftop business work it could be quite
attractive. The value is all in the relationships,

theres very little capex in this. Its all about
making sure you have the right to attract new
tenants and making sure that adding those new
tenants doesnt double your cost base.
So were back to the first question; will MNOs give

away this headache for free, or do Russian rooftop
sites have value?
It depends if you can lease them up, said the

advisor. If you cant lease them up then the MNO
should give away the rooftops: a one-year lease is
not really an asset. Especially if youre then tied
into a long term contract with the MNO, theres not
much value to be created.
How many new sites will be built in Russia?
Russia needs another 15,000 base stations in

the next two to three years. Russias two largest
towercos are building around 100 new sites per
month, a combination of ground based towers and
lampposts.
Should Russian towercos diversify beyond steel

and real estate to provide power, a/c etc?
In markets with low grid coverage what makes the

business case for towercos to provide power as a
service is that the consumption of a generator isnt
proportional to output so if you have two tenants
it wont cost you more than one tenant. So in Africa
they were able to add additional tenants without
additional diesel consumption. In markets where

the lions share of opex comes from maintenance
rather than energy, it depends who owns the
shelters, and whether MNOs are happy to share
those shelters. If so, significant efficiencies can be
unlocked by optimising air conditioning.
Batteries are not currently part of our offering,

said one Russian towerco. There are very few
sites without electricity. And any battery backup is
provided by the operators.
Electricity supply is a matter of cost, said another

towerco All operators want lower tariffs so they
decided to keep the headaches to keep the costs
down.
It seems most European towercos are not

responsible for power, although in some cases a
sister infraco is responsible, as is the case with
Deutsche Funkturm.
Russian tower association proposed
During the Russia roundtable at the recent

TowerXchange Meetup Europe, Alexander Chub,
President of Russian Towers, proposed the creation
of a community to present a united front to the
regulator and other stakeholders, and to utilise
resources more efficiently. The idea was supported
by all participating towercos. Any other Russian
towercos interested in joining such an association
please feel free to contact TowerXchange and well
connect you with Alexander
XX
A first look at the CIS tower

markets, particularly Kazakhstan
and the Ukraine
Towers could come to market from VimpelCom and TeliaSonera / Turkcell
The emerging European tower markets panel at TowerXchange
Thousands of towers are expected to come

to market across the CIS in the next couple
of years, triggered by the extension of
VimpelComs tower monetisation programme
to the region. At the recent sell-out
TowerXchange Meetup Europe, TowerXchange
hosted a panel session on Emerging European
tower markets and a subsequent roundtable
focusing on the CIS. With thanks to the
moderators and participants of those sessions,
heres what we learned.
Keywords: 4G, ARPU, Altel, Armenia, Asia Research, Asset Register, Azerbaijan, Bankability, Belarus,
CIS, Central Asia, Country Risk, Debt Finance, Europe, Europe Research, Georgia, Infrastructure Sharing,
Kazakhstan, Kazakhtelecom, Kyivstar, Kyrgyzstan, Lease Rates, Logycom, MTS, Market Overview, Moldova,
Network Rollout, Pass-Through, Research, Sale & Leaseback, Tajikistan, Tax, TeliaSonera, Tower Count,
TowerXchange Research, Turkcell, Turkmenistan, UkrTower, Ukraine, Uzbekistan, VimpelCom, lifecell

< Opportunities in the Kazakh tower market
< Opportunities in the Ukrainian tower market
< Challenges achieving the scale necessary to attract international investment in CIS towers
< The appetite of MNOs in the CIS to monetise their towers
< Investors perspectives on CIS towers
Spotlight on Kazakhstan
With a 2.7mn km and only 18.2mn population,
Kazakhstan is not densely populated. However, as
the third largest of the CIS member and associate
member States, it is home to one of the regions
more investible tower markets.
The Kazakh mobile market consolidated from
four to three operators when Kazakhtelecoms
Altel merged with Tele2 in 2015. The combined
entity is 51% owned by Kazakhtelecom but
Tele2 has operational and management control.
Altels 4G monopoly is currently being opened
up to competition from the countrys other
operators, Beeline (VimpelCom) and Kcell
(TeliaSonera+Turkcell). LTE spectrum auctions in
2016 will introduce license obligations requiring
provision of coverage to all settlements with a
population over 500. This means 800-1,000 new
towns will need to be connected, requiring the
erection of 1,000-1,500 additional towers.
Kazakhstan currently has around 25,000 base
stations located on various structures including
around 7,000 cell sites, ~5,300 of which remain
MNO-captive. A further ~700 towers are owned by
fixed line operator Kazakhtelecom, while around
1,000 privately owned structures are also in use.
Participants in the CIS roundtable suggested over
a thousand towers could be erected in Kazakhstan
in the next two to three years, driven by next
generation network rollouts and big infrastructure
projects like providing coverage along the main
railway lines and along the highway from China to
Western Europe finished last year.
Estimated cell site count, Kazakhstan

1,000
otherwise the valuation realised could be

compromised.
1,500
Beeline (VimpelCom) towers
650
Beeline (VimpelCom) rooftops etc

Tele2+Altel
700
Kazakhtelecom
2,000
Kcell
Other structures used for telecom
1,200
Logycom, currently Kazakhstans only independent

towerco with a recently signed contract to build 77
towers for Altel, reported that it can take up to four
months just to acquire land for Kazakh towers, but
that land can often be secured at a very favorable
rate. There is then the usual assortment of around
ten further permits required to fully legalise the
towers. The complexity of permitting in Kazakhstan
means many existing towers may not be fully
legalised.
Logycom operates a steel and grass business model
MNOs retain responsibility for power, and O&M is
outsourced to proven subcontractors.
The fixed line incumbent operator Kazakhtelecom
has a network of around 700 towers. While the
network is no longer used by Kazakhtelecom

themselves as they use fibre, the towers are widely
used as the default choice for other MNOs rollout.
Informal estimates suggest there could be an average
of 2.5 to three tenants on each of these towers,
but they may be leased out at rate significantly
cheaper than a commercial independent towerco
rate. Increasing separation between the State and
Kazakhtelecom, reducing the companys access to
low cost interest rates, may provide an impetus to
monetise the towers, which are currently seen as
something of a cash cow by the operator.
While TowerXchange anticipate tower transactions
in Kazakhstan in the coming 12-24 months, a
substantial sale and leaseback would need to
preceded by a period of paperwork cleansing,
VimpelComs tower monetisation programme is

rumored to be extending to CIS States in the near
future, which could bring their 3-4,000 Kazakh
structures to market, of which around 1,500 are
believed to be ground based towers, with the
rest likely to be rooftops and other urban infill
solutions such as lampposts.
TeliaSoneras proposed exit from Kcell could
prompt the monetisation of their ~650 towers,
particularly if Turkcell is successful in buying out
TeliaSoneras majority stake in Fintur, the joint
venture holding company which manages their
stakes in Kcell. Turkcell recently commenced a
process to IPO their carve-out Turkish towerco
Global Tower, illustrating the companys current
thinking toward tower monetisation.
While access to capital in Kazakhstan suffered
during recent political turbulence, the climate
for international investment into the country is
increasingly attractive since the introduction of
the Incentives Law, implemented in January
2015. The law provides a number of incentives to
invest >US$20mn in qualifying new businesses,
including customs duty exemptions for up to
five years; State grants potentially including
free land use; tax incentives including potential
profit tax and land tax exemptions for up to ten
years and property tax exemptions for up to
eight years; and investment subsidies by way
of reimbursement of up to 30% of expenses
incurred.
XX
The biggest challenge for international investors

interested in Kazakhstan remains exchange rate
instability. After spending US$28bn propping up
the value of the Tenge, the Kazakh government
allowed their currency to float in August 2015,
resulting in significant currency devaluation (in
August 2015 youd have got 185 KZT to the dollar, at
time of writing that figure had doubled to 330 KZT).
While Kazakhstans MNOs owned by international
players have reduced capex, the effect of currency
devaluation on the tower industrys cost base has
not been as pronounced, with reports that the cost
of tower manufacture increased only 10-15%.
Population of current and former CIS members and associate members,

excluding Russia
Kyrgyzstan
Georgia 5,664,939
Armenia
4,931,226
3,056,382
Belarus Azerbaijan Kazakhstan Uzbekistan Ukraine

9,589,689 9,780,780 18,157,122
29,199,942 44,429,471
Moldova Turkmenistan
3,546,847
5,231,422 Tajikistan
8,191,958
Spotlight on the Ukraine

The Ukraine is the largest of the CIS States with a
population of around 44.4mn. GSMA Intelligence
suggests there are 63.5mn connections in the
Ukraine, giving SIM penetration of 142%.
The country is host to four MNOs: Kyivstar
(VimpelCom), Vodafone-MTS, lifecell (Turkcell) and
Intertelecom, the latter being a CDMA operator
focused primarily on the Crimea.
Nationwide fixed line operator UkrTelecom, part
of SCM group owned by the countrys richest
man Rinat Akhmetov, has a 3G mobile subsidiary
TriMob, which has recently been the subject of an
acquisition attempt by MTS. SCM had previously
been a shareholder in lifecell (then known as
Astelit) before that was bought out by Turkcell.
The Ukraine has one of the least developed mobile
networks in Eurasia, with 3G rollout having only
reached the big cities to date. For example, market
Source: CIA Factbook estimates, July 2015
leaders Kyivstar announced their 3G network

achieved almost 40% population coverage by April
2016. The Ukrainian national communications
regulator, NCCIR, has reserved 4G spectrum for
auction.
There are around 11,000 towers in the Ukraine.
Kyivstar owns around 5,500 and Vodafone-MTS has
a further ~4,500. Ukraines only towerco UkrTower
has around 1,200 towers and 290 IBS, serving all
the MNOs and ISPs in Ukraine. UkrTower recently
acquired lifecells 811 towers for US$52mn.
UkrTower is 100% owned by Turkcell, and is a
subsidiary of Turkcells captive towerco Global
Tower, which is slated for IPO later in 2016.
Were renowned for our indoor coverage, said
Zafer Ozbay, General Manager of UkrTower in a

panel session at the recent TowerXchange Meetup
Europe. The MNOs all come to us and appreciate
the value of sharing IBS. UkrTower operates a steel
and grass business model; they connect sites to
the grid, but the batteries and backup DGs remain
owned by the MNOs or their subcontractors.
The Ukraine is in the grip of a political and
economic crisis. The cost of living is increasing but
salaries are not increasing, leading to a significant
reduction in disposable income (one result of this
is an increasing level of theft from cell sites, with
site security a growing priority). ARPU is falling,
so Ukrainian MNOs are cautious to deploy capex;
very few new towers have been built in the last five
years.
investment in an indigenous towerco, and

investment in Uzbekistan seems unlikely in the
near term given the recency of the MTS-VimpelCom
scandal.
Vimplecom
In order for a CIS tower industry to reach scale,

were going to have to see some multi-country sale
and leasebacks.
The appetite of MNOs in the CIS to monetise
their towers
The MNOs in the CIS case be grouped into
three categories: State owned operators like
Kazakhtelecom; multi-national MNOs like Turkcell,
Vodafone and T-Mobile; and regional MNOs whose
largest opco is in Russia.
Other CIS markets

The CIS tower market remains immature. One
participant in the CIS roundtable at TowerXchange
said: Its great to see towercos going into this
space. While build to suit (BTS) tower businesses
offer more gradual growth, we need bigger tower
divestitures to make the CIS more interesting to
international investors.
To an international tower investor, many CIS
states are too small on their own to be a viable

investment, but if towers were consolidated,
the region would be of greater interest, making
first mover BTS towercos potentially interesting
platforms, given their founding base and local
know-how.
Looking simply at the scale of the CIS member
States, associated members and former member,
only the Ukraine, Kazakhstan and Uzbekistan are
likely to offer sufficient scale for international
The largest of the latter group, VimpelCom are

known to be considering selling tower assets across
region as part of a global tower monetisation
programme. TowerXchange has heard unconfirmed
reports that VimpelCom is in the early stages of a
CIS process, while their process to monetise the
MNOs Russian towers continues. BAML and TAP
Advisors are believed to be leading the VimpelCom
Russia and CIS processes. With Telenor exiting their
stake, there is added impetus for VimpelCom to
restructure their balance sheet.
Turkcell is listing their captive towerco, and has
made a binding offer to buyout TeliaSoneras stake
in joint venture Fintur, the Scandinavian operator
having openly discussed their intention to exit
Central Asia. Weve seen several opco sales recently
which have shaken loose the towers (O2 Czech
XX
Republic and more recently, Viva in the Dominican

Republic), so MNOs acquiring CIS opcos from their
peers have the option to raise capital by monetising
towers.
Fintur
Investors perspectives on CIS towers

Beyond macro economics, the usual questions
apply for investors interested in telecom towers in
the CIS: who are the MNOs, and how comfortable
are you doing business with them? What is their
anticipated investment in 4G (or in the case of the
Ukraine, 3G)? Given that you live and die by the
MSA, are you comfortable with rule of law in the
country concerned? And of course, how far are
you prepared to put your faith in the management
team? If youre investing in emerging market
towers there will always be more homework to be
done to understand the regulatory framework, asset
ownership and registration.
The biggest issue for us has been the dominance
of State owned incumbents, said one participant
in the CIS roundtable at the TowerXchange Meetup
Europe (April 2016). Even where private investors
own a significant stake, if former State owned
incumbents remain linked to the government there
is a risk that telecom is seen as a cash cow, which
can result in investments being put under extreme
taxation pressure.
Despite these concerns, investors increasingly see
towers as relatively safe class of assets, so if the
country concerned has developed a framework
which makes real estate a relatively safe harbor,
savvy investors will see beyond short term macro
economic challenges and may still be interested in

CIS towers.
The geopolitical and macro economic risks of
investing in Russia and the CIS have become more
visible recently. Currency devaluation has had
the most concrete impact on financing, bringing
local currency financing into focus as an option,
particularly given that contracts are likely to
be local currency based. But there isnt always

sufficient long term funding available from local
banks, and local banks may be less familiar and
comfortable with the towerco business model, and
thus can be inclined to take a more conservative
view of contracted revenues. Organisations like the
IFC, EBRD or Asia Development Bank can educate
local banks and improve access to local currency
financing where available
Potential tower divestitures

in Poland within 12-24 months
New 4G spectrum accelerates migration to shared infrastructure in Poland
Polish mobile subscriber market share
21.9%
2%
Orange Polska
Polkomtel
26.8%
26.7%
T-Mobile Polska
P4
Other
22.6%
Source: UKE 2014
A culture of infrastructure sharing has existed

in Poland since 2011 when T-Mobile and Orange
signed a 15 year deal to share radio access
networks. Fast forward to 2016, and the joint
venture (JV) appears to be in danger of collapse.
There is speculation that one or both of the
parties may want to exit the agreement and sell
some of their towers to a third party. Drawing
on insights gleaned from the Poland roundtable
at the TowerXchange Meetup Europe 2016,
moderated by Darragh Stokes of Hardiman
Telecommunications, lets explore the JV in
more detail and take a broader look at the
structure of Polands tower and mobile market.
Keywords: 4G, ARPU, Active Infrasharing, Emitel, Europe, Europe Research, Hardiman
Telecommunications, Infrastructure Sharing, LTE, Market Forecasts, Market Overview, NetWorkS!
T-Mobile, Network Rollout, Operator-Led JV, Orange, Orange Polska, Play, Plus, Poland, Research, Sale &
Leaseback, Small Cells, Tower Count, TowerXchange Research

< The current state of the Polish telecoms market
< About the joint venture between Orange and T-Mobile
< Opportunities for tower companies in Poland
< Infrastructure refurbishment required for for LTE
Poland is seen as one of the most investible

economies in CEE with real GDP growth expected to
be 3.6% YOY in 2015, forecast to rise to 3.9% in 2016,
giving GDP per capita of 11,262 in 2016, according
to BMI. So how investible is Polands tower market,
and what are the prospects for towercos to enter the
market?
Polish telecoms market
The Polish mobile market is attractive to towercos
because it is relatively evenly balanced between four
players T-Mobile, Orange Polska, Plus and Play,
although at the end of 2014 Polish regulator the UKE
had licensed seven MNOs and 20 MVNOs. In 2014,
the entire telecommunications market in Poland was
worth PLN 39.21 billion (around 9bn).
Over the past few years there has been a steady
decline in revenue from fixed line and mobile
telephony (According to Analysys Mason ARPU had
declined to PLN 32.3 / 7.70 by 2014), which has
been compensated for by a rapid increase in income
from Internet services. In 2014, the Polish Internet
market grew by more than 11.5% compared to
the previous year. According to GSMA Intelligence
(Q4 2015), SIM penetration is at 143% with mobile
broadband penetration at 61% in a 38.6mn
population country.
Orange and T-Mobile joint venture
In July 2011, Orange and T-Mobile signed a 15
year deal to share their radio access networks. A
JV infraco called NetWorkS! was set up by the two
XX
operators to cover the management, planning,

support, development and maintenance of their base
stations and infrastructure. Orange and T-Mobile
have continued to manage their core networks and
frequencies.
The 50/50 JV was set up with the intention of
enhancing network performance, cutting costs and
preparing the shared network for LTE. At present,
combined the two operators own about 13,000
towers and rooftops. There is a significant amount
of parallel infrastructure that is held in common
between them. Over the next few years, the MNOs
plan to eliminate some duplicate base stations and
re-build and refurbish a significant proportion of
their towers to use recently acquired 4G spectrum.
3G coverage is almost complete in Poland, while
Orange claim 87% 4G coverage and T-Mobile is
forecasting 92% 4G coverage by the end of Q2 2016.
There is speculation that T-Mobile

and Orange may be open to
selling some of their towers to an
independent tower company. They
have different values T-Mobile is
strongly focused on cutting costs,
while Orange is more focused on
expansion
3,000-5,000
61%
renovation for 4G
Broadband
towers need
87-92%
4G
penetration
9bn
telecom
market
SIM penetration
SLB
50-50 JV
between Orange
NetWorkS! and T-Mobile
operates
imminent???
13,000 towers
7.70
22,000 total ARPU
According to TeleGeography, recipients of new 4G

spectrum have two years to cover 1,149 regions
with no internet access or access at speeds of below
10Mbps. They must also cover 1,053 towns of up to
30,000 inhabitants within three years and 91 towns
of between 30,000 and 50,000 inhabitants within
four years.
Polish tower market
There are roughly 22,000 towers in Poland. Orange
owns roughly 7,000 towers, while T-Mobile and
Plus have 6,400 and 4,000 towers respectively.
There is currently one independent tower company
in the country Emitel which owns about 370
143%
Emitel has
370 towers
towers, most of which are broadcast facilities.

TowerXchange is tracking one further startup
towerco in the country, details of which have yet to
emerge into the public domain.
There is speculation that T-Mobile and Orange
may be open to selling some of their towers to an
independent tower company. They have different
values T-Mobile is strongly focused on cutting
costs, while Orange is more focused on expansion.
In addition, the JV hasnt operated as efficiently as
some might have hoped. This has led some analysts
to conclude that the JV is ill-fated, and that one or
both of the MNOs may be interested in divesting
towers in the future.
Preparing for LTE

In October 2015, the Polish telecom market regulator
UKE launched an auction for 19 frequencies in the
800 MHz and 2.6 GHz ranges. Frequency bands
offered by UKE had been freed after the switch to
digital TV from analogue services. Poland, as the rest
of Europe, intends to allocate these frequencies to
the development of fast mobile Internet.
The auction came at an opportune moment had
the government restricted Internet services to the
current frequencies, the operators would have
struggled to provide good quality services within two
years.
Since the frequencies were announced, a number
of broadcasters have expressed an interest in the
multiplex licenses (multiplex five and six). DDT
channels in Poland are still growing in terms of
ownership and ad revenues, and there has been
considerable interest in the licenses. Over twenty
channels have applied for the licenses so far, which
will be allocated shortly in a beauty contest.
It is estimated that between 3,000 and 5,000 towers
will need to be renovated to support the rollout of
4G. Ultimately, the success or failure of the rollout
will be determined by the willingness of the MNOs to
share resources.
Network sharing
The format that this sharing will take has yet to be
decided, but there are a number of avenues that the
MNOs can explore. They may choose to increase
the number of Points of Presence (POPs) on their

towers by installing 4G antennae across their existing
portfolio. Alternatively, they may opt to retro fit their
towers with multi band antennae.
Operators are also exploring the possibility of
using small cells, street furniture and fibre to
provide fast broadband to customers. Emitel has
already embarked on a programme to add fibre to
its towers, and other operators are likely to follow
suit. Converting street furniture presents a bigger
challenge and it is not always immediately clear
who actually owns the assets. Despite this, the MNOs
have already approached some municipalities in the
country to set up pilots.
Conclusion
The number of Fibre to the Home (FTTH) network
connections is expected to grow rapidly in Poland
over the next few years. Over five million connections
are expected to be added over the next four years. To
give a sense of the increase, Poland only had 77,000
FTTH lines at the end of 2013. Given these facts, it is
hardly surprising that Polish MNOs are focused so
strongly on delivering 4G services. The rollout of a
nationwide LTE network over the next five years as
mandated by law will create many opportunities for
tower companies and equipment providers.
Then there is the Orange and T-Mobile JV. If the JV
dissolves, it is likely that one or both operators may
wish to sell some of its towers.
Participate in the
TowerXchange
community
Tower
manufacture
& installation
Investors &
advisers
Tower
Independent
towercos
Xchange
Decision
makers
at
operators
Regulators
& policy
makers
Equipment
& managed
services
The prospects for increased competition in the tower

market in Poland are good, so watch this space
XX
Romanian MNOs retain

control over infrastructure
Opportunities for tower companies appear to be limited
The Romanian telecom and broadband market is one of
the most advanced in Europe, although SIM penetration
of 141% (GSMA Intelligence, Q4 2015) among a population
of 19.4mn is somewhat inflated by multi-SIMing. In recent
years network investment has meant that 3G is available
widely, while LTE has a growing footprint and is expected
to be available countrywide in 2016. Market competition
has also rendered services increasingly affordable for
consumers. It is a positive picture for MNOs and consumers,
but not necessarily tower companies, who have struggled
historically to gain entry to the market. Drawing on insights
gleaned from the Romania roundtable at the TowerXchange
Meetup Europe 2016, lets look at why tower companies
have been locked out of the country, and whether there is
any chance that they may get admitted in the near future.
Keywords: 4G, ANCOM, ARPU, Deutsche Telekom, Europe, Europe Research, Infrastructure Sharing,
LTE, Lycamobile, Market Overview, Netgrid Telecom, Operator-Led JV, Orange, Ovidiu, RCS&RDS,
Regulation, Research, Romania, Telekom Romania, TowerXchange Research, Vodafone

< The evolution of Orange and Vodafones joint venture Netgrid
< How Romania is embracing 4G
< The current state of the Romanian telecoms market
< Why MNOs in Romania appear to have no plans to divest towers
Romanian telecoms market

The Romanian mobile telephony market includes
four operators Orange, Vodafone, Telekom
Romania (owned by Deutsche Telekom) and
RCS&RDS. At the end of 2014, Orange Romania
had 10.5mn mobile clients, while Vodafone
Romania had 8.6mn users, followed by Telekom
Romania with 5.9mn mobile subscribers.
RCS&RDS does not record data on its clients, but
according to an estimate published in the local
business daily Ziarul Financiar, the company had
just over a million mobile customers in 2014.
Local sources suggest RCS&RDS may IPO in H2
2016.
Although Romania is the tenth poorest country
in Europe, it has taken great strides to improve
its digital infrastructure. In January 2014, the
country had 3.79mn fixed broadband lines,
representing the 9th highest number of lines
amongst European Union (EU) countries. During
the same year, ultra fast broadband (at least
100 Mbps) penetration reached 4.%, well above
the EU average of 1.6%. Launched in 2015,
Lycamobile was the first MVNO in Romania.
Romanias investment in broadband is expected
to spearhead more growth in the telecoms sector.
Driven by the introduction of 4G, the market is
predicted to grow at a CAGR of 2.7% between
now and 2018, reaching RON 16.4bn (~3.66bn)
by 2018. The top growth segments are expected
to be fixed and mobile data, boosted by multiplay
service uptake.
In 2013, Orange Romania and Vodafone

Romania set up a joint venture called Ovidiu
Telecommunications to manage the two companies
shared infrastructure. The deal, which covers active
and passive equipment, was expected to generate
savings of about 10mn over 16 years. In April
2014, the two companies announced that they had
rebranded the company as Netgrid Telecom.
Orange Romania launched LTE in 2012 and claimed
to have 70% population coverage in Q4 2015. At that
time Telekoms coverage was around 35%. Orange
has since signed a wholesale network sharing
agreement with Telekom, giving the latter national
roaming on Oranges 4G network.
Romanias Infrastructure Law and National NGN
infrastructure plan
Passed in 2012 by ANCOM, the National Authority
for Management and Regulation in Communications
of Romania, the Infrastructure Law (no. 154/2012)
defines the regulators stance on infrastructure
sharing (see http://www.intt.tn/upload/files/
Roumanie.pdf). The Infrastructure Law also:
< States that if documentation is correctly
submitted and access conditions met, sites can be
built on public property within 30 days of request
for access being received
< Provides a standard contract for access on private
property
The Infrastructure Law also appears to more or less
mandate infrastructure sharing of sites on public
property, while setting the minimum structural

capacity of sites.
In 2015 Romanias Ministry for Information Society
approved a National Plan for Next Generation
Network Infrastructure Development to promote the
widespread availability of fast broadband Internet.
Promotion of access to passive infrastructure and
improving transparency and coordination of civil
works are two of five pillars of the plan.
at present, there do not appear to be

any prospects for tower companies
to enter the Romanian market.
There is currently no market
rationale for the MNOs to divest
their towers to a third party
Romanian tower market

Initiated in 2014, ANCOM is finalising a national
inventory of electronic communications networks,
in part to ensure a common database is used for
network sharing, prior to the publication of which
it is not possible at present to ascertain how many
towers are present in Romania. All of Romanias
towers are currently owned by the MNOs, and there
are no independent tower companies operating in
the country.
The prospects for independent tower companies
appear to be poor. While Romania is one of the
poorest countries in Europe, its citizens are
extremely enthusiastic about technology. Network
coverage is excellent both for voice and Internet, and
the range of handsets and smartphones available
is extensive. Romania is the most competitive and
advanced telecoms market in Eastern Europe. With
Average Revenue Per User (ARPU) of 20, operators
are under no pressure to divest any of their towers.
They can comfortably re-invest a portion of their
earnings in maintaining and improving their
infrastructure. It also makes a difference that the
Network sharing agreements
majority of MNOs operating in the country are

foreign-owned multinational businesses with deep
pockets.
Conclusion
The Romanian mobile telecoms market is one of

the most dynamic in Eastern Europe. Over the
coming years, the market is expected to consolidate,
with operators providing a number of integrated
services covering data, broadband, Internet, TV and
video. Competition is heating up in the market and
operators are actively looking for new commercial
opportunities for example, RCS&RDS recently
announced plans to enter the energy market and
become a power supplier.
However, at present, there do not appear to be
any prospects for tower companies to enter the
Romanian market. There is currently no market
rationale for the MNOs to divest their towers to a
third party. Unless something dramatic happens in
the sector, tower companies are better off seeking
opportunities in other European markets
XX
Special feature:
Small cells and DAS

Diversification of the towerco business model into areas including
small cells and DAS was high on the agenda at the TowerXchange
Meetup Europe, with roundtable discussions on the topic bursting at
the seams. Digest the perspectives of WIG, Arqiva, Cellnex and INWIT
who joined our panel on the subject the event.
Small Cell Forum Chair, Alan Law shares trends in small cell
deployment and discusses the implications behind the forums
projection that by 2020, only 20% of small cells will be fully deployed
and managed by MNOs.
Nick Johnson, Co-Founder and CTO of ip.access and Chairman of
the multi-operator working group at the Small Cell Forum, discusses
opportunities for towercos and other stakeholders to build small cell
networks for hire.
Finally, Kaiser Associates evaluate the prospects for small cells in
three example emerging markets: Indonesia, Chile and Nigeria.
Please read:
330 Towerco ambitions in DAS, small cells and public Wi-Fi
333 The growth and rollout of the global small cell market and the
role for towercos in multi-operator neutral-host deployments
339 Small cell networks for hire
344 The viability of small cell in emerging markets
Image courtesy of Cellnex
Towerco ambitions in DAS,

small cells and public Wi-Fi
Small Cell Forum moderates debate between Cellnex, INWIT, WIG, ip.access and
Arqiva at the TowerXchange Meetup Europe

TowerXchange
Two of the busiest roundtables at the inaugural TowerXchange

Meetup Europe focussed on small cells and DAS, reflective
of the tower industrys growing appetite to diversify their
business models beyond macro structures. Rounding up the
second day of the Meetup, Rethink Technology Researchs
Caroline Gabriel represented the Small Cell Forum and
moderated a discussion between towercos Cellnex, INWIT,
Arqiva and WIG, plus vendors ip.access, in an open panel
discussion examining the challenges and opportunities
presented by small cells, DAS and heterogeneous networks.
Keywords: 4G, Active Equipment, Active Infrasharing, Arqiva, Business Case, Capacity Enhancements,
Cellnex, Core Network, Backhaul & FTTT, DAS, Densification, Europe, Europe Insights, IBS,
Infrastructure Sharing, Installation, INWIT, Leasing & Permitting, LTE, Market Forecasts, Network
Rollout, Passive Equipment, Rethink Technology Research, Small Cell Forum, Small Cells, Towercos,

< What opportunities Europes towercos see in the deployment of DAS and small cells
< Advantages that an independent infrastructure provider can bring to both venues and operators
in the deployment of venue DAS
< What some of the key challenges are in the deployment of outdoor small cell networks
< Opportunities for infracos in public Wi-Fi
What opportunities do towercos see for

themselves in small cells and DAS?
INWIT, formed following a carve out from
Telecom Italia and subsequent IPO, has a network
of 11,500 towers. CEO Oscar Cicchetti also sees
small cells presenting an opportunity. MNOs are
increasingly willing to share infrastructure amid
the financial pressure created by the high levels
of capital needed to be deployed in spectrum
auctions and the rollout of new equipment for
LTE. Passive infrastructure is only the tip of the
iceberg in terms of what a towerco can be offering
to an operator. Small cells should be offered as an
added service; as we move through the rollout of
4G and ultimately 5G, there will be an increased
requirement for densification and MNOs are
already interested in sharing this micro-coverage.
INWIT are closely following the technology
roadmaps of LTE microcell multi-operator vendors.
Alex Mestre from Cellnex came with the message
to the audience that the advent of small cells will
not kill macro cells. In auctions, MNOs are paying
billions of dollars for 700 and 800MHz frequencies
which will never be used for small cells. Urban,
as well as rural areas will still need macro cells
operating on lower frequencies. It is important that
the community convey this message to analysts
- small cells and macrocells are two different
systems that sit hand in hand and there is a role
for both in the future of telecoms infrastructure.
Both are required to achieve optimum coverage
and capacity. In Italy, Cellnex have deployed DAS
networks inside tunnels, along motorways and
XX
on provincial state and regional roads through

their subsidiary, TowerCo. In Spain Cellnex have
secured concessions on street architecture in
Barcelona and are undertaking a project to deploy
small cells on the infrastructure for an operator
whilst also installing systems in football stadia and
other high traffic venues.
Scott Coates from Wireless Infrastructure Group
(WIG) referenced how they had entered the DAS
market out of necessity, given the absence of
quality independent infrastructure players active
in the sector in the UK and Europe. In the last 18
months WIG have installed 20 new DAS systems
in the UK. Coates commented that whilst there
are challenges having to work with active as well
as passive equipment, he was convinced that it
was an opportunity for infrastructure companies
such as themselves. When it came to outdoor
small cells, he felt that whilst it was clear there
is a potential role for wholesale infrastructure
providers, it was not yet clear whether such
solutions represented an investible platform.
ip.access co-founder Nick Johnson commented
that there are currently more small cells than
macrocells deployed although, added Cellnex Alex
Mestre, the demand for small cells is not equal
across the globe; where there is a higher scarcity
of frequency, there is a higher requirement for
small cells. As the interaction of small cells with
the macronetwork increases, there is more of a
role created for the towerco. Towercos are ideally
positioned to sit as an honest broker between the
operator and the building owner.
What are the advantages offered by an

independent infrastructure provider in venueDAS?
that an operator would face. Working through an

infraco in such a way can be a significant advantage
to an operator.
Arqivas Nicolas Ott commented that he felt

towercos were the preferred choice for landlords
in the deployment of DAS. They served as a one
stop shop, acting as a single contact person for
the landlord and could achieve cost savings by
aggregating multiple MNOs within a single system.
He also felt that as long term investors in the
infrastructure, towercos were ideally positioned to
make investments to improve the systems.
What are some of the challenges faced in the

deployment of small cells?
Scott Coates added to this, pointing out the

benefits also brought to operators through
working with infracos. Often the decision making
process of venues for new potential DAS systems
is very slow. Venues need to be taken through the
value proposition early on, explaining how robust
coverage is an essential service they should be
delivering to their patrons, rather than viewing
it as a money making exercise to install Wi-Fi
systems.
Securing the right location for small cells is key,

commented Oscar Cicchetti. Arqiva called attention
to the challenges that are presented around
permitting, commenting that within the UK you
could find different local authorities having very
different processes - the cost and time required to
install small cells in different London boroughs,
for example, can vary widely. A second major
challenge is in relation to backhaul - microwave
wont be sufficient to support requirements and
rolling fibre out to each individual small cell is
costly. There needs to be a balanced economic
model thats a win-win for all parties, with small
cells securing easy access to the backhaul that they
require.
Alex Mestre added to this that venues can often

feel like it is the operators duty to install a DAS
system in a venue when coverage is not up to
scratch. MNOs dont want to pay for installations,
whereas venues think the MNO should be
paying as they arent delivering the right level of
coverage. As an independent third party, infracos
can enter this discussion with venues, presenting
an offering to help them improve coverage
without the added complexities and pushback
Whilst the jury is still out on the strength of the

business case for towercos in the deployment of
small cells, some are already active in the field.
In line with this, we asked panellists who had
experience to share some of their thoughts on
where the biggest challenges existed.
Is there a role for towercos in public Wi-Fi?

Discussion moved on from small cells and DAS
to look at public Wi-Fi. Panellists felt that the
installation of Wi-Fi was simple and quick and
that there was a key role for towercos to play.

Arqiva have installed the public Wi-Fi system in
Heathrow while in Barcelona, Cellnex have put
public Wi-Fi on almost 10,000 hotspots located on
traffic lights.
As well as Wi-Fi being used to provide services in
public places such as hotels and shopping malls,
it is also a crucial component for data offload
when congestion is high. In the U.S. this is much
more advanced, with MNOs having taken a very
pragmatic approach with the lack of frequencies
having necessitated offload. In Europe, where
licensed frequencies are more able to handle
traffic, Wi-Fi has been seen as a threat by some
MNOs. Oscar Cicchetti added to discussions that
from a technical point of view Wi-Fi may just
become one unlicensed frequency that is managed
by operators.
In a world where we are short of spectrum
however, all panellists agreed that the interaction
between macro and micro-networks was set to
increase and that there will be a key role for
a full spectrum of solutions to meet growing
coverage requirements. At the inception of the
tower industry and of TowerXchange, back in
2012, focus amongst actors centred very heavily
on macro structures and pure passive equipment.
One thing that became increasingly clear during
the Meetup was that this paradigm is changing business models are diversifying, networks are
becoming heterogeneous, and boundaries are
blurring as we look to find a way to deliver global
telecoms infrastructure most cost effectively
Meetup
Americas 2016
Meetup Africa
2016
16-17 June,
Boca Raton
19-20 October,
Johannesburg
Meetup Asia
2016
Meetup
Europe 2017
13-14 December,
Singapore
4-5 April,
London
XX
The growth and rollout of the global

small cell market and the role for towercos in
multi-operator neutral-host deployments
An interview with Small Cell Forum Chair, Alan Law
Alan Law, Chair, Small Cell Forum
An increasing number of towercos are viewing the small cell market as

a key area for growth, especially in developed markets where operator
focus has shifted to urban infill and densification. With 2015 seeing small
cell equipment sales pass the US$1bn mark for the first time, technological
advances making multi-operator neutral host small cells readily available
and market forecasts that by 2020 over 80% of small cell deployments will
involve third parties TowerXchange spoke to Alan Law, Chair of the Small
Cell Forum to better understand the role that towercos could play in this
rapidly expanding industry.
Keywords: Active Infrasharing, Americas, Arqiva, Asia, Business Case, Business Model, Capacity
Enhancements, Capex, Cisco, Co-locations, CommScope, Crown Castle, DAS, Densification, Europe,
Infrastructure Sharing, Installation, JC Decaux, Leasing & Permitting, Market Forecasts, MNOs,
Network Rollout, Opex Reduction, Opex Sharing, Outdoor Equipment, Reliance Jio, ROI, Shelters, Small
Cell Forum, Small Cells, Towercos, Urban vs Rural

< Who the Small Cell Forum are and how they are working to accelerate small cell deployment
< The use cases of small cells and why the definition with DAS is blurring
< The current size and future growth projections for global small cell markets
< Market drivers for multi-operator small cells and the implications for towercos
< How barriers to small cell deployment such as access to site, power and transmission are being
addressed
TowerXchange: Please can you give us a

background to Small Cell Forum
Alan Law, Chair, Small Cell Forum: The Small Cell
Forum has been around since 2007. In its initial
incarnation it was known as the Femto Forum
and at that time it was primarily focused on the
residential market and creating an industry vehicle
to drive chipset availability for this whole new
market potential. The starting question for the
industry was If I can buy a WiFi access point for a
few dollars, why cant I buy a cellular access point
for the same sort of price and what is it that needs
to be done in order to facilitate that?
We have come a long way since then. We started
focused solely on residential and then as a body
we have expanded to cover use cases in enterprise,
urban and rural and remote locations. With this
broadening of scope, the femto name wasnt so
appropriate any more femto is just one category
which was suited to residential. So we needed a
broader name for the forum and it became known
as the Small Cell Forum.
Our specified goal is solving the HetNet puzzle
which is really about driving the scale of adoption
of small cell technology within the industry and the
ecosystem. A lot of what we do is about addressing
gaps in understanding and standards that exist that
can be barriers to deployment. As we address each
of these barriers the deployment path becomes
smoother.
We have membership covering everything from
chipset suppliers, component suppliers, OEMs that

bring access points together, system integrators,
test providers and operators the whole ecosystem
is represented.
TowerXchange: We hear lots of definitions
surrounding small cells and DAS with many of
these boundaries between systems blurring,
how does the Small Cell Forum define the small
cell market?
Alan Law, Chair, Small Cell Forum: Small cell
is an umbrella term for operator controlled low
powered radio access nodes including those that
operate in licensed spectrum and unlicensed
carrier grade WiFi bands. Small cells typically
have a range from 10 metres to several hundred
metres and the types of small cells include
femtocells, picocells and microcells (those
groupings broadly increasing in size). Whilst this
is the latest definition that we have, the definition
is now certainly blurring with the adoption of new
technologies and capabilities such as virtualisation.
As you start to virtualise a small cell, the physical
network equipment becomes quite similar to DAS
(distributed antenna system) in the sense that it is
an amplifier and a radiating element that you then
seed with cellular base pan processing which is
hosted somewhere else in your network through
software. When you virtualise in that way you can
conceptually think about it as a tightly integrated
DAS and base station infrastructure- its similar in
an architectural sense.
In the sense of the environments that we look at,
we do have these categorisations of Residential and

SoHo (small office, home office), Enterprise, Urban
and Rural & Remote. The whole idea is that forum
covers the broad spectrum of deployment scenarios
which have been organised on an environmental
basis.
were doing has a strong customer focus whilst also

being underpinned with the realities of what can
actually be delivered.
TowerXchange: Can you tell us a little more

about the Small Cell Forums key areas of work?
Alan Law, Chair, Small Cell Forum: Throughout

the year we have various releases. Whilst we have
no fixed schedule, we would expect to have at
least one release per year. 2016 is unusual in that
we are likely to have three releases. This is a bit
unprecedented in terms of output but is a great
testament to the activity in the forum and how the
work is being distributed amongst the membership.
It is also indicative of the fact that so much is
happening from a technological standpoint.
Alan Law, Chair, Small Cell Forum: The Small Cell

Forum has effectively got six prongs to its work
program which look at new technologies that
we think will be quite transformational. In the
enterprise and smart enterprise space we have
a workstream looking at virtualisation, another
looking at SONs (self organising networks) and
HetNet and increasingly we add in what we
call automation on to that. The difference with
automation really being the fact that it covers
everything from the workflow management and the
site instructions to the technology, configuration,
set-up, maintenance and optimisation piece. Were
also working on license exempt technologies (in the
sense of understanding what that means for the
small cell densification story) as well as working on
multi-operator, neutral host systems and 5G, M2M
and IoT.
Weve created a model where we have champions
for each of these activities where we assign both
an operator lead and a vendor lead. This gives us a
balance of what an operator wants to see and what
a vendor thinks needs to happen and so we end up
with a balanced output. It makes sure anything that
TowerXchange: How is the work communicated

to the community?
We presented the smart enterprise release at the

Mobile World Congress, we plan to release our next
piece on HetNet foundations at our London event,
and then well have another release later in the year
which will include lots of the work were doing on
virtualisation. It is an incredibly busy year but it is
great content that is coming out which we think will
help the market to continue to grow significantly
over the forthcoming period.
TowerXchange: When you speak about the size
of the small cell industry and the sort of growth
that is expected what kind of numbers are we
looking at?
Alan Law, Chair, Small Cell Forum: An important
milestone for the industry was back in November
XX
Small cell deployments
Market status report | February 2016
13.3 million small cells

shipped to date
10.0m
14.0m
8.0m
Cumulative shipments
12.0m
6.0m
4.0m
2.0m
0
March
2014
September December
2014
2014
March
2015
September December
2015
2015
10.0m
8.0m
6.0m
4.0m
2.0m
0
Residential/SOHO
IN 2015,
URBAN
SHIPMENTS
GREW
120,000
NON-RESIDENTIAL SHIPMENTS
CONSTITUTED 38% OF TOTAL
SMALL CELLS IN Q4
280%
NON-RESIDENTIAL SMALL
CELLS COMPRISED 66% OF
SMALL CELL REVENUE
IN 2015
IN 2015,
ENTERPRISE
SHIPMENTS
100,000
80,000
60,000
40,000
20,000
DOUBLED
800,000
Urban
30,000
700,000
Another important milestone during the course

of the year was that we crossed US$1bn of
small cell equipment revenue, that was just for
equipment and so doesnt include any of the extra
market opportunity around installation and site
acquisition. But in the sense of where the numbers
are going in the shorter term were looking at 270%
growth for enterprise during the course 2016,
another 150% growth in the urban sector and if we
Small cell shipments BY USE CASE
12.0m
September
2013
We released our latest small cell deployment

numbers for Mobile World Congress [all these
release documents are free to download on the
site www.scf.io]. There have been 13.3mn small
cells shipped to date making it a substantive
market in terms of where it stands. In the sense
of understanding how the market has developed
to get to that, during course of 2015, enterprise
shipments doubled, urban shipments grew 280%,
rural and remote grew 70% and residential
(the most established market) grew 20% - there
was significant growth in each sector which is
encouraging.
Small cell market now worth more

than $1billion annually
14.0m
last year where we released what we called our

Crossing the Chasm report, the messaging behind
the report was were on the hockey stick of growth
now. There have been, to date, lots of projections
which get changed due to all kinds of circumstances
-theres always the fear that the growth will start
next year, with that next year continuously
being pushed out. Our Crossing the Chasm report
states that we think we are already on the growth
curve, we have put the stake in the ground and we
have the confidence in the statistics to believe that.
Solving the HetNet puzzle
600,000
500,000
400,000
300,000
200,000
25,000
20,000
15,000
10,000
5,000
100,000
0
Enterprise
September
2013
March
2014
September
2014
March
2015
September
2015
December
2015
Source: Small Cell Forum
2016 forecast the future is bright
REGIONAL analysis
Europe
North America
APAC
December
2014
Rural & Remote
North America
APAC
Europe
Small cell shipment OUTLOOK
Rural & Remote
March
2014
September
2014
December
2014
September
2015
December
2015
2016 forecast the future is bright
REGIONAL analysis
Europe
North America
APAC
MEA
China
Latin
America
North America
APAC
Europe
China
MEA
Latin
America
Small cell shipment OUTLOOK

10.0m
ENTERPRISE
SMALL CELL
SHIPMENTS
WILL GROW
BY 270%
THIS YEAR
9.0m
Small cell shipments
All small cells
March
2015
Non-residential
small cells
8.0m
7.0m
6.0m
5.0m
4.0m
3.0m
2.0m
1.0m
0
all
tation,
emote: Sm
ry, transpor
Rural & R
ote indust
m
re
s,
ge
rural villa
ncy
an urban
or emerge
all cells in
utdoor sm
Urban: O
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: Indoor sm
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te
En
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le
ses
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es
carrier an
nits in hom
U
:
O
H
al/SO
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es
fic
small of
and very
2013
Residential/
SOHO
2014
2015
2016
Enterprise
2017
2018
Urban
2019
2020
Rural
& Remote
Small cell revenue FORECAST
Note: Small cell definition

now includes low-power
RRH units
Annual small cell revenue
S
FINITION
NEW DE Cell Forum
for Small egments:
ed in
market s
cells deploy
URBAN
SMALL CELL
SHIPMENTS
WILL GROW BY
150% THIS YEAR
$7.0bn
$6.0bn
$5.0bn
SMALL CELL REVENUE

FORECAST TO REACH
$6.7 BILLION BY 2020
$4.0bn
$3.0bn
$2.0bn
$1.0bn
2016 Mobile Experts LLC.

Forecast/shipment data provided by Mobile Experts
www.mobile-experts.net
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
cast eye further ahead were anticipating that small

cell equipment revenue will be around US$6.7bn
by 2020 growing from the billion of last year (see
figure one).
Residential
Non-residential
Source: Small Cell Forum
players being acquired by big companies such as

CommScope and Cisco, and the Nokia-Alcatel Lucent
merger. There is a degree of consolidation but there
is still a lot of competition and we continue to see
new entrants as well entering the market.
TowerXchange: As the market matures, are we

seeing consolidation of the equipment suppliers
whose equipment sales are accounting for the
numbers in these statistics?
TowerXchange: Is the growth that were seeing

across the sectors worldwide or do you see
bigger growth in some regions that others?
Alan Law, Chair, Small Cell Forum: I would say there

is still a broad market, there has been a degree of
market consolidation, but that is more due to small
Alan Law, Chair, Small Cell Forum: Were seeing the

split across different regions being quite varied, the
largest regions being Europe, North America and
APAC. However, there is significant growth globally.

For example, the smallest region at the moment is
LatAm but if we look over the course of the last year
it grew 500%; even though its a late blossomer its
working hard to catch up! Similarly, when you look
at the numbers for China, they are currently very
modest, but there are certain deals in place that if
we look into 2016, China will most probably swamp
everybody by the end of the year.
There is a need for small cell technology
internationally and there are tremendous
opportunities. A good reference is the presentation
Reliance Jio (one of the Indian operators) gave at
our Dallas event. In terms of deployment over the
next two years they are looking to create 100,000
macro sites, 300,000 small cells and 500,000 WiFi
Were anticipating that small

cell equipment revenue will
be around US$6.7bn by 2020
growing from the billion of
last year
September
2013
XX
TowerXchange: With such big numbers being

forecasted for deployment how do you envisage
that deployment will be rolled out? Who will be
the key stakeholders and what business models
make most sense?
Alan Law, Chair, Small Cell Forum: We dont have
all the answers right now but let me give you some
statistics. Our Crossing the Chasm report contains
research from Rethink Research who estimate
that by 2020 only 20% of small cells will be fully
deployed and managed by MNOs; what that means
is that for 80% of these future small cells there will
be some other party involved in the deployment and
management of those assets. Theres a good chance
that towercos that are building this infrastructure
can have a role in that. A significant new potential
opportunity is up for grabs and its a massive
growth area.
In release six theres a document which might be
interesting to the TowerXchange community called
Market drivers for multi-operator small cells.
Within the report it takes a look what the market
might look like, both with and without multioperator neutral host small cells. It estimates that
for the enterprise vertical the multi operator market
is 91% bigger than without and in public spaces
it is double the market with multi-operator than
without. Hence why in the forum we have theme
looking at multi operator and neutral hosts as we
By 2020 only 20% of small cells will be fully deployed and managed by
MNOs; what that means is that for 80% of these future small cells there
will be some other party involved in the deployment and management of
those assets. Theres a good chance that towercos that are building this
infrastructure can have a role in that
believe it will be one of the key requirements of the

future.
TowerXchange Has there been reluctance in
the past to look at multi-operator, neutral host
solutions and if so, why?
Alan Law, Chair, Small Cell Forum: To some extent,
yes, but technology has clearly got better with time
and it continues to improve which makes it easier
to do multi-operator and do it better. There is also
an appreciation of changing market conditions, in
the sense that for many operators, coverage is quite
similar and no longer a differentiator. Operators
always want to differentiate what they can do
in their market to gain customers and customer
loyalty. They can differentiate either through upper
layer services or the radio capabilities that they
have in their network. One of the newer changes
which is having an impact is with concepts such
access points; this is nearly a million assets being

deployed in two years which is quite incredible in
the sense of the numbers.
as mobile edge compute and virtualisation; these

enable operators to differentiate even over common
sets of infrastructure. That makes it easy to support
some of the business cases for shared infrastructure
going forward.
In our questionnaire that went out we asked MNOs
what they considered to be the biggest concerns
surrounding multi-operator deployment. The three
highest scoring concerns were upfront capex and
return on investment; monetisation; and enabling
competition - over 50% of respondents gave those as
their top three. Our work programs seek to address
these concerns; looking at the right technological
deployment and solutions that will help address
the capex and ROI issue; developing new service
enablement supporting the monetisation piece; and
working on changes in virtualisation that will help
to ensure that competition remains between the
operators.
People are not debating whether to

use small cell technology, they are
asking how to deploy it and how to
do it at scale weve moved away
from the why and on to the how
TowerXchange: When speaking of challenges,

what barriers exist around the physical
deployment of small cells?
Alan Law, Chair, Small Cell Forum: There are always

the classic challenges around gaining access to a
site, to power, and to transmission to support any
small cell deployment. The good news is that there
are a number of companies that own worldwide
international portfolios of street infrastructure
assets and advertising hoardings (such as JC
Decaux) who are starting to make sure that their
new street furniture is equipped with space to
allow small cells. You see special tram stops in the
Netherlands that have been created to host small
cell infrastructure, there are smart advertising
hoardings being developed where small cells can
sit at the back and we have seen solutions on street
lighting in China.
This type of infrastructure is a good testament
to maturity of market; people are not debating

whether to use small cell technology, they are
asking how to deploy it and how to do it at scale
weve moved away from the why and on to
the how. This again was an interesting part of
the Reliance Jio presentation back in Dallas. With
all of those hundreds of thousands of assets they
are working to deploy, the only way that it can be
achieved is through automation on every level. The
company has worked very hard to automate every
process which then allows them to scale to the
thousands of deployments they need to make every
month in order to hit targets.
TowerXchange: When we move away from the
urban side and look at the enterprise side,
where have you seen the biggest uptake and how
important are multi-operator small cells?
Alan Law, Chair, Small Cell Forum: In public spaces
you dont have the degree of control over which
operators are in use in a particular area and so
there will be a strong aspiration to have multioperator deployments.
When it comes to enterprises, a lot of the drive for
technology is to allow greater efficiencies to be
delivered and to have a greater level of flexibility.
The beauty of small cells is that it allows great
fluidity in your business, with opportunities to
ramp up and scale down very quickly in order
to address demands that are being placed on the
company. Having solutions that are also very quick
and rapid to deploy (which is what you get out of
small cell technology) also helps that agility. If I
need to send 50 people to a site, I can equip them

with the small cell infrastructure they need to go
with them. Installing it means they can continue to
work in the way that they naturally would in the
office in that same agile way; similarly when they
move on, its very easy to remove again.
There is tremendous flexibility that is coming out
of these new capabilities and technologies and
its happening not only in the sense of workplace
improvements but also in the way that things such
as retail are transforming. There is a real change
in consumer behaviour if you go into a shop and
they dont have the item in that youre looking
for, you can go online and order it there and then.
People often think of the increasing demands on
mobile infrastructure in terms of increasing social
media levels, but this is also an important part of
the equation adapting to consumer and workplace
behaviour with the view of selling more goods or
driving better working efficiencies.
TowerXchange: How has the Small Cell Forum
engaged with the towerco market in the past and
how to you foresee this changing?
Alan Law, Chair, Small Cell Forum: Weve had
variable degrees of interaction with towercos in the
past and count some of the larger companies (such
as Arqiva and Crown Castle amongst our members).
As we advance into a new world where there will be
a bigger focus on neutrally deployed assets, I think
there is even more potential for towercos and we
hope to work closely with the market to improve
synergies
XX
Small cell networks for hire

Tower companies poised to become big players in the emerging multi
operator small cells market
Nick Johnson, Co-founder and CTO, ip.access
Businesses and properties across a wide

range of markets are crying out for multioperator small cells. Tower companies are
perfectly placed to provide a small cell
network to multiple operators because
they have relationships with MNOs, private
and State landlords, and understand how
to operate and commercialise networks. In
this interview, Nick Johnson, Co-Founder
and CTO of ip.access and Chairman of
the multi-operator working group at the
Small Cell Forum, describes how the small
cell ecosystem is moving toward a multi
operator model, and the opportunities
therein for independent infrastructure
specialists.
Keywords: Active Equipment, Active Infrasharing, Europe, Europe Insights, IBS, Infrastructure
Sharing, ip.access, LTE, MOCN, RF Design, Small Cells, Small Cell Forum, Whos Who

< The key markets for multi-operator small cells, such as hotels and property developers
< SUMO as a white label platform for multi-operator small cell deployments
< How tower companies can get involved in monetising small cell deployments
< The future of multi-operator small cells
TowerXchange: Please introduce yourself and

ip.access to our readers where do you fit in the
telecom infrastructure ecosystem?
Nick Johnson, Co-founder and CTO, ip.access: Im
one of the founders of ip.access. The company
started right at the end of 1999, just when the
telecoms winter was about to set in! We started
life as a spin out of TTPCom, a company which
provided systems designs for GSM handsets. I saw
how we could use the same handset technology
and apply it to develop small base stations.
Since then, the company has grown fairly steadily,
and now have about 160 people working for the
company. In terms of geographical presence, we
have three separate sites a development site in
Pune, India; our headquarters in Cambridge, UK;
and a support lab in the North West of America
where we provide support to T-Mobile and AT&T.
When we started out we had a vague intent to focus
on all kinds of access networks. But in the end we
decided to focus on licensed spectrum and serving
MNOs; weve done GSM, 3G and LTE.
Over the last couple of years, weve noticed that
things have changed and mobile operators have
started to struggle with their own sense of identity.
Many MNOs are not sure whether they are service
providers, access networks, big pipes or something
smarter. They appear to be searching for new
versions of themselves. We think this is one of the
reasons why multiple operators have chosen to
share networks between one another.
We still see MNOs as our principal customers,

but we think that the multi operator opportunity
brings with it a whole range of customers that not
only we could serve, but also that the operator
could serve as well.
The fact is that mobile operators are still
struggling. They are very good at dealing with
consumer customers they have a clear picture
of what customers like and what they buy and
have a good idea of what the large corporates
need. But they struggle with the guys in between,
and thats where we think they are missing
valuable business. Together with the Small Cell
Forum, weve identified a number of vertical
markets that need multi-operator small cells to
succeed. The most vocal players have been hotel
chains and property developers.
Let me give you an example. Camden Housing
Trust in New Jersey, USA, recently stood up at a
meeting and told us that we were missing a trick.
They told us that people will pay more for high
quality cellular coverage in an apartment than
they will for a granite kitchen. The owner knows
that he can install a granite kitchen himself,
but if the mobile coverage is inadequate he
chose to stay at a different hotel. Hotel chains are

a great example of a segment who is willing to pay
for the infrastructure, but just dont have any way
to deploy multi-operator small cells today.
They told us that people will pay

more for high quality cellular
coverage in an apartment than
they will for a granite kitchen
At the same time, weve seen a change in

spectrum licensing emerge in the US and
Europe with Citizens Broadband and Licensed
Shared Access. Alongside this, weve seen a
corresponding shift in the small cell market from
single operator applications to multi-operator
applications.
may be stuck in that situation indefinitely. In the

homebuyers hierarchy of needs, cellular coverage
has been neglected. Of course, a property company
needs to get good cellular coverage from all
operators, not just one. So they are crying out for
operators to come together on this.
The hotel industry has the same challenge. The
degree to which they get repeat business is partly
down to the level of cellular coverage they provide
if theres no coverage, people wont stay at that
hotel again. We know of one major chain that
had this problem and tried to get the operators
to respond to it. Unfortunately, the operators
didnt see it as their problem; the end user wasnt
complaining to the network operator, they simply
In order to address this gap in the market, ip.access

is promoting a feature in its roadmap called Super
Multi-Operator (SUMO). Were taking the 3GPP
feature known as Multi Operator Core Network
(MOCN) and making it commercially workable,
so that multiple MNOs can share the capacity of
the small cell in a controlled way, according to a
predefined sharing policy. It also allows the small
cell operator to measure and manage resources
used by each MNO, so you can wrap an SLA
around the whole thing and bill for it at the end
of the month. This enables you to wrap a business
model around spectrum sharing in a way you
couldnt before, and opens up the opportunity
for independent small cell operators to run the
network.
TowerXchange: How are the Small Cell Forum
advancing the cause of multi-operator small
cells?
Nick Johnson, Co-founder and CTO, ip.access: From
a Small Cell Forum point of view, I and James
Body from Truphone have put together a work
programme to knock over the barriers to operators
working together. Were looking at whether these
blockages are arising from regulation, technology
or commercial factors. Were also trying to work
out why multi operator isnt more widely deployed
in small cells.
XX
While a tower company may

have a macro station on top of a
multi story car park, they may
not actually have any coverage
inside!
At Mobile World Congress a couple of papers were

released by the Small Cell Forum. One was on the
market drivers for multi operator and the other on
the regulatory aspects.
Although ip.access are focused on SUMO and
MOCN its not the only game in town. Its one
of several multi operator approaches including
MORAN (a tower site sharing option where
operators use their own spectrum), DAS, and other
intelligent repeater type solutions. In short, were
looking at a wide range of small cell and non-small
cell technology that can deliver aspects of the multi
operator experience. However, we do feel that the
MOCN based technology is the right one.
MOCN is good for sites that dont get enough

traffic to merit a cell for every operator. But if you
are sharing the cell amongst five operators, the
business case springs into life. MOCN is a clear
winner in this instance one box, one piece of
spectrum and one service provider.
TowerXchange: If the majority of small cell

deployments will be shared between multiple
operators by 2020 (80% according to the Small
Cell Forum), what role could be played by third
party infrastructure companies like tower
companies?
We believe that the multi operator capability

makes even more sense when the small
cell network is being operated by someone
independent. And tower companies fit well into
that category. They already have the commercial
relationships with the MNOs, and they understand
how to operate and commercialise networks.
Nick Johnson, Co-founder and CTO, ip.access: The

short answer is a big role. At the moment, there is
a deployment group within the Small Cell Forum,
which is led by Peter Love from Nokia. He and I
believe that the tower companies have a big part to
play within that group. Whether a deployment is
multi operator or single operator almost becomes
a secondary issue. Tower companies become a
natural part of the deployment ecosystem, whether
they are doing it on behalf of an operator, or a
venue where they offer it as a service to multiple
operators.
Running a small cell as a neutral host has a lot of

mileage as a concept, especially with new bands
like LSA spectrum or Citizens Broadband in the US.
TowerXchange: Could a towerco white label a
small cell solution?
Nick Johnson, Co-founder and CTO, ip.access: We
are actively discussing this with a number of tower
companies who have approached us on the subject.
The real estate aspect of it is very interesting.
While a tower company may have a macro station
on top of a multi story car park, they may not
actually have any coverage inside the building! We
have a lot of experience in deploying consumer
femtocells and as a result our technology is plug
and play. You dont have to be a radio wizard to
install it its as easy as plugging in a Wi-Fi access
point. So our technology lends itself well to white
label situations.
The other thing worth bearing in mind is that

spectrum licensing is starting to liberalise with
Citizens Broadband and Licensed Shared Access.
One objection that gets raised from time to time
is who is going to donate spectrum that they
have spent billions of dollars on, to the benefit of
competitors. However, commercialisation of the
spectrum by a tower company can overcome this
objection, unlock additional revenue from that
spectrum, and create a win win situation for all
parties.
Spectrum liberalisation can also accelerate multi
operator deployments. For example, a tower
company can put up a site and use spectrum in
lamppost, rather than just a zipcode. These are the

kinds of things that tower companies understand
really well.
While small cell developers are coming from
a focus on small, self-deployed solutions like
femtocells, tower companies are coming down
from macro cells to metro cells and lampposts
perhaps well meet in the middle!
TowerXchange: Please tell us about the use
cases for ip.access SUMO solution.
Nick Johnson, Co-founder and CTO, ip.access:
Let me give you an example. One company is
providing a private network to a Dutch hospital
using our base stations. The service acts as a pager
TowerXchange: Why do so few small cell

vendors understand the opportunity that tower
companies represent?
Nick Johnson, Co-founder and CTO, ip.access:
Speaking for myself and some of my colleagues,
the small cell business started from a presumption,
which we try and reconfirm as much as we can,
that small cells are all about self-deployment.
The idea is that you give them to the enterprise IT
consultancy or consumer and they put them up
themselves. When we think of how small cells are

deployed we think of Wi-Fi.
Its only been recently that weve realised that
when you want to deploy small cells where there
isnt an IT company present for example, in
urban street furniture deployments that you
need a partner like a tower company. AT&T, for
instance, confessed at a small cell conference
recently that when they wanted to deploy a small
cell to an urban site they couldnt do it. They
couldnt provision backhaul to the lamppost in the
area because it didnt have a zip code, and their IT
systems couldnt cope with that. As a result, they
had to undertake a big IT project to allow them
provision fibre, power and a bracket to a particular
citizens broadband. Companies like ours can then

connect the base station via MOCN to multiple
operators core networks, using that neutral
spectrum to provide coverage for everyone.
They couldnt get backhaul to the

lamppost in the area because it
didnt have a zip code
XX
replacement system and a general communications

network for the medical staff, using standard
handsets.
In this case, the deployer which plays the
equivalent role of a tower company is entirely
responsible for the service. They decide where
to place the small cells; how to go about the
installation process; and what penalties they
should be liable for within the context of an SLA.
Its very much a traditional as a service model.
The capex for the equipment is borne by the
deployer and they then rent the service to the
facility. Although there arent multiple operators
involved, the deployer is using non-traditional
licensed spectrum, so it is putting in place a proxy
for a future shared access solution.
TowerXchange: What can vendors do to enable
tower companies to offer small cells as a
service?
Nick Johnson, Co-founder and CTO, ip.access: If
you look at our service, we help tower companies
to operate and manage networks. In common with
other small cell vendors, we offer a management
system with our solution and we can either operate
that on behalf of the customer or provide that to
the customer and allow them to integrate it with
their own solutions.
If we are asked to manage the network, we will
put in place a small team that will look after the
performance of the network on a daily basis. They
will respond to escalations and customer feedback

and will fix particular issues.
For tower companies that dont have RAN expertise
in-house, we can offer small cell as a service; a
management service that they can in turn offer
to their customers. One of the reasons we like
SUMO is because it allows companies to offer
management services to multiple operators at
once.
TowerXchange: Finally, please sum up your
vision for the future of multi-operator small
cells.
Nick Johnson, Co-founder and CTO, ip.access: We
hope that multi-operator small cells become the
norm in the future. Weve seen deployments being
done with Wi-Fi because its intrinsically multi
operator its hard to get all the MNOs engaged in
a given venue. We dont think this will continue
to be the case. We expect that small cells will be
deployed in a multi-operator model as easily as
Wi-Fi.
In terms of our longer term vision, we believe
that LTE will start to displace Wi-Fi in application
terms LTEs performance is superior in congested
spectrum so LTE will become the technology of
choice rather than Wi-Fi.
At the same time we dont expect LTE and small

cells to drive Wi-Fi to an early grave. These
technologies will exist alongside each other even
when 5G comes along
Meetup Americas
2016
16-17 June, Florida
Meetup Africa 2016

Meetup Asia 2016

Meetup Europe 2017

4-5 April, London
The viability of small cell in

emerging markets
Highlights from a new white paper released by Kaiser Associates telecom practice
By Seavron Banus and Timothy Dee, Kaiser Associates
Kaiser Associates Telecom Practices latest

white paper explores the factors and
business trends that support small cell
investment globally, by highlighting three
unique country case studies Indonesia,
Chile, and Nigeria. In this article you will
find selected highlights from the white
paper, or download the full text free here:
http://info.kaiserassociates.com/hubfs/
Telecom_Practice/Small-Cell-in-EmergingMarkets_Kaiser-Associates.pdf
Keywords: 4G, Africa & ME, Americas, Asia,Business Case, Chile, Fibre, Huawei, Indonesia, Kaiser
Associates, LTE, Lawyers & Advisors, Network Rollout, Nigeria, QoS, Regulation, Small Cells, Strategic
Consultancy, Third Party Reports, Whos Who

< The five key viability factors that drive small cell infrastructure investment globally
< Insights from the deployment of small cell infrastructure in developed economiesa case study
on the U.S.
< The specific market dynamics and trends for small cell infrastructure deployment in emerging
markets
Introduction
While the benefits of small cell are clear, several
prerequisites must be in place for deployment of
the technology in a new market. Kaiser Associates
has identified the five key factors shown in figure
one which determine the viability of small cell in a
given market.
These five critical factors provide a framework
in which to think about small cell investment
in emerging markets. This paper explores how
differently these questions play out in Chile,
Indonesia, and Nigeria, and aims to determine the
viability of the technology in each market.
Country case studies
Indonesia: Given the rapid development of,
and new capacity demands in the Indonesian
mobile broadband market, operators are turning
increasingly to the use of small cell antennas they
are expected to invest roughly US$20 billion in this
technology over the next five years. Indonesian
operators Telkom, Telkomsel, and 3 Hutchison
recently announced a significant agreement with
small cell manufacturer Huawei, which launched
Lampsite 2.0, its latest small cell innovation. There
is tremendous demand for indoor mobile coverage
across the country, and deploying indoor small
cell networks will provide a boost to all operators
network coverage and capacity.
< Detailed small cell market case studies on Chile, Indonesia, and Nigeriathree of the worlds
fastest growing mobile technology markets
However, a major challenge when servicing these

new small cells in Indonesia will be obtaining
XX
evant and important solution. In the coming years we
m 9% -
band
million
in Jaecture,
than
often
base
t their
boost
n with
help
e
conps. To
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Bolt!
other
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es on
enser
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oped
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e, for
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ere
re exwever,
aining
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strucll deains a
umber
exity,
authoboost
Mobile
Cellular
Telephone
Smartphone
Utilization
Penetration
PROJECTED SMARTPHONERate
USAGE
GROWTH IN MOBILE
SUBSCRIBERSHIP
& DATA USAGE
that determine the viability of small cell in a given market:
NETWORK
RELIABILITY
& CAPACITY
FIBER
AVAILABILITY
& QUALITY
QUALITY OF
REGULATORY
ENVIRONMENT
COUNTRY
POPULATION
DENSITY
Areas where
existing wireless
networks have
issues with network reliability
and/or insufficient capacity
are well suited to
small cell buildout
since the technology can provide additional
dependability and
capacity in challenging locations.
Small cell deployment depends

on an extensive
fiber backhaul
network which
acts as the
backbone
of the infrastructure; therefore,
areas with
existing fiber or
plans to buildout
fiber are more
viable for small
cell solutions.
A regulatory
environment
that is open to
telecommunications / wireless
buildout must
be in place to incentivize investment, protect
infrastructure,
and accommodate the use of
municipal structures for small
cell sites.
Densely populated
areas account for the
majority of mobile
data traffic demand,
and at the same
time often represent
the greatest challenge to network
performance. Due
to their size and flexibility, among other
factors, small cell solutions are especially
relevant in densely
populated areas.
AS A PERCENTAGE(PER
OF TOTAL
CELL USERS
SUBSCRIPTIONS
100 PEOPLE)
ACROSS INDONESIA
102%
114%
125%
126%
2011
2012
2013
2014
73%
(2019)
AVERAGE SIM S
PER USER
IN INDONESIA
Mobile Cellular Telephone

Operator
Market
Penetration
Rate Share
SUBSCRIPTIONS (PER 100 PEOPLE) ACROSS CHILE
2011
2012
2013
2014
Telkomsel
45%
3 Hutchison
14%
2.1
Indosat
22%
129%
137%
134%
133%
AVERAGE SIM S
fibers,
ationPER USER
,
but
all cell Other
llular
IN CHILE
as seunicaXL Axiata
btel is
at in- a dependable, qualified, and flexible backhaul
conservice provider that can supply the required
ey de
SOURCE: MOBILE WORLD LIVE (HTTP://WWW.MOBILEWORLDLIVE.COM/
ASIA/ASIA-BLOGS/BLOG-INDONESIAS-RANKINGS-SHIFT-XL-FALLS-TO-4TH/)
to meet requirements at a reasonable cost.
e pre- services
xisting Fixed-line backhaul options, such as copper or
7
nicipal fiber, are likely
Movistar
to prove inflexible or too costly to
us
pri- / TORONTO / WASHINGTON, D.C. KAISERASSOCIATES.COM
O PAULO
ns for use in conjunction with small cells outside of highly
developed areas, and the alternatives such as
ng rehe viClaro Issue 16Entel
XX | TowerXchange
| www.towerxchange.com
mains
fore-
5%
14%
Operator Market Share
38%
24%
35%
Growth in mobile
subscribership
and data usage
increases the
need for network capacity.
This capacity is
created through
investments in
new wireless
infrastructure,
typically in the
form of macro
sites & small
cell solutions.
Figure one
microwave or satellite networks are under

consideration.
While some portions of small cell hardware

are more expensive than those found on macro
base stations, this technology often yields cost
Chile: As mobile data consumption rates continue
advantages in allowing operators to target their
to grow rapidly in Chile, operators are being
customer bases more strategically. In this case,
forced to think about the classic capacity versus
it can help operators satisfy the data and voice
coverage issue more than ever before. On the
demands of large consumer groups living in dense
whole, the major Chilean operators (Entel, Claro
urban areas, where macro sites are notoriously
/ Amrica Mvil, and Movistar / Telefnica) are
difficult to deploy. There is little doubt that within
4
currently working with limited construction
the foreseeable future towercos and operators
2016 KAISER
ASSOCIATES,
INC. / OFFICES:represents
KUALA LUMPUR /a
LONDON
/ SO PAULO /operating
TORONTO / WASHINGTON,
budgets.
Small
cell, however,
viable
in ChileD.C.willKAISERASSOCIATES.COM
begin taking a more serious
economic alternative to meet this challenge.
look at small cell technologies (Entel, for example,
menmajor
m the
th all
have
infraerian
and a
early
uture
re an
strug-
ogies
erent
t, tax
ormivernm to
fundo dismuch
fforts,
nued
or inanies,
wers,
strucly atof the
Mobile Cellular Telephone

Penetration Rate
SUBSCRIPTIONS (PER 100 PEOPLE) ACROSS NIGERIA
58%
67%
73%
78%
2011
2012
2013
2014
2.4
AVERAGE SIM S
PER USER
IN NIGERIA
has already begun deploying some small cell

technology in Santiago), alongside their associated
intricacies and unique deployment strategies.
Operator Market Share

MTN
Nigeria: Tower construction is already a key pillar

of enhancing the Nigerian network, with build-tosuits averaging 2,000 - 2,500 new towers per year
Other
the highest rate of expansionGlobacom
in Sub-Saharan
Etisalat
Africa. Small cell technologies, however, offer an
attractive alternative or complement to towers in
areas where cell site densification
is a high priority
Airtel
issue.
42%
1%
15%
21%
20%
The market trends in Nigeria point to a favorable

juncture of consistently increasing data demand
and localised markets of unique subscribers
who depend upon cellular devices for access
to an array of online amenities (e.g. banking).
Against the backdrop of significant efforts to
upgrade Nigerias network with the launch of 4G
technology toward the end of 2014, and ongoing
3G network augmentation in Nigerias major
metropolises, another major driver of small cell
adoption will likely stem from the quality of
service problems currently associated with all
major operators.
industry replete with global opportunity, which

markets and countries could benefit most from
small cells? Of these, which are ready today for
investment in the technology? Which factors go
into evaluating this?
Despite the clear opportunity for small cell

technologies to support the rise of capacity
hotzones, the inherent unpredictability of
Nigerias regulatory environment, tax regime, and
limited availability of fibre represent formidable
barriers to implementation.
Kaiser Associates, through its own experience in

the small cell space, has determine these factors to
be:
< Growth in mobile subscribership and data usage
< Network reliability and capacity
< Fiber availability and quality
< Quality of regulatory environment
< Population density
Conclusion
We know that the demand for mobile data will
continue to necessitate a concerted increase in
coverage and capacity. We know that this upward
trajectory is a truly global phenomenon. We
also know that telecommunications companies
who leverage small cell technologies in building
out networks will be the primary leaders of this
growth, and will stand to gain the most from their
smart, early investments.
Given the extremely high population density in

urbanSOURCES:
areas such
as Lagos,
theDEVELOPMENT
anticipated
rise
EMARKETER,
GMSA,and
WORLD
INDICATORS;
COMMUNICATIONS COMMISSION (JUNE 2015)
in country-wideNIGERIA
data penetration
(from below 10%
today to over 40% in the next four years), small
cell technologies will likely come to represent a
The ambiguity, then, lies not as much in choosing
critically important element of Nigerias network
11
the weapons as in choosing the battlefields. In an
development.
O PAULO / TORONTO / WASHINGTON, D.C.
The aim of this paper is, at one level, to provide

examples of how differently these questions play
out in specific emerging markets (e.g. Indonesia,
Chile, and Nigeria). At another level, it is to provide
a framework for how to think about small cell
investment in emerging markets more broadly by
identifying the critical factors involved.
Using the U.S. as a reference point for a highly

developed market with proven small cell viability,
it is necessary to take a holistic view of the feasible
emerging markets opportunities and place them on
a relative scale for easy comparison. The scorecard
of markets in figure two summarises this concept
using Kaisers methodology.
Thorough consideration of these key external
factors is critical to determine where opportunity
exists, for it is only after an informed and factbased assessment of where to play that we can
KAISERASSOCIATES.COM
XX
begin to think about how to win. In partnering with

investors and telecommunications providers over
the past two decades, we have learned that in-depth
research into these factors is a crucial foundation
for success. This knowledge enables companies to
tailor their approach and grow dramatically within
their selected target markets.
CONCLUSION
FIGURES IN MILLIONS
NUMBER OF
SMARTPHONE USERS
80
INDONESIA
40
Once it is clear that a market is ready for small

cell, a second wave of strategic decisions and
operational knowledge comes into play. Each
company must develop its key differentiators,
and it is this foresight and investment in relevant
capabilities that have set many of todays
leading infrastructure providers apart. These
differentiators can range from implementing a
strong real estate group that engages and develops
relationships with municipalities; to the acquisition
of existing fibre infrastructure in strategic areas;
to the development of advanced radio-frequency
data that enables a company to proactively identify
carrier needs and secure access to these areas.
Extensive experience in the wireless infrastructure
industry has shown that each company must
carefully inform and plan its own evolution.
Knowledge of these structures and strategies, in
combination with the factors that drive small cell
viability, enable each player to position themselves
for success in this space
The table below represents

Kaisers assessment of
each countrys readiness
for small cell development
MOBILE & DATA USAGE
NIGERIA
2013
INDONESIA (2013)
CHILE (2013 & 2014) 23.7
NIGERIA (2014)
CHILE
0
MOBILE CELLULAR SUBSCRIPTIONS
2018
REGULATORY ENVIRONMENT
139
UNIQUE SUBSCRIBERS
INDONESIA 106
CHILE 11.7
NIGERIA 58
MOBILE PHONE INTERNET CONNECTIONS
130
INDONESIA
CHILE 9.8
NIGERIA 72.4
INDONESIA
CHILE
NIGERIA
ENFORCING
CONTRACTS RANK
109
48
169
170
56
143
*Per World Bank Doing Business Scorecard, lower score is better
SCALE IS 1-5, WITH 5 BEING THE HIGHEST
MOBILE &
DATA USAGE
NETWORK
RELIABILITY
& CAPACITY
FIBER
AVAILABILITY
& QUALITY
QUALITY OF
REGULATORY
ENVIRONMENT
COUNTRY
POPULATION
DENSITY**
4.5
3.5
2.5
5.0
3.5
4.0
3.0
3.0
2.0
2.5
1.5
4.0
OVERALL
SCORE
INDONESIA
3.5
3.8
CHILE
4.5
3.6
NIGERIA
4.0
26k
NETWORK DOWNLOAD SPEEDS
3G
4G
3G
4G
INDONESIA 2.9
12.1
CHILE 1.1
3G
NIGERIA 1.6
4G Data N/Alimited national coverage
2.8
FIBER AVAILABILITY
& QUALITY
NETWORK RELIABILITY
& CAPACITY
12.8
Kilometers (approx.)
of fiber optic network in Indonesia
after Telkom's Indonesia Development
Network proposed
$600 million expansion investment.
3.95k 40k
of Entel's fiber
optic transport
network in Chile.
of fiber-optic cable
in Nigeria, including about 12,000
km of terrestrial
fiber cable and about
31,000 km of submarine fiber cable.
**FOR DETAILS ON POPULATION DENSITY SEE COUNTRY MAPS ON PAGES 6, 8, 10
Figure two
13
2016 KAISER ASSOCIATES, INC. / OFFICES: KUALA LUMPUR / LONDON / SO PAULO / TORONTO / WASHINGTON, D.C.
OVERALL
RANK*
KAISERS SMALL CELL VIABILITY ASSESSMENT
FIGURES IN MEGABYTES PER SECOND
Download the full white paper Viability of

Small Cell in Emerging Markets at
http://info.kaiserassociates.com/hubfs/Telecom_
Practice/Small-Cell-in-Emerging-Markets_KaiserAssociates.pdf
313.2
KAISERASSOCIATES.COM
About the Authors:

Seavron Banus: Seavron Banus is a Vice
Timothy Dee: Timothy Dee is a Principal in Kaiser
President at Kaiser Associates and co-leads the
Associates Telecommunications Practice, based in
firms Telecommunications Practice. During
Washington, DC.
Participate in the
TowerXchange
community
his five years at the firm he has led significant

value creation initiatives for clients across
Timothy brings deep experience leading
the telecommunications industry globally
global engagements with senior leaders of
with a focus on independent tower and small
telecommunications companies. As his work
cell companies, carriers, data centers, and
focuses on organisations operating in emerging
communications providers. His experience
economies, he offers a unique understanding of the
includes extensive work with CEO, CFO,
challenges these companies face across their stages
and COO clients worldwide, at established
of development. Timothy has partnered with clients
and emerging companies, in developed and
on a number of strategic initiatives, including:
developing markets. Seavrons work has
organisational structuring, process improvement
spanned a full range of critical issues, including and cycle time reduction, key performance indicator
operational strategy definition, organisational
(KPI) definition, operational / financial systems
restructuring, customer segmentation,
selection and implementation, and cross-company
process redesign, roles and responsibilities
indicator benchmarking.
realignment, activity-based staffing,

commercial due diligence, post-acquisition
Prior to joining Kaiser Associates, Timothy worked
integration, and market opportunity analysis.
at Deloitte Consulting, where he led initiatives
Tower
manufacture
& installation
Investors &
advisers
Tower
Independent
towercos
Xchange
Decision
makers
at
operators
Regulators
& policy
makers
Equipment
& managed
services
focused on strategic organisational change and

Seavron Banus hold a joint BA/BS degree from
process optimisation within the U.S. Federal
Middlebury College in Geography and Spanish,
Government. He is fluent in Spanish, and holds a
with a minor in Economics. He is also Six
M.A. degree from the School of Foreign Service at
Sigma certified and has be formally trained
Georgetown University, as well as a B.A. in Spanish
as a Co-active Coach. Additionally, Seavron is
Literature and Latin American Studies from Colby
fluent in both English and Spanish
College
XX
TowerXchanges
whos who in passive
infrastructure equipment
and services
Welcome to the TowerXchange whos who!

Welcome to the TowerXchange whos who, a kind of vendor directory with
personality! Over the last three years weve interviewed over 160 business
leaders from innovative passive infrastructure equipment and service
providers. By popular demand, here we categorise those profiles, with each
company name hyperlinked to our exclusive interviews.
xxx Abloys successful track record in LatAm
xxx Bladon Jets microturbine gensets
xxx Invendis: expanding in Africa and Asia
xxx Acsys on improving cell site productivity
xxx Enertikas ESCO proposition
xxx IPS unleashes the Off-Grid Beast!
xxx Ascots plug and play hybrid generator
xxx EnerSys: the case for lead-acid batteries
xxx Nexsysone simplifies network management
xxx Ausonia revolutionises energy solutions
xxx FG Wilsons new opex-busting DG
xxx Tarantula facilitates co-location in Europe
Images courtesy of CCE, Camusat and Jtel
TowerXchange's who's who in passive equipment and services
Is your company not included in our Who's who?

Would you like to suggest additions? Please email
Energy equipment and ESCOs
Controllis
Heliocentris
Total
Ascot
Cummins
Heliocentris hybrid solutions
TSi Power
Ascot hybrid
DAQS Europe
Huawei Network Energy
Turbina
Apollo Solar
Eltek Africa
IPS
UGE (Urban Green Energy)
Apollo Solar on Africa
Eltek APAC
Mecc Alte
Unipower
AST (Applied Solar Technologies)
Eltek CALA
Orun Energy
ZTE
AST case studies
Eltek on ESCOs
Pace Group
Energy storage
Ausonia
Emerson Network Power
Panasonic
Amara Raja
Ballard
Enatel
PowerOasis
Coslight India
Ballard CALA
Enertika
PRAMAC
EnerSys
Bergey Windpower
FG Wilson
ReliOn
EnerSys Africa
Bladon Jets
FG Wilson opex-busters!
Schneider Electric
GE Energy Storage
Bladon Jets revisited
Flexenclosure
SDMO
GILDEMEISTER
Camusat
Flexenclosure Myanmar
SEDEMAC
GS Yuasa
CCE
Flexenclosure Myanmar, part two
Solar BK
Imergy
CCE EMSaaS case study
Gen Power
SunEdison
NorthStar
XX
TowerXchanges whos who in passive equipment and services (cont.)

Redflow
Digant Technologies
Nexsysone Africa
Abloy CALA
Saft
FieldForce
Nexsysone network management
Acsys
Trojan Battery Company
Flexenclosure eManager
Qowisio Long Range Technologies
Site monitoring and management
Flexenclosure on fuel monitoring
Accruent
Galooli
Accruent on globalisation
HMS Industrial Networks
Accruents SaaS
Inala SAM
Qowisio goes wireless
Acsys mobile app
Quintica
Acsys productivity
Tarantula
AKCP
Tarantula Asia
Capital Safety
Tarantula Europe
AIO Systems
Inala Infrastructure Intelligence

Tarantula process optimisation
AIO Systems Asia
Acsys on SLAs
Infozech
EMSS Consulting
Telemisis
Karam
Treefrog
Construction, O&M and managed

services
AIO Systems CALA
Infozech Discipline of Action
AIO Systems Nigeria
Infozech India and Myanmar
azeti Networks
InfraSTAT
azeti Networks on site protection
Invendis
Broadnet Telecom
Invendis Africa and Asia
ZNV
Caryon Development
NAAP Global Solutions
Access control, Health and Safety
Alkan CIT
ConnectM
Nexsysone
Abloy
Ardom Telecom
WebNMS
ADNA
Westell Africa
AJ Ingenieros
Westell CALA
Alifabs (now CommScope)

TowerXchange's who's who in passive equipment and services (cont.)
Camusat
KGP Logistics
Plessey
Le BLANC
Camusat East Africa
Leadcom
Reime Group
Metalogalva
Camusat Myanmar
Leadcom CALA
Sagemcom
CLEARGOL
Leadcom Myanmar
EEC Group
Lemcon Americas
Structural engineers, rooftops,

masts, towers and accessories

Ambor Structures
Ericsson
Likusasa
Ericsson Nigeria
Likusasa Mozambique
Ericsson Managed Services
Mer Group
Mott MacDonald
NANHUA
Orion
ASE Structure Design
Ramboll
Cue Dee
Sabre Industries
Delmec
Sierra Tower Partners
Everest Engenharia
Mer Group CALA
Grid Rental Sites
Mer Group Ghana
GSMTOWERS turnkey
Mer Group low cost sites
GSM Telecom Products
Huawei Managed Services
Mobiserve
GSM Telecom Products Myanmar
HOI-MEA
NETIS
Intelli Towers on costs
i engineering
NETIS Ghana
Intelli Towers on evaluation
Ganges Internationale
Solaris Technologies
Geostrut
TIA Telecom
TKM Maestro
TNX
Valmont Site Pro 1

IPT PowerTech
NEWL
Intelli Towers on strengthening
VNTower
Jtel
Planex
Leadcom on strengthening
Zamil Infra
XX
Abloys successful track

record in Latin America
The access control company discusses its high quality products and local
know-how
Jussi Ahvalo, General Manager, Abloy Latin America and Alejandro Valderrama,
Managing Director, Abloy Colombia
With twenty-five years of

experience in Latin America, Abloy
is well equipped to serve operators
and towercos looking for top
solutions to secure their sites and
equipment. Inthis interview, the
regionalGeneral Manager, Jussi
Ahvalo, andAlejandro Valderrama,
MD of Abloy Colombiadiscuss
with TowerXchangethe
companys range of products,
their characteristics and why
clients have selected Abloy as their
security partner.
TowerXchange: Please tell us about Abloys

activities in Latin America. Which countries are
you active in?
Jussi Ahvalo, General Manager, Abloy Latin
America: Abloy is active in all major Latin American
markets. Specifically, we have our own sales units
in Mexico and Colombia and operate in twelve
countries in the region. The other countries are
covered through a wide network of well trained
distributors.
Abloy is dedicated to adding value to its customers
by supplying cutting edge security solutions. We
have a deep understanding of the telecom industry
and its dynamics in the CALA region, thanks to our
twenty-five years of local experience.
In light of our local know-how, we understand the
specific needs of our customers beyond security.
Operational efficiency is a top priority; operators
constantly need to improve their business
operations to remain competitive in todays
challenging market.
Keywords: Abloy, South America, Mexico, Colombia, Access Control, Urban vs Rural, Batteries, Risk, Site
Visits, Whos Who

< Abloys history and footprint in Central and South America
< How security requirements vary between operators and towercos
TowerXchange: Who are your main clients? And

how does the demand change between operators
and towercos?
Alejandro Valderrama, Managing Director, Abloy
Colombia: Abloy is working with top tier telecom
operators in CALA and worldwide.
< Urban compared to rural sites and their specific risks

< The award-winning Abloy CLIQ Connect and other top range products
Requirements do differ between operators and

towercos and thats why at Abloy we offer a wide
array of solutions and products which can adapt

to different business environments and meet the
needs of all kind of players in the telecom industry.
outsourced suppliers. For towercos, we need to

consider flexible access rights and real time control
and keep in mind that towers are their core assets.
solutions. Problems such as robberies of equipment,

sabotage of sites as well as the lack of control on
subcontractors can all cause losses for towercos.
Even though operators and towercos pertain to

the same business segment, their core business is
fundamentally different and so are the solutions
we offer to each of them. For example, operators
tend to have security departments with supervisors
who have similar access rights to the infrastructure,
while towercos dont necessarily have security
departments and instead tend to work with several
TowerXchange: What kind of security issues is

the CALA region exposed to? And how can Abloy
help solving them?
At Abloy, we recognise the importance of all these

aspects and always ensure the highest level of
security. Thanks to the Abloy CLIQ Connect solution,
towercos can control subcontractors and their
access to the site, while also checking the number of
hours spent on the job.

America: Towercos face various issues in terms
of security and beyond, most of which can be
effectively solved thanks to our access control
Abloy has been recognised as a leading security

XX
TowerXchange: Is security a problem in cities as

well as remote areas in Latin America?
Alejandro Valderrama, Managing Director, Abloy
Colombia: The nature of the problems tends to
differ between cities and remote areas. Within
cities, problems depend on the level of security of
specific neighbourhoods.
The main problem in remote areas is the time
needed to reach the site and react so we need to try
and implement solutions that are strong enough
to resist to any attempt of non-authorised access.
Abloy offers solutions to both rural and urban
infrastructure and is well aware of the specific
dynamics of each area.
According to our customers, urban sites are
actually more vulnerable if they arent properly
protected and just closed with a lock or padlock.
These sites are easy targets for urban crime.
Equipment, batteries and any other subcomponent
should be secured as well as they are in high
demand on the black market.
Thefts happen in rural areas as well but actually
communities tend to give value to sites and the
connectivity they ensure, which to an extent
mitigates the risk. And rural areas tend to be less
urban sites are actually more vulnerable if they arent properly

protected and just closed with a lock or padlock. These sites are
easy targets for urban crime. Equipment, batteries and any other
subcomponent should be secured as well as they are in high demand
on the black market
brand worldwide and our customers feedback

confirms it. According to their comments, our
access control solutions guarantee the continuity
of their business more efficiently than any other
product in the market.
connected with the black market.
from others in the market?
TowerXchange: How does the demand for

security solutions differ between LatAm
countries? And between LatAm and other
regions such as Asia?
Jussi Ahvalo, Latin America General Manager,

Abloy: Abloy develops and manufactures the
most advanced locking technology in the market.
Our Abloy CLIQ Connect is a revolutionary
product and has been recognised worldwide with
prizes such as the Golden Award in the Access
Control category at the Merlion Awards in the
Safety & Security Asia 2015 Exhibition and the
Gold Medal in MTP Securex 2016 in Poznan,
Poland.

America: This varies from region to region. Some
countries have adopted U.S. standards while others
prefer European ones.
And much depends on the specific problems faced
by each local market and their socio-economic
environment. For example, in spite of many
cultural differences within Asian countries, there
are several similarities across the region and the
demand for our solutions tends to be the same.
TowerXchange: How does your product differ
Abloy has a proven track record for producing

strong products apt against physical attacks,
which work very well under any environmental
conditions. Our products exceed many quality
and performance standards, such as the Super
Weather Proof padlocks which are the only
mechatronic locks in the market certified IP68
How to improve cell site

productivity and workforce management
Data is the key to productivity
To date, monitoring of workforce activity on cell sites has been reliant on the
use of disparate systems, paper records and word of mouth. Acsys, best known
in the telecoms sector for their access control systems, is now expanding their
focus to develop a platform which integrates access data with data points
from multiple third party systems, offering infracos the opportunity to better
track activity and productivity on site. TowerXchange spoke to Acsys Michael
Sothan to understand the platform, what data it can capture and how it is set to
revolutionise productivity at telecom cell sites.
Keywords: ARPU, Access Control, Acsys, Brazil, Business Case, Capex, Change
Management, Energy Efficiency, How to Guide, Installation, Investment, Job
Ticketing, KPIs, Managed Services, Monitoring & Management, O&M, Opex
Michael Sothan,
Business Development
Global Accounts, Acsys
Reduction, QoS, RMS, ROI, Rooftop, SLA, Site Level Profitability, Site Management
System, Site Surveys, Site Visits, Skilled Workforces, South America, Uptime

< How Acsys is expanding their focus outside of security to better monitor workforce patterns at
cell sites
< Which third party systems and metrics can be integrated to develop a holistic picture of cell site
operations
< How data can be used to develop job based KPIs and SLA clauses to monitor and improve
productivity
< What trends are starting to be observed on optimal completion times for key maintenance tasks
< How Acsys system is being adopted and customised by infracos
TowerXchange: Please can you provide an

introduction to Acsys and why they are now
looking to expand beyond access control?
Michael Sothan, Vice President, Americas, Acsys:
Acsys was originally a general access control and
workforce management solution provider. In the
companys early days we did a lot of work with the
government and military sectors but after seeing
a strong fit in the telecom infrastructure space, we
developed a telecom-centric access control and
workforce management system specifically for the
sector which has now become well recognised by
the industry.
Whilst security is always a concern for tower
owners, and we are aware of very high rates of
vandalism in some Latin American countries like
Brazil, the market is shifting towards an increased
focus on efficiency and opex reduction. With
customers demanding ever more data at lower
costs, ARPU is being driven down and capex on the
increase operators are putting more focus on their
bottom line, looking at ways to make savings.
In order to improve efficiency on site one must first
understand what is happening on site; to date it has
been hard to get a clear picture on this. There has
been a real lack of data detailing what is going on
even to the extent of knowing for certain whether a
job has actually been done! If a job is being done, it
is useful to know factors and metrics such as when
it was done, who did it, how long it took, did it take
longer than it has in the past? When you start to
obtain and interpret this data you start to develop a
XX
increasing visibility and control of their operations.

Infracos have been putting in place processes
to oversee what is happening but where a lot of
inefficiencies have been coming in is that these
separate processes are not integrated. There have
been a lot of gaps in the data and as such guess
work has had to take place. This has made enforcing
their processes a real challenge.
Putting in place the Acsys system means that
each time a job is being done there is real time
data correlated with that job which can then be
integrated with further data points. This not only
allows for the creation of more effective processes
but, perhaps even more importantly, allows for
their enforcement.
meaningful picture of site operations.

Operators deploy lots of different pieces of software
such as OSS systems, trouble ticketing systems,
billing systems and remote site management
software systems to monitor what is happening
on site, but these systems dont talk to each other.
Acsys solution, while focused on managing physical
activity on-site, is to provide an open platform
which can integrate with one or all of these third
party systems to give a more holistic view of site
operations. This fills in the vacuums of data that
have existed and presents a complete picture of
what is happening at your cell site.
TowerXchange: How long have Acsys been
working on this software?
Michael Sothan, Vice President, Americas, Acsys: It

has been very much an ongoing evolving process
but something which we have begun to shift our
focus more heavily towards in the past year.
TowerXchange: Prior to such a platform being
developed by Acsys, how have tower owners been
able to monitor operations?
What weve realised is that whilst the telecom
industry is a very high tech industry, when it
comes to O&M they have relied on a very piecemeal
and low tech approach. Infracos have been
amalgamating multiple types and sources of data
from digital records to paper based reports right
through to word of mouth all with the aim of
TowerXchange: How have you worked with

clients to develop the solution and what has been
their reaction to the system?
As we work with clients they give feedback on
what data they would like to capture to enable us
to create them a tailored system. Generally what
most of the clients really want is an increase in the
data generated about their O&M and an increase in
the efficiency of their O&M. Key questions theyre
looking to answer include the obvious; who is on
site and what asset are they accessing? This is
critical for tenants who want to monitor their active
infrastructure, to the less evident; which vendor is
doing the job more efficiently? What is the average
time spent on site? How many sites can be serviced
a day under routine or preventative maintenance?
TowerXchange: Have you developed the solution

in partnership with third party software
providers? Can most main systems be integrated
into Acsys solution?
With a lot of work still under development, I cant
name all the vendors that we are working with
but what I can tell you is that we are working with
a number of major remote monitoring system
providers from across the U.S., Europe and Asia.
With several of them we have already completed
integrations and a few have already been deployed
in the field. Weve also been working with some
of the major ticketing providers and are now
beginning to look at specific billing softwares and
larger scale ERP platforms.
The idea is to keep our system as open as possible,
using open APIs and web services which allow for
integration. The challenge is that we cannot simply
make a pre-made system, because every client is
using a different mix of softwares and vendors.
Instead, on a per project basis, we work with each
individual client to see where they are finding gaps
Clients are interested in a number of factors. The most critical, but possibly
the most overlooked, is very simple - a hard verification of if a vendor
visited a site. Without this, how does the infraco, or MNO, know that an
assigned task was completed? It all links back to SLA adherence if you
cant verify whether the visit was even made it makes it impossible to
enforce the SLA clauses you put in place
in data and look to create a customized solution to

fill in those gaps.
The strategy is not to create a pre-made system
but to be able to discuss on a project by project
basis what each client is using and which gaps
they are finding, so that we can create something
customised.
TowerXchange: What kind of metrics are clients
looking to obtain through using Acsys system?
Clients are interested in a number of factors. The
most critical, but possibly the most overlooked,
is very simple - a hard verification of if a vendor
visited a site. Without this, how does the infraco, or
MNO, know that an assigned task was completed?
It all links back to SLA adherence if you cant
verify whether the visit was even made it makes
it impossible to enforce the SLA clauses you put in
place.
In terms of the appetite for such a system, we have

realised that companies are much more willing
to budget for and buy a solution that increases
productivity in their operations. Security is an
essential component to a towerco business but it is
not something that people are excited to purchase.
When we can provide a solution that saves people
money by reducing their opex, it becomes much
more interesting for the client to invest in it.
Next would be vendor time to site and time on site.

They want to gain a hard verification of how long
it takes a given vendor to reach a site, especially in
the case of emergency maintenance, and also how
long a given supplier or contractor spends on site.
Even if the client is not paying on an hourly basis,
they need to have a clear picture of this. If you
are putting in place service level agreements you
need to be able to monitor this in order to be able
to enforce the clauses you put in place. Vendors
also need to know they are being monitored. This
creates a greater sense of accountability which
naturally increases quality.
Another useful feature of this is that you can
develop job based KPIs, working out how long it
should take, on average, to complete a specified
task. This allows you to better plan your routine
maintenance and also enables you to budget more
accurately, setting aside a set amount of time for
a contractor to do a job, and avoiding overtime
payments when they go outside of this.
XX
As well as assessing response and service times or

vendors you can also use this to benchmark the
equipment itself. For example, if you take a diesel
genset you can look at the number of call-outs
that it needs on an annual basis and compare the
MTTR following a fault. This enables you to make
more informed decision making when it comes to
equipment procurement.
TowerXchange: From deployment of your
systems to date, has Acsys started to observe
benchmarks for given tasks and is there
anything that you can share?
We try to be as consultative as possible in working
with our clients but the amount of data that we
have access to depends on how independent our
client wants to be. In some instances they prefer to
keep everything in-house whilst in others we work
very closely with them in analysing their data. At
the moment the amount of information that we
can share is dependent on NDAs that are in place,
but we are ultimately very happy to help the client
analyse and interpret the data they obtain.
We have however started to see certain trends
in different regions. For example, in India weve
noticed that because of traffic, especially when it
rains, there was a certain client which couldnt get
more than one site serviced per day as they were
driving back and forth to collect keys. This problem
could be rectified by installing our mechatronic
locks, taking the number of sites that could be
serviced up to as many as four! As such, this also
gives us an indication of the number of sites that a

client should be able to have serviced in a day.
Another example I can give is in Africa where we
did a study on three different vendors carrying out
oil filter changes. One vendor was taking 20 minutes
to do the change, a second took an hour and a third
took two hours. When the client inspected the sites
it became clear that the vendor that was doing the
job in twenty minutes was frequently not changing
the filter at all, whereas the vendor taking one hour
was doing a good job. From this we could elucidate
that the required time to do an oil filter change was
one hour, much less and the job wasnt being done
properly and any longer and the vendor should be
more efficient.
ERP
Enterprise Resource Planning
MRP
OSS
Manufacture Resource Plan
Trouble Ticketing Software
Cloud
HRM
TTS
Remot site monitoring
RSM
DATA
BILLING
THE KEY TO PRODUCTIVITY!
SMART PHONE
WITH APP & SMS
TowerXchange: How much analysis is required to

extrapolate meaningful findings from the data?
Is there a degree of automation?
ANY PHONE
WITH SMS
OR
CODE ?
OR

There are certain elements which can be automated,
for example with our system you can pre-set alarms
if, for example, people are on site too long or are
requesting access outside of their normal zone.
The system can go as far as automatically blocking
access until the vendors geo-location is at the
correct site. For certain clients we have even built
custom reports and automated alarms based off of
what they find critical.
ready format, which means clients can utilize all

of Excels built-in analysis tools to also analyze our
data.
If you want to break down findings and connect

them to other data points, some of this is still being
done manually. Importantly, all of our different
reports can be automatically exported in an Excel-
Acsys can offer a service whereby our engineers

run analysis every week and send a report back
to the client and we are always working to add in
more ways to further automate the process.
FRONT GATE
CELL TOWER
BTS SHELTER
GENERATOR
BATTERIES
FUEL TANK
LTE CABINET
being done you can enforce SLA clauses, with a

data trail in place vendors know that their activities
are being monitored. Knowing this means vendors
are now required to follow processes established
by management which they may have previously
ignored.
TowerXchange: Do any other companies have a
similar offering to Acsys?
TowerXchange: Why is it so important to

improve the way in which infracos can better
understand workforce patterns on cell sites?
From a very general perspective if you look at
the advent of management science you have all
these innovative concepts that were developed like
systems theory, value based management and lean
manufacturing which have been adopted by various
industries and are being taught in the worlds top
management schools. The approach to managing
operations in telecoms infrastructure shouldnt be
any different.
We are trying to equip infracos with the skills to
adopt lean O&M in the same way you hear about
lean manufacturing working to achieve more
with less, reducing costs and acting more efficiently.

Companies that can use tools like ours to identify
patterns in workforce behaviour can than weed out
the inefficiencies, create optimised processes and
obtain a competitive advantage, resulting in them
becoming leaders in their field.
A more specific answer to the question is that
understanding workforce patterns enables you to
better manage staff and subcontractors on site, not
only verifying that work is being done in timely and
accurate fashion but also enabling you to better
plan and forecast work that needs to be done.
When you have an indication of how long a job
should take you can put in place job based KPIs
planning the amount of time and cost required for
a given job, avoiding overtime payments. Similarly
by having a definitive answer on whether a job is

There are companies offering wired or WiFi dependent solutions which require a lot of
hardware to be installed on site. These companies
are generating a lot of data which has the potential
to be integrated but the issue is they dont have
the reach to be able to install it on the majority of
sites. A high level of expense and time is required
to install these systems and as such, the solutions
are usually only being installed on a few critical
backbone sites. Such systems lose much of their
value as they cant correlate what is happening on
those handful of sites with what is happening on
the other 90% of the network. No other vendors
have the ability to not only install a solution on
every single site from critical backbone sites, to
rooftop sites to remote sites out in the middle of
nowhere but also on every asset on the site.
When it comes to other mechatronic lock providers,
we dont see any other companies going the extra
mile to utilise or exploit the data that is being
generated by the system. They focus exclusively
on the security aspect but to us that is just the
foundation. Pulling out as much data as possible
and making that data work for you!
XX
Ascot: All in one, plug & play

hybrid generator with solar and AC/DC
generators for mobile telecom sites
Ascots Flying Doctors ensure successful installation and integration
With eight years of experience and thousands of installations in critical markets throughout Europe,
the Middle East and Africa, the Ascot hybrid energy solution for telecom is considered one of the most
reliable and proven hybrid solutions on the market. Ascot has been active in the South American market
for many years and recently entered the U.S. off-grid and backup power market, with innovations
from different continents driving technology innovations. Approved and widely used by the Vodafone
Group, Helios Towers Africa, IHS Tower, STC Saudi Telecom, Ooredoo, Zain and Sudatel in their critical
operations, Ascots technology has been proven as the right product for harsh environments such as in
Saudi Arabia, Iraq and Sudan as well as mountain top sites in Nevada.
Ascots certified performance has been proven over a decade of accumulated system data thanks to a
sophisticated and efficient remote control system embedded in the Ascot Hybrid Power Unit (HPU).
Keywords: Americas, South America, Peru, Haiti, Caribbean, Ascot, Energy, How To, Opex Reduction,
Power, Renewables, Site Visits, Solar, Unreliable Grid, Off Grid, Whos Who, Wind, Opex, Capex, Fuel
Security, Batteries, Energy Efficiency, Hybrid Power, Solar, LPG, Wind, Logistics

< How to meet the changing energy requirements of multi-tenant tower operators
< Tailoring solutions to meet the power needs of sites with varying climactic conditions and grid availability
< Deploying a significant number of hybrid solutions across African and American portfolios
< How the business case for solar and wind power is justified by logistics and the criticality of coverage
< What it will take for demand for hybrid energy to reach the tipping point
TowerXchange: Please introduce where Ascot

Industrial fits into the telecoms infrastructure
ecosystem.
Dr Michele Greca, CEO, Ascot Industrial: Choosing
Ascot today means trusting an organisation
with twenty-seven years of international market
experience with a brand name that means quality
and reliability. Our typical products include hybrid
generators: AC and DC generators designed by
a team of in-house, highly skilled engineers in
accordance with our customers specifications,
which work with advanced controls and energy
storage, often incorporating renewable energy
sources.
Telecommunication companies historically
recognise Ascot as a leader in the sector thanks to its
innovative products and technologies for generators
and for the family of hybrid solutions deployed
globally in thirty-eight countries.
This is the true know-how of Ascot competence
and flexibility. Its only by visiting remote sites and
looking at how they are configured that we can
apply our knowledge to optimise hybrid systems to
benefit both the operator and ourselves!
TowerXchange: How did Ascot Industrial get into
the hybrid energy for telecoms market?
Dr Michele Greca, CEO, Ascot Industrial: From the
inception of Ascot Industrial from 1986 until 2000,
our core business was developing generators for
the military, oil and gas, power plant and marine
sectors. The defence sector has been for us like
location is like a forward communication base

in war reliability is critical and maintenance
visits must be kept to an absolute minimum. As
competition becomes more aggressive in telecoms,
battles will be won by whoever can provide the
best service at the lowest opex, so its critical to
improve energy efficiency.
TowerXchange: Why do telecom operators need
to reduce opex?
Dr Michele Greca, CEO, Ascot Industrial: The role
of the operators is to provide subscribers with
an always-on service, grow usage and reduce
customer churn. In order to gain more market
share than their competitors they need to have a
reliable network operating at the lowest possible
operating expense.
Formula One is to Ferrari a cutting-edge R&D

function weve applied to the telecoms sector.
For example, back in 1997 we developed an
application to charge the huge batteries on
submarines while in port. Ten years later I was
speaking with a manager at Zain who challenged
me to produce an engine with low fuel consumption
to power his cell sites. At first I thought it was
impossible, but from his words came the idea
to apply the same technology we used to charge
submarine batteries to charge cell site battery banks,
even when the generator is switched off.
Having proven our application in large scale projects
such as the submarine one, it was relatively simple
to adapt it to charge the 600-1550 amp hour batteries

at cell sites, and we quickly developed and sold our
first hybrid solution in 2008, which was installed in
very harsh physical and maintenance conditions in
Sudan.
Between 2008 and 2009, we installed fifteen units
in as many countries for various telecom operators,
so we tested the solution in different temperatures,
humidity and altitude scenarios it was a good
challenge that pushed us to invest in the project.
When we were working with the operators in the
field, Ascot was fixing the problems of today and
of tomorrow. Ascot is well established to meet the
specific needs of telecoms. A cell site in a remote
A decade ago when the competition was minimal,

operators expanded rapidly and the cost of phone
calls was high. At that time operators did not pay
very much attention to opex, concentrating on
building their infrastructure rather than finding
an optimised power solution. Very inefficient
energy solutions, based on standard and often
disposable diesel generators as the primary
energy source, were installed with very high
servicing costs especially for off-grid and weak
grid sites.
That era is now over. To be and remain competitive
in the future, operators and tower companies
have to find and implement new strategic
energy solutions to enable lower opex than their
competitors.
XX
TowerXchange: Can you tell us more about the

hybrid solutions already in the market?
Dr Michele Greca, CEO, Ascot Industrial: As hybrid
technology is relatively new, todays market offers
different solutions made by combining different
brands of products to form a hybrid package:
ie. X Controller and Y Batteries combined with Z
generator et cetera.
The result of that mix is the manufacturer of
each single part guarantees their part as a stand
alone item, not associated with other components,
hence the controllers available on the market are
not specifically designed for the scope and the
integration of the parts to combine into a hybrid
package - resulting in cell site energy being very
expensive and inefficient, and with no single point of
accountability.
The innovative Ascot patented DC-HPU is an
integrated plug & play power solution designed to
supply energy to telecommunication sites using up to
68% less fuel than the current diesel generating sets
running 24 hours a day and using up to 98% less fuel
when integrated with solar solutions.
We have recently deployed our first fleet of U.S.
hybrid sites including generator, solar and battery
storage for remote locations. These unique offXX | TowerXchange Issue 16 | www.towerxchange.com
and our solution is applicable for difficult sites

throughout the Americas. We are active in Haiti,
Peru, and other Latin American and Caribbean
networks.
Subscriber revenue generated

by telecom operators has a
direct impact on opex. In fact,
only with lower expenditure
and reliable service can the
operator decrease call tariffs,
acquire more subscribers and
generate more revenue
Subscriber revenue generated by telecom operators

has a direct impact on opex. In fact, only with lower
expenditure and reliable service can the operator
decrease call tariffs, acquire more subscribers and
generate more revenue.
grid sites can include a non-penetrating tower

foundation, rapid deployment multi-tenant
monopole tower and our hybrid power system. It
can be constructed and commissioned in less than
one week but run autonomously for six months a
design necessity for mountain top cell sites which
are inaccessible for many months throughout the
year.
Minimal site disruption achieves speed and
environmental goals; no power lines are necessary
where they do not exist and are terribly expensive,
and the optimum RF site coverage objectives were
achieved in one case with one off-grid site rather
than four sites that were located near existing
power. The opex and capex savings are compelling
TowerXchange: How has your offering evolved as

the off-grid tower market changes?
Dr Michele Greca, CEO, Ascot Industrial: In the
last couple of years, hybridisation has attracted
the increasing interest of the telecom operators.
They have pushed the market to propose hybrid
solutions to power their sites. However its not
easy to replace a traditional generator with a
hybrid solution because most of the current hybrid
solutions on the market are new and also the local
maintenance teams are not prepared to manage
these sophisticated systems. Operators want hybrid
power solutions but once installed, they can face a
lot of problems if they dont fully understand how
the system works.
To overcome that resistance, Ascot offers a plug
& play hybrid solution, which utilises the same
interface as standard generators - typically a
DeepSea Control System - that can dialogue with the
internal logic of the hybrid component.
In addition, today we include a service called Flying
Doctors which means that once our clients have
purchased the technology we can offer installation,
training and operational support along with the
package (for example we used this on the 1,500 sites
we recently upgraded for Vodacom). We also offer
a package where our team and local partner will
go side by side installing the machines and doing
For tower operators, we created and integrated

a distribution box which just didnt exist before,
meaning the client had to supply it. Now its
integrated into the system so the output of the
machines matches the output for the tenants so you
can have one, two or more different tenants. Its a
market-proven product especially in Africa; network
owners like Helios Towers Africa and Vodacom are
using our hybrid systems and are making referrals
and giving references to use Ascot products as they
are so easy to install, manage and maintain.
Our solution easily integrates with PV or wind
power so these energy sources can plug and play
with our machine. Were also offering a remote
monitoring and control system so our clients can
remotely manage the performance of our machines.
Ascot is a manufacturing company so originally, our
business model was just to supply the equipment
and leave the client to organise other details
namely financing packages. Now some clients want
a capex-based model and some want an opex model
with integration in a financial package. We can now
offer both and have the flexibility to provide what
our clients desire.
onsite training in order to guarantee the machines
installation and performance. We use this team to
identify the main difficulties faced in the field by our
clients. Our Flying Doctors team report back this
information immediately allowing us to continually
improve the difficulties faced in operations. For
example, if they dont like the control panel we can
change it to work better for them. This helps us to
provide our clients with the solutions they need.
TowerXchange: How do hybrid solutions compare

to running diesel generators 24/7?
Dr Michele Greca, CEO, Ascot Industrial: The magic
number of fuel savings is 68%, achievable with the
Ascot Hybrid. You can reach 98% in combination
with a Solar PV System.
Operators were only using diesel generators off-
grid because there were no other financially viable

solutions until recently.
When a consumer goes out to buy a hybrid car,
those cars are not competing with normal cars. They
are serving different needs and there is simply no
comparison in terms of fuel consumption.
The telecom sector is just like the automotive
industry in the future no-one will use diesel (or
petrol) engines hybrid power is the future. Why
dont people use hybrid now? Price, performance
and availability and Ascot is at the forefront of
improving all three.
Telecoms operators want hybrid power already, but
like consumers changing their normal car for an
electric car, they want to know how the change will
affect their operations. Once telecom operators are
sure hybrid power works, it will only be a matter of
time before all off-grid and weak grid cell sites are
upgraded to hybrids.
Essentially hybrid solutions are big battery chargers.
Their role is to produce, store and reuse energy. As
the price comes down and the performance and
reliability is proven, the business case for hybrid
energy becomes more compelling at more and more
cell sites.
There will be a tipping point where demand for
hybrid power rises very quickly. At the moment,
innovators are still finding competitive advantages,
which they dont want to share, but when
innovations are collated, everyone will want it and
it will stimulate that big jump in demand. Investors
XX
solutions Ascot is bringing to the market?

Dr Michele Greca, CEO, Ascot Industrial: Our
innovations are always driven by market demand.
Today the main challenges are fuel theft and the
possibility to deliver our systems to remote and
difficult areas. To overcome these challenges we
have developed a range of Liquefied Petroleum Gas
(LPG) hybrids we now offer LPG powered engines.
In markets like Nigeria, LPG is cheap and easily
available, and its also far more complicated to
steal. The LPG hybrid project was developed for
the United States market and now were making it
available for the African market where we foresee a
lot of uses.
arent afraid of those consolidated technologies.

TowerXchange: How do the power requirements
differ between single and multi-tenant cell
sites?
Dr Michele Greca, CEO, Ascot Industrial: Towercos
often have to invest in power solutions before they
know how many tenants will be on the tower and
before they know their total power requirements.
So energy systems for shared sites need to be
modular, with a low initial capex investment
for single tenant sites, and a small increase in
investment for each additional tenant. Towercos
dont want to deploy the capex to support multiple
tenants right away, they need scalable modules with

a few small extra parts for additional tenants.
Ascots tested and proven power solution for
towercos, our modular DC-HPU for one to three BTS
of up to two kW, has an engine capable of supplying
power to three banks of batteries, so the main
change to accommodate multiple tenants is just to
add extra battery stacks. We also enable metering to
bill tenants for their own energy consumption. We
allow customers to right-size their power systems
and then stack on new systems only when needed.
This drives fuel efficiency and sequences capex
properly.
TowerXchange: Tell us about the innovative LPG
In terms of delivering the system to remote areas,

todaywe offer twosolutions: a semi-knock down
product that can behand carried and then easy
reassembled on siteand a containerised cargo
package which is a completeand mobile telecom
site; both are effective and very popularsolutions.
Other advantages of LPG include eliminating
fuel degradation and associated damage to diesel
generators (LPG does not degrade over time) and
more acceptable environmental aspects we are
deploying these systems into sensitive ecosystems
such as U.S. Government public lands.
We continue to evolve and expand our portfolio by
quickly learning and adapting to the most difficult
site requirements, based on both the most rough
and remote conditions as well as sites with the most
difficult environmental and government approval
processes
Ausonia: the Italian

(r)evolution of energy solutions
TowerXchange: Please introduce Ausonia

where do you fit in the telecoms infrastructure
ecosystem? How did you get started in this
business?
Ausonia explain their switch from capex-only to offering a full opex solution
to the market
Massimo Ombra, CEO, Ausonia: Ausonia has a

very long history, we were the first company
to produce diesel generators in Italy, starting
our activities in 1932 thanks to the efforts of my
grandfather. We are still a family company today
and following the management of my grandfather
and my father, I have now the role to lead and
manage the company, keeping client satisfaction
as our main priority.
Massimo Ombra, CEO, Ausonia
As towercos consolidate their

portfolios and search for proven
power solutions which fit with their
need to reduce opex, Ausonia talk
us through their long history in the
market and how they developed
both capex and full opex offering
to enable them to deliver power
solutions worldwide. Drawing on
over 80 years of R&D experience,
Ausonias hybrid solutions are
proving successful for both towercos
and MNOs.
Keywords: Ausonia, South America, Central America, Batteries, Energy, Energy Efficiency, Energy
Storage, ESCOs, Fuel Security, Hybrid Power, Installation, O&M, Opex Reduction, Site Visits, Unreliable
Grid, Whos Who

< How Ausonia has grown in the tower industry
< The driving factors fueling their growth in telecom towers
< The importance of flexibility when developing solutions for clients
< How high efficiency solutions can reduce opex costs and O&M demands
Since the outset, we have continuously invested

into R&D activities and we expanded our product
portfolio to meet all the specific needs of our
customers, who come from many different
industries and countries, and who always need
tailored products. Thanks to this, over the years
we provided power solutions to critical sectors
such as telecoms, oil & gas, defence, healthcare
and many others. Specifically for the telecoms
market, we provide different kinds of gensets for
powering Base Transceiver Stations, BSC/MSC,
data centres all kinds of cell sites, as well as
mobile power units for energy recovery and nobreak power systems for TOC sites. More recently,
we added into our portfolio High Efficiency Power
Units dedicated to remote areas and off grid,
BTS power supply applications. With such wide
flexibility, we can definitively say that Ausonia is
not only a product manufacturer, but its also a
solution maker.
XX
TowerXchange: How has Ausonia grown in the

tower market and what has fuelled that growth?
Massimo Ombra, CEO, Ausonia: Ausonia entered
the tower market through the supply of power units
to MNOs and towercos on a pure capex model basis.
After many years of experience in this industry
with this business model approach, in 2003 we got
the opportunity to enter into a big challenge which
definitively changed our way of approaching the
telecoms market. That was when we were awarded
a contract by Vodafone Italy for the supply of
energy to their off-grid BTS sites in Italy through a
full opex business model. This was something new
to us, but we structured ourselves in order to give
Vodafone the utmost power availability on site and
achieve their complete satisfaction for the energy
services we had to provide.
We then created our energy service company
(MediPower, ndr) and developed a genset model
specifically designed around the needs of this
activity and able to optimise our operational
costs. Since then, we have continuously expanded
this business by signing power lease agreements
also with TIM, Wind (Vimpelcom) and H3G.
Furthermore, in 2010, we have also developed a
family of high efficiency diesel gensets solutions
dedicated to off grid and bad grid cell sites, in
order to further reduce our opex and share this
advantage with the telecom operators, enjoying of a
continuous growth which has been possible thanks
to the high quality standards of our products and
the excellent service levels offered to the Italian
operators. Today we can say we power almost 85%
of the off grid, base transceiver station BTS sites

in Italy. We realised that the solid experience we
gained directly from the field could allow us to
start offering and replicating the full opex business
model also in foreign countries.
Massimo Ombra, CEO, Ausonia: Honestly, very

positive and with excellent forecasts for the future.
Being very flexible in our offer, going from a pure
capex offer to the full opex business model, we can
now satisfy different kind of demand for power.
TowerXchange: How have you found customer

response to Ausonias solutions in the African
market?
After the testing we directly performed on the

sites we service in Italy, todaywe have a proven
technology which has been installed in several
Fuel consumption trends over three years (l/kWh)
to add deep cycle batteries for CDC operation,

and this makes our customers more than happy,
especially when they think about their sites
located in harsh climatic conditions, where they
can eliminate the costs of the batteries and of
the ACU needed for the battery cabinet, further
reducing both the power and fuel consumption on
site.
Traditional AC gensets
Hybrid system where batteries lose efficiency over time
Ausonia variable speed DC gensets
1,60
1,40
1,20
1,00
TowerXchange: In a sector where opex is kept

to a minimum, can you talk us through the
numbers which make your solution stack up?
How does capex and opex compare?
0,80
0,60
0,40
0,20
0,00
countries with different temperature, humidity

and altitude scenarios, guaranteeing extreme
reliability and power continuity.
Remember that we are not only a producer of
these power solutions, but also first users in
performing the Energy as a Service model, so
we are perfectly aware of the importance of the
reliability of a product, as well as its capability
of maintaining unaltered performance over its
lifetime. Our customers know this and in recent
years they asked us to provide them with our High
Efficiency DC gensets, which are based on variable
speed DC generator technology we developed
internally in Ausonia for the telecom industry.
With our units on their sites, our customers
realised that this technology can guarantee them

huge opex reductions, both in terms of fuel cost
savings and number of maintenance and/or
refueling trips to site.
They clearly understood our technology went
beyond the typical concept of hybrid solutions,
in which a genset needs to cycle with batteries
in order to achieve the desired opex reduction.
In fact, we are able to achieve even more savings
than the typical hybrid power units available in
the market by directly operating our variable
speed DC generator, which automatically adjusts
the engine speed according to the load existing on
site and following the most efficient point of its
power curve. All this is done without the necessity
Massimo Ombra, CEO, Ausonia: There are multiple

advantages to our high efficiency solutions for
powering cell sites. Thanks to the significant
reduction in fuel consumption and different
capacities of our integrated fuel tank, we can
extend the refueling interval of our power units
up to three to four months. On top of this, our high
efficiency solutions can be configured to have a
preventive maintenance interval of up to 2,000
hours, which is more than 80 days and requires
only four or five trips to a site per year to perform
maintenance activities.
Additionally the systems can be controlled
and managed remotely through a web-based
dedicated system which can be integrated to the
Network Operation Centre (NOC) to track alarms,
ticketing and escalation. Moreover, thanks to
the scalability of our modular solution, we can
deliver systems to power multi-tenant sites, in
which each operator can be billed singularly for
XX
Meetup
Americas 2016
its energy consumption. Considering all this, if

our customers compare our DC gensets solutions
with the traditional solutions installed around the
globe, they realise that the payback period is often
less than one year and the product lifetime goes
over five years, making it therefore an excellent
investment even in preparing short term business
plans.
TowerXchange: Do you always work directly
with the operator or towerco or do you also
work closely with managed service providers in
the market as well?
Massimo Ombra, CEO, Ausonia: All these

scenarios are possible in this market. We have
supplied directly to operators when they owned
the passive infrastructure assets, but we have sold
our units also to towercos when the sites were
on lease. In some other cases, we offered our
solutions to local managed service providers who
wanted to add a plus feature into their current
offers for services. So, I have to say we are totally
open to work in all possible directions with any
reliable partner, given for us it is mandatory to
keep our clients happy - whats best for them is
also the best for us!

Jet powered microturbine gensets

offer a more efficient alternative to
traditional DGs
Innovative solution is more cost effective, cleaner, greener, quieter, burns just about any
liquid or gas fuel and breaks even compared with DGs after approximately 15 months
Stuart Kelly, Bladon Jets
Its not often TowerXchange comes across a genuinely

innovative alternative to a traditional diesel genset that provides
primary or backup power to many emerging market cell towers,
but when we heard about Bladon Jets micro turbine gensets
(MTG), we had to find out more! While the MTG is cleaner and
quieter than a traditional DG, with almost no maintenance
requirements, what makes the MTG particularly interesting to
towercos is the fact that they are more efficient and are cleaner
and quieter than a similar powered DG. Delivering cleaner
and more efficient energy are key business requirements we
continuously see from mobile operators and towercos.
Keywords: Africa, Asia, Bladon Jets, Capex, DG Runtime, Energy, Fuel Cell, Hybrid Power, Off-Grid, Opex
Reduction, RMS, ROI, Rooftop, Shelters, Site Visits, Skilled Workforces, Solar, Spare Parts, Unreliable Grid,
Uptime, Whos Who

< How Bladon Jets harnessed the power of choice at 40,000ft for static power solutions
< The size and weight advantages of MTGs over traditional DGs
< A low maintenance solution: no oil, no water, only one big moving part
< The importance of an energy efficient solution that compliments your existing supply chain MTGs
can run on almost any liquid or gas fuel
< Months to breakeven/crossover in different scenarios, compared with traditional DGs
TowerXchange: Where do Bladon Jets fit in the

telecoms infrastructure ecosystem?
Stuart Kelly, VP Market Development, Bladon Jets:
We have invested considerably in R&D over the last
5 years and perfected the design and manufacture
of low cost jet powered microturbine gensets
(MTGs). Our MTGs are positioned to replace diesel
generators as the primary or backup power solution
at cell sites, thanks to our superior performance and
reliability. Bladons MTGs are ultra quiet, clean and
green, small and light, which is critical at shared
cell sites.
Jet engines arent new. This is a 70 year old
technology, and is the power of choice at 40,000ft.
Our secret sauce is not so much a new technology
as a manufacturing methodology that enables
us to produce microturbines economically in
volume. One of our most important manufacturing
techniques is a process to cut turbine blades from
a single piece of material. Our units are about 30%
smaller than a diesel generator, yet they generate
the same power. Weve been able to manufacture to
a price point such that our MTGs are commercially
viable compared to reciprocating diesel gensets.
TowerXchange: How did your micro jet engines
evolve as a solution for cell sites?
TATA became excited about our micro turbines
and invested via Jaguar Land Rover in 2010. The
first incarnation was actually in the Jaguar CX75
concept supercar, but the ancillary application of
XX
the technology was for static power solutions for

telecoms.
We are finalising our market entry strategy to sell
12kW MTGs into telecoms. For us the towercos,
managed service providers and MNOs themselves
are all prospective clients.
TowerXchange: Which telecom markets are you
targeting and why?
Given the Tata connection, an early market will be
India. The continent of Africa is also a key market
for Bladons products. We have conducted field
trials in Africa over the last few months and learned
valuable feedback from our partners there. Some
of our field trial units have been running nonstop
for 1000+ hours without ANY filter changes or
servicing. Thats a really compelling proposition to
towercos that are crippled with genset maintenance
costs.
We have attended TowerXchange Meetups around
the world to share Bladons vision with MNOs and
towercos. With so many assets changing ownership
in Africa, there is a new focus and financial drive
to leverage tower assets harder. When towers are
bought, or being prepared for sale, audits often
reveal the assets arent operating as efficiently as
the owner might have thought. But the new owners
dont want to create too much turbulence in the
supply chain, so its important that our solution
complements the existing energy supply chain in
developing markets.
Clean, green and ultra low maintenance makes the MTG most attractive for telecom sites
TowerXchange: Tell us about your solutions

maintenance requirements.
Microturbine engines are a low or no maintenance
solution. Unlike a diesel reciprocating engine, there
is no oil and no liquid coolant in our solution. We
have just one moving part, the turbine itself, which
runs on air bearings with no liquid lubrication.
Maintenance is a key issue at remote sites that
might be many hours drive on a lousy road the
cost to get there can kill the TCO so a technology
with the potential to dramatically reduce site visits

can be very compelling. There is a very low skill
requirement to maintain our MTGs in the highly
unlikely event of a turbine failure, our strategy is
remove and replace, not rebuild onsite. For lesser
maintenance issues, such as filter changes, the O&M
subcontractor can readily maintain a stock of fuel
and air filters.
As well as reducing fuel and maintenance costs,
thieves are less inclined to steal our MTGs as
there are few if any parts they can recycle.
TowerXchange: Okay, so what are the advantages

of micro jet engines over other alternate energy
solutions such as fuel cells or solar?
There is no reliable or sustainable supply chain
to support hydrogen or methane fuel in Africa
yet. As a technology that is hostile to the current
supply chain, the practical challenges of keeping
fuel cells running are prohibitive to embracing that
particular alternative energy solution in more than
perhaps 20% of the estate. Lets be honest, green
power is not widely used on cell sites. In India for
example, eco-friendly cell sites account for less
than 1% of the estate, but tower owners still want to
migrate away from the reciprocating diesel genset
because of the substantial energy and maintenance
opex it incurs. We dont see our solution as an
Aspiring ESCOs that are currently in the business

of maintaining traditional diesel gensets have an
opportunity to profit handsomely by deploying
a more reliable solution like ours their goal of
selling at a price per kWh rate becomes more
compelling. Our MTG unit has robust telemetry
built in, so you need fewer field engineers as many
settings can be changed remotely. From the NOC
you can see if units are operating outside of their
tolerances, enabling preventive maintenance
rather than waiting for it to break. Also, and not
insignificant for the tower operator, is the use
of telemetry to know where the unit is as well
as having the inbuilt electronics to stop the unit
operating if moved without permission the same
technology as a tracker system on a car.
We dont see our solution as an alternative to a 200sqm PV

array; our solution is so much more compact that the use cases
differ significantly
alternative to a 200sqm PV array; our solution is

so much more compact that the use cases differ
significantly. Solar isnt the optimum alternate
energy solution for all cell sites; even in Africa,
sites dont get good quality sunshine all the time,
especially in high rise areas with shadows. You can
install solar panels on an urban rooftop, and find
that six months later the neighboring building has
had five floors added! Our solution doesnt succumb
to such vagaries. Solar has to be a part of the future,
but in the context of telecom towers its not a killer
app, its a point solution. Our MTGs can be used
to smooth power from solar as well as replacing
a chugging tractor engine based generator. When
renewables work the MTG can become a part core
part backup, there are no startup issues even if its
left idle for some considerable time between use.
The fuel will contaminate before the genset has a
problem!
But the important thing is that this is an evolution
not a revolution the MTG can be adapted to any
local fuel supply resource. Bladon gensets, in

keeping with all turbine based solutions, run on a
wide range of fuels, including green alternatives
such as natural gas and biofuels as well as diesel
and kerosene. Bladon MTGs will also tolerate a
blend of fuels like diesel mixed with kerosene thus
making the mix useless for thieves planning on
using it for other diesel engines.
TowerXchange: How does the capital outlay for
your MTGs compare to traditional DGs, and
when does the Total Cost of Ownership (TCO)
crossover?
The capital outlay for an MTG is currently slightly
higher than a quality diesel genset solution, but
the price difference is a double not triple digit
percentage. Running for 12 hours a day in SSA in
30 heat then within 15-19 months the TCO will
crossover having recovered the difference in capital
outlay through fuel and maintenance cost savings.
XX
Stuart Kelly, VP Market Development, Bladon

Jets: We go into production later this year. The
first run of MTGs have already been ordered, and
weve signed distribution agreements already
with partners in Africa and India. Well be
manufacturing in the UK, and in Asia soon too, and
from the US in due course.
TowerXchange: What is the sweet spot in terms
of the load your solutions can support?
Our Bladon MTG12 MTG delivers up to 12kW, with
output options 230V AC or 120V AC. We also have a
48V DC output variant that telecom clients tend to
like. Most telecom sites need somewhere between
3kW and 6kW for constant power, maybe 9kW if
there is a hybrid arrangement requiring battery
bank charging. Since the MTG runs at variable
speed to match the load our efficiencies are much
better at partial loads compared to traditional DGs
TowerXchange: How do you ensure modularity
as power requirements increase with the
addition of multiple tenants?
Given that operators are trying to drive power
consumption down, a new BTS might need 1kW
when the last model needed 2kW. At the moment
the applications we see dont consume more the
3kW in total, so it should be possible to add a second
tenant without upgrading the MTG. Because our

unit doesnt de-rate over time, its ability to deliver
continuous power is stronger. The MTG is a more
reliable means of delivery of consistent power
than a conventional DG for a multi-tenant site. If
additional tenants are added beyond what one MTG
can provide, the answer is to add a second unit in a
daisy chain. And if the power requirement reduces
again, our units are relatively easy to relocate
to another tower. Another critical consideration
is that the MTG can be 25% more efficient as a
reciprocating engine when running at part load.
TowerXchange: How do you bring Bladon Jets to
market do you sell direct or through channel
partners?
Our model is to sell through partners. Towercos and
MNOs need the credibility of boots on the ground
to provide after sales service, even with a low
maintenance solution such as ours. We are targeting
key managed service providers on the front lines of
tower builds, upgrades and maintenance, with the
objective of creating a pipeline for thousands of unit
sales.
TowerXchange: Finally, please sum up how you
would differentiate Bladon Jets from other cell
site energy solution providers.
Stuart Kelly, VP Market Development, Bladon
Jets: Weve taken a well known form of power
generation in the reciprocating engine, turned it on
its head and married it with another established
We go into production later

this year. The first run of
MTGs have already been
ordered, and weve signed
TowerXchange: How near are your MTGs for

telecom to being a market-ready solution?
distribution agreements
already with partners in

Africa and India
technology in jet engines, then developed a

manufacturing process to bring to market an
innovative solution with a lower TCO business case
for telecom tower operators. Micro jet engines are
ultra reliable, super durable, low maintenance,
and generally have a TCO runway in Africa and
India from 9 to 19 months. The MTG is designed
to support the current supply chain, which means
our solutions can be easily introduced with an
expectation of a short term payback. The fact that
its an exciting jet engine is only so interesting
what matters is reducing fuel bills, and the ability
to deploy it into the field easier and cheaper than a
regular diesel genset
Enertikas ESCO proposition

for Europe and CALA
From Spain to Mexico, the company aims at generating 60% savings for the
Last week I visited the Enertikas offices in Barcelona
to interview the companys CEO, Francesc Tarong,
and discuss their energy saving proposition which
has so far attracted among its client base Cellnex and
Telefnica in Europe and in Latin America.
Francesc Tarong, CEO, Enertika
Enertika was created in 2008 and has over fifty highly

qualified employees located in their offices in Spain,
Guatemala, Mexico and Chile. So far, the ESCO has
delivered great results to its clients which go beyond
the telecom sector and include municipalities such
as Barcelona and Madrid, automotive companies
including Seat and utilities such as GasNatural Fenosa.
Keywords: Air Conditioning, Americas, Batteries, Business Model, Capex, Central America, Chile, ESCOs,
Energy, Enertika, Europe, Guatemala, Hybrid Power, Mexico, Multi-Region, Off-Grid, On-Grid, Opex, Opex
Reduction, Site Visits, South America, Spain, Unreliable Grid, Uptime, Urban vs Rural, Whos Who

< Enertikas footprint and services in Europe and beyond
< Which kind of ESCO services are a priority in Europe and CALA
< The ESCO business model and its financial advantages
< How does Enertikas WATTABIT software work?
TowerXchange: Please tell us about Enertikas

energy efficiency proposition.
Francesc Tarong, CEO, Enertika: At Enertika we
focus on reducing energy opex thanks to three
separate solutions. On one hand, we are able to
manage the overall energy consumption of base
stations thanks to our IT platform, WATTABIT. Via
its dashboard, we track detailed information with
regards to the levels of consumption on each and
every tower, weather conditions affecting it, the
temperature at various points of the site as well as
any other factors impacting the distribution and
consumption of energy.
Being a remote system, we are able to easily
access and track data for large portfolios of sites
spread across distributed locations. Specifically,
we receive data from each base station every
fifteen minutes and we are alerted immediately in
the event of over-consumption at any given site.
Secondly, we have developed a free cooling
system that exploits natural refrigeration and
maximises the advantages provided by climatic
conditions in order to reduce the energy
consumption of air conditioning hence the energy
bill.
Lastly, we supply energy to our clients whose sites
are located off-grid or linked to unreliable grids
thanks to a combination of photovoltaic, battery
and gensets solutions. Thanks to our energy
solution, weve been able to ensure our clients
savings to up to 60%.
XX
TowerXchange: Can you share some insights with

regards to your European projects?
Francesc Tarong, CEO, Enertika: So far, weve been
active in Spain where we serve both Telefnica
and Cellnex, and we are looking into Italy as well.
In Europe, the ESCO model has been extremely
well received especially since we partner with
our clients and make the initial investment, hence
relieving them from the capex element. In fact, our
revenue is generated via the savings we ensure
to our clients which represents for them a double
incentive Not only do they start saving from day
one but additionally, they dont have to pay for our
services out of their pocket!
In Spain, weve supported Telefnica for its offgrid sites but most of our work is focused on the
implementation of our solutions to reduce opex and
energy consumption rather than providing energy
since most sites are connected to the grid.
Especially since the advent of tower companies,
there is a lot of attention on reducing opex and
ensuring high level of efficiency at each site.
Sustainability is an important factor, particularly
for listed companies, but potential savings and
competitiveness are key when making the decision
to opt for an ESCO partner.
The European tower market has been flourishing
over the past couple of years and now the creation
of Telxius represents another opportunity to
bring those assets to maximum efficiency levels.
Optimisation is becoming a buzzword not only
A screenshot of Wattabit
for towercos, who see towers as their number one

income generator, but also for operators that decide
to keep their towers but still aim to minimise their
operational costs.
TowerXchange: Please tell us more about your
operations in CALA.
Francesc Tarong, CEO, Enertika: In Central America
weve initially thought wed see higher level of
demands for off-grid sites but in reality, just like in
Europe, the electricity grid is quite efficient in major
cities and suburban areas. And although rural areas
arent well connected yet, we havent seen a lot
going on there in terms of network densification.
Penetration and smartphone adoption in those
areas arent great yet and operators and towercos

arent likely to commit to huge investments unless
mandated by regulators.
On the other hand, CALA towercos and operators
are generally very receptive when it comes to
energy savings. You see, most MNOs in the region
have developed their networks quite fast especially
since competition is fierce. So lots of operators
have found themselves with good sized networks
in a relatively short period of time and havent
necessarily paid enough attention to technical
elements such as air conditioning and cooling
systems.
Nowadays, MNOs are paying more attention to
So we are able to cater to both ageing networks

with infrastructure whose energy consumption is
affected by obsolete systems, and new installations
where we can maximise energy efficiency from day
zero.
Enertikas business model
TowerXchange: Can you share some practical

details on how WATTABIT works?
Francesc Tarong, CEO, Enertika: First of all, we
install a number of sensors on certain areas of the
base station to track KPIs such as temperature,
access, energy et cetera. And we also install an
embedded PC on each site able to upload large
volumes of data to the cloud.
This wave of data is received by our engineers
which then can:
energy consumption especially since its such a

burden on their balance sheets and are getting in
touch with ESCOs to improve upon those obsolete
systems that were implemented back then.
Most air conditioning solutions available in the
market require some level of manpower to adjust
the temperature according to climatic conditions
or after maintenance has occurred on a site, which
often results in the parameters being modified. At
Enertika, we offer remote solutions for this problem
since WATTABIT is able to modify the temperature

at each base station without the need of any on site
intervention. And when the tower is located in a
remote part of Guatemala, remote management is
particularly handy!
Other clients, such as the ones we are in discussion
with in the Andean region, are now developing
their networks for the very first time, which gives
them a great opportunity to adopt state of the art
systems such as Enertikas.
< Compare data related to consumption with what

we receive from the utility company. In this case,
we analyse the actual consumption with the one
our client gets invoiced for and we are often able
to identify a first gap. In this case, Enertika offers
among its services to claim back the over-invoiced
amount to the utility company on behalf of our
clients.
< Detect simple and combined alarms on

temperature, access, failures et cetera. The access
element, to give you an example, is useful as we
often track changes in temperature after the visit
of maintenance inspectors which maybe prefer a
cooler or warmer environment during their visit.
XX
Our platform can fully integrate with existing

RMS solutions and requires minimum
maintenance. In fact, any software update is
performed remotely and the only elements that
require changing are the cooling filters which can
be switched by any technician in charge of site
maintenance.
In the case of off-grid sites, our system tracks the
level of power generation and the status of each
component such as batteries, gensets and the
photovoltaic plant.
WATTABIT offers a very quick, easy to read
overview of the project thanks to its dashboard,
and then provides advanced functions such as
analytics and tailor-made reports as requested by
our clients.
TowerXchange: Which savings can your clients
expect?
Francesc Tarong, CEO, Enertika: Savings vary
region by region but weve seen them reaching
25% in CALA and around 18-22% in Spain.
Enertikas business model allows our clients to
start saving from day one and we ensure them
incremental growth on their savings and EBITDA
whether their energy consumption needs are
likely to increase or not.
We invest in projects with a minimum financial
commitment of 1mn with estimated potential
savings over 10% and where we can ensure payback time to be no longer than five years


how to guides)
Tower
Xchange
Why lead-acid batteries

meet the requirements of >80% of
the worlds cell sites
A comparison of energy storage chemistries, and a comparison of requirements
across EMEA
Anssi Laitinen, Marketing Director

Reserve Power EMEA, EnerSys
Leading energy storage solution provider EnerSys has

transformed from a few hundred million into a $2.5bn
business over the last 13 years that Anssi Laitinen has
been with the company. He started as a Sales Engineer
back in 2003 and has witnessed the global expansion
and growth of EnerSys. During the last five years Anssi
has been in a marketing leadership role and witnessed
the shift in customer demands. Todays customers are
now wanting advanced, application specific solutions to
meet their challenges.
Keywords: Air Conditioning, Batteries, DG Runtime, EnerSys, Energy, Energy Efficiency, Energy Storage,
Lead, Lithium, Logistics, Off-Grid, On-Grid, Opex Reduction, Outdoor Equipment, Project Finance, RMS,
This article includes forward-looking statements

and / or information, which are based on the
Companys current expectations and assumptions,
and are subject to a number of risks and
uncertainties that could cause actual results to
materially differ from those anticipated. Such
risks include, among others, risk associated with
competitive actions, technology development and
implementation, intellectual property infringement,
failure to integrate acquired businesses, penetration
of existing markets, expansion into new markets,
hiring and retaining high quality management and
key employees and general economic conditions
including the risks described in the Companys most
recent annual / quarterly report, as applicable, on
Form 10-K / 10-Q respectively, filed with the SEC,
along with other unforeseen risks. Nothing that
we say today should be interpreted as an update
to the information or guidance that we provided
in our most recent investor call, our most recent
quarterly / annual report, as applicable, on Form
10-Q/10-K respectively, filed with the SEC, and our
current reports filed with the SEC on Form 8-K since
quarterly / annual report.
Renewables, Shelters, Site Visits, Skilled Workforces, Sodium, Unreliable Grid, Vanadium Redox, Whos Who

< Lithium-ion, nickel-cadmium, Sodium Nickel Chloride and flow batteries suitability for Telecom markets
< Tailoring EnerSys core TPPL technology to meet specific client requirements
< The implications on performance of correct charge, discharge, maintenance and replacement regimes
< Intelligent temperature management: modernizing sites and moving equipment outdoors
< A closer look at backup power requirements of European cell sites
TowerXchange: Please re-introduce EnerSys

- where does the company fit in the telecom
infrastructure ecosystem?
Anssi Laitinen, Marketing Director Reserve Power
EMEA, EnerSys: EnerSys is a global leader in energy
storage for industrial applications. We have over
10,000 customers in over 100 countries and have
been supplying reliable products and services for
100 years. Both in Europe and in the US we boast
XX
tremendous heritage and knowledge, with many

of the worlds most renowned battery plants under
our umbrella.
As a segment, Telecom is a part of our Reserve
Power business and contributes >35% (FY15) of
global Reserve Power sales. The Telecom business is
an invaluable opportunity to interact and develop
together with a fast changing industry.
Traditionally EnerSys has been a faithful, valued
battery supplier to OEMs and end users, which we
are proud of, however we are increasingly adding
an extra layer of product and services. Though our
recent acquisitions EnerSys has focused on vertical
integration and value added solutions. EnerSys
remains a trusted battery manufacturer, and now
supplies a variety of other product and services;
latest being thermally managed enclosures,
cabinets for BTS and Fibre-to-the-X environment.
We are integrating power into cabinets, provide
monitoring solutions and offer a range of anti-theft
solutions. This has enabled EnerSys to become
a broader supplier and partner to the telecom
industry.
TowerXchange: When tower companies are
providing shared power solutions, what are
their energy storage options, and what are the
pros and cons of each solution?
EMEA, EnerSys: More than 80% of all batteries are
still supported by lead-acid chemistries.
Lithium-ion and other alternate energy storage
chemistries may be getting lots of exposure, but

deployment has been slower than expected and
their track record remains limited. Lithium-ion
has found a narrow niche where the situation calls
for reduced space and weight. Lithium-ion may
offer more cycles, but there is still a narrow band
where Lithium-ion benefits materialise in terms of
Total Cost of Ownership (TCO), and recycling can be
expensive.
Nickel-cadmium is a capital intensive solution,
and has seen small scale usage as backup power;
typically at remote telecom sites. Sodium Nickel
Chloride batteries never really took off, and some

well-known players have divested that business
now.
Flow batteries have a niche presence in the market
place but typically this technology has a relatively
low energy density, round trip efficiency and
some complexity at a system level. While flow
batteries offer good cyclability, are relatively safe,
nonetheless it remains a big exercise to get the
system commissioned.
Every energy storage technology has its pros and
cons, technically and commercially. In the context

of infrastructure sharing where power is shared,
loads are significant at the outset, which calls for
a certain type of energy storage solution. There is
risk in investing the extra capex to get the 10,000
cycles that some of these alternate chemistries
claim to provide. If they fail at 6,000 cycles, or if
there are instances of theft or vandalism, the TCO
fails. In the EMEA and Asia telecom markets, you
have to be brave to count on a battery to survive on
a site for more than five years due to challenging
grid conditions, theft or pure application related
challenges.
Lead-acid batteries have been supporting industrial
applications for over 100 years. Today Thin Plate
Pure Lead (TPPL) is our backbone technology
and for example EnerSys SBS EON Technology
batteries launched in 2007 in the telecom off-grid
landscape continues to be used in the harshest
conditions.
Whilst EnerSys is already the industry leader,
we are still exploring how far this technology
can be stretched we have not seen the limit
of what lead batteries can do. Manufacturing
process improvements like design and materials
development are enabling us to improve the
product every year. We have our base TPPL
platform and we dont need to deviate too far
from that its more a matter of fine tuning the
engine, using features of the chemistry to match the
requirements of the specific race. In the MEA tower
business it is all about high cycles and temperature
resilience. In the US and mainland Europe the
battery may need to deliver high performance in

one minute when in utility scale energy storage
these requirements may be combined. TPPL can be
tailored to the application.
TowerXchange: One of the ways towercos can
add value for their clients and improve their
own bottom lines is to reduce opex - can you
share some examples of how EnerSys solutions
have enabled opex reductions?
EMEA, EnerSys: Whether we can reduce opex by
around 60% compared to a site running the DG
24/7 depends on the customer specific operating
conditions. Fuel costs are relatively low today,
so this is not only a driver but when you plug in
service costs (such as those defined simply by the
distance of the site from the refueling depot), and
the replacement cost of the DG, all significantly
influence the potential opex saving.
Having implemented our TPPL batteries in
challenging telecom grid conditions for over
nine years, we now know how the product has
performed and this gives us the confidence to
continue to support our existing and future
customers.
Towercos need to recognise that energy storage is
becoming a crucial component of value creation.
If battery banks are sized, charged and discharged
correctly, monitored correctly and if timely actions
for replacement is taken, then the site operation
and reliability will be optimised.
C-level guys at towercos should understand it is not

just a simple battery: it can be your best friend or
worst enemy depending on execution. If uptime
targets are missed, the cost of SLA penalties is
compounded by reputational damage. We have
seen sites where best in class deployments are
ruined by adding a cheap battery to an expensive
generator. This has led to the generator not starting
when needed. Or in other scenario, the business
case is spoiled due to the wrong battery operating
settings used by the customer. The worse the grid
conditions, the more crucial the role of energy
storage and correct operation is needed.
TowerXchange: What role is EnerSys playing in
the migration from indoor to outdoor telecom
systems?
Anssi Laitinen, Marketing Director Reserve
Power EMEA, EnerSys: EnerSys provides a variety
of thermally managed enclosure solutions. This
offering helps the transition from traditional, high
energy consumption sites to more environmentally
friendly, lower opex solutions. Typically in many
of these projects, the requirements are governed
by this simple question: what do you want to cool
and what is the best way to do it? Does your battery
require cooling? Radio equipment and rectifiers
can often run up to 55-65C. If youre dealing with
a supplier who understands the role of batteries in
thermally managed cabinets and who can provide
one energy storage solution, you can reduce risk
and complexity and develop an overall power
package tailored to meet the requirements of your
specific rollout with the minimum opex.
XX
TowerXchange: Is the migration from indoor to

outdoor telecom systems nearing completion?
Power EMEA, EnerSys: What I see is that site
modernisation from an energy consumption
perspective has not proceeded at the rate and the
scale many expected. It requires a fundamental
change in thinking to move everything out into the
sun and/or really start to run your equipment in
higher temperatures. It will be a long process to
modernise Eastern European and African cooling
systems to stop or reduce running A/C. Most
equipment today still remains in the same small hut
or building, but many of these could be converted
to outdoor equipment in the future. Temperature
tolerant TPPL technology together with thermally
managed solutions can play a significant role in
this.
TowerXchange: Lets talk about the European
telecom tower market; what backup power
solutions are typically on European cell sites,
and what typical energy storage requirements
do those sites have?
Power EMEA, EnerSys: Europe is a different market
compared to Middle East and Africa. There is
generally less expectation for cyclic capability. Float
non-high cyclic lead acid batteries have proven to
be the most reliable, most deployed energy storage
product in European telecoms.
European grids are generally stable, but challenges
arising from equipment or ambient temperatures

mean there is still an interest to run sites at higher
temperatures and unlock the savings of free
cooling. In Italy, Spain and parts of Russia and
the CIS; markets where towercos are increasingly
active, free cooling can help. On these areas where
we see extreme temperature differences free
cooling could offer a solution to optimise sites
yearly energy consumption.
Many countries in Europe have recommendations
or even regulatory instructions regarding the
back-up times on mobile cell sites. For example,
Sweden has recently started to move from two
hours back-up time to four hours, especially
outside densely built-up areas. On the other
hand, in Germany, regulators do not require any
backup power, so there are sites without any
back-up power. Towercos should understand
these fundamentals to determine what kind of
requirements and dynamics this may drive. It also
significantly impacts the risks and returns of the
investment.
Problems can begin to occur in countries where
grid stability varies for example between major
cities and less populated areas. This drives
the battery selection especially in cases when
major cities may utilise less cyclic batteries in
comparison with less populated areas, where
there may be a need for high cyclic, more robust
battery solutions.
TowerXchange: As the tower industry becomes
increasingly global, please explain the
importance of working with global partners.

Power EMEA, EnerSys: As mentioned, EnerSys
has over 10,000 customers in over 100 countries.
We have a leading worldwide presence with 32
manufacturing facilities located in the Americas,
EMEA and Asia.
At EnerSys we believe we need to build the
solution to create the best overall value. As a
global company we maintain our leadership
position by providing customers with world
class products and services, achieved through
total employment involvement, team work, and
supplier partnerships. This belief is the foundation
that helps shape the companys vision for progress
and allows our customers to achieve their goals.
TowerXchange: Finally, please summarise
how you would differentiate EnerSys from
competitive energy storage solution providers.
Power EMEA, EnerSys: I believe what makes
EnerSys unique is our products and our people.
Our products and services are the foundation
of our market leadership, and our solutions are
recognised for their quality and heritage. Our
battery products span a broad range of sizes,
configurations and electrical capabilities, enabling
us to meet a wide variety of customer applications.
And I believe EnerSys has very talented people to
fit the needs of our customers worldwide
FG Wilsons customers define

the requirements for a new opexbusting DG
New telecoms product extends service intervals to 1,000 hours and can be controlled
from the NOC
FG Wilson is a leading global supplier of diesel
generator sets with a strong heritage of quality,
support and value. From 6.8 to over 2,500 kVA,
today FG Wilson offers a wide range of generator
sets, all built in modern facilities. This interview
focuses on FG Wilsons new telecoms product,
a new packaged generator product designed
to meet the requirements at distributed cell
sites, where the new telecoms products 1,000
hour service intervals and integrated remote
communications can significantly reduce opex.
Michael Milligan, FG Wilson
Keywords: Caterpillar, Energy, Energy

Efficiency, FG Wilson, Hybrid Power, NOC,
Opex Reduction, RMS, Site Visits, Spare
Parts, Whos Who

< Defining the requirements for a new efficient DG in partnership with customers
< How FG Wilson maximise reliability
TowerXchange: Can you introduce your company

and tell us about FG Wilson?
Michael Milligan, Account Manager, Global
Accounts, FG Wilson: FG Wilson is a world leader
in the generator set industry. We were founded in
1966 in Belfast which means that this year, we are
celebrating 50 years in business. Our first products
were mini power stations, mostly for the Middle
East, and we still market large custom generator
sets, but in many parts of the world we are probably
better known for self-contained small power units
which are relatively simple to buy and operate and
require a minimum of installation work. These
are supported by a global network of around 300
dealers.
FG Wilson generator sets are trusted to provide
emergency power in over 190 countries around
the world. They provide essential standby power to
critical applications such as hospitals, airports, data
centres, telecommunication networks as well as
residential properties and factories.
FG Wilson generator sets are manufactured at
Caterpillar facilities in the United Kingdom, United
States of America, Brazil, India and China.
Since 1998 FG Wilson has been owned by Caterpillar
Inc, one of the leading US corporations and a
Fortune 500 company. The brand now sits within
Caterpillars Industrial Power Systems Division.
< DG-only or hybrid applications

< Post sale service and warrantee support
TowerXchange: Tell us about FG Wilsons new

telecoms product what makes it special?
XX
To reduce operating costs, site visits for

maintenance and fuel replenishment, the product
offers 1,000 hours between service intervals, and
comes with set-mounted fuel tanks of up to 2,000
litres. Being able to monitor the generator set from
the telecom NOC maximises uptime and allows
preparation for site visits minimising servicing costs
and ensuring that site visits are effective.
The product options list includes a flexible range
of enclosures offering three levels of sound
attenuation to help ensure that it meets local noise
regulations.
What makes this product special is that not only
does it go further in offering much more value
to customers with a specification strongly led by
customers, but also we have been able to offer this
for a significantly lower price.
TowerXchange: Tell us about the reliability of
your solution?

Accounts, FG Wilson: First and foremost, this is a
very customer-defined product. We spent a great
deal of time simply talking with our customers and
dealers and working through issues together to
understand what was important. There was a real
focus on product operating costs and this has led
to a packaged generator product which is ideal for
telecoms users, or indeed for any customer who
operates at sites which are fairly remote. And the
product is perfect for either hybrid or generator
only applications.
We know from past experience that rigorous upfront design, testing

and validation lead to superior reliability throughout a products
lifetime and that this can save customers a substantial amount of
money over time

Accounts, FG Wilson: We know from past
experience that rigorous upfront design, testing and
validation lead to superior reliability throughout a
products lifetime and that this can save customers a
substantial amount of money over time.
We are a volume manufacturer and we take
reliability extremely seriously. We have made
multi-million dollar investments in our industryleading Engineering Centre of Excellence where
all our new products are given intense pre-launch
testing which include vibration, engine/alternator
cooling, electromagnetic compatibility, noise, water
ingress and rating/transient performance. Our
products operate in the toughest environments
and are designed to perform exactly in the way our
customers expect.
together with our distributors through our Partners

In Quality programme which provides on site
product performance feedback back to our product
engineering team.
Manufacturing quality is extremely important

to us and our facilities operate with rigorous
production quality controls, utilising the Caterpillar
Production System and standard work processes.
Then, once products are installed, we work
TowerXchange: What warrantee and after sales

support do you offer FG Wilson customers?
TowerXchange: Can you outline how FG Wilson

integrates with hybrid providers?
Accounts, FG Wilson: We have incorporated a great
deal of product flexibility including control systems
and remote communications to ensure that our
generator set integrates seamlessly with any hybrid
system. We are partnering with several established
hybrid manufacturers to confirm compatibility
and ensure efficient and fast deployment of our
products on site.

Accounts, FG Wilson: FG Wilson has a global
Meetup Americas
2016
16-17 June, Florida
Meetup Africa 2016

The new telecoms product with optional fuel tank
network of around 300 dealers who offer

aftermarket and warranty support for the complete
generator set package a one stop shop. Dealers
are fully trained on all aspects of the generator
package and are supported by the FG Wilson central
technical helpdesk, technical libraries, on line
systems and an extensive parts distribution centre
which ships three million parts a year and carries
11,500 product line parts.
Our dealers will be close at hand, fully equipped
and trained, with quick access to parts in-territory
to offer a fast and efficient service to solve any
issues during initial visits, which minimises any
product down time.
Meetup Asia 2016

TowerXchange: Where have the generator sets

been successfully installed?
Michael Milligan, Account Manager, Global Accounts,
FG Wilson: FG Wilson has installed over 600,000
generator sets since 1990 and we continue to
develop new products based on tried and tested key
components. In every continent there is a significant
population of FG Wilson generator sets working at
telecom sites, and there are many reference sites
listed on our website. Were now building on that
population with this new customer-led product
Meetup Europe 2017

4-5 April, London
XX
Invendis: Expanding operations

in Africa and Asia
How Invendis is expanding its footprint and delivering increased opex reductions
TowerXchange recently caught up with
Satish Kulkarni, CEO of Invendis to get
an update on their latest projects, plans
to expand their footprint, and successes
in Africa and Asia. We discussed best
practices for inventory reduction, fighting
fuel theft, site monitoring and capturing
data on energy usage.
Satish Kulkarni, CEO, Invendis
Keywords: Africa, Asia, Asia

Insights, Batteries, edotco, Invendis,
Logistics, Monitoring & Management,
Operational Excellence, Off-Grid,
Opex Reduction, RMS, Site Level
Profitability, Site Management System,
Site Visits, Unreliable Grid, Uptime

< The expansion of Invendis footprint in Africa and Asia
< How Invendis reduces inventory cost by 20 to 25%
< How Invendis is reducing fuel theft
< The benefits of tracking individual batteries on sites
TowerXchange: Please give us an update on some

of your new projects and milestones since we
last spoke.
Satish Kulkarni, CEO, Invendis: Over the last two
years we have moved into several new countries
and territories. Two to three years back a lot of our
business was from Africa in countries like Tanzania
and Malawi. Over the past four to five years weve
installed systems in over 4,000 sites in Africa; we
work with almost all of the towercos in Africa. We
have some business from Helios Towers in Africa,
and were about to sign a contract in Ghana and
Tanzania with them. Were still active in Africa and
continue to grow there.
In the Middle East we have a contract through
Nokia as a primary contractor, and were doing
work for them on 275 sites increasing to 1,000 sites.
In Asia we recently won a contract with edotco
to install systems on 12,000 sites in Malaysia,
Bangladesh, Sri Lanka and Cambodia. We are
deploying 3,000 systems in Bangladesh and 3,000
in Malaysia, and then we will deploy another 6,000
by the end of 2016. There is also a lot of activity
in India; we estimate that towercos are using RMS
on close to 200,000 sites. We are installed on 3,400
of Ascend Telecoms sites and we also have an
order from Intelligent Energy who are handling
the energy assets on GTLs sites. There is a lot of
consolidation happening now and new capex is
being deployed including energy monitoring and
optimisation. At one point 95% of our business was
coming from outside India, and now over the past
two to three years things have been changing. We

are also deployed on 2,500 of American Towers
sites in India, and we manage another 5,000 towers
for a power equipment company.
Over the past five or six years weve deployed on
over 20,000 sites in all of our markets. There is
consolidation happening across Africa and Asia
and our business will grow there as a result. There
are some huge potential opportunities in countries
like Thailand, Indonesia, Myanmar and Singapore.
Prices for connectivity have come down and a lot
of companies and governments are switching to
green energy, batteries and hybrid solutions. We
feel that over the next three to four years there will
be a lot of interest in replacing diesel generators
with batteries, and our solutions will play a role in
managing these.
TowerXchange: Do you have any success stories
to share?
Satish Kulkarni, CEO, Invendis: In Ghana we were
able to bring down the inventory cost for the
towercos by 20-25%. There were some major issues
with the grid there and the power was down about
three hours per day once every four or five days.
We installed our system and it greatly increased the
efficiency of the sites.
There are also difficult conditions in countries
like Bangladesh that experience annual flooding.
The sensors that we installed on the sites were
able to detect when flooding of the equipment
was imminent so that clients could be notified and
measures could be taken.

Our project in Iraq is challenging due to the
security issues and political situation, not to
mention the environmental conditions. However
we had experience operating in desert conditions
from a previous deployment in Oman for Omantel
a couple of years back. We provided automated
coverage of 300 remote exchanges; were in talks to
install on their towers as well to collect operational
data which should happen later this year.
and power generated to get an idea of how much

the site requires in general, and any abnormal
activity usually indicates theft. Most of our clients
in Africa have said that pilferage has been reduced
considerably and within eight to ten months theyve
recouped the cost of the system.
Our systems also protect expensive batteries by
embedding sensors on them that trigger an alarm if
they are moved out of the site, alerting clients that
they have to go to the site to investigate.
Weve also handled extreme cold at -10 or -20

degrees in some of the more remote northern
sites in India. Two or three years ago about 1015% of our clients were MNOs but now its mostly
towercos.
TowerXchange: Since a lot of fuel pilferage

originates within the supply chain, is there a risk
of remote monitoring sensors being damaged
by staff or subcontractors? What can be done to
prevent this?
TowerXchange: Weve heard about markets

where 30% or more of diesel has been stolen,
15% of batteries stolen. What can towercos and
MNOs do to improve security at remote cell
sites?
Satish Kulkarni, CEO, Invendis: This is a major issue
in a lot of countries, any market where the grid is
unreliable; people can steal upwards of 160 litres
of fuel and if the readings are not accurate its hard
for towercos to judge how much fuel has been used
and whether any is missing.
Satish Kulkarni, CEO, Invendis: This does happen

and it can be difficult to manage. With remote
management the sites dont need to be visited on
a regular basis; workers can go when required to
investigate an alarm or make occasional deliveries.
The increased efficiency of RMS means that there
is less work to be done and fewer hours are
required which hits the ground crews financially.
Its important to invest in the ground crews
and involve them in the security of the site, and
some companies offer rewards for reports about
tampering.
When you install highly accurate sensors they have

the ability to interface with the site management
system and update data on fuel levels in real time.
Clients can do an end-to-end audit of fuel use
TowerXchange: How can data from site

monitoring be integrated with maintenance
workflows and job ticketing to reduce O&M
costs?
XX
TowerXchange: CCTV is expensive to install and

footage needs a lot of bandwidth under what
circumstances is this investment worthwhile,
and how can costs be contained?
Satish Kulkarni, CEO, Invendis: The cameras that
we install on sites are activated when they detect
movement and grab images of whats going on
in the tower. This has helped us overcome the
challenge of expensive cameras that are on 24/7 and
require constant power and bandwidth to transfer
images when most remote sites dont have a data
connection. Multiple cameras running constantly
would be expensive and unnecessary when a small
amount of footage can identify the perpetrators,
or let you know that its a false alarm caused by an
animal or a branch.
TowerXchange: How do you customise alarms to
so; we categorise them based on the action needed

to respond to them. Some are extremely critical
like fire alarms, but they all have varying degrees
of importance and escalations that go up the
command chain. Its all differentiated by the action
that is needed to be taken.
Data from the site goes directly

to the ground crews and they
are notified via their phones or
computers. This constant flow
of actionable data has greatly
decreased opex since clients
know where and why they
need to do site visits
Satish Kulkarni, CEO, Invendis: Data from the

site goes directly to the ground crews and they
are notified via their phones or computers. This
constant flow of actionable data has greatly
decreased opex since clients know where and
why they need to do site visits. Prior to this, an
engineer could make a scheduled site visit, identify
a problem, but not have the necessary equipment
to fix it since they didnt know about it in advance.
Now the multiple site visits have been greatly
reduced and travel is always based on need. This
has been especially valuable in Africa where the
sites are more remote, the roads are difficult, and
hours of travel in four-wheel drive vehicles is
required.
ensure the customer isnt overwhelmed and can

focus only on alarms which require action?
Satish Kulkarni, CEO, Invendis: We provide
complete end-to-end security including motion
detectors on the doors, smoke detectors, water
detectors and other combinations of sensors. These
provide a wide variety of parameters but the clients
dont require all of them so the granular data is
collected and can be built into reports that can be
used later. Some data are critical and some are less
TowerXchange: How do tower operators

translate RMS data into actionable intelligence?
Satish Kulkarni, CEO, Invendis: Here are two
examples: with RMS a client can continuously
monitor the charge and health of the batteries and
identify any one that isnt performing. When a
battery isnt performing its a drain on resources;
it draws more power and decreases the amount
of power available. As soon as this situation is
identified the battery can be replaced, saving
resources by acting on the problem as early as
possible.
For the second example, all of the information on
the tower is constantly available, and if the power
goes off for 12 hours, the system will also remember
that it went off for seven to eight hours the previous
week. This can be extrapolated to all the towers in
that region and the data can tell whether there is
a trend of increasing power cuts requiring more
fuel for backup generators. Many times the rolling
power cuts in these places are not announced and
it helps to have data on them to put into actionable
intelligence like this. Clients can get a very detailed
set of data on the grid situation, and once they have
nationwide deployment of RMS on their sites they
may even be able to share or monetise it
IPS unleashes the Off-Grid Beast!

EXERON runs virtually maintenance free, and can reduce opex by 96%!
International Power Supply (IPS) has developed
a robust, military-grade off-grid power solution,
which has now been refined for virtually
maintenance free operation in telecom
applications. IPSs modular solution is readily
upgradeable for the era of infrastructure
sharing, and has the advantage of all the
components having been developed and sourced
from the same manufacturer. TowerXchange
spoke to CEO Alexander Rangelov to learn
more
Alexander Rangelov, CEO, IPS
Keywords: Air Conditioning, Batteries,

DG Runtime, Energy, Energy Efficiency,
Hybrid Power, IPS, Infrastructure Sharing,
International Power Supply, Lithium,
Logistics, Microgeneration, Off-Grid, On-Grid,
Opex Reduction, RMS, ROI, Rectifiers, SLA,
Shelters, Site Visits, Spare Parts, Whos Who

< How IPS developed and attracted investment into EXERON The Off-Grid Beast
< Reducing telecom opex by 96% with a 16 month ROI on a 1.5 kW load site
< How dynamic control of battery charging can extend battery life by 30%
< How IPS simplify delivery, installation and maintenance
< The importance of all the power systems, enclosures and A/C equipment coming from the same
manufacturer
TowerXchange: Please introduce International

Power Supply to our readers where do you fit
in the telecoms infrastructure ecosystem?
Alexander Rangelov, CEO, IPS: IPS is a 26 year
experienced high tech company specialised in the
R&D and manufacturing of power electronics and
energy conversion technologies for the areas of
telecommunications, off-grid electricity, defense
and railways. We are deeply specialised in the
design and development of complete telecom
indoor and outdoor power solutions for both grid
connected and off-grid applications. Our portfolio
includes all kinds of power components and
solutions needed for telecom infrastructure, all of
which are developed, designed and manufactured
by us in Sofia, Bulgaria (EU).
TowerrXchange: What has attracted PTIG,
PostScriptum Ventures and BlackPeak Captial to
invest in IPS and how are you going to deploy the
capital?
Alexander Rangelov, CEO, IPS: Our investors have
been attracted from our unique and innovative
product: EXERON The Off-Grid Beast. It was
invented by IPS initially for military applications
(powering communication infrastructure and
desert camps) for providing reliable power in
remote and hardly accessible areas with harsh
ambient conditions. In the last seven years
we developed the system to become a solution
addressing the global electricity and environmental
problem. The fast market penetration and
international recognition we have achieved, the
XX
IPS has partners, distributors and operating

systems in 51 countries. Offices, logistics hubs
and service points are distributed worldwide at
strategic locations.
we achieved 96% telecom opex reduction and a 16 month

return of investment period for a diesel generator powered
off-grid site with 1.5 kW constant telecom load
TowerXchange: How are your solutions proven

in terms of their ability to reduce opex in
distributed telecom networks?
Alexander Rangelov, CEO, IPS: Regarding opex
reduction, it is very important to find the
optimum correlation between the opex reduction
level and the return of investment (RoI) period.
With one of our projects with a large telco group
we achieved 96% telecom opex reduction and
a 16 month return of investment period for a
diesel generator powered off-grid site with 1.5
kW constant telecom load. This result is thanks
to the highest integration level of the EXERON
system components and the innovative process
and battery management. IPS developed unique
software for dynamic control of the battery
charging process, leading to extending the battery
life by approximately 30%.
TowerXchange: What is the sweet spot in
terms of the kW load on the site which EXERON
is able to support?
Alexander Rangelov, CEO, IPS: We are not limited

to any output power. The whole EXERON system
structure is based on power modules of 2 kW or
4 kW. So the minimum power step is practically 2
kW. The unique IPS communication protocol can
address up to 16,300 modules simultaneously. So,
this means 16,300 modules x 2 kW or 4 kW.
A large number of modules are used in our mini
grid applications, but for telecom applications
typical numbers would be 2 kW, 4 kW, 6 kW, or up
to 36 kW in some special cases.
TowerXchange: Tell us about IPSs Exeron
system and how it meets the needs of towercos
who need to increase the power capacity at cell
sites as additional tenants are added?
Alexander Rangelov, CEO, IPS: The modular
IPS teams passion and our enormous R&D ability

made our investors keen on supporting our
global expansion. The capital is invested in R&D,
business and market development, new logistic
hubs and offices around the world as well as
manufacturing facilities.
system structure offers great scalability and

flexibility. There is only one unit (MCU Main
Control Unit) that monitors and controls all system
modules (rectifiers, solar charge controllers,
inverters, DC-DC converters). All of them are
hot pluggable. The power capacity extension for
any power system component is easily done by
simply adding new plug&play power modules. The
advantage of having only one MCU for the whole
system, and sourcing all modules from only one
manufacturer, is great efficiency, redundancy
and self-control. It is the base for the intelligent
mini-grid systems. It is unique because the same
EXERON technology with the same control unit
that is used for telco towers can be deployed as a
mini-grid electricity solution for villages controlling
and monitoring over 16,300 power modules
corresponding to 65 MW of power. That is why we
call it EXERON The Off-Grid Beast!
and manufacturing all products under the NATO

military standard for quality AQAP 2110, so every
single component meets higher requirements than
usual. As mentioned before the EXERON system has
been developed initially for military applications
in remote areas. A big advantage is that it can
operate in very harsh ambient conditions with
temperatures between -40C and +80C, heights
above 4000m above sea level, high humidity and
salinity, acid environments et cetera. These features
are not always the case for civil applications but
have high importance for the telco companies in
some areas of Africa, Asia and South America.
TowerXchange: How do you ensure ease of
delivery, installation and maintenance of your
solutions at remote cell sites?
Alexander Rangelov, CEO, IPS: The ease of delivery
is guaranteed with the new manufacturing facilities
that we have built and the logistics hubs in Africa,
Asia, Australia and America.
EXERON The Off-Grid Beast
TowerXchange: Tower companies Service

Level Agreements (SLAs) often demand 99.599.9% uptime tell us about the reliability and
autonomy of your solution.
Alexander Rangelov, CEO, IPS: IPS is developing
The ease of installation is guaranteed in a few

simple steps, since everything is included and
pre-installed in the system. The EXERON runs
basically maintenance free, however if some of the
modules need to be exchanged it takes not more
than ten seconds, because every single system
module is hot pluggable (rectifiers, solar charge
controllers, inverters, DC-DC converters, the MCU
Main Control Unit, surge protection devices et
cetera). Another big advantage is that an outage in
one of the modules or more of them cannot lead
to a full system stop. Even in case of main control
unit failure, the system will continue its operation

unchanged.
Following the military standards for quality during
the development phases and manufacturing, a high
system availability and robustness is guaranteed.
It is a clear advantage and of crucial importance
for remote, hardly accessible and long-distance
site locations, which leads directly to reduced opex
costs.
TowerXchange: Should remote monitoring
capabilities be built in to energy systems or
should third party RMS be used to monitor
performance?
Alexander Rangelov, CEO, IPS: Yes, the remote
monitoring is built in to the EXERON. It offers three
options for remote monitoring and signaling: there
are potential free contacts for signaling (event
relays), there is an SNMP monitoring, and the third
one is the integrated web server in the MCU. It is
accessible through HTTP. You can monitor, but also
control the functions and parameters of the system.
The MCU can also monitor and transfer the signals
from different sensors that can be connected to the
EXERON smoke, fire, humidity, temperature, et
cetera: up to 16 sensors.
TowerXchange: Do you see IPS being a pure
solution provider, or do you have any appetite
to explore energy services company (ESCO)
business models?
Alexander Rangelov, CEO, IPS: IPS is a R&D and
XX
systems with energy storage. We are continuously

developing the system and believe that this is the
only way to break limits and create innovative
functionalities and features.
better performance, faster RoI, robustness, advanced features

and functionality, a global all-in-one scalable solution, leading
to outstanding opex savings
TowerXchange: How would you differentiate IPS

and EXERON from competitive modular hybrid
energy solutions?
Alexander Rangelov, CEO, IPS: In just a few
words: better performance, faster RoI, robustness,
advanced features and functionality, a global all-inone scalable solution, leading to outstanding opex
savings.
EXERON is a multi-talented beast! It can be used
for grid connected sites in the way of a customised
outdoor cabinet with a purely modular rectifier. At
the same time EXERON can be deployed to control
manufacturing company, so in this aspect we are a

pure solution provider. In 2016 together with our
investors we started offering also the ESCO business
model, but mainly for residential applications.
and optimise hybrid diesel genset-battery sites, but

also PV-diesel-battery sites. The good thing is that it
can start as grid connected or hybrid configuration
and then at anytime new power modules can be
added solar charge controllers and/or inverters.
All within the same architecture. And under the
same MCU control unit.
To mention it again, our clear advantage over
other solutions is the fact that we develop and
manufacture all the system modules. At the end
they talk to each other in the system via a unique
communication protocol, developed by IPS and
delivering optimal performance and efficiency. In
addition, we have the ability to scale our power
modules. There are a lot good solutions and
products on the market, but they have limitations.
Still in 2014 in Germany, EXERON won the world
innovation ees Award for innovative off-grid power
IPS designs and manufactures not only the

power systems, but also the proper environment
- enclosures and outdoor cabinets with many
options, heat exchange options, but also with our
own developed air conditioning module. We have
even built a redundant air conditioner for cooling
and heating. Its virtually maintenance free! Sounds
good?!
TowerXchange: Whats next for IPS and
EXERON?
Alexander Rangelov, CEO, IPS: We are ready to
open a new chapter in IPSs successful history in
the next couple of months, which will be a huge
technological jump. In the beginning of 2017 we
are planning to release a new storage technology
integrated in the EXERON which will offer the
long life and multicycle ability of Lithium-based
batteries, but at the price levels of Lead-based
batteries. Keep an eye on IPS and EXERON-The OffGrid Beast!
TowerXchange are delighted to announce

IPS as the Diamond Sponsors of the
TowerXchange Meetup Africa! Come
and see EXERON The Off-Grid Beast on
October 19-20 at the Sandton Convention
Centre, Johannesburg!
Nexsysone: How ONE software interface

simplifies the management of network deployments,
co-locations and maintenance activities
Since 2001, the Nexsysone platform has been used for 250 projects in over 40 countries
Jim Prosser, CEO, LEC Consultancy DMCC
The Nexsysone software platform has been refined and

proven in more than 250 large scale, complex network
rollout, integration and maintenance projects worldwide.
Originally developed as an internal competitive
differentiator for Lemcon Networks, Nexsysone is now
available to external customers such as towercos, MNOs
and system integrators by LEC Consultancy DMCC out of
Dubai, who also provide parallel service offerings. In this
interview, Jim Prosser, CEO of LEC Consultancy, shared
with TowerXchange in-depth details about Nexsysones
evolution and capabilities.
Keywords: Americas, Brazil, South America, Asia, Africa, Zimbabwe, Change Management, Job
Ticketing, KPIs, LEC Consultancy, Monitoring & Management, Network Rollout, Nexsysone, NOC, O&M,
Opex Reduction, RMS, Myanmar, Philippines, Indonesia, Site Management Systems, Whos Who

< The history of Nexsysone in the Americas
< How Nexsysone addresses the key network deployment and maintenance work streams
< Synchronising work tasks to manage peak volumes and improve resource utilisation across multiple
network operation centers
< How some of the largest greenfield deployments are using Nexsysone to co-ordinate the site sharing
process between operators with tower companies
TowerXchange: Tell us about the history of

Nexsysone in Americas.
Jim Prosser, CEO, LEC Consultancy DMCC: Nexsysone
has been around since 2001. Our success story
began in Sweden in 2001 where Nexsysone (then
named LNT) was used to deploy the first ever shared
UMTS network in the world for 3GIS (a joint venture
between Vodafone, Orange and Hutchinson). In 2003
Nexsysone was deployed in the U.S. for the T-Mobile
National UMTS deployment. Subsequently our
solution was used to consolidate a number of local
operation centers into a National central remote
integration center in Dallas.
Our solution provided users with a single point
of contact for nationwide integration tracking,
rollout management reporting, alarm and fault
management with OSS API integration, competence
development and workforce management
processing. Using best practice innovation gained
from our telecom experiences since 1996, we
customised our modules to deliver a true telecom
focused end-to-end project deployment tracking
and reporting platform. All aspects of the typical
challenges faced when deploying or maintaining
high volume complex networks were addressed by
Nexsysone.
Customer acceptance lead-times using intelligent
forms and work force task processing were reduced
from three months to one day (i.e. sometimes
before the technician had left site after a successful
integration).
The word soon spread that Nexsysone was changing
XX
the way networks were typically deployed and

maintained. Within a year after starting operations
in the U.S., Nexsysone was deployed in Rio de Janeiro
to support twelve countries across Latin America
for six operators. Between Dallas and the Brazilbased regional operation center, we managed over
3,000 sites per month with UMTS upgrades, new
site builds, core deployments, Edge activations, rehomes, fault management and site co-locations.
TowerXchange: How does Nexsysone assist the
tower industry these days?
Jim Prosser, CEO, LEC Consultancy DMCC: As the
independent towerco model matures, operations
become more complex. Nexsysone addresses these
complexities.
Weve listened to the requirements over the years
and tailored our solutions to meet them. Previously
our solutions exclusively focused on operators
and system integrators but with the shift towards
site sharing over the years weve adapted to meet
these changes. A perfect example is in Myanmar
where Nexsysone is solely used to deploy and site
share infrastructure for two of the three operator
networks. Myanmar currently has one of the largest
greenfield deployments in Asia and Nexsysone is the
exclusive supplier to both operators Ooredoo and
MPT.
We tackle the site sharing process from the
operators perspective and from the towercos
perspective. Both have their own requirements
but Nexsysone empowers both parties to reach
that common agreement. We have an integrated
RMS system, a tenant request portal (with a site

information pack download feature), access
management solution, cost control, field tech
workforce management system, asset and site
project management solution and an analytics
reporting engine that assists with data analytics to
ultimately improve work process efficiencies whilst
reducing deployment and operational costs through
visibility of factual data.
TowerXchange: Tell us about Nexsysones current
offering and footprint.
Jim Prosser, CEO, LEC Consultancy DMCC: Nexsysone
is a system that has been moulded through twenty
years of experience of designing, building and
operating mobile networks. We have secured
two thirds of the Myanmar market because of
the completeness and suitability of our offering.
Consistently, in all the deployments I have been

involved with over the last twenty years, weve found
that operators, and now towercos, require a scalable
management system managed through a single
interface. They need to consolidate documentation,
control progresses, manage leases, rental billing and
cost control; maintain the network, provide quality
assurance, manage their workforce, cost control,
provide end-to-end asset management, consolidate
RMS data and develop the competence of their
resources and subcontractors.
Our offering has five software modules which address
all these issues. For us its all about synchronising the
data and aligning processes between departments
and companies into a single interface to manage
communication within the projects. Currently
our busiest regions are the U.S., Myanmar, the
Philippines, UAE and some countries across Africa.
In Myanmar two of the three MNOs (Ooredoo and

MPT) use Nexsysone to manage their rollouts. This
means it is being used by all the active towercos,
system integrators and OEMs in Myanmar. The
Myanmar network rollout is a greenfield network
rollout with a strong focus on site sharing. In the
U.S., Mycom International use our software to
manage their extensive Sprint, Verizon and AT&T
turnkey rollouts. Were also in Zimbabwe, the
Philippines, and Indonesia.
TowerXchange: What drivers are making your
clients make the switch to Nexsysones solutions?
Is the decision simply financial?
Jim Prosser, CEO, LEC Consultancy DMCC: We are
telecommunications professionals with software
skills. Not the other way around.
We firmly believe that it is the telecom specific
knowledge that exudes from Nexsysone that appeals
to our customers. It is a robust and dependable
solution, with an unrivalled history of industry
experience that comes built in. So no, it is not just
a financial decision. It is all about understanding
our customer needs and adapting the system
accordingly. No project is ever the same. Weve
worked on enough to know that!
To understand Nexsysone it is important to
understand its history and pedigree. Nexsysone is
not new to the telecoms industry. Nexsysone was
part of Lemcon Networks until four years ago.
Lemcon was a Finnish system integrator operating
in forty countries across five continents, which grew
with Nokia in the 90s and 2000s. When Lemcons
parent company sold its telecoms business unit, LEC

consultancy Dubai under the previous management
of Lemcon took full ownership of Nexsysone.
Nexsysone has been at the heart of planning,
building, integrating, upgrading and modernising
well over 250,000 cell sites since 2001. It was a
system my team and I designed and built for our
company. We were constantly adapting it to meet
the challenges of the dynamic telecoms industry. It
is all about understanding our customer needs and
adapting the system to meet them. It is a product
that helped us manage some of the worlds toughest
rollouts and implement game changing rollout
management software solutions, which are now
common practices in most countries. Having used
our solution, towercos come to us with their own
requests for additional stand-alone features, or to
integrate their existing systems with Nexsysone
when purchased by an operator.
Nexsysone allows them to confidentially manage
their own projects or unrelated projects. They
also have other projects on going and other things
happening that doesnt necessarily need to be
shared meaning they need their own central asset
database for example for passive infrastructure or
task workforce management solutions.
TowerXchange: How does the relationship
between Nexsysone, operator and towerco work?
Jim Prosser, CEO, LEC Consultancy DMCC: It works
by understanding that Nexsysone precisely is the
relationship between the operator and the towerco.
We work together with our customers and their
supplier ecosystem so that Nexsysone defines those

relationships. Nexsysone binds the objectives and
operations of the stakeholders together, and has
become a primary single source of real time project
information for official project communication and
progress measurement.
An experienced rollout manager will tell you that the
biggest challenge in every large rollout is aligning
all the stakeholders on the same page. In its simplest
form, it boils down to inter- and intra-company
communication. We understand the conflicts that
arise between stakeholders in a rollout. In a towerco
scenario we focus on making the agreements
between operators and towercos as transparent
as possible. Transparency reduces unnecessary
communication and improves time to market.
Time to market is critical during a new rollout.
Harmonising the complex needs of managers,
planners, designers, OEMs and contractors, with
different priorities in different companies is
essential. Providing a single interface to attain
efficient interaction is the key. And that is where
Nexsysone comes in.
TowerXchange: Tell us more about how you help
operators and towercos work together more
effectively? How does that stack up against the
other options on the market?
Jim Prosser, CEO, LEC Consultancy DMCC: We are
not scared of customisation. We actually embrace
it but since our platform captures the typical
requirements, customisation is never a big deal.
We listen and if needed customise Nexsysone to
meet our customers exact requirements. Whilst the
XX
major objective is always the same: build the best

network for the lowest cost in the quickest time;
the processes to get there are sometimes different.
Different countries require different permits and
different acquisition procedures for example.
Efficient construction methods differ from country
to country, so lead times differ for example. Contract
and regulatory requirements mandate a different
focus and priority. All these issues must be captured
within the site management system if the project
is to run successfully. We empower the user the
ability also to make such changes themselves with a
powerful admin application called Admin-one.
Choosing a system to manage your project or
network is all about saving money, improving
efficiency and obtaining visibility. Once you have
made the decision to purchase such a system, it must
deliver for you. We believe Nexsysone offers the best
value in the market in this regard.
TowerXchange: Which of your applications is
most popular? Why do you think that is?
Jim Prosser, CEO, LEC Consultancy DMCC: Projectone and Tower-one. However, as more projects move
into the operational phase Task-one is gaining rapid
momentum.
These are the most popular, because they are the
applications needed at the start of the rollout. As
time progresses our customers may expand their
used modules. Asset-one, Task-one and Staff-one
may come into play as their pain point shifts. With
our project experience we are able to address
these future pain points before they happen by
implementing the correct platform and processes

from day one. Our project management platform is
popular because it focusses on the actual site build
programme and cost control. It therefore has a lot
more features. Tower-one captures the processes of
sharing sites. All the modules are extremely scalable
and designed to work together. Light versions have
been used by system integrators for simple milestone
tracking, documentation control and quality
assurance.
The Task-one platform manages the workforces
daily activities and is becoming very popular.
Its attraction is that it helps manage operational

teams, and more significantly it measures their
performance. It comes with an advanced geo locator
to track the location of resources or teams with an
associated easy to use ticketing system. Site builds
and maintenance tasks are made easy with Taskone. The advanced notification system build across
all modules empowers customers to action tasks
with ease whilst having visibility into organisational
bottlenecks. The mobile apps which are integrated
are very popular. They provide field resources,
project managers and executives quick access to
critical data
Tarantula platform designed

to facilitate co-location in Europe
Enabling tenants and tower companies to collaborate and realise significant
time savings
Tower companies and their tenants have historically struggled
to get visibility into the end to end co-location process. They
have not been able to identify hold-ups and have often found it
difficult to manage documents waiting for approval. Tarantula
has a proven, trusted and highly configurable software platform
(Red Cube) which leverages the latest technology to significantly
improve the efficiency of co-location operations. In this
interview, Ravi Kuppan, Founder of Tarantula, explains how
Tarantula is shaking up the world of site management.
Ravi Kuppan, Founder and Director, Tarantula
Keywords: Asset Lifecycle Platform, Asset Register, Capex, Colocations, Due Diligence, Infrastructure Sharing, Installation,
Investment, Job Ticketing, KPIs, Leasing & Permitting, Masts
& Towers, MNOs, Monitoring & Management, Novation of
leases, O&M, Operational Excellence, Operator-Led JV, Opex
Reduction, Procurement, QoS, RedCube, Risk, RMS, Sale
& Leaseback, Site Management System, SLAs, Tarantula,
Towercos, Transfer Assets, Uptime

< How Tarantulas platform helps towercos and their tenants to collaborate and reduce costs
< How independent towercos and MNO JV infracos are taking differing approaches to portfolio
management
< The 30 Tarantula tower best practice processes
< Tarantulas experience working in Western and Eastern Europe
TowerXchange: Please introduce yourself and

Tarantula for readers less familiar with your
company.
Ravi Kuppan, Founder and Director, Tarantula: I
was developing OSS tools for Telefnica in the UK
before going on to found Tarantula in early 2000.
The company formally launched in early 2001
as an industry-wide site sharing co-location
platform in the UK. Our software has helped
manage more than 18,000 co-locations on this
platform in the UK and hundreds of thousands of
co-location transactions across Europe, Asia and
Africa. This equates to millions of dollars of site
rent being collected each month, all enabled by
our platform. Our co-location module provides
centralised management of co-location on the web,
which in turn enables the customer and tower
owner to collaborate and yield time savings for all
parties. Tarantula provides transparency for end
to end co-location users can identify hold-ups,
manage documents awaiting approval, improve
performance against SLAs, and reduce disputes.
So what makes us stand out as a company? Our
team has in-depth knowledge of working with and
experience in operating tower companies. This
alignment means we understand their software
needs inside out. Based on this, we have taken
30 real-world, best practice towerco processes
and brought these to life through persona-based
workflows, linking together towerco data such as
assets and leases into one central business model.
Moreover, we have linked this integrated data with
XX
TowerXchange: What has been Tarantulas

experience of working with European towercos,
infracos and MNOs?
Ravi Kuppan, Founder and Director, Tarantula: We
have been working with UK opcos since early 2001.
Over the last 15 years we have also worked with
a variety of tier one MNOs and tower operators
across Western and Eastern Europe.
Weve learnt that Western and Eastern European
MNOs and service providers operate slightly
differently. For example, in Russia, planning
processes are slightly different than in the UK
things tend to get done much faster in Russia.
TowerXchange: How do you see the evolution of
the European Tower industry in the past year?
master lease agreements to offer a built-in pricing

and billing platform. This is available straight out
of the box, allowing companies to quickly integrate
and deploy a towerco business model and end to
end site management in a single software platform.
The software is being used in 20 different countries
around the world which gives us a wide breadth of
industry experience.
It is these inherent values and benefits that have
Ravi Kuppan, Founder and Director, Tarantula: It

appears that the time is ripe for European tower
divestment. A lot has been spent on licenses.
There are a number of planned divestments across
Spain, Russia, and Italy. On top of this, weve also
noticed an increasing number of interested buyers
- strategic as well as financial getting engaged in
European tower transactions.
All of these players have one overriding concern
how to absorb or transfer these assets quickly and
how to monetise assets in a sustainable manner.
Thats why out of the box software is so critical.
The industry will need to adapt faster as time

to market considerations become increasingly
important factors for start-up tower companies
and newly acquired portfolios. Out of the box
software will play a critical part in developing best
practice processes for these businesses so they
dont need to re-invent the wheel.
TowerXchange: How does the unique structure
of the European tower industry - consisting of
many operator-captive and MNO JV infracos
as well as independent towercos - affect their
respective appetite and need for portfolio
management information?
The industry will need to

adapt faster as time to market
considerations become
increasingly important factors
for start-up tower companies
and newly acquired portfolios
powered our product philosophy and links the Red

Cube platform to the creation of business value.
Ravi Kuppan, Founder and Director, Tarantula:

Id like to answer this question in two parts. The
first thing that needs to be borne in mind is that
there are two very different drivers affecting the
market. Fortunately, we have experience in both
segments.
The Indian market is a good example. In India,
you have Indus, which is an operator-led joint
venture tower company. You also have traditional
tower companies like American Tower. Both
of these companies have quite different goals
and objectives. One goal is to serve their MNO
parents and ultimately deliver efficient service
provision. In this regard, automated portfolio
management tool-sets are critical for managing
and provisioning the process for installing and
upgrading equipment. MNOs are less interested
in how the lease agreement links back to the
original customer order and whether it was
installed at the correct height. Joint venture
infrastructure companies are often more
interested in being efficient service partners than
in monetising the rental of the tower. So portfolio
management is more asset and SLA centric.
For independent tower companies, the business
is all about real estate. Managing the space
on towers is central for these companies
profitability. As a consequence, a portfolio
management platform needs to provide a level
of data granularity that can efficiently link leases
with assets and ensure revenue is not lost.
A lot of people seem to think the tower industry
is homogeneous, when it clearly is not. Over the

last 15 years weve learnt a lot about the nuances
in our industry. We understand the differences
between different geographies and business
models. So we know a lot about the different ways
in which companies view their portfolios. This
is why we have built a software platform that is
flexible and configurable and takes into account
the different business drivers for each type of
tower company.
TowerXchange: We hear increasing appetite
for the European tower industry to engage
with active as well as passive infrastructure,
and broadcast as well as tower assets - how
can management information support this
extension of the business model?
Extension of the business model for tower
companies will link back to processes being
extended and adapted. This will ultimately drive
the management information. Capturing data and
providing a flexible and configurable process layer
that is scalable will allow the tower industry to
quickly seize new opportunities.
TowerXchange: New tower businesses are
being created, carved out or acquired on an
increasingly regular basis in Europe - where
should such entities start when it comes
to improving asset register accuracy and
commercialising tower management which
might have previously been managed purely on
a cost charge-back basis?

First of all, tower companies need to understand
what is on their sites in terms of assets. Secondly,
they have to understand how these assets link back
to commercial site licenses.
This allows tower companies to enjoy cost
optimisation when they service their sites, and this
represents a substantial proportion of opex.
Understanding these two questions is not an
overnight process. The faster a new tower
company can invest in a proven software platform
such as Tarantula, the quicker they can enhance
their asset valuation and accelerate the whole
process of integrating assets.
We have seen several examples of this such as the
recent American Tower-Viom transaction; Helios
Towers Africa buying assets from Bharti Airtel;
and edotco buying Digicel MTC in Myanmar. A
solid platform provides confidence to the investors
when conducting any due diligence and this makes
integration of the towers easier once purchased.
Tarantula has developed an integrated tower
purchase module to ensure customers benefit from
a step by step process to ensure any new assets
can be monetised quickly.
Lastly, it should be mentioned that adopting the 30
Tarantula tower best practice processes can enable
a new tower company to rollout the platform
faster across its ecosystem of operations to create a
single version of the truth. Managing the business
through multiple Excel sheets does not inspire
XX
10%
Tower companies are waking up to the importance of data quality,

but face numerous challenges with data integrity. Our experience
is that the challenge of creating and managing a new tower
20% is often underestimated
company via a single software platform
TowerXchange: How would you characterise

the current state of portfolio management
information in European telecoms - are builtfor-purpose platforms like Tarantulas widely
used, or is your main competition still Excel
spreadsheets?
Portfolio management only covers one part of the
challenge assets are typically understood in a
narrow sense. For example, many telcos see it as
the ground and tenant lease. We look at portfolio
management in a much broader, holistic sense.
For example - the end to end process from the
the same level of confidence with investors and

potential transaction penalty warranties can be
invoked later if substantial data mis-matches are
found.
initial co-location request through the installation

all need to be covered and managed. A tower asset
is constantly changing and the key is ultimately to
derive a full history of all changes on the tower and
track how they are linked back to the commercial
lease arrangements.
Some companies think they can build it
themselves, using Excel or other building blocks.
Building your own tool really makes little sense
when standard products like Tarantula are
available with millions of dollars of ongoing
product investment that reflect improved business
practices across the industry. Also, it dilutes the
core lease management focus of towercos by
needing to build IT teams and manage non-core
IT projects.
Tower companies are waking up to the importance
of data quality, but face numerous challenges

with data integrity. Our experience is that the
challenge of creating and managing a new tower
company via a single software platform is often
underestimated. Managing expectations when all
users have one platform and they have their own
Excel or Access database is not a trivial matter.
TowerXchange: Finally, please sum up how you
would differentiate Tarantulas solution from
competitive site management platforms.
Tarantula brings 15 years of experience in this
sector globally with its software platform. We
recognise that markets are different, the US is
not Europe or Asia, while other solutions are still
learning the market differences. Having global
experience with roots in co-location from early
2000, gives us a depth of knowledge no other
competitor has when it comes to implementation.
With an installed base in 20 countries, we are
always well aware of the industrys needs and
this fuels our ongoing roadmap enhancements,
providing our customers with the latest knowledge
incorporated within the product.
Our 30 real-world tested, best practice towerco
processes integrate all data including assets, leases,
billing information, and financials, into one central
business model. This allows companies to quickly
integrate and deploy a towerco business model
as a single source of truth delivered as a software
service
Tower
2016 Site Seven Media Ltd
Xchange
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TowerXchange Issue 16

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Tower

Journal of the telecom tower industry in EMEA, CALA and Asia

Issue 16 | May 2016 | www.towerxchange.com

TowerXchange Africa and the Middle East:

Meet the tower industry leaders

CALA tower count, analysis and news

50 Africa tower count, analysis and news

CALA: Argentina opens, Brazil

132 Brazil tower industry facing its toughest year yet

111 Global tower market maturation

MEA: whos who, plus AMT

169 TowerXchanges whos who in MEA towers

115 Ranking the top 185 towercos worldwide

TowerXchanges whos who

Asia: China, Indonesia, Laos,

220 Inside edotcos NOC, plus Sri Lanka and Myanmar

| TowerXchange Issue 16 | www.towerxchange.com

65% European towerco

272 Cellnex CEO keynote interview

TowerXchange Meetup calendar

www.towerxchange.com | TowerXchange Issue 16 |

With special thanks to the TowerXchange Inner Circle

(Chairman) Daniel Lee

The TowerXchange Journal is free to

monetises this community through hosting

and is governed with the support and advice

informal network of advisors

Tilak Raj Dua

Peter Owen Edmunds

| TowerXchange Issue 16 | www.towerxchange.com

independent community for operators,

qualifying recipients. We also provide

www.towerxchange.com | TowerXchange Issue 16 |

New tower count, new towercos

Since our last update, weve seen the creation of

TowerXchanges periodical CALA baseline data

Estimated number of towers owned or managed by towercos in CALA

In terms of tower count, Amrica Mvils spin off is

599 540 573 386 221 136

599 540 573 386 221 136

599 540 573 386 221 136

SBA Communications 900 7,032

Deal value US$

Cost per tower US$

Spain & Germany

XX | TowerXchange Issue 16 | www.towerxchange.com

Empowering tomorrows connected world

Connectivity is at the core of everything we do. Providing rst-of-its-kind regional accessibility,

Newest towercos in the CALA market

close to 100 sites to its portfolio across Nicaragua,

Colombia, Peru, Guatemala, El Salvador, Ecuador

Peru, Chile, Brazil (Germany, Spain)

Selected estimated CALA tower counts

XX | TowerXchange Issue 16 | www.towerxchange.com

In the meantime, SBA Communications added

FPS TOWERS IS FRANCES TOWERCO PURE PLAYER

Major tower transactions in Latin America 2011/2016

Special thanks to Jonathan Atkin, Managing Director at RBC

Deal value US$

Cost per tower US$

www.towerxchange.com | TowerXchange Issue 16 |

One of Africas leading

Find out more about our business at

LatAm towerco breakdown by country