In 2016, ExteNet designed and built a small cell network, connected via a high capacity fiber infrastructure, throughout downtown San Francisco. The network was built in preparation for the NFL’s Super Bowl 50 championship game, between the Denver Broncos and Carolina Panthers. Importantly, the game which took place in February 2016, attracted 1 million+ visitors to San Francisco. These visitors created a need for networks which could support a significant uptick in capacity.

ExteNet was given the mandate to provide connectivity services for San Francisco’s 995k+ residents, be 4G & 5G service-ready and have a dense, high-capacity fiber backbone. Additionally, San Francisco is the most densely populated city in the United States after New York, with over 18k people per square mile. This means that San Francisco is a challenging environment for ExteNet to build digital infrastructure.

Working closely with city planners, the San Francisco Public Utilities Commission (SFPUC) and the San Francisco Municipal Transportation Agency (SFMTA), ExteNet adhered to the aesthetic needs of the city and its residents during the network design and construction phases.

San Francisco Network Build-Out

ExteNet built the network to deliver the city of San Francisco with high-speed wireless connectivity. Importantly, Verizon as its anchor tenant.

In partnership with Zayo, through a joint conduit agreement, the companies worked together to build the network. Together, the two companies built a 300-route mile dark fiber system expeditiously. As part of their agreement, within San Francisco, ExteNet agreed not to compete with Zayo in the wholesale or enterprise fiber business. Similarly, Zayo agreed not to compete with ExteNet in small cells within San Francisco.

ExteNet was responsible for installing 400 small cell nodes on pole infrastructure (e.g., utility poles) under the ownership of the city and public utility. Installation took 3 years to complete alongside the city of San Francisco. Additionally, ExteNet built a C-RAN hub on Market Street, where the company aggregated 150 baseband units for Verizon. These baseband units connect via dark fiber to the small cells located on pole infrastructure.

Regarding zoning, ExteNet acquired permits from the city of San Francisco, including a franchise agreement for downtown San Francisco. Notably, Crown Castle is the only other provider that has a franchise agreement in San Francisco. Thus, the franchise agreement effectively provides ExteNet with a strong barrier to entry in this market from its competitors.

Overall, strong entitlements, first-mover advantage, capability to build-out and deploy fiber plant in an efficient way have all given ExteNet an edge over its competition.

Financial Update on the San Francisco Network

In 2020, ExteNet’s San Francisco Network has grown considerably, winning additional tenants and deployments including:

  • Verizon ultimately expanded to 600 small cell nodes
  • City of San Francisco (for Public Safety) put on 500 small cell nodes, at a subsidized lease rate
  • Google Fi (Google’s mobile network) put on 150 small cell nodes
  • T-Mobile overlayed and initially put on 200 small cell nodes and then expanded to 400 small cell nodes
  • AT&T put on 350 small cell nodes

Financially, the project IRR of 35%+ for the San Francisco Network, after 5 years of investment, is exceptional. Specifically, these investments returns were for ExteNet’s key investors Colony Capital (NYSE: CLNY) and Stonepeak Infrastructure Partners.

With the emergence of 5G and the Internet of Things, dense networks like San Francisco’s will be needed. These networks will facilitate reliable delivery of the high-bandwidth speeds enabling those technologies.

ExteNet operates 31.0k small cell nodes and 600 C-RAN hubs. Additionally, the company has 4.0k owned fiber route miles and 16.0k leased fiber route miles across the United States.

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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