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Out of Africa: Delmec Team Round-Up from TowerXChange Africa 2022

This year, TowerXchange Meetup Africa 2022 made a welcome return to Johannesburg after a three-year break.

The event marked the 10th anniversary of TowerXchange, and once again attracted all the key players in the telecoms infrastructure industry, including representatives from tower operators, towercos, telcos, service providers, consultancy agencies, and investors.  As always, the Delmec contingent was strong, including CEO Kealan Delaney, Head of Engineering and Innovation Damien Kelly, Head of Sales and Marketing Orla Kane, and Sales Development Manager Áine Kenna.

The team based themselves in Sandton, the business centre of Johannesburg. They were glad to leave the cold and wet weather behind, and arrive into the warm temperatures of an African spring.

“It was really great to have everyone back in Africa again,” says CEO Kealan Delaney. “We always enjoy catching up with our colleagues and clients there, discussing industry developments and learning more about market challenges. Plus, it was a welcome chance to enjoy a little sunshine before we’re knee-deep in an Irish winter!”

Connecting rural and urban sites

The Delmec stand proved to be one of the busiest, with a steady stream of attendees stopping by to meet a company they’d heard much about. Every conversation, chat, and catch-up confirmed that the biggest focus for towercos and MNOs in Africa is still infrastructure, specifically urban densification and rural roll-outs.

Government bodies are applying pressure to close gaps between the two, although, as is the case in other territories, complex regulation does slow the pace of innovation. “Of course, significant investment is what’s really needed,” Damien Kelly says, but cautious that this requires “economies of scale, a reduction in the cost of capital, and demonstrably strong ROIs for investors.”  He gives an example: “If a towerco is going to build a new site in a rural area, it’ll need a high number of tenants to make it viable. In low-population locations, that can be a real challenge, so we need to find more cost-effective ways of gaining coverage in these areas.”

The situation gets even more complicated when it comes to 5G, as most rural residents in the region don’t have phones that are compatible with the newer technology.  With even fewer rent-paying tenants available, the commercial need for new sites will become even more difficult to justify.

Infrastructure support is among the key services Delmec offers in Africa, helping our clients navigate disparate regulations, secure international funding, and assess, develop, and maintain sites all over the region. “It was clear from our discussions that regardless of whether you represent a towerco or service provider, it’s vital for everyone to really understand the customer’s needs and ask,” says Áine Kenna. Sometimes the right solution only emerges when everybody gets in a room together — which is exactly why we flew to South Africa for this exciting event.

Drivers for digitisation

Delmec led a lively session on ‘life in a digital towerco’, in which we explored asset digitisation, solutions to common challenges, and technological advancements. “Remote site monitoring (RMS) was a hot topic,” says Damien Kelly, pointing out that the level of data received from the site can vary significantly depending on the system and the towerco. “The challenge with getting updates on everything from power usage to site access, network connectivity, and fuel level is that it can be information overload: in this case, towercos might need to install clever systems or embark on training to make sure the data is interpreted correctly and used efficiently.”

The session prompted a number of suppliers to exhibit their own offering, which made for an interesting showcase. “A lot of us concluded that the industry needs to be pragmatic in how its companies transform into digital towercos,” notes Damien. “In many cases, focusing on the low hanging fruit by trying to incorporate new technology in day-to-day operations may well be more beneficial than attempts to entirely replace manual processes.”

Readiness for 5G

A working group on ‘Planning ahead: When will Africa be ready for 5G?’ proved to be one of the most popular, attracting a robust chat and a general consensus that ‘4G is for people, but 5G is for industry’. This relates to the theory that technologies such as autonomous cars, live translation and IoT will eventually drive the need for faster connectivity, as the typical use cases we see today would not justify the large cost involved.

While most event participants agreed that 5G will likely start in South Africa initially, they also recognised a more wide-scale need for densification and fibre roll-out and talked about how best to justify it commercially.

Áine Kenna recalls that Rob Salbego from Helios pointed out that in reality, most towers in the region don’t have the capacity for 5G, the majority of phones in use there can’t be upgraded to 5G, and customers need strong 4G coverage across the region much more than 5G in concentrated areas.

This means that while it’s natural to push to progress the latest technology in our industry, it might be more pragmatic to first enhance and expand 4G in the African continent. In reality, most users care more about being able to make calls in remote areas than using virtual reality headsets in their homes.

Looking to the future

A panel titled ‘The future of Africa’s tower industry’ looked at how business is evolving in the region. For Áine Kenna, a discussion around contracts was particularly interesting:  “There has been a huge push over the last two years for contracts to be carried out in the local currency,” she says. “But this can cause concern for stakeholders due to the instability of some currencies in the Africa market.” She concedes that the majority of the capital is in US dollars, which is why there is often an incentive to keep the profit in USD. Sale and leaseback transactions are becoming the norm now in the region, due to the high volume of acquisition and joint ventures. 

It was also clear that energy and sustainability are key drivers for towerco and MNO business models right now, particularly during this period of escalating costs. Participants agreed that while solar panels are the preferred choice, in many instances a small structure footprint limits the capacity to add panels. “The need for innovation in the drive to build a greener network is evident,” says Orla Kane. “However, there is no one body giving direction on sustainability requirements, which is leading to myriad developments and added complexity for suppliers like ourselves. The industry ecosystem needs to work together to provide clarity, consistency, and more sustainable solutions.”

TowerXchange Meetup Africa 2022 proved to be an excellent opportunity for the entire Delmec team to share valuable knowledge, learn from industry colleagues, and explore vital developments in the region.

CEO Kealan Delaney returned from the trip energised about our work on the African continent — and sporting a touch of sunburn to boot. “This event made it clear that Delmec is justifiably viewed as an expert in the region,” he says. “I was proud to watch my team take their places on panels along with representatives from telecommunication giants like American Tower, Huawei, Helios Towers and more. Our people brought a dynamic combination of experience, expertise, and out-of-the-box thinking.”

Now that we’re all back at our HQ in Ireland, the push is on to convert our discussion findings into real-life solutions, helping to connect all our clients, customers, and communities in Africa — through 4G, 5G, and beyond.

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