TowerXchange Exclusive Coverage
In the TowerXchange session, Beyond Towers: Investing in New Digital Infrastructure, panelists discussed ways their companies are growing in adjacent businesses. Although the returns might not be as good as the tower business model, panelists agreed that the opportunities strengthen their financial position and further solidify their MNO relationships.
There are definitely ways in which tower companies can grow beyond the tower in businesses with very similar characteristics, even though it’s perhaps not as good as the initial business, according to Dipan Patel, Executive Vice President, Strategy, Technology & New Business, SBA Communications. Patel moderated the panel during the TowerXchange Meetup Americas 2022, held last week in West Palm Beach, FL.
“The challenge of investing in opportunities beyond towers is to do so in a way that’s complementary to our tower business with appropriate financial returns and for it to be strategically aligned to our core businesses,” Patel said.
Before the advent of 5G, Phoenix Tower International (PTI) only provided the tower and the core. Now it provides the elements in between, including baseband hotels, edge data centers, and fiber to connect the sites, according to René Espinosa, Next Generation Solutions Business Development Manager, Mexico, PTI.
“As technology changes, so do the needs of our customers,” Espinosa said. “That is why we need to keep on expanding in products that fit into the infrastructure model.” PTI also provides new services such as energy-as-a-service, which is useful for rural sites where the energy grid is not available.
Although Mexico Telecom Partners (MTP) has not invested in fiber, it has found success in developing data centers in Mexico. “The data center business has been quite a unique opportunity for us,” said Javier Wiechers, MTP Vice President, Sales. “It has helped us to make a difference in the market.” MTP also provides the carriers with maintenance services. With 5G spectrum auctions expected in Mexico this year, Wiechers said he expects the need for small cells to blossom in the next several years.
IHS Towers is deploying fiber to the tower, but it is also involved in the fiber-to-the-home (FTTH) business through an open access fiber joint venture with Telecom Italia, according to Kieron Osmotherly, Vice President, Business Development, IHS Towers. “Fiber is king. It’s something you almost can’t avoid participating in,” he said. “Getting into fiber opens up for IHS new opportunities to drive growth. It creates an opportunity to drive high quality connectivity into previously underserved areas of the countries that we’re serving and it deepens relationships with critical customers.”
IHS also has experience deploying small cells and in-building wireless systems, and it is exploring opportunities in data centers. “We are another one of those tower companies that is evolving into being more of a digital infrastructure company,” Osmotherly said.
Andean Telecom Partners (ATP) has never limited itself to towers. The towerco, which is in five markets in South America, operates 3,500 cell sites and has more than 6,000 miles of urban dense fiber. It has always evolved its products and services to meet the needs of the MNOs, according to Timothy Dee, Executive Vice President, Strategy and Technology, ATP.
“We’ve always adhered to the same investment philosophy. We deploy assets that are readily colocatable, that are difficult — if not impossible — to replicate, that have long useful lives and that are rented on a long-term basis to credit worthy clients,” Dee said.
In 2019, ATP launched its fiber business in Chile and then expanded it into its other markets, deploying multi-use, multi-tenant networks that support everything from FTTH and fiber to the tower to small cells and dark fiber leasing. “As we look forward to 5G, we will be ready to help carriers to tremendously reduce the capex and opex burdens of fiber. We see it as more than a complement to our tower business but a real collaboration with it.”
By J. Sharpe Smith, Inside Towers Technology Editor
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