Technology and Deal Making Change the Tower Sector

Developing Tech: What’s Next?

The revolution in mobile communications – the sheer amount, the demanding nature of much of the content, its bi-directionality, and the leveling of the playing field between licensed (cellular) and unlicensed (Wi-Fi) approaches – spells great changes in the use of antennas.

In the legacy world, huge macro towers (those that are obvious and those that municipalities mandate be made to look like big fake trees) were the sole approach to ferrying signals to and from users. This is changing radically.

Macro towers will always be with us. They will be mixed, going forward, with an array of femtocell, microcell and other types of antennas. In general, these antennas are meant to reuse spectrum. This, collectively, is the small cell sector.

This transition is important as the wireless industry tries to efficiently integrate the new and old generation of towers. This is leading to aggressive deal making.

In Australia, Crown Castle is selling 1,800 towers to a group of investors led by Real Assets and Macquarie Infrastructure. Crown said that it expects to net about $1.3 billion, which it will invest in its small cell network. Macquarie is a multinational that, among other things, creates public/private partnerships with municipalities. The story notes that Crown will “no longer hold significant assets outside the United States.”

A big part of the rapidly morphing cell world is creating the web of connections from the cells to the peering points, telco locations, cable headends and other important points-of-presence (PoPs) that process and traffic the signals. This is the backhaul sector.

Crown, perhaps using some of the money it is getting for its Australian holdings, is acquiring Quanta Services subsidiary Quanta Fiber Networks, known as Sunesys, for about $1 billion in cash. The press release announcing the deal says that this will more than double Crown’s fiber footprint for small cell backhaul.

And the doubling will occur in attractive areas. Sunesys owns almost 10,000 miles of fiber. About 60 percent of that fiber is located in the top 10 basic trading areas (BTAs). The company has fiber, according to the release, in the Los Angeles, Philadelphia, Chicago, Atlanta, Silicon Valley and the northern New Jersey metros.

A third recent deal is the acquisition of 294 towers and related items owned by CTI Towers by InSite Wireless Group. Not much information is available on the deal. It is interesting to note, however, that Comcast Ventures is CTI’s majority owner. Cable operators are significant players in the backhaul segment because their fiber is largely in and near the areas dominated by small- and medium-sized businesses and residences that are the most demanding for wireless communications. What Comcast does bears watching.

The wireless world is changing quickly. This means that the tower sector must change as well. Clearly, this is happening, both on the technology and deal-making fronts.

Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at cweinsch@optonline.net and via twitter at @DailyMusicBrk.