It’s always nice to buy something that belongs to you, even if just for the sake of knowing that you have it when you need it. With the cost of brand new high-end test equipment running into the hundreds of thousands of Rands or more, though, it can prove unaffordable for most companies. Renting equipment is usually the more attractive option in these cases, so we asked Coral-i Solutions’ sales director, Niki Lankesar, and training director, Donald Peddie, to help weigh the benefits of renting versus buying.
Which use-cases make renting most attractive?
Most of the time, the rental option is most desirable for project-based work. If a company is doing contract work they can build the rental cost into their budgeting and not have to worry about being lumped with a piece of equipment that they’ll hardly ever use. In some cases, a company might need to test something like an infrared camera only once a year, so it will likely prove cheaper to rent rather than have an instrument that lies in the stores and only gets used for two weeks out of the year.
In the telecoms industry, contractors are regularly expected to have an unreasonable number of teams on the promise of work that never materialises. This makes it easy to end up purchasing lots of equipment that end up just lying in your store, which can hurt a company badly. Having said that, we always suggest that, depending on the length of the contract, you may want to look at purchasing at least some of the equipment.
What instruments do you offer for rental?
We rent entry-level equipment but mostly high-end instruments, because a company will often be prepared to pay for a cheaper instrument and buy a brand new one to keep rather than rent. Some of the equipment we rent runs into the region of R1 million to buy outright – not even the biggest companies can justify buying equipment in that range because they typically only need it during the prototyping phase.
In terms of spectrum analysers we go up to 43 GHz bandwidth, and for Ethernet testers we go up to 100 Gbps. We’ve gradually progressed to concentrating on a comprehensive offering of handheld, battery operated equipment to make life easier for people who’re going into Africa to do work, for example. We don’t rent much into Africa directly but a lot of our SA clients do business across the continent.
These high-end instruments represent a big investment for Coral-i. We’ve been in the market long enough to know that even though they might only be rented out once or twice a year, we pride ourselves on being able to meet test equipment rental requirements 95% of the time. We have some equipment that doesn’t make money for us but we take the long view that being able to supply what people need, when they need it, stands us in good stead in the marketplace.
What sort of service and support can rental clients expect?
When buying, you have to worry about service and calibration, whereas we build that into the rental so you have peace of mind that you always have a calibrated instrument. Importantly, this mitigates those cases where test equipment is used by multiple engineers in a company, and when they move equipment between them they usually don’t have systems in place for checking whether the equipment is functioning correctly. So one engineer might use it for a month or two and the next one takes it to do a project in deepest Africa with an instrument that proves to be faulty.
Through our rental model, when you return the equipment it goes through a set of tests to make sure it complies with its manufacturer’s specifications. In this way we guarantee that when you collect a piece of equipment from us it will operate correctly and within spec.
We also provide technical training to customers if they have minimal experience, but most of the time they are from a technical background and only require a short (half-hour to hour long) session with one of our specialists to familiarise them with the features and operation of the particular equipment in question. If people buy high-end equipment from us, we also readily throw in training for free because we want the instrument to work for the customer.
Rather than simply offering a ‘set menu,’ we are able to structure individualised rental packages according to a client’s needs. It is important for us to be flexible in this regard since some of the instruments have options that come with them, so depending on requirements we actually activate or deactivate options on the instrument for specific use-cases.
We also offer discount structures, for instance, if someone wants to rent something for a long period like a year, and tend to offer good discounts to good paying customers.
What trends are happening in the rental market?
The market is highly influenced by technology rollouts, so we find when there is a jump in technology or upgrades, like with 3G to LTE, there’s a massive requirement for the new equipment that goes with it. The next jump we anticipate is 5G, something we are looking forward to and gearing towards.
The telecoms industry is generally poorly managed in terms of projects and rollouts happening at the drop of a hat. This makes life particularly difficult for contractors as the telco will tell them there’s all this work in the pipeline but they’re not sure when it’s going to kickstart. Then suddenly they call on a Friday and expect you to do the rollout the following Monday. The chances of procuring a brand new piece of high-end equipment on the same day is virtually impossible. Also, if you have a fibre break and it’s an urgent situation, it’s not an option to wait a week or more to acquire a new piece of test equipment.
When the economy is under pressure rental becomes a more attractive option, so for example, a lot of people are nervous right now about capex because they don’t know what’s going to happen with the government. Our biggest market is definitely contractors, since all the network operators have gone towards outsourcing their network functions, so there are more smaller players without massive resources.
A crucial issue right now is fluctuations in the rate of exchange – this really impacts the price of goods, sometimes to the tune of hundreds of thousands of Rands for the high-end equipment. To budget for this is very difficult for companies, but our extensive rental pool makes us fairly immune to these fluctuations.