The investment by InSite Wireless Group in Canton, Ohio-based Agile Networks last week provides InSite with access to lease up towers. But, more interestingly, it allows the DAS and tower owner to dip its toe into the world of connectivity, according to Tony Sabatino, who joined InSite as president and chief strategy officer last month.
“Agile is a great lease up opportunity,” Sabatino said. “We are morphing ourselves into a carrier solutions provider. The first area is vertical real estate — in other words, the power, the tower and the connectivity that carriers need.”
Agile Networks has a unique relationship with the public safety community operating a statewide, open-access, gigabit backhaul network, where public safety is the anchor tenant on its network while leveraging the vertical assets for communications expansion. Agile Networks has a network that consists of hundreds of communications assets throughout Ohio that can be marketed to wireless carriers, M2M providers and industrial enterprises in all 88 counties to deliver the true solutions carriers require.
“Agile has a wide range of customers on its communications network in the urban and rural markets across the territories it operates,” said Kyle Quillen, Agile CEO and founder. “Key customer verticals include oil and gas, public safety and, of course, mobile carriers. The customers get excited about the fact that we can deliver services in many of the challenging areas that others just struggle with.”
Agile Network’s networks provide last-mile connectivity with carrier-grade performance and military-grade security carriers, as well as public safety, in rural as well as urban areas across Ohio. Canton, Ohio’s innovation district was the site of a collaboration last February among Agile, RADWIN and Facebook to deploy high-speed broadband network. Last year, Agile began working with Microsoft to bring broadband internet access to rural areas in Ohio, reaching 110,000 unserved people.
“Public safety is an anchor customer on our network and is a key partner to allowing Agile to provide the type of unique solutions demanding customers, such as mobile carriers, are increasingly looking for as their capacity and coverage needs increase,” Quillen said.
InSite Wireless Group began in 2000, specializing in distributed antenna systems. Today, it operates more than 66 major DAS venues nationwide and more than 2,000 telecom towers and sites across 40 states in the United States, Puerto Rico, the U.S. Virgin Islands, Australia and Canada.
Similar to Crown Castle International’s investment in fiber connectivity to its small cells, InSite will look at providing fiber connectivity to its macrocell tower assets. Sabatino said he believes connectivity is a key part of preparation for 5G, because the massive data utilization on the user side will demand high-speed backhaul.
“A fiber broadband connection to a vertical asset drives it even further into the 5G world,” Sabatino said. “We are going to start investigating — in all our assets — how we bring connectivity to the site,” Sabatino said. “We are going to use Agile as a springboard to understand how connectivity enhances our business.”
On that last point, Sabatino emphasizes that is not abandoning its emphasis as a tower company. He said Agile’s connectivity is an added bonus because it makes the vertical assets more attractive, and it has a good return itself.
“As we learn more about the business, we will learn more about the connectivity side,” Sabatino said. “We won’t jump in all-out into connectivity, but we will look at it in terms of how we can continue to make our assets attractive. Have we fully committed to the connectivity world across our portfolio? No. I think we are just putting our foot in the water.”
What keeps some tower companies from jumping into fiber is the lower return on investment. The multiples are not the same as towers; however, connectivity provides the platform to bring other solutions to the asset, according to Sabatino. Sabatino envisions InSite possibly acting as an alternative access vendor, bringing connectivity to towers in the future.
“Connectivity acts as a driver for us to lease other components on the asset. As we have access to vertical real estate, we can offer a broadband connection to our customer along with the vertical real estate,” he said. “What makes those assets so attractive is the high reliability point-to-point connections. We go to the carriers and we can provide them not only vertical real estate but also the backhaul component to their core.”
More Diversification into Connectivity
InSite is not alone. In May, Digital Colony, a combination of Digital Bridge and Colony Capital, a real estate investment management firm, purchased fiber-optic network provider Zayo Group, with the help of EQT Infrastructure IV fund, in a transaction valued at $14.3 billion. Also this year, Digital Colony acquired Toronto-based Cogeco Peer 1, a provider of collocation, network connectivity and managed services that owns more than 2,050 route miles dense metro fiber.