EdgePoint Infrastructure CEO Suresh Sidhu (pictured, below) predicted demand for 5G services in the Association of Southeast Asian Nations (ASEAN) would gather pace and fuel growth in the infrastructure segment, telling Mobile World Live the company is open to widening its tower portfolio to include small cells.
Sidhu said the tower company is open to amending its operating model slightly, but noted everything needs to be converted to a lease-style concept.
“Otherwise, it won’t work for the way we price and get capital and return capital.”
The company is funded on the basis of essentially leasing revenue. “Whatever we do must come back as leasing revenue as well.”
In the interview at its office in Kuala Lumpur he added “clearly, small cells is something we would do”.
The company expects operators to look at more shared networks, particularly in rural areas, requiring it to extend its model.
Passive focus
He believes the need for infrastructure gets more complex as 5G adoption broadens, with more cost-effective deployments required in the long term as lower-ARPU consumers sign up.
EdgePoint Infrastructure prefers to stay in the passive, or what Sidhu calls the semi-active area, which he says has more scope for doing things without butting heads with operators.
While the CEO was unable to comment on the status of a move by its parent DigitalBridge to offload some of its tower assets in the region, he highlighted his team is focused on continuing to grow the business. “If there are more investors to be included in that picture, I think we remain open to it.”
Its mission is to be a long-term provider of infrastructure to operators and in a way nations and it sees a huge continued need to build infrastructure, he said.
“ASEAN is an interesting model where you have a very sustainable, long-standing and supportive industry in terms of mobile operators that like the infrastructure model. But you still have to be skilful, navigate fairly practical operational challenges and be cost effective.”
Regional growth
Investment in 5G is accelerating across the region, with Malaysia the current hot-spot, Sidhu said.
The significant, continued 5G investment in the country will be positive for the infrastructure market, he noted.
“It will be good for the overall uptake of 5G as well. If the country can get the spectrum strategy right, it positions it to possibly be a faster adopter of private networks for industry.”
Interest in the private 5G market also will be driven by the country’s move to give operators two wholesale players to work with.
In Indonesia, operators are likely to step up rollouts in urban centres, with a focus on in-building coverage, which he said is the natural use case for much of 5G as most usage will be in a semi-static environment.
Indoor builds are also being pushed in Malaysia.
“I think MNOs in Asia are finding their mojo again. They’re just a little better capitalised.”
He explained recent mergers in Indonesia and Malaysia are different than Western Europe, where tie-ups have been survival oriented.
The deals in Asia have happened when the MNOs are not necessarily at their most stressed, to build a balance sheet for growth.
EdgePoint Infrastructure owns and operates more than 15,000 towers in Indonesia, the Philippines and Malaysia.
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