Small cell and distributed antenna system networks have become important and fast growing complements to deploying new spectrum and adding additional macro towers as U.S. mobile operators are focused on densifying their networks in urban areas. Small cells are becoming more common as an attractive option to increase capacity and extend coverage outdoors, and distributed network solutions are becoming increasingly popular for enterprise buildings and high-traffic indoor venues. Although these markets are in their infancy, they are poised for rapid growth.
Business case for distributed networks deployments
Wireless 20/20 has been examining the role of small cell and DAS as critical elements of mobile network densification. Our focus has been on the business case for various distributed network solutions in large venues such as stadiums, college campuses, enterprise buildings, hospitals, airports, shopping malls, train stations, subways and convention centers with a high density of broadband users. Wireless 20/20 showcased its new WiROI Neutral Host Network Venue Business Case Analysis Tool at the Tower & Small Cell Summit, co-located with CTIA Super Mobility 2015. Leveraging the in-depth knowledge garnered from over 100 engagements with 3G/4G operators worldwide, Wireless 20/20 has been using the new WiROI tool to analyze a wide range of distributed network solutions for various venue environments:
• Compare and analyze network technology options like Wi-Fi, DAS and LTE small cells.
• Conduct a complete return-on-investment analysis for venue owners, mobile network operators and neutral host providers.
• Model the service level agreements and cost savings under various business scenarios.
• Simulate various methods for monetizing the investment in venue networks.
• Help MNOs and venue owners analyze how to best partner with neutral host operators.
Venue-led deployments
Some venue owners have been investing in DAS and fiber network deployments to monetize these business opportunities and create new revenues by offering a common all mobile carriers. For example, the San Francisco 49ers recently commissioned DAS Group Professionals to re-deploy what may be the largest DAS network at Levi’s Stadium. DGP selected the JMA Wireless Teko DAS platform for this ambitious renovation to double the capacity of the less than one-year-old DAS solution to assure major wireless carriers that Levi’s Stadium would have enough cellular capacity for the NFL’s Super Bowl 50 in February 2016. DGP deployed more antennas to increase coverage and support more cell sectors inside Levi’s Stadium and increased the DAS footprint outside the stadium in adjacent parking lots. For its first-ever Monday Night Football game when the 49ers unexpectedly defeated the Minnesota Vikings, Levi’s Stadium DAS saw 874 gigabytes of data traversing the AT&T Mobility cellular network and an estimated 1 terabyte or more was used by Verizon Wireless, Sprint and T-Mobile US customers. An additional 2.87 TB of data crossed the stadium’s Wi-Fi network, demonstrating wireless data usage inside NFL stadiums is only continuing to grow, with no end yet in sight.
Carrier-led deployments
A few mobile carriers have taken the initiative to deploy and operate a multicarrier DAS solution in other sports stadiums, especially when the stadium carries the operator’s brand. For example, AT&T increased cellular-network capacity at AT&T Stadium in Dallas more than 50% in preparation for the 2014-2015 NFL season when the operator secured naming rights for the home of Dallas Cowboys. AT&T Stadium has become a showcase for AT&T wireless services, with the cellular-network capacity of 17 macro cell sites. AT&T Stadium also has an extensive Wi-Fi network to optimize the fan experience. AT&T has recently upgraded its DAS deployments in several collegiate stadiums, including Ben Hill Griffen Stadium at the University of Florida; Martin Stadium at Washington State University; and the University of Kentucky’s Commonwealth Stadium. AT&T also installed neutral-host DAS deployments at the University of Kansas’ Memorial Stadium and at Ross-Ade Stadium at Purdue University.
AT&T has gone to great lengths to convince its competitors and the industry its Antenna Solutions Group deployed DAS networks is a neutral-host provider just like a tower company would or a third-party DAS provider. This may change as AT&T’s ASG is no longer a separate standalone business unit within AT&T that proactively markets and leases DAS space. A new model may be emerging as AT&T and Boingo Wireless recently partnered to upgrade the DAS network serving Soldier Field in Chicago. AT&T and Boingo co-designed the DAS solution to be neutral host while optimizing coverage and capacity inside the stadium and in the outdoor areas including the parking lots. Boingo is responsible to market the DAS services to other mobile operators.
The challenge of keeping pace with mobile data growth has driven many stadium and other large public venue owners to turn to “neutral-host” DAS and small cell networks owned and operated by third-party providers to support multiple carriers in these high-traffic areas. Neutral hosts providers have an important opportunity when venue owners are restrictive and prefer one infrastructure for all mobile operators. ExteNet Systems is one of the market leaders in multicarrier, neutral host and multi-technology distributed networks for both outdoor and indoor settings. Extenet currently operates DAS systems in more than 100 different indoor venues, including the Miami Marlins baseball park and Barclays Center in Brooklyn, New York.
Tower company neutral host deployments
For some tower companies, indoor neutral host DAS deployments are a highly complementary opportunity to their primary multitenant tower business. For example, American Tower has been focused on deploying neutral host DAS, and has more than 300 DAS deployments in venues throughout the U.S. and around 150 outside the U.S. American Tower believes an indoor DAS system can perform like a tower on a commercial basis, and has achieved an average of 2.5 tenants per network deployment in stadiums, shopping malls, hotels, convention centers and casinos.
Crown Castle has been investing in fiber optic networks to drive significant growth through small cell deployments. As a result of the acquisition of the NextG, 24/7 Mid-Atlantic Network and Sunesys Quanta fiber assets, Crown Castle owns or has rights to more than 15,000 miles of dense fiber in the top 10 U.S. metropolitan areas, including New York, Los Angeles, Chicago, Philadelphia, Atlanta and Dallas-Fort Worth. Crown Castle has approximately 15,000 outdoor small cell nodes deployed along these routes, and is now well positioned to address the desire for dark fiber backhaul solutions for small cell deployments by MNOs such as Verizon Wireless. By making these acquisitions, Crown Castle also bolstered its dark fiber capabilities to compete against other providers of fiber optic small cell backhaul services. Crown Castle is competing with Zayo and Level 3 Communications, which have acquired some attractive independent metro dark fiber assets to provide small cell backhaul. Lightower Fiber Networks recently acquired Fibertech to expand its fiber footprint in the Northeast, Mid-Atlantic and Midwest regions.
Crown Castle is also one of the largest independent DAS operators in the U.S. with about 10,000 nodes and 26 venues in operation or under construction. Crown Castle invested nearly $100 million on the construction of new sites in the third quarter of 2015, and most of that was spent on small cells rather than cell towers where new construction is leveling off. Crown Castle believes there are going to be hundreds of thousands of small cells over time and small cells will be the next iteration of the shared wireless infrastructure business. There is something of a land grab happening right now, similar to the tower business in the past. However, it has been much more challenging to add highly profitable additional tenants onto existing small cell deployments than a traditional tower or neutral host DAS. Carriers using different spectrum bands and different macro networks may find it hard to find commonality in deployment, if space is even available. Despite these challenges, small cells represent a form of incremental capacity that operators like Verizon Wireless and Sprint need and are embracing.
Independent neutral host deployments
SBA Communications had been an investor in ExteNet Systems for five years and recently decided that neither small cells nor DAS deployments fit into its portfolio any longer. SBA has now exited its investment in ExteNet and is now focusing on long-term maximizing capital appreciation through its tower site leasing and site development businesses. As such, ExteNet recently completed a $1.4 billion recapitalization led by Digital Bridge Holdings and Stonepeak Infrastructure Partners. Digital Bridge is a holding company for several tower companies in the U.S., Mexico and Latin America, and its co-founder and CEO Marc Ganzi is now chairman of ExteNet’s board. Until now, 90% of Extenet’s growth has been organic through network deployments. After the recapitalization, Extanet has additional funds to support long-term growth, and has expressed an interest in acquiring carrier-led indoor network deployments that can be re-purposed and modernized to support multiple carriers.
ExteNet has deployed in enterprise buildings such as the Empire State Building in New York City, Willis Tower and Trump International Tower and Hotel in Chicago. ExteNet also deployed an indoor DAS and outdoor small cell and carrier Wi-Fi network blanketing approximately 15 square miles in Las Vegas, increasing outdoor cellular coverage and capacity within some of the leading casinos and hotels. Verizon Wireless recently partnered with ExteNet to deploy an outdoor small cell network with more than 400 fiber-fed small cell nodes mounted on city owned steel light posts and wooden utility poles throughout the financial district of San Francisco. ExteNet is working with Aldridge Chicago to deploy a distributed “4G” network in the Chicago subways – covering all 22 miles of tunnels, in the stations and plans for service on the trains with all four mobile carriers participating.
ExteNet designs, builds, owns and operates networks that support all four nationwide U.S. mobile carriers, and scale to mobile traffic growth. As a neutral host, ExteNet has deep relationships and ongoing activities with all four major mobile operators and its goal is to never build a network for just one carrier. By co-investing with mobile operators, ExteNet delivers much lower upfront cost than carriers could achieve building these networks on their own. Several MNOs are now actively examining the economics of next generation active DAS and small cell networks deployed by neutral host providers among their options to address the data capacity challenge.
This column was authored by Berge Ayvazian, senior analyst and principal consultant of Wireless 20/20. Wireless 20/20 helps mobile operators and their vendors develop their 4G LTE launch strategies, service offerings, marketing plans, technology roadmaps and business cases. More information about the WiROI™ Neutral Host Network Venue Tool can be found at www.wireless2020.com/WiROINeutralHost/.
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