Tall propositions from technology stack to towerco
In an exclusive interview with Mobile Europe Totem’s new CEO Nicolas Roy explains the differences in business culture between a telco and towerco.
The chief technology officers (CTOs) of European mobile network operators (MNOs) may not be making the best use of their time by getting involved in mast management. Given that time is the mobile operator’s most precious resource, they might need change their priorities. Delegating mast management and passive infrastructure issues to a specialist could make a company a lot more profitable. That is the lesson learned from an audience with Nicolas Roy, the former Orange group technical director turned mast maestro. It’s eight months since Roy was appointed as CEO of Orange’s independent towerco Totem and the difference in disciplines has been interesting, Roy told Mobile Europe. In February Mobile Europe reported that chief financial officer Ramon Fernandez had hinted that Orange’s Totem division was ‘well positioned for deals’, presumably a euphemism for being on the acquisition trail. With its 26,000 tower sites in France and Spain it has exceptional leverage. Fernandez said core operating growth is an imperative 2023.
Chairman Stéphane Richard said that Orange, with its network of over 56 million connectable households, is the uncontested European fibre optic leader. Beyond France and Spain, Orange’s biggest areas of activity in the European nations was expected to be Totem, in its role as neutral and independent service provider. “By retaining control of our infrastructure, we have made a crucial decision for our future growth,” said Roy. Infrastructure sharing options for operators will include better coverage and connections in dense and enclosed environments, said Roy. Totem could give unfettered access to hostile territory such as stadiums, underground stations, trains and offices. These are the sort of conversations that a technical director does not like having however.
The old Roy would have preferred to talk about technology protocols rather than planning permission. By getting drawn into these areas, said Roy, a CTO can find themselves fighting a battle they are not equipped for. Many technology companies get their fingers burnt on the commercial property market as they have no idea of its hidden complexities and fall into any number of money pits. “You are dealing in non-technical conversations,” said Roy, noting how his job has changed in the last eight months. “You are dealing with landlords and local authorities and their conversations don’t follow the same [rationalisations as you might expect in a logic-related job such as a technical director’,” said Roy.
A towerco chief has to understand property and politics as well as empathise with the digital needs and uses of operators and their clients. It’s a unique job for which there is no training manual as this all new, according to Roy. The towerco CEO must be everything from an advisor on network construction and maintenance, a relationship expert when dealing with landlords and they must have access to elusive sustainable energy sources, said Roy. “Our industry is at a turning point,” said Roy, “in the past we have seen many tower companies funding the networks of their customers and we do think that tomorrow those MNOs would still want them to fund the networks. But the funding options mean they are more likely to turn to a tower company to provide their infrastructure and to raise capital by selling off their passive units.”
Meanwhile, Totem proves its worth by getting their money to work harder by getting more performance out of the assets they invested in. “Yes it’s clear that is the case. I mean, pure players and divested MNOs did create their own tower companies to extract as much value as they can,” said Roy. On that note, Roy wants to get the density of occupation up on Totem’s sites. Instead of having two MNOs sharing each tower, Roy would rather have five relationships to manage. “Success is gauged on different objectives,” said Roy. “Sometimes it’s about how quickly you can get permission for all these towers and construct them. That is where dealing with all the local authorities [is a fine art]. You need to find a common view with landlords, authorities and the operators in order to find the best sites.”