I had the opportunity of discussing the wireless tower business with Oscar Cicchetti, who has a very in-depth knowledge of the telecom biz (he was head of a major Telecom Operator network infrastructure, head of international Biz and more recently head of a Tower Infrastructure company) and he made several points that I found quite interesting.
Now, towers to stick wireless antennas on their top should be all about real estate, concrete and steel. As a matter of fact, it turns out to be much more, courtesy of the transformation of a business driven by a favourable economic framework and, of course, being able to leverage on advancing technology.
The cost of money is pretty low (it does not mean that you have plenty of it, just that the interest on loans is to an all time low) and investment funds having a long term horizon find it better to invest in infrastructures, since these have a long time span and can generate revenues for several years to come. The radio coverage is now pervasive so you already have the towers in place but the deployment of 5G (and later of 6G, relevant since we have a horizon of a few decades) is multiplying the number of sites, since cells are getting smaller. In Italy the estimate is towards over 10 times as many cells as we have today (74 thousands moving up to a million) and although a portion of them may not require a “tower” (the cell will be inside a mall, as an example) a significant increase in towers is expected.
Deploying a tower requires the deployment of energy supply, most of the time of a closed place were to place equipment and in these cases you may also require air conditioning. Additionally, you have to connect the antennas with optical fibres – either directly with optoelectronic conversion in the antenna or (very) near it (a coaxial cable supporting Gbps of bandwidth cannot go very far). Hence, tower companies are acquiring fibres and these fibres come in cables that contain several pairs, actually many more that those strictly needed. This overcapacity prompts the tower companies to look into ways of using those fibres to generate revenues responding to needs outside the telecom market.
What used to be a business involving concrete and steel is now growing into the provisioning of energy stations, fibres and electronics.
More than that. There is a growing consensus that delivery on the 5G promises of very low latency, like vehicle-to-infrastructure critical communications, requires a smart edge. Clearly, towers and their associated premises, are ideally positioned to host the cloud at the edge, edge computing, local data bases … This means growing into the provisioning of a service architecture, a novel business space for tower companies. From atoms to bits, actually.
Notice that this is not the end of the story. As you own a smart edge infrastructure there will be a growing number of services that could be delivered and managed completely at the edges, cutting out the core network. Even the authentication may take place at the edges and nearby towers can talk to one another creating complex and comprehensive networks. In a urban environment it would not be that difficult to route most traffic among towers with no core network involvement (do you still remember those unused fibres connecting the antennas…; besides, direct radio connectivity between/among nearby antennas on different towers is a concrete possibility).
What lays ahead is a potential disruptive transformation accelerating the shift from core to the edges. It makes for good perspectives for some, an ugly scenario for others.