Improving Tenancy Ratios through Digitization: Charting a Path to Better Metrics

Improving Tenancy Ratios through Digitization: Charting a Path to Better Metrics

9 Aug 2023 Written by Sharon

In today’s rapidly evolving telecommunications industry, tower companies are seeking new avenues for growth and improved profitability. A key performance indicator in this pursuit is the tenancy ratio – a metric that measures the number of tenants utilizing a single telecommunications tower. A higher tenancy ratio in telecom holds the key to increased revenue, making it a strategic imperative for tower companies to focus their efforts on optimizing this aspect of their business. Digital platforms are ushering in a new era of tower optimization, providing the analytical tools and data required to significantly impact tenancy ratios.

In this blog post, we’ll outline the process of leveraging a digital platform to improve tenancy ratios:

  1. Digitizing Tower Assets
  2. Inventory Analysis
  3. Data Alignment
  4. Leveraging Mount-Level Analytics
  5. Identifying Available Vertical Space
  6. Collaborative Planning for Tower Changes

The Significance of Tenancy Ratios in Tower Company Metrics

The tenancy ratio plays a pivotal role in shaping a tower company’s profitability. A higher ratio signifies that more MNOs are co-located on a single tower, optimizing resource usage, and maximizing revenue per tower potential. Furthermore, as the operational costs associated with maintaining a tower remain relatively constant regardless of the number of tenants, an increased tenancy ratio may translate to noteworthy cost savings per tenant.

A higher tenancy ratio isn’t merely a numerical feat; it’s a dynamic strategy. That strategy balances new tower development with co-locating new equipment on existing sites, a cost-effective means to increasing utilization. In a landscape where tower companies have traditionally focused on deploying new build-to-suit (BTS) towers to accommodate mobile operators, the emphasis on co-location tenants in existing ones emerges as a strategic pivot.

Against the backdrop of the burgeoning demand for increased 5G allocations, the importance of co-location gains significance. While deploying new towers offers growth, the associated capital expenditure is considerably higher. In contrast, co-locating tenants in existing towers presents a growth avenue that is capital-expenditure-light, allowing tower companies to adapt nimbly to evolving industry demands.

Navigating the Path to Improved Tenancy Ratios with Digital Twin Platforms

Improving tenancy ratios involves a series of strategic steps, facilitated by the cutting-edge capabilities of digital platforms. These steps form the bedrock of a comprehensive approach that leverages accurate and up-to-date data to optimize tower assets.

1. Digitizing Tower Assets: Digitization of tower assets is the first step to leveraging digital data. Commercial, off the shelf (COTS) drones combined with automation tools have revolutionized field surveys and enabled the creation of digital twins, precise visual representations of field assets. Drone-enabled surveys are significantly faster, safer, more accurate and easier than traditional methods, which means that they can be performed more frequently, across an entire portfolio, providing a single source of truth about each tower’s inventory. Though traditional Asset Management Systems (AMS) may house tower information, discrepancies are commonplace due to outdated or inaccurate data. The foundation for subsequent optimization efforts lies in acquiring reliable and up-to-date tower data.

2. Inventory Analysis: Once the towers are digitized, advanced tower digitization platforms leverage AI-powered tools for inventory analysis, facilitating an in-depth understanding of the equipment present on each of the towers, i.e., what’s out there, and who owns it. This accurate inventory serves as the baseline against which future optimization strategies are evaluated.

3. Data Alignment: Accurate information needs to be shared across the organization as well as with external stakeholders, to realize the most benefits. Through partner APIs, digital twins of towers can be cross-referenced with existing data from Asset Management Systems and other sources. Discrepancies are identified, rectified, and reconciled to ensure the availability of the most precise and current information for informed decision-making.

4. Leveraging Mount Analytics: AI-powered analytics can identify unutilized spaces on tower mounts that could accommodate additional equipment. Through comprehensive mount analytics, tower companies can uncover targeted sales opportunities. Analytics also provide critical calculations, ensuring that tower companies maximize space utilization without compromising structural integrity.

5. Exploring Available Vertical Space: Vertical space analytics clearly identifies unused vertical space on a tower that can be harnessed for expansion. With vertical space analysis, opportunities for new equipment levels are highlighted, unearthing new possibilities for further co-location and growth.

6. Simulation Software for Collaborative Planning: Simulation and modeling tools facilitate collaborative planning sessions with stakeholders such as MNOs. This interactive approach empowers tower companies and MNOs to collaboratively explore colocation opportunities: potential tower layout changes, ensuring optimal space utilization, improved tenancy ratios, and better customer relationships.

Digitization: Improving Tenancy Ratios and More

In a competitive telecommunications landscape, tower companies must continuously seek avenues for growth and profitability. Improved tenancy ratios are a key strategic pathway toward achieving these goals, and co-location offers a critical advantage.

Digitization revolutionizes tower optimization processes and provides the tools companies need to improve KPIs. By digitizing towers, harnessing advanced analytics, and enabling collaborative planning, tower companies can unlock untapped potential, maximize tenancy ratios, and propel themselves toward improved revenues and new business opportunities.

Digital Twin Platforms serve as catalysts for innovation, collaboration, and, ultimately, elevated profitability.

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