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Musings From Connect(X) 2021

Editorial Opinion by Ernest Worthman

(ORLANDO, Fla. – Oct. 6, 2021) — After two long years (although it seemed so much longer), WIA’s Connectivity Expo convention, also known as Connect (X), is back – and a great time is being had by all. Although the cloud of COVID-19 hangs over the conference, the light at the end of the tunnel shines through. Nearly everyone I spoke with was confident in the progress being made and how wireless is moving toward 5G and other wireless technologies.

The Connect (X) session, “View From the Top.” Photo courtesy of WIA.

According to the WIA powers that be, the conference attendance is only down by perhaps 10 percent, compared with 2019. A remarkable showing. Technical sessions abound, and attendance is respectable. The keynotes featured the usual suspects from T-Mobile, SBC, Crown Castle, Vertical Bridge, American Tower and, this year, Dish and Amazon Web Services. Having AWS here is a real indication of how the telecom segment is embracing and integrating technologies of the 21st century, such as the cloud.

There was no shortage of cutting-edge discussions around O-RAN, 5G, mmWave, fiber, neutral host, what the infrastructure bill means and how it will enable our industry. How to get into the loop for funds was an extremely popular session. CBRS, public-private partnerships, the edge, DAS, fixed wireless and fireside chats rounded out the conference.

What was most impressive to me in both the sessions and vendors is the visibility of 5G. Although the carriers receive the most noise when it comes to 5G, there is a quiet revolution going on with many vectors that are coming onto the scene. What I mean by that is the permeation of 5G in the enterprise, the industrial IoT, transportation, city centers and other applications outside of carrier-implemented 5G.

In the end, attending this show gave everyone a great perspective on how not just the wireless infrastructure is evolving, but how other platforms such as software are changing the way infrastructure hardware is evolving and how new verticals such private wireless are gaining some significant traction – it is not about the carriers anymore.

From left: Susan Au Allen, Deb Mercier, Pamela Prince-Eason and Ashli Fuselier.

One thing close to my heart at this conference is how WIA supports the Women’s Wireless Leadership Forum. There was a session I attended that featured some real powerhouse panelists. The session was moderated by Susan Au Allen, the national president and CEO of the U.S. Pan-Asian American Chamber of Commerce Education Foundations. Panelists included Deb Mercier, the WWLF executive director for programs; Pamela Prince-Eason, president and CEO of the Women’s Business Enterprise National Council; even a millennial, Ashli Fuselier, secretary of the WWLF executive board.

What impressed me about this panel was the general understanding of not only the challenges faced by women, but also their dedication to educating and supporting small and medium businesses (SMBs) in how to address and understand the issues involving diversity of all types. These individuals are truly power brokers in moving the diversity needle.

This was one of the best panels I attended or moderated. Hats off to these amazing women.

I want to express my appreciation of the involvement of WIA in many segments of not just wireless, but also business and government. It played a pivoting role in helping to shape some of the funding in the recent infrastructure bill, as well as other governmental policies in the wireless ecosystem.

I am elated that this conference is back. Aside from the over-the-top deep dive into the wireless space, it was great to see old friends and make new ones. And, the closing WWLF reception again featuring wireless’ greatest (and only) band the best harmonica player in wireless ecosystem, Johnathan Adelstein. And you thought he is just a mover and shaker with a pretty face. That made all the craziness worth every minute. Awesome job, WIA. Thanks for all you do, and see you in Denver next year.

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Ernest Worthman is an executive editor with AGL Media Group.

Tower Industry Success Comes with Competition from Disruptive Companies

By J. Sharpe Smith, Senior Editor

Flush with opportunities, the tower industry is exposed to certain threats as disruptive companies try to take advantage of those same prospects, according to speakers during the Connectivity Expo panel “Investments, Partnerships and M&A in a Converged Edge/Tower Architecture,” moderated by Pat Troxell-Tant, CEO, Vogue Towers.

The tower story is a growth story, according the panelists, which included: Robert Paige, senior VP of Mergers & Acquisitions, Vertical Bridge; Clayton Funk, managing director, MVP Capital; Ron Bizick II, CEO, Tarpon Towers; Bud Blinick president, Cell At Auction; Jerry Sullivan, CEO, Strategic Wireless Infrastructure Fund; and Daniel Agresta, president and CEO, APC Towers.

While there has been some slowing in the first quarter from the top three carriers, driven by tentativeness caused by the potential merger, Paige expects it to pick up and be on par with last year, when Vertical Bridge saw an increase in carriers investing in new sites, as well as adding capacity to existing sites.

Tarpon Towers’ business has been largely amendment driven, but it has also seen increased coverage plays resulting in more builds-to-suit, according to Bizick.

“Our largest BTS customer is Verizon, and they have made a concerted effort in many of our markets to build out poorly covered or uncovered areas,” Bizick said. “We anticipate others will follow their lead, as they are a bellwether.” Tarpon also felt the effects, however, when Verizon redirected some capital from towers to small cells and fiber.

Paige agreed saying that Vertical Bridge has seen a “tremendous” BTS buildout with 200 towers last year, which it is set to surpass this year. The tower company’s revenues are evenly split between amendments and collocations.

Near term buildout drivers for the tower industry include AT&T’s FirstNet, T-Mobile at 600 MHz and the Sprint/T-Mobile. In the long-term, in four to five years, Paige forecasted, looms the much talked about 5G.

“We are hopeful that the [Sprint/T-Mobile] merger will go through, so we will have a strong number three carrier,” Paige said. “We are thrilled with the prospects of the T-Mobile buildout at 600 MHz in the short run and in the long run. The big event will be when 5G is ready to deploy, which is when you will see the next big uptick. I am a little pessimistic when that will occur. I believe it will happen 2023 to 2025, not because the technology isn’t ready, but the use cases and the incremental revenue is a little further out.”

A Dark Lining for the Silver Cloud

Tower multiples are at an all-time high and the market is frothy, according to Bizick, but a new type of tower asset is being introduced allowing low escalators and unlimited amendments.

This new class of low-cost, alternative tower company has been successful in securing the vast majority of the FirstNet tower build and even AT&T’s legacy tower build. Bizick has no doubt that it is having an impact on the traditional tower business model.

“They are setting some precedents, driving down BTS pricing. From the BTS perspective, they are taking market share. No doubt about it. They have taken opportunities away,” he said.

Agresta said the existence of the disruptive tower companies is the result of a private tower companies coming out of the carriers and new money looking for a platform to start a tower company or to invest in someone else to build a tower company.

“There are too many tower companies competing for the carriers’ business,” Agresta said. “There is the possibility the competition will drive bad behavior. We need to create partnerships with the carriers and keep things at fair market value.”

Sullivan countered that the increasing data usage (250,000 percent for AT&T since 2007) and consumer demand for the networks will require more towers well in the future. “Carriers will continue to have increasing demand for infrastructure, which will create opportunities for new entrants like my company,” he said.

Bizick noted that carriers have been looking for alternatives to the public tower companies to lower their costs for years, but the issues between big tower companies and the carriers are now affecting small tower companies, pressuring lease rates and BTS construction costs.

Paige agreed saying he is concerned that some of the new entrants into the tower market are driving everything, including new builds, collocations and M&A, to the lowest common denominator.

“Companies are agreeing to terms that are just not viable. If you sell to the wrong people, you end up cutting the rent in half,” he said. “We are seeing unlimited loading on towers. To get any decent type of return, you have to make herculean assumptions on new growth.”

The infusion of plentiful capital from infrastructure investment groups fuels the disruptive companies and distorts the tower business model, Bizick added.

“For sure. The economics of those deals seem unnatural,” Bizick said. “A low-cost source of capital is one thing, building single-tenant towers in the middle of nowhere or overbuilding is another; I don’t think it is a good practice.”

Bizick predicted that within the next five years this new class of tower owner may shake out unless it can get adequate lease up rates.

“When the music stops will these guys find a chair? I am skeptical,” Bizick said. “With regard to valuations and exit strategies, that is where it hurts. I see a shakeout in five years when the investors ask for their money and these companies try to exit, unless lease-up comes to the rescue.”

Connect (X) Top Execs Give Buoyant Report on Health of Tower Industry

By J. Sharpe Smith, Senior Editor

The View From the Top panel. From the left: Steve Vondran, American Tower; Jeffrey Stoops, SBA Communications; Jay Brown, Crown Castle, David Weisman, Insite Wireless Group; Alex Gellman, Vertical Bridge; and Jonathan Adelstein, WIA. (Photo Don Bishop)

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.

 

Dense Networks: Much Promise but Far To Go

By Ernest Worthman, AWT Exec. Editor, IEEE Sr. Member

The terms used to define dense networks vary. Some call them ultra-dense networks, others call them hyper-dense networks, even hybrid dense networks. But regardless of what they are called, they promise to offer ubiquitous wireless coverage, wherever you are.

While there is a lot of chatter about dense networks and they are well covered at Connect (x), the bottom line is that they are still in the petri dish stage. There are some test beds and area such as sports stadiums that come under the dense coverage umbrella, but they have yet to scale to areas much larger than such venues, with next-generation technology. In fact, according to Greg Najjar, Director, Business Development, Advanced RF Technologies, “There are innovations, and apps, yet to be developed that are not even on the radar screen yet.” These will be what puts the pedal to the metal in the development and deployment of dense networks.

While the technologies for densification are rapidly reaching the viability stage, technologies are not the real challenge, according to the panel discussion. The real challenge is esthetics. That makes so much sense. While we rush to make it possible, technologically, putting that technology into hardware and deploying it poses a significant challenge. This because hardware is ugly and we just don’t want to see it. And, the hardware cannot be just dropped anywhere. There are many issues with who owns what and if they are willing to be part of this solution.

But that is not all. Even if we overcome the visibility factor, and have the technology, applying it transparently and reliably is also challenging. By that, I mean finding ways to scale network density.

The panel discussed that while it is pretty easy to cover an area, even a large one, with dense coverage. The dynamics of the space are often fluid. For example, take a sports venue. Typically, such a venue sees high traffic only periodically and then it is swamped. And that traffic may be dynamic within the venue as well. It may not be a particularly critical problem with a stadium, but scale that to the enterprise, city centers, or other large development s and it becomes problematic.

The panel addressed that by talking about new technologies such as AI, virtualization and self-optimizing networks. That is likely to resolve many of the issues, but realize that these technologies are in various stages of evolution and not necessarily ready for prime time, today.

And, of course, there is the RoI, which has yet to be proven. The pressure is always on cost containment, but in many cases, the cheapest solution may work under some conditions, and not under others in the same environment.

And finally, there is the issue of integrating all of the technologies currently in existence with new ones on the horizon. The last thing that the industry wants to do, with densification, is reinvent the wheel.

But it ended on an optimistic note. Once all the issues are resolved and densification begins, in earnest, the benefit will be tremendous.  You will be able to find a parking space without driving around. You can find out how long your favorited restaurant wait is, even reserving a special table. People management will become possible, such as directing individuals to less crowded exit and entry points at various venues and showing crowd dynamics. And, not to mention autonomous vehicles and smart “x.”

Densification promises a lot. But it will take some time to deploy it, ubiquitously. And don’t forget, it will stratify across not only places but people and things as well. The vision is to up the level of the transparent user experience, across everything.

Towers Provide a Springboard for Connectivity Expo

By Don Bishop, Exec. Editor, Assoc. Publisher, AGL Magazine

The Connectivity Expo, Connect (x), conducted in Charlotte, North Carolina from May 21 to May 24 by the Wireless Infrastructure Association (WiA), showed how much the membership association’s remit has expanded since it grew from PCIA’s Site Owners and Managers Alliance, a membership section of tower owners and managers. Once focused, seemingly, almost entirely on telecommunications towers, the annual convention has increasingly added coverage of wireless network management, technology and content through the years.

Using partnerships with other organizations, this year’s convention added substantial coverage of the nationwide public safety broadband network of the First Responder Network Authority (FirstNet). Coverage of public safety wireless communications to that extent is something WIA previously left to others.

Tower companies received plenty of representation at the convention, with executives of five tower companies appearing during the “View from the Top” roundtable that has highlighted WIA conventions for 12 years running. And WIA’s board of directors has only tower company executives, plus the association’s president, with seats at the table.

Keynote speakers came from the ranks of wireless carriers, would-be wireless carriers, internet strategists, asset managers, manufacturers, data center operators, NASCAR, Amazon, FirstNet and the FCC. In fact, not one, but two FCC commissioners, including the chairman, spoke at the convention’s general sessions.

For years, a question asked at WIA conventions was, “What will Charlie do?” referring to Charlie Ergen, Dish Network’s founder and chairman. Since 2006, Dish Network has acquired rights to radio-frequency spectrum without putting it to use for terrestrial commercial wireless communications. As a deadline to use it or lose it approaches, the company has revealed plans to build a wireless network to serve the internet of things (IoT). Ergen spoke at the convention, saying that the company’s intentions already have been revealed through agreements with partners, and he summarized the Dish Network plan for using its spectrum.

Ergen said Dish Network’s access to only a limited amount of upllnk spectrum meant that its wireless network would not offer broadband service comparable to other wireless carriers and their plans to offer 5G wireless communications. Instead, the Dish Network would serve a universe of IoT applications. That’s what Charlie said he would do.

Dish Network probably would spend as much as $10 billion on its wireless network, Ergen said. His estimate later met skepticism at a panel session with representatives of privately owned tower companies where none of the participants responded affirmatively when asked whether they believed Dish Network would spend that much.

Tower companies heard good news expressed in a session of investment bankers, business brokers and stock analysts where a panelist said he expected Sprint and T-Mobile US to keep spending like crazy — $10 billion to $11 billion combined — to bolster their networks while their proposed merger goes through regulatory hoops for as much as a year to 18 months. And if and when the merger happens, he said that during the next three years, Sprint and T-Mobile will raise their spending with tower companies. He said the carriers would not turn off anything until they put all of the Sprint and Clearwire frequencies on T-Mobile sites and all of the T-Mobile frequencies on Sprint sites that they are going to keep. Watch the pages of AGL Magazinefor who said what about the outlook for towers and other wireless infrastructure.

Meanwhile, the convention’s coverage of all things related to the FirstNet network highlighted concerns about helping first responders with their wireless communications to save lives, prevent injury, treat the injured and protect property.

A corner of the convention dealt with ending fatalities caused by vehicular collisions with pedestrians and bicyclists. Computer vision systems at intersections allow observing, tracking and analyzing the behavior of people, cars, bicycles and dogs including not just collisions, but also near-collisions that otherwise go unreported. Knowing what actually goes on with all of these moving parts allows cities to take actions that save lives.

In all, Connect X offered a remarkable range of speakers and information that extended well beyond the world of towers, small cells and distributed antenna systems that underpins WIA and its convention. Deep in its history and under previous names, WIA had little to do with wireless infrastructure. Each year brings a new mixture of markets, technology and regulation. Towers may not be central to WIA sometime in the future, but for now, they continue to have influence, as evidenced by a portion of the convention focus and by the membership of the association’s board of directors.