Towerco leveraging Alfamart store locations to provide coverage and capacity for MNOs

One of the towercos TowerXchange identified in early 2017 was Indonesia-based PT. PERMATA KARYA PERDANA (PEKAPE). Through its relationship with Alfamart, one of the leading retailers in the country, PEKAPE is uniquely positioned to offer some of the best locations desired by MNOs for coverage, infill and capacity. Despite coming up against established towercos such as Tower Bersama, Protelindo and even MNO-led Mitratel (Telkomsel), PEKAPE has carved out a nice niche in the local telecommunications infrastructure sharing marketplace. During my visit to Jakarta over the summer, I caught up over dinner with its CEO and CTO. Read on to learn more.

TowerXchange: Please introduce yourself, your role, and company.

I am the CEO and co-founder of PT. PERMATA KARYA PERDANA (PEKAPE), and have been in this role for the last four years. I have more than 25 years of experience in the telecommunications industry across various functions, with various mobile network operators and vendors, including XL Axiata and Bakrie Telecom. I started my career as an engineer, then progressed through product development and management. Eventually I shifted back to focus on operations, honing my expertise in telecom network and IT.

PEKAPE was founded in 2013, beginning operations in mid-2014, with the vision to be a premier telecommunications infrastructure provider in Indonesia, contributing to the country’s goal to bring affordable communications to all citizens. Our mission is to facilitate faster and more economic roll-out of wireless operations throughout Indonesia including countryside and remote areas, as well as urban city centres.

I have been the CTO at PEKAPE for the last two years while also leading the day-to-day operations including business planning and development. In terms of background, I have more than 22 years of experience in the telecom industry.

TowerXchange: Can you share with us your business model?

Our business model is mostly the rental of passive infrastructure to MNO clients, based on five to 10-year contracts, under an opex model. Having said that, we do have other models available such as revenue sharing.

TowerXchange: And how did the relationship begin with Alfamart?

Since inception, we had the engagement of Alfamart to use both its stores and lands, which are ideal sites as they are within the network planning of the MNOs. As you can imagine, this partnership makes it much easier and faster to acquire sites.

In addition, as Alfamart continues to expand its operations and in-store service offerings, it needed to source technology solutions to support its growth. So a separate company like PEKAPE was needed to focus on that side of things.

TowerXchange: Can you tell us a bit about your clients?

We serve most MNOs in Indonesia including H3I (Tri), XL Axiata, Telkomsel, Indosat, Internux (Bolt) and Smartfren.

We provide build-to-suit (BTS) and co-locations to our clients and while we’re not working with non-traditional, non-MNO clients yet, we are working on new initiatives to breakthrough.

TowerXchange: Please tell us more about the composition of your portfolio.

We offer a mix of assets, which include microcell poles (MCP), self-supporting towers (SST) and nano-sites. There are currently more than 300 sites in our portfolio with more growth expected to meet market needs, with a current split of 80% MCPs and 20% SSTs.

We operate across Indonesia, especially in Sumatra, Java, Kalimantan, Bali and Sulawesi. We plan to expand to west and East Nusa Tenggara in near terms while eyeing opportunities in the rest of the country.

For context, Alfamart currently has more than 10,000 locations countrywide which gives PEKAPE plenty of room to grow!

TowerXchange: And what does a typical site set-up look like for PEKAPE?

At PEKAPE we deploy, operate and maintain a variety of site typologies including SSTs, monopoles and pico sites.

Our sites’ dimensions vary depending on the available space and needs. A 32m high tower will require a 10x10m ground space whereas a microcell pole (MCP) we deploy at Alfamart stores will need a 1.5x4m ground space.

The sites are connected to power via PLN, the State-owned electricity company. We are responsible for backup power and typically use mobile diesel generators. Our nano-sites however, are connected to the stores due to minimal power consumption at four Amps. Power is either charged as a pass-through or at a fixed price.

In terms of transmission, MNOs use and provide either microwave or fibre optic since Alfamart stores don’t have fibre available.

TowerXchange: How would you summarise PEKAPE’s competitive advantage?

As a result of our partnership with Alfamart, we are uniquely positioned to offer solutions for MNOs to increase coverage, infill and capacity, with faster deployments and competitive pricing.

TowerXchange: And what about your plans for future business growth and expansion?

Our future plans include the deployment of plenty of new locations in order to support our clients’ network rollout needs across Indonesia. And we are working to provide fibre optic cable to support their transmission requirements.

Indonesia is a market that presents great expansion opportunities for tower providers since MNOs are still deploying quite heavily and need our services to either expand coverage or enhance capacity.

PEKAPE is here to serve its clients and partner with them in their growth plans!

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Alfamart’s history started in 1989 by Djoko Susanto and family. Founded under the name of PT Sumber Alfaria Trijaya Tbk (the Company), it began the business in trading and distribution to then enter the retail sector in 1999.

In 2002 the Company started an exponential expansion thanks to the acquisition of 141 Alfa Minimart stores which also led to a rebranding and the current Alfamart name.

Alfamart is currently one of Indonesia’s leading retailers, serving more than 3mn customers daily, with approximately 10,300 stores across the country. With more than 70,000 employees, Alfamart is one of the largest employers in Indonesia.

Source: http://corporate.alfamartku.com/

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