The Future Network spoke to ExteNet Systems, the innovating infraco who are deploying distributed networks and tackling the neutral host model across various topographies in the US. Having begun with high profile venues, they are increasingly turning their attention to the enterprise sector, and work both indoors and outdoors. We discuss how carriers and end users are becoming more informed on the benefits of installing distributed cellular networks, how business models are adapting, and how the economics of building individual and private networks are becoming more viable.
The Future Network: Please can you introduce ExteNet Systems.
Tony Eigen, Marketing, ExteNet Systems:
ExteNet Systems is a distributed networks company based in the US. We are technology neutral and so we don’t couple ourselves to any particular product. We work with the carriers, municipalities, and also building owners to build cellular networks for both indoor and outdoor settings to improve coverage, capacity and performance.
ExteNet is a neutral host operator, the benefit of that being that we are not aligned with one carrier. We will go into a particular property or city and fund, design, build and own network infrastructure. We then earn our money by leasing access to the carriers.
We have built infrastructure in lot of key buildings in the US, such as the Empire State Building as well as in a large number of hotels, office buildings and sports venues and also have a lot of activity in big cities including San Francisco, Boston, Manhattan and Las Vegas where we have built outdoor networks.
ExteNet Systems has been in business for around 15 years, and is growing quite rapidly. About 18 months ago we also acquired a small company called Telecommunications Properties Inc. (TPI) which added a nice adjacent business to our existing operations. TPI basically own and operate the fibre infrastructure inside large and significant multi-tenant office buildings in major cities; they become the gatekeeper with whom to negotiate for any operator who wants to provide a service to the tenants inside that office. This is an area of the business which we are focussing on integrating and building up.
In addition to the aforementioned activities, we have also dabbled in Wi-Fi, mainly on the indoor side, particularly in the sports and entertainment vertical.
The Future Network: Can you explain how you decide which antenna will be used in your networks and how you work with the supply chain?
Tony Eigen, Marketing, ExteNet Systems:
For all the networks that we build, be they indoor or outdoor, small cells or DAS, we use standard off the shelf third party products; we don’t really partner with vendors to drive them to design any specific features just for us. A lot of the technology choice it is driven by the anchor carrier, with the first carrier having more influence on the network design. We have to use carrier approved vendors as a baseline requirement but we try to have relationships with all the main vendors so that we can pick and choose whichever technology makes the most sense. The time of year, region and various other factors can influence the choice of technology.
The Future Network: What has been the attitude of operators towards using shared distributed networks?
Tony Eigen, Marketing, ExteNet Systems:
We tend to find that the big carriers keep an eye on one another; if AT&T goes into a building, for example, then Verizon are also likely to also jump on board. Getting the buy-in of the different operators isn’t usually a problem. All the carriers are currently touting that their network is the differentiator, be that better coverage, a faster LTE network or a stronger signal. As a result, they’re needing to invest in their networks to back up that claim and ensure that their competitors don’t get a competitive edge.
These days, everyone expects to be connected wherever they are; it’s no longer just about marquee buildings, companies are starting to have to go downstream to look at improving coverage in smaller buildings. In order to achieve this cost effectively, new economic models need to be developed; models which also involve education of the building owner to have more of an investment and see connectivity as a utility and an essential piece of infrastructure. People are starting to understand this, slowly but surely, with different companies going at their own pace.
The Future Network: Would ExteNet ever build a single operator network?
Tony Eigen, Marketing, ExteNet Systems:
Our standard operating procedure is that we will always build a network to support multiple operators and we will do that from day one; as soon as we have the commitment from the first carrier we feel fairly confident that we’ll get at least a second one on there.
There are a handful of examples where we have done single operator networks but these are much more the exception than the norm. In some examples an operator may own a particular network but they have contracted out the work for us to manage, upgrade and expand upon - effectively making us a third party service provider. Whilst there are a handful of arrangements like this, our focus remains on the ownership model with multiple carriers, as that is where the economics work best.
The Future Network: After high profile venues, which sectors do you identify as having the highest potential for future growth?
Tony Eigen, Marketing, ExteNet Systems:
Hospitality continues to be active, as does sports and entertainment. A lot of new stadiums are coming up in the US so the carriers are interested to get those wired, and it’s not usually a challenge to get all four carriers on that. The new trend here in the US is making new stadiums more of a destination, building retail outlets and restaurants alongside. As such, the whole area needs to be connected, and therefore this remains a priority.
There’s currently a lot of activity and hype around the enterprise sector with everyone trying to figure that space out and develop a model that works. With these smaller buildings (under 500,000 square feet), the tenants want to be connected and the building owners and carriers get that, but the carriers also know they’re not able to fund a network build-out in every building. The economics are however starting to change.
One of the reasons we acquired TPI was to try and develop an offering in the enterprise space. Our goal was to find a solution that works in cooperation with the carriers and building owners to provide the next level of granularity, providing some level of service or connectivity to individual enterprises in a major multi-tenant office building. Through the acquisition of TPI we own all the fibre in the building and so can deliver connectivity to each individual tenant. That connectivity isn’t just via wireless carriers, we can also provide connectivity to fixed broadband carriers using dark fibre to the tenant. We can also manage the relationships between the fixed broadband players and the tenants, taking a piece of the economics in doing so.
Things are slowly getting settled on how the economics will work, there’s a lot of education, a lot of discussion, some trial and error but at the end of the day things continue to move forwards.
The Future Network: Do you approach carriers regarding not-spots or do they come to you?
Tony Eigen, Marketing, ExteNet Systems:
Definitely both, but we have been working with all four carriers long enough that we’re pretty clear on what their requirements are, understanding the kind of profiles that they will be interested in.
We have a lot of back and forth on a regular basis between ourselves and the operators. On the one hand, the operators will come to us with particular coverage or capacity issues; and on the other hand we will share with the carriers the inventory of sites that we have, both indoor and outdoor, where we have permitting or right of way agreements.
Having these underlying agreements in place means that we are able to act fast when a carrier wants to expand their network. We have a significant sized group in-house that is constantly working on getting the permitting or various rights of way, it is a major undertaking with every municipality having its own set of rules and processes which makes it hard to standardise processes.
In a lot of the major cities we want to build out and own our own fibre so that we’re not relying on third parties to get access. Owning our own fibre means we’re able to get to market faster plus it makes for better economics, both of which are an attraction for the carriers. In Manhattan, for example, we have a large amount of fibre throughout the island which is serving both indoor and outdoor deployments. Having this in place means that when carriers want to add small cells to a specific area it is a fairly quick routine add for us from an infrastructure standpoint.
