Read this article to learn:
- How day-to-day operations and timelines for strategic projects have been impacted
- How data usage patterns have changed and how this will impact demand from MNOs
- New technologies and processes that have been implemented
- The longer term impact on the sector
With the world in the grips of a major pandemic and strict social distancing measures in place, never before has maintaining connectivity been so important. With the tower industry’s critical role in keeping the world connected, TowerXchange was honoured to draw upon its network of towerco leaders from around the world to discuss towerco resilience and response to the crisis. Top executives from Cellnex, Helios Towers, Phoenix Tower International, SBA Communications, TAWAL, Vertical Bridge and the EWIA (with collective responsibility for just under 120,000 towers across 33 countries) joined a truly global virtual panel to explore the impacts of Covid-19; here we summarise their main messages.
The impact of the pandemic on towerco operations
Saeed Alshehri, COO, TAWAL: Saudi Arabia was one of the first countries to implement strong measures to tackle the outbreak, with the government banning travel, enforcing working from home and imposing a curfew. TAWAL responded quickly, putting in place a pandemic response team (chaired by our CEO) to meet on a daily basis to react to the latest guidance from government and implemented working from home even before the government mandated it. We moved from having a single Tower Operating Centre (TOC) with a single backup in place, to having three TOC locations with two backups, enabling greater social distancing between employees. Every week we are also doing a dry run to ensure that should we need to, we are able to run the TOCs from home. We are working with our contractors to secure more spare parts and now have a six month buffer for managed services as well as 30% stock for ongoing projects. The local content requirements put in place for the government have also been of great help in managing our supply chains, with 90% of our towers being manufactured in the country. Our business continues to run smoothly throughout the pandemic and with staff working from home.
Kurt Bagwell, President, International, SBA Communications: Adapting to lockdown measures has been an interesting challenge; SBA’s international business is active in 13 different countries with an employee base of 450 people, the majority of which (bar field-based staff) are now working from home. Very quickly in each market we worked to get classified as an essential business, with the process being simpler in some markets than others. Being an essential business means that we have been able to support our customers 100%. In some countries there are travel issues when it comes to crossing boundaries between municipalities and provinces but in general we have been able to continue pretty much as business as usual. We have no problems with carrying out maintenance, although access to rooftops has been slightly more challenging (especially on residential buildings where people are concerned about letting outside visitors in) and as such, this has taken a bit more time to coordinate. We had been working on tools prior to the pandemic to automate site visits and access to site and these have proven useful during the crisis. Whilst maintenance and site upgrades have continued almost as normal, we have seen some delay when it comes to new construction work and being able to get the required equipment.
Dagan Kasavana, CEO, Phoenix Tower International: In many ways, we have been prepared for today’s situation from the inception of the company; all of our staff have laptops, all of our software and reporting is cloud based and our employees are used to working from other offices and from home. I feel very proud that we have been able to virtualise the whole system with almost 300 employees across 14 markets working from home. When the crisis started, the first thing we did was reach out to our customers, with myself and our heads of sales getting in touch and telling clients that we are open for business, that we can do everything we could do pre-pandemic in this environment, and that we are here to help with all their coverage needs. This was a pretty powerful statement early on and since then we have been proving that we can do this, virtualising things that previously relied on physical interaction (e.g. in some of our markets landlords had to present invoices to get paid) and working with municipalities and governments to carry out maintenance of sites. Throughout this, we have been able to grow and increase the lease up of towers, although as Kurt mentioned, building new sites has been tougher with approvals being slowed due to municipalities working from home and having their focus placed elsewhere. We expect the builds to be back ended this year and so don’t expect the slowdown to have a material impact on our business as long as the economy gets going again in Q3 in the way that we all hope it does.
In addition, we have also looked at ways that we can support our business partners during the crisis, for example we have emailed landlords and offered ground lease buyouts, or other financial amendments to their ground lease, to enable them to get cash to them now. We are a well capitalised company, in a great sector, and so we have the ability to support the stakeholders we work with. Now is also the time for us to step up and supply sustenance and support to people across the world who are struggling, taking the lead in the communities in which we work.
Alex Gellman, CEO, Vertical Bridge: I would echo a lot of the same things that the others before me have said and that we continue to find new ways of doing things, such as virtual zoning hearings with various jurisdictions to keep things moving. One of the biggest barriers has been carrier logistics which have typically been very hierarchical and reliant on paper and so a significant shift has been required on this front. As long as we get back to work this summer, I don’t think the current crisis will have a material effect on the whole year. All of us are lucky to be in the industry that we are in, which is not true for some of our customers or for the broader economy.
Kash Pandya, CEO, Helios Towers: Fortunately for the African continent, the vast majority of the population are very young and the young are resilient to the virus. Some of our markets went into lockdown quickly (and Ghana has actually come out of lockdown) but with 70-80% of the population living hand to mouth and relying on daily income to put food on the table, it is very difficult to have a hard lockdown for the long term. Most of our customers and operations are under lockdown and even though Tanzania did not enforce this, we have moved towards remote working. For us this has had added challenges in that many of our colleagues don’t have power infrastructure or connectivity at home and so we have had to put special measures in place; some people have been coming into the office, in other instances we have taken hotel premises where staff can get better, stronger connectivity to enable them to do their job.
In our markets, towercos are seen as an essential service and so we can move around the country with minimal interruption. We took the right steps to secure supply chains and spares. A key part of our service is power management and so diesel fuel stocks had to be put in place; typically we had 4-6 weeks of stock and now we have three months with a pipeline to support that. We feel positive about our current status and, given the dependence of the African economy on mobile connectivity due to limited fixed line infrastructure, see an important role in the coming months.
Jean-Pierre Faisan, Chair, Communications Working Group, EWIA: Many countries in Europe have been heavily impacted and we realise our responsibility to maintain essential connectivity. Our customers are not only MNOs but also emergency service networks and important public services that have to be maintained. When it comes to how we have responded (at TDF), as mentioned by others staff are remote working as much as possible, our field operation teams are following strict guidelines with appropriate personal protective equipment, and we have also put in place psychological support for our staff as it is important to not underestimate the impact that the crisis is having on people emotionally.
Sergio Tortola, Global Operations Director, Cellnex: Cellnex took a very early stage response before official lockdowns came into place, with the majority of our staff (1600 people across eight countries) working from home from March, including those running the NOC. On the whole I would say that the impact of the crisis on the business has been low, maintenance and services have been going as normal, deal progress has continued, there has been some slow down on site rollout, mostly on rooftops, but nothing very dramatic.
The change in mobile data traffic and the implications of this
Dagan Kasavana, CEO, Phoenix Tower International: Our customers are still trying to work through the recent trends and analysing the data and so it is a bit too soon to speak of significant changes. Phoenix Tower commissioned a study in Colombia and found that network traffic in the urban core was lower, traffic in some residential areas was higher and as, as would be expected, traffic in areas where people congregate (e.g. stadium DAS) was down significantly. In general mobile usage is up 20-40% but it’s not homogenous and it’s a very different pattern to pre-pandemic.
Kash Pandya, CEO, Helios Towers: Vodacom reported a 40% increase in traffic in South Africa and the regulator has released emergency spectrum to allow networks to cope with such increases. Helios is building towers and putting tenancies on towers to support this increase in traffic.
Saeed Alshehri, COO, TAWAL: Pre-pandemic, the government of Saudi Arabia put in place a major initiative to increase mobile broadband speeds across the whole country and so a number of expansion projects were already running. When the lockdown started the country saw a 30% increase in data usage in one month, with the government releasing additional spectrum to the three MNOs to accommodate this increase in traffic. We have seen the knock on effect of this in the addition of more tenancies to sites, rather than seeing the requests for new sites to be built (which will be a longer term solution). We have also seen requests for moving of COWs (cells on wheels), although no increased demand for new temporary coverage solutions.
Sergio Tortola, Global Operations Director, Cellnex: For Cellnex we saw a big increase in broadcasting services but the impact was less noticeable in the mobile sector. The highest increase has been in residential areas and fixed line Wi-Fi, with DAS going down, although Cellnex are involved in providing DAS to temporary hospitals. In Europe, the fixed line market is very strong.
Alex Gellman, CEO, Vertical Bridge: We have seen lots of fibre companies trying to get into the street now, pushing hard for permits, but cities have been busy with other things which is creating a bit of tension, with a mechanism now being set up between municipalities, infracos and the FCC to address this. We have seen many of our broadcast customers, particularly small radio operators, take a hit during the lockdown. With people not driving, radio stations have had sources of radio advertising pulled and some have reported revenues to be down by as much as 80%. One thing that the pandemic has shone a spotlight on in the US is the digital divide; for example schools have had to stop giving grades as in some areas only half of the students have internet access at home, thus preventing them from carrying out school work. As a short term solution, some operators have been sending school busses equipped with Wi-Fi into neighbourhoods but as a more permanent solution, addressing the digital divide will move up the agenda.
Kurt Bagwell, President, International, SBA Communications: We have seen some appetite for temporary solutions, offering COW and as a general rule of thumb we have seen traffic up by 20-40%, with some sites in particular being very overloaded, but operators doing a good job keeping up with traffic. The changing data usage in residential areas due to people working from home is an interesting discussion as there will likely be a new normal after the pandemic with many people continuing to work from home. Carriers will need to relook at their networks in residential areas and we are likely to see densification of such regions occurring.
Jean-Pierre Faisan, Chair, Communications Working Group, EWIA: In general, we haven’t seen much in terms of demand for temporary solutions in Europe, with the exception perhaps of Italy where the country was hit hard early on and emergency services had to adapt quickly. There hasn’t been demand for new masts but there has been some demand for new services at existing masts. Densification programmes are already in place across the continent, with goals to bridge the digital divide and we expect these programmes to continue.
The role of technology in handling the impacts of the pandemic
Kash Pandya, CEO, Helios Towers: We have long been utilising technology to manage our asset base, monitoring on a minute by minute basis the performance of our towers particularly around power provision, what needs fixing when, feeding this into preventative maintenance schedules et cetera, all feeding into our data platform. Such an approach has enabled us to move from an average of around 12 site visits per month down to about two. The pandemic has caused us to manage our operations in an even more remote manner and interestingly we have seen our power uptime improve during the lockdown. We are open to using technology and have already started to implement a number of tools over the past 2-3 years to enable us to become more efficient and reliable.
Kurt Bagwell, President, International, SBA Communications: The pandemic has caused us to be more reliant on data and as such any lack of quality in data is more evident. Previously a lack of data or quality of data could be made up for by being in the field speaking to people but you lose that during lockdown. Whilst SBA has good data, it just goes to show the importance of continuing to take this up a notch. In terms of some other technologies which have proven valuable, we are working with drones for site surveys and we have been using bluetooth locks for site access.
Sergio Tortola, Global Operations Director, Cellnex: Whilst the lockdown hasn’t specifically driven us to explore new technologies, lots of technologies that we were piloting have proven useful and as such we are keen to expand upon these. We have been using BIM which has enabled us to do site surveys on rooftops without having to go onto them; we manage access automatically; and we have integrated our interactions with customers, landlords and suppliers, automating a lot of processes. When we talk about innovation it isn’t just about technologies but also processes, we have been looking at doing things in different ways as a result of the pandemic and some of that will be with us to stay.
Saeed Alshehri, COO, TAWAL: As a new company, we started digitally at the beginning, putting in place a tower management system that controls everything end to end and launching big data driven initiatives. What the Covid-19 crisis has shown however is that certain technologies are not luxuries, they are critical in ensuring business continuity and as such this will add a lot of weight when making a business case for their usage.
Dagan Kasavana, CEO, Phoenix Tower International: A lot of our processes were automated already, not only because we were working in so many jurisdictions but also because we are a relatively new company and the technology was available. For companies that have been operating for 20 years or more they would have faced a question about whether they wanted to disrupt existing operations to implement a new technology but for us it was from the start. Technology is very much in focus right now, looking at automation, leveraging RF data and working with our customers on a data driven approach. We are also looking at energy as a service, supporting our customers whose revenues have been hit and helping them to increase their margins and operate as profitably as possible.