Monetising towers as drone delivery platforms
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Monetising towers as drone delivery platforms

Image credit: Staex

This newly identified business opportunity takes advantage of telecom towers’ good positioning and ubiquity – but is there a viable commercial model?

TowerXchange’s Tomorrow’s towerco report explored the top adjacent service lines that towercos are diversifying into. The main drivers for this have been maximising utilisation of assets, looking to better serve existing customers and future proofing themselves.

Towercos’ whole business model is driven by the digitisation of society and that digitisation is continuing to open new monetisation opportunities and enfranchising new clients that include different ways of using towercos’ infrastructure and the land under it. One such example is a Web3 drone corridor pilot which launched successfully at the end of May in Berlin with towerco involvement from Vantage Towers.

The venture

A public-private consortium called NEXA formed by seven German entities (the towerco being among them) was set up to explore developing industrial digitalisation with 5G, to enable cross-sector and cross-industry collaborations and new business models. One of them involves creating a drone corridor for commercial operations in an urban area. The potential to improve urban mobility, use 5G connectivity and existing infrastructure while testing secure machine-to-machine payments and data sharing were tested.

As futuristic as it sounds such an endeavour is complex to set up and execute prompting the creation of a mini ecosystem to tackle the different challenges and complexities.

Berlin-based software company Staex who is leading the consortium, contributed its software and expertise to manage the communication between humans and machines.

Vantage Towers provided the land around their towers to be used as drone vertiports for take-off, landing and charging of the drones. The proximity of the vertiports to the towers ensures connectivity of the drones, which is particularly relevant for functional drone highways within and between cities, once they become a reality. The location of the sites promises proximity to customers too.

The other participants in the consortium are drone makers Germandrones, payment system providers paymenttools, blockchain platform Lisk, IoT and mobile connectivity provider Chirp Wireless and the Senate for economic affairs of Berlin.

Funding for the project has come from the consortium partners who have invested in the realisation. The private companies contributed financially and with technology, services and expertise (and time and energy). Public bodies have provided support, enabling the “lab environment” for the project.

According to Paksy Plackis-Cheng, CSO at Staex, “in the future machines will need to connect into ecosystems where different entities must collaborate. That will include handling regulations and permits, paying the physical landowner where the drone lands, connecting to charge the drone, and managing tasks such as goods delivery, data capturing, fees, taxes, insurance.”

The business model and potential use cases

The project aims to allow various drone companies to provide services on-demand rather than having a single entity manage all drone operations. This includes the potential to provide services like for example an emergency inspection or data capture following a storm, delivery of goods such as medicines, organs for transplantation, etc., through flexible business models where companies can be paid per task or through other negotiated agreements.

“Delivery drones will change the way we think about logistics and play an essential role in future smart city concepts, where Vantage Towers’ infrastructure will be a key enabler. I am pleased that Vantage Towers will be at the forefront of shaping this exciting sector through the NEXA consortium. At Vantage Towers, we are always open to new business models that can share our infrastructure.” says Juan De Miguel, Head of Technology Strategy and Innovation at Vantage Towers.

This world-first proof-of-concept in Berlin was the first step (of many) towards the future realisation of the business case for commercial drone operations with machine-to-machine transactions in densely populated areas.

Drones can be controlled remotely by an operator or there can be autonomous flights through pre-planned routes. Web3 control, with the help of advances in artificial intelligence and machine learning, could lead to improved autonomy of drones that can perform complex tasks without constant human control. The payment flows around logistics, smart contracts and micro-transportation by drones can be handled entirely via blockchain.

The commercial use drones for conducting visual line of sight operations (VLOS) is slowly becoming a regular part of telecom infrastructure maintenance in rural and countryside areas, in addition to other infrastructure upkeep such as for railways, power lines inspections and so on. The use and flights of Beyond Visual Line of Sight (BVLOS) of the drone operators is minimal. There is an argument that it reduces operational costs and removes putting humas in dangerous or hard to access locations in some instances, but in practice it’s complicated in terms of permitting and regulation.

At present, it is not possible to fly drones in urban environments. And there is no regulation (or any in the making) relating to flying drones in cities today under VLOS, let alone BVLOS in Europe. “Before we can implement the technical solution, we need to get the regulation first so we can have a corridor.” says De Miguel.

The possibility of establishing a permanent drone corridor between Berlin State and neighbouring Brandenburg State is being discussed, with plans to have further discussions with relevant German authorities in the autumn of 2024, says Paksy.

“For now, there is no commercial proposal on our end” says De Miguel. Following the proof-of-concept completion, the NEXA partners will decide which particular use cases are suitable to fit into this technology. All of them do not exist today and more research and testing is needed to determine if in addition to land use, drones that fly enabled by 5G signals, may also need to use any additional equipment on towers for a particular use case.

The project has been publicly acknowledged by the state authorities involved. The Berlin State secretary has spoken about the innovative nature of the project and the need for similar initiatives. The 5G enabled project demonstrated the importance of saved time and energy and effective collaboration among different vendors and suppliers being crucial, especially in a smart city context. Staex emphasise the need for operational flexibility and having a trusted platform where partners and stakeholders can do data management through asset sharing, data collection, permit and contract management, and automated payment processes. Openness and collaboration are important for the project to scale up and continue being successful, adds Paksy.

Should towercos be just the providers of sharable infrastructure (or other assets) or should they play a deeper role in smart city and data-as-a-service environments? To define this role they should continue taking part in connected infrastructure projects, do more tests and collaborate with more stakeholders to determine new business models or develop existing ones.

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