A Global Perspective on Regional Digitization Trends in the Tower Industry
The digitization of tower enterprises is a worldwide trend. However, implementation varies across the globe: each region has different circumstances and a different starting point. For Tower Companies or Mobile Network Operators (MNOs), it’s essential to stay informed about digital trends across various regions. This knowledge can aid in identifying new markets, guiding infrastructure development, innovating new services, and maintaining a competitive edge.
As a leader in enterprise asset digitization and digital twin technology, vHive is dedicated to serving all use cases that arise from various regional requirements. This article presents our collective experiences and expertise, sharing our company’s views on the regional trends influencing the digitization process within the tower industry, highlighting the unique features of various markets:
- North America
- Latin America and Africa
- Europe and Australia
North America: From Close Out Packages to Digital Twin Models
The tower industry in North America, particularly in the United States, has been at the forefront of technological innovation. Still, while pioneering in the adoption of drone technology, the U.S. market originally employed this advanced tech to create the same close-out packages, which are essentially static PDF reports. This approach reflected the industry’s initial tendency to apply new technology to conventional processes.
However, a significant paradigm shift is currently underway within the North American tower industry. Industry players are beginning to recognize the immense value in transitioning from static reports to dynamic digital twins. The focus has shifted towards leveraging digital knowledge for a comprehensive understanding of portfolios. This shift represents the industry’s realization of the transformative potential of maintaining data on digital platforms, gaining AI-powered analysis and sophisticated modeling capabilities.
This transition to digital platforms is not just a change in the method of data presentation, but a fundamental shift in how data is viewed and utilized. The move from static to dynamic represents a move from viewing data as a snapshot in time to understanding it as a living, evolving entity. This shift allows for timely and comprehensive assessment of the tower’s condition, equipment, and potential optimization, providing a bird’s eye view and a nuanced understanding of portfolios as well as a deep analysis of individual assets.
This shift is already bringing about substantial benefits, including improved efficiency, increased accuracy, and enhanced decision-making capabilities.
Latin America and Africa: Embracing Digitization to Manage Rapid Change
The telecommunications tower industry in Latin America (LATAM) is a dynamic and rapidly evolving sector. Latin American advisors write on The Dialogue that the vibrant independent wireless tower industry is a key pillar to making LATAM more productive, inclusive, and sustainable. According to Fitch Ratings, however, the region has seen a decline in tower ownership by operators to roughly 25% in 2021, making it one of the lowest globally in terms of operator tower ownership. This shift has led to an increase in the number of players and co-locations on towers.
Similarly, the telecommunications tower industry in Africa is experiencing significant growth and transformation. Mordor Intelligence predicts the market size in terms of installed base will grow from 199 thousand units in 2023 to 249.65 thousand units by 2028, at a CAGR of 4.63% during the forecast period. While TowerXchange points out that in 2023, there has been a slowdown in acquisitions as most major tower transactions have taken place, Africa’s SME market continues to drive greenfield tower deployments to close the continent’s massive connectivity gap.
In such a bustling environment, tracking changes becomes a significant challenge. The markets in this region are characterized by rapid changes and initially poor information. However, the advent of digitization and the use of advanced technologies like drones and digital twin platforms are revolutionizing the way these challenges are addressed.
The primary use case for drones and digital twins in the tower industry of these regions emerges in inventory tracking, revenue leakage prevention, and understanding alterations on towers. These technologies are particularly relevant considering the constant changes in these developing markets. They provide a comprehensive solution to understand and track changes, thereby improving billing accuracy and enhancing overall tower management.
In conclusion, the tower industry in both the LATAM and African regions are at the forefront of embracing digitization to navigate the challenges posed by rapid changes and growth. The use of drones and digital twins is not just a trend, but a necessity in this context, paving the way for a more efficient and sustainable future for the tower industry in these markets.
Europe and Australia: Streamlining Co-Location in a Competitive Market
In Europe, the tower industry has seen a steady increase in the share of independent TowerCos in recent years, rising from 13% in 2014 to 35% in 2021, according to research by EY. This growth, however, still lags other regions such as the US, Central and Latin America, and India. The European market is marked by strong competition, driving a need for enhanced co-location processes.
In Australia, the tower industry faces unique challenges due to the country’s vast, sparsely populated geography. Regulators and operators alike see satellites as more cost-effective connectivity solutions than building traditional towers, says SPGlobal. Despite these challenges, the Australian mobile communications tower market continues to grow, driven by the rollout of 5G and renewed interest in small cell technology.
Like Europe, the focus in Australia is also on streamlining the co-location process. The aim is to manage MNO-initiated changes on the tower efficiently, reducing time-to-revenue and enabling faster responses to market changes. This includes utilizing digitization platforms for everything from identification to simulation, submission request, fast approval, and post-change follow-ups.
Both Europe and Australia are making strides in digitizing their tower industries, with this particular emphasis on streamlining co-location processes. Digitization not only enhances operational efficiency but also provides a competitive edge in these markets.
Asia: Embracing Digitization to Meet Unique Regional Challenges
In Asia, the tower industry faces a unique set of challenges and opportunities. The region’s diverse geographical features, from its urban centers to its remote rural areas, present a complex environment for tower operations.
A significant trend in Asia’s tower industry is the increasing emphasis on monitoring the health and integrity of tower sites. This is crucial given the unique conditions that many of these sites are exposed to. For instance, towers located near the sea are susceptible to rust due to the salty air, while those in rural areas are often targets of theft. These factors necessitate effective maintenance prioritization to ensure the longevity and functionality of the towers.
To address these challenges, the industry is turning to digitization and automated inspection processes, enhancing the efficiency and effectiveness of tower maintenance operations. Through digital platforms and automated inspection, the industry is better equipped to maintain the optimal functionality of its towers, thereby ensuring the continued provision of essential telecommunications services across the region.
The Global Mergers and Acquisitions Trend: The Role of Digitization
On a global level, the tower landscape is being continually reshaped by mergers and acquisitions (M&A). These strategic moves are integral to the expansion and diversification of both Mobile Network Operators (MNOs) and tower companies, who are constantly engaged in the buying and selling of tower assets.
In this context, digitization has emerged as a game-changer, revolutionizing the M&A process. It has become an indispensable tool for due diligence, the critical stage where potential deals are scrutinized and evaluated.
MNOs and towercos are leveraging advanced digital technologies, such as digital twins and drone cell tower inspections, to facilitate a comprehensive and efficient due diligence process. With drone-enabled surveys, buyers are able to survey more of the assets proposed for sale, in less time: establishing a single source of truth about what actually exists in the field.
The use of digital twins not only streamlines the due diligence process but also uncovers potential investment opportunities. It enables MNOs and towercos to identify areas for improvement or expansion, thereby informing strategic decision-making during the M&A process. Moreover, digital twins play a crucial role in establishing a baseline for newly acquired assets. They provide a detailed record of the asset at the time of acquisition, serving as a reference point for future inspections, maintenance, and upgrades.
The role of digitization in the M&A environment of the global tower industry is transformative.
It enhances the efficiency, accuracy, and strategic impact of the M&A process, driving growth and innovation in the industry.
Digitization in the Tower Industry, Around the Globe: Dynamic and Versatile
The use cases we’ve discussed throughout this blog post merely scratch the surface of the potential of digitization in the tower industry. They serve as initial steps in a journey that is as dynamic as the technology itself.
Each region across the globe is harnessing the power of digitization to address its unique challenges and opportunities. Every company, irrespective of its size or location, can find its own path into this digital revolution. By identifying their unique entry points, companies can fully embrace the benefits of comprehensive digital twin adoption. This approach allows them to tailor the technology to their specific needs and objectives.
The global trend underscores the fact that digitization is far from a one-size-fits-all solution. Instead, it is a versatile and powerful tool that can drive transformative growth in the tower industry. By adopting and adapting digitization strategies, companies can not only keep pace with the industry’s evolution but also shape its future.