Pedro Yarahuan joined Ballard Power Systems almost two years ago, after more than six years of experience with other fuel cell manufacturers and twenty years at Ericsson. His wealth of knowledge goes beyond fuel cells and their applications, and spans into the key dynamics of the telecom tower industry in the CALA region. In this exclusive interview, he shares his views on Ballard’s offerings, challenges and opportunities of urban and rural sites in Latin America, and some interesting insights as to opportunities beyond passive infrastructure for carriers and towercos.
TowerXchange: Please introduce Ballard, its key activities and footprint with regards to Latin America
Pedro Yarahuan, Director of Sales – CALA Region, Ballard Power Systems:
Ballard is a global company offering fuel cell technology solutions to a variety of industries. Fuel cells are a clean source of energy and to date, we have shipped around 150 MW of hydrogen fuel cells worldwide and thousands of systems designed specifically for outdoor telecom sites.
The Latin American market is one of our fastest growing regions. In 2013, we counted twelve commercial deployments and to date, the count has increased to fourteen. Our customers are all major regional carriers including América Móvil, Telefonica, Digicel and LIME as well as TSTT in Trinidad and Tobago and Bahamas’ BTC. We have two new deployments in the pipeline which will bring our project count to sixteen over the course of 2014.
We address the backup power needs for the global, and specifically Latin American, telecom markets and focus our attention on outdoor sites with power demands up to 5kW DC.
The ideal sites for Ballard solutions are in urban environments, where regulation forbids the use of diesel generators; or areas with a high degree of theft and security problems which result in diesel generators being stolen, and rooftops.
TowerXchange: Latin America is experiencing a high growth in demand for rooftops. How is Ballard’s offering suitable for rooftops?
Pedro Yarahuan, Director of Sales – CALA Region, Ballard Power Systems:
Fuel cells are an ideal solution for carriers and tower companies looking at setting up cell sites on rooftops as they allow them to overcome the problems caused by traditional diesel generators.
In fact, landlords usually don’t allow the use of diesel generators on rooftops and, if they do, they’d demand that the carrier provide power for the entire building rather than for the cell site alone. This means that the carrier is forced not only to equip the rooftop with a very large diesel generator but it’s also deemed responsible by the landlord in case of its failure.
Hydrogen fuel cells eliminate this problem from the root.
TowerXchange: What are the advantages of hydrogen fuel cells from an environmental perspective? And from a technical and economic standpoint?
Pedro Yarahuan, Director of Sales – CALA Region, Ballard Power Systems:
The environmental advantages are a key component of our offering. In fact, the fuel used in our systems, also called hydroplus, is 100% bio-degradable and spill control requirements are very light given its properties. This results in considerable savings in terms of site preparation and spill containment procedures.
Fuel cells are a silent, light solution. Our generators weight less than 300kg and are relatively small compared to traditional DG. Moreover, they don’t require connectivity to the AC panel as they consume a small amount of DC power (250W) in standby.
The Ballard remote monitoring capabilities are extremely powerful. Systems are built from the ground up, considering SMNP protocol requirements, which virtually interfaces with every NOC centre available in the market. Practically, this means that the technician does not need to go to the site to perform advanced troubleshooting, verify its status and, if needed, connect with the factory and with the main office to solve any problem straight away thanks to the availability of local trained technicians and a tiered support system back to the experts at Ballard. The result is very low incidences of downtime and much faster response times supporting end users of the technology. This is a very big differentiator of our technology against anything else in the market.
Someone might object that our products aren’t the most economical. But we are confident that the Total Cost of Ownership (TCO) of our fuel cells clearly shows the economic advantages of using this technology. These economic facts are publicly available on our website.
Featuring fuel autonomies of 40 hrs and above, thanks to the system’s ability for truly dynamic power delivery, coupled with very low cost of preventive maintenance by only having to clean or replace two air filters every year (or every 500 hours) and refuelling as needed, make this solution a great choice for telecom carriers.
TowerXchange: Which regions and specific areas demand fuel cells rather than traditional generators?
Pedro Yarahuan, Director of Sales – CALA Region, Ballard Power Systems:
Ballard fuel cells are the perfect answer for high-end residential areas, and busy commercial settings equipped with rooftops.
Imagine a site in Kingston, Jamaica or in Nassau, Bahamas. In these areas, a call from a tourist can cost up to US$ 5 per minute and the local carrier simply cannot afford a low quality service. This is where our solutions come handy.
Towers based on seamless pipes projects has the highest antenna surface, therefore they are the most suitable option for multiple tenants from the first erection
Imagine a site in Kingston, Jamaica or in Nassau, Bahamas. In these areas, a call from a tourist can cost up to US$ 5 per minute and the local carrier simply cannot afford a low quality service
TowerXchange: TowerXchange: How does the business case for fuel cells at off-grid sites stack up in Latin America and the Caribbean?
Pedro Yarahuan, Director of Sales – CALA Region, Ballard Power Systems:
In remote, off-grid areas Ballard fuel cells need to be part of a more complete balance of plant involving alternative generation, battery banks and controllers . We will be happy to cooperate with carriers and site owners looking at providing coverage in remote areas as our fuel cells are an ideal complement for these types of solutions going forth.
It is also pertinent to mention that carriers struggle to make good RoI when providing coverage to remote, off-grid areas. The site revenue just does not justify high OPEX solutions. At the same time, carriers struggle with investing on expensive CAPEX solutions, as it would take decades in recuperating investment. That’s the challenge of off-grid sites. I am referring to very small villages in very remote locations throughout the CALA region where communities are likely to share few phones, mostly with pre-paid plans and maybe single digit internet connections. The business case to reach these areas needs to consider government investment to help carriers justify CAPEX or OPEX investments and we foresee that such availability of funds will take some time to develop.
On the other side and to date, the opportunity in Latin America is now well beyond coverage and is focused heavily on differentiation of services in urban areas and multiple services with the same access to the subscriber. People want more offerings, products and competitive bundles and this is what carriers are paying close attention to. Remote areas will take some time to become a priority.
TowerXchange: Is security a major problem in Latin America? If so, which areas are posing the hardest challenges?
Pedro Yarahuan, Director of Sales – CALA Region, Ballard Power Systems:
From a security standpoint, some areas of Latin America pose hard challenges to overcome.
In fact, theft of diesel, copper and equipment is a reality especially in areas affected by natural disasters and endemic poverty. Moreover, remote areas present additional technical challenges that require expertise beyond imagination. When a company is required to install a system on top of a high mountain or near a volcano, the team involved in the project doesn’t only have to be technically equipped but able to sustain physical challenges, modify site environmental conditions, etc.
With specific attention to theft, security is an issue not only in remote areas but can affect urban sites as well. We are aware of sites placed in key metropolitan locations where generators are locked in cages and patrolled 24/7.
TowerXchange: Are you currently working with tower companies as well as carriers?
Pedro Yarahuan, Director of Sales – CALA Region, Ballard Power Systems:
To date, we haven’t started working with tower companies but we are very eager to discuss our solutions to them.
The key opportunity for the tower industry to serve carriers with power solutions is finding a solution to the severe fines imposed on carriers by the LatAm governments for shortcomings in site availability and/or quality of service. Energy provision to the site can stop functioning not only due to lack of maintenance but in case of natural disasters as well as theft.
The key opportunity for the tower industry to serve carriers with power solutions is finding a solution to the severe fines imposed on carriers by the LatAm governments for shortcomings in site availability and/or quality of service
Therefore, and due to the aforementioned potential fines, tower companies are reluctant to get involved in selling energy to carriers as an additional service as they would then be responsible for continued power service, which in the event of a power failure, could result in carriers directly passing through penalties issued by the government to the tower company.
We believe that tower companies could add value to the industry by offering extra services such as power, but the trend of towercos owning sites is a relatively new dynamic in the region and the balance is still being defined.
In light of this, many co-located sites have one generator per tenant which is far from being a cost effective solution. In order for things to change, the tower proprietors need to open a channel of conversation with local regulators to eliminating or amending the penalty system. If governments decide to eliminate fines, tower companies could add lot of value to the telecom industry, beyond passive infrastructure.
TowerXchange: What’s your view on why América Móvil have been more reluctant to sell their towers than other LatAm carriers?
Pedro Yarahuan, Director of Sales – CALA Region, Ballard Power Systems:
There are carriers that see their passive infrastructure as strategic, amongst them, América Móvil. Some carriers define sites as “productive” as they generate revenue for the company by generating excess electricity at some of its sites and sell it back to the National utility company.
Telecom sites are normally placed in the best traffic locations throughout the region and this is the key reason for some carriers to not wanting to sell nor share their sites. One of the few exceptions is in high end beach resorts where, due to regulatory limitations, carriers need to share towers.
Tower companies could create productive sites just like other carriers do these days. In some instances, telecom sites are conceptualised as “telecom oasis” because all the equipment can be hidden in sculptures and site can host a variety of services such as stores, hotspots, coffee shops, restaurants, etc. These sites aren’t just telecom hubs but fully operational commercial centres that generate revenue for carriers and its affiliated commercial partners.
Tower companies could create productive sites just like other carriers do these days. In some instances, telecom sites are conceptualised as “telecom oasis”... These sites aren’t just telecom hubs but fully operational commercial centres that generate revenue
TowerXchange: How do you see carriers’ strategies evolving in the 4G era?
Pedro Yarahuan, Director of Sales – CALA Region, Ballard Power Systems:
I believe that regional carriers are looking beyond passive infrastructure sharing and more closely at active infrasharing. This is a very interesting option for carriers looking at cost-effective options to rollout 4G LTE but it’s definitely a threat for tower companies as it reduces the number of potential tenants they can attract to their sites.
Interestingly, while some carriers haven’t shown strong interest in Latin America to share its passive or active infrastructure, they also own MVNOs in the U.S., One example is TracFone, owned by one important LatAm regional group, where the carrier is heavily involved in buying capacity rather than towers in North America. TracFone is a very agile company able to offer cost effective plans and devices to its subscribers, and the company doesn’t need telecom towers.
An interesting trend along those lines is the Multi-Play strategy which is now gaining popularity in the Caribbean.
On these sites, the carrier installs a system called DLC (Digital Loop Carrier), which can provide TV services, landline, mobile, hotspots and security services via a single access point to the subscriber. This means that whoever owns the best real estate to locate a DLC access point will be able to offer multiple services to its customers, hence an important revenue generator to the carrier.
I think tower companies should take a closer look at this trend as they could potentially get involved too. In order to function, the site of a Multi-Play system needs to be within a ½ mile of the subscriber, which implies a need for cell site densification in the areas where it’s offered.
