In mid 2009 Pragma commenced discussions with the Space Commercial Services (SCS) group of companies, which is headed up by Dr Sias Mostert. This followed on from the interaction with Sias in 2008, when he presented the keynote address in the annual AMTL conference on the Extreme Reliability of Sunspace Satellites. The initial discussions have since crystallised into an agreement to establish a joint venture between Pragma Africa and SCS Telecoms, with the objective to deliver Pragma’s well-proven ACC service into a vertical ICT market sector, with specific focus on the African telecommunications industry.

SCS Telecoms is part of the SCS group of companies and specialises in the application of space, satellite and related technologies for commercial and development activities in Africa and the Middle East. The team at SCS Telecom has vast experience in a range of telecommunications and related areas throughout Africa. This includes satellite communication, GSM technology and strategies, outsourcing and managed business services.

The African telecommunications market has a very large mobile (cellphone) component, which currently comprises more than 100 000 mobile towers and is growing at about 10% per year. However, this landscape is undergoing rapid change, driven by the need to reduce costs as the market matures and margins come under pressure. The past decade represented a ‘gold rush’ – a scramble for markets and market share, as operators set out to claim their slice of this potentially lucrative pie. With promising opportunities becoming scarce, a wave of consolidation and cost cutting is now taking place.

One of the major cost-saving opportunities is tower sharing, which could save mobile operators across Africa and the Middle East about R70 billion in ongoing capital and operational expenditure over the next five years, according to the telecoms advisory firm Delta Partners. It entails operators collaborating to share either the active elements (the physical network) or just the passive elements of their base stations – including the physical tower structure, security, power and diesel generators.

Tower sharing can be facilitated by operators forming joint ventures or even separate tower companies to handle the management and further rollout of network infrastructure. Operators could also sell their towers outright to existing tower companies on a lease-back basis.

A third option would be to retain the towers, but to outsource their management and maintenance to an organisation that could deliver such a service at a lower cost than the operator due to economies of scale and core business. All these options represent a golden opportunity for outsourced physical asset management services, with a centralised ACC service support centre connected with real-time links to base stations. (See Figure 1 for schematic representation.)

The industry is currently abuzz with wheeling and dealing, as operators, tower companies and service providers try to hammer out the shape of the future. All this activity is creating opportunities for Pragma Africa, provided that we can demonstrate telecoms expertise, which is why we partnered with SCS Telecoms to form Pragma SCS. To get Pragma SCS up to speed, the active role players from Pragma Africa are Karl Nepgen (asset care service strategy and direction) and Louis Volschenk (business development), and from SCS Telecom the participants are Jannie van Rhyn and Peter Schulze (both engineers with hard experience in telecom operations and management in African countries).

To date Pragma SCS has introduced its unique services to most of the major operators on the continent such as MTN, Vodacom, Safaricom (Kenya), Zain (Central and West Africa) as well as industry OEMs and service providers such as Ericsson and Nokia-Siemens. In April Karl Nepgen and Peter Schulze also attended the East Africa Mobile Conference in Nairobi, Kenya, where promising contacts were made with leading operators and suppliers.