Two of the busiest roundtables at the inaugural TowerXchange Meetup Europe focussed on small cells and DAS, reflective of the tower industry’s growing appetite to diversify their business models beyond macro structures. Rounding up the second day of the Meetup, Rethink Technology Research’s Caroline Gabriel represented the Small Cell Forum and moderated a discussion between towercos Cellnex, INWIT, Arqiva and WIG, plus vendors ip.access, in an open panel discussion examining the challenges and opportunities presented by small cells, DAS and heterogeneous networks.
What opportunities do towercos see for themselves in small cells and DAS?
INWIT, formed following a carve out from Telecom Italia and subsequent IPO, has a network of 11,500 towers. CEO Oscar Cicchetti also sees small cells presenting an opportunity. MNOs are increasingly willing to share infrastructure amid the financial pressure created by the high levels of capital needing to be deployed in spectrum auctions and the rollout of new equipment for LTE. Passive infrastructure is only the tip of the iceberg in terms of what a towerco can be offering to an operator. Small cells should be offered as an added service; as we move through the rollout of 4G and ultimately 5G, there will be an increased requirement for densification and MNOs are already interested in sharing this micro-coverage. INWIT are closely following the technology roadmaps of LTE microcell multi-operator vendors.
Alex Mestre from Cellnex came with the message to the audience that the advent of small cells will not kill macro cells. In auctions, MNOs are paying billions of dollars for 700 and 800MHz frequencies which will never be used for small cells. Urban, as well as rural areas will still need macro cells operating on lower frequencies. It is important that the community convey this message to analysts - small cells and macrocells are two different systems that sit hand in hand and there is a role for both in the future of telecoms infrastructure. Both are required to achieve optimum coverage and capacity. In Italy, Cellnex have deployed DAS networks inside tunnels, along motorways and on provincial state and regional roads through their subsidiary, TowerCo. In Spain Cellnex have secured concessions on street architecture in Barcelona and are undertaking a project to deploy small cells on the infrastructure for an operator whilst also installing systems in football stadia and other high traffic venues.
Scott Coates from Wireless Infrastructure Group (WIG) referenced how they hand entered the DAS market out of necessity, given the absence of quality independent infrastructure players active in the sector in the UK and Europe. In the last 18 months WIG have installed 20 new DAS systems in the UK. Coates commented that whilst there are challenges having to work with active as well as passive equipment, he was convinced that it was an opportunity for infrastructure companies such as themselves. When it came to outdoor small cells, he felt that whilst it was clear there is a potential role for wholesale infrastructure providers, it was not yet clear whether such solutions represented an investible platform.
Ip.access co-founder Nick Johnson commented that there are currently more small cells than macrocells deployed although, added Cellnex’ Alex Mestre, the demand for small cells is not equal across the globe; where there is a higher scarcity of frequency, there is a higher requirement for small cells. As the interaction of small cells with the macronetwork increases, there is more of a role created for the towerco. Towercos are ideally positioned to sit as an honest broker between the operator and the building owner.
What are the advantages offered by an independent infrastructure provider in venue-DAS?
Arqiva’s Nicolas Ott commented that he felt that towercos were the preferred choice for landlords in the deployment of DAS. They served as a one stop shop, acting as a single contact person for the landlord and could achieve cost savings by aggregating multiple MNOs within a single system. He also felt that as long term investors in the infrastructure, towercos were ideally positioned to make investments to improve the systems.
Scott Coates added to this, pointing out the benefits also brought to operators through working with infracos. Often the decision making process of venues for new potential DAS systems is very slow. Venues need to be taken through the value proposition early on, explaining how robust coverage is an essential service they should be delivering to their patrons, rather than viewing it as a money making exercise to install Wi-Fi systems.
Alex Mestre added to this that venues can often feel like it is the operator’s duty to install a DAS system in a venue when coverage is not up to scratch. MNOs don’t want to pay for installations, whereas venues think the MNO should be paying as they aren’t delivering the right level of coverage. As an independent third party, infracos can enter this discussion with venues, presenting an offering to help them improve coverage without the added complexities and pushback that an operator would face. Working through an infraco in such a way can be a significant advantage to an operator.
What are some of the challenges faced in the deployment of small cells?
Whilst the jury is still out on the strength of the business case for towercos in the deployment of small cells, some are already active in the field. In line with this, we asked panellists who had experience to share some of their thoughts on where the biggest challenges existed.
Securing the right location for small cells is key, commented Oscar Cicchetti. Arqiva called attention to the challenges that are presented around permitting, commenting that within the UK you could find different local authorities having very different processes - the cost and time required to install small cells in different London boroughs, for example, can vary widely. A second major challenge is in relation to backhaul - microwave won’t be sufficient to support requirements and rolling fibre out to each individual small cell is costly. There needs to be a balanced economic model that’s a win-win for all parties, with small cells securing easy access to the backhaul that they require.
Is there a role for towercos in public Wi-Fi?
Discussion moved on from small cells and DAS to look at public Wi-Fi. Panellists felt that the installation of Wi-Fi was simple and quick and that there was a key role for towercos to play. Arqiva have installed the public Wi-Fi system in Heathrow while in Barcelona, Cellnex have put public Wi-Fi on almost 10,000 hotspots located on traffic lights.
As well as Wi-Fi being used to provide services in public places such as hotels and shopping malls, it is also a crucial component for data offload when congestion is high. In the U.S. this is much more advanced, with MNOs having taken a very pragmatic approach with the lack of frequencies having necessitated offload. In Europe, where licensed frequencies are more able to handle traffic, Wi-Fi has been seen as a threat by some MNOs. Oscar Cicchetti added to discussions that from a technical point of view Wi-Fi may just become one unlicensed frequency that is managed by operators.
In a world where we are short of spectrum however, all panellists agreed that the interaction between macro and micro-networks was set to increase and that there will be a key role for a full spectrum of solutions to meet growing coverage requirements. At the inception of the tower industry and of TowerXchange, back in 2012, focus amongst actors centred very heavily on macro structures and pure passive equipment. One thing that became increasingly clear during the Meetup was that this paradigm is changing - business models are diversifying, networks are becoming heterogeneous, and boundaries are blurring as we look to find a way to deliver global telecoms infrastructure most cost effectively.
For further insights on small cells and DAS also read:
The growth and rollout of the global small cell market and the role for towercos in multi-operator neutral-host deployments
Analysys Mason: 2016 – The year for small cells to finally ramp up
How Cellnex are embracing small cells and DAS
Opportunities for an independent infrastructure provider in European DAS and small cells
Indus Towers’ vision for Smart Cities, small cells and a smarter nation!
Multi-carrier Distributed Antenna Systems in the Americas today
