November 10, 2016 —
Crown Castle International’s acquisition of FPL FiberNet Holdings is the towerco’s third purchase of a fiber provider in three years, having picked up Quanta Fiber Networks (Sunesys) in April 2015 and before that, in 2014, purchasing 24/7 Mid-Atlantic Network. And it probably won’t be its last.
The $1.5 billion deal gives Crown ownership or rights to 11,500 route miles of fiber installed and under construction in Florida and Texas, including 6,000 route miles of fiber in top metro markets. As a result, Crown will own or have rights to 28,500 route miles of fiber.
A recent survey sponsored by Telecoms.com Intelligence and Commscope concluded that the best way to provide backhaul to a high density small cell network is through a converged fiber network, according a blog written by Werner de Wolf, SVP, global service provider solutions, Commscope.
“It’s clear that 5G and even 4G, in some respects, require densification of the cells so that is the other big thing we see happening is the convergence of wireline and wireless networks,” he said.
FiberNet provides Crown with a dense metro fiber footprint in South Florida from West Palm Beach to Holmstead, as well as Orlando, Tampa, St. Petersburg and Jacksonville, among others. In Texas, the network extends from Dallas, Austin and Houston to San Antonio and Laredo.
“The addition of FiberNet’s complementary footprint in top metro markets in South Florida and Texas bolsters our fiber available for small cells in markets where we see significant demand from our wireless carrier customers,” said Jay Brown, Crown Castle’s CEO. “As demand for wireless connectivity continues to grow, small cells are playing an increasingly important role in adding the network capacity and density needed to provide ubiquitous high-speed, high-capacity wireless services.”
Fiber Optic Deals Are Proliferating
Fiber optic deals in 2016 have been coming hard and fast. Earlier this year, CS&L purchased and merged fiber powerhouses PEG Bandwidth and Tower Cloud into Uniti Fiber, which spans 590,000 fiber strand miles. In March, Verizon bought XO Communications’ fiber network business, which spans 20,000 inter-city route miles and 13,000 metro route miles. Also earlier this month, Windstream and EarthLink merged in $1.1 billion transaction creating a national footprint spanning 145,000 fiber route miles.
CenturyLink’s purchase of Level 3 does not appear to have an immediate impact on small cell backhaul, because neither company is currently involved in this market. But, in the future, the company, which will have 450 thousand fiber route miles, could be a formidable small cell backhaul force.
The wave of consolidation of the fiber providers will result in more nationwide networks and more large-scale adoption of small cell backhaul, said Joe Madden, Mobile Experts, because network densification cannot be achieved without ample access to fiber optics.
“Fiber is the limiting factor in small cell deployment. If a big mobile operator wants to deploy thousands of small cells it is difficult for them to get fiber to the right places quickly enough to make it happen,” he said. “There is a lot of value in having fiber in the right locations, ready to go.”
A company like Crown Castle can succeed selling access to the fiber to multiple operators, because the business model is so similar to towers, according Madden.
“I think all the tower companies will follow this business model. It is a natural extension of the tower business model. Instead of renting space on a steel structure, they are renting space on a fiber,” he said.
Today’s 4G LTE small cell deployment will be tomorrow’s 5G radio unit, Madden said. Because fiber is the lowest latency, most future-proof solution, it puts the carrier or the tower company in position to hang 5G equipment later and provide higher bandwidth in the future.
“U.S. operators are thinking along the lines of preparing the network for higher throughput using 5G technology and they want to use fiber for any form of backhaul they have now,” he said.