Recognized as leading T-ESCO globally, IPT Powertech Group is one the few global players to offer the largest portfolio of hybrid solutions, said the company’s CEO Nabil Z. Haddad in an exclusive interview with Telecom Review.
IPT PowerTech CEO explained how the company serves its customers’ needs with its power, energy and infrastructure solutions and highlighted the importance of its strong presence in the African region which is expanding constantly, notably with the inauguration of an office in Guinea-Conkakry.
First of all, can you give us an overview of IPT PowerTech’s scope of business?
Established in 1993, IPT Powertech is a complete solutions provider combining specialized energy/efficient solutions with innovative telecom infrastructure along with managed services, all the way to initiating the Guaranteed Savings Model and T-ESCO Model across Middle East, Africa and South East Asia. IPT is an integrator of top-notch trusted products, developing and identifying best technologies in order to create a product optimizing the output of the solution.
Recognized as leading T-ESCO globally, IPT Powertech Group is one the few global players to offer the largest portfolio of hybrid solutions and retain a consistently strong presence with offices in 11 countries and a regional coverage of more than 60 countries and more than 4,500 experts on board, continuously developing its service offering to meet the ever-changing industry demands.
Whilst power and telecom services divisions remain key parts of our business, our focus has increasingly turned to our telecom-ESCO business where we see huge potential.
Is IPT Powertech Group well positioned to serve the operators’ need for an optimal TCO?
IPT Powertech Group has always been a front-runner in anticipating customers’ needs from tailoring specialized solutions all the way to offering a complete power solution and merging hybrid and renewable energy solutions with telecom infrastructure and field managed services and maintenance.
This makes us pioneers in merging the two worlds, giving end-to-end solutions to towercos and MNOs, all the way to initiating the guaranteed savings model globally, and making us the largest ESCO worldwide in terms of number of sites.
Operators across the globe are coming under increased financial pressure with competition from OTT players and ARPU continuing to decline. They are searching for ways to decrease OPEX whilst minimizing capex and the ESCO model offers an ideal solution. Thus, IPT is proud to initiate the Power leasing concept, where energy is sold as a service. We became a Telecom Energy Service Company (T-ESCO) company that invests, and provides comprehensive energy, and site infrastructure solutions and services to its customers, from auditing, to redesigning, procuring, and implementing innovative site solutions, all the way to managing networks, on a full OPEX model while guarantying savings and efficiencies.
The Guaranteed Savings Model and the T-ESCO model both serve MNOs and towercos in a way to reflect the appetite for capex spending or capex leasing, all the way up to optimal TCO. Both models ensure the deliverables of power availability and reliability to the network respecting all Service Level Agreements (SLAs) related are met.
Your presence in Africa is remarkable. How important is the African region for IPT PowerTech, especially after the inauguration of the new office in Guinea-Conkakry?
IPT Powertech covers West Africa with offices in Nigeria, Ghana, Morocco and Algeria, all acting as a hub for neighboring countries across the African continent. Recently, we inaugurated our office in Conakry- Guinea, after signing a long-term contract with one of the operators in Guinea Conakry under the ESCO matrix model.
Under this fixed energy model, IPT Powertech will be responsible for the CAPEX, supply of power solutions in addition to the managed services, which will allow the operator more concentration on his core business. Our duties will focus on providing complete power solutions that consist of generators, hybrid systems and solar systems. Initially we will take over management of the existing power equipment on sites, but over time we will upgrade this to make the system more efficient, a process which we have begun already.
How do you feel IPT Powertech is realizing the company’s growth potential in the Middle East?
For the Middle East, our headquarter is based in Lebanon, Beirut in addition to a development laboratory equipped for testing under harsh environmental conditions for solution/product optimization. We also have offices in Iraq and KSA, and in 2017, we acquired Shabakkat KSA, a member of Shabakkat Group, a leading telecommunications solution provider in the Middle East. We believe that the acquisition was a strategic decision and thus integration of Shabakkat KSA within IPT Powertech Group will be primary for accomplishment of IPT potential growth.
Shabakkat KSA’s main line of business comprises of network rollout, site acquisition, renovation and construction, infrastructure equipment supply, installation and commissioning, managed services, field and facility maintenance. Shabakkat KSA team exceeding the 1,300 specialists delivers full turn-key telecom site infrastructure services, in addition to consultancy services for more than 20 projects in the kingdom, reaching up to 30,000 sites for Zain, STC and Mobily through direct and indirect contracts with main vendors.
However, IPT Powertech is willing to invest and expand into new countries in the Middle East and Africa within the upcoming few years, as long as that growth is profitable and aligned with the strategic direction of the business.
Can you tell us more about your accomplishments for the past few years, specifically with the initiation of the Guaranteed Savings Model?
IPT Powertech Group is engaged in Nigeria on the major project of Guaranteed Savings across the African continent, supplying energy efficient power solutions—including management and long-term maintenance — and OPEX optimization under a long-term contract.
The guaranteed savings model is something which IPT PowerTech has been promoting for a long time, having introduced the model about five years ago. Historically, when an MNO or towerco purchased energy equipment, they used contractors to deploy, operate and maintain it. When the equipment isn’t performing as hoped, a blame game can ensue with the contractors complaining that the equipment isn’t delivering on expectations, whereas in reality it may have been incorrectly deployed or maintained by the contractor.
Our approach in eliminating the blame game is simple: combine energy equipment provider, system integration, and O&M service contracting services to create a single point of accountability. By being the energy system integrator and the contractor at the same time, we are able to manage key points in the value chain, thus leaving no room for performance failure—or for the ‘blame game.’ In fact, we believe that our group is one the few solution providers globally offering and merging hybrid and renewable energy solutions with telecom infrastructure services and offering field managed services and maintenance all at the same time
Under a guaranteed savings model, we sell the equipment to the MNO or the towerco who then pays a fixed rate for us to install and maintain the equipment. We guarantee that we will deliver the savings promised, any deviation from this will be absorbed by IPT PowerTech. This gives the MNO or towerco not only clarity on the capex to install the system but also provides predictability in OPEX. With IPT PowerTech providing, deploying and maintaining the equipment, it avoids the blame game between equipment vendor and contractor that can so often occur in the management of power on cell sites.
The guaranteed savings model offers an alternative to the ESCO model, whereby the MNO or towerco still deploys the capex (whereas in an ESCO agreement the ESCO would invest the CAPEX).
What is the secret behind the success of the guaranteed savings model?
IPT Powertech Group is proud to be the initiator for the guaranteed savings model in Nigeria and the African continent. The success of this model is attributed to several factors varying between the quality of our products, technical know-how of the technical team, constant remoting along with adequate O&M training.
To begin with, the IPT in-house designed and developed Hybrid Power solution are built with high quality and robust components meeting high standards. Furthermore, our technical team continuously tracks and monitors the guaranteed savings system’s performance with RMS tools, by constantly checking the daily system performance, routine maintenance programs and diesel consumption.
The group ensures that our guaranteed savings criteria in the contracts are met through constant site inspections, audits and repairs.
Moreover, we believe that the Power System Maintenance training program is considered as an integral factor for the success of the model allowing the upskill of our O&M resources in order to maintain the health of our implemented systems.
How does IPT Powertech finance the ESCO projects, and what are the investment plans for the future? What kind of investors do you see as being interested in the ESCO space?
We have relied on our own funds this far but do envisage that we will look at outside financing. We are receiving a large amount of interest from investors on both the debt and equity side from banks and funds and could foresee that many investors which have played in the towerco space will start to look at investment opportunities in ESCOs.
The challenge however is that the T-ESCO model is still very new and investors are still trying to understand it; there is a lot of ambiguity in the term ESCO, people don’t understand what type of contracts or MLAs are in place. There’s also a lack of sizeable ESCOs in the market which investors can compare; after IPT PowerTech, the next biggest sized ESCO is way behind.
Ultimately however, there are a lot of parallels between ESCOs and towercos; it is still in the telecom infrastructure space involving long term (10 year) contracts with creditworthy MNOs and towercos. There is a lot of commonality in the two business models and the fact that towercos often view ESCOs as the competition only goes to support this view.