TowerCos to drive economic growth says edotco, Roland Berger

• Study estimates that TowerCos can help MNOs save up to US$10 bil
• Can enable sustainable connectivity by reducing 17mil tonnes in carbon

edotco Group, an integrated telecommunications infrastructure services company and consultant firm Roland Berger has jointly concluded that mobile network pperators (MNOs) could save up to US$10 billion (RM43.9 billion) through infrastructure sharing.

Entitled, ‘Towering Above: Building Tomorrow’s Digital Infrastructure in Asia,' the study suggested that MNOs can cumulatively save up to US$67 billion (RM249 billion) for consumers due to affordable 5G connectivity by 2025. 

The study also showed that TowerCos can enable sustainable digital connectivity by reducing up to 17 million metric tonnes in carbon footprint by 2025.

According to edotco, the report explores the critical roles and potential impact of TowerCos across nine key Asian markets – Malaysia, Indonesia, Thailand, Bangladesh, Pakistan, the Philippines, Myanmar, Cambodia and Sri Lanka. 

It also demonstrates how TowerCos are stimulating sustainable digital connectivity to realise incremental socio-economic benefits for industries, societies and governments.

According to the report, digital infrastructure is becoming a critical digital economy enabler, with 5G expected to transform the industry. 

As a result, TowerCos are now transforming their roles to become digital infrastructure providers, in addition to working closely with industry stakeholders to undertake deeper forms of active infrastructure sharing, the study indicated.

Gayan Koralage, director of group strategy at edotco Group, said while MNOs are rapidly expanding their network in low average revenue per user (ARPU) markets such as Asia, they face a significant challenge in keeping their cost per gigabyte under control while striving to meet the industry demands and adhering to regulators’ intended policy and regulatory outcomes. 

“These can only be addressed sustainably through a higher degree of infrastructure sharing,” he said.

The report also noted that despite Southeast Asia (SEA) and South Asia being among the fastest growing sub-regions in terms of average data usage per user, MNOs have not been able to capitalise on the traffic trend. 

This is causing the continuous decline in ARPU, making it challenging for MNOs to generate returns that commensurate with their cost of capital, it said.

“In overcoming the MNOs’ investment conundrums, solutions based on software-defined networking and a stronger partnership with next-generation TowerCos can foster greater scalability, speed and cost advantages.

“Such partnerships are rapidly unfolding in developed markets, showcasing the TowerCos’ emerging catalytic roles in business, society and the environment,” he said.

The study further noted that leading TowerCos are poised to assist MNOs by moving up the value chain by offering innovative 5G-enabled solutions such as open RAN, network- as-a-service solutions and edge computing to help MNOs achieve greater cost- and network- efficiency.

“Given today’s telecommunications industry dynamics, TowerCos must evolve to become active digital infrastructure providers to provide the needed industry scalability, efficiency and flexibility,” said Damien Dujacquier, managing partner of SEA, Roland Berger.

“However, the right regulatory environment is needed with five policy reforms critical to power growth: strong digital infrastructure mandate, conducive licensing and ownership regime, active promotion of infra sharing, streamlined process and enablement of adjacent services.,” he added. 

Click here to discover more insights from the Towering Above: Building Tomorrow’s Digital Infrastructure in Asia study.