As seen from the vantage point of an executive with a large tower company, the best opportunities for small companies to develop towers lie in geographic areas where they have expertise and an economic advantage that larger companies cannot match. According to Allan Tantillo, vice president of new technologies at Vertical Bridge, there is an opportunity for entrepreneurs to build towers in rural areas, on tribal land and on federal land where they can develop cooperative relationships with local authorities and populations in a way that some larger companies cannot.
Speaking on Jan. 24 at the AGL Local Summit in Newport Beach, California, Tantillo said that Vertical Bridge has an aggressive build-to-suit tower program, and that Vertical Bridge works with smaller tower companies to develop towers and then later purchase their portfolios.
“There is still a tremendous opportunity to build towers,” Tantillo said. “It is the most efficient way to provide broadband coverage across a geographic footprint. Towers will be needed in suburban areas and in rural areas. Small tower developers play a crucial role, because they have expertise in specific jurisdictions. They have an opportunity to build towers through relationships that they’ve developed and through knowledge they have that larger tower companies cannot obtain, at least not without a lot of expense.”
Asked whether Vertical Bridge helps to fund small tower companies, Tantillo said: “Vertical Bridge is a very creative tower company, and we look at all opportunities to develop their portfolios and support the community.”
Vertical Bridge specializes in wireless base station equipment collocation services, including renting space for antennas on towers, and constructing build-to-suit towers. A statement on the company’s website says that Vertical Bridge is the United States’ largest private owner and manager of wireless communication infrastructure.
The tower business will be affected by several new technologies, Tantillo said. He mentioned 5G wireless communications, millimeter-wave technology and massive multiple-input multiple output (MIMO) communications. He said T-Mobile US has committed to roll out 5G on its 600-MHz spectrum across every inch of the country. As companies like T-Mobile continue to deploy along that front, there will be a great opportunity for the tower industry,” Tantillo said.
There is a lot of talk about how technologies deployed on Citizens Broadband Radio Service (CBRS) frequencies will influence the in-building wireless world, Tantillo said, along with using CBRS outdoors to augment mobile network coverage in rural areas.
An evolution in television involving the roll-out of a new broadcasting standard, ATSC 3.0, uses advanced transmission and coding techniques for video and audio to deliver new services to viewers. Tantillo said it will have an effect on the tower business, but to what extent is not clear. He said Vertical Bridge owns the largest portfolio of broadcast towers, and that American Tower has a large broadcast tower portfolio, too.
The question of who will pay for the millions of in-building wireless systems needed to provide the density of wireless access points that mobile network operators will need in the coming years remains to be answered, Tantillo said. He said that because 80 percent of a wireless carrier’s network traffic originates and terminates indoors, there will have to be some kind of shift in financing and ownership.
Uploading and downloading video accounts for much of the increase in network traffic. Tantillo said that when the networks begin to carry 4K video, augmented reality and virtual reality content, a revolution has to happen. “In the in-building wireless world, a large community says the landlords are going to pay for it — and they are,” he said. “Another community says there is no way the landlords are going to pay for it, because the ownership of the buildings turns over, and they don’t see any value to it. The solution will require a tussle and the outcome is unclear.”
In Tantillo’s view, the three or four major wireless carriers do not have enough money and will not have enough money to pay for all of the in-building wireless systems. He said that is where third parties such as Vertical Bridge and other towers owners come in.
“Where we have capital and opportunities, it’s our job to figure out what the solutions are,” Tantillo said. “There will be a tremendous amount of experimentation over the next two, three or four years until we start seeing how that fleshes out.”
On the Edge
With in-building wireless, Tantillo said he sees similarities with what is happening with data centers, edge computing and how content has to move to the edge of the network to make 5G wireless communications possible.
“We understand that network latency has to be reduced, but we do not know what the data centers will look like,” Tantillo said. “I have seen proposals from data centers at the edge designed to put 5,000 square feet of equipment at a cell site or another location, and that will be the data center on the edge. I have seen other proposals that say all that is necessary for edge computing is a rack that fits into a standard Ericsson or Nokia cabinet.”
Tantillo questioned whether many typical urban or suburban cell sites have 5,000 square feet, let alone that the space already is leased by the tower company, and whether there may be another 5,000 square feet adjacent an existing cell site or in close proximity to it. “How many edge computing facilities will be necessary?” he wondered.
Edge computing will be highly transactional, Tantillo said. By way of example, he said that the edge may house the top five Netflix movies and TV shows, and everything else has the same demand. “It is still too early to tell what the landscape is going to look like,” he said. “But it is an exciting time to be involved and to help to craft that landscape.”