Towercos currently find themselves at a fork in the road: down one path lies a known and tested business model which builds strategic value and creates high multiples, but which also may have a limited shelf life; down the other lies an opportunity to move into exciting new verticals and become closer to their customers, but which is untested and could mean a dilution of their value proposition. For those that choose to pursue the ‘service model’ route in particular, careful investment in new technologies which will help them develop their offering and, critically, manage costs, is becoming more and more important.
Site level change
In terms of site design principles, it’s important to remember that 5G is a network of networks. IoT and organisations like LoRA or Sigfox mean in the future a multi-technology, multi-access tower will be needed, which is highly resilient and which offers energy, the tower structure itself and backhaul. In addition, massive MIMO will also change antenna configuration which will affect the way sites are used. Even now, towers might have broadcasting antennas, mobile telecoms equipment for as many as four tenants, TETRA public safety networks and national IoT networks on them. At some point with 5G, towercos expect this to converge into one technology, with towercos slicing and routing and offering real time services.
Much of the industry expects to see discrete antennas and the sharing of towers in its current form until 2035, but beyond this sharing active networks is more likely and the hardware on towers will be dramatically reduced. DAS, for example, may have six operators spanning 48 signals in one fibre, managed by one service provider. Technical rooms and processing will all be combined as well. For those towercos who plan to move into the service model, this is about growth and also about survival – they foresee space being less of a scarce resource on towers as all of the technology will sit in one box, although this stage may be preceded by a bulge in demand for space as massive MIMO rolls out.
New services and offerings
At Mobile World Congress 2018, MNO CEOs were keen to speak about shedding and allowing third parties to manage part of their complexity. Towercos who are operating in DAS aren’t only providing a service now – they’re also proving their capability to manage active networks in future. Even OTT providers may need hosting services in order to improve customer experience. Fibre will be key and understanding the positions needed on highways to support autonomous cars, as well as urban needs around traffic lights and cameras will also need to come into these multi-tenant solutions.
Rather than radiating from one spot, towercos are looking at streets and areas and working out how they can spread technology through this area. Many towercos envisage that they will lose the ‘tower’ element and become managed services providers, taking complexities away from the operator. Macro towers are just a part of what towercos can do: in the case of a shopping centre, for example, there is a huge amount to be managed, and the antennas deployed there are exactly the same as those on a macro tower on a hill, but serving a higher number of people in a much smaller area. The same applies to lamp posts with cabinets, even individual homes with FTTH connection could operate as small sites for creating a 5G network. Towercos need to keep open minds about the scope of their capabilities in order to maintain their position and relevance.
New capabilities
NOCs will become more and more important, manned 24/7 and overseeing power and active networks. Towercos will need to increase their skills in terms of software and ensure they’re using the right platforms to really deliver in this area.
As connectivity becomes an ever more critical part of our society, security will also be forced higher up the agenda and as driverless cars and live feeds from police vests become more common, maintaining security will become even more critical
As connectivity becomes an ever more critical part of our society, security will also be forced higher up the agenda. Water, energy and transport are already forced to have a certain level of security, and as driverless cars and live feeds from police vests become more common, maintaining security will become even more critical.
Sites which are designated for PPDR (public protection and disaster relief) must provide controlled access already, either through onsite staff or cameras. When 5G rolls out further and critical services rely on towercos’ towers, every site in the network will be critical, and towercos will need to find a way to manage the increased costs of high levels of security and power resilience. If security is provided as a service, and technology allows tenants to manage their teams’ interactions with a site, then those costs will be easier to share.
Power and backup on site will need to be improved in line with security concerns as well. Performance changing batteries will come into play and the ability to knock down power consumption will make solar and other renewable solutions more viable on European sites.
New technologies
Towercos are already using new technologies focused on 3D reality models of the BTS. In order to move operators or towercos from previous technologies to new technologies such as 5G, it’s evident they need new tools to have a complete overview of the infrastructure. Digitalisation is a way to have a system which can geo reference information coming from inspection or EMF and provide a unique repository where you can recall queries, anomalies et cetera. Customised algorithms for machine learning to analyse big data will allow towercos to manage and use all of the data they produce. In the not too distant future AI will enable self-optimising networks, we’re on the cusp of handing control at a certain level to machines in the future.
Drones are being used with increasing frequency for surveys and some towercos are exploring the use of apps on phones to manage site access – benefitting from the technology their own customers are providing.
Where next?
Towercos will need to focus on short term gains and obligations, while keeping an eye on the bigger picture. The assumption of responsibility for operational resilience including site security and backup power will need to be done within the next few years, whereas setting up datacentres and NOCs will take longer to deliver and for operators to be comfortable handing over the reins. European towercos have had an easy ride to date compared with their counterparts in Africa or Asia, where operations and cost management are a much bigger part of the business. If they plan to evolve into service businesses, this will have to change, with towercos needing to secure a much higher number of products and services while ensuring costs are effectively managed.
