TowerXchange can count on the fingers of one hand the number of digital indoor solution startup success stories we have encountered worldwide. But when we find such companies, they tend to be both impressive and instructive. In just two years, Space World has forged a market leading position in the previously untapped Indian indoor coverage market. TowerXchange met with Space World Managing Director Ankit Goel at MWC19 to learn more about their story.
TowerXchange: Please introduce Space World to our readers.
Ankit Goel, Managing Director, Space World:
Founded two years ago in Delhi, Space World is a pan-India, neutral host infrastructure provider focusing on the relatively untapped market of digital indoor solutions. We provide multi-operator solutions and we have strong relationships with all the Indian MNOs. Space World is privately owned and we share our solutions on a non-discriminatory basis.
Space World already has 500+ indoor sites, representing nearly 250mn square feet of covered area, making us the market leaders in India.
My Co-Founder Radhey Raman and I are first level entrepreneurs, and have come from an engineering background with the associated qualifications. We have previously been involved in telecom equipment manufacturing for ten years, but two years ago we realised that the opportunity to provide indoor connectivity was even bigger than we could imagine, with data usage driven by social media. Space World has come out of a traditional family business, and in two years we have already deployed more than 500 sites in India, with our first few international sites getting added to the portfolio in Myanmar.
Space World is self-sustaining, self-funded, and profitable with a strong EBITDA.
Space World is registered as an Infrastructure Provider (IP-1 – the same registration as India’s towercos), and we are a member of India’s Tower and Infrastructure Providers Association (TAIPA).
TowerXchange: Please describe the addressable market for indoor connectivity in India.
Ankit Goel, Managing Director, Space World:
I would break down our addressable market into two broad segments. Firstly retail, such as commercial buildings, malls and office buildings – typically properties of over 500,000 sqft. And secondly institutional – special projects such as providing ubiquitous coverage for multiple MNOs within metropolitan transportation networks, within hospitals, educational Campuses and airports. For example, there are over 100 airports alone in India! Any high density public areas are potential addressable opportunities for us.
It is critical that we understand the different stakeholders in real estate, and are able to identify communities or places of interest within which we can provide our unique connectivity solution.
In terms of new business development, sometimes we proactively source new opportunities, and at the same time we respond to RFPs – including helping potential customers understand their needs and help them draft their requirements.
Space World is riding on India’s growth story. Our addressable market includes commercial and residential high-rise buildings, including in Tier 2 and 3 towns (which are sometimes larger than Tier 1 towns). Most cities with a population in excess of 2.5 million will have a metropolitan transport network, and providing coverage on that network is a key addressable market for Space World.
India’s objective to create 100 smart cities will be dependent on a digital backbone based on digital DAS. And Space World is proud to be India’s market leader in digital DAS.
India’s objective to create 100 smart cities will be dependent on a digital backbone based on digital DAS. And Space World is proud to be India’s market leader in digital DAS
TowerXchange: Who should pay for coverage indoors, the building owner or the MNO?
Ankit Goel, Managing Director, Space World:
We believe that in India the only viable business model is to monetise indoor coverage via the MNO rather than through the realtors. However, our value proposition to MNOs is a zero capex solution: Space World deploys the capex, and we also reduce the opex by sharing our digital indoor solutions between multiple operators. We’re offering an indoor solution that acknowledges and addresses the current and future needs of Indian MNOs. It’s almost axiomatic to remind your readers that 70% of mobile data is generated from indoors.
India’s MNOs recognise the overall benefits of infrastructure sharing both outdoors and now indoors, demonstrated by the fact that Space World has a tenancy ratio of 2.3 despite having only been in business for two years.
TowerXchange: Congratulations on achieving such a great tenancy ratio! How has this been achieved in such a short space of time?
Ankit Goel, Managing Director, Space World:
There was no connectivity in many of the areas we serve, yet they are often densely populated, so often all three MNOs want to be tenants from day one. So while a macro tower is often built initially for just one anchor tenant, in an indoor scenario we often have two or three tenants right from start.
While the tower business is driven by latitude and longitude based search rings, there is no location-based competition indoors – we have exclusive rights within our properties, so the MNOs have no other option but to use our solutions – and they are highly likely to renew their contracts!
TowerXchange: Are your contract structures similar to towercos?
Ankit Goel, Managing Director, Space World:
Yes. We typically sign 15 year contracts with fixed annual escalations. Incremental tenancy revenues go straight to our bottom line, so there are lots of parallels to the towerco business model.
TowerXchange: Why aren’t the tower companies focusing on indoor solutions – what are the biggest differences in your business model?
Ankit Goel, Managing Director, Space World:
Of course we have tremendous respect for the Indian tower companies, for their their growth story, and for their achievements in delivering and sharing the outdoor passive infrastructure on which India’s mobile services have evolved. But Space World serves a fundamentally different market.
Space World recognises the criticality of bespoke property acquisition in serving this market. Whereas site acquisition is equally important in towers, the approach can readily be standardised, whereas in the indoor market everything is bespoke and niche.
Another critical differentiator is our key account relationships with both MNOs and real estate companies. And of course, indoor coverage requires unique engineering skills for the management of semi-active equipment.
TowerXchange: What technologies are you using?
Ankit Goel, Managing Director, Space World:
We use custom solutions tailored for each use case, from passive and active MIMO, to passive and active SISO, and small cells.
Understanding the technology is crucial. It’s all futureproof – readily upgradeable in no time at all. 100% of our solutions support multiple operators.
TowerXchange: A couple of operational questions – how do you fiberize your digital indoor solutions, and who is responsible for ensuring power availability and uptime?
Ankit Goel, Managing Director, Space World:
We typically leverage the operator’s fibre outside the building. They bring fibre to the kerb, we bring it inside the building. Backhaul remains the operator’s responsibility.
We provide power plants and lithium batteries, with energy costs passed through to the landlord. Uptime is monitored from the operator’s NOC. We use zero diesel – we’re a very green operation, so we avoid the pitfall of diesel pilferage.
TowerXchange: Can you share details of an example project?
Ankit Goel, Managing Director, Space World:
We have just completed the biggest installation of Active DAS in India – a metro tunnel tube project that has just started being used. The highest data traffic anywhere in India is coming from this project, at the peak rush hours as people go online during their journey to and from work.
TowerXchange: Finally, what is your view of the future of communications infrastructure provision in India?
Ankit Goel, Managing Director, Space World:
The Indian communications infrastructure provision story is transitioning from a successful but mature story of infrastructure sharing at the macro network layer, to the next chapter focusing on the heterogeneous network layer. Now its all about data. We’re moving from traditional to IP-based networks, and the spectrum we’re using is completely different.
There has been a blood bath at the operator layer of the Indian mobile ecosystem. We’re consolidating from 8-9 to 3-4 MNOs. Some of the remaining MNOs already have distressed balance sheets, even before the acquisition of costly 5G spectrum. To make 5G viable, we’re going to need to create smart cities enabled by shared networks. But the scope of network sharing must move beyond passive to passive and active infrastructure.
The economics of smart cities will be completely different. It’s all about low latency, fibre connectivity, and creating new capabilities for coverage and high capacity.
At Space World, we are positioning ourselves to be leaders in this new, data-driven economy. We facilitate the most cost-effective data-driven solutions for MNOs, while at the same time adding value to real estate, institutions and society. Connectivity is a lifeline for Indians. It is time to extend that lifeline indoors!
