American Tower operates 178.8k towers, which support innovative 5G use cases, in five distinct geographical regions. The company operates towers in the United States (40.6k), India (73.6k), Latin America (40.9k), Africa (18.8k) Europe (4.8k).

Key Demand Drivers In-Place for 5G Adoption

Long-standing demand drivers in the United States mobile industry continue unabated. Unlimited data plans, advanced devices and increasing mobile video consumption consistently result in 30% or more growth in annual mobile data consumption per year. To keep up, carriers have added significant additional equipment to existing transmission sites. At the same time, carriers are driving forward with incremental spectrum deployments to support today’s 4G networks.

Average monthly smartphone usage in the United States now stands at 10 gigabytes per month. This has nearly doubled in less than 3 years. Further, by 2028, industry estimates suggest that the total mobile data usage in the United States will be around 6x 2018 levels.

Key Demand Drivers In-Place for 5G

Examples of how mobile data usage has continued to increase recently include:

Mobile Video Usage
  • Both in social media applications and through video streaming applications (e.g., Netflix, Hulu, Prime Video, Disney+).
Every Application on a Smartphone Refreshes in the Background
  • Data draws are occurring on a user’s phone in the background. Thus, users are consuming data when they are not even using the specific application or watching a video.

Carriers will need to efficiently manage the network cost challenges that this continued explosion in mobile data traffic growth creates. American Tower stipulates that cost management from the carriers will be one of the most important 5G Use Cases. In turn, this will be the main driver for the deployment of 5G digital infrastructure. Simply put, the cost per gigabit delivered must continue to decline at the same rate as the growth in aggregate traffic carried across the network. Otherwise, the carriers will not be able to sustain their operating margins.

5G Initial Use Cases – American Tower’s Perspective

Global businesses including cloud service providers, data centers, aerospace, automotive and property owners will need digital infrastructure across multiple countries, for their 5G future. Many 5G use cases including media (social media, branded media, gaming), drone control systems, autonomous vehicles, autonomous long-haul trucking, augmented reality & virtual reality and smart factories & buildings, will be deployed by existing carriers, industry verticals or even by the government.

Certain use cases will ultimately fail to gain traction or scale, while others that have not even been thought about today will be introduced by creative entrepreneurs. Similar to how the founders of Uber and Lyft introduced ridesharing with a robust 4G platform, when it became available to them. 5G is a precursor for the next iteration of cloud-based industry, consumer-facing industries, and industrial businesses. Principally, 5G will become an important piece of industry transformation because it can lower the cost structure of many businesses.

American Tower has spent, more than $900m on innovation projects related to identifying these new 5G use cases. These 5G use cases will specifically be able to leverage American Tower’s 40.1k towers across the United States.

5G Initial Use Cases Framework and Examples

Drone Control Systems – 5G Use Cases

American Tower is using drones to promote safety and enhance its own site monitoring and maintenance functions. The company’s customers, specifically carriers, are using drone control systems technology to reduce their unit cost of operations. Longer-term, American Tower’s portfolio of tower sites could play a significant role in a 5G-enabled drone air traffic control system. This is a similar concept to an airport traffic control system. Companies including, United Parcel Service (UPS) and Google have received regulatory clearance to begin drone deliveries for limited purposes. These clearances are for specific geographic areas, which is an indication of the progress being made.

Autonomous Vehicles – 5G Use Cases

Autonomous vehicles will be able to manage their immediate surroundings with its sensor array. Therefore, the autonomous vehicle will avoid colliding with a pedestrian walking across the street and other vehicles at an intersection. Currently, only hundreds of these “test” autonomous vehicles exist in the San Francisco Bay Area, Pittsburgh, and Phoenix. However, the number of autonomous vehicles in existence will ultimately increase, to number in the millions. This will require no human interface to drive, for destination routing, traffic management and fuel management. In order to implement this functionality, there will need to be a strong low-latency connection between the vehicle, and the 5G network. This low-latency connection will help control the vehicle beyond its immediate surroundings.

Additionally, with autonomous vehicles, there will be a much more significant desire for entertainment from everyone inside the vehicle. This is a result of the traditional “driver” being freed from the responsibility of driving. In-vehicle entertainment is already growing given the proliferation of ridesharing services, like Uber and Lyft. Specifically, ridesharing is where the consumer does not own the vehicle and they are not driving the vehicle.

Once autonomous vehicles reach scale, most people are going to be doing something else while they are driving. Thus, a significant component of time will be spent on entertainment, gaming, and other high-bandwidth applications. At scale, the United States autonomous vehicle industry could represent 100 million customers using 20 gigabits per month of data all on the 5G network.

Long-Haul Trucking – 5G Use Cases

Globally, the long-haul trucking business, has extremely high labor costs. Additionally, each driver can only drive for a finite number of hours each day. Trucks are often parked, temporarily to switch crews, or overnight because of the limitations on the human driver. This underutilization of the truck fleet is a very inefficient way of moving goods back and forth for businesses. However, autonomous trucks, by eliminating the need for drivers, can reduce labor costs of the trucking industry significantly.

It is clear that 5G has the ability to transform the long-haul trucking business. Therefore, this business may become the first scaled use of autonomous ground vehicles given the significant cost-benefit to the industry.

Venue Owners – 5G Use Cases

Venue owners will leverage 5G technology, including those in retail centers, sports stadiums, and entertainment venues. More broadly, commercial real estate owners will benefit from 5G’s capabilities to enhance building management systems (BMS). Specific property types to benefit from 5G include warehouses, factories, and office buildings. Furthermore, 5G technology will be leveraged in building management systems to lower costs in operating those buildings.

Autonomous Factory – 5G Use Cases

Autonomous factories will also connect with indoor 5G technology. These facilities will use 5G’s highly-secure, encryptable communications systems. Thus, factories will no longer have to bolt-down heavy machinery on a factory floor. This enables machinery to be mobilized and moved overnight, instead of over days. The benefit of 5G connectivity enables factory floors to be re-configured for productivity improvements or newly introduced product lines.

Adam Simmons covers Towers for Dgtl Infra, including American Tower (NYSE: AMT), Crown Castle (NYSE: CCI), SBA Communications (NASDAQ: SBAC), Cellnex Telecom (BME: CLNX), Vantage Towers (ETR: VTWR), IHS Holding (NYSE: IHS), and many more. Within Towers, Adam focuses on the sub-sectors of ground-based cell towers, rooftop sites, broadcast / radio towers, and 5G. Adam has over 7 years of experience in research and writing for Towers.


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