Fiber Access Becoming Selling Point for Cell Sites
Cellphone tower companies that prioritize fiber access will get more business from wireless operators as carriers roll out WiMAX, HSPA and other bandwidth-demanding wireless services, alternative backhaul provider officials told Communications Daily. Though carriers and backhaul providers are studying copper alternatives to fiber and microwave to increase bandwidth at cell sites, tower real estate teams are still more focused on cutting costs, said Jason Jesseph, Level 3 business relations director. “The real estate team goes out and drives around and they look at… Kwik-E-Marts and corn fields and wherever else they think they can stick a tower,” Jesseph said in an interview. “They find the cheapest land they can and that’s where they put it. Nowhere in that decision process is access to a fiber optic network considered.”
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Carriers have long emphasized expanding coverage, directing tower companies’ focus toward meeting height, location and other radio-frequency requirements, Tower Cloud CEO Ron Mudry told us. Finding the most cost-effective site in the carrier-designated 1.5-mile radius search ring is the real estate team’s next consideration, Jesseph said.
But the wireless industry is at a “transition point” where carriers are realizing that they need to increase capacity, Mudry said: “Wireless carriers have increased their focus on backhaul alternatives this past year as a result of the current and anticipated growth of network traffic driven by the deployment of 3G and 4G networks.” Phil Olivero, FiberTower business development vice president, also noted the trend. “Carriers are clearly telling us that broadband backhaul capabilities are critical at their cell sites,” he said in an interview. A mix of fiber and microwave antennas is “a requirement” to meet their needs, he added.
Sites with backhaul alternatives already installed are going to be more attractive to carriers, Mudry said. Making fiber access a greater priority when picking sites could therefore be a “competitive differentiator” for a tower company, Jesseph said. “If the tower companies would do a little homework up front… they could potentially offer a lot of value to their customers.”
Legacy copper infrastructure can’t support carriers’ high-speed wireless plans, Jesseph said. Historically, wireless towers have used one or two copper T1 lines, each with 1.5 Mbps capacity, he said. That was “more than enough” to handle voice traffic, but new data services demand significantly greater capacity, he said. “I as a user could kill an entire T1 on a cell site myself,” he said. “If there’s only three T1s and there’s three of me, then I could basically suck up all the capacity for the entire cell site and when everybody else is trying to use their cellphone there would be no capacity.” Mudry was more conservative in his projections, estimating that cell site capacity must increase by three to five times over the next few years to support more data-intensive services.
Carriers could simply add more T1 lines, but copper doesn’t come cheap, Jesseph said. Each line costs $200 to $600 to install, depending on geography, and backhaul spending already eats up nearly a third of carriers’ annual operating expenses, he said. To increase capacity, the industry must instead “overbuild the entire infrastructure” using a hybrid of fiber and microwave technology, he said. Fiber is more scalable, offers multiple terabits of traffic, and has “virtually no” capacity limit, Jesseph said. At minimum, copper costs carriers $133 per Mbps for installation; fiber can reduce the price to $30 or $40, he said.
Ubiquity is copper’s advantage. Copper is “everywhere,” whereas fiber is not available “off the beaten path,” Jesseph said. Fiber is used at about 5 to 10 percent of cell sites across the U.S.; in three to five years, the industry expects the proportion to increase to only 25 to 45 percent, Olivero said. “There’s significant obstacles to getting fiber to a majority of the cell sites or even many more cell sites than there are today,” he said. Opening up roads and building aerial structures for fiber is expensive, and getting local governments’ permission can be difficult, he said.
Backhaul providers can install microwave antennas on towers to extend speeds, a less expensive proposition than laying down new fiber. But microwave can’t send a reliable signal “more than a couple miles away,” Jesseph said. Relaying the signal from one microwave antenna to another is doable, but is usually limited to three hops maximum, he said.
Where fiber is available, tower companies don’t always take advantage, costing carriers thousands in the long term, Jesseph said. For example, towers sometimes get built across the highway from a fiber access point, he said. “For me to build the fiber over there could be $300,000 because I have to trench fiber all the way under the highway,” he said.
Tower operators are not oblivious to carriers’ fiber needs, said Olivero, whose company FiberTower counts American Tower and Crown Castle as investors. “You're not going to find many tower operators who would disagree with the statement that having broadband access alternatives available at their sites is an important issue,” he said. “I don’t think tower operators are ignoring this. I just think there’s many other issues they've got to balance.” Mudry agreed that saving money isn’t tower siters’ only consideration after determining sites meet RF requirements. Securing local government permits and landlords’ permission to build towers remains a challenge for the infrastructure industry, he said. Crown Castle declined to comment for this article. An American Tower real estate official didn’t return requests for comment.