ZenFi is of the view that 5G networks, over time, will become the network that connects everything. The wired connections that currently provide high capacity and low latency connectivity, will be replaced by 5G wireless connectivity, delivering high capacity and low latency.

Historically, digital infrastructure was built to support “sparse networks”. An example is in the New York Metro area where macro sites are built a half-mile to 1-mile apart (and up to 5 miles apart) providing large areas of coverage. In the shift to a 5G environment, where capacity needs to be close to the end users, antennas will be needed everywhere. Antennas will be on every floor of every office building, from sub-basement to rooftop, and every tunnel, street corner, manhole cover and bus bench.

New York City is a Uniquely Difficult Environment to Deploy Digital Infrastructure

In New York City, at major intersections, each light pole carries a separate mobile operator’s antennas. With hundreds of thousands of light poles throughout New York City, there will ultimately be 100k+ antennas across the city. These antennas, ZenFi notes, will support the evolution towards 5G, which is a quantum leap from 4G deployments.

The fundamental problem that requires solving, is building-out the underlying digital infrastructure, including:

  1. Bringing fiber-optic connectivity or high-speed wireless connectivity to those antenna locations
  2. Bringing power to those locations; and
  3. Creating locations for antennas i.e., the “space”

However, the problem is that fiber is not deployed in all the correct places, which require connectivity. For example, in New York City fiber is not built-out to most light poles, which will eventually house antennas. Therefore, fiber conduit from manhole systems, over to light poles are needed in order to bring the fiber to the light pole.

Additionally, power supply, which needs to be available 100% of the time, to feed the device, has to be brought to the light poles. Finally, appropriate sites need to be identified, in order to be the locations for those antennas. This is a particularly challenging task in New York City.

ZenFi anticipates that building all of the required 5G digital infrastructure across the United States will necessitate hundreds of billions of dollars in investment.

New York City has Been a Leader in the Mobile Wireless Space in the United States

New York released its Mobile Telecommunications Franchises in 2004 where New York’s Department of Information Technology determined that the city had an asset. This asset was New York’s light poles, street poles, traffic signals, and utility poles, throughout the city. Collectively, these poles could be used as wireless sites for the purposes of network densification.

New York City created a franchise process and a set of rules that were homogenized for any party that wanted to use this pole infrastructure to install antennas. In contrast, across the river in New Jersey, in cities like Weehawken, Hoboken, Jersey City and Newark, rules are all set by the local municipalities. Or these municipalities have no rules in-place.

ZenFi operates in hundreds of municipalities in New Jersey. All of these municipalities have either adopted rules that differ or have not adopted rules. As a result, ZenFi has to go in front of several city councils and administrators to seek approval to do the same infrastructure build-out that they have done in adjacent jurisdictions.

A tremendous opportunity exists for ZenFi to build these fiber networks for 5G. However, municipal understanding of permitting needs is critical, in order to not impede the progress of these fiber network builds.

ZenFi’s 1.1k Route Mile Network Throughout the New York and New Jersey Metro Regions

ZenFi owns 1.1k route miles of underlying fiber infrastructure. Additionally, it owns the rights to 6.0k sites, including the poles (which the mobile operators put their antennas on). Finally, it owns network edge colocation facilities where the mobile operators can install their equipment to run their operations.

ZenFi Sees the Need to Build a New Type of Network – Known as a Fronthaul Network

Historically, networks have operated in a distributed radio access network (RAN) model. Whereby, there are base stations on rooftops or at the base of towers, which permits a backhaul network architecture.

However, the network needs to move to a cloud model called a cloud radio access network (Cloud-RAN or C-RAN). In this model, centralized base stations and centralized command and control of radio frequency (RF) processing takes place on the light poles. The key difference being that the baseband processing of that radio frequency (RF) signal happens at central locations.

ZenFi began building this new fronthaul architecture that would run as complementary architecture to the current backhaul architecture. ZenFi notes that the sole business rationale behind this fronthaul architecture build was to focus on mobile network densification. Further, ZenFi points out that for consumers to get the true benefits from 5G, mobile network densification is a pre-requisite.

Overall, the opportunity exists for ZenFi to build new businesses to support the evolving 5G ecosystem. Customers including Verizon, T-Mobile, AT&T and DISH Network will be providing tremendous opportunity, for many years to come.

ZenFi operates 1.1k fiber route miles, with 2.3k wireless nodes. This fiber connects to 45 edge data centers throughout the New York and New Jersey metro regions.

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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