September 17, 2015 — The tower business is not going away, but managing the convergence of technologies and networks will be the key for wireless infrastructure providers to meet the needs of carriers in 5G and beyond, Marc Ganzi, Digital Bridge CEO, said in a keynote address, Sept. 16, at the Tower and Small Cell Summit.
“Get ready to be versatile and to learn how to provide multiple types of infrastructure and how to shift capacity across the network. Those are the types of partners that carriers are going to want going forward,” Ganzi said.
The tower or macrosite side of the business is very healthy, Ganzi said, with 6 percent to 12 percent annual growth. “There is a lot of investment and a lot of sites getting built. Thousands of macrosites are being deployed. It is an incredibly important, vital component of the ecosystem,” he said.
However, Ganzi said that Wall Street investors take a much broader view of towers, dividing the communications infrastructure, or comm-infra, industry into five subsets: macrosites, distributed network services (aka DAS), collocation facilities/data centers, dark and lit fiber (interconnect/backhaul), and the Cloud.
“The thunder that towers enjoyed over the last two decades is now being shared with other components of the ecosystem,” he said.
Consumers and their data demands – full motion video, downloading music, content-based programs — have forced carriers to improve their networks, which is forcing wireless infrastructure providers to look beyond macrosites.
“We have to think about how we are going to remain relevant to our consumers, the carriers, going forward. Compared with the early years of cell tower development, it is a much more complex value proposition,” Ganzi said. “We have to think, not just about macrosites, but we are forced to think about small cells, about interconnectivity, about backhaul, about collocation, and about the Cloud and hosted services.”
The industry must figure out how the different comm-infra subsets fit together, Ganzi told the audience.
“We all love to get ourselves into silos, saying ‘I’m in the collocation business or the small cell business or the backhaul business or macrotowers,’” he said. “Really, if you want to survive and evolve, you need to be in the networking business: building, managing and optimizing networks.”
Ganzi said he watches which mergers transpire and listens to the carriers to understand industry trends. As examples of convergence, he mentioned the merger of Sunesys, a fiber-optic networks provider, with tower/DAS provider Crown Castle International, and fiber-optic provider Zayo’s entrance into wholesale collocation through the purchase of infrastructure-as-a-service provider Latisys. The mergers are critical to meeting the carriers’ needs, he said.
“Convergence is really important because of how carriers are putting out their RFPs these days. It is not just bidding on towers or small cells or strands of dark fiber. RFPs are now interplayed, where you have to demonstrate multiple capabilities.
It is about a delivery system of bandwidth,” Ganzi said. “Infrastructure providers today are no longer single-trick ponies. You have to be able to deliver macrosites, small cells, backhaul, collocation and to a certain degree managed services.”
How will 5G networks be built? Ganzi said that macrosites, small cells and DAS will remain the core of the network, but what will change is how data runs over those networks.
“Capacity will be spread out to the edge of the network. The only way you can do that is through a fiber-based architecture, connected to macrosites, to small cells and to Wi-Fi, all of which you bring back to one common radio room,” he said. “That requires convergence: collocation facilities merging with fiber, merging with macros and merging with small cells. At the same time, hosted services provide the software piece of the network. The only way that 5G works is if all five pieces of the network work together.”