August 7, 2014 — As carrier capex continued at historic levels, aggressive network investment in both LTE coverage and densification initiatives by major tenants drove American Tower’s organic core growth by more than 11 percent in the U.S. market, officials said during the first quarter FY 2014 earnings call.
Outside of holistic agreements, amendments dropped, year over year, from 70 percent to 60 percent of American’s commenced new business. The split between amendments and collocations is expected to be 55 percent to 45 percent, respectively, in the future.
“This indicates to us that the shift towards densification from initial 4G coverage is well underway,” Tom Bartlett, chief financial officer said. “Accordingly we have increased our outlook for our domestic organic core growth to more than 9 percent for 2014, up more than 50 basis points versus our prior expectations.”
Another driver of demand for tower space is the deployment of Voice-over-LTE service or VoLTE with Verizon and AT&T planning commercial launches within the next 12 months.
“And our analysis to ensure the same quality of service, voice calls that travel via data packets over the internet necessitate greater cell site density compared to voice required to support classic circuit switch voice calls,” James Taiclet, chairman, president and CEO, American Tower said. Eventually, American projects that VoLTE will require carriers to increase the density of their networks by 20 percent to 30 percent.
Carrier wireless capital spending, which hit $34.3 billion in 2013, is expected to be nearly $35 billion this year, according to Taiclet, which has historically had a positive effect on organic core growth rates. From 2010 to 2012, annual aggregate spend on carrier wireless capital spending grew from $25 billion to $30 billion translated to organic core growth at American Tower in the range of 7 percent to 8 percent.
“The combination of the increasing numbers of high end smartphones and tablets significantly higher utilization per unit and a consumer focus on quality of service is in turn requiring carriers to continuously augment their networks,” he said.”At American Tower, we are seeing first hand others ramp-up and carrier spending is translating in to the significant leasing activity on our sites and our operations teams have been busier than ever processing application associated with these raising levels of new business.”
Roger Entner, analyst, Recon Analytics, puts the numbers into context. The combined capex of $21+ billion that AT&T spent last year was more than the 20 operators in the five largest European Union countries, combined.
“Indeed, [when you add in T-Mobile and Sprint] U.S. wireless carriers spent roughly $109.58 per US citizen to upgrade wireless infrastructure in 2013 whereas the EU5 carriers that serve the more affluent European countries spent significantly less, at roughly $52.64 per citizen,” Entner writes.
August 1, 2014 — T-Mobile is aggressively rolling out LTE in the 700 MHz A-Block, achieving coverage of 158 million people or about 50 percent of the population and 70 percent of the existing T-Mobile customer base. Nine of the top 10 and 21 of the top 30 metros have coverage.
“I’m thrilled to report that the first 700 megahertz sites are already on air,” said John Legere, T-Mobile’s CEO. “Compatible handsets are being field tested right now and are expected to be available for sale by the fourth quarter.”
Not the entire A-Block spectrum block is currently available. Half of the markets covered by A-Block spectrum are encumbered by Channel 51, which limits T-Mobile’s ability to use the spectrum until the incumbent broadcasters are relocated. However, agreements have been signed to relocate broadcasters in five markets covering more than 13 million people, which will be available for launch in 2015.
Additionally, T-Mobile has acquired A-Block spectrum in multiple markets covering 8.7 million in population for $50.5 million. The average megahertz per POP price of approximately $0.48 compared to $1.85 per megahertz POP price T-Mobile paid in the Verizon A-Block transaction.
T-Mobile has also begun its LTE network expansion on its limited remaining 2G footprint lighting up its first 1.9 GHz LTE sites. The LTE rollout should cover more than 280 million people with by mid-2015.
At the Speed of LTE
T-Mobile maintained its position that it is the fastest network in the second quarter, according to Legere, with average download speeds of 19.3 megabits per second. The carrier based its claims on its analysis of crowd sourced LTE data.
“We continue to amp up our speed as we commit more spectrum to LTE and upgrade our cell site backhaul,” he said. “We’ve now rolled out 10×10 4G LTE in 43 of the top 50 metro areas, and we continue to grow our wideband LTE footprint, currently covering 17 metro areas and aiming for at least 26 by year end. As a reminder, with wideband LTE, customers are regularly observing speeds into 70 megabits per second range. Our network’s speed is simply incredible.”
Capex, Down Year Over Year, Will Ramp Later in 2014
T-Mobile spent $940 million on capex in the second quarter, which was flat compared to the first quarter ($947 million) and down 15 percent from $1.1 billion in Q2 2013. First-half 2014 was $1.8 billion and full-year capex is projected to be between $4.3 billion and $4.6 billion, according to J. Braxton Carter, chief financial officer.
“There will be a bit of a ramp up later in the year as we shut down the CDMA portions of the MetroPCS network and continue the rollout of 700 MHz and the deployment of 4G LTE on the 1.9 GHz PCS spectrum,” Carter said. “We continue to see the benefits of our spend as our 4G LTE network, the fastest in the nation, covers more than 233 million people in 325 metro areas.”
J. Sharpe Smith is the editor of AGL Link and AGL Small Cell Link. He is also an occasional contributor to AGL magazine.
August 1, 2014 — While saying that Sprint’s work building out its network is not done, CTO John Saw told the carrier’s fiscal year first quarter earnings call that the focus is being shifted away from building out Network Vision to evolving its multi-band platform.
“Our focus on quality and optimization also applies to our capital spending as we reevaluate where our resources are focused while we wind down the Network Vision build. We are also leveraging SoftBank and our vendors to collaborate on ways to deploy the network on a more capital-efficient basis,” Saw said.
“When moving more traffic to our expanded LTE footprint, we are also able to spend less on 3G capacity than we had planned,” he added.
Capital expenditures were more than $1.4 billion in the quarter, up $359 million, because of the 2.5 GHz build, but year-over-year capex was down $481 million, because of reductions in Network Vision spending, according to Joe Euteneuer, chief financial officer.
“This year’s spending on network modernization has been lower as spend for construction has wound down as we approached our originally planned deployment targets. Partially offsetting this decrease is higher spending on Sprint Spark deployments,” Euteneuer said. “Our capital spend is expected to increase in the second half of the year as we continue to invest in LTE capacity by expanding LTE on 800 MHz and 2.5 GHz spectrum to enhance the customer experience.”
During the last three months, Sprint substantially completed the replacement of its 3G voice system and began offering high-definition voice nationwide, which Saw called the “icing on the cake, because of its exceptional clarity.” LTE coverage grew to 254 million people, as well.
Plans include enhancing voice coverage by adding more 800-MHz frequencies to the network footprint and strengthening LTE system coverage, speed and capacity in the 800-MHz and 2.5-GHz bands, with a renewed focus on network quality and optimization.
“We will relentlessly focus on network quality and optimization to ensure an optimal user experience,” Saw said. “In the last few months, we have committed more resources in the field where our engineers are working on individual cell site by cell site to ensure they are all working at optimum levels.”
The voice network has been turned up on 800-MHz frequencies in one-third of the Sprint footprint, and it is expected to be complete by the end of the year. The improvement will have an immediate effect as 60 percent of Sprint’s post-paid subscribers are on 800-MHz-enabled handsets.
Expanding the LTE footprint to 254 million people gives a good foundation to build on, Saw said, as the carrier expands Sprint Spark to cover 100 million people with LTE in the 2.5-GHz band by the end of the year, by which time Sprint expects to have capabilities for carrier aggregation in the 2.5-GHz band, giving added capacity and increased data speeds.
“We are excited to have begun the installation of eight transmit, receive (8T8R) radios, which should significantly improve the coverage and speeds of our 2.5-gigahertz TDD LTE service,” Saw said.
J. Sharpe Smith is the editor of AGL Link and AGL Small Cell Link. He occasionally contributes to AGL magazine, as well.
July 10, 2014 — All stadium wireless systems evolve over time with changes in usage, new spectrum and advances in technology, but sometimes an upgrade will be spurred by a special event to ensure adequate capacity. That is certainly the case with Target Field in Minneapolis, which plans to be ready with extra wireless capacity, as the Major League Baseball All-Star Game brings a mass of people with wireless digital devices, as well as additional scrutiny by MLB executives, media and a nationwide TV audience.
In preparation for this year’s Major League Base All-Star Game and the prospect of additional strain on the capacity of the wireless system, Insite Wireless revamped the DAS at Target Field using equipment from TE Connectivity.
“There are no empty seats at an All-Star Game. It is a big event with a huge influx of media,” said John Spindler, TE Connectivity vice president product management. “While the stadium has a seating capacity of 39,000 people, conservatively there will be around 45,000 to 50,000 people in the stadium, which demands a lot more wireless system capacity than a regular game.”
The All-Star revamp of the DAS at Target Field included adding 1900 MHz MIMO and 2100 MHz Advanced Wireless Service 4G LTE services and adding eight new sectors — four for access and egress areas and four for the seating area.
“We are seeing this across the entire portfolio of stadiums that we have done,” Spindler said. “There are three tools that DAS providers have to increase capacity: they can add frequencies, they can increase the number of coverage sectors, and they can deploy MIMO antennas.”
The equipment manufacturer has worked with Insite Wireless on DAS solutions at the ball field since Target Field, home of the Minnesota Twins, opened in 2010 when a low-power 2G and 3G DAS using the 850 MHz and 1900 MHz bands was deployed in the locker rooms and business offices. A year later, high-power remotes were deployed for coverage in the seating areas and the concourses using six sectors. In 2012, 700 MHz LTE capability was added into the system.
After the All-Star Game is over, the Twins won’t let the extra capacity go to waste as fans will gobble up data like hot dogs.
“Enhancing the fan experience through wireless helps stadiums compete to get fans to leave their couch at home and come to the event. The ability to see replays is something that has not been available at the stadiums,” Spindler said.
Additionally, active components were added to the BTS-to-DAS headend, to reduce the need for space and allow for remote diagnostics and monitoring of the carriers’ downlink power levels.
Progress is being made in the effort to spread LTE cellular service to rural America, bringing the need for upgrades to existing towers and maybe even some new, fill-in sites. This week, Sprint reached LTE agreements with a dozen rural and regional network carriers, giving smaller carriers a path forward to high speed wireless.
Sprint, Competitive Carriers Association (CCA) and the NetAmerica Alliance have developed the Rural Roaming Preferred Program to provide carriers with low-cost access to Sprint’s nationwide 4G LTE network in rural areas where the cost of building such networks and the roaming costs are prohibitively expensive. CCA has developed a central data hub as a clearinghouse for its members to enter into reciprocal roaming agreements with Sprint, which has formed a shared-network alliance with the NetAmerica Alliance.
Sprint has a history of rural network cooperation with nTelos, which has been extended through 2022, but agreements signed by carriers as part of the Rural Roaming Preferred Program kicks that into high gear with the potential of coverage to 23 states with a population of more than 34 million people. Agreements were signed with SouthernLINC Wireless, C Spire Wireless, Nex-Tech Wireless, Flat Wireless, nTelos, MobileNation, Inland Cellular, Illinois Valley Cellular, Carolina West Wireless, James Valley Telecommunications, VTel Wireless and Phoenix Wireless.
This week’s announcement, however, is merely the first step in a business mating ritual where the carriers will be vetted as business and spectrum partners for Sprint.
Rural Carriers Sign on to Use LTE Switches
From a technology standpoint, rural carriers appear to be gearing up for 4G. NewCore Wireless has announced a flurry of agreements to host rural 4G/LTE networks on its switch facilities.
LTE switching agreements were signed with Mid-Rivers Communications, a telecommunications cooperative in eastern and central Montana; Illinois Valley Cellular (IVC), a provider in north central Illinois; and Glenwood Telecommunications, which serves 12 counties across south central Nebraska.
Other rural carriers using NewCore’s LTE switches include Rainbow Telecommunications, Kansas; and Dickey Rural Networks, North Dakota.