5 Big ideas that will shape the Australian Tower Market in 2023
Jon Lipton, CEO of Amplitel has identified five key themes he thinks will shape the Australian Tower Market in 2023.
1.How governments will subsidise infrastructure deployment in regional rural and remote areas
Both the Federal and state governments have recognised the need to co-invest in extending mobile coverage to regional and remote Australia.
There are multiple inquiries and pilot funding programs occurring at the Federal and State level. Each of these look at different solutions for providing rural residents, businesses and tourists the ability to connect with a high quality mobile network in less populous rural areas. In addition, the government would like to ensure consumers have a choice of network provider in these areas.
This is a complex issue that intersects with government policy, each mobile carrier’s customer strategy and network investment.
There are multiple reviews underway: the ACCC’s Regional Mobile Infrastructure Inquiry, the Parliament of Australia’s Inquiry into co-investment in multi-carrier regional mobile infrastructure and separate inquiries by the Department of Communications.
In parallel, the NSW Government is piloting an Active Sharing Partnership program which seeks to drive multi-carrier outcomes through active sharing for government funded sites.
The government is in early stages of these inquiries, and we expect to get better insights into their thinking towards the middle of this year.
2. How TowerCos will provide support for MNO-led active sharing
The towerco market is all about supporting our MNO customers in delivering their coverage requirements. From Amplitel’s perspective we need to continue to develop new towers to meet network coverage gaps, reduce the cost and time in delivering these towers and make it easier for customers to co-locate on existing infrastructure. Amplitel will continue to support our customers no matter what their investment strategy.
With the exception of In Building Coverage (or Distributed Antenna Systems), which could meet some definitions of active sharing, there is no active sharing among operators currently.
DAS sharing in facilities such as hospitals, shopping centres, stadiums has been occurring for many years in the Australian market, leading to better coverage outcomes for consumers.
Technology is changing at an ever-increasing pace, that puts pressure on MNOs to invest further to meet consumer demand. This increasing cost pressures on MNOs mean we have to seek creative solutions to meet customer needs in a capital constrained environment. We also note that technologies that were emerging previously, such as LEO Satellites, are now becoming more competitive and may be able to provide an alternative to traditional mobile services particularly in remoter areas.
Sharing active assets to reduce costs could be one of the solutions available to MNOs to reduce the cost of extending coverage into areas where the business case is not as strong.
We believe there could be adverse impacts from how active sharing is implemented. If mandated by the government, it may reduce the competitive and commercial incentives for MNOs to invest to improve coverage and service quality.
We also note that the disaggregation of the mobile market value chain in Australia which created a largely independent towerco market should remove any historical barriers to the passive sharing of infrastructure. The industry has essentially evolved to support commercially driven competitive coverage outcomes.
3. How Towercos will seek to differentiate their offering
Key to achieving success is the ability to create a differentiated value proposition. A key pillar for Amplitel is ourdigital twins which will make it faster and easier customers to do business with us. Digital twins are evolving at pace from physical replicas of infrastructure to digital replicas to complex models you can query to understand how something changes over time. Amplitel’s use case for Digital Twins is not just to allow customers to analyse sites they are or want to locate on in 3D, but to enable them to understand the infrastructure through time. This allows the operators to plan functionality by virtually adding or removing equipment, automating applications and streamlining preliminary design work.
4. Maximising tower capacity through sustainable engineering innovations
While conditions in the outback are not, engineering is predictable. This is incredibly important as the aging infrastructure that currently supports rural Australian’s needs to be upgraded and supplemented in a cost effective, time sensitive and sustainable manner in the present to maximise the value in the long run.
A key growth area for Amplitel will be to continue to focus on increasing tenancy rates on existing infrastructure which will lead to reductions in duplicate infrastructure and increased sharing benefits for all market participants through reduced costs. This is only possible through sustainable and long-term plans to upgrade a site as a home to multiple operators.
The opportunities to expand into new products and services may not be limited to organic growth. If Australia follows similar trends to the international market, it will be interesting to see which other digital infrastructure sales come to light in the next 24 months.
5. The harmonisation of State and Territory planning and development of the approval process for towers
We believe there could be some simplification or streamlining of planning arrangements to reduce the cost of gaining government consent for new infrastructure. In addition, we believe that all governments should adopt the NSW government review by IPART to link lease costs to land area occupied rather than to the number of tenants on a tower.
Community engagement about new sites is important to us. We listen to feedback we receive as part of our consultation processes for new sites.