Multi-country turnkey infrastructure solution provider ieng Group has seen their business transform from an initial focus on site build and upgrade, to focusing on longer term O&M contracts. ieng Group increasingly see Africa’s ‘Big Four’ towercos as their primary clients for managed services, tower surveys and strengthening, and for build-to-suit programmes. ieng Group has also recently opened an office in Myanmar.
TowerXchange: Please introduce ieng Group – what role do you play in the telecoms infrastructure ecosystem?
Kadri Hakim, COO, ieng Group:
ieng Group Group is one of Africa’s leading turnkey infrastructure solution providers. We are established in twelve countries: Algeria, Burkina Faso, Cameroon, Congo B, DRC, Ethiopia, Ghana, Rwanda, Uganda and Zambia. Our newest and soon to be biggest operation is Myanmar. Our headquarters are in Lebanon. We’re a cash flow funded, Lebanese-Canadian company, co-founded by myself and CFO Rami Shibley.
TowerXchange: What are ieng Group’s capabilities, and can you tell us who some of your key clients are?
Kadri Hakim, COO, ieng Group:
We plan, procure, build, optimise and maintain telecom infrastructure. We also provide tower manufacturing through our partner Eki-Struct.
Most of our business now comes from the Big Four African towercos, although we also work with MTN, Airtel, Orascom and Ooredoo.
TowerXchange: Did you win your managed services contracts after the towercos acquired the towers, or was the relationship with ieng Group transferred from MNO to towerco with the tower transaction?
Kadri Hakim, COO, ieng Group:
We were already providing managed services to the MNOs – after the acquisitions our contracts eventually became with the towercos.
Towers are the core business of the towercos – they know exactly what they want, and they know exactly what it costs. They want the same services we are currently providing to MNOs, but with a higher service quality – reflected in the SLAs.
TowerXchange: When towercos enter a new market, how do managed services providers like ieng Group position yourselves to secure new contracts?
Kadri Hakim, COO, ieng Group:
We find out about the tower transactions after the deals close, not before. We use the experiences and credentials we have from our existing relationships with the towerco to enter new markets.
TowerXchange: Do you forsee there still being a role for the tier one OEMs, Ericsson, Huawei, Nokia and ZTE, in managed services for passive infrastructure in Africa?
Kadri Hakim, COO, ieng Group:
When they were maintaining both the active and passive infrastructure for the MNOs, it made sense. But towercos don’t own active equipment, so they have no need to use a vendor like that for managed services. We believe the towercos will work more and more directly with companies like us to manage their passive infrastructure, leaving MNOs still working with vendors for the management of active infrastructure.
TowerXchange: What is the balance of your business between EPC contracts and O&M?
Kadri Hakim, COO, ieng Group:
When we started the company in 2007, all our business was EPC – site build and refurbishment. When the EPC business started slowing down from 2009-10, we went into O&M. We now have more than 3,000 sites under management.
O&M provides good recurring, stable business; we know the work is coming. We try to stabilise our operations on O&M revenue, such that any EPC revenue is the cherry on the cake.
ieng Group provides managed services for both passive and active infrastructure.
TowerXchange: What are the implications for your business of the current wave of tower transactions in Africa, with towercos acquiring 17,877 new towers in the last quarter alone?
Kadri Hakim, COO, ieng Group:
We believe all the managed service providers will see a surge in their businesses. Towers are the core business of the towercos, they are well financed and will invest in new site builds, refurbishment programmes, strengthening for co-locations and energy efficiency programmes.
With the recent wave of tower transactions, towerco’s short term focus is to understand and stabilise the networks they just acquired, and to understand the quality of sites – based on which they will determine which towers they have to refurbish or upgrade. Then they will tackle co-location sales and building new sites for their anchor tenants – the framework agreements often include a build to suit programme.
TowerXchange: What do you anticipate being the impact of the increasingly important role of towercos on the build to suit market?
Kadri Hakim, COO, ieng Group:
Whenever we’ve been asked to execute build-to-suit programmes for the towercos, they’ve built towers with capacity for at least three tenants.
We’re not seeing a lot of single tenant towers being installed any more – EPC contracts from MNOs have decreased significantly.
TowerXchange: What factors influence the cost of upgrading a single tenant tower and power solution to be suitable for multiple tenants?
Kadri Hakim, COO, ieng Group:
The power system has to be upgraded or replaced to suit the new power requirements. The tower part is more complicated and depends on the load of the existing tower structure. We have been providing tower strengthening services to a lot of towercos. We do a structural analysis of tower to see if it is suitable to take another operator. If it isn’t suitable, we provide and implement a strengthening solution. Occasionally we find there is no solution and the tower has to be replaced – or we might find that the cost of strengthening is so great that it’s preferable to build a new tower.
TowerXchange: How do the priorities of the Myanmar towercos differ from those in Africa?
Kadri Hakim, COO, ieng Group:
The towercos in Myanmar are undertaking a massive build to suit program rather than acquiring existing networks which involves refurbishment, upgrades and tower strengthening services. Myanmar is witnessing for the first time a substantial telecom site deployment, so the priorities and challenges are very different. Because it’s new network being deployed, all the towercos have the possibility to utilise the most recent technologies in telecom passive infrastructure, for example they are putting in place the most recent hybrid power systems; energy efficiency programmes and security locking systems.
TowerXchange: Finally, please sum up how you would differentiate ieng Group from other turnkey infrastructure firms in SSA and Myanmar.
Kadri Hakim, COO, ieng Group:
ieng Group has an edge thanks to our well-structured, flexible management system which allows us to adapt to the local culture with our global experience. We understand what’s required locally to adapt our structure and be the most efficient turnkey infrastructure firm in each country. We are also fortunate to have a young, experienced, motivated, smart management team that excels in their work.
ieng Group is happy to follow its clients into new countries – we typically start two new operations every year. This includes following the Big Four towercos as they enter new markets in Africa. We know how they work, and they know what to expect from us
ieng Group will be exhibiting at the 5th Annual TowerXchange Meetup Africa & Middle East, being held on 3-4 October at the Sandton Convention Centre, Johannesburg. Visit the website for more information
