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How Telecom Towers, Fiber Fit Into a Digital Real Estate World

By Don Bishop, executive editor, associate publisher, AGL Magazine

High single-digit and low double-digit growth now are found in different places than towers and fiber. Nevertheless, towers sustain respectable growth, while fiber continues to be super-competitive.



The way tower companies have been built is with a historic view that they have to dominate that one space, according to Marc Ganzi, CEO of Digital Colony Management and president and CEO of Colony Capital, a global digital infrastructure, real estate and investment management firm with 15 digital portfolio companies, 350 employees and $47 billion worth of assets under management. However, Ganzi said that tower customers’ needs are changing, and the networks they serve are changing, too. Ganzi spoke about telecommunications towers and digital real estate at a Connected Virtual Tech Event presented by Fifth Gen Media.

Regarding towers, Ganzi said that today, site acquisition specialists do not receive from mobile network operators a search ring as they did before. “It’s not like, ‘Here’s a polygon; go work it. Go bring me back three candidates,’” he said.

Ganzi said an inquiry these days is more likely to say something like, “I have 26 polygons.  My standard deviation is 500 yards. I need 14 to 18 strands of fiber. By the way, I am going to put remote access units (RAUs) on top of all this. I don’t care if it is a tower or a utility pole. Here are my coverage specifications. By the way, we are fronthauling this back. You have to find me a radio access network (RAN) hub where I am going to have 3,500 square feet. Here are my technical standards for my RAN hub. And here is another list of technical standards for my cloud partner, who, by the way, is Amazon Web Services (AWS), and you have to create an ecosystem for them, too.”

At this point, Ganzi said, if you are a tower operator, “your mind just blows, because what you have just been handed is a mesh network that is going to interface and ultimately deploy multiple-input, multiple output (MIMO) technology. The only way you can deploy MIMO is with multiple radio access point networks, where there is a small cell node, a Wi-Fi access point — whatever it is, it is all coming back to a point of aggregation. That point of aggregation is called decentralized RAN. The radio access network is now being decentralized.”

Network operators are not building $250 million Ericsson switches anymore, Ganzi said. Those were back in the days when they were building 2G and 3G networks, he explained, but that sort of construction is just not happening, anymore. “The infrastructure is lighter,” he said. “It is more nimble. The ability to design and proliferate those networks requires a totally different abacus than what we were dealing with before.”

Digital Colony is going in that direction, and Ganzi said the evidence is reflected in the work the company performs on edge computing and small cell infrastructure side, and is reflected by the amount of fiber Digital Colony bought with its acquisition of Zayo Group Holdings for $8.2 billion in partnership with EQT.

“We are prepping ourselves for a different kind of battle,” Ganzi said. “We are going to play the game differently from the way we played it before. I don’t know if our industry is adapting fast enough, which is why you are seeing more carriers self-performing than ever around their 5G architecture.”

Nevertheless, towers are still great, Ganzi said. “American Tower is not going to go out of business because they whiffed on Cloud-RAN,” he said. “Equinix is not going to go out of business because they missed on edge computing. All these are great, well-run, multibillion-dollar companies that are built for the future.  However, the good growth, the high single-digit, low double-digit growth, is in a different place, now.  If you want to chase that, you have to go one way. If you want 3 percent to 4 percent growth, you go another way.”

Rich Berliner of Fifth Gen Media asked Ganzi a question related to why industry analysts have more praise for Digital Colony’s fiber-optic cable assets than for those owned by tower operator Crown Castle International. Ganzi said that for Crown, the difficulty involves storytelling. He said that Crown is beginning to give a lot more disclosure about its fiber business. What many do not understand, Ganzi said, is that unlike towers, fiber has multiple different types of businesses.

“You can go invest in infrastructure, which is the part that Jay loves,” Ganzi said, referring to Jay Brown, CEO of Crown. “Infrastructure includes long-term leases, long-haul metro rings, fiber to the tower and fiber to the node. Those four verticals are performing really well for Crown. They are having a lot of success in their long-haul routes, their metro rings, and their fiber-to-the-tower business and their small cell business. Where Crown has gotten a little bit sideways is with its enterprise business.”

The enterprise fiber business is super-competitive, Ganzi said he tells everyone. He said it is hard to be successful in enterprise fiber “because there is no privacy in having that great, zoned tower where, for example, you are driving down the Garden State Parkway, and there is this one pine tree that you got zoned that no one else could get zoned. You know how that ends. It ends with four rad centers and a tower that is doing $180,000 cash flow.”

In comparison, Ganzi said, “you go run fiber down the middle of Paramus, New Jersey, and there will be four or five competitors running down that conduit. If I have a 100,000-square-foot office building, and I have a curb cut with five providers, Crown being one of them, that is just a race to the bottom. You’re pricing circuits, you’re pricing wavelengths, you’re pricing dark fiber, and it is brutally competitive.”

Although that is the part of the business that Ganzi said he did not want to say Crown underestimated or overestimated, he said that from Day One, Crown should have told the story this way: “We have this other business, and it is not like towers. Let us explain it to you. It is going to have 60 to 100 basis points of churn every month. But, here is the good news: We are growing it at 14 percent to 15 percent, so it is a nice little net 3 percent to 4 percent growth business.”

If Crown would have disclosed that, pushed it over to the left really fast, and kept its wholesale fiber business in one lane, reported small cells in the third lane, and towers in the fourth lane, Ganzi said, the company would not have had a problem. Now, he said, Crown has to unwind that story and tell the story differently. Ganzi said he understood Crown’s situation with telling it story the right way, because he observed that Zayo Group Holdings had the same problem. The reason Digital Colony was able to buy Zayo at the right price, he said, was that Zayo had a messaging problem.

“The reality is that Crown has a great management team and a great set of assets,” Ganzi said. “They are going to figure out how to tell the story. Trying to communicate with public investors what fiber is, is hard. My good friend Jennifer Fritzsche at Wells Fargo Securities used to say, ‘Fiber is just a tower turned on its side.’ It’s not that simple.”

Ganzi listed factors that differentiate the fiber business from the tower business: “Permitting. Strategic moat. Privacy of conduits. Curb cuts. Access to buildings. The Telecommunications Act of 1996 that leveled the playing field, giving equal access to all property owners. Non-discriminatory access curb cuts to the minimum/main point-of-entry (MPOE). Once that happened, building owners could not keep us out of their MPOE. An enterprise had to let everyone in to the MPOE. What an enterprise did inside its risers was up to the enterprise, but the enterprise had to provide open access for everyone. That has created kind of a free-for-all with the enterprise.”

Since Digital Colony bought Zayo Group Holdings, Ganzi said he has served on Zayo’s board of directors, and he spends three to four hours a week on matters involving Zayo. Every week, he said, he learns more about the fiber business, which he described as super-interesting. He said Digital Colony is going to do really well with Zayo, yet other companies may not do well with some of their fiber assets if they paid a multiple of 28 or 30 times for those assets, as he said he has observed some pay.

“The fiber business is hard,” Ganzi said. “You have to wake up, and you have to fight every day.”

Referring to how much of his company’s digital strategy revolves around 5G wireless communications, Ganzi spoke of the money spent on digital during 2020. “There will be about a $378 billion total available market (TAM) in digital spend,” he said, “and $211 billion of that will be fiber. Some of that has to be 5G, yes? But a lot of that just has to be bringing broadband out to homes, and a response to the COVID-19 pandemic. So, big overweight in fiber to the home, big overweight in fiber to the whatever — data center, tower, you name it — and then, fiber to the enterprise.”

In Ganzi’s view, fiber is not necessarily a 5G catalyst and, instead, fiber is the connective tissue that brings it all together. As for towers and small cells, he said they probably represent about an $80 billion TAM in 2020, in terms of what was spent, and probably another $70 billion to $80 billion in data center spend. With data center spend, Ganzi said, everything Digital Colony is doing is oriented to the cloud because most of the growth is based on cloud computing, rotation of public cloud, rotation of private cloud, enterprise workload-shifting and IoT workload-shifting.

He said Digital Colony also is doing quite a bit with artificial intelligence (AI), which is reflected in many AI workloads with Nvidia and with teaching universities such as Carnegie Mellon and Georgia Tech, where Digital Colony has data centers on their campuses. IBM defines AI workloads as applications based on machine learning and deep learning, using unstructured data and information as the fuel to drive these applications.

“That’s what we call big compute, because those types of compute loads are big power density generators.”

Under the product name of DGX Systems, Nvidia offers what it calls the world’s first portfolio of purpose-built supercomputers designed to give data scientists the most powerful tools for AI exploration that goes from the desk to the data center and to the cloud.

“You have to have a sophisticated facility to deal with those AI guys, particularly Nvidia,” Ganzi said. “Nvidia is a big customer of ours.”

Ganzi Receives Telecom, Media & Technology Leadership Award

By the Editors of AGL


Marc Ganzi, future CEO of Colony and the current CEO of Digital Colony, received the Telecom, Media and Technology Leadership Award and the TMT M&A Awards 2019 recently in London.

“I am humbled to have been selected by my peers for this recognition,” Ganzi said in a prepared release. “The award is testimony to my partners and team at Digital Colony who continue to execute our commitment and vision to serving our customers globally with mission critical digital infrastructure.”

Ganzi has a long career as a pioneer and leading entrepreneur in digital real estate and infrastructure, and 2019 has been a year of exceptional achievements. He led the closing of the first and largest discretionary investment fund dedicated to digital infrastructure – Digital Colony Partners, the partnership between Colony Capital and Digital Bridge – at more than $4 billion of committed capital. A major acquisition was announced in May 2019, with Ganzi spearheading the Digital Colony and EQT (pending) $14 billion acquisition of Zayo Group Holdings.

In 2019, Colony CEO and Founder Thomas J. Barrack, Jr. and Ganzi announced a strategic combination of their companies and the creation of a dynamic partnership. Colony Capital acquired Digital Bridge, with Ganzi slated to succeed Barrack as Colony CEO. Ganzi’s investments in digital infrastructure have consistently leveraged the real estate component critical to infrastructure investing, which aligns with Colony’s global scale, operating platform and capital markets access. The intersection of real estate and digital trends, and the historic, transformative global deployment of 5G network infrastructure are the themes that Ganzi and the new combined company are aggressively pursuing with expanded financial resources and investment talent.

Zayo Purchased by Ganzi’s Digital Colony, EQT

Acquisition is Latest in Global Buying Spree of Small Cell, DAS, Fiber Assets

Marc Ganzi’s vision of diversification took another big step yesterday as his global investment firm Digital Colony purchased fiber optic network provider Zayo Group, with the help of EQT Infrastructure IV fund, in a transaction valued at $14.3 billion. Zayo will transition from a public company to a private company but remain headquartered in Boulder, Colorado. The deal is subject to regulatory and shareholder approval.

Jennifer Fritzsche, senior analyst, Wells Fargo Securities, said. “Ultimately, we believe ZAYO will be a valuable asset within the acquirers’ portfolios and create natural synergies with their other investments. Digital Colony, through its partner Digital Bridge, touches many of the converging parts of the communications infrastructure ecosystem.”

Digital Colony is a combination of Digital Bridge Holdings, which is headed by Ganzi, and Colony Capital, a real estate investment management firm. Digital Bridge is a holding company that is quite diversified, owning Vertical Bridge, Mexico Tower Partners, ExteNet Systems, Databank, Vantage Data Centers and Andean Tower Partners.

As a global investment firm, Digital Colony focuses on next generation mobile and internet infrastructure – towers, data centers, small cells, and fiber.

Ganzi said, “Zayo has a world-class digital infrastructure portfolio, including a highly-dense fiber network in some of the world’s most important metro markets. We believe the company has a unique opportunity to meet the growing demand for data associated with the connectivity and backhaul requirements of a range of customers.”

Goldman Sachs and J.P. Morgan are serving as financial advisors to Zayo Group in connection with the transaction and Skadden Arps is serving as legal counsel. Morgan Stanley and Deutsche Bank are acting as financial advisors to Digital Colony and EQT Infrastructure, and Simpson Thacher is serving as legal advisor.

Spencer Kern, analyst, New Street Research,  said the transaction was bad news for Crown Castle International. First, the pricing of transaction has negative implications because the implied multiple on Zayo’s fiber is 7x lower than the multiple placed on CCI’s fiber by the market.

“We don’t see any reasons why CCI’s fiber should trade at such a high premium to Zayo’s; at the multiple implied by the Zayo transaction, we see 8 percent downside to CCI’s stock price,” Kern wrote. “Second, the new ownership of Zayo could drive greater competition in small cells, putting pressure on CCI’s small cells win-rate, pricing, or both.”

A Busy Year for Digital Colony

Since its inception, Digital Colony has aggressively moved forward on Ganzi’s vision of diversification, with a particular emphasis on the United Kingdom. Last August, Digital Colony entered the U.K. indoor DAS and small cell market with an investment in Stratto, which offers an Infrastructure-as-a-Service business model.

On April 29 of 2019, the global investment firm announced further growth of its U.K. platform through the acquisition of iWireless Solutions, a small cell provider that serves large, high profile venues in the U.K. (London Olympic Stadium, Twickenham Stadium).

Last November, Digital Colony purchased Opencell, which provides multi-operator indoor coverage and currently has more than 2,000 cells across 100 networks that are used by all four U.K. mobile network operators. Opencell was then merged with Stratto.

“Our goal from day one has been to build the leading digital infrastructure platform that delivers exceptional indoor and outdoor network solutions to the mobile network operators in the U.K.; combining Opencell’s capabilities and active networks with the Stratto platform helps us accelerate those goals,” said Ganzi, in a November 2018 press release. “We look forward to continuing to strengthen our relationships with our customers as well as positioning Digital Colony’s U.K. digital infrastructure platform as the recognized leader in the small cell sector.”

Outside the United Kingdom, Digital Colony Buys Fiber, Towers

Elsewhere in the world, Digital Colony has reached out and planted it flag. Last week, Digital Colony closed on the acquisition of Toronto-based, Cogeco Peer 1, a provider of colocation, network connectivity and managed services company. Cogeco Peer 1’s fiber business, which currently encompass more than 2,050 route miles of owned, dense metro fiber in Canada’s two largest urban markets, plans to become the country’s first neutral-host provider of small cell and 5G infrastructure and enterprise and wholesale fiber connectivity.

At the end of just Digital Colony completed its acquisition of Helsinki, Finland-based Digita Oy, which owns and operates the nationwide digital terrestrial television and radio broadcasting tower infrastructure network in Finland and is the largest independent owner of telecom towers in the country.

















Canadian Investor Buys a Third of Vertical Bridge

Long‑term institutional investor Caisse de dépôt et placement du Québec (CDPQ) has acquired a 30-percent stake in Vertical Bridge Holdings, which will use investment to continue to expand its portfolio of broadband and broadcast towers, small cells, real estate and other wireless infrastructure assets ahead of 5G deployment.

Since its inception in 2014, Vertical Bridge has completed more than 250 acquisitions and grown its portfolio to over 266,000 sites, including more than 16,000 owned and master-leased towers, as well as the nation’s largest and tallest private portfolio of broadcast towers.

“With this acquisition, we expand our exposure to telecommunications infrastructure by partnering with a first‑class operator that is strategically positioned in the market and brings a wealth of knowledge of the industry,” said Emmanuel Jaclot, Executive Vice‑President, Infrastructure at CDPQ. “We are delighted to work alongside the Vertical Bridge team and support the company’s next stages of development and long-term growth in an attractive wireless infrastructure sector.”

CDPQ joins a diverse group of long-term investors who have supported Vertical Bridge since its founding. The group includes Digital Bridge, The Jordan Company, Goldman Sachs Infrastructure Partners, Stonepeak Infrastructure Partners, The Edgewater Funds, CalSTRS and Dock Square Capital LLC. The Vertical Bridge executive team also holds a significant stake in the business.

“Two key goals since the day we were founded have been to be a leader in wireless communications infrastructure and to have longevity as a private company. The commitment from CDPQ – as well our current investors’ ongoing support – will allow us to continue to meet these objectives,” said Alex Gellman, CEO and Co-Founder of Vertical Bridge. “We are thrilled to add CDPQ to our investor group and look forward to working with them as we offer an even broader range of innovative infrastructure solutions to customers in the dynamic U.S. wireless and broadcast markets.”

Digital Bridge Holdings was formed in 2013 through a partnership between Ben Jenkins of Dering Capital (and formerly of The Blackstone Group) and Marc Ganzi (former founder and CEO of Global Tower Partners).  Digital Bridge owns interest in a broad range of communications infrastructure companies, including: Mexico Tower Partners, Vertical Bridge, ExteNet, Andean Tower Partners, Databank and Vantage Data Centers.

“We are pleased to welcome CDPQ to the company’s group of investors,” said Marc Ganzi, executive chairman of Vertical Bridge and co-founder and CEO of Digital Bridge. “As the world prepares for the next generation of mobile technology, and coverage and capacity demands rise, their support and guidance will be a vital asset to the Board and to the management team as we collaborate to achieve our goals and support carriers by providing best-in-class digital infrastructure solutions.”

Change May Flow from Possible New Mobile Network Operators

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

Multiple-input, multiple-output (MIMO) and machine-to-machine communications stand ready to change the wireless infrastructure business in response to wireless communications carrier requirements.


The delivery of infrastructure today is a more complex effort than it was in the 1990s or the early part of the 2000s, according to Marc Ganzi, CEO of Digital Bridge. Compared with today’s business focus, wireless infrastructure companies used to think more about where wireless carriers wanted tower sites and how the tower companies could efficiently deploy their balance sheets to help carriers extend their networks, he said. Digital Bridge develops, owns and manages tower and rooftop antenna sites, data centers, fiber-optic cable routes and backhaul, cloud storage, small cells, distributed antenna system (DAS) networks, and Wi-Fi wireless local area networks.

In the past, Ganzi said, separate companies handled the wireless infrastructure segments of towers, DAS and fiber. For the future, Ganzi expects 5G wireless communications infrastructure requirements to transform the wireless carriers and how they spend capital.



“I challenge everyone to not think so much of being in the tower business, but to think of being in the bandwidth delivery business.”

— Marc Ganzi, CEO of Digital Bridge

Photo by Don Bishop

Preparing for 5G

“We are spending a lot of time thinking about how networks are converging, how we can be helpful and, most importantly, preparing a fairly substantial spend to make 5G work,” Ganzi said. “The industrialization of the network is really important to understand. You have to think about the network in multiple dimensions.”

In Ganzi’s view, the first dimension involves multiple input, multiple output (MIMO) communications, which at least uses multiple transmitting and receiving antennas for a given base station, and sometimes multiple transmitters and receivers that each have multiple antennas to transmit and receive more than one data signal simultaneously over the same radio channel. The effect minimizes errors and optimizes data speed.

“With MIMO, you immediately change the dynamic of how infrastructure is built because now you’re relying on small cells, Wi-Fi, macro sites, backhaul and edge data centers, and then ultimately, the backside of a cloud-based radio access network (C-RAN) with base station hotels or carrier hotels,” Ganzi said.

Machine-to-Machine Connections

“A second dimension addresses 5G’s potential not only for connecting 7 billion human beings on this planet, but also it is about connecting 7 trillion devices,” Ganzi said. “No longer are we building networks for people-to-people connections. We’re talking about machine-to-machine connections. Those machine-to-machine connections are going exponentially far faster than anyone can comprehend. As we think about where we’re going to be in 2030, with 7 trillion devices connected via wireless networks, that’s an exciting place to be.”

Hierarchy of Objectives

Ganzi said customers have a hierarchy of objectives, including quick, capital-efficient deployment that solves legacy lease issues while bringing down the total cost of bandwidth delivery over time. He said wireless infrastructure providers have profited greatly as deployment partners with carriers, but a fundamental shift to lighter, smaller infrastructure is mostly likely to be more rent-efficient. Trying to help customers optimize their operating expense is important, Ganzi said, along with understanding how to deliver many solutions quickly.

Future Customers

“Regarding the customers of the future, I wonder how far Charlie Ergen will go with the Dish Network internet-of-things (IoT) network,” Ganzi said. This year, Ergen, the company chairman, announced Dish Network’s plans to deploy a nationwide, narrowband IoT wireless network. “How do cable TV companies get into the business of wireless communications?” he asked. “Do the cable companies eventually own a network?”

If the No. 3 and No. 4 national wireless carriers, T-Mobile US and Sprint, merge as they have said they intend to do, Ganzi said the cable TV companies may end up entering the business as a fourth national wireless communications carrier. “We have to think a lot about what they will need for infrastructure,” he said.

Another potential new mobile network operator Ganzi identified as a future customer for wireless infrastructure could come from companies that Wall Street sometimes refers to in a group as FANG, using the first letters of their names: Facebook, Amazon, Netflix and Google.

“Probably the FANGs will not build their own wireless communications networks unless there are some changes made about net neutrality,” Ganzi said. “But chances are, maybe one of them will, or they build pieces of the network, or they joint venture with the cable TV companies to build a joint network. I am optimistic about traditional content providers and companies that deliver goods and services. It benefits them to have network elements, if they can control and own them.”

Referring once to the industrialization of the wireless network as the IoT, Ganzi said it would be logical that for Amazon to deliver a flawless experience, especially with drone delivery, Amazon will need some form of a wireless network with low latency and with computational functions and applications placed at the network edge.

Aggregation Points

“You will see carrier hotels, small-cell base station hotels or C-RAN hubs, whatever you want to call them, as aggregation points where content and wireless come together to reduce latency as low as 1 millisecond,” Ganzi said. “To achieve that, we have to be 1,000 percent faster than we are today. Some of these challenges are confounding from an engineering perspective, and I believe it means we will see new wireless carrier entrants.”

In Ganzi’s view, if T-Mobile US and Sprint merge, it will be positive for the wireless infrastructure industry. He said the best result would be the emergence of a fourth mobile network operator. But whether or not the companies merge, much work will need to be done to densify mobile networks.

Network Reinvestment

“Rationalizations of networks take about seven years, depending on how long the duration of the existing macro sites is with the company that’s acquiring the other company,” Ganzi said. “Between the third and sixth years after a merger, you see a reinvestment in the network. We’ve seen that happen time and time again. I am not concerned about the short-term implications of the merger. I am more interested in its by-product, and whether it encourages cable TV companies to invest, Dish Network to invest or the FANGs to invest. Whatever happens, the number of devices that will need to be connected over the next decade is a staggering figure. To accomplish that is going to require a lot more bandwidth and a lot more infrastructure. I challenge everyone to not think so much of being in the tower business, but to think of being in the bandwidth delivery business.”


Ganzi emphasized the importance of focusing on work flow to reduce cycle time. He said the need to complete projects more quickly applies to all businesses. For antenna site projects, he said bringing the customer experience down from a 180-day experience to a 90-day experience represents a remarkable achievement because it pulls sites into a quarter.

“It starts with people,” Ganzi said. “It’s harder and harder today to find good people to run these businesses just because of the sheer volume of activity and not really having a great safety net for training. How do we continue to train the next generation engineers? How do we train the next professionals in wireless infrastructure to really come on board and be effective on Day One? If you don’t have the right people, you can’t create alpha in investing. Owning infrastructure assets is great. You can have the best leases; you can have the best cash flows. But people create alpha, not the assets.” In business terminology, alpha is the excess return on investment relative to a benchmark return.


Although the wireless infrastructure business continuously faces a challenge from regulations, Ganzi said, the challenge brings opportunity. If it becomes easy to perform a site make-ready, to build a tower or to pull a building permit, wireless infrastructure specialists will become less useful to wireless carriers. He said wireless infrastructure specialists have the skills to perform the hard work and provide a strategic value-add to wireless carriers. A value-add becomes quantified as the difference between the revenue received for a product or service and the cost required to produce it.

Ganzi said the Wireless Industry Association, under its previous name PCIA, did a good job with regulation in bringing the wireless infrastructure industry and municipal governments together to offer the collocation of wireless equipment on existing sites as a matter of right. “How the industry responds and how the FCC responds will largely dictate how easy it will be or how difficult it will be to deploy next-generation networks,” he said.

Marc Ganzi spoke at the Connectivity Expo conducted by the Wireless Infrastructure Association in Charlotte, North Carolina, in May.The next Connectivity Expo is set for May 20–23, 2019, in Orlando, Florida.