As India ushers in the 5G era, the role of telecom infrastructure companies in accelerating digitalisation will become even more cricital. In an interview with tele.net, Sanjay Goel, executive vice president and president, Asia-Pacific, American Tower Corporation (ATC), talks about the growth opportunities in the Indian market, ATC’s initiatives in the 5G space and the company’s future growth strategies…
How has ATC’s journey been in the Indian telecom sector?
American Tower is one of the leading independent passive telecom infrastructure providers in India. We launched operations in India in 2007. Over time, with strategic acquisitions and build-to-suits, we have reached where we are today. Today, we have approximately 75,000 towers in our portfolio.
Our journey has not been entirely linear, but our global expertise that we adapted to suit the Indian market, and experience and capabilities in the global tower industry helped us navigate challenges and firmly establish ourselves as the leading independent tower company of India. Today, we have a national presence and serve all major telecom service providers in the country.
As strategic partners of our customers, we help them establish their communication network with speed and ease. Our processes and systems are designed to help customers expand their communication network infrastructure through faster time to market and the highest level of service delivery.
We have also been running the Digital Communities programme since 2012, in line with the government’s Digital India initiative. It aims to improve the quality of life through connectivity. Having recently passed the milestone of 200 such communities, the programme leverages the connectivity of our communication sites to provide essential services such as education and healthcare, to the underprivileged. To date, more than 200,000 students have enrolled in learning centres and over 192,000 have received digital skills certifications to enhance employability.
What are the growth opportunities for you in the Indian market?
As 5G becomes mainstream, providing significantly higher speed and bandwidth to start with and eventually moving to massive machine-type communications and ultra-reliable low latency communications, a whole level of new usage and demand will be placed on networks. This will create a tremendous data-driven demand, resulting in the need for new sites and capacity enhancement of existing ones. A successful 5G roll-out will be enabled by robust new-build tower expansion activities, greater densification, smaller towers, in-building solutions, fibre-to-the-tower, edge data centres and services that speed network deployment.
As the second most populous country in the world with over 1.3 billion people, we expect the number of wireless transmission points to double to serve the 5G market. India will also need half a million small cells and microcells over the next three years. No one stakeholder group has the capability to provide all this capacity. Collaboration among key players will be critical and we are strategically positioned to play our part and support the Digital India Vision.
We remain focused on maximising growth on our existing assets and executing what we expect to be a robust new build pipeline, which provides compelling opportunities to create meaningful scale and earn solid returns on capital in the market.
The year 2022 is crucial in terms of 5G roll-out in India. What have been ATC’s initiatives or strategies so far?
The availability of 5G will enable a whole new level of mobile usage and demand for networks. Macro towers enable multiple carriers to house their equipment on the same site, helping optimise capital efficiency while also minimising the environmental footprint of wireless networks. We expect macro towers to remain the preferred infrastructure for the deployment of 5G network in most areas.
Given our nationwide scale and strategic customer relationships, we are in a strong position to harness this 5G potential to serve carriers in providing high speed data.
Are there any challenges you are facing in the Indian market? How do you plan to address these?
Only around 34 per cent telecom towers are connected with fibre. If the full potential of 5G is to be realised, at least 70 per cent would be optimal. At the same time, in certain configurations, a good deal of 5G potential can still be attained, on an all-mobile basis, with technology enhancements.
5G’s successful roll-out will require greater densification, smaller towers, small cells, in-building solutions, fibre-to-the-tower, managed rooftops and services that speed network deployment. The challenge that the tower industry will likely face is the availability of products based on the unique requirements of customers. As a global leader in the telecom infrastructure space for more than two decades with experience in supporting 5G roll-outs in several markets that we operate in, we are well positioned to engineer and build such products.
Our global experience and expertise in providing the right infrastructure for optimised wireless adoption positions us well to support India in its 5G journey and help our customers optimise their network investments.
What is your outlook for the Indian telecom sector in the coming years?
We are at the cusp of real acceleration in the Indian market. We are optimistic about the opportunity in India over the long term. With all the operators planning to upgrade their networks to serve the data demand, we expect that there will be an industry-wide requirement to support and enable this transition. As the second most populous country in the world with over 1.3 billion people, the number of wireless transmission points in India will also need to double to serve this 5G market. So, we expect the demand for tower assets to grow in India.
With increasing ARPUs, significant investments in passive infrastructure will likely follow as the 5G ecosystem evolves. The key industry players are well equipped to do this.
Given our nationwide scale, long-standing customer relationships and learnings in the marketplace over the past decade, we are committed to play our role in the Indian industry to deliver robust growth both organically and through the deployment of new sites for many years to come.
Are you looking to invest in India in the coming years? What kind of investments are you looking at?
In India, macro cell towers will anchor the deployment of 5G, ensuring that wireless service providers have the backbone infrastructure to deploy wireless networks of the future.
Currently we have approximately 75,000 tower sites in India, and we plan to add another 3,500 sites this year to optimise our customers’ investment in 5G. We plan to invest a total of Rs 20 billion in this market in 2022 and 2023 to grow organically as we continue to execute our new build programme.
What will be the focus areas and growth strategies for ATC in the future?
We aim to help build a robust backbone for mobility in the country by scaling up macro towers and introducing complementary technologies, such as in-building solutions, edge data centres, fibre and smaller towers. Today, we operate as a digital shared infrastructure provider in the telecom value chain to offer our customers an integrated suite of complementary solutions to fit seamlessly into their complex network designs to support 5G.
Going forward, we expect that new growth opportunities will become available and benefit telecom infrastructure providers as they help develop the backbone of a thriving digital ecosystem.
The upcoming 5G roll-out and increased data consumption will result in significantly higher energy demand. Reducing emissions is an important part of our overall strategy and we believe it is an opportunity to both improve our cost efficiency and our appeal to our tenants, especially in emerging markets.
A significant portion of our carbon footprint is attributed to generating power as a service for tenants in markets with non-existent or unreliable electric grids — a marketplace differentiator that drives our overall customer satisfaction.
Although we cannot control the energy demand from tenant equipment, we are working to reduce the associated emissions by investing in efficiency improvements and renewable energy.
American Tower recently announced expanded greenhouse gas emissions reduction goals via our science-based targets. We are aiming to reduce direct scope 1, indirect scope 2, and indirect scope 3 supply chain GHG emissions by at least 40 per cent by 2035. This will be measured against a 2019 baseline to build upon our targeted 2017 goal of reducing our diesel-related emissions.