One area that has proven its critical importance in telecoms operation is co-location.
Co-location is an arrangement that allows an operator to share some type of physical space with other operator (s), often competing operators.
Telecoms service providers routinely enter into agreements with with one another to share networks and other assets. These arrangements facilitate interconnection of networks; satisfy mandated asset sharing required by law or regulatory authority in order to promote competition; and help carriers maximise their use of assets, manage risk and build business cases with improved returns on investment.
Experts, however, say operators not embracing co-location service fully, have the tendency of bearing the burden of high operating expenditure (OPEX) and capital expenditure (CAPEX). This, it is believed, could have a ripple effect in the quality of service provided.
In Nigeria, for instance, where telecoms subscribers have continued to experience poor quality of service daily, service providers are also complaining about the challenges they face in the operating environment.
Nigeria being a country where subscriber base rises on a monthly basis, experts stress the need for operators to provide more infrastructure such as base stations, power generators, security and maintenance of available infrastructure to meet the rising demand.
And as the average revenue per user in Nigeria is declining, operators are expected to adopt cost reduction models.
All things being equal, competition among telecoms service providers should bring down call tariffs, which automatically means a reduction in revenue for operators. With declining ARPU, telecoms operators would face a bigger challenge of how to increase revenue.
The Managing Director, Basnik Telecoms, a telecom service-support company, Mr. Olanrewaju Adedoyin, said embracing the co-location model fully would reduce the cost of doing business for the operators.
“This has happened in other markets and it can happen here. Telecoms operators can achieve up to 60 per cent OPEX reduction as co-location services are efficient. This is key because CAPEX reduction is critical in managing telecom business,” he said.
He said his experience working with the major telecoms operators in Nigeria had confirmed that they needed to invest in co-location services as an affordable alternative to build their own base transmission stations.
Co-location services provide significant technical and cost advantages in managing telecoms business. The bulk of co-location services entails collaborating to share either the active elements (the physical network) or the passive elements of their base stations, which include the physical tower structure, security and diesel-powered generating sets.
According to Adedoyin, one main objective of co-location services is to reduce the enormous OPEX and CAPEX that infrastructure rollouts demand.
Though co-location independent service providers, such as Basnik, Helios, Swap and IHS, have offered their services to the operators, not all operators have taken advantage of these provisions. Few operators have shunned the model of co-location. This approach has increased their OPEX and CAPEX, since they have continuously borne the burden of rolling out sites in different parts of the country.
He stated that managing a site involved constant power supply for 24 hours, maintenance of the diesel generators, provision of logistics, managing and staying committed to the host community.
Explaining the modalities, Adedoyin said, “Managing a site can be done through the network operating centre, where the towers can be monitored remotely. All sites are connected to the centre and we have people with telephones managing the sites.”
He said the major challenge facing the operators was power supply, adding that on a regular basis, the operators encountered diesel and generator theft and some ‘hotheads’ in the host community.
Adedoyin said, “Each time diesel is being brought to a site, there are miscreants waiting to collect toll. The operators do not need to carry this burden. This is transferred to the co-location service providers. It is our responsibility to manage all these issues as well as the property owner’s excesses.
“With the way the miscreants operate, it is quite hard for co-location service providers to have a definite volume of diesel for a period.
“There is no template. This has made the independent service operators as bulwark for the telecoms operators. Aside from the reduction of CAPEX and OPEX of the telecoms operators, co-location services also offer several benefits, some of which include the power to roll out several sites within the shortest possible time.”
The Basnik boss said to provide quality service to the over 120 million mobile lines, the industry needed about 70,000 base stations. Currently, there are about 25,000 sites.
“We still have a long way to go. The technology behind telecoms requires the strength of the frequency to be close. Each of the base stations and the capacity must be in a cluster. For this to happen, there must be a minimum base station to carry the traffic and to connect the base stations together. This explains why the industry needs more capacity and not coverage.”
The lack of capacity is what is usually responsible for the poor quality of service in the sector, and not lack of coverage, he said, adding that a place like Lagos with limited landmass required co-location services.
“We need 10 metre by 10 metre of space to locate a site but because there is no space in Lagos, we can have a waiver for smaller size. That is where co-location service comes in,” he noted.
The Executive Vice-Chairman, Nigerian Communications Commission, Dr. Eugene Juwah, recently said co-location had so far helped to reduce cost of operation and extension of network service to the remote parts of the country.
He also called on telecoms operators to take seriously the issue of infrastructure sharing, as practised in advanced countries, saying the NCC would ensure co-operation among telecoms companies in that regard.
Recently, the Vice-Chairman and Group Chief Executive Officer, IHS, Mr. Issam Darwish, said to support expansion and continued growth in the business, operators in the co-location sphere should do more researches and develop new products that would allow clients to perform better and also deliver better quality of service.
He also called for investment in a capable and skilled workforce to effectively meet the growing needs of operators.
Co-location, among other benefits, experts say, will reduce noise and air pollution around sites while improving the quality of service. This, they say, will continue to protect the environment and make telecoms business to thrive in the country for a long while.