Towerco opportunities and challenges

 

September 2017

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Opportunities

Tower companies have been popular in India, China, and parts of Asia, Sub-Saharan Africa, and South America. MNOs must satisfy the customer demand for 3G and 4G services, and tower companies have to provide them with the infrastructure required to address the growth in data services.

Well established in the US, tower businesses are now spreading to Europe. More and more European mobile operators are considering spinning off their mobile infrastructure in order to streamline their business and fund new investments. Indeed, growth in data strains the networks of without bringing equivalent revenues. Tower companies are ready to jump on the opportunity.

5G will bring further opportunities for tower companies as advanced network technology and extra sites will be required.

 

Challenges

However, tower businesses face a number of challenges:

  • A number of mobile operators are reluctant to relish the strategic control of their infrastructure to tower businesses

  • Completing a tower co deal is a challenging process, requiring a large effort over a long completion time (two to three years), involving legal and accounting risks, as well as resistance from technical staff

  • The regulatory framework and the operational environment can be difficult in developing markets

  • In several countries such as India, MNO mergers have reduced tenancy ratios and even the number of co-location sites

  • In some regions, intense competition, price war, and cost reduction have left MNOs unable to invest adequately in infrastructure

 

Solutions

To overcome those challenges, tower businesses should:

  • Foster sound partnerships with mobile operators, demonstrate their capacity to reduce TCO, build their track record in infrastructure management

  • Demonstrate their added-value to government bodies

  • Invest in infrastructure which can be shared across MNOs

  • Be more energy efficient, using hybrid power systems

  • Deploy IoT and cloud to manage sites, in order to cut operating costs, decrease down-time, and strengthen security

  • Invest in small cells and Wi-Fi, to enhance in-building coverage and the quality of data communications

 
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