Roughly two-thirds of U.S. occupations are exposed to some degree of automation by artificial intelligence (AI), according to the analysts at Goldman Sachs. That doesn’t mean those jobs are necessarily at risk, the firm has stated, because some jobs will be “complemented rather than substituted by AI.”
The impact of AI on the tower industry is often portrayed as a positive one, partly because training large language models requires massive amounts of data, some of which will be transmitted over 5G networks. DigitalBridge Group (NYSE: DBRG) CEO Marc Ganzi has stated that his team believes mobile will be the most powerful and efficient delivery mechanism for AI. Continue Reading
More demand for mobile services typically means more investment in towers, but the impact of AI on the tower industry is likely to be more nuanced than that. Some jobs may be lost, some may be created, and others may change dramatically. Already, AI is impacting tower companies and their employees in three distinct ways.
1. Tower asset management is becoming more efficient. American Tower (NYSE: AMT) is using digital twins to analyze data from tens of thousands of cell sites worldwide, in order to reduce the need for physical site visits. DigitalBridge is using predictive models built by AI rather than code written by engineers to manage its extensive portfolio of digital infrastructure.
Vendors are promising the tower industry multiple asset management benefits from AI. Drone data provider Visual Intelligence claims it can cut the time it takes to inspect a site for upgrade by 65 percent and cut the cost of the inspection by 35 percent, using AI to analyze the data its drones collect. Sitetracker notes on its website that its AI helps towercos visualize data, generate predictions and use people and other assets more efficiently. Galooli says it has patented energy optimization AI that can make adjustments based on minute-to-minute site status.
These advances can impact workflows by reducing the need for people to visit sites, crunch data or write code. Meanwhile tower owners may need more people to manage and deploy the AI tools, creating new job descriptions.
2. Carrier network upgrades are set to become more efficient. Public cloud engineering specialist Intuitive Cloud has a case study on its website detailing work with a “leading telecommunication provider.” According to Intuitive Cloud, the telco is establishing a machine learning operations process on AWS. “The model’s performance showed a twofold enhancement compared to benchmarks for imbalanced datasets, resulting in more accurate churn predictions,” according to the case study.
As wireless carriers employ AI to learn more about their customers, their network upgrade roadmaps are evolving. The ability to marry churn data with network performance data at a granular level empowers operators to more accurately project the returns on investment that site upgrades can deliver. This can generate new business for towercos and their contractors, but it could also have the opposite effect if carrier site upgrades become more targeted.
3. Some towercos are benefitting from demand for data centers. American Tower and DigitalBridge have both invested in traditional data centers, and SBA Communications (NASDAQ: SBAC) is building smaller edge data centers. These companies stand to benefit as AI creates robust demand for centralized compute power. Latin American data center operator Scala Data Centers is now the fastest growing company in the DigitalBridge portfolio, according to Agostinho Villela, VP and CTO at Scala.
Villela spoke recently at the Datacloud USA 2023 conference in Austin, TX. Data center operators at the conference described a shortage of space and power, and said the prices they can charge are rising as public cloud providers and enterprises lease more space to run AI-driven workloads. Bryan Pryor, managing director at Houlihan Lokey, said the industry has seen 30-50 percent price increases, and Paul Vasilopoulos, managing director at Bank Street Group, said vacancy rates are below one percent in Northern Virginia, the nation’s largest data center market.
Robust demand for data centers will indirectly impact the tower industry. It should increase revenue for at least two of the largest tower owners in the U.S., helping to offset the current impact of reduced spending by the U.S. wireless carriers.
This article represents the opinions of veteran telecom industry editor and journalist Martha DeGrasse, an Inside Towers Contributing Analyst with features appearing monthly. DeGrasse owns Network Builder Reports and contributes regularly to several publications. She was formerly a writer and editor with RCR Wireless and a TV business news producer.
By Martha DeGrasse, Inside Towers Contributing Analyst
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