Autonomous TowerCos add a new layer to African telecoms

As the demand for voice and data traffic continues to grow across Africa, Mobile Network Operators (MNOs) must ensure the necessary infrastructure is in place. However, this requirement can affect their operational efficiency and profitability. To tackle this challenge, many MNOs are adopting a delayering strategy, which involves dividing their networks into separate, self-governing entities. An example of the benefits of delayering is the emergence of tower companies. The success of these tower companies relies on the presence of a dedicated Business Support Systems (BSS) platform. With these systems in place, Africa’s MNOs will be better positioned to optimize their networks and prepare for evolving customer demands for the future. 

Optimising operations 

Mobile networks in Africa account for up to 98 percent of all voice and data traffic across the continent, making them the primary means of voice and internet connections. Since 2020, there has been a significant increase in data traffic, primarily due to the COVID-19 pandemic, which led to more people working and learning from home and a rise in the use of online services such as mobile commerce and mobile banking. 

Meeting customers' rapidly changing behaviors and demands can be costly for MNOs. Moreover, while Africa’s mobile infrastructure will primarily rely on GSM and 3G technologies in the foreseeable future, a shift to LTE and 5G will be necessary as network demand increases. This transition will require considerable investment.

As MNOs wrestle with changing demands, rising costs, and the complexities of migrating from GSM and 3G to LTE and 5G, they will seek ways to optimize operations and improve efficiency. For many, delayering may be a viable solution. This process involves separating the traditional telecoms model's governance, financial accountability, and organizational structure into three distinct units (or layers). These layers are made up of the ServeCos, which manage the retail side and what the MNO sells to end-users. The NetCos, which are responsible for the core network and technology stack. And finally, the InfraCos, which oversee the MNO’s hardware and assets, including cell towers.

The advantages of delayering are substantial. By reassessing operational structures in this manner, African MNOs can enhance their operational efficiency, free up capital, and invest in next-generation connectivity in anticipation of future demand.

The TowerCo example 

The efficiency of delayered assets and their focus on a specific aspect of telecommunications appeal to investors and can lead to increased cash flow for businesses. Analysts note that pure-play ServeCos, NetCos, and InfraCos tend to outperform traditional telecom companies. For example, tower companies, or TowerCos, can operate their sites approximately 40 percent more efficiently than conventional telcos, making them attractive partners. It’s no surprise that TowerCos have achieved a ROIC (return on investment capital) of 10 to 15 percent over the past two decades, while traditional telcos have struggled to break even on their cost of capital. 

Key BSS benefits for unlocking TowerCo growth

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Independent TowerCo specializes in operating neutral hosts and “passive” wireless network infrastructure, like mobile towers. By sharing towers with multiple tenants, they improve coverage, reduce MNOs’ overall costs, and enable MNOs to pass those savings on to end-users. TowerCos’ business model also allows them to find more innovative solutions, sustain growth, and assist partnering companies in maintaining a competitive edge. Importantly for MNOs throughout Africa, independent TowerCo’s will play a crucial role in enabling 5G and expanding mobile network coverage across the continent.

Complex challenges 

The evolution of TowerCos from traditional telecom companies has allowed them to focus exclusively on infrastructure, significantly improving efficiency. However, this transition has left them susceptible to challenges that standalone businesses face in complex operating models.

Successful TowerCos must manage multiple tenancies at a single site, support complex business models, and execute intricate quotation processes with numerous variables. Traditional telcos use a BSS—a set of software programs designed to manage partnerships, customer and service orders, products, and services—to support such processes. But, while practical, these systems were not designed for the complexities of TowerCos operations.

TowerCos rely on efficiency and adaptability, but traditional BSS often fail to meet unique industry requirements, such as passive infrastructure leasing, collocation enablement, and support for new technologies like small cells and edge computing.

To maximize efficiency and establish profitable partnerships, TowerCos need dedicated BSS solutions tailored to their specific needs. Relying on manual workarounds and patches can lead to substantial and unnecessary investments of time, effort, and money, ultimately undermining the efficiency that makes them so profitable. 

Advantages of dedicated BSS 

A purpose-built BSS solution enables TowerCos to fully capitalize on the business opportunities presented by Africa’s evolving connectivity landscape. A BSS designed specifically for TowerCos can streamline the lead-to-cash process by automating each step, from initial customer engagement to final transactions. 

TowerCos can integrate OSS (Operational Support Systems), BSS, and ERP systems to ensure data flows smoothly across segments. This integration is crucial for coordinating complex operational processes required for next-generation networks like 5G and LTE. 

BSS solutions also improve customer interactions with robust order capture and management capabilities, enabling quick and accurate responses to service requests. They optimize billing and financial operations, guaranteeing correct invoicing and payment for services rendered. Additionally, a dedicated BSS platform supports complex business models, allowing for tailored service offerings and effective management of contract lifecycles. These systems also provide detailed analytics and reporting tools to identify performance trends and operational efficiencies, which are crucial for making informed decisions on asset utilization and future investments. 

Seizing opportunities 

By incorporating the capabilities of a modern, integrated, and modular BSS solution, TowerCos can streamline their foundational operational processes and adapt to Africa’s rapidly evolving telecommunications landscape.

Of course, TowerCos are just one example of how delayering, supported by a dedicated BSS, can help MNOs maximize the efficiency and commercial potential of their business models. With huge changes on the horizon, Africa’s MNOs should act now to seize the opportunities available by optimizing and streamlining their operations for greater efficiency and profitability.

This article was originally published in African Wireless Communications magazine.