Vantage Towers Taking Advantage of Network
Gergő Budai (second left) with collegues on a tower site visit.
The Budapest Business Journal spoke with Gergő Budai, the head of Vantage Towers Hungary, about its demerger from Vodafone, its first six months of business, and its plans for the future.
BBJ: Let’s start with a recap. Why was Vantage Towers founded?
Gergő Budai: Vodafone Group outsourced its passive base station elements, including towers, building-mounted stations, and distributed antenna systems, to a standalone corporate group last year to make more efficient use of the equipment. Vantage Towers Group covers 10 countries with about 82,000 base stations across Europe. Vodafone Hungary also joined this group initiative: Vantage Towers was established in Hungary on November 1, 2020. Vantage Towers Hungary has taken over the ownership and operation of the network and is responsible for building, installing, and operating new towers, stations, and antennas. These elements have been made available to others in the telecommunications industry as well as players from different sectors so that not only Vodafone can utilize this passive network infrastructure. The availability of high-quality, secure network infrastructure enables the rapid development of customer-focused digital services, with particular regard to 5G technology and its roll-out in business and retail services, all of which combined contribute to the digital development of Hungary and Europe. Simply put, it is much more cost-effective for mobile operators and other market players to share an antenna structure or a distributed antenna system than each building their own. It is better in other ways too; for example, for the city landscape.
BBJ: How many employees and towers does Vantage Towers Hungary have, and how does this compare to your competitors?
GB: We currently have more than 2,000 base stations, approximately 800 towers, 1,200 building-mounted stations, and about 100 indoor unit systems (i.e., distributed antenna systems). Vantage Towers is the second largest tower company in the country. The number of base stations is increasing all the time; since the company’s launch in November, we have deployed about 30 completely new base stations, and there is continuous growth in the number of tenants (third-party partners) on each site. Apart from third-party contractors, we currently employ 33 people, but we are expanding. However, it is important that our organization doesn’t grow too big and remains flexible, efficient, and agile.
BBJ: How were the last six months since establishment?
GB: It’s definitely been a very busy couple of months. Vantage Towers Group (of which Vantage Towers Hungary is a member) debuted on the DAX Frankfurt stock exchange this spring, indicating our independence from Vodafone. We are proud to join the SDAX index as of 21 June – so quite shortly after our IPO. I am proud to say that Vantage Towers started its Hungarian operations with a successful first six months. Cooperation Agreements have been signed with several major players in the ICT market, including Antenna Hungária and Delta Systems. We cooperate with Antenna Hungária to improve the network coverage of Hungary with the efficient use of base stations, while our partnership with Delta Systems is important because of the development of 5G, internet of things, Industry 4.0, and smart building solutions. It is a great pleasure for us that these partnerships can benefit both industry and society.
BBJ: How did your colleagues and clients react to the change?
GB: We have been through an eventful period, both at the company level and personally, too. I get to manage a newly formed company in an up-and-coming industry. Telecommunications infrastructure is currently being outsourced to tower companies in our country and also in other European states. As a result, I expect that an innovative and very competitive market will be created, and I am proud to be a part of it, as we are now shaping it. I will, of course, try to maintain good relations with current and former clients as well as former Vodafone colleagues and those from other industry players; after all, we are now working in a specialized area, separated from Vodafone. One of the main reasons behind the demerger was to strengthen synergies by cooperating and using our base stations and antennas with as many industry players as possible. That can even enable players from other industries to utilize them, for example, to build private networks, to achieve better indoor coverage, for meteorological measurements, for various atmospheric tests, for drone charging or installation; the list goes on.
BBJ: How will the introduction of 5G affect your business?
GB: Developing 5G networks and ensuring adequate coverage will require constructing many new small cell microsites. These are mainly distributed antenna systems providing indoor coverage and lamp post-mounted small cell antennas. The shared use in these cases is even more reasonable, so that tower companies will have a crucial role in this area. With 5G, the outsourcing of base stations is particularly beneficial because the new generation mobile network requires a different approach to the previous operating models. With earlier generations, service providers bought the frequency, set up a network, turned it on, customers bought a SIM card, turned on their phones, and the service worked. This will be different with 5G because we are talking not only about telecommunications but also about infocommunications, which requires strong partnership and cooperation.
BBJ: What are your plans for the future?
GB: We have been working from the outset to make the necessary infrastructure available in a sustainable manner for the digital transformation of Europe and Hungary. To achieve this goal as soon as possible, we are constantly trying to develop our infrastructure. Our plans include the construction and deployment of additional base stations and establishing partnerships with further key players in the ICT market and other industries so that as many people can use our infrastructure as possible. Additionally, we will continue strengthening indoor network coverage, its installation and development, focusing, for example, on office buildings, industrial buildings, underground car parks, and event halls.
BBJ: What about the company’s carbon footprint? How can this be improved?
GB: Operating towers consumes a lot of energy. Therefore, 100% of our base stations and sites in Hungary have been running on electricity purchased from renewable energy sources since last November. In several of our stations, we test local alternative power generation solutions, which in most cases means installing solar systems. We aim to increase the efficiency of our energy use by 15% by 2023. Furthermore, by 2025, we want to reuse, resell or recycle 100% of network equipment that will have become redundant. To give a specific example, we currently have several base stations that are no longer powered by a diesel generator but by solar panels in the event of a power outage. The aim is to make solar panels the primary source of energy for these stations, and only in the event of persistent bad weather should mains power be used.
This article was first published in the Budapest Business Journal print issue of June 18, 2021.
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