Sanjiv Ahuja: Eaton's first goal is passive
infrastructure sharing, but later he hopes it will be able to
share active networks
Sanjiv Ahuja, former chairman of Orange, and a number of
other senior figures from the world's telecoms industry, have
set up a bold project to share infrastructure in emerging
So far Eaton Telecom Infrastructure is keeping a low profile.
But visit the rented office in London where Ahuja bases his
operations and you're likely to bump into Terry Rhodes, the
former founder and CTO of Celtel, the company subsequently
taken over by Zain, conducting meetings in the corridor.
"We also have Alan Harper: he's president," says Ahuja. Harper
spent more than a decade with Vodafone, finishing as group
strategy director before leaving in 2007 to pursue other
So far Eaton is still in the development phase, but Ahuja - who
ended his role with Orange in 2008 - is keen to talk. It's one
of several opportunities that he's now pursuing, but the others
have to remain confidential for the moment.
Initially Eaton's goal is "passive infrastructure sharing", he
says: "That's tower sharing, in emerging markets. And over time
we will transition it to sharing active networks."
He lists a few other stars of the industry, including business
development director Tea Tuominen, another ex-Celtel and Zain
executive, where she headed mergers and acquisitions as well as
greenfield licence bids.
"I have several other people who have emerging market
experience - particularly with Celtel", in addition to those
two. "I've known several of these people for a long time - we
were all part of the industry." Another executive is Thomas
Jenell, former director of operations at Celtel and an ex
Ericsson executive, who is CTO.
They were all asking: "What is it that keeps the penetration
rate low in these markets?"
Some countries - Uganda, for example - have high penetration
rates, but others are still that are still low. "What are the
barriers?" asks Ahuja. "One of the biggest is the cost of
building the network. It's dropping but it's still very high.
The cost per subscriber is still very high in terms of capital
There are two significant costs, he adds: the radio network and
the tower infrastructure. "Most of these countries still aren't
doing infrastructure sharing, so we started to look at the
Reducing the cost increases the economic activity, he says, and
that "increases the efficiency of the operators, and helps to
lower tariffs, increasing penetration". And all that reduces
energy use and is therefore better for the environment. "All of
these benefits are there, but it's not happening. So let's be a
catalyst in getting it done in emerging markets - where it's
needed a lot more than it's needed in the developed
And it's a good time for such initiatives. Operators in
emerging markets are still largely on 2G technology, "but
there's 3G to come, there's WiMax to come, there's LTE to
come," he says.
So he has built a team of people "with experience, credibility
and knowledge of building and operating networks, of forming
relationships with the operators around the globe".
The company "is primarily funded by the founders", says Ahuja.
"That's the right way to represent it."
Now Eaton Telecom is working on partnerships with operators.
The idea is to take an existing base of infrastructure, "and
grow that as our anchor customer grows with us, and bring new
customers on to it".
Infrastructure sharing will increase penetration into the
market "that wouldn't be happening otherwise" - but won't those
anchor customers wonder why they should give away a competitive
advantage, network coverage, to rivals?
"It's a valid question but I think today in most of these
markets this isn't as big a competitive advantage as it used to
be. And the economic savings they get in opex and capex is
really significant, and that helps overcome those
Lastly, and more importantly, he adds: "If they don't do it,
their competitors will do it anyway. It's time for them to step
in, help them restructure their balance sheet and take an asset
out which today is just being used by them," he says.
"And the thing that is really important: it is economically the
right thing for them, helps increase the penetration of mobile
communications in the country, increases the economic activity,
and it is better for the environment, and better for energy
usage." So there are "tremendous" social and environmental
benefits, as well as economic operational benefits.
Where is Eaton hoping to start? "We are making offers and
looking at assets throughout the African continent, from north
Africa down to South Africa. There are several opportunities
we're working on."
And he and his colleagues are also working on opportunities "in
central Asia and south Asia, as well as eastern Europe", he
says: "It's a broad footprint that we are addressing
What can Eaton offer to these operators? Certainly, Ahuja has
put together a talented and well connected team, but what can
they offer that an operator in, say, South Africa or Bangladesh
or Kazakhstan couldn't do itself?
"Do you know, it's very, very hard for two or three companies
that have been competitors for several years to suddenly start
working together - and to be able to get the leadership to be
instantly start thinking beyond the businesses that they helped
to create." They need a third party, someone that is neutral
and can help them all and ensure that decisions are taken
fairly, properly and appropriately.
"Our global scale brings the economies that you just don't have
in a country-by-country operation." So Eaton can "provide opex
and capex optimisation that they wouldn't get - but we also
help provide a truly neutral third party infrastructure".
The telecom towers, the passive network, are what Eaton wants
to work on at first, including the power and the security, "but
our very next step providing the active network, because today
the radio technology is there", he says: "A single radio
equipment can be shared across different frequencies, by
Eaton doesn't intend to own the spectrum, he says. The
customers will have their own spectrum and will be able to use
Step two will be "a couple of years down the road when the
regulators allow active network sharing so you will see the
same radio equipment being shared by several operators", he
says. "We want to be there to provide that."
He's not looking at the backhaul network. Maybe in the future,
but "it's not our focus". Generally customers "like to own
their own backhaul".
So who are the customers? "Our customers are large telecom
operators in each of these countries," he says. Are? "We are in
extensive negotiations, and close to consummating several
opportunities at this stage." He's aiming for announcements "by
the middle of this year".
Privately, he names some companies that the Eaton team is
working with. "They're large, multi-country telecom operators,"
is all he will say for publication.
Is he competing with companies such as Ericsson and Nokia
Siemens Networks which are looking to do managed services deals
to run networks in many parts of the world? "I think they're
our partners in this," says Ahuja. "Generally we don't see them
as owning the infrastructure. We see them as potential managers
of the infrastructure."
And he questions whether a vendor-independent network can be
managed by a single vendor.
Eaton's offer to operators will "free up cash which is on their
balance sheet by selling us their asset", he says. "The second
thing is, we commit to providing them operational savings and
capital savings, over the years."
Savings will be "substantive enough that we have interest today
from several operators, almost a dozen operators that we are
talking to today". There's be cash up front, and then savings
in capex and opex.
"Today we're looking at more than half a dozen countries."
Where first? Hard to say, but he's expecting somewhere in
Africa or central Asia to be in the lead. By central Asia, he
means countries such as Afghanistan, Kazakhstan and so on:
places which are still off many operators' mobile maps.
Eaton is not looking for start-ups: "We want to work with
existing networks," says Ahuja. "It's easier. We like to deal
with the major operators and this gives us a substantive
portfolio to begin with."
But he does want to be there for the development of coverage,
by building new towers as penetration and demand increase.
"Absolutely. That's intrinsically linked to this business," he
"On the surface this all appears a simple proposition, but in
practice it is very complex," he says. Eaton will have "to
understand the true inventory - what is designed, what is
built, what is installed". Usually there are gaps between
perception and reality.
Then Eaton will be there in between the operators and their own
customers. "We will have to give hard service level agreements
to our customers, and ensure we are part of their overall
business process. If they need a new site, they will need it in
a certain period of time to serve their customers, and we will
have to get it there."
That will put Eaton right in the planning process and will have
to be arbiter between competitors, "while keeping very thick
Chinese walls, not sharing the information - that's why the
role of a neutral third party becomes very important".
Sounds like a challenge for Ahuja and his colleagues - but he
has an experienced team working with him and they almost
certainly know what they're letting themselves in for.