Cellnex has been at the forefront in driving the evolution of the towerco model from traditional REIT to full infraco. One area of this transformation is the development of non-macro services to support MNO, property developer and private enterprise customers through DAS and small cell deployments. TowerXchange speaks with Cellnex’s Head of Small Cell and DAS Product Line Victor Dot to understand what is driving activity in the non-macro space and how Cellnex is capitalising on growing demand.
TowerXchange: People know who Cellnex are, so please introduce your company from an IBS and small cell point of view
Victor Dot, Head of Small Cell and DAS Product Line, Cellnex:
From an indoor solutions view, Cellnex has a presence in 12 countries with IBS deployments in all of them. At the moment we are deploying over 6,000 nodes (radios), or over 300 in building deployments. We are also working on several outdoor small cell and DAS deployments, and we have the largest deployment of outdoor small cells in Europe, with 1,200 sites in London and further deployments in other cities such as Barcelona, Milan and Dublin.
We are also running a series of colocation small cell pilots, moving from owning the infrastructure to active equipment in outdoor small cells, to explore how to manage the active equipment and sell this capacity extension to our customers.
A lot of outdoor deployments have been in Italy where the solution is understood by the MNOs. It is a popular solution for areas where local councils don’t want the visual impact of a macro sites and help keep the infrastructure discreet and beautified. The second success case is London where we have the concession in 14 boroughs and we are installing Small Cells for the UK operators.
We also have a lot of residential as well as commercial properties covered with IBS. New building developers recognize inbuilding coverage as a must and have some residential deployments in Portugal and the Netherlands. We started this a few years ago but we see this scaling up heavily in the future. Where before key utilities went from just heating and power, to including wifi, now mobile connectivity is a critical element to this.
TowerXchange: What are the key factors driving demand for 4G and 5G micro solutions?
Victor Dot, Head of Small Cell and DAS Product Line, Cellnex:
We know that 80-90% of phone call originate from inside buildings, as people use their mobile phones a lot in the office, with only 10-20% of calls taken outdoors on the street. We also know there is a blockage in spectrum from outdoors to indoors. So IBS is a need, not just for MNOs to extend their coverage but also for landlords.
There are two elements driving this that we are responding to: a need for coverage and capacity. A big driver for capacity enhancement is bringing indoor coverage to large venues such as stadiums and shopping areas with high volumes of traffic, where macro capacity isn’t sufficient. Landlords are also recognizing the need for inbuilding coverage and understand that if they want to have more services and provide a better customer experience, they will need to deploy IBS. This is a trend that we are seeing accelerating in all Europe.
Sometimes it’s not only deployment for coverage but also to support new business models. You need a certain level of connectivity resiliency to provide digital and mobile use cases that enterprises and property owners want to adopt.
Most landlords, around 70-80%, aren’t that bothered about whether its 4G or 5G, they just want a resilient mobile service connection. We try to understand their needs so we can recommend which type of technology suits their needs best, with 5G upgrades happening largely at major venues and transportation routes such as metro lines. Medium and small sized venues such as hotels, office buildings, shops and car parks don’t have a use-case for 5G yet.
TowerXchange: What is the process for upgrading existing 4G IBS to 5G: a simple software update or more?
Victor Dot, Head of Small Cell and DAS Product Line, Cellnex:
It depends; if we are talking about 5G in terms of MNOs using legacy frequencies, or those refarmed from their 4G spectrum, the system we are deploying is ready to support this. However, if you want to add new 5G frequencies you need to deploy new radios. The systems we have been installing over the last 5 years are all 5G ready and our hardware supports 3.5GHz frequencies.
If at any point an MNO or landlord wants to upgrade to 5G all the underlying infrastructure necessary for this is already installed. Software wise it’s also not an issue, the software on our DAS system is upgraded every 6 months and includes 5G compatibility. The only change required is adding a new radio for a new frequency such as 3,5GHz.
TowerXchange: What is the typical model for an inbuilding network, and how is the commercial arrangement structured?
Victor Dot, Head of Small Cell and DAS Product Line, Cellnex:
We have 2 different models to support 2 different customers. On one hand when we go into major venues it’s because the MNOs have an appetite to bring their coverage onto that premises. As a neutral host we provide the infrastructure to support the needs of multiple MNOs, minimizing the impact on the venue by deploying a single network.
But other types of properties might not be of commercial interest to MNOs as they are satisfied with the coverage, they provide from their macro layer. However, the property owner may want to improve cellular mobile coverage in their building, so our customer becomes the building owner, and we act as the middleman between the MNO and the landlord. Building owners don’t want the hassle of having to coordinate with multiple MNOs, so we act as a single point of contact to manage the relationship on both sides.
There are some nuances where we can offer a flexible solution, such as if a property owner wants to extend the network an MNO deployed to parts of the building they weren’t interested in covering. For outdoor coverage the model is the same where we act as the single point of contact between the councils and the MNOs.
As Cellnex is present in 12 countries it’s hard to take a broad view across all markets but we are seeing indoor and DAS, which traditionally sat with the MNO, becoming more of a neutral host/property owner relationship.
New certifications for green buildings are also driving demand from building owners to have resilient and energy-efficient IBS, as it’s adding value to their own buildings and services. New buildings are looking to have capacity from day 1 and it’s now considered a critical utility. Some customers prefer to own the assets themselves, so we just do the installation and maintenance, but in the majority of cases we own the system and we prefer to do it this way.
TowerXchange: Can you expand on the tenders for transport corridor coverage networks in Spain/France/Italy? How do you classify this?
Victor Dot, Head of Small Cell and DAS Product Line, Cellnex:
We are deploying and testing different connectivity solutions (including 5G DAS) along a series of transport corridors between the borders of Spain, France, Portugal, Italy and Austria. These trial projects are partially funded by the European commission through the CEF-2 initiative. You can have an outdoor DAS solution in a corridor because you aren’t deploying much active equipment, the real challenge is how to manage cross-border DAS networks to allow MNOs from different countries to connect.
Alongside this is some testing of V2X technologies for transport companies, including various types of infrastructure with macro, small cell and DAS. This addresses an important question for the industry which is how infracos can help provide the networks for new technologies being implemented by transport companies as well as support the connectivity for end-users on these networks.
Train companies are adopting new technologies for security and signaling on railways and they will need significantly more deployments along corridors. We are also trying to understand the combinations of pure rail deployments versus mixing with the outdoor network. How can we join these two to become more efficient and meet the needs for the various parties involved?
TowerXchange: Many small cell/IBS deployments are operator owned, do you envision existing IBS deployments being acquired and consolidated?
Victor Dot, Head of Small Cell and DAS Product Line, Cellnex:
Most of the Operators systems are single MNOs. We all know, the owners of the buildings need mobile connectivity for the users, so if operators do not want to deploy their own system, or extend the service, Neutral Host can take over the system to make it multi-operator and more cost efficient either for the MNO or for the landlord.
