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American Tower Noncompete Clause Rattles Tower Service Contractors

By J. Sharpe Smith, Senior Editor

The wireless infrastructure industry is abuzz over a letter contained in an email that American Tower sent to its contractors last week, expressing its concern about the practice of building new towers near existing towers.

The letter responds to wireless communications carrier efforts to lower their antenna space rental costs by building towers near sites where they already have antennas and where they believe the rent is too high. The letter from American Tower says the practice of placing new towers nearby, known as overbuilding, is “not sustainable or scalable.”

“American Tower believes that building such towers is unnecessary, short-sighted and reckless,” the letter from Jared Morley, director of supply chain at American Tower reads. “It harms existing landlords, needlessly clutters otherwise peaceful neighborhoods, wastes precious resources and does nothing to improve the coverage, capacity or quality of today’s stressed wireless networks.”

The letter includes a noncompete amendment to American Tower’s master contract agreements. By signing the amendment, a contractor agrees to not to work for a wireless communications provider on any “new wireless communications asset” within one-half mile from an American tower site. If that agreement is violated, American Tower reserves the right to remove the contractor from its preferred contractor list.

Contractors have until June 15 to sign the agreement and until Aug. 17 to discontinue any work that is not allowed in the agreement.

A battle between a public tower company and the carriers is not really too surprising. It has been coming on for a while.

Last year, the carriers took direct actions to lower tower costs. In November 2017, AT&T and Verizon opted to use Tillman Infrastructure to build towers for their use and committed to leasing and co-anchoring the towers. The purpose was to make it possible to relocate equipment to new towers as leases for space on current towers expire. As recently as April 26, AT&T continued to move away from the traditional tower building and leasing model by signing a build-to-suit agreement with CitySwitch. Under the agreement, CitySwitch will begin tower construction as early as the second half of 2018 and will lease completed sites to AT&T.

SoftBank Group’s $400 million joint venture with Lendlease Group to develop or buy 8,000 towers and rooftop sites will reduce site rental costs for Sprint.

Tower contractors have been caught in the middle of the feud between AT&T and American Tower and essentially will have to choose sides. Some said they believe the letter was heavy-handed, and they feel blindsided by it. Some also expressed concerns that the amendment is too vague. Although the letter asks them not to participate in the development of any new towers, the amendment uses broader language, referring to new wireless communications assets.  They say, the broader language would keep contractors from laying fiber, or installing in-building wireless or outdoor DAS and small cell systems, within a half-mile of an American Tower site.

Some contractors also complained about the letter’s tight deadlines. For some, signing the noncompete amendment to the master contract will probably be a no-brainer. American Tower will provide them with far more work than any company overbuilding for the carriers. Some companies will no doubt test American Tower’s resolve and refuse to sign, while others simply do not know whether to sign the new agreement. Either way, the clock is ticking.


J. Sharpe Smith
Senior Editor/eDigest
J. Sharpe Smith joined AGL in 2007 as contributing editor to the magazine and as editor of eDigest email newsletter. He has 29 years of experience writing about industrial communications, paging, cellular, small cells, DAS and towers. Previously, he worked for the Enterprise Wireless Alliance as editor of the Enterprise Wireless Magazine. Before that, he edited the Wireless Journal for CTIA and he began his wireless journalism career with  Phillips Publishing, now Access Intelligence.  Sharpe Smith may be contacted at: ssmith@aglmediagroup.com.

Qualcomm, SoftBank, Sprint Develop 5G in 2.5 GHz Band; Rollout Expected in 2019

May 11, 2017 —

Working with Qualcomm Technologies and SoftBank, Sprint is developing 5G technologies in the 2.5 GHz band, including the 3GPP New Radio (NR) standard.

“Today 2.5 GHz TDD-LTE is one of the largest global wireless ecosystems used by some of the most influential operators in the world such as SoftBank and all of China’s operators, including China Mobile,” John Saw, Sprint CTO, wrote in a blog today.

The agreement includes developing a 3GPP 5G New Radio (NR) on the 2.5 GHz spectrum, which Sprint expects to deploy in late 2019.

“As one of the first proponents of 2.5 GHz and TDD-LTE for 4G, we understand the value of building a strong global ecosystem early on. This is why we are working with Qualcomm and SoftBank to develop the 3GPP 5G NR capabilities for 2.5 GHz,” Saw wrote.

Sprint has more than 160 MHz of 2.5 GHz spectrum in the top 100 U.S. markets, more mobile-ready 5G spectrum than any other U.S. carrier.

“Today we’re using this advantage to densify our network with more cell sites and antennas to build a strong foundation for 5G,” Saw wrote. “We are ensuring that Sprint’s deep 2.5 GHz spectrum is an early first-mover in the 5G ecosystem. Not all spectrum bands have this kind of global support and economy of scale.”

Last December, Sprint announced that it had developed technology that will increase 2.5 GHz network coverage by up to 30 percent to nearly match 1.9 GHz spectrum performance, while penetrating buildings at a rate of be 90 percent of what is achieved at 1.9 GHz spectrum.

The carrier demonstrated the advanced technology, known as High Performance User Equipment (HPUE), which a new power class – Power Class 2 – for end-user devices such as smartphones. In development for two years, HPUE was designed to improve the performance of TDD-LTE Band 41 networks, John Saw, wrote in a blog.

“In 2015, we began working on a solution to improve our 2.5 GHz coverage by increasing the uplink coverage of Band 41 devices,” Saw wrote.

Sprint said that its network is ready for the initial rollout of HPUE in its 250 LTE Plus markets. Samsung, one of Sprint’s most important ecosystem partners, is expected to support HPUE in devices slated for commercial launch sometime this year.

SoftBank, Ericsson Set to Experiment with 5G at 28 GHz

March 26, 2017 —

SoftBank has been granted an experimental license to conduct tests on the 28 GHz frequency band, and will commence indoor and outdoor trials in Tokyo Waterfront City, using Ericsson’s 28 GHz 5G test bed, which supports advanced features of the next generation technology.

The coming trial will cover both device mobility and stationary tests and include base stations and device prototypes with control signal feedback using mid-band spectrum at 4.5 GHz. Advanced 5G technologies will include massive-MIMO, massive beamforming, distributed MIMO, multi-user MIMO and beam tracking.

The more advanced testing follows basic 5G trials completed in the fall of 2016 by Ericsson and SoftBank in the 15 GHz and 4.5 GHz bands.

The trials will evaluate RF propagation on the 4 GHz, 4.5 GHz and 28 GHz bands, using new air interfaces  at speeds exceeding 10 Gbps with latency of less than 1 millisecond.

Tests will use a 100-megahertz channel in the 4 GHz band; a 200-megahertz channel in the 4.5 GHz band and a 732-megahertz channel in the 28 GHz band.

SoftBank said it aims to launch 5G commercial services around 2020.

Sprint Dumps Hesse; Ends Pursuit of T-Mobile

By J. Sharpe Smith —

Hesse

Hesse (Photo: BGR)

August 6, 2014 — The news surrounding the cellular industry’s third and fourth largest carriers has hit a fever pitch in the last 24 hours. Most recently, Sprint replaced Dan Hesse with Marcelo Claure as the company’s president and CEO. At the same board meeting, Sprint directors voted to end their $32 billion offer to buy T-Mobile, according a report in the Wall Street Journal.

Regulators have been making very clear from the beginning that they did not believe a merger of the number three and four carriers would not improve the competitiveness of the market.

The FCC’s displeasure with the prospect of a Sprint/T-Mo combo has been long suspected as it recently changed its spectrum holdings rules, which would have forced Sprint to divest its 2.5 GHz spectrum if it coupled with T-Mobile.

Additionally, the FCC is circulating a proposal to revise spectrum bidding credits to encourage the entrance of small businesses into the wireless carrier business, which notes the FCC’s desire to push beyond the current four major carriers, let alone collapse back to three.

Claure, 43, joined the Sprint Board of Directors in January and is the founder and CEO of Brightstar, a subsidiary of SoftBank.

“As president and CEO, Claure’s first priority will be to continue the build out of Sprint’s network by leveraging its strong spectrum holdings as well as ensuring that Sprint always maintains truly competitive offers in the marketplace,” the company said in a press release.

Hesse has served as Sprint’s head since December 2007, and led the company through a series of acquisitions, including the merger with SoftBank, and a multi-year overhaul of its nationwide network, known as Network Vision, including the shutdown of the Nextel network.

Even with the turmoil at Sprint, Jennifer M. Fritzsche, Wells Fargo senior analyst, expressed optimism that the carrier will turn a corner with the completion of the Network Vision build out and deployment at 2.5 GHz.

“Recall while S only has a 5×5 channel today, with the light up of the 2.5 GHz spectrum it will have multiple 20×20 channels and a spectrum position that would be significantly deeper than many of its peers,” she wrote.

Don’t Forget Iliad

Perhaps a bit lost in yesterday’s titanic announcements, T-Mobile rejected the $15 billion, or $33 a share, bid by cheeky French concern Iliad, according to the Wall Street Journal, refusing to open its books to them. The bid was rumored to be too low and cost synergies of the merger exaggerated. The only upside of the deal appeared to be the fact that it would not raise the ire of antitrust authorities.

Iliad’s odyssey may not be over. Reuters reports that the firm, which controls 13 percent of the French market with a low-cost service, will most likely come back with a sweetened deal.

T-Mobile Ready to be Sprint’s White Knight, and It’s About Time

J. Sharpe Smith —

Another piece of the puzzle fell into place in Sprint’s quest to merge with T-Mobile this week, as the carrier’s majority owner Deutsche Telecom AG agreed to Sprint-owner Softbank’s plan to buy T-Mobile for a price tag of $32 billion, according to published reports.

The hook up with T-Mobile may be needed now more than ever, according to research by RBC Capital Markets, which reports that Sprint’s network modernization progress has stalled since February.

“Our ongoing monitoring of Sprint’s network upgrades indicate that overall progress has been slow on both voice- and data-related cell-site improvements since February,” RBC analyst Jonathan Atkin wrote. “However, there has been some incremental progress in data speed upgrades, particularly in the Spark markets (e.g., 75 data speed upgrades in New York versus February).” New York topped Sprint’s network upgrade list with 1,332 data speed upgrades, 32 data capacity upgrades and 21 voice upgrades, followed by Los Angeles with 1,009 data speed upgrades, 3 data capacity upgrades and no voice upgrades.

However, RBC is seeing increased activity in the 2.5 GHz band at Sprint as the 8T8R LTE equipment starts to ship.

Perhaps as a result of the slow progress of Sprint’s network upgrades, subscribers’ perceptions of its networks have suffered. Its voice score of -26 percent was the worst among the national carriers, and was down 9 percent from the previous survey results from January 2014, according to RBC’s research.

“Sprint also trailed its peers, which posted net negative scores in the single digits,” Atkins wrote. “Of note, we found that respondents in Sprint’s Spark markets reported worse network performance for both data and voice quality (18 percent and 29 percent net negative scores, respectively) versus respondents in non-Spark markets (9 percent and 22 percent net negative scores). Our previous survey of Spark versus non-Spark markets had shown an incremental improvement in Spark markets.”

Atkins noted in an interview with AGL Link that the pairing of Sprint and T-Mobile has some nice synergies for the latter’s sites in urban areas.

“Sprint’s 2.5 GHz spectrum position, coupled with the urban/metro focus of T-Mobile’s transmission locations, suggest to us that Sprint, upon consummating a merger with T-Mobile, would add 2.5 GHz LTE equipment at T-Mobile sites, rather than remove gear, in order to meet its network density requirements,” Atkins said. 

Now Sprint and T-Mobile just need to convince the government that having just three national carriers is sufficient for wireless competition. That may be easier said than done.

 

J. Sharpe Smith is senior editor, AGL Link.