edotco, a regional tower company in Asia, today released a white paper titled “Future Proofing The Digital Infrastructure Business: A Regulatory Perspective”, which discusses a number of important factors impacting the businesses of independent tower companies, including the implications from 5G’s roll-out globally. Below we summarize select portions of edotco’s white paper.
edotco – Tower Company
edotco’s infrastructure portfolio comprises 33.5k+ towers, of which 22.3k towers are operated and 11.3k towers are managed by the company.
Evolution of Tower Companies for 5G
The traditional tower company business model has historically been focused on coverage. However, the fundamental shift in demand over the next decade will be for additional capacity and in-fill. A key driver of this change is 5G, which is being built-out on both 4G and 5G network infrastructure with i) multi-radio access technology (RAT) and ii) several different spectrum bands.
Overall, 5G requires wireless carriers to have a large and diverse number of physical locations and equipment to provide full coverage and seamless connectivity. At the same time, 5G deployments are increasingly being outsourced to independent tower infrastructure companies such as edotco. Examples of these 5G deployment requirements include:
5G requires a greater number of outdoor tower sites. Specifically, these include smaller macrocell ranges in suburban areas, mini macro cells deployed on poles in cities, and small cells placed on rooftops and street furniture.
Indoor deployments of cellular networks, including 5G, require a partnership approach. Particularly, these partnerships are between wireless carriers, enterprises, local councils, transport providers, stadiums, and property owners. Collaboration is necessary for connectivity to reach the optimal locations within buildings and venues.
Increasingly, large arrays of active antennas will accompany many 5G expansions, especially for mid- and high-band frequency spectrum. Indeed, massive MIMO antennas will often require new sites or upgrades to existing sites.
Wireless carriers are virtualizing and disaggregating their radio access networks (RANs) to reduce their operating and capital expenditures in a 5G environment. However, these changes to network architecture require upgrades to backhaul connectivity to support 5G traffic loads. Additionally, fronthaul and mid-haul connectivity is necessary between different RAN elements such as radio units, distributed units, and central units.
Overall, these multi-haul advancements require dense deployments of fiber with high strand count to facilitate low-latency fronthaul.
As wireless carriers continue to virtualize their RANs, they will require data center capacity for virtualized network functions that are deployed in cloud infrastructure. Certain of these functions will be located close to the tower site to support low-latency response times. In turn, tower sites, shelters, and servers will need to be located near the source of data distribution.
Rationale for Tower Companies – edotco
Independent tower companies will become increasingly important as wireless carriers expand 4G/LTE coverage (particularly in emerging markets) and deploy 5G services. Indeed, enhancements to wireless networks will result in a need for new investment in tower infrastructure. However, wireless carriers may not want to and/or be capable of deploying capital into these infrastructure investment initiatives.
Tower Infrastructure Investment Examples
- Equipment Load: massive MIMO antennas are heavier, which requires structural upgrades to existing towers sites
- Power Requirements: 5G/MIMO antennas will increase power consumption by ~2.4x, which necessitates power upgrades to existing towers sites
- Densification: involves a combination of macro towers and small cells, which can often be a cheaper alternative
Business Development by Tower Companies
Historically, tower companies have focused on the construction and maintenance of physical tower assets. However, new business opportunities are emerging for owners of towers infrastructure, like edotco, with 4G/LTE and 5G deployments:
Small Cell Deployment
Collaboration with utilities to secure locations for small cells on city infrastructure like streetlights, utility poles, and light poles. In order to accelerate the deployment of small cells, U.S. and European government bodies are reducing federal regulatory hurdles for 5G deployments. Additionally, exemptions from certain local permitting requirements for the roll-out of small cells are being put in place.
4G/LTE and 5G are dramatically increasing traffic loads. In turn, the number of tower sites are growing but also the traffic per cell site, straining the tower infrastructure.
These forces are creating an opportunity for tower companies to manage the fiber backhaul connectivity on behalf of their wireless carrier tenants.
Fixed Wireless Access (FWA)
In mid-2020, fixed wireless access (FWA) services passed a take-up rate globally of 100+ million customers. Indeed, wireless carriers and fixed operators are offering these services.
Distributed Antenna Systems (DAS) require provisioning in locations such as airports, stadiums, shopping centers, and transit hubs. American Tower is an example of an independent tower company with a sizable presence in Distributed Antenna Systems (DAS).
Mobile Edge Computing
Deploying small data centers at the base of tower sites allows data processing and services to move as close to the end user as possible. For example, SBA Communications, through its SBA Edge data center strategy, is evaluating ways to deploy mobile edge computing.