Speakers gave upbeat assessments of the tower industry on the “View From the Top: Tower Executive Roundtable,” moderated by Jonathan Adelstein, president and CEO of the Wireless Industry Association during its Connectivity Expo earlier this week.
Earlier this week, which has been crowded with wireless news, FCC Chairman Pai announced that to receive approval from the FCC for the Sprint merger, T-Mobile had committed to deploying its 5G network into rural areas, with 85 percent of rural Americans covered within three years and 90 percent covered within six years.
Alex Gellman, Vertical Bridge CEO, said he believed even if the FCC had not required the rural coverage, the New T-Mobile would have done it anyway.
“I always believed that T-Mobile would be aggressive as a standalone wireless company post-merger,” Gellman said. “It will be a positive for the tower industry to have an aggressive, co-equal third carrier, especially one that is focused solely on wireless investment in their network. AT&T and Verizon, on the other hand, have competition from other segments for their capital.”
The previous day at the Connectivity Expo, T-Mobile Chief Technology Officer Neville Ray showed a graphic that depicted a three-layer 5G rollout cake with the bottom, largest layer consisting of 600 MHz spectrum, topped by mid-band spectrum layer with the top, and smallest, layer of millimeter wave spectrum.
David Weisman, president and CEO, InSite Wireless Group, responded to the carrier’s plans, saying he views the T-Mobile 600 MHz rollout as validation for macrocells, but he noted how far the industry still is from understanding what approval of the merger will look like.
“The Department of Justice has not spoken. When they do there will be a whole set of details and concerns as to how it is going to rollout. It may create a three and a half carrier environment. The devil is in the details,” he said.
Jeffrey Stoops, SBA Communications CEO, said T-Mobile’s proposed deployment at 600 hits SBA’s sweet spot, and he sees it resulting in a lot of collocation on existing SBA assets.
“T-Mobile, which is an active services client of SBA’s, will be requiring more services,” Stoops said. “We will help speed the deployment of the network so Neville won’t have to pay any penalties.”
Jay Brown, president and CEO, Crown Castle International, seemed less interested in prognosticating the future of the Sprint/T-Mobile merger. Instead, he noted that fundamentally the tower industry prospers when the carriers are well funded and there is spectrum to deploy, as well as growing data needs.
“The driver is the growth and usage of data. As we progress from a 4G environment toward 5G, we are better off concentrating on the opportunities and the need for infrastructure, regardless of the number of carrier customers in the market,” Brown said.
Speaking of wireless industry growth drivers, the panelists touched on the early stages of 5G development and the ongoing saga of Charlie Ergen, DISH and the deployment of a nationwide IoT network.
The tower industry is barely at the beginnings of what will be a decade long deployment of 5G, according to Steve Vondran, American Tower Executive VP, president, U.S. Tower Division.
“As you see the use cases develop and the usage of the network go up 30 to 40 percent per year, we expect the same evolution of 5G that we saw in 4G,” he said.
Brown pointed to increased number of connections per base station, which will be enabled with the 5G equipment, making Internet of Things applications possible.
“It opens up the business model for lower-use devices, as well as lower revenue devices that should allow the carriers to generate better economic returns for the spectrum that they hold,” he said. “As we see better economic returns, the carriers’ willingness to invest in their networks to improve their networks is a virtuous cycle that we all benefit from.
Stoops noted, and Brown and Weisman later agreed, that since there is little 5G equipment available, the driver for tower growth remains in the future. Weisman has seen some initial demand for supplemental millimeter wave hotspots for venues with heavy demand.
“It is great for our industry in that we are at this very early stage in the evolutionary rollout,” Weisman said. “We are going to see a whole host of rollouts that are going to lead to more utilization of our infrastructure. There is doubt that 5G has the potential to be part of a new industrial revolution.”
Weisman said he is confident that business cases for 5G will eventually be developed, perhaps through using network slicing to provide a premium product with a higher price tag, but until then carriers will need to work on their business model for consumer users. “It will come. There will be an Uber for 5G, but in the meantime carriers will move away from unlimited data. They can’t continue to give data way,” he said.
DISH and other Comm-infra Opportunities
SBA Communications has been doing a lot of business with DISH Network, helping it deploy its nationwide Internet of Things network. Stoops described DISH has appreciative of SBA’s help in its efforts to deploy its technology. Brown called DISH diligent in its buildout efforts, and Weisman referred to the company as a “sleeping giant with an enormous amount of spectrum capacity.”
“One of the things we have been able to help them with is to rely on our roots as a network development company with our services side of the business,” Stoops said. They have a lot at stake. We are working hard with them to see that the [spectrum buildout requirements] get met. There is a lot to be done and we are right in the thick of it.”
Brown said it is important to look beyond the Big Four carriers to find infrastructure opportunities so much spectrum laying fallow and capital flooding in looking for wireless applications.
“I think we are in for a prolonged duration of growth rate. Look at the amount of capital that is looking to convert every type of data into a mobile application. DISH is one of those early players,” he said.