Strategy Consulting: TowerGrid – Asset Base

Monetization Strategy

GROUP -10 : John (21) || Megha (26) || Rahul (39) || Shreya (47) || Swetangshu (54)
Tower Grid’s Business Model:
 Customer Segmentation
 Value proposition
 Product Offering
 Pricing
 Sales & Distribution
 Customer Segmentation
Method: B2B Selling

CSP Tower Vendors

Tower
Vendor
Tower Grid CSP

 Tower grid must target both the service

providers as well as the tower vendors in a
B2B selling mechanism
Subscribers
Exhibit 13

 The most preferred customers are the

vendors which are transforming their
existing circle C type of cell sites into circle
A. Thus, making them more profitable
 Value Proposition

Business level
benefits

Easier land Low O&M costs:

Access to Reduction in More than
acquisitions and Tower as a
hinterlands Carbon 99.5%
regulatory Service (TaaS)
footprint availability
approvals

Policy level
incentives
Transformation Electrification of non-
E-governance Leveraging assets of electrified telecom
into a digitally
via emerging broadcast & power towers; reducing diesel
empowered
technologies sector to improve consumption at BTS sites
knowledge
like IoT, Mobile connectivity
economy
 Product Offerings
Lease lines (P2P)
 SDH/DWDM
 E1/E3/DS3/STM-1/STM-
4/STM-16/STM-64/10G/100G
Capacity
 Scalable from present capacity
of Gb to Tb
 Layer -1 DWDM/SDH, Layer-2
switching
 Backbone reliability of 99.95%
 Self-resilient rings for
redundancy
Due diligence
A platform shall be
installed on the tower for
mounting the telecom
equipment and further
Infrastructure MPLS/VPN Other services draw power from the
services  3 tier architecture: Core, Edge,  Datacenter services earth line
 Dark Fiber on UGOFC Access layers  Video conferencing
 Co-location services  Dual home connectivity to  UCaaS
No interference
 PoP infrastructure prevent single point of failure  IoT for smart cities should occur with the
 Tower-space leasing  Real-time network for power  VoIP high voltage from
 Managed services
EHV lines
transmission applications
 Layer-2 & 3 to support  Wi-Fi
different Class of services
Telecom equipment
Backbone reliability of 99.95%
co-located shouldn’t
 Scalability up to 500Gbps in degrade the
core performance of the
transmission
 Pricing & Financials (1/2)
There can be mainly 2 pricing strategies adopted by Tower Grid based on
3 key factors to whether the demand is for a new site or using an existing one
influence price:

 No. of towers utilized

(tenancy)

 Location of installed
base

 Performance of the
service operator Greenfield Strategy Brownfield Strategy
 Adding new BTS onto an existing tower
(demand based  Tower Grid builds a tower from scratch
 Usually during network modernization
 Operates and collects all the revenue till
charging) on the initial CAPEX is recovered process 2G -> 3G -> 5G
 Immediate roll out of 50:50 revenue
subscriber base,  Enters into a 50:50 revenue partnership
sharing
with the service provider
ARPU based market  No. of BTS tenants per tower per month  No. of BTS tenants per tower per month
share
* In order to calculate the overall TCO, consider the services like security, O&M and so on
 Pricing & Financials (2/2)
In line with CERC (Sharing of Revenue derived from utilization of Transmission Assets for other business) Regulations,
2007 Tower Grid is required to share the revenue derived from such business with the beneficiaries.
3) Revenue
1) CAPEX-CAPEX/Location Parameter Industry BSNL Tower
Average Grid
S. CAPEX Asset Life Details
No. Expenditure (expected)
Urban Rent – 56000 51750 50000
i. Rs. 16 lakhs 15 years Power PT and other power single tenant
equipment Rural Rent – 56000 50000 45000
ii. Rs. 2 lakhs 7.5 years Battery charger with remote single tenant
monitoring Urban Rent – 49000 48075 45000
iii. Rs. 2.5 lakhs 5 years Battery Bank second tenant
Rural Rent – 49000 46500 40000
second tenant
2) Operational Expenses

Source: CERC
Annual operational expenses/Location:  Parameter: Rentals/location/month
 Rent includes energy cost
Rs.1.12 Lacs (Rs.9325/Month).  Urban: Rural Tower Split ratio is 10:90 % and double tenancy of
100% in urban area and 5% in rural area.