Mobile tower firms turn the corner

The second year of building is under way for the tower companies working to extend coverage for Telenor and Ooredoo, moving steel and concrete by truck and buffaloes to thousands of sites around the country.

Apollo Towers global project management officer Bill Pollack said the firm has learned a lot in the last year, as it worked through difficulties such as obtaining leases and permits and contending with the weather.

“We’ve learned how to do this,” he said. “We’ve learned how to get past the rainy season – in fact we’re already preparing for it. We’ve hired our teams of water buffaloes because it’s the only way you can get steel to sites in the rainy season. Trucks can’t make it.”

There was intense pressure in the industry last year to get the steel in the ground so the two foreign telecom operators could begin services on time.

Ooredoo and Telenor selected two tower companies apiece early last year for their initial build – Ooredoo with Myanmar Tower Company and Pan Asia Majestic Eagle, Telenor with Apollo and Irrawaddy Green Towers. With further rollouts coming from them as well as MPT and possibly a fourth operator, winners and losers among the tower companies are likely to emerge.

There are also at least two more companies – including Young Investment Group – that are looking to enter the business.

Generally, tower companies make the initial investment to build each tower and provide for upkeep and power the site. The operators then place their equipment on the tower, paying a regular lease instalment for the privilege.

Tower sharing has also only happened on a limited scale in Myanmar so far, but the next rollouts may see more extensive use of the concept.

“We were encouraged to [share towers] and it makes sense,” said Ooredoo Myanmar CEO Ross Cormack. “The difference we make is through telecommunications services, so if we can speed up the rollout by sharing, if we can lower the cost of rollout by sharing, both of these allow us to reach more people more quickly and more cost-effectively.”

Tower companies generally make a large up-front investment while securing and building the site and then earn revenue through leasing space to mobile service providers. In general if the tower company has more than one tenant it is able to earn more revenue, while the service providers often end up paying less if they co-locate with a competitor.

Telenor CEO Petter Furberg said savings can be passed on to its users, as tower sharing cuts costs. “We have always said, and I believe our competitors are saying the same, that tower sharing and fibre sharing make a lot of sense in Myanmar.”

There are also savings on electricity use if a tower is carrying equipment from more than one company.
Tower company officials say there is the possibility of interference from overlapping equipment on a shared tower, but it is closely monitored and so far not much of a problem.

Mr Pollack said his firm had designed its business model around sharing. “Sharing is good for everybody,” he said. “It’s good for Apollo because we can charge the operator less and still run a sustainable business. It’s good for the operators because they pay less. And at the end of the day it’s good for Myanmar citizens because cell phone [costs] are dropping and will continue to drop.”

Still, tower sharing means there may not be a need for as many tower companies, forcing consolidation in the sector. Industry insiders told The Myanmar Times that in the long run there will likely be three or four tower companies, as opposed to the four to six there are today.

Mr Pollack said some discussions are currently under way that could result in consolidation.
Still, whether one or another tower company is building a tower has minimal impact on an end-user, provided the quality is high enough.

Mr Pollack said the consumer should never know what tower company is involved, as it is part of the infrastructure.

“When you take a railroad from point A to point B, you don’t know who built the tracks and you’re not supposed to care, as long as the quality is there,” he said.

A big change on the horizon is the possible entrance of a fourth mobile operator. Mr Pollack said they could decide to share entirely rather than build their own towers.

Still, some of the initial headaches for the tower companies, including permits and construction techniques, are now more understood.

“The factory is humming along,” he said.

Source: Myanmar Times

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