The global telecom power supplier

Caterpillar is a global leader in energy equipment for many sectors, including telecoms. In the tower industry they have supplied generator sets and hybrid systems for many years. As well as powering cell sites, Caterpillar has also been a leader in the data centre industry since its birth, powering much of the digital infrastructure the world relies on today. As the world transitions to 5G increased power demand will lead to some very interesting challenges, and an increase in the commonalities of the two spaces. Caterpillar, and its dealer network, have been offering remote asset management, and ESCO-like services for many years, and will play a major role in telecom tower power for years to come. TowerXchange speaks with Neil Smith, Sales Manager - Europe Africa Middle East and their plans for the sector. 

TowerXchange: Please briefly introduce Caterpillar, and your history supplying the telecom industry.

Caterpillar is a global leader in supplying and servicing equipment for the construction industries, resource industries and energy and transportation sectors. As a global business we are a Fortune 100 company, one of the thirty on the Dow Jones Industrial Average and have also been named to the Dow Jones Sustainability Indices. In addition to physical products and parts and service support, we also have a financial products business which supports our dealers and customers.

In the energy sector we are a recognised world leader in diesel and gas engines, industrial gas turbines and increasingly in renewable energy solutions. It is our Electric Power Division which works most closely with the telecoms industry, having powered tens of thousands of towers across the world, and also powering many of the data centres that support mobile data.

In the tower industry we have supplied generator sets and hybrid systems for many years, initially working directly with operators, and then through the growth of the towerco industry. When the industry was being built in the Middle East and Africa we already had dealers in place to provide local expertise and service support (and often provided logistical and security support in the very early days of GSM rollout).

TowerXchange: Caterpillar has a global presence through its dealer network, can you explain the benefits to customers of this route to market?

Caterpillar has a network of 168 dealers serving 193 countries, some of whom have been with Caterpillar for generations – for example our dealer in Lebanon celebrated its 90th anniversary as a Cat^® dealer this year. Our global presence means we can assure the same level of support to telecom customers expanding into new markets, almost wherever they go they will find an active Cat dealer with world class support services and infrastructure.

Many of these dealers are major companies in their own right, with the financial strength, logistical networks and local knowledge to allow growing customers to quickly scale up their operations in new places.

TowerXchange: 5G is driving a convergence in digital infrastructure, how is Caterpillar reacting to this trend?

Caterpillar has been a leader in the data centre industry since its birth, and we power much of the digital infrastructure the world relies on today. As we are also heavily involved in the telecom tower industry globally, we can see a lot of commonalities in the two spaces.  Uptime is critical across the network. Both mobile networks and data centre infrastructure are seeing continuous growth in demand, and in capital expenditure.

The hosting of cloud data in co-location data centres and co-location of mobile networks by towercos are driven by the same economic drivers.  The Caterpillar approach in both industries is to work with end users or service providers to support critical uptime requirements with solutions that optimise life-cycle costs. The optimum solution in most cases will be a combination of product and services, often including financial services.

If, as expected, the rollout of 5G requires our customers in the mobile industry to become data centre operators as well as tower operators we already have the expertise to help them be successful in that transition.

TowerXchange: How do you see power requirements at cell sites changing with green agendas and increased data consumption in the 5G-era?

We have all seen over the last decade the transition of cell sites in the MENA region from being diesel powered to being mostly hybrid powered, which is driven as much by economics as by any green agenda. However, the increased power demand of 5G could lead to some very interesting challenges. Increasing solar power supply on existing tower sites could be difficult given the space claim requirements of larger panels, which could lead to a greater use of diesel power in the mix.

At the other end of the scale, the potential for more distributed small cell coverage in cities, which would appear simple in developed markets with reliable grid power, could prove challenging in some of the MENA markets where reliable power supply is an issue.

The optimum solution will probably not be a “one size fits all” 10kW base station. We are likely to see power supply changes in existing infrastructure, and possibly see much more distributed power supply for new 5G infrastructure depending on the approach to cell sizes in different markets. As a supplier of power to the industry we know we will need to be flexible and support a wide range of products to support the divergent demands in power requirements.

TowerXchange: What has driven Caterpillar’s focus on service innovation in addition to product innovation? Can you give us a couple of examples?

Caterpillar has a long history of innovation and constantly invests in research and development, not just in products but also in service provision. As an example, our dealers have been using remote monitoring to support service operations for decades before it became industry standard – I recall myself using a system before the mobile phone revolution where generator sets would contact service technicians by pager or even in one case with a connected fax machine!

Of course, the use of modern communications makes remote condition monitoring much more straightforward and we are continuing to roll out Cat Connect throughout our product range to improve efficiency in asset management and service support.

Our remote monitoring tools now connect to a range of other service innovations – from mobile apps designed to allow operators critical data at their fingertips, to fluid sampling laboratories which monitor oil and fuel for signs of component wear which allows repair before failure and improved uptime.

TowerXchange: How can towercos use your remote monitoring and data collection systems to improve uptime and site autonomy?

The Cat Connect system allows towerco asset managers to receive and share information about their assets in real time.  Customised dashboards and web-based maps allow a view of the whole fleet, whether in the office or out in the field, allowing maintenance and service operations to be planned out proactively and in a timely manner. The dashboards can be configured to focus on key assets, or on critical KPIs to make fleet management simpler.

Where the system really differentiates itself is in Preventative Maintenance Planning, which can be either time based or condition based depending on the mode of operation and is based on millions of hours of operating experience of Cat equipment. The Cat Connect system allows the towerco asset manager to leverage the expertise of Caterpillar and the dealer organisation to optimise life cycle costs and improve equipment efficiency and life expectancy.

TowerXchange: Your dealers have been offering Cat products on rental and ESCO-like basis for some time, do you see opex-based offerings as an important growth area?

We see opex-based offerings as an important growth area across our business, not just in telecoms.  Businesses want to use their capital in their core business and leave the owning and operating of supporting infrastructure such as power supply to experts in the field.  In the telecoms industry we expect this demand to grow rapidly as operators apply themselves to the capital intensive development of 5G infrastructure.

Cat dealers have a long history of offering rental or financed solutions to our customers in many industries, and in the electrical power industry many are used to offering contracts based on hours run or cost per kWh. Cat dealers can offer a menu of options to customers, from simple equipment purchase, repair and maintenance contracts, equipment rental to full power supply contracts. In fact, after the discussion on ESCOs in last year’s TowerXchange MENA meetup, one of our dealers commented that they had been working as an ESCO in telecoms for over a decade, they just didn’t realise it was a new thing!

TowerXchange: How would you summarise the approach Caterpillar is taking to telecom power, and how does it differentiate you from your competitors?

Caterpillar’s approach to the telecom industry is rooted in our history of providing solutions to help our customers be successful. We were in at the start of the mobile telecoms industry, and in at the start of the data centre industry.  We know we can only be successful and grow if our customers are successful and grow.  We want to build long partnerships with the people in this industry as it goes through continued radical change, and we will do that by applying the combined experience, expertise and financial strength of our global family of Caterpillar and Cat dealerships.