By Satish Kulkarni, Chief Executive Officer, Invendis Technologies
Remote monitoring and management solutions for passive network infrastructure have received acceptance among tower companies around the world. Telecom companies in the developed markets have already progressed to advanced outsourcing of remote monitoring services (RMS) while those in emerging markets are beginning to realise the prospects of passive network management as a discrete business function. There is increased advocacy of passive infrastructure management across these markets as a valuable means of reducing capex and opex while enhancing service and value propositions for customers. Simultaneous markets like Africa and South Asia are seen as receptive to such solutions.
Remote monitoring and management services for passive infrastructure offer a huge potential for cost savings for multi-sourced energy utility and workforce mobilisation. At the same time, passive infrastructure service providers are facing challenges regarding the ownership of business functions, as strategic control and information security is in favour of the associated customers. Traditionally, telecom operators in India had tower infrastructure management as a core part of their business and they had internal teams dedicated to it. With the infrastructure sharing model in place, the distributed network has spread rapidly, making it crucial to address operational issues. Also, the rising cost of diesel and grid power has made energy management at cellular sites difficult. Owing to the sharing of sites by multiple tenants, tower companies look at customised solutions to trace revenue-bearing tenancies and their effect on asset values.
Maintaining efficient and profitable sites is the new defining factor for the differentiation and success of telecom and tower companies. Therefore, cellular tower site management is a key growth engine for the global telecom industry. However, the operations and maintenance (O&M) costs of passive networks are very high and there are few dedicated tools for automated analysis and optimisation of opex. Cellular tower sites are remotely based and are vulnerable to equipment failures, technical glitches, site outages and site vandalism.
In India, many regions have high tower density and most tower companies have a high share of single-tenancy sites. Therefore, even a small tower company has a bigger portfolio than a normal company in other countries. Tenancy ratios, rentals and ARPUs are lower, and the typical investment in setting up a tower is 25-30 per cent less in India as compared to overseas. Power and fuel costs constitute 30-40 per cent of an operator’s network costs, with pervasive power leaks and fuel pilferages. Overall, actual costs are more than the costs proposed in the business plans. Thus, it is important to make a detailed analysis of these costs to gain strategic control over returns on investment (RoIs). RoI in other countries is much faster than in India given the latter’s dense population and unprecedented mobile penetration. It is clear that operational excellence in India needs more focus. Factors that make monitoring solutions relevant for operational excellence and RoI are as follows:
- Transition to hybrid solutions: Tower companies are inclined to deploy sustainable cellular sites. Further, there is a need to reduce the carbon footprint of telecom towers by adopting hybrid power solutions. Managing multiple power sources (back-up and main sources) at sites and making them reliable enough to run under optimised operational conditions is the next imperative. Also, the use of diesel needs to be restricted.
- Dedicated datasets: Customised managed services are important for tower companies in India, as tower growth is taking place in rural areas. These regions have specific demands pertaining to feasibility, power usage and workforce availability. Thus, there is a need for specific solutions with dedicated dataset delivery.
- New cost models: Tower companies are choosing fixed-cost models over actual costs for operational efficiency. Strict power and fuel usage levels have been set for sites. This model is being implemented to avoid pilferage and disputes.
Recent trends in RMS
Many companies are trying to achieve results by combining smarter business models, identifying site-specific problems and aligning their individual business processes. Different business functions are explored to see their effect on opex optimisation. This helps in selecting a “service mix” for remote monitoring contracts that can leverage built-in cost efficiency to enjoy cost benefits. Preventive maintenance, field force mobilisation and energy optimisation are the preferred functions for RMS outsourcing. Therefore, the strategic involvement of service providers is less so far.
As a generic strategy practised by a tower company, RMS is outsourced to specialised service providers over in-house teams. This impacts capex, as there is a separate allocation of finances for third-party contractors. Increase in capex in the initial build phase is followed by reduced opex over the period of implementation. Since expert solution architects provide these services, the quality offered by them is of great value to companies. This approach is known as the capex efficiency approach wherein the opex decreases over the period of RMS implementation.
