SBA Communications, through its SBA Edge data center strategy, is evaluating ways to deploy mobile edge computing infrastructure to support its existing and future customers’ need to distribute their computing capabilities to more locations. Specifically, these locations include regional data centers and smaller, local data centers at the base of the company’s towers.
To-date, SBA has invested in two regional data centers and one tower-based data center in support of its mobile edge computing initiative. Although these mobile edge computing sites will not meaningfully contribute to SBA’s financial performance in the short-term, they will become increasingly important as wireless carriers continue to deploy 5G and as more applications require proximity to the wireless network edge.
Regional Data Centers – SBA Edge
SBA Communications notes that its regional data centers serve as a research and development opportunity for mobile edge computing. Specifically, the company is using these facilities to better understand the various mobile edge computing business models that can eventually be offered at its existing tower sites.
JaxNAP – Jacksonville, Florida
In August 2020, SBA Communications acquired Jacksonville’s Network Access Point (JaxNAP), a data center located in Jacksonville, Florida. Specifically, JaxNAP is a colocation and interconnection facility offering 14 megawatts of power capacity and 280k sqft.
Customers of the JaxNAP facility include subsea cables, telecommunications companies, and ~20 fiber providers. Notably, the facility houses the Jacksonville Internet Exchange (JXIX) and connects to a subsea cable landing station.
New Continuum Data Centers – Chicago, Illinois
In September 2019, SBA Communications acquired New Continuum Data Centers, an 80k sqft data center in West Chicago, with a fiber loop that connects to the downtown Chicago area. At acquisition, the facility offered a mix of retail and wholesale colocation, as well as fiber-based interconnection services.
Tower-Based “Greenfield” Data Centers – SBA Edge
Ultimately, SBA’s goal is to develop the “greenfield” real estate at its tower sites with its mobile edge computing offering. Specifically, the company is targeting incremental leasing revenue from customers that desire colocation, with power and cooling, at the company’s tower sites. For example, SBA Communications has deployed an edge data center at one of its tower sites in Foxborough, Massachusetts.
Overall, for applications that require proximity, SBA Communications’ tower sites represent the location with the lowest latency potential from the application, to the mobile user’s device.
U.S. Tower Portfolio – Edge Opportunity
SBA Communications states that it has 8.0k+ tower sites in the United States that could house an edge data center. Indeed, this represents 46% of the company’s 17.3k tower sites which are located in the U.S., as of March 2021.
In terms of criteria for a tower-based edge data center, SBA highlights the need for secure & sizable ground space, adequate power availability, and fiber connectivity.
At each of SBA’s tower sites, the company can place between 6 and 20 server racks. Therefore, the implied organic leasing opportunity for SBA from mobile edge computing ranges between 48k and 160k server racks.
SBA Communications notes that it has had success with its customers using a “hub-and-spoke” architecture for mobile edge computing. Specifically, the company’s tower-based edge data center provides colocation for a customer’s computing infrastructure, which acts as the “spoke”.
Subsequently, that customer is able to interconnect to the Internet or private networks through a larger SBA metro data center, which acts as the “hub”. Importantly, this “hub” data center is an intermediate aggregation point for compute and storage.
In locations where SBA Communications does not own a metro data center, the company partners with third-party data center operators.
Presently, SBA Communications has secured initial customers with colocation leases at its tower-based edge data center deployments. These customers vary by type and purpose and include:
- Larger Customers: leasing multiple sites for applications such as video caching
- Smaller Customers: lack in-house IT infrastructure and prefer to have access to a third-party data center in close proximity
- Wireless Carriers: gradually using mobile edge computing as Open RAN (O-RAN) and virtualized RAN (vRAN) gain importance