When American Tower Corporation (ATC) bought Cell C's tower infrastructure in 2010, it forever changed the face of South African mobile telecommunications, as ATC South Africa's network and service provider agnostic approach is paving the way for a more open and competitive market.
The infrastructure sharing model lowers the barrier to entry for operators and service providers of all sizes, and ATC South Africa's provisioning of connectivity services on an infrastructure as a service basis gives everyone access to the same level and type of geographic coverage.
This all leads to a more competitive market place, where operators and service providers are able to roll out services more quickly, and are also able to differentiate more on price and content, as well as bundled and value-added peripheral services, as connectivity, capacity and coverage become largely ubiquitous.
“Infrastructure sharing or, to be more specific in our case, tower sharing, is nothing new,” explains CEO of ATC South Africa, Pieter Nel.
“It has been happening in some form in South Africa for some time now, but we are the first independent, pro-competition service provider to adopt this network agnostic model, which has been steadily gaining popularity in other countries around the world due to the numerous benefits.”
Nel explains that mobile network operators (MNOs) are continually looking to reduce capital expenditure and operating costs, and mitigate risk, while simultaneously improving efficiency in today's increasingly competitive marketplace.
“The costs of rolling out new infrastructure can be prohibitive, even for the bigger MNOs, as access to new high sites is limited, the cost of power continues to rise and the need to future-proof a network's technological capabilities becomes increasingly more important,” he continues.
“The MNOs are also choosing to turn their focus to their core business, which is attracting and retaining a strong customer base through better content and service delivery.
“As such, they are turning to the professionals, who have the expertise and capacity to manage and maintain infrastructure, the capital to build-out next generation networks and the peripheral services to enable them to focus on their core business activities such as better content solutions and customer retention,” says Nel.
“And by delivering this all on an outsourced, managed services basis we are creating a compelling value proposition for all MNOs and service providers in the country.”
According to Nel, the trick to getting this model right is ATC South Africa's ability to acquire or build out network infrastructure and manage and maintain it in a manner that works out cheaper for MNOs than self-provisioning the same capabilities would.
“We are able to do this as we have the expertise, global best practices, economies of scale and the world-class applications and services that come with being the third biggest telecommunications provider in the United States by market cap,” he continues.
“This means we can manage, maintain and provision capacity on any tower infrastructure better than anyone else in the market, thereby giving MNOs and service providers the ability to focus more on their core business.”
Having taken this value proposition to market in 2010, ATC South Africa already boasts most of the major MNOs as clients and is currently in talks with most of the current and future broadband solution providers. “Understandably the incumbent operators have, in the past, chosen to safeguard the sunken investments they have made into infrastructure in South Africa's maturing market,” explains Nel.
“However, now that we are entering a mature market phase, where we have saturation in mobile voice services and a rapidly growing mobile data market, MNOs are looking to unbundle their investment and create new revenue streams through infrastructure sharing agreements with other operators and providers.
"This is now giving smaller providers access to these facilities, allowing them to innovate in the ways they deliver capacity, increase the rate at which they can deploy new services and it also gives them more control over how they price their products and services, as their capacity needs are now scalable.”
The other benefits of having an equal opportunity tower infrastructure provider is the fact that capacity planning becomes more centralised, which reduces the number of towers required and the associated power consumption needs of running a national wireless network.
“Our pro-environment approach delivers better national coverage with fewer towers, base stations and generators, and we also use renewable energy sources, like wind and solar power to reduce our carbon footprint,” states Nel. “This not only benefits the environment, but delivers further cost savings to the operators.”
According to Nel, all of these factors should eventually equate to a positive impact on the prices end-users pay for using these mobile telecommunications services.
“With our pro-competition approach, our ability to better control capacity planning, the reduced capex, opex and management requirements on MNOs and service providers, as well as the improved aesthetics of fewer towers and the positive environmental impact that tower sharing has, we expect the adoption of the infrastructure sharing model to grow significantly in the local mobile telecommunications market in the near future.
“This will greatly benefit South Africa and will drive the continued advancement of the telecommunications industry along the same lines as other leading emerging markets,” he concludes.