Towering through: Towershare deal will spur growth in telecom sector
KARACHI: In April 2014, Islamabad took a giant leap forward by auctioning the mobile spectrum for third-generation (3G) and 4G technologies. This April, the country’s telecom market went through another major breakthrough that is likely to spur the growth of mobile broadband across Pakistan.
The breakthrough under discussion is the recent deal between Warid Telecom and Towershare – a leading operator of wireless communications infrastructure with focus on Middle East North Africa and South Asia region.
Under the deal, Towershare will acquire 4,500 base transceiver station (BTS) towers, commonly known as mobile towers, of Warid Telecom, Propakistani reported earlier this month.
Shortly after that, Toweshare, which buys, builds, maintains and operates telecom tower infrastructures, entered into another agreement with Ufone to help the latter expand its coverage to remote areas of the country.
Under the agreement, Towershare will rent spaces to Ufone on cell sites that they will build.
The Dubai-based telecom towers company, according to market talk, will be signing an agreement with all five operators, which is likely to trigger the growth of mobile penetration – especially broadband.
In the past, telecom operators in Pakistan have tried to build mobile towers themselves, but it has not worked because of the huge costs attached to the rollout and maintenance of these mobile towers. Even globally, it is always independent tower companies that eventually buy telecom towers.
Towershare’s entry in the Pakistani market and aggressive expansion plans are therefore very beneficial for both the industry and consumers because of the advantages attached to infrastructure sharing.
The advantage for all
With an independent company taking care of the critical infrastructure, the cellular service providers can focus on other aspects of business and cut their expenses – that is the operators can save on high capital and operational expenditures associated with maintenance of mobile towers.
Tower sharing will also help service providers enter underserved areas of the country by setting up connectivity with mobile towers built by a third party.
Moreover, tower sharing will reduce the environmental impact of network expansion, which means only one mobile tower can be shared by all operators eliminating the need for having five different towers, minimising the visual impact of towers in surrounding areas.
It will also help reduce power consumption in terms of fuel and generators required to sustain independent dedicated networks. The tower-sharing model, according to sources, has the potential to reduce 200MW of power requirements of Pakistan – enough to power multiple industrial complexes.
In short, tower sharing helps reduce the cost of providing services to remote or difficult areas, ensuring that millions of people get the services that are otherwise not available.
For a country like Pakistan, this is a welcome development for it will help expedite the growth of mobile network to far flung areas – one aspect that the country has been lacking.
Despite its robust and investment friendly regulatory environment, the country’s broadband penetration remains under 10% or 12 million as of March, 2015.
With Towershare taking responsibility of building new cell sites, the network expansion will be swift because all the operators will need to do is to share space on rental basis, not to mention the foreign direct investment the country will attract towards infrastructure development – the company has already pledged an investment of $400 million towards building new towers, according to sources familiar with the matter.