There are just 6,917 base stations in Afghanistan (Source: Afghanistan TRA) and the national fibre optic ring has yet to be completed. One firm taking a multipronged approach to solving Afghanistan’s connectivity headaches is Asia Consultancy Group, which provides hosting, managed services and telecom towers in the country. TowerXchange sat down with Asia Consultancy Group’s Chief Operations Officer Hussein Abdulkader to discuss the group’s strategy, before he appears at the TowerXchange Meetup MENA 2020 in Dubai, on the 28th and 29th January.
TowerXchange: For the purpose of our readers please introduce Asia Consultancy Group and tell what assets you have on the ground? What is the blend of macro towers versus rooftops, DAS, small cells and IBS in your portfolio?
Hussein Abdulkader, Chief Operations Officer, Asia Consultancy Group:
Asia Consultancy Group (ACG) is a privately-held company in the ICT sector providing hosting, manages services and also acts as a towerco.
ACG is engaged in facilitating the development of 21st century digital telecommunications in Afghanistan. We provide premier telecommunications engineering and consultancy services, microwave network planning and design, infrastructure construction, cell tower co-location leasing, radio access network (RAN) sharing, and digital television broadcasting services throughout Afghanistan. We also have other active projects and services in many telecommunications subsectors in Afghanistan:
- Recently entered the civil radar surveillance sector as the local partner to Thales France
- Won a nationwide fibre optic license to provide carrier grade data services
- Own and operate a 150+ site microwave cell tower network, available for leasing between Kabul–Mazar, Kabul–Pakistan, and Kandahar–Herat backbone routes
- Operate digital TV transmitters, repeaters, and gap filler sites in Kabul
- Own and operate 250 RANsharing virtual network sites throughout Afghanistan to expand the reach of the country’s mobile operators
- Run VSAT hub stations and uplink services in five major cities
- Manage aircraft surveillance and the air traffic control network at Mazar-e-Sharif International Airport
TowerXchange: How is the business financed and what does this mean about your capacity to acquire and build more towers? How many BTS and are you looking to build in the foreseeable future and which parts of the county will see the most investment?
Hussein Abdulkader, Chief Operations Officer, Asia Consultancy Group:
ACG has been mostly self-funded so far, but as we grow, we are looking for financial institution and/or private equity funding.
We plan to build or acquire a minimum of 100 sites per year, but this would be complemented by building over 3,000km of fibre network over the next four years. The cell sites would be spread across the country for rural coverage to low revenue areas where MNOs don’t want to invest.
ACG has been mostly self-funded so far, but as we grow, we are looking for financial institution and/or private equity funding
TowerXchange: What is ACG’s tenancy ratios, and how is that affected where you facilitate RANsharing?
Hussein Abdulkader, Chief Operations Officer, Asia Consultancy Group:
On our backbone sites we have a tenancy ratio of 2.3, while on our RANsharing sites we have a tenancy ratio of 1.5 where we host Roshan, Etisalat, Salaam and MTN.
TowerXchange: We understand that a new licence has been awarded. What opportunities do you anticipate this will provide besides enhancing market competition in the region?
Hussein Abdulkader, Chief Operations Officer, Asia Consultancy Group:
The new licensee has yet to start operations, but it is showing an interest to co-locate on our sites.
TowerXchange: What are AGC doing to facilitate the rollout of 4G? Is there significant demand for 4G in a predominantly 2G market?
Hussein Abdulkader, Chief Operations Officer, Asia Consultancy Group:
To launch pure 4G and to enhance 3G the country needs stable internet services and a wider reach of fibre aggregation nodes. ACG is strategically placed to provide these services and infrastructure in Afghanistan.
TowerXchange: In early 2018, the ATRA agreed to provide US$32.1mn of funding to deploy 250 base stations in rural and remote areas. You and Roshan were to deploy 137 of those sites. Tell us about your joint bid.
Hussein Abdulkader, Chief Operations Officer, Asia Consultancy Group:
As joint bidder with Roshan, 120 sites have been deployed and are now on air, but the remaining 13 have a serious security risk and are being reviewed as force majeure¸ meaning due to unforeseeable circumstances we are unable to fulfil the contract. The other sites in the programme were awarded to Afghan Wireless, 84 sites, and Afghan Telecom, 29 sites.
TowerXchange: Please tell us about your strategy of rolling out fibre to the home (FTTH). When is the first phase expected to be released?
Hussein Abdulkader, Chief Operations Officer, Asia Consultancy Group:
The first phase should be launched in Q1 of 2020, this would link our northern border with the CIS States to the under-sea cable in Pakistan and to the regional Point of Presence. Our strategy is to be a carrier of carriers and setup a fibre transit backbone network. FTTH is our future plan for in four years’ time, dependent on funding.
TowerXchange: In Afghanistan 99% of sites run on diesel gensets, but ACG is different. Which energy efficient solutions are you currently using?
Hussein Abdulkader, Chief Operations Officer, Asia Consultancy Group:
On most of our RANsharing sites we now run solar plus backup systems as we control the power consumption and only have one set of BTS equipment there. This keeps power consumption low and reduces site visits.
TowerXchange: How does ACG manage the difficult security situation in Afghanistan?
Hussein Abdulkader, Chief Operations Officer, Asia Consultancy Group:
We involve the community by providing employment and training to support the sites and, in turn, they secure the sites because they understand the value of keeping the sites on air for their connectivity. This does not work all the time, but it is the best option.
TowerXchange: Please summarise your future vision for Asia Consultancy Group?
Hussein Abdulkader, Chief Operations Officer, Asia Consultancy Group:
Asia Consultancy Group aspires to be the carrier of carriers by choice and deliver not just FTTH in Afghanistan’s five major cities but provide triple play services to homes and content services via a Tier 3/4 Data Centre in Afghanistan for all cloud hosting for corporates.
We at ACG aspire to serve Afghanistan’s ICT needs with state of the art technology through innovation, advanced technology, training locally; providing excellence through customer satisfaction and focus.
The Afghanistan market
Afghanistan has five MNOs; Afghan Wireless, the country’s fastest growing MNO, Roshan which is funded by the Aga Khan Development Fund and is the country’s largest MNO, multi-national players MTN and Etisalat, and newcomer Afghan Telecom, which is part of the Ministry of Communications and Information Technology. Afghanistan is home to 32.5mn subscribers, but only 23% of them have access to 3G. And barely 1% of connections are 4G (data from Afghanistan TRA, Q2 2019). In a country of 36mn people, telecoms infrastructure is still some years behind its neighbours; in Pakistan over 40% of connections are 3G/4G, and in Iran nearly 60% of subscribers are 3G/4G.
Each operators owns and operates nearly all of their sites, with MNOs understood to have between 1,000-1,500 towers each. The Telecom Regulatory Authority of Afghanistan (ATRA) states that there are 6,917 base stations in the country, which due to limited sharing we are treating as a proxy for tower count, although this obviously means a higher margin for error.
Due to high opex costs, Asia Consultancy Group (ACG) has begun to roll-out RANsharing sites which host a number of operators on one base station.
The security situation has deteriorated significantly since mobile operators entered the market in the early 2000s. 99% of sites run on dual diesel gensets – even in cities. MNOs have been reluctant to invest in solar so far, but ACG run their sites on solar plus battery to reduce fuel cost and exposure to security risks. There are few major international contractors operating in the market outside of the military, but i-eng are one of the few international engineering firms working in the country, where they suggest they are running many sites on an Energy Services Company (ESCO) contract.
