Small cells and DAS: how fast is the industry moving towards neutral-host?

Thanks to his experience as an analyst and consultant, Berge Ayvazian has a deep understanding of the rules of the small cell and DAS game in the United States. In this interview, we explore the dynamics of outdoor and indoor deployments, the opportunities for neutral host, and take a closer look at 5G and its most likely applications and implications.

TowerXchange: Please introduce yourself and your background.

I have over thirty years of experience as a telecom and wireless industry analyst and consultant. In the past, I served as CEO of the Yankee Group from 1999 to 2001 and led the company’s IPO which resulted in its sale to Reuters. While at the Group, I covered various roles such as Chief Strategy Officer and co-chair of the 4G World and Mobile Internet World conference programs. I then worked as Senior Analyst and Consultant for UBM’s Heavy Reading, and chaired Tower & Small Cell Summit, which was held in co-location with the CTIA. Currently, I am a partner in Wireless 20/20, a boutique wireless consulting firm.

TowerXchange: Where would you say the focus for towerco led small cell projects is in terms of indoor or outdoor deployments?

The focus for U.S. MNOs has been on densifying their networks in urban areas and enhancing in-building coverage in high traffic indoor public venues and enterprise buildings.

Over the past few years, small cells and DAS networks have become important and fast growing complements to deploying new spectrum and adding additional macro towers. Small cells are becoming more common as an attractive option to increase capacity and extend coverage outdoors.

On the other hand, DAS networks solutions have become increasingly popular to extend coverage in venues such as airports, shopping malls, enterprise buildings, college campuses, stadiums and arenas, convention centres, hotels, transit systems and other high traffic venues with dense user rates. A DAS solution can support multiple carriers over one antenna network distributed throughout the building. This can be effective from both a cost and resource standpoint. But the overall cost of the overhead for a DAS network makes them most cost effective for larger venues.

TowerXchange: Have you seen many neutral host projects? How have these gone? Do you think the neutral host model has a future for towercos?

The challenge of keeping pace with mobile data growth has driven landlords of many stadiums and other large public venues to turn to neutral host DAS and small cell networks, owned and operated by third-party providers to support multiple carriers in these high-traffic areas.

Neutral host providers have an important opportunity when venue owners are restrictive and prefer one infrastructure for all mobile operators. For example, American Tower has been focused on deploying neutral host DAS, and has more than 300 DAS deployments in venues throughout the U.S. and around 150 outside the U.S. Crown Castle is also one of the largest independent neutral host DAS operators in the U.S., with about 10,000 nodes and 26 venues in operation or under construction.

I’d say there is something of a land-grab happening right now, similar to the tower business in the past.

TowerXchange: On the indoor side, is the focus still on more high profile buildings, or are you seeing a shift into other areas?

Indoor cellular connectivity is not an amenity. It is an absolutely essential utility like heat, light and electricity.

Middleprise is a large segment of the in-building wireless market covering small and medium-sized commercial buildings, hotels, hospitals, colleges and even small retail stores. All of these venues can benefit from a cost-effective neutral host small cell solution, flexible enough to support multiple carriers.

TowerXchange: Have you seen much interest in the enterprise sector?

Enterprises in small and medium-sized venues are still seeking a cost effective in-building wireless solution. The Middleprise market segment far outnumbers the larger venues, and includes tier two venues from 100,000-500,000sq ft and tier three venues from 25,000-100,000sq ft.

Both venue segments represent a large and rapidly growing market opportunity for in-building wireless solutions, with increasing revenue to compete for year on year. Both of these benefit from the recent introduction of multi-carrier small cells that support neutral host resource and capacity sharing.

TowerXchange: Are there any new players entering the space to run small cell projects and potentially decreasing the available market for towercos?

The emergence of Multi-Operator Core Network (MOCN) technology enables new players to leveraging the cost advantages of neutral host access and cost effective RANsharing to run small cell projects in Middleprise venues.

These entrants could allow the underserved enterprise customers to somehow take control of their own destiny in getting high quality cellular service into their premises, with capex and opex savings of 50-80%. However, there’s no commercial benefit to the first mover. All the first mover does is open the door to their competitors so for now, no one is making the first move!

TowerXchange: And how do things differ on the outdoor side?

Operators typically plan to install outdoor small cells on utility poles, lamp posts, church steeples and other structures that rise above most roof levels. Most of sites require zoning, permitting and negotiations with municipal authorities.

Verizon recently partnered with ExteNet to deploy an outdoor small cell network with more than 400 fiberised small cell nodes mounted on city-owned steel light posts and wooden utility poles throughout the financial district of San Francisco. Mobilitie is reported to be a primary partner for Sprint that is planning to deploy some 70,000 outdoor small cells over the next few years. And Crown Castle has 15,000 miles of dense fibre optic networks in the top ten U.S. metropolitan areas, including New York, Los Angeles, Chicago, Philadelphia, Atlanta and Dallas-Fort Worth to drive significant growth through outdoor small cell deployments. Crown Castle has approximately 15,000 outdoor small cell nodes deployed along these routes, and is now well positioned to address the desire for small cell deployments by MNOs such as Verizon Wireless.

TowerXchange: How are towercos managing the relationships with the government and/or municipal stakeholders? Or is this more the territory of the MNOs?

Single carrier small cell deployments require the acquisition of roughly the same number of discrete sites, and each carrier has to secure the sites and negotiate terms for deployment.

Alternatively, neutral host providers can deploy multi-carrier small cells to serve multiple carriers and would be located, where possible, on government-owned right of ways, which are typically far cheaper than space rented from private landlords.

Several towercos including Crown Castle, Mobilitie and ExteNet are well positioned to extend the neutral host model from indoor venues to manage relationships with the government and municipal stakeholders and accelerate outdoor small cell deployments.

TowerXchange: Do you think that developments in the unlicensed spectrum space will have the necessary effect and boost small cell deployments?

It has been much more challenging to add highly profitable additional tenants onto existing small cell deployments than a traditional tower or neutral host DAS. Typically, carriers prefer to have all of their frequencies supported by their small cells.

Carriers using different spectrum bands and different macro networks often find it hard to find commonality in deployment, if space is even available. But this leads to small cell networks supporting a dozen or more frequencies, which is expensive in terms of both radios and infrastructure.

Several MNOs are now actively examining the economics of next generation multi-carrier small cell networks deployed by neutral host providers using unlicensed spectrum bands among their options to address the data capacity challenge.

TowerXchange: What are your thoughts on both the CBRS project and the MulteFire Alliance?

The CBRS Alliance supports a neutral host shared spectrum using 3.5GHz light-licensed spectrum. 3GPP has now formally approved band 48 for the U.S. CBRS spectrum (3550 to 3700MHz), overlapping with bands 42 and 43 already in place (3.4 to 3.6GHz and 3.6 to 3.8GHz). This was required for both smartphone and small cell vendors to proceed with product development.

The MulteFire Alliance is a consortium of industry players that support LTE in the 5GHz band, which can support the users of all wireless carriers with a single RF carrier. The MulteFire Alliance has recently published its specification during Q1 2017, and commercial availability will be mostly driven by handset availability.

Wireless 20/20 has developed a WiROI™ business case tool to help venue owners and mobile operators pinpoint the business models that provide a significant cost saving, while providing a positive ROI for neutral host providers over a 10-year period.

TowerXchange: In your opinion, what needs to happen in order to meet the expectations of 5G? Does it all fall to small cells or are there other technologies that towers could get involved with?

The mobile industry movement toward 5G is being driving by the use of new MMWave spectrum bands in combination with advances in backhaul and beam-forming technology, network virtualisation and network programmability.

5G will be introduced sometimes after 2020 and is going to be much more than a 4G Very Long Term Evolution (LTE). In fact, it will use spectrum above 6GHz, will Increase Peak Data Rate to 1-10 Gbps and reduce network latency.

There are three primary use-cases that will make 5G financially worthwhile and they are:

- Enhanced ultra mobile broadband

- Massive IoT connections

- Ultra-reliable networks

AT&T and Verizon are testing a 5G FWA RAN infrastructure deployment scenarios as the first phase of ultra-mobile broadband infrastructure based on small cells in residential neighbourhoods. 5G FWA is attractive to operators since it could provide a lower cost and fast rollout speed compared to FTTx. 5G Fixed Wireless infrastructure will be optimised for gigabit broadband to the home using a neighbourhood access unit or small cell with fibre or mmWave backhaul. It is not likely that towercos will benefit from the opportunity for deploy the small cells in residential neighbourhoods.

Ultimately 5G offers the opportunity to achieve true network convergence, since the same technology and the same infrastructure can be used to provide next generation FWA, MBB, IoT and Ultra-reliable wireless networks.