Tom Bartlett, American Tower CEO, told the Q3 earnings call last week how American Tower aims to use its neutral-host real estate portfolio to help customers deal with the convergence of wireless and wireline networks, which will lead to numerous additional services that call for mobile data centers.
“We believe that this convergence along with increasing digitalization, network virtualization and cloud-native software-defined services will lead to increasing demand for distributed, interconnected global edge compute processing,” Bartlett said.
Infrastructure at the edge should remain a critical component of the network architecture as it evolves, according to Bartlett, which is where American Tower’s real estate assets reside.
“We are focused on developing communications infrastructure business models that augment the value of our existing assets, expand our revenue base beyond traditional tenants, and enhance our leadership role in the wireless ecosystem,” Bartlett said. “At the highest level, our goal is to selectively extend our digital infrastructure core capabilities to further encapsulate neutral hosted wireless connectivity, transport, and compute functions as part of our comprehensive platform.”
American Tower plans to offer tenants an integrated suite of complementary solutions to fit within the increasingly complex network designs.
American Tower will focus its investments on business models with contracted long-term revenue commitments from Tier 1 customers; multi-tenancy and multi-service offerings with low ongoing maintenance capex; operating leverage characteristics similar to towers; and synergies and adjacencies to existing American Tower assets and skillsets, Bartlett said.
In the United States, as 5G deployments accelerate, American Tower expects an increasing number of lower latency applications and more cloud-based customer demand for application-level and network compute functions at the edge.
“There are two distinct solutions within this emerging ecosystem: distributed compute and mobile edge compute,” Barlett said. “We believe that these two offerings will develop on different timelines and will allow us to provide differentiated valued propositions for our customers.”
On the distributed computing side, enterprise workloads continue to move to the public cloud. In the near term, on- or off-premise private cloud computing is also being used as a hybrid solution. American Tower has begun deploying micro data center facilities at select tower sites and has seen early indications of solid demand in collaboration with partners like Flexential, a nationwide data center platform.
“Small and medium-sized businesses are often willing to move legacy workloads to more responsive, proximate, cost-effective data centers, and we believe that many data centers at some of our macro towers can represent optimal locations for these installations,” Bartlett said.
In the long term, however, 5G mobile edge compute solutions at the tower to represent a much larger opportunity to fulfill the need for low latency, according to Bartlett.
“The foundational concept of our mobile edge strategy is the expectation that localized neutral host, multi-operator, multi-cloud micro data centers can be the most cost- and technology-efficient means to which latency can be reduced,” he said. “These facilities can be optimally located at select macro tower sites that already have power, fiber and multiple wireless tenants, rather than each cloud provider and carrier forging ahead with their own connectivity arrangements.”
Colo Atl, an American Tower company and provider of carrier-neutral colocation, data center and interconnection solutions, is in the early stages of small-scale deployments at the tower sites.
“At this point, we think a scaled solution is still at least a few years away, but there is tangible progress being made, and we are excited about the possibilities,” Bartlett said. “Underlying this excitement of the potential future 5G related use cases that we expect to drive rapid uptake of mobile edge compute functions.