TowerXchange-Issue - 02

Standard Bank: aggressive bids likely to continue
Tower Xchange Helios take you inside the due diligence process
Who’s who: turnkey infrastructure and law firms

Africa’s New telecoms infrastructure journal
TowerPower: reducing Africa’s reliance on diesel
ISSUE 2 | FEBRUARY 2013 | www.towerxchange.com
The front lines of the African Tower Industry

Who’s who in the telecoms infrastructure supply chain
Don’t miss TowerXchange’s checklist of the data you need to buy and sell towers Tower Xchange
With special thanks to the TowerXchange “Inner Circle”
Our informal network of advisers: About TowerXchange
Alan Harper Chuck Green Tunde Titilayo TowerXchange is your independent community
CEO CEO CEO for operators, towercos, investors and
Eaton Towers Helios Towers Africa SWAP Technologies & Telecomms suppliers interested in African towers. We’re a
community of practitioners formed to promote
Michel Faivre Riana Donaldson Fazal Hussain and accelerate infrastructure sharing in
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d’Infrastructure AMEA Operations Support former CEO invest in towers; we’re a neutral community
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infrastructure.
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Managing Director, Global former CEO, Zain Africa Managing Director The TowerXchange Journal is free to qualifying
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TowerXchange was founded by Kieron
Torsten Esbjørn Ayman Al Adl Rajat Malhotra Osmotherly, a TMT community host and events
Regional Director, Africa Associate Director – TMT CEO, Middle East & Africa organizer with 16 years’ experience, and is
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Consultant, Executive Director Senior GM of Legal Affairs and Consultant
Cover image courtesy of Camusat
Warid Telecom, Former CEO, Contracts Investec
© 2012 Site Seven Media Ltd. All rights reserved. Neither the whole
Orascom Int’l Investment Warid Telecom
nor any substantial part of this publication may be re-produced,
stored in a retrieval system, or transmitted by any means without
Laurentius Human Gary Staunton the prior permission of Site Seven Media Ltd. Short extracts may be
quoted if TowerXchange is cited as the source. TowerXchange is a
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Inala Likusasa Group number 8293930.
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Contents Departments
5 News
< African MarketWatch
< MTN selling South African towers?
< Bharti Infratel’s IPO
10 Editorial
How towercos buy
26 Viewpoint
12 48
Why tenancy ratios above two will be difficult to
Investors’ verdict on the TowerPower – reducing
achieve in Africa
African tower industry Africa’s reliance on diesel
13 Are African towers a bankable investment? 53 PowerOasis’ “Smart towers” 69 Introduction to infrastructure sharing
16 Standard bank: aggressive bids likely to continue 57 Eltek: What hybrid energy can do for Africa’s towers 69 Experiences from the front lines of running a
20 Opportunities for new market entrant towercos? 61 How CPS deliver multi-tenant tower power towerco in Ghana
22 Perspectives from Hayat Comm’s and Atlas Tower 65 How ESCOs can reduce your energy opex by 30-35% 103 Booz & Co on how to overcome objections
32 Anatomy of an
infrastructure sharing deal 71 Leveraging RMS to optimise
preventative maintenance 82 Who’s who in tower design,
manufacture, installation & MS
33 Who’s who: lawyers with African tower experience 72 From data to intelligence 86 Likusasa on connecting the next billion subscribers
35 Checklist of the data you need buy and sell towers 73 Inala’s Laurentius Human on how to identify the 91 Camusat’s logistics and maintenance best practices
38 Inside the due diligence process with Neil Taylor smallest capex that yields the biggest return 96 “What gets measured gets done” at Reime Group
43 SPAs and MLAs; how to accelerate transactions 77 Towards just-in-time maintenance with Kentrox 100 Leadcom marry passive & active infrastructure
3 | TowerXchange Issue 2 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 2 | 3

Libya
News
The Libya Herald quotes Malik Shaban of
ZTE describing Libya Telecom & Technology’s
strategy to rollout 588 new WiMAX towers to
supplement the ISP’s existing 346 towers
African MarketWatch: New licenses, acquisitions and upgrades in brief Mali
Agence Ecofin report that Alpha Telecom
Angola DRC
Angolan market leaders Unitel have launched France Telecom has rebranded their 2011 Mali has secured the country’s third mobile
an LTE service, and have budgeted a $1.35bn acquisition CCT under the Orange brand licence. Alpha Telecom are believed to have outbid
network investment between 2013-15. Rival network Airtel and Viettel to secure the licence
Egypt
Movicel launched LTE in April 2012 According to Ahram Online, landline operator Mauritania
Telecom Egypt has sent a release to the stock Tunisie Telecom may be close to selling its
Cameroon
Vietnamese operator Viettel has been awarded exchange expressing an interest in acquiring an MVNO majority stake in Mauritanian telco Mattel,
the coveted third license in Cameroon, beating license. Telecom Egypt owns 45% of Vodafone Egypt, according to Jeune Afrique. France Telecom are
Airtel, Monaco Telecom and Korea Telecom. Viettel’s who compete with Etisalat Egypt and Mobinil for the believed to be interested
website states “Viettel Cameroon has committed Egyptian mobile market Morocco
to cover 81% of Cameroon’s territory when it goes Etisalat, KT Corp and Qtel have confirmed
Ethiopia
operational; and will use 2G and 3G technologies. The According to Addis Fortune, Huawei and ZTE their intention to bid for Vivendi’s 53% stake
domestic experts consider this event as a “big hit for are bidding US$1.5bn for vendor financed in Maroc Telecom
national telecommunications”, bringing a high quality network expansion projects in Ethiopia, where Namibia
service and cheaper price to Cameroon.” Ethio Telecom has divided Ethiopia into eleven Having completed it’s acquisition of
infrastructure zones and plans to allow only one Powercom (Leo) late last year, Telecom
Cameroon
SMS Mobility has a JV with Camtel to launch a vendor within each of eleven newly created ‘telecom Namibia has awarded a US$46m contract to ZTE to
new voice and data MVNO circles’. The state telco are also finalising negotiations replace Leo’s 2G sites and transfer then dismantle
with equipment vendors to introduce LTE in Addis Telecom Namibia’s own CDMA base stations to a new
Djibouti
Evatis, mobile brand of Djibouti Telecom, Ababa, with 3.5G HSPA+ in all big cities by 2015 3G and LTE network
launched a 3.5G service at the end of Kenya Nigeria
December 2012 Essar Telecom Kenya’s country manager Airtel Nigeria has completed LTE trials in
Madhur Tanejar is quoted in Agence Ecofin Lagos
DRC
Africell has raced to over one million saying they plan to participate in the open access LTE Nigeria
subscribers within two months of launch, consortium and rollout 4G. Meanwhile local website Etisalat Nigeria will rollout a further 1,000
leveraging substantial co-locations existing sites The Star also quotes Taneja announcing receipt of a base stations with Alcatel-Lucent in 2013
operated by Helios Towers Africa US$146.5m capital injection from Essar Group to ease Nigeria
debts and pave the way for a further US$97.7m capex The NCC has given interim approval for the
DRC
Agence Ecofin reports that Airtel DRC is about injection in March rollout of Capcom, formed from the merger
to launch 3.5G HSPA+. Tigo, Vodacom and of CDMA operators Starcomms, Multilinks and MTS
Africell also acquired 3G licences Wireless

Sao Tome & Principe
Sao Tome and Principe’s regulator Autoridade MTN selling South African towers?
Geral de Regulacao has invited investors
to tender for the country’s second fixed and TMT Finance quote an “unnamed source” that MTN is in “formal discussions” with American Tower to acquire
mobile telecoms license. National PTO Companhia assets in a private sale, rather than through the usual auction process. Tech Central suggests that MTN has
Santomense de Telecomunicacoes is currently the sole “moved to play down the report”. TMT Finance tend to have the ear of certain key investment managers, so there
operator may be enough smoke to suggest a fire, so we’ll explain the obvious reasons why people are putting two and two
South Africa together in this case.
Speculation continues that 8ta’s prized 8.3GHz
spectrum might make them an acquisition With MTN owning approximately 6,000 towers (and co-located on a further 2,000 towers) in South Africa, if
target by rival operator Cell C, or a means of Airtel a portfolio of consisting of the majority of their assets did come to market, American Tower may be the only
securing an entry into South Africa, who continue to African towerco with immediate access to the necessary capital to partner MTN in such a transaction. That
be linked with a move for either 8ta or Cell C doesn’t preclude Eaton, Helios, IHS or any other new market entrant accessing additional capital of course –
Uganda we’ve seen many occasions where a winning bid has preceded the announcement of a new tranche of PE.
MTN Uganda will deploy LTE in the coming
months. MTN currently has 1,100 base stations The rumour also makes sense because MTN and American Tower are already working together in joint venture
in Uganda, where they have a joint venture with towercos in Ghana and Uganda. In 2010 American Tower paid MTN $218.5m for 1,876 towers and a 51% stake in
American Tower the joint venture towerco in Ghana. In 2011 American Tower paid MTN $89m for 1,000 towers and a 51% stake in
Uganda the joint venture towerco in Uganda.
Sure Telecom tested their first GSM call in
December and expects to launch in the first American Tower already has a significant presence in South Africa, having acquired 1,400, plus a further 1,800
half of 2013, bringing the total number of operators in towers under construction, from Cell C in 2010 for a price of $430m. ATC’s Q3 2012 Quarterly Report suggested
Uganda to a dizzying seven they were marketing 1,601 towers in South Africa at that time
Tanzania
Vodacom Tanzania recently conducted a LTE race is well and truly on in
successful LTE trial in Dar Es Salaam using South Africa
NSN’s Single RAN technology
Zambia MTN South Africa’s LTE network went live on Saturday
Vodacom were one of more than five operators 1 December 2012 in selected areas of Johannesburg,
bidding for the 4th license in Zambia Pretoria and Durban. MTN are believed to have deployed
Zimbabwe a total of 1,600 base stations across the three cities.
In local publication TechZim, Telecel
Zimbabwe revealed it had 2,582,000 active Vodacom reported their 500th LTE base station in early
mobile subscribers, up 70% year-on-year, and that December, adding BSTs at a rate of seven a day.
Telecel had deployed 157 base stations in 2012, with
plans to add more in 2013 as well as extending 3G Meanwhile, Cell C have announced the commencement of
coverage their LTE trial Johannesburg

3G rollouts and a further new market entrant rumoured
in crowded Cote d’Ivoire market
After selling 931 towers to IHS Africa for $151.5m to IHS Africa at the end of 2012, MTN’s long awaited 3G
network is launching in Abidjan. Third ranked operator Moov Cote d’Ivoire is also rolling out 3G with the
help of Ericsson. Moov’s rollout began in October 2012 and is scheduled to be completed by the end of 2013.
MTN and Moov are playing catchup on rival Orange Cote d’Ivoire, who launched 3G in April 2012.
MTN and Orange lead Cote d’Ivoire’s market share, with 33-35% of the market each, followed by Moov
(Etisalat) with a little over 20% of the market. Comium, Oricel and Café Mobile (Aircom) are also active,
with rumours that Maroc Telecom may be interested in acquiring unused spectrum from Warid Telecom.
IHS Africa awarded Middle East & Africa Deal of the Year
IHS, Africa’s largest independent infrastructure tower company by number of towers managed, has won
the Middle East & Africa Deal of the Year Award at the TelecomFinance Awards held in London on 30
January 2013.
IHS won the award for its US$284 million acquisition of 1,758 mobile network towers in Cote d’Ivoire and
Cameroon from MTN Group in October 2012. A member of the independent panel of judges who selected
the winners said; “this deal enabled IHS to consolidate its position as a first tier player on the competitive
African tower stage.”
Under the acquisition terms, MTN becomes the anchor tenant on towers acquired by IHS through a sale-
and -leaseback agreement. IHS will manage the mobile network towers and other passive infrastructure.
The agreement also included a commitment between the parties for IHS to rollout a build-to-suit
programme to support MTN’s future tower requirements in both countries.
“The award comes after another strong year for IHS,” said Issam Darwish, CEO of IHS Africa. “We now
have over 5,000 towers under management and have raised over $700 million to support our growth across
Africa and the Middle East. We are delighted to receive this award and for the team to be recognized for its
hard work and dedication to delivering the best value for leading mobile operators in the region.”
Simon McCoy, BBC presenter and host of the
In a separate interview with Reuters, Darwish said IHS was looking at acquisitions in another six countries TelecomFinance awards ceremony and Steve
on the continent, probably in West or East Africa “Hopefully we can do another 2-3 this year. We plan to Howden, M&A and Corporate Finance Director, IHS
own 20,000 sites within the next four years.”

The implications of the rupees, before settling back to 190 rupees at time of
press.
lukewarm response to Bharti Is Infratel’s valuation symptomatic of investor coolness

toward the tower industry, or toward the India
Infratel’s IPO economy? According to the Wall Street Journal “Bharti

Infratel’s flop on listing shows the fragility of the
Aggressive pricing and challenging conditions in India mean the IPO (Indian) market... The issue price also made the IPO
expensive compared to other infrastructure companies
tells us very little trading on India’s exchanges, some analysts said.”
220
Bharti Infratel’s share price
Firstpost agreed: “The primary market in India
is teetering. Retail investors are yet to get their
confidence back. Bharti Infratel’s almost-flop IPO is
210 another proof of this… Bharti Infratel is priced more
than 48 times its earnings even at the lower end of the
price band. If the company had expected that investors
200 will make a beeline for the shares at this valuation, it
is in a fool’s paradise. Given the turbulent phase the
telecom sector in India is going through, it would have
190 been a surprise if the issue elicited a better response.”
An analysis of the subscriptions could be interpreted

180
28 Dec 2012 07 Jan 2013 15 Jan 2013 23 Jan 2013 31 Jan 2013 08 Feb 2013 more positively. While retail investors were reported
to have taken only 20% of their allocation, the appetite
Bharti Infratel wasn’t just an important IPO for the suggested a valuation of $93.6k per tower, which seems of tower industry-savvy institutional investors
tower industry, with potential floats to follow from toppy compared to the 2010 tower deals between GTL carried demand to 1.3 times the shares on offer,
Viom Networks and Reliance Infratel – it was an Infrastructure and Aircel at $84.4k per tower and the underwhelming but over the finish line nonetheless.
important IPO for India as the country’s largest IPO for $78.9k per tower paid by ATC to Essar Telecom – usual Indeed, some analysts suggested Bharti Infratel’s poor
two years. However, complaints of aggressive pricing qualifiers requiring familiarity of full terms of the deal business fundamentals compared to international
made it difficult to draw conclusions from the market’s notwithstanding. Bharti Infratel’s pricing may reflect competitors, and Bharti’s focus on the challenging
lukewarm response to the IPO. Bharti Infratel raised the realisation of an exit for some existing investors – domestic Indian market, may have suppressed
$761m (41.7bn rupees) in the IPO, giving the company although when KKR invested $250m in 2008, it valued demand.
an initial valuation of $7.6bn, which had fallen 13% by Bharti Infratel at $12.5bn.
December 28 to $6.6bn. Bharti Infratel operates 34,220 towers, and plans to use
Bharti Infratel’s share price rallied through January, funds raised from the IPO for dividends and to invest
The aggressively priced IPO at 210 rupees per share trading in the low 200’s and climbing to a high of 220 in a further 5,000 towers

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Editorial
stock in order to meet the towercos’ own exacting
mean time to repair and installation requirements
within SLAs with tenants. Once you get beyond the
How towercos buy deal-making / real estate management “top layer”
of a towerco, the tower operators are obsessive-
the impact of the entry of independent tower compulsive about uptime, yet many outsource
companies on that supply chain, and to ask “how do much of the O&M process, so they can and should
towercos buy?” be demanding clients.
Towercos account for an increasing Selling to towercos is reportedly a case of “slow,

proportion of Africa’s greenfield and slow, quick, quick, QUICK!” One vendor spoke
retrofit expenditure of it taking three years to progress from concept
Given the significant proportion of new build-to- to purchase order with one of Africa’s leading
suit contracts being secured by towercos, together towercos, complicated by requirements for public
with the pent-up maintenance and capacity upgrade tendering. He described a procurement process that
investments a tower transaction can release, it’s was stringent and complex, but noted that while
clear that tower companies are critical prospects towercos are very precise in their due diligence,
for Africa’s passive equipment, EPC and managed when a decision is taken towercos move at 100mph
service providers. – expedience is key, and they involve new vendors
in a military-like process to get new equipment
Kieron Osmotherly, TowerXchange Founder
A new class of energy equipment, RMS and installed swiftly.
In this our second issue, TowerXchange starts a long managed services providers vendors has emerged
journey to profile proven innovative equipment who aspire to be strategic partners “on the same We’ve seen few instances of towercos agreeing
and managed service providers to Africa’s telecoms side of the negotiating table” as tower companies. exclusive supplier agreements within a given
infrastructure community, interviewing senior category. One towerco executive talked of having
executives at companies with a demonstrable track Independent tower companies rightly have supplier agreements with three of four generator
record of saving energy and maintenance opex, and a reputation as canny buyers manufacturers, and a requirement that each keep
optimising rollout and retrofit capex. Each towerco operates a rigorous process for stock on hold for them as towercos don’t like to keep
the selection of new suppliers, always with in- their clients waiting.
The selection of the right equipment and managed house procurement teams, often governed by
services partners, and the identification of procurement committees that go all the way up to Despite exclusive contracts being rare, towercos can
innovations that yield the best opex saving for the board level. be high value clients in terms of volume. Towercos
lowest capex, are both critical decisions for tower know this and will negotiate hard on price. But they
operators, whether MNOs or independent towercos. Towercos can be very demanding when it comes all assure us that they try not to squeeze margins to
So this edition seems like a good time to consider to delivery time and maintenance of warehouse the extent that suppliers business is threatened! If

O&M service providers are lucky enough to secure Eaton subcontracts new site installation and
a contract with a towerco, don’t be surprised if maintenance.
they tender maintenance contracts annually or bi-
annually – this seems to be standard practice. Maintenance contracts
The entry of towercos into a market may herald
Where do towercos invest first when they’ve the consolidation of supplier contracts. Where
acquired a new portfolio of towers? Upgrading operators’ legacy contracts might see multiple
capacity, deep cycle batteries, line conditioning and partners engaged in security maintenance and fuel
RMS are popular delivery, towercos are often inclined to bundle this
into fewer, longer term contracts. But every towerco
The CEO of one towerco said they focused their takes a different approach. Another towerco cited
initial investments post-acquisition on better the importance of managing multiple regional
mechanisms for refueling, on connecting RMS to the suppliers to operate sites economically.
NOC, and on other measures to improve security on
sites. The local CEO of a different African towerco One of the unspoken truths of tower transactions
said their first priority has been cleaning the energy is that MNOs may defer non-essential maintenance
supply; replacing old copper wires with voltage when they know they’re going to sell their towers,
Thanks Camusat for the use of your images!
regulators. so the completion of a transaction can release pent
up O&M expenditure. critical to the success of towercos as maximising
A third CEO suggested that the entry of towercos tenancy ratios, so choosing the right vendor is
into a new market was a particular opportunity for Energy equipment and ESCOs critical.
power equipment vendors because operators had A sensible question energy equipment vendors
been running sites for a single power user, while and ESCOs should ask towercos is whether the We hope you find TowerXchange’s exploration of
towercos would need to upgrade sites with capacity structure of their sale and leaseback or operational the tower industry supply chain useful. As ever, if
to load more tenants and that means generators lease deal includes a power pass through model. If you have any comments or want to recommend a
need to be enhanced, resized and upgraded. His power costs are passed through to the tenant, then company to be featured in a future edition, please
first measure was to invest in technologies such the MNO retains full exposure to power opex. If the feel free to contact me!
as deep cycle batteries that reduced run time and towerco takes on the risk of energy consumption,
associated fuel costs, while he was also installing they are much more likely to be inclined to invest in All the best,
RMS. energy opex reduction innovations.
Kieron Osmotherly
Eaton Towers tend to do their own power Towercos create value by reducing opex – primarily Founder, TowerXchange
management, and decide, define and design what energy and maintenance opex. On pages 26-31 of
equipment to install at sites to improve power this edition, AT Kearney go so far as to contend M. +44 (0) 7771 148001
efficiency and therefore site level profitability. that maximising site level profitability is almost as kosmotherly@towerxchange.com

Special Feature:
Investors’
verdict on the
African tower
industry
In this special feature, TowerXchange looks at
the African telecoms infrastructure landscape,
and her emerging tower industry from the
perspective of the investor. What constitutes
a bankable opportunity in Africa? How do
debt and equity investors view the existing
‘Big Four’ towercos in Africa? Are there still
opportunities for new market entrants?
TowerXchange has spoken to douzens of
leading investors to ascertain their views on
the market. Some are bullish, some more
cautious; this special feature explains why…
Highlights of this special feature:

13 Are African towers a bankable investment?
16 Aggressive bids likely to continue, according
to Nina Triantis of Standard Bank
20 Are there opportunities for new market
entrant towercos in Africa?
22 Hayat Communications move up the
value chain
24 Atlas Tower assessing opportunities in Africa

Are African towers a
If the African telecoms infrastructure market is
restructured to anything like the extent of the
Indian market, where 85% of towers are owned
bankable investment? by independent towercos, then Africa’s towercos

are going to need capital to finance plenty more
acquisitions – only 5-10% of Africa’s towers have
US$billions of capital needed as networks expand and towers transferred from operator-captive to towercos to
change hands date.
American Tower, Eaton Towers, Helios Meanwhile, Mott MacDonald predict that twice
Towers Africa and IHS Africa, the as many Points of Service are needed in most
African markets. Tens of thousands of towers are
‘Big Four’ market leading towercos
needed to complete the rollout of mobile networks
in Africa, are all well financed. All in Africa. Towercos often secure preferred bidder
four have the credibility of having status on build-to-suit agreements, supplementing
completed multiple tower transactions the value of sale and leaseback deals. Many
in Africa. But with tens of thousands installation contractors report that towercos
already represent the lion’s share of greenfield
of towers expected to come to market site builds in certain markets in Africa.
in Africa, it is clear that US$billions of
investment is needed. Towercos can access only so much debt finance
to back tower, transmission and build-to-suit
Keywords: Raising Finance, Build-to-Suit, Risk, investments. It takes some serious capital to
Private Equity, Debt Finance, Aggressive Bids, acquire infrastructure assets, and the risks are
Bankability, Tenancy Ratios, Credit Worthiness, high enough that Private Equity is often required.
Infrastructure Sharing, Africa, CPS, Macquarie, IFC, The biggest risk remains that key players become
Investec over leveraged, but ultimately these are real
assets that investors are lending against. There
Read this article to learn: is some valuation risk in paying premium prices
to enter a market, but it’s justified by the need to
< Why the African tower industry is attracting US$billions of investment
build a brand as a credible player with towers
< How investors evaluate the bankability of tower opportunities
under your belt – with their aggressive bids to
< Where investors see the risks in African towers
date in Africa, the ‘Big Four’ towercos are buying
< How towercos create value through tenancy ratios above two and by reducing opex
market share.

How investors evaluate opportunities in models of the past are unsustainable. Sale and lease
African telecom towers back of towers makes sense from a financial point
Investment opportunities in African towers of view – freeing up capital to focus on creating
look good on paper. “The maths and the market customer value and spreading the network cost
dynamics are right. While we haven’t made any as an operating expense. In the Unites States we
investments in African towers yet, it’s a case of have seen that extracting towers from the telco
finding the right investment in terms of size and into a separate tower company has seen resultant
returns,” said a senior director at one Infrastructure valuations three to three and half times greater
Fund. “It’s clear that African Mobile Network than that within the telco. The attractiveness of
Operators are committed to infrastructure tower companies to potential investors lies in the
sharing, but what we’re looking for is a bankable predictable cashflows, long terms leases and solid
opportunity with a package of assets that lend tenants – tower portfolios are a very saleable asset.”
themselves to co-location, and a clear path to a
profitable business.” tower sharing. Critical factors underpinning the “A lease up rate approaching 1.8-2.0 sees solid
success of tower companies include the number returns for the tower company. A lease up rate
As former CEO of Zain Africa (now Airtel) and of existing and potential new operator licences, above 2 is where you start to see exponential
current Chairman of Clean Power Systems, Chris market growth (particularly data), tower lease-up value creation. Succeeding in African towers is
Gabriel has extensive experience in African towers potential (also known as the tenancy ratio), and also about operating efficiencies – reducing cost
from the operator, vendor and investor perspective. political and economic stability.” of service through streamlined methods and
Another of Chris’ current roles is as Senior Adviser processes; reducing opex and capex through scale
to Macquarie Bank, with a remit to advise on global TowerXchange spoke to Andres Millan-Drews, logistics; and optimising energy costs (power and
telco infrastructure deals and establish an EMEA Principal Investment Officer at the IFC. “IFC has diesel) through a combination of alternative energy
portfolio of independently owned shared mobile supported several players to fund both bids and solutions, including hybrid power, solar and wind
tower and site infrastructure businesses. organic growth,” says Millan-Drews, who continues: energy. Opex savings well above 50% have already
“Investors are interested in operational risk, as been realised by numerous operators through
We asked Gabriel for his views on the African downtime can incur substantial fines, so it’s not just deployment of such alternative energy solutions,”
tower market. “Infrastructure sharing is evolving, about tenancy ratios. The margins may be smaller concludes Gabriel.
predominantly driven by price competition, in Africa, but overall EBITDA is higher than Latin
shrinking margins and shorter technology life- America, for example, as rent is more expensive.” Overcoming investor concerns
cycles. It is already underway in several African So, what is putting off some investors? “Our
countries including Ghana, Tanzania and Uganda, Chris Gabriel takes up the discussion: “With the interest in telecoms towers has reduced because
and has just spread into Cameroon and Cote proliferation of new operator licences, new entrants expectations are tough to realize. Towers are a risky
d’Ivoire. While there’s a good volume of potential seek to compete predominantly on price - this, and expensive business in Africa with political
deals at discussion stage, this remains a formative coupled with shorter technology life cycles means and currency risk, tribal issues and at times
market. Not every market in Africa is ready for that the stand-alone network build and capex governments seem to treat telecoms as a cash cow,

with new taxes and fees,” said one investor. know. Given the huge capital involved in these tower market in Africa.
Another investor expressed concerns about the transactions, and the lack of information, we’re
credit worthiness of second tier operator anchor cautious about investing.” Bankable opportunities
tenants, and about the lack of transparency in the TowerXchange spoke to Ahjeeth JaiJai at Investec,
market, saying: “we are somewhat risk averse in TowerXchange spoke to another company with a who have co-funded a towerco deal in Tanzania.
telecoms. Competition in Africa often means only track record of substantial investments in telecoms We asked JaiJai how passive infrastructure sharing
the number one and number two operators in a in Africa and the Middle East. A couple of years deals rate on the risk / return scale, particularly in
market are financially viable, and often it’s only ago they evaluated African tower investments. the current economic climate, when investment
the third, fourth or fifth ranked operators who They felt that valuations were overhyped. They funds aren’t as forthcoming as they once were.
want to sell their towers. When evaluating these were underwhelmed by the tenancy ratios being
opportunities, a credit assessment of the anchor achieved at the time. And they felt the 20-25% “Equity and debt funding have different appetites.
tenant is critical, as is an evaluation of the market equity returns they were seeking weren’t possible. Towerco multiples are very attractive for the equity
for new towers, for new technology upgrades, and They were concerned that profitable African investor, given that towerco multiples are generally
for data growth.” operators were disinclined to entertain the short- higher than those of Mobile Network Operators.
term cash-in of their towers, and preferred the long The debt finance option represents access to quality
“Can the towerco management generate additional term future proofing and competitive advantage of credit at attractive margins.”
sales?” He continued, “Co-location ratios are retaining control of the network.
critical. One of our biggest challenges is the lack of How do investors determine how bankable
data about how pioneering deals have progressed This sounded like a reasonable analysis of an infrastructure sharing project is?
“Lendors are looking for a package of assets that
“
– have tenancy ratios been achieved? We don’t some markets where coverage remains a key
differentiator. But where coverage is becoming lend themselves to co-location. Lenders also have to
commoditised and QoS becomes the critical be sure SLAs are met. Performance and track record
differentiator, operators’ are recognising the are key, as are tenancy ratios. Local knowledge is
opportunity to release stranded assets on their critical – this is the gap for new market entrants.
When evaluating these balance sheet and share infrastructure. For Ultimately, we’re looking for a clear path to a
example, MTN are happy to say that their tower sale profitable business,” concluded JaiJai.
opportunities, a credit
and leasebacks in Ghana and Uganda have been a
assessment of the anchor tenant
the market for new towers, for

new technology upgrades, and
for data growth
“
is critical, as is an evaluation of
success, and they have subsequently agreed deals
in Cameroon and Côte d’Ivoire. As joint venture
partners, the deal structures in Ghana and Uganda
look as favourable to MTN in the long term as in the
short term.
The investment community has the full range of
attitudes toward African towers. Investors familiar
with the unique machinations of the tower industry
are bullish. For more cautious investors, the lack of
transparency in African towers remains a problem
– a problem TowerXchange will do our part to ease,
Perhaps if the unsatisfied investor repeated their whilst respecting the confidentiality of Africa’s
analysis today, they might find a more attractive tower industry pioneers!

Aggressive bids likely to
TowerXchange: Are Africa’s towercos paying a
justifiable premium for first mover advantage?
Indeed are first mover operators realising a good
continue as African tower price?
industry matures Nina Triantis, Managing Director, Global Head of

Telecoms and Media, Standard Bank: There are
significant market differences in the performance
Standard Bank’s verdict on the tower operators bidding for Africa’s of the tower industry. For example, in Indonesia,
infrastructure assets Tower Bersama has created phenomenal equity
value with nearly 80% EBITDA margins, while there
Standard Bank is Africa’s largest financial institution with a presence in are less attractive markets such as India. It’s hard to
eighteen countries, offering corporate, investment and retail banking. judge where Africa will end up on that continuum.
Standard Bank has had a TMT focus since 1998 and has followed the
major operators since then to maturity. Standard Bank was an early
Tower operators have been keen to establish a
stage investor in Celtel. Standard Bank has been financing the tower
footprint in Africa. Helios have certainly benefitted
industry in Africa since 2010 and has led a number of the more recent
from being first to market, as they’re the sole tower
transactions including in Ghana, Tanzania and Uganda. Standard Bank
operator in Tanzania and DRC.
is also an adviser in the tower business, and has an active current
mandate in Africa. TowerXchange spoke to Nina Triantis, Managing
Director and Global Head of Telecoms and Media at Standard Bank. It’s always difficult to judge tower transactions as so
much depends on the fine print that is not publicly
Keywords: Creating Equity Value, Aggressive Bidding, Cost of available. For example, tower portfolios changed
Capital, Country Risk, Infrastructure Funds, Private Equity Funding, hands for a high price in Uganda last year, but much
RoI, Tenancy Ratios, Site Level Profitability, New Market Entrants,
depends on the terms and Uganda is a good market.
Infrastructure Sharing, Africa, Ghana, Uganda, Indonesia, Nigeria,
The Aga Khan is looking to build out in several
Nina Triantis, MD & Global Head of Telecoms Tower Bersama, American Tower, Eaton Towers, Helios Towers
and Media at Standard Bank Africa, IHS Africa countries in East Africa, and as long as the towerco
has a good anchor tenant, even if not all lower
ranked operators survive, the tower operator still
Read this article to learn:
gets a boost of revenue.
< Are Africa’s towercos paying a premium for first mover advantage?
< Comparing the funding, cost of capital, experience, appetite for risk and aggressive bidding of
By all accounts MTN are very happy with their
American Tower, Eaton Towers, Helios Towers Africa and IHS Africa
recent deals with IHS Africa in West Africa. Ivory
< What comes first, the investment or the bid?
Coast is a highly sought after market, with another
< Do the ‘Big Four’ towercos have the ‘digestive capacity’ to acquire all the towers coming to market in
one or two additional operators possibly entering
Africa?
the market. Cameroon has two active operators

with a third license pending. which existing networks overlap. Also, if it’s not an Nina Triantis, Managing Director, Global Head
aggressive deal, the tower operator can still make a of Telecoms and Media, Standard Bank: Whilst
There’s a fine balance to be struck for tower decent ROI on a lower tenancy ratio. American Tower may have the deepest pockets and
operators gaining a foothold in Africa. While none the lowest cost of capital, all tower operators appear
have reached the scale of 10,000+ towers, 5,000 There is still considerable investment in 3G to come to have access to capital, depending on the size of
towers is an interesting scale in Africa. For example, in Africa, and there are still capacity issues. The the transaction. IHS, Eaton and Helios are backed
Tower Bersama don’t have 10,000 towers, but aggressive bids we’ve seen in the African tower by private equity so have a disadvantage in their
they’re in a very good position in a single market industry aren’t going to stop, although some tower higher cost of capital as compared to American
in Indonesia, and would certainly be considered a operators have the luxury of being a bit more Tower.
mature tower operator. measured than others.
However, sizable transactions all need additional
TowerXchange: Are three towercos in Ghana too TowerXchange: I guess you’re talking about capital, and many current investors are already
many? Would tower operators shy away from American Tower… maxed out. Helios Towers Africa has some
having three compete in a single market again? substantial backers. IHS has a more diverse capital
Nina Triantis, Managing Director, Global Head of base and Eaton Towers has the backing of Capital
Nina Triantis, Managing Director, Global Head Telecoms and Media, Standard Bank: American International.
of Telecoms and Media, Standard Bank: The Tower has tremendous opportunity – they’re the
competitive spirit may drive tower operators to bid only true global tower company. They have capital, TowerXchange: Are investors looking for
for any assets even if they are the third operator but they’re disciplined and have the luxury of being opportunities in the African tower market – or
or are late to market, but a lot depends on the able to pick and choose markets. do tower operators have to work hard to find
attractiveness of the market, including the number capital?
of mobile operators. Ghana is a highly competitive American Tower’s appetite for African
market from an MNO perspective. opportunities has a lot to do with country risk. Nina Triantis, Managing Director, Global
They’re cautious where they go, like a lot of other Head of Telecoms and Media, Standard Bank:
Whether three tower operators can prosper in US companies, hence doing their first deals in South There is interest in African towers. A couple of
“
a single country also depends on the extent to Africa and Ghana. American Tower has lots of infrastructure funds that haven’t invested may be
American Tower’s appetite for

African opportunities has a lot
“ opportunities in Latin America and they seem to be
more comfortable there.
TowerXchange: Does American Towers’ cost of

capital mean they are best placed to finance deal
structures focusing on cash release, or are the
interested, but for most investors the tower industry
is part of the telecoms sector. The majority of the
capital accessible to this market isn’t going to come
from pureplay infrastructure funds.
It’s a difficult task to raise funds. While a lot of

to do with country risk other players in the sector well enough funded to investors buy into the tower industry business
compete for such opportunities? model, not everyone will take country risk, or
accept the seemingly long lead time to earn a

When Helios raised money the first time around African cellular industry, and hence are very
the potential of the industry was obvious, but knowledgeable.
it’s become progressively more difficult to access
capital. Investors are concerned about aggressive IHS Africa was initially focused on managed
bids and deal prices, and are concerned about the services and has over time been phasing that
amount of time it will take to achieve decent return business out and building the co-location business.
on investment in the mid-twenties or higher. As a result IHS are strong on engineering skills.
TowerXchange: From an investor’s perspective, I wouldn’t be surprised to see tower operators

what do you see as the differences between moving toward outsourcing because managed
Africa’s ‘big 4’ towercos (IHS, ATC, Helios, services is a lower margin business with a high cost
Eaton)? base. The newer tower operators outsource more,
for example Helios Towers Nigeria does more in-
Nina Triantis, Managing Director, Global Head house than Helios Towers Africa.
of Telecoms and Media, Standard Bank: All four
Seemingly long lead time to earn a respectable return
are viewed as good tower operators, although it’s As in any business, PE won’t invest if the valuation
respectable return. This is often a chicken and egg quite a simple business. They’re all focused on is regarded as high, or if they don’t think they can
situation as investors do not want to blindly provide operational excellence. Some are better institutional achieve targeted returns within a given timeline.
capital, equally, tower companies do not want to buys than others – some are more “corporate”. It’s Positioning and pipeline are key; whether that
enter into contracts without financing in place. possible that some may be acquired in the future. tower operator has the opportunity to invest in
And there are differences in how aggressive they sensible deals.
TowerXchange: Do the tower operators need to may be when bidding for opportunities.
secure the investment first before they can make TowerXchange: Are the business plans targeting
a credible bid, or do the investors need to see a We’ve spoken about American Tower, who are in a tenancy ratios between 2.3 and 2.6 achievable?
winning bid before they’ll invest in the towerco? category of their own. Investors will differentiate Can tower operators offset any shortfall by
between them and players that are PE funded. investing in energy opex reduction to improve
Nina Triantis, Managing Director, Global Head site-level profitability?
of Telecoms and Media, Standard Bank: Tower American Tower were initially the least experienced
operators raise capital in different ways. For “African” operator whereas IHS Africa and Helios Nina Triantis, Managing Director, Global Head of
example, Capital International invested in Eaton had a few more years of African experience from Telecoms and Media, Standard Bank: We’ve seen
when they only had their deal in Ghana, for which where the independent tower model originated in a lot of reasonable business plans. Tenancy ratios
Eaton already had an equity partner, so Capital Nigeria, albeit with the CDMA operators as tenants. are more or less on target but haven’t exceeded
International took a leap of faith in future deals. expectations in some instances, in other instances
In other instances, letters of intent for build to suit Whilst Eaton Towers started later in Africa, its tenancy ratios are reaching or slightly exceeding
orders may help secure investment. principals have extensive experience in the two. 2.6 might be a bit aggressive, but tenancy ratios

“
aren’t the only measure of success. Tower Bersama – I don’t think tower operators will go absolutely
is valued at nearly 17-18 times EBITDA, on a tenancy everywhere, at least not in the short term. There
ratio of 1.6, but with a much higher prospective will be focus on the part of sellers and buyers on the
tenancy ratio.
I think tower operators are focused on site-level

profitability, particularly on reducing energy opex.
While lots of management time has had to be
devoted to getting deals and securing funding, tower
countries that make the most sense.
If certain transactions involving thousands of

towers came to market today, none of the tower
operators except American Tower would be able to
win the deal without raising substantial additional
It may be difficult for new tower
operators to get into Africa at this
stage. Mobile Network Operators are
very protective of their towers, and
are disinclined to entrust them to a
“
companies also have to focus on cost and other equity. To clarify that point, American Tower company without experience
operational issues. maintains an edge as their capital is immediately
available, but the other three major African
Tower operators will continue to do a lot of M&A, towercos now all have the backing of large and There is more capital to be raised to do all the
but I suspect many are minded to do a certain significant institutional shareholders, so raising the deals, but yes I think the existing tower operators
number of deals then focus on operational capital required for a big deal will be easier than it are able to do those deals. It seems that the market
excellence. There are a mind-boggling array of would have been at the outset. is accelerating, though is still moving more slowly
potential energy saving solutions, choosing the right than originally anticipated.
investment remains a challenge, and when tested
they don’t always deliver what they promised. It may be difficult for new tower operators to get
into Africa at this stage. Mobile Network Operators
TowerXchange: If Africa eventually goes the are very protective of their towers, and are
way of India, in the sense that 80%+ of towers disinclined to entrust them to a company without
are transferred from operator-captive to experience. New regional tower operators may
independent towercos, do Africa’s ‘Big Four’ emerge from strong local relationships, but will
towercos have the ‘digestive capacity’ to acquire find attracting funding difficult. The African tower
all the towers coming to market, or is there a gap market is already quite competitive. Rational
in the market for additional players? competition, with tower operators achieving larger
scale, is good for investors.
Nina Triantis, Managing Director, Global Head
of Telecoms and Media, Standard Bank: I’m We could see operators doing transactions to
conservative as to the scale of opportunity in manage their towers jointly, although this has yet
Africa. There are only going to be so many towers to happen in scale. Some local operators have hived
from a logistical and permitting perspective, and off assets in anticipation of this, but even Airtel has
some of the numbers suggested are pie in the sky. become one of the best tenants on everybody else’s
Africa is a collection of a large number of countries towers!

Are there opportunities
TowerXchange are tracking several potential new
market entrant tower companies who maintain
a watching brief, or who are actively bidding, on
for new market entrant Africa’s telecom infrastructure assets.
Prospective new market entrants come from three
towercos in Africa? categories:

< Turnkey infrastructure and managed service
providers moving up the value chain, often
Do new entrants have the necessary competence, experience and funding?
fronting consortia that include investors
< Niche market towercos building upon localised
Are there gaps in the African tower market for new entrants? Is
portfolios
the aggressive bidding of the ‘Big Four’ towercos pricing would-
< International tower companies diversifying their
be competitors out of the market? Would new market entrants
asset portfolio
satisfy MNO’s criteria for towerco partners with “competence,
experience and funding”? TowerXchange addresses these
A fourth alternative category of potential new
questions and talks to towercos who exemplify three categories
market entrant is operator-led tower companies
of potential new market entrants – turnkey infrastructure
such as Airtel’s Africa Towers and TELMA’s TowerCo
providers moving up the value chain, niche market towercos,
of Madagascar. TowerXchange will be taking a
and international towercos diversifying their portfolio.
closer look at operator-led towercos in a future
Keywords: New Market Entrants, Towercos, Auctions, special feature.
Aggressive Bids, Turnkey Infrastructure Providers, Economies
of Scale, Infrastructure Sharing, Africa, India, Europe, United Competence, experience and funding
States, America Tower, Eaton Towers, Helios Towers Africa, IHS
critical for new market entrants
Africa, Hayat Communications, Alcazar Capital, Helios Towers
The leading tower decision maker at one of
Nigeria, SWAP Technologies, Bharti Infratel, Atlas Tower
Africa’s leading operators is skeptical that there
is much room in the market for new entrant
Read this article to learn: tower companies. “It’s a tough market for new
< What are the fundamental criteria MNOs use to evaluate towerco partners and how do prospective entrants,” he said. “These assets are sensitive.
new market entrants measure up? The competence, experience and funding of any
< The credentials of turnkey infrastructure providers as potential towerco partners prospective partner are critical. Why would we
< The criticality of tower industry experience in the management team trust the crown jewels of our network to anyone but
the most proven partners?” With four established
< Why the “goldrush fever” for African towers may preclude the participation of new market entrants
towercos already commanding portfolios of
< The value of first mover advantage which the ‘Big Four’ have paid a premium for
thousands of African towers, at least one major

Turnkey infrastructure and managed service providers
moving up the value chain
“
The hero of this category is IHS Africa, who built
a reputation for engineering excellence building
and selling tenancies on their own towers in
Nigeria, while managing towers on behalf of prospective new market
third party owners in Nigeria, Sudan and Ghana. entrants with a turnkey
IHS graduated from respected managed service
provider to become Africa’s leading towerco
(by number of towers owned and managed) by
winning a fiercely competitive auction for 1,758
of MTN’s towers in Cameroon and Cote d’Ivoire,
and backed by $125m of equity investment
infrastructure provision
pedigree in Africa have
proved that they have the
“competence” and “experience”
to be trusted with crown jewel
“
from European investment firm Wendel and its assets
subsidiary Oranje-Nassau. IHS are proof that
companies can make the breakthrough from
managed service provider to credible bidder for how to get maintenance crews to sites during
African tower portfolios. the rainy season when roads are impassable to
everyone else. In short, prospective new market
Prospective new market entrants in this category entrants with a turnkey infrastructure provision
have the advantage of substantial experience of pedigree in Africa have proved that they have the
the logistics of installing and maintaining towers “competence” and “experience” to be trusted with
in Africa. They know how to navigate the specific crown jewel assets.
requirements of leasing and permitting authorities
in local markets. They know how to deliver All the turnkey infrastructure players might lack is
steelwork to remote locations within tight delivery the real estate and investment management skills
operator doesn’t anticipate any more flourishing. timescales. They have the engineering capability to of the pureplay towerco. Blend in some seasoned
reverse engineer an acquired tower that lacks CAD tower industry veterans in the management
Let’s take a look at the characteristics of each of drawings. They are comfortable taking on the risk team to tick the “real estate” box, and a private
those categories of potential new entrant towercos, of selecting and implementing the right energy equity investment partner to tick the “investment
consider how they fare against the “competence, equipment and services, and the RMS systems management” and “funding” boxes, and you might
experience and funding” criteria, and look an to manage assets from their NOC. They know have the ingredients for a highly credible bidder
example from each category.

Hayat Communications move up the some $30m of paid-up capital, and a market cap We would provide energy management services,
that varies between $40-100m.We partner with a but subcontract filling of diesel and the related
value chain number of private equity firms across the region fleet management of trucks. Similarly, we keep site
that are interested in making a play in the telecom acquisition in-house much of the time, but sometimes
To get a stronger sense of the perspective of players
infrastructure space. work with local real estate companies in complex
in the “Turnkey infrastructure moving up the value
chain” category, TowerXchange spoke to Rajat markets where they may better access to landlords as
Hayat Communications and Alcazar Capital are well as a larger database.
Malhotra, CEO for the Middle East and Africa at Hayat
currently engaged in a tower transaction in
Communications
Vietnam. We’ve already established a team on the The Service Level Agreements in managed services
ground and are in discussions with multiple sellers and are tight; we don’t want the risk of outsourcing.
TowerXchange: Thanks for talking to us today Rajat.
tenants. Vietnam is an attractive market for foreign Approximately 400-500 of our staff are focused purely
Please tell us a bit about Hayat Communications
investment and also has enough room for a tower on managed services.
– where do you fit in the telecoms infrastructure
player to grow. Highly fragmented tower ownership
ecosystem, particularly in Africa?
allows us a lot of flexibility on how to approach the
TowerXchange: Why should operators outsource
tower space.
Rajat Malhotra, CEO, MEA, Hayat Communications: We to specialist infracos such as Hayat? Why can
design, build and operate networks, providing turnkey you deliver the same services cheaper than the
We’re also looking at additional transactions in Asia
services, systems integration and managed services. operators’ own in-house teams?
and sub-saharan Africa.
Our Managed Services include first line, second line,
front office, back office, core, as well as running the Rajat Malhotra, CEO, MEA, Hayat Communications:
TowerXchange: Do you believe managed services
NOC/Trouble Ticket System. Most of our services are In our opinion, the operators role is to finance and
should be delivered using in-house resources, or is
executed in-house, avoiding middle man mark-ups, and envision the network, and once it’s built, to focus on
it a case of subcontracting to local market experts?
more importantly ensuring KPIs and SLAs. the customer. Just as it is not practical (or necessary)
for the operator to manufacture their own telecom
Rajat Malhotra, CEO, MEA, Hayat Communications:
We’re also actively bidding for tower portfolios across We find we can deliver quality services faster, meeting equipment, they also don’t need to focus on building
Africa, Asia, and the Middle East. The financial backing and exceeding customer expectations by provisioning networks.
we have from our partners means we have a good most services in-house. We have 1,200-1,500 staff,
appetite for risk and investment to lower opex. We tend about 30% of our workforce fluctuates depending Building infrastructure is our actual business model,
to favour countries where we have a presence on the on active projects. Around 98% of those staff are whereas for an operator, it’s a means to an end – a
ground. technical resources (engineers, technicians and project platform for delivering their core services. As a result,
managers). we are more focused on finding ways to be leaner and
TowerXchange: What can you tell us about Hayat’s more efficient in delivery.
financial credentials, and your experience of Occasionally we will outsource non-core services. For
acquiring tower portfolios? example when we construct a site we would The same applies to Managed Services. The size of our
subcontract the concrete foundations, but focus on organisation compared to an operator, allows us to
Rajat Malhotra, CEO, MEA, Hayat Communications: erecting the tower and installing the equipment with operate more cost-efficiently. Additionally, using the
As a public company, Hayat Communications has our own teams. same teams that constructed the network to maintain

it allows a quicker and more accurate response. Our
teams understand it, because they built it.
Niche market towercos building upon localised portfolios
TowerXchange: How has the managed services
market changed since Hayat first got into the There are not a lot of small
business six years ago? entrepreneurial towercos in Africa, so
this is a small category. Perhaps the most
Rajat Malhotra, CEO, MEA, Hayat Communications: historically significant player here is
The biggest change has been the privatisation of state- Helios Towers Nigeria, one of the pioneers
owned operators, and the entry of second and third of the tower industry in Africa. But HTN
operators into several markets. Those new entrants are not a new market entrant, and their
were more willing to outsource, and when they did, pan-African expansion is fulfilled through
there were dramatic opex savings realized. a separate entity in Helios Towers Africa.
Then the OEMs started seeing managed services as Another example from the niche market
a growth area. Again, it wasn’t just about reduced towerco category also hails from West
headcount; the focus is increasingly on saving energy, Africa. “SWAP Technologies have been in
and on energy management skills. At first managed the build-to-suit market since 2005 and
services were purely passive infrastructure – civil and did the first towerco deal in Africa with
electrical – but with the emergence of reliable local
Zoom Network in May 2009, followed by
service partners, it wasn’t long before the scope of
a deal with Starcomms in August 2010,”
work started to include active, radio, and microwave
says the company’s Chief Executive
equipment.
Tunde Titilayo. Helios Towers Nigeria
and SWAP Telecoms and Technologies
While managed services pricing per site is likely a third
make the ‘Big Four’ a ‘Big Six’ in West
of what it was five years ago, volume has gone up and
Africa – SWAP’s portfolio extends beyond Nigeria. “Our footprint includes over 700 owned towers in
has allowed companies such as ours to establish scale.
Nigeria, we’re managing towers for MTN and others in Ghana, and we were the first towerco in Côte
d’Ivoire.” Where would SWAP seek to expand, and do they have the funding to participate in capital
There are still areas that are considered off-limits for
outsourcing with some clients, such as core and second
intensive deal structures? “We’ll continue to focus on West Africa and are interested in all types of
line support, but we see these barriers coming down as infrastructure sharing deals,” concludes Titilayo.
well. With both operators and OEMs looking to reduce
headcount, companies like Hayat are being counted Niche market towercos building upon localised portfolios have “competence” and “experience”
on to absorb high level resources and provide these from the front lines of the African tower industry. If they are backed by solid funding, then players
services directly in this category can be credible bidders too

International tower companies diversifying their asset portfolio Atlas Tower assessing
The hero of this category is of course American towerco, you should expect them to be credible
opportunities in Africa
Tower, who in Q2 2012 announced that their players. But this is an article about new entrant
international segment had generated higher towercos, and American Tower is anything but a TowerXchange: Tell us about Atlas Tower’s
commenced new business than their domestic new market entrant! interest in Africa.
segment for the first time in their history.
What about new market entrants from India? When Nathan Foster, President & CEO, Atlas Tower
American Tower, and indeed their US domestic Bharti Airtel acquired Zain’s assets in 15 countries Companies: Atlas is interested in opportunities
market rivals Crown Castle, have been great Africa, many analysts foretold the swift entry into in Africa. We are currently assessing the African
proving grounds for some of the greatest minds Africa of Bharti Infratel, with many speculating landscape for acquisition and Build to Suite
in towers. A lot of their former senior executives that India’s other towercos would follow. Rumours opportunities of all shapes and sizes that might
are now on the management teams of some of the persist that India’s towercos remain in dialogue couple well with our long-term revenue goals. We’re
most successful towercos in emerging markets. Of about potential partnerships and investments that currently in a due diligence phase.
course there’s Chuck Green at HTA, formerly CFO could see them enter the African market, perhaps
at Crown Castle. Jim Eisenstein, once ATC’s Chief by acquiring an existing African towerco or in a TowerXchange: Do you agree that Africa has
Development Officer, heads up Grupo TorreSur in joint-venture with an operator. Yet one cannot help been a seller’s market to date, and that towercos
Latin America, while former ATC Vice Chairman but feel they have enough on their plate dealing have paid a premium for first mover advantage?
and President of their international division with the turbulent domestic Indian market. In
Michael Gearon is a leading mind behind Protelindo particular the effects of the recent cancellation of Nathan Foster, President & CEO, Atlas Tower
in Indonesia. If you see an ex-ATC or Crown Castle 122 licenses has prompted some commentators to Companies: As a prospective new entrant, we’re
“
Director on the management team of a new entrant forecast that the Indian tower industry could lose as looking for an adjustment from “goldrush fever”
much as 10-12% of it’s total income. to a more tempered and logical market. We’ll put
our feet on the ground at a time when we feel the
Interest may not just come from India. The strategic valuations are correct.
links between some of Africa’s leading operators
rumours persist that India’s
towercos remain in dialogue
about potential partnerships
and investments that could see
them enter the African market
“ and investors/owners in Europe mean there are
transferable relationships between Group Strategy
functions in Europe and European towercos.
The United States has one of the most mature tower

industries in the world – could other American
TowerXchange: Based on your experience in the
US, how important is revenue from upgrades to
new technologies in driving towerco revenues?
Nathan Foster, President & CEO, Atlas Tower

Companies: The entry acquisition isn’t where
towercos follow ATC into Africa? TowerXchange towercos make the money – the business is owning
spoke to one US towerco prepared to admit that assets in areas best positioned for wireless data
they are looking at opportunities in Africa growth. It matters less the technology acronym

“ “ Are the market conditions right
As a prospective new entrant, for new entrants?
we’re looking for an adjustment
from “goldrush fever” to a more Whether international towercos diversifying
tempered and logical market their portfolios and considering entering the
African market come from India, Europe or the
US, they are likely to satisfy all three criteria for
and more that the fundamentals of data usage is “competence, experience and funding,” as in
available to the population. many cases they are managing portfolios of tens
of thousands of towers already.
TowerXchange: Is the cell-site densification
required as Africa moves from 2G to 3G or in Perhaps new market entrants are simply being
some cases skipping to LTE going to generate the “priced out” of Africa? Certainly there are more
upgrade revenue for towercos that many hope? bidders for most portfolios than just the ‘Big Four’
towercos, but the Big Four continue to win all the
What has been your experience in the US?
auctions – so far at least.
Nathan Foster, President & CEO, Atlas Tower

Several investors agree with Atlas’ Nathan Foster
Companies: I don’t know enough about Africa yet,
that there is a “goldrush fever” for African
but upgrade revenue must be a likely scenario
towers that drives acquisitions to a premium that
for our investment. In the US, amendment and
precludes the participation of some classes of
modification revenue represents more than 40%
would-be participant. Will the “goldrush” end?
of our revenue. The question we ask is how soon
Not anytime soon according to Standard Bank’s
before Africa can model like that. Still, I believe the Nina Triantis (see the interview on pages 16-19).
appetite for wireless data will continue whether the Will the ‘Big Four’ have an unassailable lead in terms of relationships, credibility and scale by that
market is Harare or Houston. time? That is why they’re paying premium prices for Africa’s towers – to establish market leadership
and build portfolios big enough to benefit from economies of scale. It’s going to be tough for new
TowerXchange: Are there opportunities in Africa market entrant towercos to compete with the ‘Big Four’.
for new market entrants?
One investor familiar with the African market told TowerXchange “You’d be a brave soul to enter the
Nathan Foster, President & CEO, Atlas Tower African market now and still find the private equity to back you – the existing towercos have such a
Companies: Ask me again in 6 months, one step at head start”
a time

Why tenancy ratios
In the tower space, Laurent has worked for several
large operators on network transformation and
cost-efficiency programmes – structuring many
above two will be difficult

initiatives around network and tower outsourcing.
Laurent has also worked with investors looking to
invest in towercos in markets such as South Africa,
to achieve in Africa… Ghana and Tanzania.
TowerXchange: What’s your view of the African

…and what the tower industry should do to create new value by tower outsourcing market?
leveraging reduced fuel consumption and providing fibre to the
Laurent Viviez, VP & Partner, AT Kearney: We’re still
tower
in the early stages of tower outsourcing in Africa.
MTN is doing tower sharing or tower outsourcing
Keywords: Tenancy Ratios, Consolidation of Operators, National in South Africa, Uganda, Ghana, Cameroon and
Roaming Agreements, Pass-Through, Energy Management, Site- Cote d’Ivoire, but it’s still early days. Etisalat have
Level Profitability, Fuel Theft, 3G, LTE, Cell-Site Densification, tower outsourcing on their agenda, but have not
Fibre, Active and Passive Infrastructure Sharing, Africa, South
followed it up strongly to date. Orange Group has
Africa, AT Kearney, Cell C, American Tower, Telkom, MTN,
pressure to reduce its debt level, so there’s pressure
Vodacom, Orange, Etisalat, Airtel
to accelerate tower outsourcing. As we know, Airtel
has registered tower companies in 16 African
Laurent Viviez has over 15 years consulting experience in
countries. Meanwhile Vodafone seem a bit late in
telecoms. For the last 5 years he’s focused on Africa, working
the game, having only done a deal in Ghana. But
with most of the major telcos, equipment and handset
there are lots of deals in the pipeline.
manufacturers on projects as diverse as pricing, distribution,
Laurent Vivez, VP & Partner, AT Kearney m-payments, cost-efficiency, and network outsourcing.
TowerXchange: In your recent report “African
Telecoms at a Crossroad”, you highlighted
Read this article to learn: potential consolidation of operators as Africa’s
< The implications of consolidation among operators for the number of credit-worthy tower major players, MTN, Vodacom, Airtel, Orange
tenants in Africa, and what this means for tenancy ratio targets (plus in certain markets Globacom, Etisalat
< Site-level profitability as an important performance metric for the tower industry and Millicom) have very strong positions in
< How consolidation of towers in dense urban areas can increase tenancy ratios their markets while operators ranked fourth
< A call to revise Service Level Agreements that pass-through fuel consumption and lower struggle to achieve profitability.
< Why towercos should diversify into the provision of microwave and fibre to site backhaul capacity Does this illustrate a lack of credit-worthy
potential tenants available to independent tower

“
operators? TowerXchange: How should tower companies
Laurent Viviez, VP & Partner, AT Kearney: Many

of the towerco business plans I have seen have
targeted tenancy ratios greater than two – in some
cases as high as 2.3 to 2.6. I believe tenancy ratios
respond to the lowering of the glass ceiling on
their potential tenancy ratios?
Laurent Viviez, VP & Partner, AT Kearney: I feel

many towercos will need to revisit the assumptions
Tower contracts that pass
through power costs are a
huge missed opportunity for
both operators and tower
“
above two are going to be tough to achieve in in their business plans around the achievable
markets where multiple operators do tower deals. tenancy ratios, and make them more conservative – companies
tenancy ratios above two are quite ambitious.
If you’re a market leader and you want to share tenancy ratios through the consolidation of towers.
towers, your most likely clients are smaller players. However there are opportunities to increase Competing operators all have towers close to
While African markets might have an average each other in dense urban areas, which limits
of 3.5 competing operators, the markets with 8-9 the potential for sharing in these high traffic
competing operators markets like Nigeria and areas – the potential for sharing may be greater
Tanzania are not sustainable. In the context of a in less fashionable areas. In urban areas, there
consolidating operator market, it will be tough to is an opportunity to consolidate and discontinue
achieve high tenancy ratios if smaller operators are existing towers, and share remaining towers,
forced to exit, merge or undertake structural moves achieving higher tenancy ratios. However, this
like full network mergers, active network sharing or requires considerable co-operation. The costs
national roaming agreements. of decommissioning towers and transferring
hardware can be high, but there’s an opportunity to
In a number of markets it was a smaller, challenger consolidate towers when upgrading to 3G and 4G as
operator who sold their towers first, for example operators are installing new equipment anyway.
third-ranked operator Cell C in South Africa, and
Millicom in Ghana. These moves have triggered I also feel towercos haven’t maximized
market-leading operators to follow and bring their opportunities in energy management. Towercos
towers to market. Prospective tenants often find can compensate for any tenancy ratio shortfall by
market leaders often have most attractive locations, offering to leverage reduced fuel consumption.
so it will be tough for towercos linked to smaller Fuel can cost as much as 10% of revenues. Tower
players to achieve aggressive tenancy ratio targets. contracts that pass through power costs are a
For example, Cell C had targeted tenancies from huge missed opportunity for both operators and
Telkom in South Africa, but when MTN secured tower companies. I recommend that operators task
many of those tenancies, it forced Cell C and tower companies to achieve fuel consumption by
American Tower to revise the business plan and the as much as 50%. While the operator may retain
valuation. responsibility for diesel price changes, volume of

fuel consumption should be part of a towerco’s
service level agreement. This incentivises the Traditional Power Optimization Levers
towerco make changes such as reducing pilferage,
which can be up to 30% in some markets, and Alternative Energy efficient BTS
energy
installing solar panels or hybrid diesel generators Temperature
Pilferage control
with the right capacity – generators have significant Outdoor sites
increase
High
over-capacity in some markets.
Increase
electrification rate
TowerXchange: In the report “African Telecoms Fuel server device
Business Impact
Site sharing
at a Crossroad”, two of your calls to action were Use daily battery
Optimize capacity
Hot-air exhaust pipes
“drive a step change in operational excellence” generator
loading with Increase battery
and “keep investing in the network”. What Medium deep-cycle capacity Dynamic Temperature
batteries Use quick- settings
practical steps should CTOs, senior network charging
cycle batteries Right DG confirguration
planners and independent tower operators take Adapt Electericity
contracts
Heat exchanger
to fulfill those calls to action? Preventive regular
AC from DG:
BTS from battery discharge
Timed start-up
Laurent Viviez, VP & Partner, AT Kearney: Let’s
answer this from a capex and opex point of view. Low High Network
tolerance Swap Globalize Fuel
batteries procurement
Capex budgets in Africa have become compressed
over time. Network investments can represent up to Not quantified Low Medium High
80% of capex. Where capex was as high as 30-40% Quantified Ease of Implementation Source: AT Kearney
of revenue two years ago, in some markets capex
is now down to 10-15% of revenue. There was a you’re a smaller operator, it’s a challenge to match to 50% of spend. Operators’ internal optimisation
time when opex was not growing as fast as revenue this capital requirement spree, so you need to teams are looking at sourcing programmes to
growth, driving free cash flow appreciation and explore structural ways to reduce opex and capex, reduce equipment costs, power reduction, and the
stock valuations. But now operators have hit a wall considering network sharing and national roaming outsourcing of network management, O&M and
because traffic is still growing fast, price wars are arrangements. Even market leaders should consider towers. The opportunities for cost reduction are
suppressing revenue growth, and capex budgets network sharing and roaming agreements to cover simply massive.
have to be squeezed. Yet operators still need to rural areas.
invest to extend networks, they need to invest However, operators need to be clear about what
in 3G, 4G, backbone and backhaul capacity, so With prices dropping dramatically, for example they’re expecting from tower outsourcing. There is
there’s a surge in capital investment requirements. Nigeria saw a drop from $20 to $6 in the last two a trade-off between reducing opex and releasing
For example in Nigeria MTN and Etisalat have years, operators need to accelerate cost efficiency cash when structuring these deals, and I’m not
had to increase their capex budgets this year. If initiatives, given that the network consumes up sure all operators have might the right decision,

particularly in cases where capital release has been will need new sites, so this is positive news for sharing, for example Telkom does national roaming
favoured over opex reduction. towercos. on MTN’s network with Cell C on Vodacom’s
network in South Africa. I wouldn’t be surprised
CTOs have an array of options to reduce capex and I’m not sure how much attention African towercos if smaller African operators were keen on active
opex: tower outsourcing, network outsourcing, have for small cells – it’s further down the road infrastructure or national roaming deals, but it’s
energy management services, national roaming, in Africa. There is a potential infrastructure play a question of whether will the market leaders will
and managed capacity deals like we’ve seen in around small sites, for example in the UK Virgin accommodate them.
India. CTOs need to take a long term perspective, Media is building a wholesale offering for small
and ensure decisions taken now don’t create sites where they’ll manage sites, radio equipment TowerXchange: To conclude, how would
blocking points to long term opportunities. For and use their fibre to provide backhaul. I can see you summarise your recommendations to
example, if an operator outsources towers and a play for towercos around small sites, but they participants and investors in the African tower
their towerco secures substantial tenancies from need backhaul capacity as backhaul is such a big industry?
operator A, yet the anchor tenant subsequently chunk of the cost of small sites. So a parallel growth
wants to share infrastructure or even merge opportunity for towercos is fibre to the site. Fibre Laurent Viviez, VP & Partner, AT Kearney: there’s
with operator B, that outsourcing deal becomes a is costly, and again operators will need to share, huge growth potential for towercos in Africa
blocking point. This is why many CTOs hesitate to creating an opportunity for towercos to provide because it’s still early days for most operators. But
initiate outsourcing deals. microwave and fibre to site backhaul capacity. towercos need to be careful about their assumptions
around potential tenancy ratios.
TowerXchange: Your report also calls attention TowerXchange: Will active infrasharing play a
to the rising levels of data usage forecast role in African telecoms infrastructure in the Energy management services, the rollout of 3G and
in Africa. With the introduction of 3G and next 3 years? 4G, small sites and small cells, and fibre to the tower
eventually LTE, what are the implications could also be an attractive opportunity for the tower
for the densification of cells – will this drive Laurent Viviez, VP & Partner, AT Kearney: I don’t industry, but diversifying their businesses beyond
infrasharing? Or usher in a small cell era? see many African operators proactively pushing towers will make them more complex and will
active infrastructure sharing today. 3G was the require new skills.
Laurent Viviez, VP & Partner, AT Kearney: Small trigger for active infrastructure sharing in Europe,
cells don’t mean operators stop building new and it’s easier to implement active infrastructure At a macro level, I’m optimistic and positive about
towers. For example, Orange in France had about sharing on a greenfield network as opposed to the African tower business. On a micro level, I
10,000 sites in 2000, now they have more than merging brownfield networks. I have seen an active would make a more qualified recommendation.
22,000, and it could rise to 35-50,000 including small infrastructure sharing deal in Gabon between Moov Investors need to be careful and look at
sites. and France Telecom, in which Moov used Orange’s opportunities on a deal by deal basis. Are tenancy
network in suburban and rural areas. ratio assumptions realistic? You’re dependent on
Growing traffic and the use of higher frequency the deal structure and competitive environment,
means further network densification is needed. 3G There are some national roaming agreements and you need to be able to walk away from a bad
and 4G will drive significant densification – Africa in Africa, which are a form of active network deal

business knows there are several opportunities to
The importance of site-level profitability as a performance measure optimise diesel spend (monitoring and supervising
consumption, managing pilferage, ensuring you
TowerXchange recommends readers download a copy of AT Kearney’s excellent report, have the right spec site configuration and DG et
“The Rise of the Tower Business”. We spoke to Nikolai Dobberstein, Partner at AT Kearney cetera), but we feel there is an over-emphasis on
and co-author of the report. technical solutions and that implementation is the
key.
TowerXchange: Are tenancy ratios over-
emphasised as measure for the success of the Vendor management and managing costs on the
tower business? ground is critical. Significant improvements can
be made by getting the simple stuff right: getting
Nikolai Dobberstein, Partner, AT Kearney: Until the air conditioning settings right, controlling and
now, the focus has been on tenancy ratios as a ring-fencing pilferage, using the TOC to understand
measure of success for the tower industry. With what’s going on at sites and scheduling preventative
many costs still passed through from the tower maintenance. You also can improve security –
company to the operator, there has been less dedicated security guards can be very costly and
incentive to reduce fuel, O&M and security costs. might even be correlated with pilferage. Patrolling
models should be considered. And of course you
Cost-focused, smart operators, are realising that it can act to bring down real estate costs.
may be better for tower companies to handle power
and fuel, O&M under fixed cost arrangements, These solutions are all known to tower companies
especially as they seek to penetrate rural areas with and operators, but it is critical to apply the right
low electrification. This has the benefit of stabilizing management concepts and tools to drive those
charges, avoiding disputes and empowering the improvements.
tower company to really manage operations. Under
such arrangements, site-level profitability is a key TowerXchange: Is site-level profitability as
performance indicator. important in less mature African markets where
there isn’t the oversupply of sites we see in
TowerXchange: How can the tower business countries such as India?
improve site-level profitability?
Nikolai Dobberstein, Partner, AT Kearney: The
Nikolai Dobberstein, Partner, AT Kearney: Power importance of site-level profitability holds
and fuel cost savings remain the most important, regardless of the environment, particularly in
yet the most difficult opportunity to create value urban areas, where even in less mature markets
and improve site-level profitability. The tower there will be a high number of existing towers.

Typical Tower company P&L Illustrative P&L with a pass-through power and fuel model
46
Others includes penalties, under-recovery

in power & fuel costs, and provisions
18-
20
12- 7-
146 15 10 8-
10
100
20-
25
45-
55
20- 5-
25 8
Gross Power Net Rent O&M & HR and Others EBITDA Depreciation Interest Profit
revenue & fuel revenue Security G&A after tax
pass-
through
Source: AT Kearney
As my colleague Laurent suggested, tenancy networks. Nikolai Dobberstein, Partner, AT Kearney: We’ve
ratios over two are going to prove difficult to seen towers co-located with internet kiosks, retail
reach in Africa, despite the fact that there may be So site-level profitability is also important for less outlets and ATMs, or used to provide electrification
four or more operators in some markets. While mature markets. for rural irrigation.
extending networks into new rural areas often
yields immediate demand for additional tenancies, TowerXchange: Are there other sources of The income stream is limited compared to the
there is a limited opportunity to drive co-locations revenue and value add for the tower industry tenancy rental income, but they can provide good
and tenancy ratios in urban areas, where several beyond operator tenancies? opportunities for corporate social responsibility
operators have already built out their own tower

Special Feature:
Anatomy of an
infrastructure
sharing deal
TowerXchange gets under the skin of the due diligence
processes and examines the contractual frameworks
that form the spine of a tower transaction. We’ll take you
inside the data room to look at the permits and paperwork,
engineering and commercial analyses needed to realise the
best valuation of your towers. We’ll introduce you to eight
law firms with hands on experience of advising on these
deals.
We’ll examine the finer points of SPAs an MLAs and we’ll tap
into Neil Taylor’s unique experiences of these transactions
from the perspective of both the operator (Millicom) and
towerco (HTA).
Your legal “how to guide” includes:

33 Who’s who: lawyers with experience
of advising on African tower transactions
35 A checklist of the data you need to buy, sell
and share towers
38 Neil Taylor takes us inside the due diligence process
43 Vinson & Elkins examine the SPAs and MLAs
45 Webber Wentzel explain how to accelerate
infrastructure sharing transactions

TowerXchange Who’s Who
Herbert Smith Freehills
Nick Elverston, Amanda Hale
and their telecoms team at
Lawyers with Direct experience of advising on African tower transactions Herbert Smith Freehills have
done a lot of African work,
The TowerXchange Who’s Who provides a Clifford Chance including advising Bharti
John Graham, Partner at Clifford on the acquisition of Zain’s
guide to the most experienced practitioners
Chance has worked on all of African telecoms business
in a specific field of expertise; introducing you
American Tower’s bids in Africa, in 15 countries, being part
to the individuals you need to have on speed-
including the deals closed with of the team representing
dial to help you achieve your objectives in
MTN and Cell C. John recently Cell C on aspects of the
infrastructure sharing. In this special feature,
returned from Abu Dhabi where he advised a number American Tower transaction
we look at the lawyers who have advised both
of regional operators regarding their infrastructure and associated 2G/3G roll-
operators and towercos on tower transactions
and M&A activity. TowerXchange has spoken to John at out, and advising the banks
in Africa.
some length, and he clearly has considerable expertise in relation to the Seacom
in infrastructure sharing and is spending a lot of his undersea cable project. Most
In order to buy or sell telecoms towers, do you recently, Nick and Amanda advised on the biggest
time advising on bids in Africa and the Middle East.
need a telecoms lawyer? A real estate lawyer? active infrastructure sharing deal in the world – the
Or an M&A lawyer? The answer is yes – to all Cornerstone joint venture between Vodafone and
Freshfields Bruckhaus
three! There’s a small universe of lawyers Telefonica (O2) in the UK, in which over 18,000 towers
Deringer
with ‘hands dirty’ experience of tower sharing are being shared as well as the rollout of LTE active
Natasha Good, Partner
transactions in Africa – in fact, TowerXchange at Freshfields Bruckhaus assets.
generally finds ourselves referred to one of Deringer has been found
eight practices, listed here in alphabetical on the opposite side of Linklaters
order, each of which has impressive the negotiating table IHS Africa referred TowerXchange
credentials. from John, representing MTN in negotiations with to Linklaters’ Vincent Ponsonnaille
American Tower and other towercos. Natasha has an who handled IHS’ recent work in
impressive telecoms pedigree: subsequent to a year on French speaking Africa. Vincent
Keywords: Lawyers, Regulation, Due
secondment to Offtel (now Offcom, the UK telecoms is joined in Linklaters’ TMT team
Diligence, Deal Structuring, Passive and Active
regulator), Natasha built up extensive experience by Julian Cunningham-Day among
Infrastructure Sharing, Africa, MTN, Cell C,
advising telecoms infrastructure transactions, initially others. Linklaters’ experience in Africa includes
Airtel, Vodafone, Millicom, American Tower,
in Europe where she aided Hutchinson and T-Mobile’s advising Zain, IHS and other operators on local
Helios Towers Africa, IHS Africa, Clifford
3G network sharing. Natasha is now increasingly tower sharing projects in Tanzania, Kenya, Cote
Chance, Freshfields, Herbert Smith, Linklaters,
focusing on Africa where she has advised MTN in d’Ivoire, Cameroon and Uganda as well as a variety
Paul Weiss, Simmons & Simmons, Vinson &
Ghana and Uganda. Natasha is a member of the of pan-African tower sharing initiatives between the
Elkins, Webber Wentzel
TowerXchange “Inner Circle”. continent’s largest operators. Linklaters’ experience of
XX | TowerXchange Issue 2 | www.towerxchange.com www.towerxchange.com | TowerXchange Issue 2 | 33

telecom towers began with advising towers to IHS Africa. M&A Partner Christian Taylor Friend Firms”, Webber Wentzel can provide clients
large UK incumbents such as BT co-heads the firm’s Africa growth markets group and with a unique expertise of local jurisdictions and
and National Grid on the sharing of came to Simmons & Simmons from Freshfields. He cultures, and a deep understanding of the ‘on the
their infrastructure. Linklaters has has advised MTN on many of their transactions in ground’ challenges companies can face. Webber
subsequently advised on various Francophone Africa. Christian was joined in leading Wentzel’s experienced telecoms practice does a lot
European infrastructure sharing the Cameroon and Cote d’Ivoire deal team by ICT of work for MTN and Africa specialist Steven De
projects, as well as Vodafone Essar’s formation of the Partner James Cotter. Backer, who’s worked on some landmark transactions
massive Indian tower JV Indus, while they also advised throughout the African continent in different sectors,
on Bharti Infratel’s recent IPO. Linklaters recently Vinson & Elkins has helped IHS Africa secure finance and make bids in
announced a strategic alliance with Webber Wentzel. Jeffrey Eldredge, Partner at Tanzania and the DRC. Steven shares his views on how
Vinson & Elkins is joined by to accelerate infrastructure sharing transactions in an
Paul, Weiss, Rifkind, colleagues Robert Dixon and interview on pages 45-47.
Wharton & Garrison François Feuillat. “We have
Bruce Gutenplan, Partner at 15 years’ experience in tower
Paul, Weiss, Rifkind, Wharton transactions, principally in Would you recommend any other lawyers
& Garrison LLP, works closely Europe and Africa,” says with telecoms infrastructure experience
with his partner, Mitch Berg, Eldredge. “We have advised
in Africa? Write to TowerXchange at:
on tower transactions. “For on over ten sale and leaseback
transactions in the last couple
kosmotherly@towerxchange.com, and
more than 15 years, we have
represented leading investors, of years in countries such as we’ll verify their credentials and add
telecommunication carriers and tower companies in the DRC, Ghana, Nigeria, South their profiles to the archived version of
some of the largest, most innovative and precedent Africa and Tanzania. We have also advised on various this article.
setting transactions in the U.S. and around the globe. investments in the sector.” Jeffrey Eldredge is a
In Africa, we have represented Millicom in its Ghana, member of the TowerXchange “Inner Circle”, and you
Tanzania and DRC transactions with Helios Towers can read an interview with Jeffrey and Robert on page
Africa and Cell C in its deal with American Tower 43 where they explain the Sale Purchase Agreements
in South Africa, and we’re counsel to Soros Fund and Master Lease Agreements underpinning It wouldn’t be a legal article without a
Management, the lead investor in Helios,” Bruce said. infrastructure sharing agreements. disclaimer: while TowerXchange has
spoken with all the lawyers referred to
Simmons & Simmons Webber Wentzel in this article, and received third party
Simmons & Simmons Webber Wentzel is a truly
testimonials endorsing their efficacy, this
advised MTN during their African law firm, with over
500 lawyers in South Africa.
article should not be considered “advice”
2012 tower transactions
in Cameroon and Cote Through their involvement and you should undertake your own due
d’Ivoire, culminating in in the Africa Legal Network diligence to select a legal adviser.
the agreement to sell 1,758 and their network of “Best

A checklist of the data you What’s the biggest challenge to closing
infrastructure sharing deals? “The main challenge is
that tower sharing is an asset deal where the assets
need to buy, sell & share towers are not always transparent. The risks are around
the preparedness of sites – is the structure in place?
From accurate co-ordinates to permits, leases, designs, drawings Are all the permits and clearances secured? Is there
and information on the generator, TowerXchange explains the data a risk of ground lease disagreements?” Said Gilles
Tre-Hardy, Vice President at Lazard. Lazard served
you need to maximise the valuation of your towers as advisers of France Telecom-Orange in their
recent deal with Eaton Towers in Uganda, so Gilles
has some familiarity with gathering the data needed
to sell towers.
The quality and comprehensiveness of data of on

the network included in an operator’s RFP and data
room can directly affect the valuation of the towers.
“We inspect at least 10% of the sites and if the data’s
not right, the valuation is reduced,” asserts Chuck
Green, CEO of Helios Towers Africa.
Keywords: Data, Permits, Ground
Leases, Tower Location Information, When TowerXchange spoke to one active bidder on
Designs and Drawings, Load African telecom towers, they complained “data on
Valuation, Safety, Due Diligence, the physical network is terrible! Bid documents are
not great, and we like to check everything.” Another
RFP, Tower Valuation, Risk,
towerco recalled an instance where the operator’s
Generators, Air Conditioning, ARPU,
co-ordinates of their cell sites suggested six towers
Infrastructure Sharing, Africa,
were at sea! That particular transaction wasn’t
Lazard, Helios, Clifford Chance in Africa, but the anecdote illustrates that tower
location information isn’t always accurate.
Read this article to learn: “It’s a very bureaucratic process to build cell sites
< The specific data you need to maximize the valuation of your towers in Africa,” said a senior executive at an operator.
< The impact of missing data on valuations “Government agencies are slow – if you waited
< The practical reasons why operators data may be incomplete, and what can be done for everything, you’d never achieve the rollout
deadlines set by the government when they

issue the license. So when you come to sell your
towers, you discover there were things you needed Data Room Wish List, Version 1.0
and didn’t get – missing documentation, lost
Permits and paperwork
documentation due to staff turnover or a change of
< Reliable list of sites with accurate co-ordinates
contractor. It’s a complex process to trace all that
evidence, and in many cases you have to start from < Building, environment and civil aviation permits
zero.” < Local authority approvals
< Proof of payment of taxes
TowerXchange has heard reports that in some
< Ground leases, ideally extended where required
African countries the issue of environmental
permits is backlogged by five years. Under such < Copies of rights to land collated and ready to assign
circumstances, inevitably some operators have
taken a pragmatic approach to rollout, and their Engineering analyses
documentation may never be complete.
< Tower designs, drawings and calculations
Clifford Chance’s John Graham is familiar with < Any available reverse engineered data on towers for which designs and drawings are missing
the data problem: “The biggest frustration when < Load valuation: up to date database of equipment on towers, ideally with location
dealing with tower transactions in Africa can be < Foundation evaluation including dimensions and the quality and reinforcement of concrete
the slow deal cycle and difficulty in assembling the
< Up to date health & safety compliance
necessary information to commercialise a carrier’s
sites.” < Uptime data, including a differentiation between DC and AC power
< Generator model, age, installation and anticipated decommission date
“Timing is slowed by the challenges carriers face < Grid connection and diesel generator run time information
collating information about their towers, getting
< Shelter space, air conditioning system and load
that information to a state of preparedness where
towercos are ready to buy them,” continues < Accurate maintenance record
Graham. “Ultimately, we’re talking about selling < Transmission bandwidth
assets that weren’t designed to be separated and
sold, and in many cases the state of a carrier’s
Commercial analyses
records are poor. Matters can be complicated by
< Subscribers per Point of Service and associated ARPU
the fact that carriers frequently outsource site
acquisition and passive infrastructure construction < Current traffic and forecasts for future demand
and may never have had occasion to ‘lift the lid’ < Demand for any different technologies at the site (2G, 3G, LTE if applicable)
on the record keeping of their contractors – it’s not
< Partnering status
always all there in terms of paperwork & permits.”

“ “
One of the reasons why these deals are so long
and complicated is because there are so many
stakeholders involved in the tower sites for each
of the operators. From Group-level strategists to
local shareholders, the CTO and existing network
management team, and that’s before you get into
layers of contractors and sub-contractors past
and present. If everyone hasn’t ‘bought in’ to the
“If the data’s not right, the
valuation is reduced”
– Chuck Green, Helios
Towers Africa
“ “carriers frequently
outsource site acquisition
and passive infrastructure
concept of infrastructure sharing, getting people to construction and may
retrieve essential documentation can be a lengthy
process. never have had occasion to
‘lift the lid’ on the record
“Preparing even a modest data room can take list may only be “nice to have” data at the outset.
months - some of our transactions took over a year Detailed engineering and commercial analyses
keeping of their contractors
to close for this reason,” adds Clifford Chance’s
Graham, who goes on to conclude “despite the slow
timelines, the track record of transactions in Sub-
Saharan Africa is very good – most towers that come
to market close – that’s not always the case in the
might follow after negotiations with towercos have
started, and indeed they may be initiated by the
towerco, but operators equipped with some or all of
this information are better positioned to maximise
valuations and accelerate deal closing. For example,
– it’s not always all there
in terms of paperwork and
permits”
– John Graham, Clifford
“
Middle East.” conducting a full load valuation on several sites can
Chance
be expensive, but it can yield significant returns
Different markets may require different by revealing hidden capacity in over-engineered
data towers, which has a positive impact on valuation
Data requirements will differ from market to
market, and you should use this checklist as a
Comments and suggestions on our data room wish list?
starting point only. This is also a “wish list”, and
we wouldn’t want to discourage operators from
exploring infrastructure sharing if their data sets This list is based on several research conversations with experienced practitioners, but does not derive
are incomplete, although spending a couple of from any specific individual or organization.
months compiling data before sending an RFP to
towercos can be a worthwhile investment of time. If you have suggestions for additional data required, or please share your recommendations with the
TowerXchange LinkedIn group at www.linkedin.com/groups/TowerXchange-4536974 or contact
“Need to have” and “nice to have” data
Kieron Osmotherly at kosmotherly@towerxchange.com.
Data in the “permits and paperwork” section is
typically “must have”, much of the rest of the wish

Inside the due diligence TowerXchange: Once an operator has decided
to investigate selling their towers, how do they
invite bidders? Is it simply a case of calling
process from both the operator the investment bankers with experience in
this market? What information is needed to
and towerco perspective determine the market for your towers?
Why having an acceptable database of towers is important, but Neil Taylor, Chief Legal Officer, Helios Towers
Africa: Investment bankers would once have been
why knowing your organisational goals is even more important the first calls to make, and I’ve got tremendous
respect for them, but now everybody knows that
Neil Taylor joined Helios Towers Africa in May 2011. Neil has
Helios, ATC, IHS and Eaton Towers are the main
a unique perspective on leading due diligence processes for
players to talk to.
infrastructure sharing transactions as he’s sat on both the buyers
and seller’s side of the negotiating table; Neil was previously
In terms of the information needed, ultimately it’s a
General Counsel at Millicom and part of the core team that
real estate business, so it’s about location, location,
structured joint venture towercos with Helios in Ghana, DRC
location. Where are your towers? Are they secure?
and Tanzania. He has been practicing for over 20 years, starting
out as a commercial litigator before increasingly specializing in Are they in locations desirable to other prospective
M&A transactions, including over 20 deals with leading electronic tenants? If your rollout plan was to put another
component distributor Avnet before moving to Millicom in 2008. tower next to competitors’ sites, then you may have
a less valuable portfolio as overlap obviously affects
Keywords: Real Estate, Organisational Goals, Maintenance, desirability and value.
Rental Rates, Structuring a JV, Towerco Valuations, Transfer of
Assets, Novation of Leases, Permits, Government, Due Diligence, You need to know the condition of your towers and
Regulation, Pass-Through, Country Risk, Infrastructure Sharing, take a realistic view of their state of maintenance
Africa, Ghana, Tanzania, DRC, Helios, Millicom, Vodafone and capacity to add other tenants. And of course
Neil Taylor, Helios Towers Africa
a lot depends on the demographics of the market
– five competing operators means there are more
prospective tenants than in markets with one or two
< Millicom’s objectives when structuring infrastructuring deals with Helios in Ghana, Tanzania and DRC
license holders.
< How to prepare a tower database that is “acceptable” for negotiation with towercos
< The “lumpy” road to achieving target tenancy ratios But the most important thing is to figure out your
< How to novate and transfer hundreds of leases organisational goals from infrastructure sharing, as
< Helios Towers Africa’s appetite for country risk the sale value of your towers depends heavily on the
lease rate you’re willing to pay. This is why in the

“
same market you might see similar towers changing transfer, whereas tower deals have same intensity
hands for $230k per site in one transaction, yet of negotiation, but you’re married at end of it, so
$70k per site in another – it’s a function of differing you need to enter into it with the right spirit.
goals; balancing maximizing cash, minimizing opex, Most M&A transactions are a
or finding a sweet spot that protects and stabilizes TowerXchange: One towerco, that shall remain
one-off; you’re most likely to
opex while releasing some cash. nameless, complained “data on the physical
not see the buyer or seller again
network is terrible! Bid documents are not great,
TowerXchange: What were Millicom’s objectives
in the deals with Helios?
Neil Taylor, Chief Legal Officer, Helios Towers

Africa: Millicom saw the value of getting into tower
after the transfer, whereas
tower deals have same intensity
of negotiation, but you’re
married at end of it, so you
need to enter into it with the
“ and we like to check everything.” What data does
the towerco need to conduct it’s due diligence
and, remembering back to your time on the
operator side, why is assembling complete data
such a challenge for the operator?
game, perhaps because Millicom shareholders right spirit
Kinnevik from Sweden had in the past “sold the Neil Taylor, Chief Legal Officer, Helios Towers
paper mills but kept the forest” – they understood Africa: Assembling complete data is a challenge
that it’s okay to not own a piece of the value chain. because when Africa’s networks were being
to tether the latter two together as we knew what built, operators weren’t measuring compliance
I was part of the team that did Africa’s first we were doing by then. So while we signed the against objectives for a future asset sale, they were
substantial infrastructure sharing transaction Tanzania and DRC deals within three weeks of each measuring against fast rollout objectives. In some
between Millicom and Helios, and we realised that other, we certainly didn’t wrap one up then start the African countries it’s even written into the law that
because towercos typically trade at higher multiples next and finish it that quickly – much of the work if you apply but don’t receive a building permit by a
than Mobile Network Operators, if we moved was done concurrently. certain time, go ahead and build anyway.
assets from one balance sheet to the other, it meant
benefitting from that higher multiple. Of course, if They turned out to be good deals for both What a towerco wants is a ground lease that’s
operators want to retain a stake, it’s important that parties, hence I’m able to sit on both sides of the transferable, and terms that that don’t allow the
the terms of the transaction aren’t so harsh as to kill transaction. In fact there’s a bit of a running joke landlord to terminate or renegotiate every time a
the value for the towerco. about it; when Helios come across any challenging different operator’s installation or maintenance
points in the Master Lease Agreement and ask why team shows up at the site. Towercos will expect the
Millicom knew our objectives for each deal. With so they were included, I usually say “because I made required aviation, building, and environmental
many different moving parts, the deal team could you sign it!” It helped that Millicom took a stake and permits to be available. It’s also good to have a
have easily got confused, so it was important to had an interest in the towerco being a success, and sense of what the operator thinks is on each tower,
decide what we cared about in advance. both sides are pretty happy. available space, hub sites and MSC. Other nice to
know information might be the age and model of
The Ghana deal, and the Tanzania and DRC deals Most M&A transactions are a one-off; you’re most the generator, anticipated decommissioning date,
were definitely separate. We were confident enough likely to not see the buyer or seller again after the and an accurate maintenance record that reflects

“
No towerco will walk away from a deal because took eight months rather than the four months it
documentation isn’t perfect, but on the other should have taken to issue.
hand towercos aren’t going to pay until the
documentation has gone from “not perfect” to It doesn’t have to be a long drawn out process. But
No towerco will walk away from “acceptable”. Ultimately we’ve got to make it clear it does require focus on details on a tower by tower
a deal because documentation to our investors that the portfolio has the value we basis. It’s not launching the towerco that is time
ascribe to it. consuming, in fact our CEO Chuck Green developed
isn’t perfect, but on the other
hand towercos aren’t going to
pay until the documentation
has gone from “not perfect” to
“ TowerXchange: The most common complaint
about infrasharing transactions doesn’t seem to
be that deals don’t close, but that deals take so
long to close – how can operators and towercos
a hundred day launch plan to start a towerco from
which we have implemented three times!
TowerXchange: Much of the work post-deal

consists of the novation and transfer of hundreds
“acceptable” accelerate transactions without compromising of real estate contracts – tell us how the legal
the quality of due diligence? teams on both sides get to grips with all these
leases, assessing what they’ve got, the right to
Neil Taylor, Chief Legal Officer, Helios Towers extend and the terms to extend?
whether scheduled maintenance actually was Africa: Operators should spend a month or two,
undertaken. even if it’s at expense of first mover advantage, Neil Taylor, Chief Legal Officer, Helios Towers
getting database together and knowing what they Africa: The MNO and towerco do this together as
The reality is that sometimes operators only do and don’t have. the MNO has established relationships with their
discover what data is required when they’re putting landlords. It’s a big task, but it’s not complicated
together the due diligence package. I have brought But data isn’t the only reason for delays. and it can be completed surprisingly quickly. There
in third parties to help put the due diligence Adjustments based on what comes out on due are simple, easy to explain things: we need to be
package together, but in my experience the learning diligence inevitably take time. For example if an able to add additional tenants without landlord
curve for those outside resources is too steep – it’s operator claims their opex is $2000 per site, yet we consent, we need to be able to borrow against the
better for operators’ Group headquarters to send see there’s been no maintenance on several sites tower, and we need to avoid terminations.
people. because they fired the contractor several months
ago, then the real opex might be $2400. The cost of The towerco and the MNO will establish the extent
While data doesn’t need to be complete for maintenance is never zero, towercos will figure this to which payments under the ground lease may
operators to start exploring infrastructure out and adjust accordingly. increase as a result of the process. The conversation
sharing opportunities, in the end somebody has starts with “we’d like to make changes and we’re
to get all these pieces of paper, and towercos are Another cause of delay can be the time taken willing to pay you something to make those
usually happy to second people to help operators to secure infrastructure provider licenses. The changes,” so it’s not the worst conversation the
get everything together, although operators are Tanzania transaction took longer to close for no landlords have ever had! The only complications
sometimes reluctant to accept our help. other reason than that the infrastructure license might be if you can’t find a landlord, or a

government entity might be the landlord, and if effectively prohibit sensible business – but we don’t
they’re not responsive to change. see that in Africa.
TowerXchange: In the case of privatized national Part of my job is to understand the regulatory
operators, where the government might retain environment; the license regime, the costs of
a stake or at least have a political interest in the the license, what regulations have been written
ownership of infrastructure assets, is the range for infrastructure sharing or that apply to
of options in terms of deal structure limited – infrastructure sharing. In many cases we’re going
could sale and leaseback be too complex, forcing to find ourselves driving regulations that are still
a preference for operational leases? being drafted, but we don’t shrink from engaging
with regulators.
Neil Taylor, Chief Legal Officer, Helios Towers
Africa: In many cases there are ways round that As far as I know, only one market in Africa regulates
obstacle. The challenge facing Vodafone Ghana the pricing of co-locations, and we’d certainly want
was a one-off. Vodafone had just completed the to be involved in the conversation if any other Neil Taylor, Chief Legal Officer, Helios Towers
acquisition from the State and everyone knew what countries were thinking of following that lead. Africa: Well nothing’s ever completely ‘fixed,’
they’d paid for it. There were all these discussions there’s always going to be an escalator on CPI or on
going on in the press, and the local opposition TowerXchange: So is it preferable to let markets unit price. However, at Helios we believe in a model
were suggesting that the crown jewels had been set pricing? where we invest to reduce fuel opex, giving some
undersold. If Vodafone had sold all the towers so certainty about costs for the operator. It’s probably
soon, you could forsee an argument that they were Neil Taylor, Chief Legal Officer, Helios Towers the biggest difference compared with the Indian
selling it for more than they paid for it! Government Africa: I think operators should be allowed to model.
involvement isn’t necessarily a problem for every prioritise different things; their organizational goal
deal. might not prioritise cash release or maximizing On the other hand, if an MNO wants a power pass
equity stake over negotiating the lowest possible through clause because they don’t want us to
TowerXchange: What regulatory conditions rental rate, or they might want to pay a premium make money on energy so be it, but under such
make countries more favourable to telecoms for optimum uptime rather than building a low cost circumstances we’re not incentivized to invest in
infrastructure investments? Are there any red network. saving power. There’s enough value to go around
flags that make countries less attractive for for everyone in these deals.
infrastructure sharing investments? TowerXchange: Why would either an operator
or towerco want to pass through energy opex? TowerXchange: What are the main risks that
Neil Taylor, Chief Legal Officer, Helios Towers I can understand passing through exposure to operators can choose to pass on to towercos in
Africa: Some regulators have more to say about and diesel price changes, but why disincentivise the tower transactions?
actively support infrastructure sharing than others. towerco to maximize energy opex savings by
We’d be concerned about any regulations that passing them all through the the MNO? Neil Taylor, Chief Legal Officer, Helios Towers

“
not as visible as the MNO brand. MNOs are on consolidation, different bidders winning a new
every billboard reminding you that they’re there license than expected, or a new operator entering
and doing a lot of business. In comparison we’re markets where there’s a supposed moratorium
very dispersed. If rebels wanted to take over a on new builds, yet still building hundreds of new
towerco, they’ve got 700 sites to take over, and then towers!
Tower leasing is an they’ve got to run them! We’re recognized as doing
extremely “lumpy business” something you want to have done, so whether you Ultimately it comes down to location – if a tower
– it’s never a straight line to like the government or not, towercos are not an is in the location you need, if space is available,
obvious target. and if there are enough subscribers around, then
achieving your objectives, more than one tenant is going to want space on that
some times you’re sitting
“fat, dumb and happy”
above your target tenancy
ratio, while at other times
you find yourself in a
“ Of course we look at political risk, and ethics and
compliance programmes need to be robust, but
we wouldn’t say we don’t want to do business in
countries with higher political risk, as long as our
employees are safe.
tower. They’re unlikely to build.
I don’t think any of the towercos see a big gap

between targeted tenancy ratios and what is
proving to be achievable, but we’re not jumping for
joy at realizing cheap acquisitions either – operators
trough below target TowerXchange: In this second edition of are getting good value for African towers.
TowerXchange, Laurent Viviez from AT
Kearney challenges whether the tenancy ratios TowerXchange: Could an operator-led towerco
targeted in the first round of deals in Africa are model work in Africa?
Africa: The risks that they can pass along with achievable – what do you think?
selling what they recognize to be non-core assets Neil Taylor, Chief Legal Officer, Helios Towers
includes uptime, of which a subset of that is Neil Taylor, Chief Legal Officer, Helios Towers Africa: Every operator seems to have been been
maintenance, power provision and security; foreign Africa: Helios are on track to do what we set out in conversation with one of Indus’ partners, yet
exchange; and not having to put capital into passive to do in Africa, but the honest answer is it’s too it never seems to come together. Why? It may be
infrastructure. early to tell. Tower leasing is an extremely “lumpy because Africa is not one country, it’s 53. Maybe an
business” – it’s never a straight line to achieving operator-led model will happen in a big country
TowerXchange: How does attractiveness of a deal your objectives, some times you’re sitting “fat, dumb such as South Africa or Nigeria, but there are
alter in countries with higher country risk? and happy” above your target tenancy ratio, while established independent towercos in both those
at other times you find yourself in a trough below countries, so what would be the driver?
Neil Taylor, Chief Legal Officer, Helios Towers target.
Africa: We’re in the DRC, so Helios certainly isn’t Operators worried that they’re giving away too
adverse to operating in countries that are perceived Factors that can push a towerco into one of those much value should be worried about missing
to be higher risk. In some ways, country risk opens troughs below target tenancy ratios include the boat in the value creation opportunity – and
up more opportunities to the towerco in that we’re variations in Group capex budgets, unanticipated consider retaining a stake

The Sale & Purchase Agreements TowerXchange: What are the key components of
a Sale and Purchase Agreement (SPA) in a tower
& Master Lease Agreements that

transaction?
underpin tower transactions

Rob Dixon: There are of course many components
common to all SPAs, but let’s concentrate on those
components which are unique to towers deals. A
A closer look at two important parts of the contractual framework key example is the structure and content of the
for infrastructure sharing conditions to closing. First, we’ll typically have a set
of transaction conditions precedents that need to
The devil is in the detail – the detail be fulfilled before the deal can happen at all. These
of painstakingly constructed and would include any over-arching regulatory
hard negotiated Sale and Purchase requirements (for example an operating licence or a
competition approval).
Agreements (SPAs) and Master Lease

Agreements (MLAs) that define the
Secondly, we’ll typically have a set of conditions
main terms in any tower transaction. precedent that need to be fulfilled (or waived)
Jeff Eldredge and Rob Dixon, Partners at before a specific tower can be transferred. These
Vinson & Elkins, have advised on over would normally include good title, satisfactory
ten sale and leaseback transactions in ground lease arrangements (for example, the right
Jeff Eldredge and Rob Dixon, Partners at Vinson & Elkins
the last couple of years in countries to sub-lease the tower to third party co-locators
such as the DRC, Ghana, Nigeria, South and to assign leasing arrangements in security)
Keywords: SLA, MLA, Transfer of Assets, Regulations, and compliance with regulatory requirements
Africa and Tanzania. Rob and Jeff kindly
Novation of Leases, Due Diligence, Anchor Tenant (for example, building permits and environmental
agreed to meet with TowerXchange and
Privileges, Service Level Agreements, Infrastructure consents)…it’s potentially a long list!
to provide us with an overview of tower
Sharing, Vinson & Elkins
sharing SPAs and MLAs.
The buyer will require a certain number of towers
before the deal is economically viable. Typically,
Read this article to learn: therefore, the deal will be structured so that closing
< How a minimum number of towers must be included for a deal to be viable does not happen unless and until a certain number
< The conditions precedent that need to be fulfilled before assets are transferred of towers are ready to be transferred (i.e. the
< What happens to towers that aren’t transferred in the first close tower-specific conditions precedent are satisfied or
< How the MLA defines the rights of the Anchor Tenant waived).
< How critical towers are sometimes treated differently
Jeff Eldredge: One key point in the process is

the ongoing capability (or desire) to maintain
Phased close and operate the sites so the towerco may agree Capacity crunch
to manage the sites (with the operator retaining
It’s common practice to have at least two phases ownership). The buyer is likely to conduct legal Operators err on the side of caution when it
of closing a sale and leaseback transaction, diligence on a sample of sites before signing the comes to reserving capacity on towers for future
giving extra time to finalise documentation for SPA so it will have a reasonable idea of the position upgrades. But every square meter the operator
troublesome towers. As Alan Harper, CEO of before signing the deal. The SPA is, of course, only reserves is a square meter less for the towerco
Eaton Towers explained “With Warid, 90% of one part of a sale and leaseback deal. It’s relatively to sell, and that goes directly to the value of
the towers were included in the first close, but short-lived compared with the MLA which will often the tower. When it comes to the Master Lease
we take over 100% of the towers whilst the last govern the parties’ relationship for many years. Agreement, “it’s important to help operators
complicated paperwork is finalized.” avoid reserving more capacity than they really
TowerXchange: So tell us about the critical need for upgrades”, to use the words of one
the extension of ground lease terms. Towers consideration when drafting Master Lease senior towerco executive.
deals can involve thousands of different parcels Agreements.
of land. Different ground leases will expire at The MLA is an umbrella agreement which defines
different times, giving uncertainty on future Jeff Eldredge: The MLA is where the real value is the operator’s rights as anchor tenant in terms
costs. The buyer will therefore seek to have the for the tower company and where most of the real of leasing space and capacity (windload) on the
ground leases extended for a reasonable period. complexity lies in a deal. It’s a long term contract transferring towers and the towerco’s obligations
(perhaps 10-20 years) and a large value contract. to the anchor tenant in terms of such space and
Rob Dixon: As a result of that and certain other The operator needs sufficient flexibility to manage capacity (including the service levels which
conditions taking time to satisfy, there are its needs to deploy and maintain equipment, while apply). Different rights and obligations typically
typically a number of closings as the tower-specific the towerco needs sufficient control to maximise apply to different towers. For example, network
conditions are gradually satisfied. In the interim, the co-location opportunities – that’s how they build planners can get very nervous about sharing
the buyer might take over the operation of the value. Thus, there’s a natural tension that needs to particularly critical towers with other operators
“
non-transferred towers on a managed services be resolved to everyone’s satisfaction. and therefore a small number of the towers might
basis. Different deals are of course structured be identified as exclusive to the anchor tenant. The
differently – some deals go further to synthesise the
buyer’s ownership of non-transferring towers from
first closing.

TowerXchange: What happens to any towers for
which the CPs cannot be satisfied?
The MLA is where the real
value is for the tower company
and where most of the real
“ service levels for different classes of towers is also
likely to vary and be closely negotiated. These will
typically be set out in a service level agreement,
which may form part of the MLA.
Rob Dixon: There are of course other agreements

complexity lies in a deal which are important in most towers deals – for
Rob Dixon: The treatment of ‘stub sites’ depends example the Build to Suit Agreement – but perhaps
on the deal. The operator is unlikely to have that’s for another time!

How to accelerate
TowerXchange: Why does it sometimes take so
long to close infrastructure sharing transactions
in Africa?
infrastructure sharing Steven De Backer, Director, Webber Wentzel: Most
transactions of the tower deals in Africa seem to have taken

longer than expected.
Due diligence, regulatory uncertainty, tax and deal structuring It’s not really a problem with the basics of
considerations slow deals the contractual framework: Tower Purchase
Agreements, Master Lease Agreements, Build
Most potential tower transactions that come to To Suit and Service Level Agreements become
market in sub-Saharan Africa eventually close. But more standardised these days, also in Africa. You
the most common complaint is the amount of time obviously still do get a small amount of variation
it takes to close the deal. Webber Wentzel, a truly because of differences in approach between
African law firm, has considerable knowledge of American and European standards for example,
African towers having, amongst others, secured but tower companies generally know what
finance and advised on bids for IHS Africa. Mobile Network Operators expect to see in these
agreements.
TowerXchange asked director of the Africa Group
at Webber Wentzel, Steven De Backer, how to
Also, the tower companies I worked with are very
accelerate infrastructure sharing transactions. sophisticated, they know their business, and the
Keywords: MLAs, SLAs, Due Diligence, Tax, Deal technical negotiations tend to go smoothly.
Structuring, Renewing Leases, Regulation, Licensing
of Towercos, Infrastructure Sharing, Africa, Webber The reasons why closing infrastructure sharing
Steven De Backer, Director, Webber Wentzel Wentzel transactions in Africa sometimes take longer than
expected to close often relate to due diligence issues,
regulatory uncertainty and tax and structuring
Read this article to learn: considerations of the deal. One needs to understand
< The ‘homework’ operators should undertake to prepare a proper data room the local laws and structure properly to mitigate
< The tax qualification of tower leases potential risks and this really is one of Webber
< How delays can occur in the licensing of towercos Wentzel’s biggest strengths.
< Whether tower transactions should be structured as an asset transfer or as the acquisition of a newco
< Are MNOs willing to sell assets to towercos part owned by their competitors? TowerXchange: Tell us about the due diligence.

Steven De Backer, Director, Webber Wentzel:
Conducting due diligence on hundreds of
underlying leases – whether looking at every tower
and underlying lease, or just a sample of 10-15%,
takes time. Obviously there are many other issues
to be considered as part of the due diligence process
and some of those issues may impact the value of
even the feasibility of the transaction itself. It’s
imperative that these issues are identified and
managed as early as possible in the transaction.
Much depends on whether the Mobile Network
Operator have done their homework as a seller
by for example previously looking at their leases,
renewing them up front where necessary, and
preparing a proper data room.
TowerXchange: Is it a straightforward process to

secure a license for a tower company?
Steven De Backer, Director, Webber Wentzel:

Many regulators are only now waking up to the
advantages of having independent tower companies
“
in their markets, so the law is not always as clear Another delay is dealing with the tax qualification
yet as to whether or not tower businesses fall under of tower leases. At a fundamental level, we’re
the existing telecommunications regulatory regime. dealing with a sublease of the land, but the land,
If they do, approvals may be lengthy to obtain. tower and equipment might each be treated
my advice to Mobile Network
Operators is to involve
potential bidders as much as
possible in the structuring of
“ This can be compounded if the vendor’s lawyers
feel that the tower infrastructure business doesn’t
need a license, while lawyers representing the
tower companies might take a more conservative
approach. Other authorities such as competition
authorities might also increasingly become involved
differently, and different tax advisers often have a
different reading.
TowerXchange: Where do the delays occur in

structuring a transaction?
the transaction as there’s a further consolidation in the tower Steven De Backer, Director, Webber Wentzel: It
business in a country. really depends whether it’s a straight sale of all
towers like Cell C did in South Africa, a sale of

shares or if you’re setting up a joint venture newco. made during their due diligence, for example
standard terms of the underlying leases which
TowerXchange: Should tower transactions be don’t suit them, they will use that to push down the
structured as an asset transfer or the acquisition purchase consideration.
of a newco?
Investment banks, often Citibank or Standard
Steven De Backer, Director, Webber Wentzel: We Chartered for deals in Africa, are engaged to
have seen different structures being used in recent structure the transaction and solicit and shortlist
transactions on the continent. Obviously, much bidders, but I feel it’s best to also have your lawyers
depends on the intention of the Mobile Network involved from the outset to assist with identifying
Operator and what it wants to get out of the deal. pitfalls, structuring the proposed deal and draft up
Is it mainly looking at a cash consideration or term sheets for each of the agreements based on the
rather a strategic partner? However, whatever the proposed structure. You want to provide bidders
driver for the transaction might be, my advice to with all necessary negotiation instruments from as
Mobile Network Operators is to involve potential early stage as possible.
“
bidders as much as possible in the structuring of the
transaction. Look at it this way, proper structuring, TowerXchange: Do you anticipate the
taking into account potential tax benefits and continuation of the transition from operator
investment protection mechanisms, can increase captive to an independent towerco business
the consideration that towers company are willing model in Africa? I’d also be concerned
to pay.
Steven De Backer, Director, Webber Wentzel: I whether additional Mobile
TowerXchange: What can be done to accelerate
transactions?
Steven De Backer, Director, Webber Wentzel: Again,

my advice would be for Mobile Network Operators
to do their own sellers due diligence to pre-empt
think operators will be under even more pressure
to sell towers due to continuous price pressure
and increased competition, confrontation with
regulators pushing to push down prices and ARPU
decreasing.
Network Operators would
be prepared to sell their
assets to towercos partly
owned by an anchor tenant
“
problems that might impact on the price they’re In this respect, it’s interesting to note that in several competitor
able to realise from the towers and to properly of the African tower sales, the Mobile Network
consider the structure of the transaction, which not Operators have retained a stake. There is a risk that
only suits them but is also beneficial for the Tower the towercos might be unable to unlock the full rates for the anchor tenant. I’d also be concerned
companies value of towers by offering the competitive lease whether additional Mobile Network Operators
rates to additional tenants, particularly if the Master would be prepared to sell their assets to towercos
If bidders have a problem with any discoveries Lease Agreement secures particularly lower lease partly owned by an anchor tenant competitor

Special feature:
TowerPower –
reducing Africa’s
reliance on diesel
TowerXchange profiles and learns from the
leading power equipment and ‘energy as a
service’ providers serving Africa, examining
their capabilities and experiences, and
asking each the capital outlay required and
anticipated RoI to retrofit or rollout their
solutions. This special feature, which will
extend across the next three-four editions
of TowerXchange, will explore quick fixes
to improve energy opex; how to evaluate
sites for solar and wind hybrid energy; and
we’ll examine installation, monitoring and
maintenance practicalities and TCO models.
Featuring five insightful articles:

49 How to minimise the number one source of
opex: energy consumption
53 PowerOasis’ “Smart towers”
57 Eltek explain what hybrid energy can do
for Africa’s telecom towers
61 How CPS deliver multi-tenant tower
power
65 Orun Energy on How ESCOs can reduce
your energy opex by 30-35%

How to minimise the ? diesel has risen as high as $2 in certain countries,
particularly in West Africa, with some estimates
suggesting fuel theft could be as high as 30-40% in
number one source of

some markets.
While line conditioning systems can be used to
opex: energy consumption clean up poor quality power, could hybrid power
solutions be the ultimate answer to reducing
reliance on diesel?
grid innovations, sometimes blending renewable Hybrid energy

energy sources into hybrid solutions with a 8-24 An estimated 10% of Africa’s cell sites use hybrid
month RoI, and sometimes simply looking for the power, with the majority using CDC (Charge
“quick fixes” that yield the quickest and best opex Discharge) batteries to reduce DG runtime.
reduction for the lowest possible capex. Upgrading to CDC batteries is often the first step to
integrating renewable energy sources, with the cost
“Infrastructure sharing in Africa has a unique of solar panels having better than halved over the
dependency on generators due to the lack of a last four years, and wind turbines being trialed on
reliable grid in many countries,” commented several cell sites in Africa.
Andres Millan-Drews, Principal Investment Officer
at the IFC. “So infrastructure sharing becomes
more of a logistics than a real estate play with
Service Level Agreements (SLAs) around downtime
critical.”
Unreliable grid and costly backup DG

It’s axiomatic to say that Africa has a rural
electrification challenge, while city centres suffer
Selecting the right power solution to achieve the from an overloaded grid and resultant brownouts.
best possible energy opex reduction at each cell site The challenge of meeting SLAs targeting 99%+
is a critical decision. TowerXchange presents part uptime on intermittent grids delivering poor
one of our ongoing TowerPower series, profiling quality mains power (under or over voltage and/or
proven energy opex saving innovations and under or over frequency) leaves Africa’s cell sites
interviewing the senior executives behind them. dependent on expensive diesel, and exposed to
We’re looking for on-grid, unreliable grid and off- the risk of pilferage. The cost per delivered litre of Image courtesy of Camusat

“
Selecting which sites require investment tenants on a cell site. TowerXchange hears common
in hybrid energy complaints that inefficient, over-sized generators
Not all cell sites are created equal of course. Some and shelters have been installed at many cell sites in
simply serve more customers, more ARPU, others Africa.
handle important backhaul and transmission There needs to be a
traffic. Or towers might be in locations more Energy as a service new class of energy
attractive to potential tenants. And of course if some It’s not unusual for SLAs to transfer energy opex
sites go down, the majority of their subscribers can from mobile network operator to towerco, passing management service
be picked up by over-lapping base stations.
Different energy solutions are needed according to

the requirements of any given site. For example, it
may be a priority to eliminate diesel consumption
through to the towerco responsibility for energy
efficiency and reducing diesel theft. A new class
of power specialist subcontractor is emerging,
Energy Service Companies (ESCOs). Towercos can
back-to-back their energy risk exposure to ESCOs.
providers that have core
competencies, can localise
services, and can customise
solutions for each site
“
at remote sites that are difficult to refuel, or at sites Ultimately, every passive infrastructure sharing or
where pilferage or watering down of diesel is a outsourcing deal and every SLA will be structured – Fazal Hussain
recurring problem. For guidance on how to evaluate according to the objectives of the parties involved,
of cell sites for hybrid energy, check out the advice so it’s important to understand the structure of
of PowerOasis (pages 53-56), Eltek (pages 57-60), and the deal in order to understand which party is as high as 50%! Energy is the bulk of the cost, and
CPS (pages 61-64). responsible for which risk. that can be slashed using hybrid technologies and
through economies of scale.”
Futureproofing cell site energy for the Fazal Hussain has a unique perspective on cell
additional of multiple tenants site energy. Fazal served as CEO of pioneering Fazal felt that ESCOs would be the future of
A modular approach is critical to futureproofing a towerco Helios Towers Nigeria before becoming telecoms energy. “Most companies serving the
site, for example installing only sufficient rectifiers Managing Director for the Middle East and Africa energy management needs of telecommunications
required for the current tenant(s), while leaving at leading hybrid telecom power manufacturer sell kit rather than solutions, hardware rather
shelf space for additional equipment. Once multiple Eltek. He’s now Managing Partner of Deka Global. than service. There needs to be a new class of
tenants are using a tower, the use of a central power TowerXchange met Fazal for a coffee and a chat energy management service providers that have
system, combined with distribution and metering about the evolution of the energy as a service core competencies, can localise services, and can
systems to charge each tenant on consumption, can business model. customise solutions for each site.”
be the most energy efficient solution.
Fazal spoke of a presentation he’d made at a So how do you make energy as a service work?
Space is at a premium at all cell sites, shared sites telecoms infrastructure conference in 2009 back “Keep your solution simple so you can achieve
even more so, which means power equipment in his Helios Towers Nigeria days. “While the reductions in energy opex using local maintenance
must have the minimum footprint. It’s also critical equipment manufacturers were pitching opex skills. At the same time, be aware of when you
to have the right size generator for the number of savings of 10%, I was saying we could make savings might need to bring in specialist skills – for example

I needed to use an expert team to work in remote and they are in the process of converting 90% of
desert conditions,” concluded Fazal. towers in rural Nigeria to Solar hybrid. Recommendations
On pages 65-68, TowerXchange interviews the Where do towercos start with their energy Would you like to recommend an energy
founder of Orun Energy, a ground-breaking ESCO equipment investments? It varies on a case by case equipment manufacturer, ESCO or power
that can reduce energy opex by 30-35%. basis, but if the deal structure includes batteries, efficient base station developer to be profiled in
installing deep cycle batteries can be the quickest TowerXchange?
How Africa’s leading towercos manage way to reduce reliance on diesel. If the most urgent
energy opex issue is combating pilferage, installing Remote We’d love to hear from readers about solution
When MNOs agree deal structures with towercos Monitoring Systems might be an early priority – providers with proven experience of reducing
that transfer power responsibility to the towerco, certainly most towercos will want comprehensive energy opex in Africa. If you founded, work
they are also transferring the responsibility to select dashboards of power consumption available at for, or partner with an interesting solutions
and invest in the right energy equipment upgrades. the NOC, enabling them to profile grid availability provider, please contact:
and energy consumption at each site in order to kosmotherly@towerxchange.com
For a view from the bridge of a towerco, prioritise the capital investments that yield the best
TowerXchange asked Chief Executive Chuck Green opex reductions. Please note that none of the companies
how Helios Towers Africa measures and manages profiled in TowerXchange have “paid for”
power opex. “To understand opportunities to Be sure to check out TowerXchange’s special feature their coverage, although we’re grateful for the
improve your power opex, you need common on “How to leverage RMS to optimise preventative support of those who chose to advertise as it
benchmarks such as the weighting of power costs maintenance” on pages 71-80. helps keep TowerXchange free to over 1,000
relative to grid quality, reliability, and availability of African tower industry decision makers.
other options.” Energy equipment upgrades, and upgrades to
strengthen towers, add capacity for additional
“Power costs have a significant impact on tenants on a tight timescale after those tenancies out generators. If the tower sale and leaseback (or
performance as they can be up to 50% of a towerco’s are sold, but typically not before the co-location operational lease) is structured appropriately, then
opex. Generator run time can vary tremendously sale. But towercos are very quick to bring newly towercos have more flexibility to improve power
from market to market. When making comparisons acquired towers to market, so capacity investments efficiency using hybrid solutions.
across markets you’ve got to take into account will also be a “quick fix” in many cases. Another
differences in tenancy ratios, generator efficiency quick fix comes from cleaning the energy supply MNOs combating poor power quality and
and theft. And of course we’re exposed to diesel – replacing old copper wires with new voltage unreliable grid, countering with power
price volatility as well as currency changes,” regulators. efficient base stations
concluded HTA’s Green.
Another towerco spoke of how the sale and Taking you to the front lines of the power problem,
IHS Africa agree that power scarcity and security leaseback of towers in Ghana provided a new TowerXchange spoke to an experienced energy
is the number one challenge for towercos in Africa, impetus to invest millions of dollars in swapping management practitioner at one of Africa’s leading

“ Power costs have a
significant impact on
performance as they can
be up to 50% of a towerco’s
opex” – Chuck Green
“
MNOs. He complained that power availability was
a challenge in pretty much every country in Africa,
with demand outstripping supply, resulting in poor
quality power, with regular total loss of power in
cases where the energy utility tries to limit demand
by rationing the supply to particular geographic
areas.
MNOs and towercos alike are engaged in quest

to reduce diesel consumption, and increase the
interval between service visits. Of course, there’s a
balance between up front capex and reduced opex,
with expectations of RoI in 24 months or less.
According to our MNO energy management

practitioner, limiting the energy requirement
of active equipment is critical in designing and
operating a truly green power solution with as
small an opex requirement as possible. We’re
starting to see MNOs evaluate and rollout power
efficient base stations.
TowerXchange will explore power efficient base

stations in our next edition

Smart towers
TowerXchange: What is PowerOasis’ value
proposition?
How to halve diesel consumption and O&M costs while improving John O’Donohue, CEO, PowerOasis: PowerOasis
reliability has a three level value proposition: developing
power architecture at cell sites to reduce energy
consumption by 50%; network management and
The PowerOasis team came out of Motorola, where
control systems that cut O&M costs by 50%; and
they spent 20 years building three generations
ensuring 97% reliability at the site.
of mobile networks. PowerOasis CEO John
O’Donohue noticed that development was focused Unlike many of our competitors, PowerOasis
on radio architecture (2G, 2.5G, 3G & 4G) while develops power solutions exclusively for the
cell site power solutions hadn’t fundamentally telecom industry. We offer holistic site monitoring
changed in 20 years. With the next billion mobile and control to achieve the same reliability in energy
subscribers to be found in emerging markets, as operators have come to expect from the radio
with limited electrification and unreliable grid network. PowerOasis have a transformational
meantime of failure (MBF) of in excess of 250k
connections, John saw an opportunity to transform
hours.
the power infrastructure at cell sites, reducing
power consumption by 50% and increasing site Our low cost, volume manufacturing partner
uptime & reliability. Jabil produce equipment to meet industry
quality standards, and PowerOasis is agnostic to
Keywords: Reducing Energy Opex, Uptime, Off- subcomponents, so we can integrate batteries and
Grid, Unreliable Grid, DG Runtime, Service Level generators that suit clients’ objectives and budgets.
Agreements, Energy as a Service, RMS, RoI, Smart We put in the architecture necessary to introduce
Grid, Africa, PowerOasis renewable components such as solar, wind, hydro
John O’Donohue, CEO, PowerOasis
or hybrid power, integrated to optimise economic
performance and uptime.
< The immaturity of the “energy as a service” business model We’re able to treat each site differently, for example
< How to evaluate a cell site’s suitability for hybrid energy solutions if a hub site has a power problem we can sequence
< The cost and RoI in diesel hybrid solutions at new sites which elements are shut down, temporarily
< How to reduce power costs and ensure network power resilience at cell sites on smart grids suspending the local site but keeping the critical
< How power requirements change when moving from single to multi-tenant shared sites transmission traffic. And of course we’re able to
alert the NOC to fuel shortages and pilferage.

“
John O’Donohue, CEO, PowerOasis: I see three they have created. Software control and remote
typical responses. First they might take the view monitoring systems may help demonstrate the
“power is too hard to manage, I want to outsource value they’ve added to their expensive network
In emerging markets
power can represent 50%
of network opex
“ power to companies offering energy as a service”.
‘Energy as a service’ is largely theoretical at the
moment; many operators just want to pass on
risk under a Service Level Agreement. I’d liken
‘energy as a service’ today to the early days of IT
outsourcing contracts, when early contracts ran
acquisitions.
The third response is “I’m going to transform the

value of my network, differentiate through superior
uptime, and tackle the power problem myself – so I
into litigation – it’ll take five years to form a stable

business model.
TowerXchange: How would you characterise PowerOasis are a product and service company.
the unique challenges in cell site energy We install the products, and provide an after
management in emerging markets? service contract, putting people in the NOC, or
training the client’s people to operate the system.
John O’Donohue, CEO, PowerOasis: Cutting diesel While PowerOasis has the crown jewels to enable
consumption and O&M costs while increasing energy services, we’re not an ‘energy as a service’
reliability is critical. CTOs may be drawn to the company.
excitement of upgrading to to 3G or LTE and rolling
out exciting VAS like mobile money, yet in emerging The second response is similar: “power is too hard
markets power can represent 50% of network opex. to manage, so I want to outsource energy and all
passive infrastructure management to a towerco”.
Too often there’s a legacy of rollout teams having The tower industry is more competitive in Africa
purchased a bag of power components under a than in Asia, and the four market leading towercos
tight deadline, handing over to the operations are bidding aggressively and investing substantial
team components that work for a while, then fail. sums just to acquire portfolios, so they are going
No one person “owns” power. There has seldom to need to grapple with delivering operational
been a holistic strategy for cell site design to efficiencies, taking operational cost out, and
optimise power consumption. In the context of increasing service levels to achieve profitability.
flattening revenues, declining ARPU and fierce tariff
competition, operators have got to take cost out. Ultimately I feel there will be consolidation in the
African tower industry, and the best valuations
TowerXchange: How do operators respond to the are going to be realised by towercos that can
PowerOasis tower and enclosure
need to reduce energy opex? demonstrate the operations and asset value

“
get the benefit of an increased valuation whether I higher capital investment in batteries that last five
retain my towers or transfer assets to a towerco in years. Our solutions offer a warranted performance
the future.” level, so the investment is protected.
TowerXchange: What data does the MNO or

towerco need to evaluate a site’s suitability for
hybrid energy solutions?
John O’Donohue, CEO, PowerOasis: We can forecast

In terms of capital outlay, for remote monitoring it’s
$2-5,000 per site, depending how many elements
the client wants to monitor. We can stop fuel theft
and help them get operationally smart with payback
based on saving with just five site visits.
I expect smart grids to
become a factor within
two years in South Africa
and some North African
“
potential savings to Total Cost of Ownership based countries
on energy consumption and cost, inventory on site, Incorporating diesel hybrid solutions at a new
and the load on a site. site costs anything from $12-30,000, depending
on the choice of batteries and desired level of cell
John O’Donohue, CEO, PowerOasis: I expect smart
An operator has a pretty good handle on energy site autonomy, but payback is achieved within 18
grids to become a factor within two years in South
costs if they know the cost of delivered diesel, and months.
Africa and some North African countries. While the
understand the extent of fuel theft, but too often
smart grid is driven by the green agenda in Europe
they don’t have that data. It’s also useful to know Off-grid new build cell sites running on solar only
and North America, in Africa the main practical
if they are paying an aggregate grid electricity bill, would cost in the region of $10-15,000.
driver is being able to put up peak energy prices to
or whether they know the energy consumption per
price people off the network and release capacity.
site. It’s surprising what some operators don’t know TowerXchange: What proportion of your
– I recall a 1kW site in Asia being billed for 17kW. business comes from new sites compared to
PowerOasis’ own smart grid platform was inspired
When we dug around near the site we found a wire upgrading existing sites?
by our experiences managing sites on an unreliable
leading to the village!
grid in Bangladesh, while in parallel we were seeing
John O’Donohue, CEO, PowerOasis: It’s about fifty-
how operators in California were being asked to
TowerXchange: What kind of capital outlay fifty between new builds and upgrades. Towercos
take their cell sites off grid in high summer when as
should operators and towercos anticipate to are driving the upgrade market as they acquire
energy demand peaked due to air conditioning use.
upgrade each site, and what’s the timeline to portfolios and replace energy equipment to support
We launched the world’s first smart grid platform,
ROI? multiple tenants, while there are still major rollouts
enabling operators to reduce site power costs and
going on in Africa.
ensure network power resilience. We deploy a
John O’Donohue, CEO, PowerOasis: All our solutions
controller on telecoms sites that intelligently decides
deliver an ROI within 18 months. We develop each TowerXchange: What’s the timeline for smart
when to power the site from grid or battery. The
business model using the operator’s real cost base, grids to have the capability to offer demand
controller can be pre-programmed or adjust to real
and offer a range of solutions to suit their Total Cost response pricing in Africa, thus maximizing
time or forward price trading platforms, optimising
of Ownership objectives. For example we can use the potential cost savings from active power
energy consumption from the grid and reducing
lower cost batteries that last two years, or make a management solutions?

PowerOasis Hybrid & Solar Systems TCO
Hybrid Payback, 14 months
$400,000
$300,000
Cat 1 Baseline
Cat 1 Hybrid
$200,000
Cat 1 Hybrid + Solar
$100,000
$
1 2 3 4 5 6 7 8 9 10
Year
Source: PowerOasis
PowerOasis hybrid cell site
total power operating costs. a difference to operators. For towercos, the energy consumption reduction. For example MTN
assimilation of newly acquired assets and Nigeria market the most reliable network, and with
TowerXchange: Is the transfer of towers from transformation of the network can take 12-18 50% of outages in Africa caused by power, their
operator-captive to specialist towercos good months. competitors have to respond.
news for companies like PowerOasis?
TowerXchange: How do requirements change Tower companies are looking for the flexibility to
John O’Donohue, CEO, PowerOasis: Optimising when moving from single tenant to multi-tenant manage multiple tenants, possibly offering different
power operating costs, and installing software shared sites? service levels to each. We can manage the power
that reports on site status and fuel consumption, consumption of each tenant, for example sharing
increases the value of towers for independent John O’Donohue, CEO, PowerOasis: Operators and power according to Service Level Agreements in
towercos and operators alike. towercos have a different focus because they each the event of disaster. And towercos want to know
have a different end customer – for the operator whether any outage is due to power going down –
Our solutions make an immediate impact and it’s all about the subscriber, for the towerco it’s all they don’t want penalty clauses coming into effect
can take just 90-180 days to make start making about the operator. Operators focus on uptime and when the base station was really the problem!

What Hybrid Power
TowerXchange: Tell us about the current state of
hybrid power at cell sites in Africa.
can do for Africa’s telecom towers Bob Hurley, Regional Director MEA, Eltek: Around
10% of African cell sites use hybrid energy, and
How to identify sites where investing in CDC battery and solar most of those have been fitted in the last two years.
hybrid power will slash DG runtime Diesel generators run 24/7 on many sites and that
leads to inefficiency in terms of maintenance, site
Eltek is a leading hybrid telecom power manufacturer visits and generator renewals. With hybrid energy
solutions, you might be able to cut run time to six
with 60 offices worldwide. Eltek’s product portfolio
hours per day, reducing diesel consumption by 70-
includes hybrid energy solutions focused on opex
75% while reducing maintenance site visits. You’re
reduction, supported by a zero capex financing
then able to run the generator at a much more
deals. Eltek have 4,000 hybrid sites deployed, and efficient load – typically they might be running at
are currently bidding for a further $100m worth 20%, we can make it more like 70% with systems
of hybrid solutions. TowerXchange spoke to Eltek’s that simply switch it off except when it’s most
Middle East and Africa Regional Director Bob Hurley efficient to do so.
and his colleague Younis Shan, who focuses on West
Africa and who had previously worked at Helios TowerXchange: If 10% of cell sites in Africa use
Towers Nigeria. hybrid or use pure renewable energy, what’s the
balance between CDC battery hybrid, solar, wind
Keywords: Hybrid Power, Reducing Opex, DG Runtime, and fuel cells, and what in you opinion are the
CDC Battery Hybrid, Solar, Wind, Fuel Cell, Renewables, relative merits of each?
Off-Grid, Retrofitting, Greenfield, Multi-Tenant,
Infrastructure Sharing, Africa, Nigeria, Eltek, Helios Bob Hurley, Regional Director MEA, Eltek: CDC
Bob Hurley, Regional Director MEA, Eltek Towers Nigeria, Etisalat Nigeria battery hybrid are the most popular hybrids. I’d
estimate that out of all the hybrid and renewable
powered cell sites in Africa, probably 60% have
Read this article to learn: got as far as investing in CDC, 30% have added
< The adoption and relative merits of CDC battery, solar, wind and fuel cell hybrid energy solutions renewables to become a full hybrid, and maybe 10%
< How to prioritise at which site to invest in hybrid power solutions are pure solar.
< How to design a greenfield site to maximise energy opex efficiency
< How to futureproof a cell site so it is energy efficient with single or multiple tenants The quickest way to reduce energy opex is to put
< How hybrid energy solutions help towercos improve site level profitability in a bigger cyclic battery to enable the battery to
run longer than the DG. In a number of cases we’re

deploying CDC solutions that are solar-ready so the cost of turbines needs to come down, and there
tower operator doesn’t have to rebuild the cabinet if needs to be more commonality across the turbine
they choose to add solar panels and chargers. manufacturers – each has their own system, dump
load, and method of converting rotating power to
Another option is pure solar off-grid sites consisting static DC or AC to input into system. Operators tend
of a cabinet with a solar charger and a cyclic to look for RoI in less than two years, so people are
battery. They might be 1-1.5 kW sites, usually in dabbling with wind power, but there’s no great
rural areas. penetration in the telecoms market.
Younis Shan, Regional Sales Director, Eltek West Fuel cell solutions usually run on a gas, so you
Africa: Solar isn’t very common in West Africa, have the logistical cost to get that gas to the site, or
given the cost, and size of power required for a you need to source a local supply to make it cost
2.5kW base station. effective. So the running cost may be similar to
using diesel as you’ve still got to top-up and monitor
Of their 3,500 cell sites, Etisalat in Nigeria have consumption. The upside to gas is it’s less stealable resolve at operational issues, not just provide a
460 hybrid sites, all of which are battery hybrids. than diesel. black box. A well chosen controller will look at
Some of those sites are totally off-grid, some have performance of batteries, generators and solar
4-6 hours of non-continuous grid power a day. The TowerXchange: Has the entry into the market of panels to tell the operator where they’re getting the
battery hybrids are realising 50% savings. low-cost manufacturers meant that off-grid solar most efficient usage.
cell sites are becoming somewhat commoditised?
Bob Hurley, Regional Director MEA, Eltek: Wind TowerXchange: How do operators prioritise at
is experimental at this stage. RoI can be five to six Bob Hurley, Regional Director MEA, Eltek: There is which sites to invest in hybrid power solutions?
years because of the cost of the tower, turbine and a price band which operators find acceptable. The
“
interconnection with the telecoms system. The capex requirements of pure solar sites is driven by Bob Hurley, Regional Director MEA, Eltek: Operators
the cost of solar panels, and that has come down often make pragmatic decisions about investing in
significantly to perhaps a third to half what they solar at big sites that have tri-site coverage – if one
Of their 3,500 cell sites,

Etisalat in Nigeria have 460
hybrid sites, all of which are
“ cost four years ago. That improves the timeline to
RoI in solar.
I don’t think it’s a commoditised market. One

of Eltek’s key focuses is to be technologically
ambitious. Technology plays an important part
site goes down and the majority of subscribers can
be picked up by an over-lapping BTS, they might not
invest in hybrid energy. Of course that changes if
it’s a backhaul or backbone site they can’t afford to
drop.
battery hybrids in which vendor is given these sites – it’s not just Operators might use multi-site monitoring to look
about price, it’s about performance too. We deploy at performance within an area or group of perhaps
a complete solution – we seek to understand and twenty sites to identify the right technology to invest

in, and at which location they’ll get the most out of When a towerco acquires a site, they must find a
it. On that basis they might select five sites for solar balance between generator capacity and efficiency.
and five for CDC batteries. Oversized generators need more diesel. You should
also make sure your generator is sized initially for a
TowerXchange: How do you design a greenfield maximum of two tenants; you can always move it to
site to maximise energy opex efficiency? a newly acquired site if tenancy increases and more
power is required.
Bob Hurley, Regional Director MEA, Eltek: At
greenfield sites the first thing to assess is grid On a co-location site, ensure that there is one
availability and consistency. If it’s an off-grid or centralised power system to serve multiple tenants –
unreliable grid site requiring significant generator the previous co-location model was for each tenant
runtime, you need to asses how big the site is, how to have their own power system due to decreases
key that site is in terms backhaul, transmission and in lease rates it is now cost effective to have one
subscribers served, and any overlap with other base outdoor centralised power system.
stations that can pick up subscribers if the site goes Younis Shan, Regional Sales Director, Eltek
down. West Africa: When it comes to greenfield site TowerXchange: Is it good news for energy
construction, smart companies are realising that it equipment providers when towercos acquire
How much power is required? Can you get away doesn’t cost much more to ensure a site is hybrid- assets from operators – do they stimulate
with simply buying a bigger cyclic battery and ready – in comparison, retrofitting is expensive. investment in energy equipment upgrades to
accept you will have some diesel cost (and diesel That said, return on investment payback cycles for reduce opex, or do they just mess up your key
theft risk), or is the site important enough to invest retrofitting to hybrid have fallen to 1.5-1.8 years as points of contact?
in solar? Other considerations might include noise solar panels are getting cheaper.
from running the DG and carbon emissions. It’s Bob Hurley, Regional Director MEA, Eltek: Many
all about finding the best fit, the least capex for TowerXchange: How do you futureproof a cell Mobile Network Operators are trying to get
the most efficiency. Is it worth investing $4,000 of site so it’s energy efficient with just one tenant, expensive, non-core network assets off their books,
capex on solar to keep a few subscribers happy if but readily upgradeable to accommodate and are devolving to towercos the challenge of
they have tri-site coverage and the majority will be multiple tenants? reducing Africa’s high opex. Towercos have a
picked up by an overlapping base station? That’s business model that requires investment in new
a commercial decision based on customer lifetime Younis Shan, Regional Sales Director, Eltek West batteries, generators and other technologies to
value and churn. Africa: You need to have a modular approach to cell drive down power costs and improve site level
site power equipment. When you have a modular profitability.
In our experience, full hybrid sites combining system, such as with your DC rectifier, you only buy
diesel, battery and solar power tend to only be what is required. Keeping a few empty slots means Where previously we maintained relationships with
deployed at key sites off the grid in Africa yet still it only costs a few hundred dollars to upgrade operators and their OEM partners, towercos have
serving lots of subscribers. compared to thousands of dollars to replace. become equally important. Airtel have driven the

“ Four years ago towercos were
making good money, achieving
leases of $7,000 per month for
a gold package. In many cases
rental rates have halved, so they
need to find ways to further
reduce opex
“
model quite hard in India, where we have to sell to
the towercos. Eltek has relationships with American
Tower, Helios, Eaton and Airtel, but it varies
country by country, even with the same towerco.
For example in one country Alcatel-Lucent might
be the OEM partner and they may be installing
Eltek equipment, but in another country the same
towerco might be working with an operator with a
pre-existing relationship with Huawei, who don’t
supply Eltek products.
TowerXchange: How can hybrid energy help

towercos improve site level profitability?
Younis Shan, Regional Sales Director, Eltek West

Africa: Market dynamics have changed. Four years
ago towercos were making good money, achieving
leases of $7,000 per month for a gold package. In
many cases rental rates have halved, so they need to
find ways to further reduce opex. I believe towercos
need hybrid power solutions to preserve their
margins, unless they can guarantee tenancy ratios
above two from the outset

Multi-tenant tower power
TowerXchange: Where do Clean Power Systems
fit in the telecoms infrastructure ecosystem?
How CPS design hybrid energy solutions to cut opex by 50-60% at Bill Bubenicek, Managing Director, CPS: Clean
multi-tenant sites Power Systems, or CPS, are entirely focused on
power solutions for off-grid or unreliable on-grid
Clean Power Systems provides end-to-end (poor-grid) cell sites. Few cell sites in Africa have
power solutions that dramatically reduce diesel stable grid power, with many reliant on diesel
generator runtimes, diesel fuel consumption generators (DG) as primary or heavily used backup
power. DG runtime can be 18-20 hours a day even at
and overall operating expenses for cell sites in
sites connected to the grid as power is intermittent
developing markets where power is unreliable or
and sensitive equipment requires that voltage
unavailable. CPS’s technology consists of AVR/Line fluctuations mean a switch from mains to DG. With
Conditioning Platforms for On-Grid applications, regulators and service level agreements targeting
Hybrid/Renewable Platforms for Off-Grid Applications 99%+ uptime, outages are unacceptable.
and Remote Performance & Alarm Monitoring
Systems for all systems. The combined technology CPS’s niche is to solve these problems on existing
has been proven and deployed on thousands of cell and new cell sites using the latest hybrid, line
sites across the Middle East and Africa. conditioning and renewable power technologies
that reduce OPEX by 50-60%, and as a side benefit
Keywords: DG Runtime, Opex Reduction, Off-Grid, reduce carbon emissions by the same. We often
Unreliable Grid, Line Conditioning, Hybrid Power, start with a low cost initial base system – we don’t
Renewables, RMS, Service Level Agreements, ESCOs, have to deploy renewable power immediately, but
Site Level Profitability, O&M, Dimensioning, Single our upgrades introduce clean technologies that
to Multiple Tenant Power Solutions, Infrastructure allow solar and wind power to be added down the
Bill Bubenicek, Managing Director, CPS Sharing, Africa, CPS road and eventually eliminate DG over three to five
years.
Read this article to learn: TowerXchange: What’s the balance of your

< How to reduce energy opex by 50% or more business between pure product provision and
< Comparing the capital outlay to install or retrofit off-grid and on-grid cell sites installation versus energy as a service?
< How to reduce maintenance visits from every 10-11 days to every 42 days
< Why average rather then peak load is critical when dimensioning hybrid sites Bill Bubenicek, Managing Director, CPS: We fall
< How to design power solutions that can be upgraded easily if additional tenants are added between the two. Our ultimate goal is the full
service model – to become a total energy and power

“
optimisation provider. But we recognise that we TowerXchange: What kind of capital outlay
don’t necessarily get the whole pie from the outset, should operators and towercos anticipate to
we may start with supply and installation. In the upgrade each site, and what’s the timeline to
end, we want to sit on same side of table as our ROI?
towerco partners with aligned interests making the When towercos
partnership larger than sum of the parts, which Bill Bubenicek, Managing Director, CPS: The capital
ultimately serves our mutual end customer, the agree on service level outlay depends on size of site and whether it’s on
mobile network operator. or off-grid. CPS has developed two product lines
agreements that transfer that address the “on-grid market” which means
TowerXchange: Who is CPS’ target customer? the site has access to AC Mains/ grid power and
responsibility for power the “off-grid market” which refers to sites that are
Bill Bubenicek, Managing Director, CPS: Towercos
make up the majority of our business in Africa.
Our focus has been on towercos because we share
the MNO as the end customer – they view us as a
partner and not just a vendor.
onto them, they’re taking
on the risk of choosing
the right power provider
“ currently using two generators as the main source
of power. For all of our product offerings, we also
include our Remote Performance Monitoring and
Alarm System to allow live performance monitoring
and alarm management.
Towercos must make power optimisation a priority. For most off grid sites, we provide our SolSite™
When towercos agree on service level agreements hybrid systems, which typically cost around $25-
that transfer responsibility for power onto them, 30,000 fully installed, with twelve months or less to
they’re taking on the risk of choosing the right customers. In our experience, the Towercos prefer ROI.
power provider, and it’s in the towerco’s interest to to optimise their supply chain and to rely on a
optimise sites immediately to maximise return on central point for end-to-end power services. This For most on-grid sites, we provide our SolSite™
their substantial investments in towers. In many includes site surveys and turnkey installation to Stability Series (Line Conditioning Platforms)
cases, Towercos make agreements with anchor O&M and Remote Monitoring Systems. For Africa, and the cost is typically around $10-15,000, fully
tenants to supply power at a certain price, and that CPS has a presence in Uganda, Ghana, Tanzania, installed, with a faster ROI of 8-12 months. We
price is often based on legacy power equipment Kenya and South Africa, and works with most of the have even had ROI’s less than eight months as this
with high DG runtime. By helping the towercos major towercos in Africa. system focuses on utilizing the AC mains power
optimize power on these sites, it results in reduced when one or two of the three phases go down,
energy costs by 50% or more, which can have a We also sell to MNOs directly and through channel while still maintaining a steady 220 volt output
significant impact on site level profitability. partners, although the MNO mindset isn’t quite across threelines. Although hybrid and renewable
as focused on capital expenditure to reduce opex. solutions get most of the recognition, in reality, our
We’ve proven CPS technologies over the last four I believe the trend for Africa’s mobile network on-grid SolSite™ system is having the greatest opex-
years and spent a lot of resources proving our operators to sell towers to specialist towercos will reducing impact across Africa.
technology and services with our existing towerco continue.

TowerXchange: Tell us about the real costs of site must be sized according to the average daily Bill Bubenicek, Managing Director, CPS: Yes. To
maintenance at remote cell sites. load of the site. utilize wind and solar energy in off-grid locations,
the site design must include some form of energy
Bill Bubenicek, Managing Director, CPS: We The dimensioning of hybrid systems requires a storage to provide power when there isn’t enough
typically find that total OPEX as it relates to power different paradigm, which can be challenging to get sunshine or wind. Hybrid systems provide the
is approximately 55% fuel-related and 45% O&M across, especially when presenting to engineers who perfect platform for the immediate or future
related. Some sites are so remote that it will take have been dimensioning sites based on peak load adoption of renewable energy sources, especially
a field O&M engineer a full day just to get there. for so many years in this industry. for off-grid sites.
When you consider that off-grid sites are running
24/7 on diesel generators, and generators require a Traditional sites with generators as their primary TowerXchange: How do you control which power
250-hour service interval; this means they require source of power seldom reach their peak load for source is used at which time?
maintenance every 10-11 days. You can then more than a few minutes at a time. Most of the
appreciate solutions that reduce DG runtime as this time, the required load is at less than 40% of peak, Bill Bubenicek, Managing Director, CPS: The key
not only saves on fuel but also extends the interval which means the generator is running at a low to a good Hybrid system is the power manager or
between maintenance visits to 42 days. load most of the time, causing the generator to run controller, which provides the essential function
inefficiently, resulting in glazing, corrosion, and of managing battery and generator cycling, and
TowerXchange: Tell me about dimensioning a reduction to the lifetime of the generator. ensuring maximum energy harvest of renewable
site for wind, solar or hybrid energy. What data energy sources through intelligent software
does the MNO or towerco need to evaluate a In contrast, when the generator starts on a hybrid controls. Additionally, through our Remote
“
site’s suitability for hybrid energy solutions? site, it runs at a high load during the boost recharge
period to charge the battery bank AND power
Bill Bubenicek, Managing Director, CPS: When the existing site load. The generator is therefore
dimensioning for a hybrid site, peak load has been running at a much greater efficiency, perhaps 80-
used in sizing the generator at traditional sites 90%, which extends its lifetime.
where the generator is the primary source of power The power solutions at a
and generates power based on the fluctuating To evaluate a site, it’s also useful for the operator
site need to be designed so
load. At such sites, it’s critical that the generator is
capable of meeting the load requirements when and
if they reach the peak load.
However, average load is the key factor in

dimensioning a hybrid site. This is because an
or towerco to know the generator capacity and cost
per delivered litre of fuel, as well as grid power
availability and rates, and the average cost of
service and frequency of maintenance visits.
TowerXchange: Are hybrid sites a necessary first

they can be upgraded easily
in the field if additional
tenants are added
“
energy storage device (battery bank) is the primary step to more widespread adoption of renewable
source of power, and this can meet the fluctuating energy, as solar and wind technologies become
load of the site as required. Therefore, hybrid sites more affordable?

Site Performance Monitoring System (SolSite™
Manager), fuel information from the generator
is collected alongside battery and power data in
order to provide complete statistics on the status
and performance of the site. This allows for remote
configuration and optimisation on the site to
maximise performance of the system. Site data is
extended via alarm relays and a GPRS Modem.
TowerXchange: How do requirements vary when

dealing with a single tenant compared to multi-
tenant shared cell sites?
Bill Bubenicek, Managing Director, CPS: The power

solutions at a site need to be designed so they can be
upgraded easily in the field if additional tenants are
added. We might need as few as three added parts,
depending on the number of tenants we’re adding.

All cell sites have to be economical in their use
of limited space, but that focus is even greater at
multiple tenant sites. So it becomes even more
important that hybrid power systems have a
minimal footprint. Our SolSite™ systems are
typically single cabinet integrated hybrid systems
and they can handle up to 3kW average load, before
requiring an additional battery cabinet.
CPS’s experience with towercos means we’re used

to dimensioning solutions that are prepared for
multiple tenants from day one, with multi-tenant
distribution boxes and power metering, giving the
towerco options on how to monitor and bill for
power, for example charging each tenant according
to their equipment’s power consumption

How ESCOS can reduce
TowerXchange: Where do Orun Energy fit in the
telecoms infrastructure ecosystem?
your energy opex by 30-35%

Kwabena Rangi Smith, Founder & Executive
Chairman, Orun Energy: Orun Energy dedicated
seven years to coming up with a best in class, end to
A closer look at site design to minimise opex: choosing the right end suite of solutions that will handle all the issues
generator, shelter, air conditioning, outdoor equipment and RMS an operator or towerco faces, from power and
cooling to remote monitoring systems. We’re a “go
to” systems integrator for telecoms infrastructure,
Orun Energy can demonstrate spectacular
with solutions including proper site design,
cost savings at a single outdoor and three installation, management and even a financing
indoor sites in the remote mountainous company to help with capex.
region of Rajasthan, India, where they’ve
have been able to reduce diesel consumption Working with Orun Energy, the operator needn’t
worry about power – we’ll provide daily, weekly
by 86-92%. We asked Orun’s founder and monthly reports on each cell site, enabling the
Kwabena Rangi Smith for his advice on how operator to focus on new services and customer
to achieve similar opex savings in Africa… experience.
Keywords: Reducing Energy Opex, ESCOs, Energy Orun Energy has set up an ESCO subsidiary to
Efficiency, Flat Fee PPA and ESA Outsourcing Models, drive its business in India using the kW/hr pricing
ERP, Service Level Agreements, Air Conditioning, Outdoor model. The India environment is actually suited
Equipment, RMS, Rural Connectivity, Infrastructure to companies willing to take risks with the opex
Sharing, Africa, India, Tarantula, Orun Energy model. The environment in Africa is still evolving
Kwabena Rangi Smith, Founder, Orun Energy
and would require more support from regulators
and the government so as to better manage the
Read this article to learn: perceived high operational and financial risks.
< What is an ESCO and how do they help reduce power opex for telecoms?
< The role of ERP systems in plotting and comparing sites, and in tracking performance against SLAs We have an open platform, and work with local
< How to re-engineer cell sites with excess shelter and generator capacity partners to access vital local knowledge and skills.
< The need for partnerships to drive value and accelerate universal access initiatives Orun Energy owns the system IP. We design the
< Why opex at a site can increase by 50-60% as you move from well connected urban areas to remote, solution at the outset, and we own contract at the
off-grid rural sites end, but in between we use supply chain partners,
O&M, a sophisticated outsourced ERP system, and

“
installs and arranges financing for projects designed by specialist, independent infrastructure
to improve the energy efficiency and maintenance companies?
costs for facilities over a seven to twenty year time
period. Kwabena Rangi Smith, Founder & Executive
ESCOs can help operators Chairman, Orun Energy: African telcos are over-
and towercos reduce
dependency on diesel
without having to invest
capital in renewable
“ Typically an ESCO provides the following services:
< Development, design and arrangement of
financing for energy efficiency projects
< Installation and maintenance of the energy
efficient equipment involved
< Measurement, monitoring and verification of
reaching themselves. With the skills shortage in
Africa, it’s tough finding people to manage every
issue from customer service to cell-sites, so it’s a
good idea to outsource to specialist companies. I
believe the tower industry is an increasingly distinct
community, and power for cell sites is an industry
energy solutions energy savings in itself too. This is where Orun Energy fits: “from
tower to power”.
ESCOs might also assume the operational and
equipment partners to deliver the solution. We train financial risk of the project. If we’re not careful the African telecoms industry
the local O&M partner on our solution, then they may be heading the same way as India, where
handle the installation and day to day management ESCO projects often include high efficiency power, regulation has impacted the market adversely,
of the system. heating and air conditioning, as well as centralised ultimately eroding value through excessive
energy management systems. competition and high operational cost.
Orun Energy uses a robust ERP system. The system
provides Orun Energy with the capability to plot As the telecom industry evolves models to outsource Another challenge in Africa is that low price,
sites on integrated Google maps and compare sites power generation for cell sites, ESCOs can help sometimes low quality passive and active
with site survey data. The system also enables us to operators and towercos reduce dependency on equipment has been installed at many cell sites,
track performance against SLAs through automated diesel without having to invest capital in renewable which are running very inefficiently. This means
workflows and configurable milestones, such as energy solutions. high opex and a high failure rate, hence Africa’s
forecast and target dates. The system gives us one- QoS issues.
click access to secure data, custom reports and Outsourcing models have been developed on an
instant dashboards, while providing Orun Energy operating lease or monthly flat fee basis. You can Outsourcing to specialist energy and tower
with an audit trail. also use a Power Purchase Agreement (PPA) model, management companies enables operators to
or an opex saving recovery or Energy Savings impose SLAs that ensure a transparent and open
TowerXchange: What exactly is an ESCO? Agreement (ESA) model. process, while delivering significant opex savings.
Kwabena Rangi Smith, Founder & Executive TowerXchange: What’s your view of the TowerXchange: What’s the blend of your
Chairman, Orun Energy: An ESCO, or Energy migration of Africa’s telecoms infrastructure business between upgrading legacy sites and
Services Company, is a business that develops, assets from operator-captive to being managed optimising the power consumption of new sites?

Kwabena Rangi Smith, Founder & Executive significantly reduce opex, but of course there’s
Chairman, Orun Energy: We have been engaged in always a capex-opex tradeoff. However, generators
both retrofitting legacy sites and building new sites, in Africa are generally swapped out every 19-24
helping towercos create multiple operator solutions months.
with capacity for up to four tenants.
Similarly, in our work in India we often found
TowerXchange: How do you optimise a site ourselves dealing with large shelters that put a
to reduce opex and add capacity for multiple greater burden on air conditioning, or separate
tenants? mini-cabins for different operators as they didn’t
want equipment tampered with. If operators are
Kwabena Rangi Smith, Founder & Executive willing to share cabins it will drive down opex.
Chairman, Orun Energy: Optimising sites for You also need to ask if the equipment can allow for
multiple tenants depends greatly on the original higher temperatures in the cabin. It might be fine at
site design. We’ve seen a lot of sites not designed 29°C, so you might simply need better temperature
optimally, and load capacity can suffer as a sensors. We’ve found simply retrofitting air
result, so we often have to address these design conditioning systems with sensors that switch
issues to make it easier to deliver our solution. to free cooling when it’s cooler at night can save
For example, we often find generators are considerable air conditioning power consumption.
significantly larger than required – perhaps because
the site owner over-estimated the prospective When we have upgrade legacy indoor sites in
amount of equipment or prospective number of India, we’ve often found opportunities to swap out
tenants. Installing a more suitable generator can indoor for outdoor as equipment, particularly as
“
equipment nears end of a typical 10-year lifecycle.
Orun Energy RMS
Indoor sites require efficient cooling, which can
account for 58-63% of power consumption. 80% You need a modular approach – we can help site
of green field sites in Africa are going to have owners stack up their requirements, and we can
80% of green field sites

in Africa are going to
have predominantly
outdoor equipment
“ predominantly outdoor equipment going forward,
but the majority of legacy sites have indoor
equipment, so there’s another upgrade that can
reduce opex.
Finally, you need effective Remote Monitoring

give you a capex you can afford. And we’ll often
wait for proven tenants that need the site to be
upgraded before making the investment.
TowerXchange: Talk to us about the capital costs

of the kind of solutions Orun Energy provides.
Systems, for example Orun’s RMS monitors sixteen
parameters and enables predictive maintenance to Kwabena Rangi Smith, Founder & Executive
avoid downtime. Chairman, Orun Energy: For a typical outdoor

legacy site, retrofit may cost in the ballpark of $38k
- $45k, with payback in 18-22 months, and an eight
year life. Payback on a new build site is significantly Quantifying potential opex savings
better: 4–7 months.
Orun Energy achieved impressive cost savings such as:

TowerXchange: Is the transfer of operator-
captive infrastructure assets to specialist < 90%+ savings in diesel costs with 35% monthly opex savings at an off grid outdoor site
towercos with aggressive SLAs requiring opex
< 86%+ savings in diesel costs with 30% monthly opex savings at an off grid indoor site
reduction good news for companies like Orun
Energy? < 70% reductions in air-conditioning runtime
< Increasing uptime to 99.99%
Chairman, Orun Energy: The towerco has got to
create a profitable infrastructure business. So far, The jury is still out on whether the towerco business rural area where there might not be a decent road.
all you’ve done is transfer risk. Energy will still be model will work in Africa; whether they’ll be able to The variable costs are all logistics – getting the
the biggest cost. Energy costs are captured in the achieve targeted tenancy ratios, and whether they diesel to the site, getting O&M to the site, the further
lease contracts with operators, so any improvement can create the portfolios of 12-15,000 towers needed you go, the more attractive diesel tends to become
in energy opex savings would go straight to the to really drive efficiencies. as a means of exchange, which means more theft.
bottom line, especially helpful where tenancy ratios Your maintenance costs rise – engineering skills are
do not meet expectations. TowerXchange: how can these opex savings scarce, and simply aren’t often found in rural areas.
“
accelerate rural connectivity? And you’ve got the cost of diesel itself which can
be 70% higher in francophone than in anglophone
Kwabena Rangi Smith, Founder & Executive countries, due to things like tax and the cost of
Chairman, Orun Energy: Africa’s tower business trucking it in.
model has to change. As networks expand, new
As networks expand, new towers will be in expensive locations, and we TowerXchange: Where next for Orun Energy?
towers will be in expensive

locations, and we need
partnerships to drive value
and spread the service
“ need partnerships to drive value and spread the
service. We need regulators to invest Universal
Access Funds. Developments like mobile number
portability in Nigeria will put further pressure on
QoS. Operators need to change their approach to
towers and let specialist companies help.
Chairman, Orun Energy: Orun Esco is in advanced
discussions with major operator in Australia for a
contract of 40-75 sites (pilot phase) for Orun On Grid
energy efficiency solutions using the opex model.
The number of proposed sites for retrofit could
The opex for a site could increase by 50-60% as you exceed 4000. Our goal is to save them 25% in energy
move from well connected urban areas to off-grid related opex

Experiences from the front
TowerXchange: How does your mindset need to
change as you move from leading an operator to
leading a towerco?
lines of managing a towerco Gareth Townley, Managing Director, Eaton Towers

Ghana: When you are running a towerco, you’ve got
in Ghana to remember back to the pre-boom days of African

telecoms. Mobile operators started “putting on
Keeping the network on the air makes it easier to sell co-locations weight,” by which I mean adding unnecessary cost
to the business during the rapid growth experienced
in the last decade. As a Towerco, you have got to get
TowerXchange wanted to learn about the
back to being proactive, lean and mean.
realities and priorities of managing the
local operating company of a towerco. TowerXchange: Can towercos really be proactive
So we met Gareth Townley, Managing if the operator either needs the location or they
don’t? Isn’t there a temptation to just wait for
Director of Eaton Towers Ghana. Gareth is the phone to ring?
a veteran of several senior leadership roles
in African TMT, including as CEO Africa Gareth Townley, Managing Director, Eaton Towers
Ghana: We certainly send information on our tower
for Viasat, and CEO of Millicom in Sierra locations to Ghana’s Mobile, 4G, TV, Radio, ISP and
Leone then Ghana. WiMAX operators, and yes they’ll call us when their
networks are congested or if they’re expanding into
new territories.
Keywords: Co-location Sales, Uptime,
TV, Demographics, DG, Procurement, But during my time as CEO of Viasat Africa, I learnt
RMS, Maintenance, Infrastructure media sales where it’s sell or die, and I believe
Sharing, Africa, Ghana, Eaton Towers, the tower industry needs active as well as passive
Gareth Townley, Managing Director, Eaton Towers Ghana Vodafone Ghana selling.
We’ve got to get away from selling a tower and

Read this article to learn: instead sell access to consumers. We’ve got to know
what these people want: do they want to access
< How co-locations should be sold proactively rather than passively
Facebook, to use mobile money, watch videos, make
< What comes first, the new tenancy sale or the site upgrade?
international calls? How much disposable income
< How towercos buy energy equipment do they have? How much airtime and data do they
< The impact of three towercos competing in Ghana represent for our prospective tenant? Our sales
guys need to know the demographics of the areas

surrounding the tower, not just the tower itself. Gareth Townley, Managing Director, Eaton Towers The more independent towercos you have in a
Ghana: We have supplier agreements in place with country, the greater potential for expanded network
TowerXchange: How are your sales teams a number of companies who we keep on their toes. coverage with lower congestion rates.
organised? It is important to avoid exclusive deals, I need my
suppliers to be competitive, ensuring stocks are TowerXchange: What’s in it for the operator to
Gareth Townley, Managing Director, Eaton Towers available at the right price, when I need it. outsource the passive network to an independent
Ghana: We’re organised by account rather than by towerco?
region. All the decision makers are in the capital Eaton Towers handles a majority of its procurement
cities so our sales teams are based there. centrally. I only get involved personally to check out Gareth Townley, Managing Director, Eaton Towers
local outlets in Ghana – whether they have a good Ghana: Operators are able to unlock the value
The mobile operators remain the largest accounts, reputation, whether they keep equipment in stock in their passive network, either by reducing
but TV will get more interesting as it migrates to et cetera. maintenance and operating expenditure or via a
digital, creating a new demand for towers. Today, cash sum.
Africa’s TV companies are quite small with big city- TowerXchange: What are the practicalities of
centric coverage. maintaining the power solutions at cell sites? It’s true that towercos don’t do anything that
the operator can’t do themselves, but I’ve been
TowerXchange: What comes first, the tenancy Gareth Townley, Managing Director, Eaton Towers a CEO of African MNOs and there are a hundred
sale or the upgrade? And how long does it take Ghana: Telecoms is a DC industry. Even though and one other things to concentrate on rather
for a new co-location site to become operational Ghana has relatively stable grid power, we still than extracting value from the passive network.
for the tenant? have sites with significant generator runtime. And Towercos enable the operator to focus on the
inevitably the generator will go down sometimes. consumer.
Gareth Townley, Managing Director, Eaton Towers But with effective remote monitoring alarms
Ghana: The priority for the operators is to find a and strong batteries, there is enough time for the TowerXchange: How would you sum up your
new site on which they can hang their equipment maintenance teams to respond and keep the site on priorities as Managing Director of Eaton Towers
and quickly generate revenue with the minimum air. Ghana?
reconfiguration.
TowerXchange: Are three towercos in Ghana too Gareth Townley, Managing Director, Eaton Towers
We usually undertake any required site upgrades many? Ghana: We have a responsibility to keep the
after a new tenancy sale. The cycle time can just network on the air. If we do that well, it makes the
be a couple of weeks, depending on what needs to Gareth Townley, Managing Director, Eaton responsibility to sell co-locations, much simpler.
be done. The upgrades can consist of some minor Towers Ghana: No. It’s better for the industry as
tower work or perhaps laying some extra concrete competition keeps prices honest and ensures we all The tower business in Africa isn’t like the US for
if outdoor equipment is used. We know the size of have to deliver a great service. example, where it’s a pure real estate play.
the generator at each site and what is required with
regard to power. There are enough operators in Ghana to keep three The African market is much more focused on the
towercos busy, plus TV, radio, 4G, WiMAX players. logistics of maintaining sites, which then combined
TowerXchange: Are those upgrades handled in- Most sites can only take three to four tenants, so with active colocation selling, drives the business
house by Eaton or by selected suppliers? there’s enough to go around. forward

Special feature:
How to leverage RMS to

optimise preventative
maintenance
Maintenance costs can cripple site level profitability
for towercos or suffocate MNOs’ business case for rural
network extensions. Poor quality roads connecting
remote cell sites, compounded by the scarcity of skilled
local resources, can mean it takes days not hours
for field engineers to reach a site, which makes the
selection of the right O&M partners critical.
The choice of RMS or ISM system is as important as the

field maintenance subcontractor. Installing sensors to
monitor passive and active equipment isn’t just about
combatting pilferage – the most sophisticated systems
integrate with maintenance scheduling systems at the
NOC, translating hundreds of data feeds into actionable
intelligence and transforming reactive scheduled
maintenance into proactive preventative maintenance,
or even achieving the “gold standard” of Just-in-Time
maintenance.
Don’t miss:
72 From data to intelligence
73 Inala’s Laurentius Human on how to
identify the smallest capex that yields the
biggest return
77 “Towards just-in-time maintenance”
with Kentrox

From data to intelligence
mediocre results from which can tarnish tower
operators’ view of the insights that remote monitoring
can yield.
delivered and consumed. Indeed, one of many On the other hand, sensors built in to generators are
applications of RMS by towercos is remote meter considered complementary not competitive to RMS.
reading, which reduces site visits while enabling each However experts caution that such sensors aren’t
tenant to be billed for energy on a consumption basis. enough on their own. Your RMS partner should be able
to integrate generator sensors into holistic systems,
Change management implications saving capital investment in pricey sensor hardware.
“A layer of subcontractors exists serving the towercos Speaking of capex, this special feature puts the leading
and OEMs who win passive and active infrastructure RMS and ISM manufacturers, Inala and Kentrox, on
sharing contracts,” says TowerXchange inner circle the spot to explain what their solutions cost on a per
member Fazal Hussain, veteran of Helios Towers site basis.
Nigeria and Eltek. “This layer of subcontractors often
includes ‘mom and pop’ businesses providing passive Translating data into intelligence
infrastructure services – small companies unable to Laurentius Human, CEO of Inala and one of the
make substantial investments, facing skills shortages, godfathers of RMS, gives his perspective on the
and struggling to deliver the reliability necessary for integration of RMS with maintenance scheduling
the prime contractor to achieve demanding SLAs.” systems in his interview on pages 73-76. According
to Human, “if you can translate RMS data into
O&M team en route to remote cell site (image courtesy of Camusat)
Dick Hayter of Kentrox has a challenging perspective actionable intelligence, you can build models for asset
Maintenance costs can represent half of power opex, on the change management implications of installing management and asset optimisation.”
which in itself is usually the single largest network Intelligent Site Management systems, including
operating cost. the need to reorganise subcontractors to combat Do you have experiences with
engineering skills shortages by adjusting lines of RMS to share?...
Remote Monitoring Systems (RMS) communicate an reporting and directing field engineers to where the
array of key performance indicators back to the NOC potential problems can be found. Read the interview
about the generation and consumption of energy. RMS with Dick on pages 77-80 . …or would you recommend an O&M
can be integrated with job ticketing and asset lifecycle subcontract, RMS or Asset Lifecycle Platform
platforms to enable preventative maintenance, Having a few sensors at a cell site is not the same thing supplier we should cover in a future edition?
reducing truck rolls, extending the lifecycle of as holistic, intelligent site management
equipment, and making pilferage auditable. If so, please contact TowerXchange at
Experts in RMS are fairly universal in their opposition kosmotherly@towerxchange.com
It’s an attractive prospect to only pay for fuel that’s to cheap point solutions “built in a garage”, the

How to identify the
TowerXchange: Tell us about the Remote
Monitoring of cell sites in Africa
smallest capex that yields

Laurentius Human, CEO, Inala: Running
telecoms infrastructure in Africa isn’t easy. But
the challenges aren’t so much about crime or
the biggest return corruption as many people think; they’re challenges

of geographical reach and of supporting diverse
requirements rather than deploying a standard
How RMS identifies investments that will slash your energy and solution.
maintenance costs
Almost every cell site is unique, whether we’re
Inala is one of the first companies in Africa to offer Remote retrofitting or dealing with a new build; they have
Monitoring Systems (RMS). The company has deployed over different priorities, different passive infrastructure
24,000 systems over eight years. Inala count Airtel, Helios, hardware, different software and active equipment
Eaton, IHS Africa, SWAP Technologies, Warid, Orange, MTN, installed, so a different configuration of RMS is
Vodafone Group, Indus, IndoSat, Digicell and Vodacom among needed for each site. You simply can’t have an out-
their many clients, and they own their own hardware IP. of-the-box standard RMS system and expect to have
TowerXchange spoke to Laurentius Human, CEO of Inala and clean, complete data coming in.
the newest member of the TowerXchange “inner circle”.
TowerXchange: What are the KPIs for passive
Keywords: RMS, Retrofitting Cell Sites, Performance Metrics, infrastructure management?
Batteries, Renewables, Unreliable Grid, Maintenance, Asset
Optimisation, Hybrid Power, Low Power Active Equipment, Laurentius Human, CEO, Inala: Tower owners
Energy as a Service, Service Level Agreements, Uptime, mainly use RMS to understand the reason for power
Infrastructure Sharing, Africa, Inala failures, whether it’s just running out of diesel,
Laurentius Human, CEO of Inala
power grid or mechanical problems. So it’s all about
energy.
< The necessity to configure each RMS to measure what’s important at that specific site The key performance metrics around energy
< How to leverage RMS to communicate critical data back to the NOC concern generation, consumption and interruption
< How to translate RMS data into actionable intelligence by integrating with maintenance job ticketing of energy at a site. On a generation site, we
< The challenges and opportunities for ESCOs in Africa monitor grid power quality, DG runtime, battery
< Retrofitting cell sites with RMS to meet the needs of towercos with multiple tenants discharge and any solar or wind components. Any
interruption triggers alarms that call attention to

“ Cell site power optimisation is a
process; it’s not something you
can ever “finish” because the
“
profile of each site changes
problems such as diesel theft, grid or battery failure

or discharge issues. We also help monitor and
remotely manage consumption: measuring what
is contributing the greatest energy load to the site
and providing the capability to switch on and off
generators and air conditioning.
Cell site power optimisation is a process; it’s not

something you can ever “finish” because the profile
of each site changes, from environmental conditions
and unreliable power grids to diesel delivery and
problematic traffic. The data from RMS becomes
more valuable as it enables tower operators to not
just identify grid failure but also to map grid failure
phases and identify the right phases.
TowerXchange: How does the communication

of these critical data vary whether the site is via SMS or a GPRS link back to the NOC. If a cell Management service companies often lack the
operator-owned, run by a third party towerco or site is owned and operated by the MNO, then they hardware platform to optimise remote monitoring
managed by a service provider? have direct control. But if the cell site is owned – they try to use generic hardware with standard
by an independent towerco, then they have to configurations, but the performance metrics differ
Laurentius Human, CEO, Inala: It’s important acquire a SIM card from the MNO and if that SIM for every site. So one size definitely doesn’t fit all.
not to underestimate the importance of RMS in card gets disconnected or runs out of credit then
communicating these critical data back to the NOC. they’re blind. Inala provides a buffer by saving TowerXchange: What kind of capital investment
As Inala has such a substantial installed footprint, management data on the site for later upload. should tower operators anticipate when
we carry all sorts of data over the GSM network investing in RMS?

“
Laurentius Human, CEO, Inala: That’s the million the highest return. In my experience, international
dollar question! An RMS system delivers between tower companies have got extensive modelling from
The power solutions at a

site need to be designed so
they can be upgraded easily
in the field if additional
“ 20 and 200 data points to the MNO or towerco
and, while we present it in a simplified graphical
format, they must be able to interpret the data.
They’ll need to prioritise which measurements
are more important for any given site; it might
be temperature for sites in arid environments, or
other markets, but those models don’t necessarily
apply to Africa, where pilferage alone can bleed you
of all your profits.
Ultimately, remote monitoring is an iterative

process to finding the right data that provide
tenants are added fuel consumption at sites prone to pilferage. The customers the right insights for the particular
towerco’s Service Level Agreement will define their challenges they face at portfolio and individual site
tenants’ priorities level.
Laurentius Human, CEO, Inala: A basic monitoring
system to log data for the top 20-30 key performance We’ve built dashboards that show the ten worst TowerXchange: What has attracted Inala to
indicators is going to cost $3,500-7,000 per site for performing sites, the ten most prone to theft, or diversify into the hybrid power and energy
the hardware and sensors, that’s before installation the ten with the worst battery performance. But services markets?
and commissioning and excludes batteries and RMS won’t provide job ticketing or a work order.
generators. A third party system is used for maintenance Laurentius Human, CEO, Inala: We’ve done a
and scheduling. For example, Bharti Airtel is number of hybrid sites. It’s a fiercely competitive
Competitive RMS range from $1,500 up to $20,000 working with IBM in Africa. Others have opted market, with a number of battery and DG
per site. Of course it varies according to what you for custom developments to integrate into their manufacturers playing in this space. Controlling
need to monitor; whether it’s grid power, diesel active network management software and yet hybrid sites is about more than RMS. For example, it
consumption, any renewables, security, navigational others prefer to deploy stand-alone third party requires a substantial outlay on batteries to get 8-15
lights, humidity, access control, et cetera. If you’re solutions. Integration between that maintenance hours of autonomy from the grid.
talking about full hybrid monitoring and control, scheduling system and the RMS is an obvious
line conditioning and deep cycle batteries providing thing to do. However, most job ticketing systems Hybrid power is a necessary first step on the road
eight hours of autonomy, you could be looking at don’t allow for the level of data input our RMS can to renewable energy as tower operators balance
north of $20-40,000 per site on a retrofit basis. provide, so there’s usually a human element to capital investments to identify the right sources
reading and responding to alarms. of renewable energy, where they slot in and how
New sites offer a lot more options. Many generators to manage and get the most from them. Again, it’s
now have in-built sensors tracking the top fuel If you can translate RMS data into actionable got to be a case of the right solution addressing the
consumption alarms. We can reduce capital outlay intelligence, you can build models for asset needs of the individual site. For example, there’s
by integrating with these sensors. management and asset optimisation, helping you generally not much wind in central Africa, which
prioritise battery bank replacement, investment means a need for more investment in batteries. The
TowerXchange: How do tower operators in line conditioning to clean up grid power, or sunlight angles onto solar panels mean that solar
translate RMS data into actionable intelligence? whatever it is that incurs the smallest capex for energy has a tough business case on the equator.

At Inala we favour chemical fuel cells; power more critical. We’re finding ourselves retrofitting taking a risk on their ability to close the gap between
generation from methanol. retrofitted sites where the RMS wasn’t sufficient to potential opex reductions and actual performance.
meet the new needs of tower companies.
Introduction of renewable energy sources may be Remote Management systems are not a panacea,
best undertaken in conjunction with a technology The entry of tower companies has changed the we’re not a magic bullet that delivers 100% uptime -
upgrade or swap enabling installation of new, low- market. The towerco may now negotiate on behalf we’re just the messengers. If you’ve acquired a low
power active equipment. There are plenty of sites at of a whole region, so we have fewer people to quality site with an old battery bank that cannot
which we can move away from diesel altogether. sell to and the sales cycles are long. But Service hold its charge, on a grid that fails 70% of the time
Level Agreements require towercos to understand and a worn out DG, RMS data will identify the
There is a plethora of new technologies with which the assets they’ve acquired and how they are deeper-lying problems in the acquired hardware,
tower operators must be familiar and up-to-date: performing, so we’ve seen an increase in orders. but then it’s up to the tower owner to prioritise
batteries, generators, renewables and now ESCOs which capital investments to make first to improve
(Energy Service Companies) – companies that Tower companies tend to be more attentive to site-level profitability.
own and operate distributed power generation. passive elements. While MNOs might have seen
Few if any tower companies want to be electricity the passive elements of their networks as a TowerXchange: How are RMS and other passive
companies; towercos would much rather back-to- necessary evil, tower companies are focused on infrastructure investments negotiated?
back their Service Level Agreements to ESCOs. the maintenance cycle and opex savings. The focus
of our business will naturally be drawn to multi- Laurentius Human, CEO, Inala: Africa’s tower
Inala has stimulated some debate about energy as tenant sites with 99.5-99.8% DC uptime Service Level industry is a small network of people, and generally
a service within the IFC and GSMA Green Power Agreements. we all know each other. Negotiations are based on
Initiatives and we are positioning ourselves to be an long-standing relationships. We negotiate on price
ESCO. But fools rush in where angels fear to tread. TowerXchange: Do tower companies’ Service of course, but also on getting sites installed and
Diesel is a currency and so getting into that business Level Agreements reflect the current state of commissioned. The site acceptance procedure that
cuts close to the livelihoods of some people who you energy opex at the sites they are acquiring? defines an acceptable installation is also usually part
don’t want to meet in a dark alley! of the negotiation.
Laurentius Human, CEO, Inala: The terms and
TowerXchange: Is the transfer of towers from conditions of Service Level Agreements between Ultimately it’s a similar sales approach for us
operator-captive to independent towercos a good Africa’s MNOs and tower companies have been whether we’re selling to an MNO, towerco or bank
thing from Inala’s point of view? drafted with a forward looking bias. – we’re selling to the owner of the asset. In the
end, grid power is going to fall short of telecoms
Laurentius Human, CEO, Inala: Of course it’s good Tower companies have very little real case study infrastructure requirements systemically across
news for us if there’s continuing growth in the evidence of the conditions of the networks they are all of Africa. Generation of electricity to power
number of base stations deployed, whether by MNOs bidding for and acquiring. They may have basic infrastructure must be one of the single biggest
or towercos. Towercos may mean there are less uptime numbers but do these refer to DC or AC operational headaches for tower owners and I don’t
towers on the hillside, but co-tenanting makes RMS power? Is it load balanced? Tower companies are see that changing

Towards just-in-time
TowerXchange: Why should tower operators
invest in Intelligent Site Monitoring?
maintenance
Dick Hayter, Managing Director MEA, Kentrox:
Tower companies are focused on reducing
operating expenses (opex) at every cell site and,
How intelligent site management (ISM) transforms maintenance with a large number of sites in Africa still reliant
scheduling and management while reducing energy opex on diesel, one of the best cost savings is in fuel and
energy consumption.
TowerXchange spoke to Dick Hayter, Managing

Kentrox recently deployed a system with a Tier
Director for the Middle East and Africa at Kentrox, 1 tower operator to enable remote tenant energy
a leading intelligent site monitoring, management, metering, providing the capability to bill each
and control solutions provider with over a million tenant at a site separately for power consumption.
products successfully deployed in carrier and With one meter per tenant, they’re able to reduce
enterprise networks worldwide. Their primary truck rolls through automated remote reading, with
focus in Africa is on tower operators and service correlation and bill generation.
providers and they have a considerable number of
Intelligent site management in this instance
Tier 1 customers throughout the region.
provides three capabilities: fuel management,
Keywords: Remote Monitoring Systems, Remote security and reduced environmental impact.
Site Management, Intelligent Site Management,
Automation, Generator Management, Energy The fuel and energy management capability, can,
Opex, DG Runtime, Batteries, Subcontractors, Fuel amongst other things enable tower operators
Delivery, Pilferage, Just-In-Time Maintenance, Change to closely monitor the state of fuel; how much
Dick Hayter, MD MEA, Kentrox Management, Reduced Truck Rolls, Africa, Kentrox is delivered, if there is abnormal consumption
(pilferage), and can also monitor the runtime and
fuel consumption of the generation plant. This
Read this article to learn: allows the tower operator to generate an auditable
< How to pay only for the fuel that your sites actual consume output and reconcile this against invoices from
< How to install fuel sensors to make pilferage auditable the subcontractors who deliver fuel, therefore
< The change management necessary to move from scheduled to just-in-time maintenance only paying for fuel that’s actually delivered and
< How to reduce energy opex and extend the lifecycle and ROI in power equipment consumed.
< What it costs to purchase and install a robust ISM solution
The tower operator also gains visibility of the

selection between mains, renewables and batteries systems alone, but the provider can follow up.
to minimise DG runtime.
TowerXchange: How big is the market for
One of the biggest challenges we encounter in Africa intelligent site management systems – are they in
is the state of batteries. On paper they look great – widespread use in Africa?
by investing more capital in better batteries you can
reduce generator runtime to just a couple of hours Dick Hayter, Managing Director MEA, Kentrox:
a day. Yet many batteries are poor quality, poorly In our opinion, the ISM market in Africa is pretty
maintained, and the amount of charge they’re immature. We’ve encountered many point solutions
able to hold in practice is significantly less than in implemented to solve one specific problem such
theory, so DG runtime doesn’t reduce as much as it as access control or just looking at fuel. Customer
should. Monitoring the state of batteries is critical. expectations haven’t always been properly
Kentrox Fuel Tanks at Risk managed, and there is customer dissatisfaction
TowerXchange: How do site monitoring systems with low cost point solutions. Tower operators and
performance of the diesel generator (DG) and help mitigate against fuel theft? service providers are becoming more interested
an opportunity to move away from scheduled in having a holistic view of what’s happening
maintenance, which is expensive especially for Dick Hayter, Managing Director MEA, Kentrox: We at their sites and are looking for carrier-grade,
remote sites. The tower owner can identify issues have fuel management systems in all three markets robust solutions, that retain data at a site in the
in the power plant, batteries and rectifiers from in which we’re active, and all of them have assisted event that the backhaul network temporarily fails.
the field and NOC, determine that a maintenance tower operators and service providers in identifying Strategic departments in tower operators and
crew needs to be sent, and provide directions to pilferage. service providers are driving the requirements for
maintenance crews as to what they should do when intelligent site management.
“
they get there. We place sensors in the fuel tank, the most
commonly being a pressure sensor that measures
ISM also measures temperature and humidity the quantity of fuel within 2% accuracy. That’s
and can instrument parameters from each piece hooked into a black box that transmits data back
of equipment, enabling tower owners to remotely
shut down air conditioning and run fans when it
makes sense to do so. This minimises the substantial
load and energy consumption air conditioning
can represent. And of course ISM tracks when
maintenance is needed.
to a central monitoring point, so we can detect
refuelling events or abnormal reductions. We use
another sensor to detect water in the fuel – it’s a
common ploy to cut fuel with water. Tampering
with or disabling sensors generates alarms. The
tricky part is collecting data from 1,000 or more cell
Tower operators and service
providers are becoming more
interested in having a holistic
view of what’s happening at
their sites
“
sites correlating it and presenting it in a way that’s
Intelligent site monitoring also gives the NOC meaningful to management. You can’t apprehend
control over hybrid power sites and optimises the a thief and take them to court of law based on our

“
Kentrox solution architecture
Implementing just-in-time
requires substantial change
management
“
delivery and a lot of “interested parties”. There
are all kinds of local cultural challenges and deep
routed interest groups to win over.
Subcontractors need to be re-organised. As things

stand today, a local person who lives near the
tower may have the capability to maintain air
conditioning. Now with ISM, all the power elements
are integrated, so the maintenance person needs
to understand all of the elements at the site: air
conditioning, batteries, diesel and renewable energy
plants, rectifiers, aircraft warning lights, security
fences and locks et cetera. Field maintenance staff
who had been managing themselves for many years
can now be directed from the NOC, telling them
where to go and what to do. Implementing just-
in-time requires substantial change management
TowerXchange: Can intelligent site management Achieving just-in-time requires excellent visibility and means stretching many O&M subcontractors
help reduce maintenance costs to the extent of of every site, with effective dashboards and alarms, beyond their capabilities.
enabling just-in-time maintenance for African but more importantly we also need tower operators
cell sites? and service providers to revise existing processes. Senior management may be disappointed with
the results of installing ISM if they don’t address
Dick Hayter, Managing Director MEA, Kentrox: It When they acquire assets, tower companies these change management issues, which can be
may take some time before we get to just-in-time often inherit an old subcontractor network, with particularly challenging in the many cases where
maintenance, but that’s definitely the target. established but inefficient mechanisms for fuel O&M is an outsourced managed service.

Unfortunately this may dissuade some tower Applying Just-in-Time maintenance to telecoms infrastructure
operators and service providers from implementing
ISM, when I would suggest that the first thing they
Historically maintenance visits to cells sites have been scheduled through regular planned maintenance
need to do is implement ISM to see what’s really
regimes. Whilst this can be effective, it isn’t necessarily efficient. Not all truck rolls are necessary – and
going on at their sites.
if your truck roll consists of a multi-day journal to a remote cell site in Sudan, that can incur a lot of
unnecessary opex.
TowerXchange: What is the typical capital outlay
per site to install your remote site monitoring
Just-in-time maintenance leverages ISM to track the actual usage of energy and other equipment at the
systems?
site and can identify symptoms of potential problems before they result in downtime. ISM also enables
the NOC to direct field maintenance teams to specific problems, which can be helpful in mitigating
Dick Hayter, Managing Director MEA, Kentrox: For
against skill shortages.
a network of 200+ towers, budget on around $5,000
per site for a full system inclusive of fuel sensors
Just-in time maintenance has been used for some time in the automotive and manufacturing sectors,
and a central O&M server installed at the NOC.
leveraging self diagnosis capabilities and usage monitoring to provide maintenance when it’s needed,
resulting in significant reductions in operating costs.
An IP remote camera would be another $700-1,200
on top, depending on functionality, but you don’t
need those on every site. pan-African services company with bona fide the lifespan of equipment. This gives tower
project management skills. operators and service providers an opportunity
Around half of that cost is services to install the to maximise the use of highly competent O&M
system, but I would recommend that operators do TowerXchange: Thanks for sharing your resources to direct less experienced resources in the
not take a shortcut on this aspect. The installation expertise and experience Dick. Could you wrap field. Uptime can be improved as we move toward
and tune-up of ISM requires a site visit, and up the interview by summing up the benefits of just-in-time maintenance, improving Quality of
proper quality control when installing sensors. We intelligent site management? Service and boosting subscriber loyalty.
“
recommend that operators engage a well-qualified,
Dick Hayter, Managing Director MEA, Kentrox: ISM helps reduce pilferage by making it more
ISM provides visibility into

maintenance requirements,
reducing truck rolls and extending
“ Investing in a robust ISM solution enables tower
operators and service providers to save opex by
reducing energy consumption through the simple
ability to turn off a generator remotely. ISM enables
the more efficient use of battery capacity, renewable
energy, and air conditioning.
auditable.
It’s not just about gathering data; it’s about

integrating data and turning it into actionable
intelligence. Intelligent site management is not
just about fuel monitoring, it improves holistic
the lifespan of equipment management and control of network availability
ISM provides visibility into maintenance over the whole lifecycle of a tower and its
requirements, reducing truck rolls and extending equipment

Download issue 1 of TowerXchange FREE at www.towerxchange.com
Departments
5 Analysis
Estimated number of towers owned or

managed by towercos in Africa
Source: TowerXchange research, quarterly filings, site lists
14 Are three towercos in Ghana

too many? 30 How to guide:
Shareability
15 Is infrastructure sharing working in Ghana? 31 $value on telecom infrastructure assets
16 BuddeComm Perspective on Ghana 32 The cost of multi-tenant towers
17 Interview with Chuck Green, CEO, Helios 34 Design for shareability
24 Best of Both Worlds? With Tony Dolton of Vodafone 37 What are my towers worth?
7 News
< IHS acquires 1758 towers from MTN
< Cameroon and Cote d’Ivoire market views
< Orange selling 600 towers in Kenya
13 Editorial
Welcome to TowerXchange
27 Introduction to
infrastructure sharing 40 Special feature:
Uganda case study
TowerXchange is free for all African
tower decision makers
28 Why share Africa’s towers? 41 How Orange leverage infrastructure sharing Whether you missed the first edition of
48 How to structure a deal 43 An interview with the UCC TowerXchange or you’ve just lost your copy,
50 The criticality of tenancy ratios 45 How Eaton hit the ground running: download issue 1 free at www.towerxchange.com!
52 When is the right time to share towers? An interview with Alan Harper, CEO

Special Feature:
Who’s who in tower

design, manufacture,
installation and
managed services
The front lines of the African tower industry are manned
by experienced turnkey telecoms infrastructure providers
– specialist subcontractors able to cut through Africa’s
engineering skills shortage through outstanding project
management and supervision capabilities. This unique breed
of partner can design a cell site to meet any requirement,
on or off-grid. They’ve surveyed and retrofitted thousands
of towers to add hybrid energy solutions or capacity for
multiple tenants, often reverse engineering the tower in the
absence of the original designs and drawings. They possess
a unique determination to install new cell sites, deliver fuel
and perform preventative maintenance despite the most
challenging logistics of washed out or non-existent roads.
In this feature:
83 Who’s who in tower design, manufacture, installation
and managed services
86 Likusasa on innovating cell site design to connect the
next billion subscribers
91 “What gets measured gets done” at Reime Group
96 Camusat’s logistics and maintenance best practices
100 Leadcom propose the marriage of passive and active
infrastructure management
Image courtesy of Camusat

TowerXchange Who’s Who MNOs and towercos want to know that the potential
turnkey infrastructure partners you shortlist have
been trading for some time, have an excellent QHSE
Your turnkey telecoms infrastructure partners for the design, record, have a track record of meeting strict delivery
installation and maintenance of thousands of cell sites in Africa schedules on time, and (ideally) have a physical
presence in your specific market – or at least in
Mobile Network Operators and towercos typically warehousing, timely delivery and installation of a neighboring country. When selecting turnkey
outsource tower design, manufacture, installation passive and active equipment and components, infrastructure and managed service partners, you
and managed services to specialist turnkey telecoms all the way to managing an NOC integrating want to know that your chosen partner has “been
infrastructure contractors. comprehensive RMS data feeds with maintenance there and done that”, so we are pleased to introduce
job ticketing and asset lifecycle platforms that enable you, or reintroduce you, to some of the partners most
TowerXchange will profile the most credible niche preventative maintenance. Services can extend into warmly recommended by TowerXchange members
and “end-to-end” service providers in this segment the installation and maintenance of energy equipment, and readers.
of the tower industry supply chain, mapping their with several turnkey infrastructure providers also
capabilities against seven key categories of service, developing cutting edge hybrid and renewable energy Companies profiled in this edition and in the first
while giving a sense of the scale and geographical innovations. edition of TowerXchange:
footprint of their operations. We will also interview < Camusat (pages 96-99, TowerXchange issue two)
senior executives at selected turnkey infrastructure “The tower acquisition and turnkey build to suit < Ganges Internationale (pages 32-33 of issue one)
companies in this edition and the next three editions models yield different financial results. Acquisition < Hayat Communications (pages 22-23 of issue two)
of TowerXchange. seems to be the road to a more profitable proposition, < Leadcom (pages 100-102 of issue two)
and tower companies’ deals often come with build to < Likusasa (pages 86-89 of issue two)
The installation and managed services end of the suit agreements,” said one investor with considerable < Ramboll (pages 34-36 of issue one)
tower industry supply chain is characterised by tower industry experience. With managed services < Reime Group (pages 91-94, of issue two)
considerable organisational complexity. Substantial reputed to be a high cost, low margin business, in the
rollout and retrofit projects engage skilled supervisors future some turnkey infrastructure companies may In future editions TowerXchange hope to profile Alkan,
to marshal hundreds of hard-working local staff. move up the value chain to bid for tower portfolios, Egypro, Linksoft, Mer Telecom, MobiServe, Netis,
Projects can span the design, manufacture, import, perhaps fronting a consortium with investment Plessey, QTE, Radio Network Solutions, TESA and Zamil
partners. Infrastructure.
Keywords: Tower Design, Tower Manufacture,
Installation, Rollout, Retrofit, Leasing & Permitting,
While few turnkey infrastructure providers have TowerXchange will examine the slightly different role
NOC, Managed Services, ESCOs, Hybrid,
Infrastructure Sharing, Africa, Alcatel-Lucent, Alkan, yet acquired and leased back towers in Africa, many played by the active equipment manufacturers, such
Egypro, Ericsson, Camusat, Ganges Internationale, have become key strategic outsourcing partners of as Alcatel-Lucent, Ericsson, Huawei, NSN and ZTE,
Hayat Communications, Huawei, Leadcom, Likusasa, towercos. TowerXchange will examine the impact in a separate special feature. The OEMs often bundle
Linksoft, Mer Telecom, MobiServe, Netis, Plessey, on the business model and capabilities of turnkey managed services with active equipment sales, and
QTE, Radio Network Solutions, Ramboll, Reime infrastructure providers of the arrival of independent often subcontract to the companies covered in this
Group, TESA, Zamil Infrastructure
towercos in Africa. special feature, so merit covering separately

Matrix of African tower design, manufacture, installation and managed service providers
(In alphabetical order. This is not yet a complete matrix - further companies will follow in parts 2, 3 and 4 of this special feature)
Approx # of
Company Capabilities Founded Staff
towers in Africa
Permits & Managed Acquire &
Tower Design Tower Manu Install TOC
licenses Services lease
1,500 worldwide,
Camusat TP 5,000 1940s
843 in Africa
African Footprint: Botswana, Cameroon, Central African Republic, Congo Brazzaville, DRC, Egypt, Guinea Bissau, Guinea Conakry, Ivory Coast, Kenya, Madagascar, Mali,
Mauritius, Morocco, Niger, Senegal, Uganda
Sample clients: France Telecom/Orange, Digicell, Eaton Towers, Bulgaria Telecom, ZTE, Telma, TowerCo of Madagascar
Approx # of
towers in Africa
Ganges India India 1991, in towers 500 perminant,
TP 4,000
Internationale TP Africa TP Africa since 2004 1,000 contractors
Footprint: “Many countries in Africa”
Sample clients: Airtel, Vodafone, Huawei (MTN), Orange, Helios, Eaton, Ramboll and Safaricom directly and through partners
Approx # of
towers in Africa
Hayat
TP 1997 1,200-1,500
Communications
Footprint:
Sample clients: Etisalat, Qtel, Vodafone, Bharti, Wataniya, Ericsson, NSN, Alcatel-Lucent and Huawei
Approx # of
towers in Africa
Leadcom TP TP 3-5,000 1982 700
Footprint (Africa): Benin, Burkina Faso, Chad, DRC, Gabon, Ghana, Ivory Coast, Niger, Rwanda, Tanzania, Uganda, Togo
Sample clients (Africa): Alcatel-Lucent, Ericsson, NSN, Huawei, Airtel, Atlantique Telecom, MTN, Orange, Tigo, Vodafone, Helios TA, Eaton, ATC
TP = Through Partners

Approx # of
towers in Africa
250 permanent,
Likusasa TP TP TP 3,000 1995
500-750 contractors
Footprint: Mauritius HQ, Mozambique, Zimbabwe, Zambia, Malawi, South Africa, Lesotho, Angola, Cameroon, Nigeria, Ghana, Liberia, SDR Guinea, Sierra Leone, Kenya,
Tanzania
Sample clients: MTN, Econet, Cell C, Vodacom, Huawei, Ericsson, NSN, American Tower, Helios
Approx # of
towers in Africa
Ramboll TP Software 7,000 1945 10,000
Footprint: Pan African, continental HQ in South Africa
Sample clients: (In Africa) Huawei, NSN, ZTE, Ericsson, American Tower, IHS Africa, Helios, Airtel, Vodafone, MTN
Approx # of
towers in Africa
Reime Group 3-4,000 1912 360
Footprint: DRC, Ghana, Ivory, Kenya, Madagascar, Malawi, Nigeria, Republic of the Congo, Tanzania, Uganda, Zambia plus satellite operations in Burkina Faso, Rwanda and
Sierra Leone
Sample clients: Airtel, Alcatel-Lucent, Eaton, Helios TA, Helios TN, Huawei, IHS, MTN, NSN, Safaricom SWAP, Tigo, Vodacom, ZTE
TP = Through Partners
Recommendations
If you would like to refer us to other turnkey infrastructure companies that Please note that inclusion in the TowerXchange Who’s who is based solely on
should be featured in this Who’s who, then please contact TowerXchange the proven capabilities of the companies profiled, usually on the basis of client
at kosmotherly@towerxchange.com. We are generally interested in recommendation. It is not possible to “buy” coverage in our Who’s who, but
companies that have manufactured, installed or maintained at least 1,000 we are very grateful to the advertisers in this special feature, Likusasa and
cell sites in Africa, or smaller companies with a unique capability within Reime Group, as their support helps TowerXchange keep our publication free
this segment of the tower industry supply chain. to over 1,000 African tower industry decision maker readers.

The future is now
TowerXchange: Thanks for speaking to us today
Gary. How has the increasing role played by
independent tower companies in Africa affected
Innovating cell site design to connect the next billion subscribers the greenfield new site build business?
Likusasa are a pan-African ICT project manager Gary Staunton, CEO, Likusasa: The operator has
and constructor offering comprehensive services different objectives from a towerco. The towerco
incorporating infrastructure construction, cell is essentially a real estate company that generates
income from rentals, while an operator’s generates
site design and installation, and diesel, hybrid
data and airtime revenue.
and PV energy solutions. Likusasa have built
approximately 3,000 greenfield cell sites in In the recent past, when infrastructure defined an
Africa and retrofitted many thousands more. operator, operators rolled out sites either through
TowerXchange spoke to Likusasa’s CEO Gary site build contractors or equipment vendors.
Staunton about the impact of towercos entering Nowadays, if an operator wants to roll out 1,000
the African telecoms infrastructure market, and base stations, their first question is now usually
innovations to improve the economics of rural “how many can we co-locate?” as co-location
connectivity. incurs less risk, and the time from investment in
equipment to generating income from the site is
much accelerated.
Keywords: Greenfield, Co-location, Power Systems,
Hybrid, Solar, Time to Market, Opex Reduction,
To ensure long term sustainability, towercos
Site Surveys, Upgrades for Capacity, Logistics,
prefer towers with capacity to maximise potential
Local Workforces, Next Billion, Rural Connectivity,
tenancies and power systems that can minimise
Infrastructure Sharing, Africa, Altobridge, Likusasa
Gary Staunton, CEO, Likusasa opex costs. In rural areas towercos might build
for a single tenant, but in urban areas builds are
almost always for multiple tenants, with designs
to accommodate potential future expansion. For
< The impact of infrastructure sharing on investments in greenfield sites
example in urban Nigeria it’s common to see high
< How to survey structural capacity and power systems to identify site modifications that enable capex, heavy towers with power systems that can
additional tenancies accommodate three or four tenants. When building
< The logistical challenges of co-ordinating hundreds of site builds and upgrades in Africa new tower sites, towercos have some tough choices
< The supervision and training necessary to harness hard-working local workforces to make balancing maximum business potential
< How to reduce capex and opex to economically connect subscribers in low ARPU areas specification with cost.

“
fixes towercos use to improve opex and add
As much as 40-50% of new

base stations would now be
expected to be co-located
“ capacity?
Gary Staunton, CEO, Likusasa: It’s neither good or

bad news for companies like Likusasa. Towercos
have a different business objective focused on
maximising return on asset investment but in some
cases they have in-house capabilities similar to ours.
We have worked with some of the most prominent
African companies including American Tower,
The practical impact of the introduction of towercos Helios and more recently IHS and we fully expect
and the co-location model to Likusasa’s traditional to continue to support these companies with the
market is significant. As much as 40-50% of newly services and innovations they require to make their
installed base stations would now be expected to business models successful.
be co-located and this percentage is expected to
increase as the model further develops. Back in There is often a wide variety of tower and power
2002 we were building around 500 greenfield sites specifications among the assets that have been
a year – that’s probably down to 200 now, so more rolled out across Africa, and as towercos make
than half of our business is related to co-locations new acquisitions they have to establish a detailed
these days. We have had to make adjustments to understanding of each tower site.
the way we work and expand the services that
we offer to accommodate this emerging demand. Likusasa provides design and construction services
This includes surveys, tower upgrade assessments that assist towercos with assessment of tower
and designs, improved database systems and the structural capacity, modifications for improvement
development of many opex reduction innovations and replacement or relocation of towers.
for power, control and security.
We also provide associated power audits that
Econet, Vodacom & MTN are substantial clients of include making recommendations on efficiency
ours through their various OpCo subsidiaries, but improvements, like managing dirty power from
as the market evolves we serve a larger variety of grid connections, hybrid and PV retrofits and sizing
clients with different business objectives. generators for the specific capacity requirements
of an increasing number of tenants. Likusasa
TowerXchange: Is the transfer of assets from is familiar with and has deployed thousands
operator-captive to independent towercos good of network management systems that monitor
Co-location sites built for USF in Zimbabwe
news from your perspective? What are the quick and control fuel, power metering and other site

operations. All of these systems have the ability to
significantly improve site efficiency.
TowerXchange: Likusasa has a particularly

strong reputation for joining up the logistics
between product manufacturers and the
successful installation of equipment at new and
retrofitted cell sites. Talk to us about the logistics
of installing cell sites.
Gary Staunton, CEO, Likusasa: Procurement

responsibility is often shared between ourselves
and the client due to the arrangements that a client
would have with its preferred technology suppliers.
However, there are significant logistical challenges
in coordinating hundreds of site builds or upgrades
across a dispersed and often remote geographical
area such as coordinating deliveries from
various African, European, American and Asian
manufacturers and integrating these imported
technologies using mainly local resources to meet
strict SAQ/ CW / TI time and quality KPI’s. supervision skills to train and manage hard- resources. The number of contracted resources
working, local workforces. fluctuates as we gear up down according to project
Likusasa have an extensive and successful track requirements.
record in this area and have developed an enviable Likusasa will typically have significant operations
organisation of people supported by systems, in five or six African countries at any one time. Likusasa invests in its people and encourages
processes and in country resources that can face These operations are used as a base for projects and development. We have different levels and
these challenges and deliver to client expectations. operations in other countries which maximises our approaches to human resource development.
overhead efficiency so we can remain competitive. For instance we do regular HSE awareness
TowerXchange: How are Likusasa able to use presentations and we maintain HSE certification
local resources to deliver highly skilled technical We have over 250 core permanent staff with such as tower climbing. We support our technology
projects? excellent constructions technical, engineering, partner product training programs by sending
administration, HSE, quality management, our in-country technicians to our partner training
Gary Staunton, CEO, Likusasa: We’ve got good commercial management and project management facilities for installation and support certification.
systems, strong partners and the required skills, overseeing 500-750 short term contract We encourage formal external training at

“ “
The objective is to reduce both capex
and opex, and to present a business
case that provides a decent return
with low ARPUs
accredited academic institutions both in-country

and internationally and in some cases we partner
with these institutions to establish training and
development programs for project management and
business leadership.
TowerXchange: How are Likusasa innovating

to make connecting the next billion mobile
subscribers economically viable?
Gary Staunton, CEO, Likusasa: Extending coverage, significant achievement. requiring $10m capex that could be deployed in
improving capacity and introducing data 6 months, based on Altobridge 2G/3G radios, a
technologies all form part of our business portfolio. In southern Africa, we’re helping a regulator fulfill solar PV power system, that incorporates a highly
For us, “connecting the next billion subscribers” a challenging rural coverage communications efficient VSAT backhaul.
means many things including making rural requirement using large solar powered multiple
communications economically sustainable for single operator co-location sites. This design considers We find that there is no silver bullet to reduce
and multiple operator sites. future proof designs for macro sites in the rural costs. You have to value engineer the network plans
application that use microwave transmission. and site designs taking into account the objectives
Likusasa recently won a project in East Africa to of all the stakeholders including the regulator,
design and implement low cost 35m/55m towers on In another example, we were presented with a operators, and local communities. One of the main
sites with grid power that is typically interrupted brief to provide connectivity to 120 rural areas with sustainability objectives that Likusasa contributes
or of poor quality. We’re working with selected a $35m budget and a 12-18 month time window. to is the reduction of capex and opex to present a
partners and the operator to build those sites Using our innovative approaches, we came up with business case that provides a decent return with
for less than $70,000 each which at that cost a a low opex, community engaging business model low ARPU’s

Likusasa is a specialist engineering and contracting service
provider in the energy, communications and infrastructure
sectors operating across Africa and the Middle East.
Telecommunications
- Fibre optic installations
- Implementation and integration of telecommunications equipment
- Remote site monitoring and control
- Turnkey rural telecommunications solutions
Energy
- Hybrid power systems
- Multi-tenant remote energy metering
- PV solar solutions
Infrastructure
- Data centres and cable landing stations
- Optical network construction
- Site upgrades and tower strengthening
- Turnkey network deployment
www.likusasa.com
contact@likusasa.com
Gary Staunton
Chief Executive Officer
E: gstaunton@likusasa.com
M: +230 941 5330 (Mauritius)
+27 83 284 6153 (SA)
What gets measured
TowerXchange: Congratulations on Reime
Group’s centenary (December 2012). Please
introduce us to the company.
gets done at Reime Group Anand Garg, CEO, Reime Group: Thank you so
much Kieron and I am indeed glad to be speaking
The new CEO of one of Africa’s leading passive infrastructure and with you on the occasion of our centenary year. I
managed service providers explains their key performance indicators also wish to avail of the opportunity to thank our
esteemed customers for their support in this rather
long journey.
Anand Garg is the incoming CEO of passive infrastructure
supplier Reime Group. Anand came to Reime from Viom
Reime Group employs around 360 people in Africa.
Networks, part of $ 100bn Tata Group, where he managed Apart from thirty expats, the majority of our team
Southern and Western India, a $300m business with 21,000 members are African. We believe in investing in
towers and over 1,000 people. Anand wanted to take what local talent. We’re now one of the leading passive
he’d learned to make a difference to a smaller set up, and infrastructure service providers in Africa, with
projects and services across the whole lifecycle from
his previous experience setting up Neotel’s rural business
rollout to energy efficiency services to managed
in South Africa gave him the geographical and cultural
services.
knowledge to return to Africa.
Reime started out as a harpoon factory in 1912 in
Keywords: Local Workforce, Rollout, Power Management, Leasing Norway, and then moved in the early 1950s into
& Permitting, Opex Reduction, Capex Optimization, Low Cost
extensive production of hot-dip galvanized steel
Tower Designs, KPIs, RMS, NOC, SLAs, Maintenance, Uptime, Asset
structures for the country’s power supply industry,
Utilization, Pilferage, Infrastructure Sharing, Africa, ACME Tele
producing 70% of the high voltage transmission
Anand Garg, CEO, Reime Group Power, Reime Group
towers in Norway.
Read this article to learn: New opportunities appeared in the rapidly

< The Key Performance Indicators for passive infrastructure management needed to meet exacting SLAs growing market for telecommunication, so Reime
< Leveraging performance measurement to optimise maintenance response times and productivity focused mainly on design and production of hot
< The necessity of understanding local laws and obligations to accelerate leasing and permitting dip galvanized towers and masts for radio link
< A comparison of capex in new sites in East ($80-100k), West Africa ($125-150k) and India and cellular phones, and 70% of the volume was
< How Reime deliver energy savings of 35-40% by running the DG at variable speeds according to active eventually exported. Decades of experience with
Norwegian landscape and weather conditions gave
equipment load
the company the right foundation to be able to carry

out demanding assignments worldwide. thus expanded to include network rollout solutions, TowerXchange: How does infrastructure capex
enclosure solutions, power management solutions, and opex in Africa differ from typical levels in
A transformation of the business that started cooling solutions and network management India, and what cost efficiencies have Reime
in 1996 has led to a highly internationalized solutions. With these patented, innovative and Group been able to achieve?
business operation focusing on managerial energy efficient solutions, Reime brings the value
and entrepreneurial services. By 2002, all steel add to its customers by reducing their opex with Anand Garg, CEO, Reime Group: A new cell site
production was outsourced to various partners their environmentally friendly green solutions. typically costs $80-100k in East Africa, $125-150k
worldwide. Reime Group later expanded further in West Africa. In comparison, the same tower
by offering its intellectual capital in the form of TowerXchange: Reime has just about every can be installed for roughly half the cost in India.
niche project management skills as well as software major name in African telecommunications on Opex running costs average $1800-2500 per month
packages for monitoring and managing network your client list - where does your business come per site, depending on number of hours of quality
rollout projects. from, direct from operators and towercos, or grid power – DG and battery runtime constitute a
via subcontracts from the major equipment significant proportion of opex.
In 2007, Reime became a wholly owned subsidiary manufacturers?
of ACME Tele Power Ltd., which is the flagship For capex, besides the product cost, it is important
company of the ACME Group of India and an Anand Garg, CEO, Reime Group: Most of our site to consider the logistics cost from sea port to
industry leader in the field of passive infrastructure build and energy efficiency product orders come final destinations in the Eastern and the Western
solutions for the telecom sector. Reime became a direct from towercos and operators. Our managed Provinces of the continent. Opex cost varies mainly
one-stop shop doing the entire gamut of businesses, services are subcontracted by the major equipment because of fuel price, space rent, per capita income
from tower supply and erection, installing passive manufacturers. (country specific) and labor wage act prevailing in
infrastructure to post sales maintenance and the country.
servicing of the sites. The solutions offered by Reime TowerXchange: What practical steps can be
“
taken to accelerate leasing and permitting when Reime have developed solutions to bring down
acquiring new cell sites in Africa? capex and opex. For example we have a unique
low cost tower design which can be built for $65-
Anand Garg, CEO, Reime Group: We firmly believe 66k, inclusive of everything you need - structure,
The only way to fast track

leasing and permitting
is to understand your
obligations fully
“ in adherence to the law of the land. The only way to
fast track leasing and permitting is to understand
your obligations fully. Because of Reime’s presence
in 14 countries in Africa, we have local knowledge
about which permits are required on a country-
wide and regional basis. The better you understand
power supply et cetera. This is a Nano tower – a 40
meter tower with capacity for 2 tenants, suited to
rural areas with low penetration, but it can also
be installed for urban in-fill sites where there are
a number of towers, but capacity and coverage
is inadequate. Reime can also design and install
your local obligations, the better your ability to towers for up to 5-8 tenants.
fulfill those obligations quickly.
On the opex side, we’ve done successful trials

Benchmark Energy Savings We have alarm monitoring systems of course, and
measure how quickly we can attend and implement
corrective actions. It’s important to mention here
that we have stringent KPI’s with our customers
for Managed Services. In order to achieve 99.998%
site uptime, we have to plan and deploy right
resource at the right place and right time, so that
the response to the cell site is a maximum of 90
minutes. For example, in Rwanda, Reime’s response
time to reach sites in and around in Kigali is 60
minutes. Accordingly, Reime has deployed resident
engineers who are equipped with tools to fix the
problem at site. We also monitor engineers in
the field from our GEMC, and are able to assess
productivity and response times – that’s important
to help us understand if we’re adequately or over-
35-40%
staffed.
These measures are all critical in ensuring we meet

leading to orders from customers including Airtel, TowerXchange: Anand, your LinkedIn profile the exacting Service Level Agreements set out in our
MTN, Tigo and various Towercos including Helios mentions your belief that “what gets measured managed service contracts.
Nigeria, Eaton Towers and American Tower gets done” – what are the key performance
that have achieved benchmark energy savings measures for passive infrastructure Similarly, we use PROMASYS, a unique equipment
of 35-40%. These savings come from our recent management? ordering and cost monitoring integrated project
innovation called the Energy Management Unit planning and tracking tool which helps us monitor
(EMU). The solution allows the existing diesel Anand Garg, CEO, Reime Group: At Reime, we have and track our project completion on a timely basis
generator to run at variable speed with regards developed unique solutions to measure KPIs of without any surprises.
to active equipment load and thus reduces the passive infrastructure management. At our state of
generator fuel consumption substantially. The EMU the art Global Energy Management Centre (GEMC) Health and safety of our assets and employees is
is further supplemented with our patented product we’re able to remotely monitor KPIs such as energy at the core of everything we do and therefore, as a
called PIU (Power Interface Unit). This incredible consumption, asset utilization, and technical company, Reime adheres to stringent HSE (Health,
solution makes up for the missing grid phase and field force utilization, which enable us and our Safety and Environment) norms.
steps up the line voltage as a result delays the customers to monitor and realise substantial opex
genset run time and therefore saves operating savings. TowerXchange: Can you tell us a little about how
expenditure. Remote Monitoring Systems are used to combat

fuel theft?
Anand Garg, CEO, Reime Group: The calibration of

the fuel tank is one of the most important features
of RMS. We can track fuel utilization. We know the
quantity put into the DG, we know the DG capacity
and track the runtime. So we can establish whether
there was any abnormal discharge from the
historical data of fuel consumption.

TowerXchange: Do you expect the African
tower industry to develop along similar lines
to the Indian market, where the majority of
assets transferred from operator-captive to
independent towercos, managed by specialist
infrastructure companies?
Anand Garg, CEO, Reime Group: There are

indications that a similar change is already taking
place in Africa. The establishment and growth
of ATC, Helios Nigeria, Helios Towers Africa,
“ We’re able to remotely

monitor KPIs such as
energy consumption, asset
utilization, and technical
field force utilization
“ Eaton Towers, Africa Towers (Airtel) & IHS bears
testimony to this. While some MNOs think retaining
their towers is a strategic advantage, they think that
owning the towers means owning the customer,
others have realised that by hiving off towers to
infrastructure management specialists, the operator
passive infrastructure on the other. Thus sharing
of passive infrastructure in Africa has become a
reality and will gain further momentum in times to
come.
It’s good news for passive infrastructure service

can concentrate on their core business of marketing providers like Reime as it provides us with an
minutes on one hand and reduce the burden of opportunity to work with all stakeholders in the
both capex and opex to a large extent by sharing the value chain: towercos, MNOs & energy providers

Reime
Ÿ Energy Management Solutions
Ÿ Cooling Solutions
Ÿ Turn-key site installation
Ÿ Managed services
Ÿ Network Monitoring System
Ÿ Opex Reduction by 30-40%
Thank You For Your Support!
www.reimenis.com
info@reimenis.com
Whatever it takes to
TowerXchange: Rolling out new cell sites swiftly
is critical. Tell us about the logistics of getting
a new tower from your factories to a remote
get it done
installation site in Africa – take us through the
import, warehousing and delivery logistics
processes.
The logistics and maintenance best practices required to install
and maintain towers in Africa Eric d’Aboville, Business Development Director,
Camusat: Logistics is probably the most important
aspect of any telecoms infrastructure rollout
Since the 1940’s Camusat has been a leader in the turnkey
programme. Camusat keeps tight control over
implementation of telecommunication infrastructures, offering
logistics, so we minimize the use of subcontractors.
a complete range of services related to construction, installation,
supply and maintenance of towers, masts, shelters, fibre and
Our two tower manufacturing plants are in Europe
additional parts. Camusat is a natural partner for operators and
so it’s essential that we have a good logistics
towercos who are looking for a company with strong capabilities all
department to deal with shipment of towers and
over Africa, with unified company culture and high QHSE standards,
accessories to Africa by air or by sea. This is the
providing a single point of commercial contact to optimize the
easy part! The difficult part is local transportation.
supply chain and negotiations of multiple similar deals in several
Africa has few proper logistics companies, and
countries.
the road infrastructure is poor. Camusat makes a
Keywords: Logistics, Warehousing, Rollout, Relocation, difference because we take the attitude “whatever it
Upgrading for Capacity, Reverse Engineering, Preventative takes, we’ll deliver what is needed to that site, when
Maintenance, RMS, Hybrid Power, Line Conditioning, Pilferage, it’s needed.”
Eric d’Aboville,
Tier 1 OEMs, Subcontractors, Infrastructure Sharing, Africa,
Business Development Director, Camusat France Telecom-Orange, Camusat As soon as we open a subsidiary in a new country,
we simultaneously will have offices and warehouse
premises, so that we can have a stock of towers
and accessories. We then can respond rapidly
< The logistical challenges of importing, delivering and installing towers in Africa
to customer requests. We keep this stock buffer
< How to overcome the challenges of relocating towers available to face most of the urgent commercial
< How to reverse engineer a tower that lacks proper documentation request of our customers.
< The monitoring tools, telemetry and statistics needed to build a knowledge base and move from
corrective to preventative maintenance In order to accelerate deployments and meet
< The contractor’s perspective on towerco asset transfers and price negotiations challenging SLAs, especially in remote locations, we
may not hesitate to invest in military-style logistics

is appreciated by our customer base – it’s not just a tower, primarily due to the foundations. In many
slogan, it’s a reality for them! cases it’s not economically reasonable to remove
foundations, as it’s difficult to destroy three to five
TowerXchange: As tower sharing increases in metre deep reinforced concrete. We might destroy
Africa, we are starting to see consolidation of the first few centimeters and re-cover with soil,
sites, so tell us about the logistics of relocating but of course that’s not always acceptable for tower
towers. operators with exacting environmental protection
standards.
Eric d’Aboville, Business Development Director,
Camusat: Relocating a tower is a measure of last TowerXchange: How do you reinforce a tower to
resort, both because of the cost and because of the add capacity for multiple tenants?
challenge of ensuring the service for tenants is not
interrupted. Eric d’Aboville, Business Development Director,
Camusat: Compared to relocating a tower,
Relocating a base station requires erecting a refurbishment is a purely technical, relatively
new tower according to the new requirements, straightforward task. The challenge comes if we
transferring equipment and using a change process don’t have proper documentation about the existing
to avoid service interruptions. Dismantling a tower, such as designs and calculation notes. It’s
tower is more time consuming than mounting a also a problem if we don’t have good information
and vehicles to make sure goods are delivered

onsite without any risk, respecting European
standards of safety and environment. When we’ve
been pushed to get new towers erected very quickly,
we’ve shipped a special unit crane from the US
to Africa that can raise 40m high, enabling tower
erection quicker than any of our competitors.
In Madagascar, where there are no roads and many

areas are impassable for normal vehicles during the
rainy season we’ve invested in heavy duty pickups,
as well as 6x6, and quads to ensure access, and we’ll
use a chopper when we have to.
Camusat’s reputation for doing “whatever it takes”

about a tower’s foundations and we can’t estimate passive infrastructure. The most important aspect have regional maintenance agencies located at an
how good the concrete is, or it’s conformity to QHSE is the power, which is where most maintenance optimum distance from each site as defined by the
standards. Reverse engineering a tower without headaches start. We work very hard to find tower operator’s SLA, with maintenance agencies
documentation is costly and it takes time. alternative green and hybrid power solutions, based as close as possible to top priority sites.
customised for telecoms. There are plenty of
We have to inspect every section of the tower, verify solar and hybrid solutions on the market, but few The final and most important component of
and measure steel thickness, potential corrosion, suppliers who really understand the specific needs preventative maintenance is human resources.
bolts and nuts, concrete foundations and then of telecom requirements. Camusat has sixty years of Camusat don’t use subcontractors so we can ensure
evaluate from these measurements what the most experience of specific African requirements dealing quality and control through good supervisors who
cost-effective way is to re-inforce the tower. We may with unstable grid power. Off grid sites are actually train and motivate the team, supported by incentive
have to increase the size of the foundations, add easier to maintain. programmes to ensure they do this repetitive job
re-inforcement legs, replace sections, add diagonals, properly.
etc. Backup diesel generators are the most commonly
used solutions at unreliable grid sites, but they can There will still be some instances where you need
Assuming you have proper documentation or be very expensive in terms of daily operations and corrective maintenance, such as in cases of theft,
have successfully reverse engineered a tower, opex. You need to look at how to deal with power vandalism or lightning strikes. Unless you want to
re-inforcing a tower is easy – with the proper availability and filtration of the grid to reduce build a defensive bunker, it’s difficult to eliminate
calculation notes, it’s a straightforward process to usage of backup generators. Camusat’s R&D teams the theft and vandalism issue, so we try to find cost
work out how to add capacity. Camusat have its have developed customised line conditioners for effective solutions. We’ll make local improvements
own R&D and design people who do this exercise the harsh environment and specific needs of Africa to security, looking at the fuel tank and connection
regularly without interrupting transmission and so that we get the most of the grid whenever it’s between the fuel tank and the generator, or
“
radio operations. present but unstable. improving access control, choosing most cost-
TowerXchange: How can tower operators The key to organising your team for preventative
minimise maintenance opex? maintenance is telemetry and statistics. Telemetry
and statistics enable you to build a knowledge
Camusat: As far as possible, we need to practice
preventative rather than corrective maintenance.
Excellent monitoring tools feeding into an NOC with
proper processes to detect and prevent corrective
interventions drive preventative maintenance.
database, based on which you can build a profile
of operations on each site to establish preventative
maintenance schedules. For example when dealing
with unreliable grid sites, we can build patterns
of grid behavior which means we can design and
install the proper equipment to maximise energy
The key to organising your
team for preventative
maintenance is telemetry
and statistics
“
efficiency and avoid equipment damage.
Achieving preventative maintenance requires
that Camusat deploy specific tools to supervise Another element of preventative maintenance is to

effective solution for that particular site. Of course
lightning strikes are also difficult to predict! We’ll
install surge protectors, but sometimes you just
have to use corrective maintenance to repair and
replace burnt out elements.
TowerXchange: What’s the balance of Camusat’s

business between MNOs and towercos? Is the
transfer of assets from operator-captive to
independent towercos good news for Camusat?

Camusat: We sell initially to MNOs, but when assets
are transferred to a towerco we become a supplier
to the towerco.
It’s too soon to say whether tower transactions are

a good business development opportunity for us.
When our clients France Telecom transfer towers
to a towerco, it means a jump into a new area and
we need to build new relationship with the towerco. the supply and delivery chain. We don’t use the country after completing an installation project.
So tower transactions are potential risk, but they’re subcontractors. Manufacturing, delivery, logistics
also an opportunity to secure business from other and maintenance are all provided by Camusat’s Our competition comes less from tower
co-locating operators. own team. So we have no real direct competition on manufacturers, and more from original equipment
this end-to-end service. manufacturers who bundle a suite of managed
We maintain a dialogue with all the towercos. They services with active equipment sales. Outsourcing
all put pressure on subcontractors’ prices, and of Thanks to our expertise in designing towers since managed services contracts to companies like
course you can only push prices so far before it may more than forty years, we have integrated towers Ericsson, Alcatel-Lucent and Huawei was a growing
decrease quality. with common basis and sections thus allowing us to trend two years ago, but MNOs are now realising
adapt our production very quickly to the customer they need maintain direct relationships with their
TowerXchange: How do Camusat differentiate changes of specification, without replacing every tower manufacture and installation companies to
herself from competition? section of the tower. minimise opex. Today the new trend is outsourcing
to towercos, and most of the towercos subcontract
Eric d’Aboville, Business Development Director, We’re also unique because of our extensive network everything, both to local subcontractors and to pan-
Camusat: Camusat has a good control of all of local subsidiaries. Many of our competitors leave African partners like Camusat

The marriage of passive
TowerXchange: Where does Leadcom fit in
the telecoms infrastructure ecosystem? How
does Leadcom differentiate itself from its
and active infrastructure competitors?
management Ofer Ahiraz, CEO, Leadcom: In 1982 Leadcom

started operating in the domestic market, adding
international operations in 1995. In 2007 we
How to combine telecoms, structural and civil engineering skills to design, acquired Ytelcom, expanding our footprint in
install, upgrade and maintain Africa’s telecoms infrastructure francophone Africa. We’re now the only company
covering Africa from East to West with a continuous
The advent of a new class of specialist passive infrastructure
geographical footprint. This enables us to support
tower operators and service providers for Africa should not
projects in neighbouring countries by sending
detract from the strategic integration of passive and active assets.
qualified telecoms, structural and civil engineers.
TowerXchange spoke to Ofer Ahiraz, CEO of Leadcom Integrated
All Leadcom subsidiaries in Africa have ISO 9001,
Solutions, an international leader in the provision, management and
ISO 14001 and OHSAS 18001 certification, giving us
implementation of telecommunications network deployment services
unique, high standards for quality, safety and the
and solutions, with an extensive footprint of more than 20 countries
environment.
in Africa and Latin America. Leadcom uniquely combines capabilities
in telecoms, structural and civil engineering, enabling them to offer
MNOs and towercos are looking for regional
RF design and implementation as well as tower design, site surveys,
partners who can support them in multiple
upgrade and maintenance.
markets with the same quality, specifications, and
Keywords: Common Framework Agreement, Tower Design, Site understanding of telecoms infrastructure. Leadcom
Surveys, Upgrading for Capacity, Maintenance, Power Equipment, is able to duplicate one framework agreement
Active Equipment, In-Building Solutions, Rooftop, DAS, Reverse to provide the same outstanding service level
Ofer Ahiraz, CEO, Leadcom Engineering, Loading, Infrastructure Sharing, Africa, LatAm, Leadcom everywhere to customers such as Airtel, Tigo, MTN,
Eaton Towers, American Tower and Helios.
Read this article to learn: Leadcom offers a wider product and service
< Duplicating the same contract framework agreement to ensure consistent service across Africa portfolio than just tower design, site build and
< How to maintain service during tower swaps maintenance. Most of our employees come from
< The potential for sharing rooftops and DAS in Africa in the near future the telecom industry, so we know how to deal
< How and why opex and capex increases as you move from well connected urban to remote rural areas with active equipment, from base stations and in-
< How to survey and strengthen a tower to add capacity for additional tenants’ equipment building solutions to microwave links and power
equipment (where we design and deploy solar, wind

or combination hybrid solutions). We’re unique DAS in South America. subcontractors, as getting sites up on time is heavily
in providing services for both active and passive dependent upon logistics.
infrastructure – most of our competitors specialise For example, Leadcom is working closely with a
in only one field or the other. towerco in South America to offer road coverage TowerXchange: By what magnitude does capex
in a nature reserve where no towers or electricity and opex rise in Africa as you move from well-
Let me give you some examples. In Ghana we are allowed. Leadcom has done the RF design, connected urban sites to remote rural sites?
are supporting a towerco who acquired some implementation, and built the outdoor DAS solution,
rusty, poorly maintained coastal towers. Leadcom for which the towerco has provided the capex, Ofer Ahiraz, CEO, Leadcom: Capex and opex can
undertook a full swap of these towers, using leasing capacity to MNOs. increase by double-digit percentages, and indeed
temporary towers to accommodate the microwave can even double in some countries, as you move
and base station equipment, maintaining full TowerXchange: What’s the balance of your from urban to remote rural areas, depending on
service while we dismantled the old rusty towers business between operator-captive and how difficult it is to reach the site. But the cost
and constructed new ones according to the client’s independent towerco-owned sites? doesn’t just come from logistics, it’s also to do
specification. with the lack of available raw materials. At some
Ofer Ahiraz, CEO, Leadcom: Towercos are relatively locations we can’t find sand, concrete or even water
In another example, we combined RF and civil new to Africa, but have become increasingly locally, so these materials, and others have to be
engineering knowledge to deliver IBS (in-building important since 2011 with the American Tower trucked in from the closest available place. Much
solutions) for multiple operators, sharing active / MTN and Helios / Tigo transactions. Since we also depends on the availability and capability of
infrastructure to provide excellent coverage within started rollouts in 2002-3 with Tigo, Leadcom have local workers to support a project.
a hospital, mall or hotel. built 3,000-5,000 sites in Africa, many in logistically
demanding countries such as DRC, Chad and Niger TowerXchange: How do you survey and
TowerXchange: Do you anticipate Africa’s where in some cases we had to charter aircraft strengthen a legacy tower to add capacity for
towercos diversifying into sharing DAS and and boats to transport towers to remote areas. We additional tenants?
rooftops? have the specifications and drawings for those sites,
making us a strong partner for the towercos.
Ofer Ahiraz, CEO, Leadcom: We’re still in the very
early days of rooftop and DAS sharing in Africa. TowerXchange: Does Leadcom manage delivery
MNOs aren’t sharing them, while towercos are logistics in-house or use subcontractors?
focusing on towers and co-locations.
Ofer Ahiraz, CEO, Leadcom: Leadcom’s supply chain
I think rooftops and DAS sharing will be an has gained vast experience in logistics in Africa over
attractive option for in Africa in the next one or the years. For shipments from port to the site we
two years, and Leadcom is positioned to be a major use pre-qualified third parties. We have a shipping
player in this market given our proven experience agent supporting us, and we constantly evaluate
Installing solar panels to reduce opex
with active sharing of remote units, fibre optics and and monitor the performance and efficiency of our

“
Ofer Ahiraz, CEO, Leadcom: The initial starting able to offer and deliver a competitive solution
point is having the detailed designs of a tower to to maintain the existing tower and only replace
analyse on our software platforms. However, in some elements, saving significant capex. This
most cases the towercos do not possess the tower
designs and drawings for each and every site, so we
have to send our expert to measure and evaluate
every part of that tower on-site, and there can be
thousands of parts in a 90-100m tower.
was probably the most complicated exercise we
undertook last year as it involved replacing the
legs of the tower, a unique procedure where we
upgraded three legs to heavy duty legs, whilst
keeping the tower in place and saving the asset for
the towerco without dismantling the active telecom
This was probably the most
complicated exercise we
undertook last year as it involved
replacing the legs of the tower, a
unique procedure
“
We also have to identify the current load on the equipment. There was no interruption in service for
tower. Many operators didn’t maintain a strong the tenant during the whole process.
database every time they swapped GSM 900 MHz
for 1800 MHz equipment or added 3G or microwave TowerXchange: Thanks for your time Ofer. How
equipment, so it’s important to map the existing would you summarise Leadcom’s product and
load on the tower and the location of the load. service offerings as applicable to the African
Leadcom’s structural engineers can then run tower industry?
simulations to identify any potential additional load
capacity on a tower. Unfortunately we often find Ofer Ahiraz, CEO, Leadcom: Leadcom provides a
overloaded towers, which the tower owner needs to comprehensive portfolio of products and services
take measures to strengthen. to the tower industry. We’ve assisted with site
surveys for due diligence; tower audits, mapping
Once we’ve defined the status of tower in terms of and structural analysis; the design, supply and
capacity (under or over loading), we can project implantation of tower strengthening; tower
the additional load from adding one or two further replacement; the design, supply, site acquisition
tenants’ equipment. We can determine whether the and installation of co-location and turnkey build 2
tower can support that load in his present condition, suite sites; we provide preventative and corrective
and if not, what is required in order to strengthen maintenance services and this is only part of our
the tower. Ultimately we can quote a full package offering.
of materials and services required to upgrade the
tower to the required new capacity. When tower companies start to look at active
equipment, as American Tower has done in the US,
Let me give you an example where Leadcom were Leadcom’s experience and knowledge in active as
able to upgrade a towerco’s assets in the most well as passive infrastructure will mean towercos
economical way. We were provided with a request can continue to enjoy Leadcom’s support, with no
Upgrading to heavy duty legs
to replace an overloaded tower. Leadcom were new partner needed!

How to overcome ? TowerXchange: I enjoyed reading the “Sharing
Mobile Networks” viewpoint – please could you
tell us about some of the strategic objections
objections to network
to network sharing highlighted in the report,
how they apply in Africa, and how they can be
overcome.
sharing Booz & Company: Some operators are already

convinced about the benefits of network sharing.
New report reveals transaction costs of $20-30,00 per site However many operators still see significant risks,
and 2-3 year RoI yet the reasons behind their reluctance to share
networks do not hold up under scrutiny. Operators
have different objections depending on their
Keywords: Business Case, Capex, Competitive Advantage, Single
RAN, Backhaul, Fibre, Transaction Cost, ROI, Decommissioning,
market position: incumbent or new market entrant,
First Mover Advantage, Shareability, Passive and Active while those with a mature network might think
Infrastructure Sharing, Africa, Booz & Company differently from those still actively rolling out.
Following the release of Booz & Company’s “Sharing Mobile From a strategic point of view, many operators feel
Networks, Why the Pros Outweigh the Cons” viewpoint, that their network provides competitive advantage
TowerXchange spoke two of the report’s authors. Roman in terms of coverage, quality, redundancy or
Friedrich is a partner with Booz & Company who leads backhaul capacity. Incumbents whose early
the firm’s global communications, media, and technology entrance into markets has given them the best
practice. Steven Pattheeuws is a senior executive advisor coverage and network quality might fear that
who specializes in network and technology transformation, sharing their network means relinquishing these
with a specific focus on active and passive network sharing. advantages, with potential repercussions for their
Roman Friedrich, Booz & Company (right) Booz & Company are one of the leading strategic consulting
Steven Pattheeuws, Booz & Company (left) market position. Even in markets with mature
firms in the world. network rollouts, some CTOs still don’t see the
network as a commodity given growing smart
Read this article to learn: phone penetration and network traffic.
< Why owning the network as such is not a source of long term competitive advantage
< How to maintain flexibility by retaining control of strategically important assets You have to ask if the network really is a genuine
< The $20-30,000 transaction cost of network sharing and 2-3 year timeline to RoI differentiator in the long term. Is network
< Comparing operator-led network sharing joint ventures with third party towerco models competitive advantage sustainable over time in
< How to structure the decommissioning of sites Africa? Even market leaders may not be able to
rollout in low ARPU areas, suggesting a selective

requirements. There’s a concern that network investment being two to three years. How should
sharing creates a rollout plan “lock in”, sacrificing we overcome concerns about the transactional
the ability to financially steer the company and cost of network sharing?
manage cash flows.
Booz & Company: Operators are often concerned
Operators’ fear of losing control over the future about the complexity of network sharing deals,
direction of networks is simply misguided. While whether sharing only passive networks, or
a shared network will have agreed performance progressing to include backhaul or antennae under
targets, operators should structure network sharing active network sharing arrangements. Operators
agreements that allow them to maintain autonomy aren’t comfortable when they feel it’s difficult
and control of selected, strategically important sites. to guarantee network quality and control over
network build outs. Operators are also concerned
TowerXchange: Tell us how to overcome about the length and complexity of negotiations,
operators’ objections to network sharing on which is why it’s essential to have clear
technology grounds. expectations, targets and time lines at the outset.
Booz & Company: Operators might have practical The transaction cost of $20-30,000 per site is
concerns about the compatibility of shared made up of decommissioning or moving towers,
networks. One operator might have 3G on 1800MHz, strengthening towers, adding space in sheds, site
and might be reluctant to share with another based accessibility improvements, updating certification
on 900 MHz. They might also have concern about and security arrangements.
sharing networks with an operator with a different
network sharing or roaming model, and surveys of vision for the rollout of 3G or LTE. The transaction cost tends to be at the higher end
2G and 3G networks have shown that subscribers of the range in developed markets with mature,
in many cases do not notice any difference between Built networks can be shared, especially if network overlapping networks as this gives rise to more
networks. sharing is combined with a modernization cycle decommissioning and reconfiguration costs. Less
that implements single RAN technology, allowing mature markets require less decommissioning
In many African countries where the rollout of networks of different generations to be combined and therefore lower transaction costs. The costs
networks is an ongoing process, we see a lot of on the same site with relatively inexpensive rise again if you’re sharing backhaul or active
c-level concern that sharing networks might mean upgrades, thereby increasing the potential financial equipment, as you may then need to invest in the
losing the flexibility to adjust capex, such as the benefit of network sharing. reconfiguration and upgrade of backhaul networks,
choice of hardware and vendors, or the ability to or the addition or replacement of antennas.
control the direction of network expansion based on TowerXchange: “Sharing Mobile Networks” made
commercial performance and potential, especially an interesting point about the transaction cost This can make the initial cost of network sharing
where regulators impose stringent coverage ($20-30,000 per site) and timeline to return on seem daunting, so some operators feel they simply

TowerXchange: Why should operators act now to
Normalized 10-year Cash-Out Profile of a Typical Network-Sharing Deal start sharing their networks?
Millions
Booz & Company: Operators’ objections to network
of euros
150
sharing are often fair, but can be addressed
properly. Potential cost savings soon exceed the
up-front transformation costs, and the range of
100 governance models open to operators means early
movers can shape network sharing deals with joint
venture or third party partners of their choice,
Above the line savings: 50 giving them a distinct cost advantage in their
include operations savings markets.
and saved network
investment
0 We have to start by establishing whether
Below the line: infrastructure sharing makes sense from strategic
Capex
expenses include network perspective. It’s important to understand if tower
transformation spend
-50 Opex sharing is already happening in a market or not. In
some markets in Europe operators aren’t forced to
Accumulated
share by regulators, but the actions of competitors
sharing gives them little choice. For example, in
Note: Figures include unilateral micro sites. Source: Booz & Company analysis
Denmark the second and third ranked operators
can’t afford to participate. However, some operators of a ten year network sharing contract. In most started sharing and the incumbent was left out of a
are turning to outside investors to finance the cases where two operators share networks in a joint relevant deal.
initial costs involved in network sharing. Investors venture, the breakeven point will occur after two to
are attracted to infrastructure-heavy investments three years. First movers in network sharing are able to shape
with limited risk, and can provide an independent deals; whether nationwide or focused in a specific
platform for additional operators to join the Many operators ask us how to flatten the area, whether inclusive of passive or active network
network sharing arrangement, lowering the cost investment profile to release funds for rollout in components or backhaul. The objective is to
base and improving the competitive position for all, the first two years, but the best way to do this is negotiate a win-win deal; an operating model that
while mitigating any regulatory concerns. to spread decommissioning over five to six years, makes sense for both operators in a joint venture,
which only delays the benefits of network sharing, not providing benefits for one at the expense of
The cash flow profile of network sharing deals is a particularly if during this period upgrades or the other. I can think of examples in Africa where
typical hockey stick. The initial capital expenditure investments are required on towers that will need relatively empty networks with good backhaul and
required over the first two to three years is to be decommissioned in the context of the deal. core networks were shared with operators with
gradually paid for through savings over a the term traffic-congested networks, thus creating a win-win

However, I see two ways in which independent TowerXchange: What factors determine the
deal with very different impact drivers for each of
towercos can generate value. In African markets shareability of a network?
the telecom partners.
with four or more operators, each with partial
coverage, the involvement of a third party Booz & Company: From a strategic perspective,
Sometimes infrastructure sharing is about more
towerco can facilitate securing deals with multiple shareability depends on operators’ willingness
than towers; operators need to take a holistic view,
operators. With Africa’s low ARPU, it’s important to to open up assets in certain high value, high
and play with scope of a deal. We’ve already seen
maximise use of assets, and sharing among multiple population density locations for sharing. With low
several operators that have adopted a wait-and-see
operators creates more value than two operators cost towers in rural areas often lacking both the
attitude to network sharing being left out in the cold
sharing bi-laterally. That said, some of the operator- capacity for additional tenants, and the revenue
– first movers in network sharing can improve their
led towerco spin-offs in India have created deals potential necessary to justify upgrades, there’s a
bottom line and will gain a real advantage over
with multiple operators. strategic disincentive to share in both rural and
their non-sharing competitors.
urban areas.
The second benefit of working with towercos is that
TowerXchange: We’ve seen a lot more sale and
they can be impartial. There’s definitely a benefit Then from a technical point of view, you have to
leaseback deals to towercos in Africa than we’ve
of having an independent party, with some skin determine if the towers are strong enough to hold
seen Indus-style operator joint ventures. We’ve
in the game, who is able to push a deal through as additional antenna, and whether there is space in
discussed the potential benefits for operators
a middle man between operators who’s working cabinets for additional equipment. These issues
to share towers in a joint venture deal, how can
relationship might not be strong enough to create can be overcome, but if you need to replace towers
third party tower companies add value?
a joint venture. In this manner, towercos are able and expand cabinets that means heavier capital
to create value where no deal would otherwise be investment. In our experience, in Africa and
Booz & Company: Joint ventures between telcos
possible. the Middle East many operators have deployed
generate the most value, as they don’t have to give
moveable towers, so the capacity for additional
up a management / operating / profit “fee” to a third
In Africa it may also be helpful that towercos can loading may be much more limited.
party.
bring cash to the table, enabling rapid build-out.
However there may be less investment appetite While rural areas in African typically rely on
Especially in Africa, we often encounter concern
for smaller tower portfolios or towers brought to microwave backhaul, the use of fibre or leased line
that working with a third party towerco means
“
losing control over with whom assets are shared, a
particular concern where the competitive positions
of operators are very different. The concern is that
if a towerco manages the assets, they might be able
to generate limited value with few towers shared
except for competitors to cherry picking high value
market late.
Shareability depends on operators’

willingness to open up assets in
“
certain high value, high population
connectivity in cities compromises shareability as
it can make it difficult to reconfigure networks if
sharing requires that you move towers.
Then you have to consider the financial feasibility

of sharing as a factor in shareability. A portfolio
of towers might constitute an attractive number
towers, accelerating their ability to compete for high density locations for sharing
for a substantial sharing deal at the outset, but a
value customers.
bottom up analysis of shareable tower gives you a

significantly lower number of towers that could be
brought to market, and that affects their value.
Participate in the TowerXchange community
TowerXchange: Are infrastructure sharing
deals in Africa resulting in many sites being
decommissioned?
Decision makers
at operators
Booz & Company: While network sharing
in Europe can mean 40-50% of sites are
ultimately decommissioned, we’d anticipate less
decommissioning in Africa, where towers are more
Investors & Independent
frequently moved rather than decommissioned,
advisers towercos
although moving towers is still a painful and
complicated exercise particularly with regards to
(fixed) backhaul. With operators upgrading to real
3G and, in some cases soon to LTE in African cities,
and with market share and usage patterns so much Tower Xchange
more difficult to forecast in Africa, CTOs rightfully
see no point in decommissioning towers they might
need in two to three years. Hence the importance
of establishing a clear view on how user numbers Regulators & Tower
and traffic patterns will evolve over the next years policy makers manufacture &
before starting a network sharing redesign exercise. installation
It can be complicated to structure decommissioning Equipment

of sites where multiple operators have assets & managed
covering the same subscribers. The site may services
not be as important for local traffic as it is
for transmission. Some sites are shared with
other operators and hence cannot easily be
decommissioned or moved. And in many cases
operators signed long term leases that have to be
paid for anyway. So unless decommissioning is
Join the TowerXchange LinkedIn™ group at
structured effectively, it can mean it takes 20-25
years to realise the benefits of network sharing www.linkedin.com/groups/TowerXchange-4536974

Tower Xchange
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Standard Bank: aggressive bids likely to continue

Who’s who: turnkey infrastructure and law firms

The front lines of the African Tower Industry

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lukewarm response to Bharti Is Infratel’s valuation symptomatic of investor coolness

Infratel’s IPO economy? According to the Wall Street Journal “Bharti

An analysis of the subscriptions could be interpreted

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Towercos account for an increasing Selling to towercos is reportedly a case of “slow,

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Highlights of this special feature:

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bankable investment? by independent towercos, then Africa’s towercos

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the market for new towers, for

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continue as African tower price?

industry matures Nina Triantis, Managing Director, Global Head of

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American Tower’s appetite for

TowerXchange: Does American Towers’ cost of

It’s a difficult task to raise funds. While a lot of

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TowerXchange: From an investor’s perspective, I wouldn’t be surprised to see tower operators

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I think tower operators are focused on site-level

If certain transactions involving thousands of

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for new market entrant Africa’s telecom infrastructure assets.

Prospective new market entrants come from three

towercos in Africa? categories:

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The United States has one of the most mature tower

Nathan Foster, President & CEO, Atlas Tower

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Nathan Foster, President & CEO, Atlas Tower

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above two will be difficult

to achieve in Africa… Ghana and Tanzania.

TowerXchange: What’s your view of the African

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Laurent Viviez, VP & Partner, AT Kearney: Many

Laurent Viviez, VP & Partner, AT Kearney: I feel

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TowerXchange: In the report “African Telecoms Fuel server device

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Others includes penalties, under-recovery

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Your legal “how to guide” includes:

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