By Ted Abrams P.E….
Thomas Wheeler understands the wireless industry: Wheeler really gets it. He is smart, dynamic and energetic. He has been privileged to see under the tent flap into the carrier community as well as into the wireless infrastructure industry in ways that are genuinely unique. As head of the FCC, the most powerful policy institution that impacts the wireless industry, Wheeler can influence the future in a way that is best for the nation and at the same time pragmatically address the realities of the wireless marketplace.
Here are the other important stories of the year, as I see it:
2. U.S. Supreme Court upholds FCC pole attachment rules
Stabilizing the FCC pole attachment rules (by having the highest court in the land uphold them) paves the way for small cell deployments on utility infrastructure. It is going unleash the biggest wave of wireless attachments during the next 10 years. Through 2020, more radio devices will be attached to utility poles than any other form of infrastructure. Some will be attached to high-voltage transmission structures, most attachments will be onto small to medium-size poles that are part of the medium-voltage distribution and legacy telephone pole line systems. We are running out of neighborhoods that are amenable to hosting large, purpose-built towers. We have to find something that stands above the surrounding clutter that can support an antenna. There are millions of utility poles with prior right to encroach, rights which predate the telecom act of 1996. It is going to be a huge business.
3. Crown Castle’s purchase of AT&T’s tower assets
I thought American was going to buy those towers. I was surprised when Crown purchased them. It is the last major portfolio of carrier tower assets. The biggest part of the story, however, is the negotiated monthly lease price of $1,900 with the 2 percent escalator. With the right financial engineering, it could have been any number. Why did the parties negotiate and publicize those particular numbers? I believe AT&T made other concessions in order to publicize these numbers and send a message to the market. AT&T wants to curb their rising OPEX, I get it. AT&T would rather pay $1,900, and 2 percent, even though those numbers are well below market pricing. The $1,900 monthly rate is low but it is not terrible, but the 2 percent escalator is just plain bad precedent. Especially bad given the likelihood that the US economy seems poised to enter an inflationary cycle.
4. Softbank purchase of Sprint
We all know Sprint was hurting. They only way they have made it the last 18 months was through vendor financing from Ericsson. The Softbank infusion of capital not only kept Sprint in the game but it also liberated Ericsson to make other investments.
5. T-Mobile purchase of Metro PCS
T-Mobile’s purchase of MetroPCS created an entity that was more clearly distinguished from Deutsch Telecom. Bigger, with a particular vision for the future, T-Mobile USA dramatically increased its value and strength in the market. The purchase also gives T-Mobile engineers access to MetroPCS’ advancements in more efficient, modern six-sector antenna arrays.
6. AT&T purchase of LEAP’s Spectrum
The fact that AT&T aggregated spectrum through the purchase of LEAP is important, because it makes the statement that the carrier is committing big capital to leveraging LTE Advanced and carrier aggregation. Clearly, AT&T is telling the market that LTE is more important than any other protocol. AT&T doesn’t care that much any more about which frequency they buy. They can profit with any frequency band to varying degrees, because with LTE Advanced, it can take a little spectrum from AWS, a little PCS, even some 850 MHz and aggregate that into one wideband carrier – just waiting for the handsets.
7. Dish battles for LightSquared spectrum, debt purchase lawsuit
I am a fan of Charlie Ergen. A professional poker player before he got into the wireless business, always an astute businessman. When he makes a move, it is interesting to try to figure out why. I don’t know what he is going to do next. He may end up building a network. He may not. It is never dull. His latest stirring of the pot is his pursuit of the LightSquared spectrum. We all know it is encumbered because of the widespread use of unfiltered (sloppy) GPS receivers. It is fun to watch him. Why is a satellite TV operator doing this? LightSquared is suing Ergen for trying to buy the LightSquared’s spectrum after he bought their debt.
8. GTP tower sale to American Tower
I have the utmost respect for Marc Ganzi and the team that he put together, and the impressive portfolio of managed sites and towers. The sale to American was not a surprise to me.
9. Small cells = massive growth potential
The newest tech gadget is the Ericsson Dot Radio, about the size of a hockey puck, which debuted late in September. The talk at the independent developers’ forum held in conjunction with PCIA’s Wireless Infrastructure show was that small cells are not ready for prime time. It’s not real yet. The prices that operators are willing to pay for the rights to attach small cells are out of line with the willingness of real estate owners to allow those attachments.
10. Huawei world sales overtake Ericsson, but Ericsson remains number one in the U.S.
Huawei has yet to overcome the perception that it is a security threat to the United States. I don’t know how much basis there is for those fears. Everybody likes to throw stones at Huawei. I think there is unfair prejudice against Huawei because of its national origin. Ericsson is so far ahead of any other manufacturer in the U.S. market, it’s hard to believe that anyone could catch them, especially if political barriers continue to block Huawei from major penetration of the US market.
Abrams Wireless, Inc. (AWI) founder and principal consultant Ted Abrams, serves clients with vested interest in wireless infrastructure, spectrum, and supporting assets. Abrams has pioneered a number of small cell and DAS implementations, which are sustained by talented individuals that Abrams recruited and teams he organized.