09 October 2024

The evolution of TowerCos to InfraCos now seems all but inevitable amidst rapid digital transformation in Asia and beyond. The investments required are huge; but ultimately, the digital InfraCo stands to win big…

In recent years, as the telecommunications landscape shifts towards new technologies like 5G, edge computing, and the Internet of Things (IoT), the role of tower companies (TowerCos) has been evolving significantly beyond the mere delivery of cellular coverage.

“The rise of 5G, IoT, and smart infrastructure is pushing traditional tower companies to expand beyond providing traditional passive infrastructure to MNOs and CSPs,” confirms Ramesh Khanna, COO, Tarantula. “To meet the increasing demand for advanced digital services, TowerCos must transform into infrastructure companies (InfraCos).”

“TowerCos are expanding their roles to become integral players in the digital ecosystem,” agrees Gayan Koralage, Director of Group Strategy & Malaysia Business, EDOTCO Group. “To unlock new innovative services, TowerCos need to diversify their infrastructure offerings and expand their capabilities beyond connectivity focusing on next-gen digital services, supporting 5G use cases and enabling smart city IoT solutions.”

Unlocking potential

To unlock and fully monetise new services, TowerCos have had to adapt.

Supporting 5G deployment requires the densification of networks, deploying small cells and distributed antenna systems (DAS), and amping up fibre rollout – no mean feat for a traditional TowerCo. For IoT networks, Low-Power Wide Area Network (LPWAN) solutions like LoRaWAN or NB-IoT are needed to support large-scale IoT applications. Meanwhile, enhanced site services like multi-tenant hosting to facilitate multiple carriers, OTT players and enterprise connectivity needs, and infrastructure sharing via colocation services for IoT and other wireless networks, is also in demand.

“With the saturation of towers and less need for new build, TowerCos will need to supplement revenue to continue growth and look at more imaginative ways to increase revenue,” asserts Jim Prosser, CEO, NEXSYS-ONE. “The more traditional ways of expanding scope for fibre and other traditional telco areas come with cost increases also but we are seeing more ways of monetising some of their existing features.”

The investments required for digital transformation of this scale are huge. Urban areas in mature markets like Singapore require heavy investment to advance densification of tower sites to support the strong uptick in 5G demand. Emerging economies like much of southeast Asia need a combination of macro towers with low frequency 5G spectrum (700MHz or 850MHz) for low population regions, and small cells with high frequency mmWave 5G spectrum for urban regions, to balance coverage and capacity. Fibre investment, too, is called for, especially in metro areas with a strong urban-rural divide like India, Indonesia, and the Philippines, as well as for underserved regions in Cambodia, Myanmar and Bangladesh.

“As InfraCos strive to build robust 5G access networks, strategic investments in small cell infrastructure, fibre networks, and edge data centres are imperative,” confirms Koralage. “The integration of edge data centres is crucial for minimising latency and optimising the performance of 5G applications, especially content-intensive services like streaming, gaming, and AR/VR. By strategically combining these infrastructure investments, infrastructure companies can effectively deliver seamless content access across Asia, catering to the diverse needs of users in various regions.”

“We are seeing things like Edge computing starting to become more important as open ran start to impact the telco, we see more operators looking for solutions that would support the new generation of networks,” says Prosser. “Backhaul capacity, data centres and fibre connectivity are fundamental investment opportunities to consider. Investing in optimisation services to improve SINR, beamforming and the emergence of small cells are other areas to consider.”

While edge data centres are considered a must, the high compute power required for this, and other infrastructure investments, places a heavy strain on power resources which must not be overlooked during the planning process. InfraCos need to consider renewable energy solutions, such as solar-powered towers and battery storage to help power sites in remote areas and improve the sustainability of telecom infrastructure.

“Backup power is something that we are seeing more TowerCos looking into, such as feeding this back into the grid for revenue or adding electric vehicle charging station to existing sites,” adds Prosser. “At the same time cost pressures increase, calling for an acceleration of operational efficiencies which can be leveraged via digitalising the operations and the underlying processes. Typically, large savings can be obtained with end-to-end digital processes. “

“By investing in cutting-edge technologies like 5G and 6G, expanding fibre optic networks, collaborating with technology partners on IoT, AI and edge computing, prioritising sustainability, and addressing the digital divide, InfraCos can play a pivotal role in driving economic growth, fostering innovation, and ensuring equitable access to digital opportunities throughout the region,” says Koralage.

With these investments, InfraCos are unlocking the region’s digital potential by providing the underlying infrastructure needed to meet rapidly evolving demands. From enabling 5G and bridging the digital divide to supporting smart cities, IoT growth, and sustainable development, InfraCos are laying the foundation for the digital economy. And, as the region continues to digitize, InfraCos will remain central to empowering businesses, governments, and consumers with the connectivity and innovation necessary for sustained economic growth and technological leadership.

For the benefit of all

Customer demand is playing a significant role in driving the evolution from TowerCo to InfraCo. As digital services become more complex, varied, and data-intensive, customers — including telecom operators, enterprises, governments, and end consumers — are demanding more.

“Consumers expect faster internet speeds, low latency, and a seamless digital experience,” shares Khanna. “Enterprises are also pushing for advanced infrastructure solutions, particularly private networks that allow them to implement IoT, automation, and real-time analytics. InfraCos, by offering end-to-end solutions, are responding to these demands and enabling businesses and consumers to thrive in an increasingly digital landscape.”

“They want high-quality experiences for things like video streaming, gaming, and virtual reality. At the same time, businesses are demanding networks that support digital transformation through AI, IoT, and edge computing,” agrees Koralage. “As consumers increasingly rely on mobile devices for data-intensive activities, the demand for specialised infrastructure providers to enhance network capacity and reduce latency becomes paramount.”

The move from TowerCo to InfraCo stands to benefit a wide range of stakeholders across the ecosystem. MNOs can offload the cost of infrastructure deployment, reducing their CapEx and allowing them to focus on core services like network management and customer acquisition. The new InfraCos themselves also stand to benefit from expanding revenue streams into new, high-margin services like edge data centres and managed fibre backhaul. For local municipalities and governments, the benefits range from improved connectivity and accelerated rollout of critical infrastructure, through to next-gen smart city developments that improve public safety and environmental well-being.

“The shift from TowerCo to InfraCo offers a win-win scenario, benefiting operators, infrastructure providers, investors, and consumers alike,” asserts Koralage. “By outsourcing infrastructure, operators can reduce costs and focus on core business, while infrastructure companies can generate stable revenue and drive innovation. This transition can lead to improved efficiency (efficient utilization of infrastructure resources, reducing duplication via colocation), accelerated deployment (operators can deploy new services and technologies more quickly by using existing infrastructure), and better connectivity and services for consumers.”

“The shift from TowerCo to InfraCo is not just a technological imperative but a market-driven necessity,” adds Khanna. “The rise of 5G, combined with the explosion of data and the need for real-time, low-latency applications, means that traditional TowerCo models are no longer sufficient. InfraCos, with their ability to support data-heavy applications and monetize emerging technologies like edge computing and IoT, are positioned as essential players in driving Asia’s economic and digital growth. This transformation benefits not just the MNOs, who can focus more on customer experience by outsourcing infrastructure management, but also enterprises, which gain access to private networks and IoT capabilities. These solutions are essential for powering digital transformation in industries such as healthcare, logistics, and manufacturing.”

Early adopters

Several Asian countries are witnessing a rapid shift from TowerCo to InfraCo, while others evolve more gradually.

“The shift from TowerCo to InfraCo is rapidly gaining momentum in regions like Asia-Pacific, Europe, and North America,” says Koralage. “Driven by factors such as regulatory changes, economics, technological advancements, and investor interest, this transition is shaping the landscape of the telecommunications industry.”

“This shift in infrastructure management not only allows for operational efficiencies but also positions key regions, particularly Southeast Asia and India, to capitalize on emerging digital trends and meet the surging demands of an increasingly connected population,” adds Khanna. “Rapid urbanization, coupled with government support for public-private partnerships, is driving the need for robust digital infrastructure in these markets.”

According to Koralage, India is seeing rapid transformation in its infrastructure industry, where TowerCos are being acquired or merged by infrastructure providers, in line with the government’s ‘Digital India’ initiative. Indus Towers and Bharti Infratel have started to expand their focus into fibre networks and small cells; and Reliance Jio is evolving into a broader digital infrastructure player by rolling out fibre, data centres, and cloud services alongside 5G.

In southeast Asia, Indonesia’s archipelago creates unique challenges for telecom operators, particularly in terms of connecting remote islands and rural areas. TowerCos like PT Tower Bersama Infrastructure and Protelindo are expanding into fibre optic networks and satellite services to address these challenges. Further, the rollout of 5G and smart city initiatives in major cities like Jakarta, Bandung, and Surabaya is prompting a shift towards InfraCo models that can offer a combination of mobile towers, fibre networks, and digital solutions.

In the Philippines, the government’s initiative to improve network coverage and reduce costs through common tower policies has led TowerCos to evolve into InfraCos. Like Indonesia, the Philippines’ geography makes it difficult to deploy large-scale tower infrastructure, thus there is an increasing focus on fibre and small cell deployment to enhance coverage and connectivity, particularly in underserved regions. As such, companies like Globe Telecom and PLDT are collaborating with TowerCos to expand fibre backhaul and integrate digital infrastructure solutions beyond just tower services.

Malaysia, too, is leading the pack in the Asian TowerCo to InfraCo shift. State-owned DNB is creating a shared infrastructure model where InfraCos play a central role in managing network infrastructure for all telecom players, pushing TowerCos to expand into more active network management, fibre deployment, and smart city infrastructure.

In Vietnam, which is rapidly rolling out 5G, TowerCos like Viettel Tower Company are evolving into InfraCos capable of handling fibre, small cells, and data centre services in line with the government’s emphasis on digital transformation.

Leading the charge

The future for digital InfraCos in South and Southeast Asia is bright; they stand to play a crucial role in building the digital highways that will drive economic growth, innovation, and societal transformation into the future.

“As 5G continues to roll out across Asia, InfraCos will become the backbone of the region’s digital transformation,” agrees Khanna. “Their investments will support the rise of smart cities, IoT ecosystems, and digital services across both urban and rural areas. This transformation will not only fuel economic growth but also ensure that the benefits of connectivity are accessible to all.”

“InfraCos will not only support the development of 5G but will also become an essential enabler of smart cities, AI-driven applications, and digital inclusivity,” adds Koralage. “As governments in these regions prioritise digital agendas, the partnership between public and private sectors will be critical in achieving the ambitious goals of building sustainable, future-proof digital infrastructure.”

In this evolving landscape, InfraCos are not just adapting — they are leading the charge towards a connected, smart future for Asia.

“Their ability to scale, innovate, and provide future-proof solutions is critical in ensuring that the region remains at the forefront of the global digital economy, benefiting businesses, consumers, and governments alike,” concludes Khanna.