[B-SIDE Podcast] How common tower companies help boost digital transformation

June 20, 2023

0 3 minutes read

The Philippines’ mobile network operators (MNOs) are now using shared towers to accelerate and lower the cost of digital transformation in the country as a result of the government’s common tower policy.

In this B-Side episode, Suresh Sidhu, chief executive officer and founder of EdgePoint Infrastructure Sdn. Bhd., speaks with reporter Miguel Hanz L. Antivola how telecommunications infrastructure companies support the Philippines’ digital transformation.

TAKEAWAYS

Seeking operations from third-party telco infrastructure companies grants cost efficiency and focus for MNOs.

“We can offer them much longer-term solutions for using our infrastructure,” Mr. Sidhu said on the difference in investment horizon for telco infrastructure companies building shared towers.

The total cost comes down for all MNOs, where their capital expenditures (capex) are converted to operational expenditures (opex), and sites are shared by multiple operators.

“Using us, [payback is] closer to seven to ten years, so rather than spending all that capex themselves up front, the leasing of the site gives them a payback that is much longer and, therefore, much better for them.”

“Colocation pricing is often somewhere in the region of 10-20% from the market price… so things are a lot cheaper for them as well.”

“The price we offer is reflective of the fact that any single site is able to be shared, and we don’t need just one operator to recover our investment.”

Other advantages for MNOs include ‘colocation discounts,’ faster market operations, and immediate access to sites.

“They don’t have to focus so much on infrastructure… That’s our job.”

“The operators can spend more time thinking about network quality and customer service.”

Process clarity is a key challenge for telco infrastructure companies in the Philippines.

“Acquiring the site and getting the landlords to agree to lease the rent — [it] takes a lot of time,” Mr. Sidhu said.

“You need to make sure that you’re talking to the right landlord. You know that you’ve got everything in order. I think that’s a key challenge,” he added.

This challenge of process clarity includes securing the necessary permits and establishing trustworthiness with landlords, both of which slow down the time it takes to build a tower.

“I think the local government units (LGUs) are also trying quite hard, but we know we can always improve and automate more processes.”

Local production of materials will boost telco infrastructure operations.

Mr. Sidhu noted that telco infrastructure companies in the country rely on tower imports, which result in longer wait time and greater cost.

“There’s not a lot of local production, and I think having and encouraging more local fabrication in the Philippines will improve time for delivery, as well as costs quite considerably,” he said on maximizing the local supply chain.

“Right now, we probably have to use multiple vendors, which is fine, but typically in a mature tower country, you have fewer bigger partners to help you deliver the sites.”

However, Mr. Sidhu also sees progress in terms of the growing number of skilled vendors in the country.

“Hopefully, they continue to grow and become more professionally established and skillful because it’s always a little different putting up a site in sandy soil, marshy soil, mountain areas, urban sites,” he said of local manufacturers who can help them install and prepare a site.

“We’re looking forward to some of these partners getting bigger and bigger over time, and therefore building more and more skill, so we can use them more regularly.”

Analytics and artificial intelligence (AI) will become an important part of telco infrastructure companies.

Aside from the continuous growth of 5G networks in the Philippines through good site acquisition, telco infrastructure companies also look forward to using analytics and AI to improve operations.

“What we’re now doing is using crowdsourced data to put analytics in place, to also offer ideas to the operators where we see they may need it,” Mr. Sidhu said.

“So we are able to transform over time, from being a reactive order taker to a proactive solution provider for operators.”

“It’s starting now, but we need to get more mature.”

Solving the backhaul transmission through satellites can complement the goal, but it still needs to mature.

Low Earth orbit (LEO) satellites have the opportunity to provide network coverage and stable broadband access to remote locations in the country, Mr. Sidhu noted.

“You can build a site almost anywhere, but the issue is what we call backhaul transmission,” he said.

“So if I build a site on one end of the country, but the nearest site is blocked by a mountain or 50 mountains, how am I going to connect that site?”

“We see them as more complementary and potential partners… The technology has to mature a little bit to become more reliable.”

“There’s some regulatory matters that probably have to be sorted out, but overall, we think it can be a complementary part of the solution for our countries’ infrastructure.”

Recorded remotely on June 5, 2023.