GSM TP on how to adapt tower design and packaging to the unique challenges of deployment in Myanmar

Myanmar needs 10,000 towers - maybe more. And Myanmar needs towers fast! However, importing towers into Myanmar is not easy, and inland logistics are a huge challenge in the context of the country’s under-developed transport network. This all adds up to a tremendous opportunity and a tremendous challenge for telecom tower manufacturers.

TowerXchange first spoke to GSM Telecom Products about their activities in West Africa. We revisited CEO Christian Strømme to hear how they got into Myanmar early and developed the local contacts necessary to tailor their designs and packaging to meet local requirements.

TowerXchange: What’s your view of the opportunity for tower manufacturers in Myanmar?

Myanmar is a great opportunity for all parts of the Telecom industry, but for tower manufacturing it is one of the last real golden opportunities. There are only a few of these type of green field markets left, and when the rumours started that the legislations would soften in Myanmar we quickly found partners in order to start positioning ourselves.

There are a lot of different estimates of the number of towers that will be built, ranging from 5,000 and upwards towers over the next five years - the only thing they have in common is that the numbers are big, and that it will take time to reach the targeted number, hence Myanmar will be an important market for the coming four to seven years for most of the tower manufactures. The time pressure that is included in the license agreements are also extremely strict which enforces that more players will be part of the rollout.

TowerXchange: What are the practicalities of importing towers into Myanmar - where are they typically shipped to, what are the customs costs and procedures, and who handles inland logistics, given the relatively under developed transport infrastructure in Myanmar?

I think that most of the towers will be sold CIF Yangon (Costs, Insurance and Freight through to Yangon), and that the local companies will handle it from there. Already that will give trouble to some of the suppliers that do not have a strong local network.

For the importers we already see several difficulties, firstly the increased business in Myanmar is already now leading to congestion on the ports, then you have a finite holding capacity at the ports, and the final difficulty is the challenge creating enough capacity to get things out of the ports.

Customs is also an issue. Towercos are believed to be allowed to import tax free when they get their licenses, but seeing the time it has taken for the operators, I believe that there will be some import problems. As far as I’ve understood the rate for towers is not a problem, which for steel towers is in the neighborhood of 1.5% (the rate is higher for other products in the telecom supply chain like energy solutions). The problem is rather one of securing permission to be allowed to import telecom towers.

For our bids we have offered CIF Yangon for most of the towers, but as mentioned we started focusing on Myanmar early, and we stated very clearly that we wanted to help and be part of the local activities for our customers. So since May last year we have had two local transport agents working with us, both for internal freight and imports - with all the challenges we have had to overcome, I am happy that we started early! We are also investigating alternative routes, via Thailand or China, in to Myanmar, in order to get around the port congestion, but also that has its own challenges. I think that our local network will be what helps our clients in the end.

TowerXchange: How do the aggressive rollout timetables affect the urgency of tower production and delivery? Is there an opportunity to hold inventory in Myanmar?

The rollout timetables are actually really aggressive. Production is not an issue; the capacities at tower manufacturers’ factories will handle the demand, however, I believe that there might be more capacity issues at the local construction level. Demand will exceed the experience in the start of the project. What we have seen before is that there is a steep learning curve when a country starts a mass rollout, and we are therefore offering to be part of the process also after the tower is supplied. This local presence from our side helps our customer in streamlining the rollout, minimising warehouse time, ensuring minimum material loss and of course helping with the tower building, training et cetera. Most important for us is that we will be there to find solutions which are helpful in Myanmar.

We have therefore developed a strong relationship with several of the local construction companies, both to help them develop to our towers, but also to exchange insights from the rollout. In a big rollout we did a few years back, we saw that there were a lot of problems with the foundations, so we standardised the foundations for the towers between certain heights, and made three types of foundations, in order to keep things simple. In this specific project we also saw that the rainy season became a problem for the rollout, so we progressed to develop these three foundations to be a single raft foundation placed on top of the soil, saving both time and money. We do not yet know what will be the biggest problems in the Myanmar rollout, but we have already started to develop some small special features based on working with our local contact network.

Due to the special modular design we are using in Myanmar, we feel confident about the possibility to build a good and flexible inventory over time. The main idea of our modular design is that it allows us to minimise the number of different towers and still cover all the Ooredoo and Telenor heights, and also the last MPT tender. So we plan to start with a small but flexible inventory, and increase it if there is a demand for it. Currently we are on the brink of sending our first sites to Myanmar, and as part of that we plan send a few sites to our warehouse facility.

TowerXchange: Given that the majority of Myanmar’s tower network will be shared from the outset, how does that affect tower design? Are almost all the towers you’re sending to Myanmar heavier, multi-tenant towers?

You are dead on, most of the towers are multi tenant towers, however there’s two strategies to this; either upgradable towers or buying multitenant towers at the outset.

An upgradable tower is a tower which is already made ready for later upgrades, with pre-punched holes and pre-designed upgrade kits. We are usually advising the latter, as the short term capex saving is not close to the costs of upgrading later, but here it is a question about how reasonable the operator demands are, and how many sites would need upgrades when one, two or even three extra tenants are added - this is then a strategic discussion that the towercos will have to calculate the effect of.

TowerXchange: Finally, please sum up how GSM Products have adapted your designs and logistics to meet the unique requirements of rolling out towers into Myanmar.

As with any project, we are tailoring every tower uniquely for each wind zone and antenna load, and optimising everything for the client.

Our local presence in Myanmar has suggested two specific features we have focused on in our designs for Myanmar: 1) easiness of build and 2) easiness of local transportation.

With easiness of build I mean that as an addition to our standard packages of documentation and detailed building guides, we have designed the towers with as few members as possible. This is done to keep the chances for building errors and material loss at a minimum.

With easiness of local transportation I mean that we have designed all pieces to be as small as possible, as several of the sites will be in areas where transport is almost impossible with trucks or boats, so we need to consider “carryability”. We have set a maximum weight for the members and will pack smaller pieces in maximum weight bundles. The maximum weight was set together with the local contractors, to whom we also offer hand carrying kits (straps and hooks) together with each tower. We have therefore adapted our SmartPack system for the challenges in Myanmar.