Operators Buy Obsolete Towers, Seek Investment for Upgrade

Telecommunications tower operators are seeking fresh funds from international finance institutions to upgrade some outdated base transceiver stations (BTS) they acquired from telecommunications operators which offloaded thousands of tower their assets to save cost and concentrate on their business.

It would be recalled that leading Nigerian and African mobile telecom operators, including MTN, Airtel and Etisalat recently sold off over 30,000 tower assets in a move that signaled adoption of a new business model predicated on cutting operational costs to shore up the average revenue per user (ARPU) from voice subscription to independent tower management companies.

Nigeria CommunicationsWeek that some of the towers acquired in these deals are outdated and are not of economic value in the present model in the tower business.

Also because of the way some of the towers were designed and built, they can only house a single base station and cannot host multiple operators.

A top staff of one of the tower operators who does not want his name in print said that “these towers acquired are small sites; telecom operators built them when their main focus was on coverage, that helped them cover more areas and did not envisage colocation model, now for such sites to be of economic value to the companies that acquired them, they will have to upgrade them to colocation standard. Such upgrades are in height of the towers, land space to accommodate other operators’ base station as well as generators.”

The staff added that the small design of those towers made it difficult for operators that own them then to share them with others operators which forced such operators such as internet service providers and code division multiple access (CDMA) operators to invest in building their own towers even when they didn’t have the resources.
 
Nigeria CommunicationsWeek also learnt that tower operators have today changed their business plan in terms of building additional towers.

Before now, they built towers in anticipation of demand by operators but they now build on demand.

“What we are doing now is for us to go to where the telcos want us to go. If any operator comes to us and say we want to expand our network, give us this number of towers and in these locations we will build for them,” he noted.

Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), said that the development in the management of towers is a testimony that the country’s telecommunications industry is responding to the dynamics of global economic trends, which makes operators more efficient as they focus on the core competent of service delivery.

“In Nigeria, tower operators are faced with problems of approval cost, multiple regulations, multiple taxations and maintenance cost,” he said.

He added that the present system of handing over towers to tower operators will create more jobs as it encourages springing up of supportive players in the industry.

“This is also fallout of our internal regulatory mechanism to ensure growth in the industry. More so, tower sale could be as a result of administrative reasons, cost reduction or shareholders decision,” he said.