Midwestern communications infrastructure provider Bluebird Network operates in Missouri, Illinois, Iowa, Kansas, Indiana and in the surrounding states. Its network has more than 9,800 fiber route miles of high-speed broadband and fiber-optic connections with more than 50,000 on-net and near-net buildings and towers, and it plans to continue to grow. Bluebird has customers one both the carrier side – all the major wireless carriers – and on the enterprise side, including a full range of hospitals, financial institutions, manufacturing companies and government entities. It is the second-largest provider to schools in Missouri.
Bluebird recently completed a 4.5-mile fiber expansion within the city of Hannibal, Missouri. The buildout connects 16 small cell towers in the area in support of a 5G wireless communications network and brings the total number of fiber miles in Hannibal to 13.5 miles. We spoke with Michael Morey, president and CEO of Bluebird Network, about the business of providing fiber for small cells.
What are the benefits of providing service to both wireless carriers and enterprises?
Morey: Our carrier approach goes hand-in-glove with what we’re doing on the enterprise side, because one doesn’t really work without the other. And let me explain why. On the carrier side, you may have the wireless relationship and the non-wireless relationship, such as AT&T. Other companies have their own enterprise sales force, and I want them to sell services on my network, as well.
How important is wireless to a fiber provider such as your company?
Morey: The biggest growth in fiber utilization right now in terms of geographic expansion is really the wireless industry. Historically, it was a macro cell tower deployment up until about five years ago, when bandwidth and frequency reuse demands required cell sites to get closer and closer to the user so they can reuse that frequency over and over again over smaller and smaller areas.
With hundreds of thousands of small cells expected to be deployed and fiber being expensive, how do you manage the economics?
Morey: There’s a tremendous need for the deployment to be less and less expensive. At Bluebird, we decided to use these small cell initiatives by the major carriers to be anchor tenants on the fiber that we are deploying. As we grow particular markets with denser and denser fiber, we then we use the enterprise team to go in on top of that to sell access to the fiber to other non-carrier entities.
For example, a 4.5-mile fiber expansion within the city of Hannibal adds 45 near-net buildings to Bluebird’s network, raising the total to 554 buildings with businesses to which we can sell fiber access. That helps make the small cell build out initiatives more financially viable for me at a lower price point, which makes them more financially viable for the carriers.
We have 488 strands of fiber in Jefferson City, Missouri, and, in Columbia, Missouri. Because when we built out those two cities, we anticipated this kind of thing going on there. When we built out those cities, we had a small cell provider as part of the deal and that helped fund the deployment of that fiber. So now, if another carrier came to me and said it wanted to deploy small cells, we have a lot of fiber all over those cities ready to go.
What about the economics of a small cell provider getting into fiber, such as Crown Castle International?
Morey: Crown Castle has tried to make a business out of buying fiber companies. Personally, I never quite understood that because I can’t figure out their business plan. If they’re just going to do towers and fiber, how can they make the fiber profitable? The only way I can see that Crown Castle makes money on the fiber is by becoming fully vertically integrated and developing another sales force that sells fiber. So you have both fiber sales people and tower sales people. Obviously, the folks at Crown Castle disagree with it, otherwise they wouldn’t be out there buying fiber companies.
What does your small cell backhaul architecture look like?
Morey: We use a hub and spoke arrangement where we have the macro cell tower or a central office in the center and might have four to eight strands of fiber going out to 16 small cells. Okay, let’s just say there’s 16 small cells and eight strands of fiber and each. That’s 128 strands of fiber that are coming back to this macro cell in the center.
What does the next year look like for you in terms of small cell deployment?
Morey: There are many, many more of these announcements in the pipeline. In those 11 states that we are in, we are doing what you saw described in Hannibal and in Columbia over and over and over and over again.