Do you know the telecom towers you see in your area could be dismantled and removed because there might be no need for such huge and bulky structures for providing next-generation 4G and 5G services?
Although this 45 meters high and ugly telecom tower has become a part of our lives, it could be simply a liability for many in the future.
At least, Jazz has off-loaded its 13,000 plus telecom towers and sold them to a Malaysian based company edotco – a tower rental firm that leases out the structure to telcos in six countries of South Asia and South East Asia, including Pakistan.
edotco took the license from PTA in 2015 for establishing itself as an independent tower company in the country for providing the infrastructure on rental to various telecom companies.
One reason for the tower sharing is to deploy one tower in any specific area and share the structure with the multiple companies instead of building four individual towers for each operator — a pattern well in practice today in Pakistan which is already creating problems for the environment, depleting energy resources, and changing social behavior. Back in May 2017, Interior Minister of Pakistan had revealed that telecom towers were causing major health issues.
So far, the Malaysian-based company has acquired and built some 700 telecom towers in Pakistan, and many of them are being availed by Wi-tribe and Ufone.
Their recent deal with Jazz will make them the most significant and only tower company in the country.
Once the contractual and regulatory approvals are taken, edotco Pakistan with the help of its local partner, Dawood Hercules Group who owns 45% shares in the company, will pay Jazz million of dollars half of which will come to Pakistan from the foreign source.
Their cumulative investment for 14,000 telecom towers will touch USD 1 billion tag.
“We have got a nod from Competition Commission of Pakistan and waiting for approval from the PTA. Once conditions are satisfied, we are in a position to make payment very next day”, confirmed Suresh Sidhu, CEO of edotco.
Are telecom towers a liability for telcos?
Yes, they are. Ever since telcos acquired 3G and 4G licenses in Pakistan for approximately $ 2 bn, the pressure to capture a significant chunk of data users have made them more worried about spending extensively on their networks; not to mention that there is a price war going on.
“Not every cell tower serve a big customer base, no matter how few customers it is catering to, it has to be up and alive for even few hundred active customers. However, feeding such sites is a challenge”, explained Arif Hussain, Country Managing Director for edotco Pakistan.
Keeping a tower active for 24 hours to serve the consumers best is a painful task for a telecom company. Energy comprises 15 – 20% cost of tower cost and when there is no electricity, a telco has to burn a lot of diesel as an alternate power source. Deputing personnel for its maintenance, paying monthly rentals and dealing with government departments add a cost that when accumulated for thousands of towers nationwide, leave no other option at the disposal of telco but to compromise on the quality of the service.
Despite payment in advance, the customer usually cries for poor telecom services in Pakistan.(jazz mobile banking story) and the operator takes the cover of exorbitant costs and taxes as a primary reason.
What are the benefits of Tower Sharing?
Lessening of metal junk in the community.
In many developed countries, telecom towers are less visible, rather camouflaged and most of the times they are installed on lamp poles where they look like no more than a street light.
There are roughly 40,000 telecom towers in all the nook and corners of Pakistan installed by all four existing telecom operators including Jazz, Telenor Pakistan, Zong, and Ufone. These cell sites if planned well and optimized appropriately could be transformed into environment-friendly structures. Their bulkiness can be shrunk down to much bearable size, and their number can be spread efficiently for supporting higher data speed in Pakistan.
Jazz, which has provided some 20% 4G and 80% 3G coverage so far would like to multiply the expansion as early as possible given it doesn’t have to think about dedicating resources for planning, building and running a telecom tower. Their tower disposal initiative might save them a considerable Opex that can be put into the system for maturing their core services.
The second largest telco in terms of the number of subscribers, Telenor Pakistan is also thriving for wider 4G coverage that is hovering around 30% at this moment. The company had gotten hold of the 4G spectrum in back in 2016, however, recently the CEO Irfan Wahab hinted at a 4G conference that Telenor Pakistan would likely consider owning its towers, unlike the rival’s approach. But edotco is hopeful to convince them sooner or later.
“It would be much hassle-free task for a telco to provide a blanket 4G coverage in the country when another expert partner is making available the 4G cell sites where they need the most”, said Suresh Sidhu
“They would like to recoup the 3G-4G investment as early as possible for investing further on their core expertise — provision of digital services through seamless and high-speed data”, Sidhu further said while talking to media representatives.
Ever since the 3G and 4G licensing in the country, Pakistan badly needs arrangements to modernize the entire telecom ecosystem. There is a need for more players to optimize the networks so that subscribers could actually get the world-class service.