Marek’s Take: Operators innovate with their network infrastructure

Marek's Take Sue Marek

There’s a change brewing when it comes to how U.S. operators view their network infrastructure. Historically, U.S. telecom companies have been opposed to any type of sharing of their network infrastructure except for co-locating antennas on tower sites. After all, it’s difficult to tout network superiority when your network is running on exactly the same equipment as your competitors.

However, that attitude is changing, largely due to growing pressure for operators to cut costs and make their networks more efficient. It is hitting many different areas of the network – from the network core to the backhaul to the power supplied to towers.

We’ve already witnessed some operators loosen their control over the core network by moving their mobile cores to the public cloud. AT&T’s 5G core network will run in Microsoft’s Azure public cloud and Dish Network’s RAN and mobile core will run in Amazon Web Service’s public cloud.

But now changes are happening in other areas of the network as well. At last week’s Wireless Infrastructure Association’s Connect(X) conference, UScellular EVP and CTO Mike Irizarry said that his company, which still owns a large portfolio of towers, is sharing backhaul resources with another operator. Irizarry declined to reveal the name of the other operator but said that his company is open to sharing other things as well, including its radio access network.

Tower sites are one piece of infrastructure that operators have become accustomed to sharing. However, typically each mobile operator adds their own network equipment to a tower site and also brings power to that site for their equipment. The more equipment on a tower means more power is required. And although 5G is a more efficient technology in terms of transmitting data, all operators are currently running their 4G networks in addition to their 5G networks, which increases the power load.

According to July 2022 research by J. Gold Associates, U.S. cell sites use almost 21 million Megawatt Hours (MWh) of power annually, which is the equivalent of the average power used by almost 2 million households.

During a panel at Connect(x) about the challenges operators and tower companies face when it comes to powering tower sites, I learned that the power component is often the most time-consuming hurdle of the network build because every state and municipality has a different permit process for doing it, making it difficult for companies to streamline.

But there is growing support for “power-as-a-service (PaaS),” in which another organization, such as a tower company, would step in and manage all the power to a tower site for its tenants.

This would speed the time it takes to get power to the tower, and also allow tenants to share the power resources. PaaS is in its early stages but holds promise for cost savings and better power efficiency.

But beyond sharing power resources, operators also are looking at creative ways to get more tower sites in areas where they want to expand. For example, Verizon, which sold its entire tower portfolio to American Tower in 2015 for $5 billion, last week entered into a new type of tower deal with Vertical Bridge in which Vertical Bridge will construct towers where Verizon needs more coverage for its 4G and 5G network. Verizon will serve as the anchor tenant on the towers. But unlike a typical tower leasing agreement, Vertical Bridge and Verizon formed an LLC for these towers and Verizon will receive a percentage of the profits from the money Vertical Bridge makes on leasing those towers to others.

Verizon, which used its $5 billion in proceeds from selling its original tower portfolio to American Tower to help fund its purchase of AWS-3 spectrum licenses, is once again interested in making money from towers.

Even AT&T is exploring infrastructure sharing in its fiber business. The company just closed on its joint venture with BlackRock to create Gigapower LLC, and plans to build a wholesale open access fiber network in certain metro areas throughout the country.  AT&T would be the anchor tenant on the fiber network but it will be open to other ISPs too.  

The telecom industry is entering a new era, where network infrastructure is no longer considered the exclusive domain of one provider. Instead, operators are looking for ways to reduce their costs, add efficiencies while at the same time expanding their reach.