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ExteNet Completes Recap, Damns the Torpedoes

By J. Sharpe Smith —

December 3, 2015 — ExteNet Systems completed its $1.4 billion recapitalization by its new investors Digital Bridge and Stonepeak Infrastructure Partners, which allows the privately held distributed network provider to execute its long-term plans for the deployment of outdoor and indoor distributed networks and small cells and maybe get bigger as well.

“With the Internet of Things a reality and 5G in the near horizon, wireless infrastructure must advance with a focus on innovative, pragmatic solutions to enable anytime, anywhere broadband connectivity,” said Ross Manire, president and CEO of ExteNet, who will remain on the board as Digital Bridge CEO Marc Ganzi assumes the position of chairman of the board.

To date all of ExteNet’s growth has been organic except for when it teamed up with SBA Communications to acquire the Mobilitie assets in 2012. The recapitalization, however, not only provided ExteNet with needed liquidity but it gave the company fuel in which to grow the business potentially through acquisitions.

“We will evaluate other companies like us in this space that might need the capital and infrastructure that we can provide,” Manire said. “It’s early in the process. No definite list of possible acquisitions. Right now there is not a huge landscape of companies that are doing what we are doing.” ExteNet will also consider opportunities outside the United States, which might be facilitated by Digital Bridge’s holdings in Mexico and China.

Manire addressed reported changes in the distributed network marketplace, which is said to be increasingly enterprise driven.

“We do see a bifurcation in the market where venue owners will need to increasingly participate economically in funding the DAS and Small Cell deployments,” Manire said. “There will be a fundamental change in the market place. We are not there yet. It is happening on a small scale, but most of what we do uses the traditional model of carrier funding.”

Other board members for the newly recapitalized ExteNet include Ben Jenkins and Warren Roll from Digital Bridge; Trent Vichie, Brian McMullen and Spencer Ryan from Stonepeak; Edward Pallesen from Goldman Sachs; and David Schaller from Delta-V Capital. Along with Digital Bridge and Stonepeak, both Goldman Sachs and Delta-V Capital are also investors in the new holding company.

ExteNet Denies Acquisition Rumors

Reuters has reported that ExteNet Systems, a Chicago-based a distributed network infrastructure company, is on the block and could go for more than $700 million, but company officials deny that a deal is in the works.

The company has been growing steadily through high profile deployments in high-rise office buildings, such as the Willis Tower in Chicago and the Empire State Building; sporting venues, including the University of Michigan football stadium, Brooklyn’s Barclay’s Center and Miami’s Marlins Park; hotels, such as the Omni Severin; and healthcare facilities, such as Banner Health.

ExteNet Systems has been in conversations over the years with investment bankers regarding equity financing as well as liquidity for investors who have been shareholders in ExteNet since August of 2004, according to Ross Manire, CEO, ExteNet.

“Those conversations will be ongoing, but there is absolutely no deal imminent. We remain focused on driving the build out of distributed networks to allow wireless carriers to deliver enhanced mobile coverage and capacity to end users,” he said.

SBA Communications purchased a significant minority stake in ExteNet, and Quantum Strategic Partners, an affiliate of Soros Fund Management, became an investor in 2010. Centennial Ventures, Sevin Rosen Funds, Columbia Capital and Centerpoint Ventures have provided equity capital since 2004 and Palomar Ventures since 2008.

The DAS and small cell industry has consolidated on multiple levels. In August of last year, BlueStream Professional Services, which provides planning, implementation and maintenance services for wireless networks, purchased the assets of Tempest Telecom Solutions’ DAS and Small Cell Division, which itself had grown through the acquisition of Leaf Communications Services in 2011.

Goodman Networks acquired DAS-integrator Cellular Specialities in 2013. Black Box Network Services bought InnerWireless in 2012. H&M NetWorks picked up a DAS design and engineering firm, In-Building Wireless, in 2011. Crown Castle purchased NextG Networks in 2011 (for a billion dollars) and NewPath Networks in 2010.

DAS Climbs to Top of Empire State Building

It might be hard to believe, but a huge swath of what is known as Class A commercial real estate or the highest-quality buildings on the market has yet to be penetrated by in-building wireless systems.

ExteNet System identified real estate venues as ripe for implementation of indoor DAS three years ago. Two years ago, ExteNet deployed a DAS in the Willis Tower (formerly Sears Tower) in Chicago.

“We see a lot of Class A buildings without in-building coverage, similar to the Willis Tower before we deployed there,” Ross Manire, ExteNet president and CEO, told DAS Bulletin.

Soaring 1,454 feet above Midtown Manhattan, the iconic Empire State Building also did not have an in-building wireless system. Until now. ExteNet Systems signed an agreement with Malkin Holdings to design, own and operate the distributed antenna system that will enable wireless access on each of the building’s 102 stories. The new DAS will serve as the crown jewel in the building’s makeover, which includes energy-efficiency, buildingwide energy infrastructure upgrades and the restoration of the art deco lobby at a cost of more than $550 million.

“Malkin Holdings clearly wanted to get coverage inside of the building as quickly as possible. It is such an iconic building, and it has so much traffic going to the observation deck, plus the amenity for tenants,” Manire said.

ExteNet is currently deploying its network, which is slated for completion in the second quarter 2014. SOLiD is the vendor for the hardware, and 15 miles of coax and fiber will be required to wire the building.

Manire describe the Empire State Building system as a “hard build.” With the building undergoing a complete preservation, ExteNet has the challenge of getting its work done while trying to stay out of the way of the other contractors. Additionally, because the structure is older, it doesn’t have raceways to pull cable through and will take more engineering work.

“One of the criteria of building an in-building DAS is that you have to generate enough signal in the interior space of the building so that you block out signal from the macrocellular environment outdoors,” Manire said. “That could demand a higher power system or more nodes and antennas spread throughout the building.”

Extenet is paying for the complete cost of the system and the deployment upfront with the expectation that it will attract multiple carriers to pay to use the system. So far, Verizon Wireless and Sprint have signed on as tenants on the neutral host system.

“We have two carriers and are working on getting two more,” Manire said. “We will move forward with an agreement from one carrier. If you waited until all four carriers agreed, you would never get anything done.”

Formula One Comes to Texas and DAS is there to greet it

The first U.S. track built especially for Formula One racing, the Circuit of the Americas (COTA), opened its doors for business on Nov. 18 in Austin, Texas, with a brand new DAS deployed by ExteNet Systems. More than 117,000 fans had access to the DAS to communicate using their smart phones during the race where Vodafone McLaren Mercedes’ Lewis Hamilton won his fourth Grand Prix of the season.

In 2013, COTA has scheduled multiple events expected to draw more than 1.2 million attendees. For example, it will be the site of the Formula One U.S. Grand Prix with an attendance of 260,000, a Grand-Am with an attendance of 130,000, a three-day MotoGP event with 210,000 people and four major concerts totaling 80,000 attendees.

“It is a high profile venue. It is the first time Formula One has been back in the United States in five years,” Ross Manire, ExteNet president and CEO told DAS Bulletin. “It is a high volume venue, given the nature of the events they will run and the capacity of the facility. Given the number of fans that will attend these events, capacity was clearly a driver behind this network, which can support 24 radio sectors. It is also flexible enough to accommodate all the different types of other events at this venue.”

ExteNet began talking with Circuit of the Americas about providing a DAS, just as COTA had completed design of the facility, almost a year before it was built. ExteNet bid on and won the contract to deploy a DAS network. Wi-Fi was not included in COTA’s communications network plans, according to Manire, but Wi-Fi is a part of ExteNet’s offerings.

“The DAS network is integrated with the existing [macrocellular] infrastructure at the track,” Manire said. “We tried to do everything we could to integrate the distributed network into the context of the overall esthetics of the track.”

Circuit of the Americas is a 3.41 mile, 20-turn racing track with more than 133 feet of elevation change, stretching across 900 total acres. The track also includes a 20,000 seat amphitheater for concerts and festivals and a 40,000-square-foot conference center. More than a dozen two-story executive meeting suites include 3,600 square feet of space, elevators and kitchens.

“Fundamentally, the DAS architecture used at COTA is comparable to what ExteNet deploys in a Major League Baseball stadium or an NFL stadium,” Manire said. “There was more infrastructure built [at COTA]. This one was a bit more complex because of the geography that had to be covered, the track, the stands and the parking facilities.”

ExteNet’s distributed network is capable of supporting up to five wireless carriers and their technologies, including GSM, UMTS, CDMA, EVDO and LTE.

“We can accommodate all the different carriers and all the wireless technologies they may want to run,” Manire said. “In any system we build we are trying to attain double digit ROI when we get three carriers on the network and so our pricing is set accordingly. When we start off with that anchor tenant we are making the financial bet that we will get the second and third, hopefully a fourth tenant.”

ExteNet faced a compressed time table for getting carriers on the system. The go ahead for the DAS was not given until in August 2012 for the system that had to be operational in mid-November. ExteNet was only able to get Verizon Wireless to commit before this fall’s inaugural Formula One race. Manire said other carriers are expected to join in providing service on the DAS.

DAS Goes Political at RNC, DNC Gatherings

The current maelstrom of political activity, with the Republican and Democratic national conventions running back to back, highlights the critical role DAS now plays in every get together our nation holds, whether there is a donkey or an elephant on your pin.

With the just concluded RNC entertaining 50,000 attendees in Tampa, Fla., and this week’s DNC expected to garner 35,000 visitors to Charlotte, N.C., a whole slew of data is being pumped over DAS systems by enthusiastic politicos.

Attendees at this week’s DNC events held at the Time Warner Cable Arena will be able to stay connected thanks to a DAS installed by Mobilitie. Using equipment by TE Connectivity, the DAS includes the installation of 524 antennas that will improve wireless coverage, capacity and data speeds during peak event times.

Mobilitie’s role as a neutral host DAS operator required planning and coordination with Verizon Wireless, Sprint and T-Mobile to incorporate their technical requirements and frequencies into the design of the DAS, which will serve 2012 DNC event and will continue to provide service to their customers who attend Charlotte Bobcats games and all other events held at arena.

DAS integrator Connectivity Wireless worked both sides of the aisle, adding 6.5 Million square feet of in-building wireless coverage at both RNC and DNC events.

Indoor DAS networks were deployed inside convention centers, hotels, meeting centers and other public venues to handle higher traffic loading of wireless voice and data services.

“As a part of our turnkey design and implementation process, we work closely with third-party operators to deploy DAS and all of the major wireless carriers to ensure that our in-building DAS networks are integrated and optimized with their macro networks,” said David Hartin, vice president of RF solutions, Connectivity Wireless.

ExteNet Systems deployed an outdoor DAS and indoor distributed network, each hosting a different wireless carrier, in downtown Tampa for the Republican National Convention.

The outdoor DAS served Sprint customers throughout the downtown neighborhoods surrounding the Tampa Bay Times Forum, site of the convention. The indoor DAS network was deployed at the 350,000-square-foot Westin Tampa Harbour Island Hotel and convention facility with AT&T as the first carrier-tenant.

But the DAS provider’s job wasn’t done there. It deployed a network operating center that remotely monitored the systems around the clock to ensure that they could handle the traffic volumes and capacity. System performance was tested with the carriers both before and after the convention started. Additionally, ExteNet provided local field service technicians on site in Tampa to support network for the carriers and provide spare parts, if needed.

DAS equipment from Corning MobileAccess was deployed at several major locations in Tampa, Fla., and Charlotte, N.C., in support of the 2012 Republican and Democratic national conventions.In all, Corning MobileAccess’ solutions provide continuous wireless access and improved cellular coverage in 12 key places – including convention centers and hotels – in the two cities.

The DAS in the Tampa Convention Center covered the facility’s 600,000 square feet, which served as a hub for the thousands of media representatives covering the convention.

Charlotte Douglas International Airport (CLT) deployed the Corning MobileAccess DAS to provide cellular coverage and capacity throughout 1.8 million square feet of terminal space. Wireless Services, a company that specializes in RF design and installation, designed and installed the DAS at CLT.

“We worked very closely with representatives at CLT to provide the airport with a customized, comprehensive solution to support the large influx of wireless communications during the convention and beyond,” said Julio Dumas, managing partner, Wireless Services.