Marc Ganzi, president and chief executive officer of DigitalBridge Group, and Alex Gellman, chief executive officer and co-founder of Vertical Bridge, delivered the keynote address at today’s AGL Virtual Summit. Moderated by Rick Heilbrunn, president and CEO of AGL Media Group, the keynote marked the first time Gellman and Ganzi have spoken together on the same panel, Gellman said.
“Ours is really a simple story,” Ganzi said. “It’s a story that started back in 1994, building a business with Alex, constructing digital PCS sites and building infrastructure. We’re in a really unique space today. We’re the only global-scale digital infrastructure firm that invests across all the key five verticals, and on a global basis: cell towers, networks, small cells and edge infrastructure. Today, we have about $40 billion in assets under management and 23 companies on a global basis. And we have over 100 investment professionals who wake up every day and only think about investing in this very specific ecosystem.”
Ganzi talked about the traditional way of investing in digital infrastructure, which he called picking a swim lane and a silo approach, where firms would specialize in cell towers, small cells or data centers.
“That’s the way networks were built in the 1990s and early 2000s — 2G, 3G and even 4G,” Ganzi said. “What we’re going through today is really an unprecedented window of opportunity — which is more than just mobility. Certainly, 5G is feeling the cap of expansion, but I would offer that cloud, particularly as it impacts access network cores, C-RAN and O-RAN, artificial intelligence, internet of things — all of these things are starting to converge.
“Secular tailwinds are driving us toward what I would call next-generation networks and, most importantly, toward next-generation network architecture — which is really about reliability, low maintenance and bringing technology and applications closer and closer to the end users,” Ganzi said. “This is the transition that this sector is going to go though over the next decade.”
Gellman said that he agreed.
“Marc has been talking about convergence for a number of years,” Gellman said. “It really has each year become clearer that convergence is coming into fruition. We look to our customers. We’re not looking at our competitors, we’re looking at our customers and seeing what kind of conversations they want to have, and what they’re thinking. And one thing that’s happening — certainly in the United States, but really worldwide — is wireless carriers are rethinking their networks top to bottom. Four years ago, we were talking about virtualizing the core, but now they’re really talking about is where the core should be, which drives the edge conversation.”
Gellman said that Vertical Bridge customers were looking at open RAN, shared RAN and their networks top to bottom in a new way.
“What’s exciting for us is we’re a tower company — so that’s pretty straightforward — but we have the opportunity, in the DigitalBridge family, as our customers demand a converged solution, to tailor the converged solution with the other partners in the family to that customer’s needs. Right now, what we’re seeing is that each customer in the United States has a different angle on it and is seeking different levels to coordinate convergence between our companies.”
During his presentation, Ganzi emphasized the need for connectivity in digital infrastructure. Presenting a PowerPoint slide that read, “DigitalBridge is levered to the powerful thematics driving significant investments in mobile and internet connectivity on global basis,” Ganzi said, “It’s simple: We need more connectivity, we need it better and faster.”
Ganzi said that there’s a persistent amount of investment, which sets up well for DigitalBridge’s sector — and he said that everyone who participates in the wireless infrastructure sector will be really busy for the next decade.
“So, what fuels that?” he asked. “Obviously, mobile data traffic — five times growth over the next five years. “That will come in traditional 2G, 3G and 4G, but 5G is the biggest growth vertical. And then, fixed wireless. Enterprise 5G networks and indoor networks. Behind that is more than just wireless connectivity. It’s computers — and the pipes that ultimately fuel that.”
When AGL’s Heilbrunn asked him about the difficulties posed by the pandemic, such as supply chain issues and skilled-worker shortages, Ganzi said he would classify the challenges into three categories.
“The first is supply chain,” he said. “It’s the strangest stuff that will hold you up today. It won’t be fiber from Corning. It won’t be a monopole form Sabre, but it will be something as silly as a grounding system. It will be something as silly an AC vent — a special type of venting system for a hyperscale datacenter. And it’s sometimes the smallest components that are stuck in a shipping container. Supply chain congestion is specialized components. It’s hurting our ability to execute.”
Ganzi said the second category is just getting people back to work.
“That’s been one of the biggest challenges we’ve had,” he said. “Getting folks motivated to return to work, return to the mission.”
Ganzi said the third category is permitting, which he said is DigitalBridge’s biggest challenge.
“Municipalities have been slow to get back to full steam,” he said. “Certainly, online permitting is great, but when you’re doing specialized things, like building a 100-megawatt datacenter, trying to lay down 100 nodes in Austin, Texas — it’s challenging. I think permitting has always been the challenge — but certainly the pandemic has made it more pronounced and more difficult.”
Gellman said that he agreed.
“We’re insulated as a macro tower builder in that we can get what we need to deploy towers, but our customers can’t get what they need to install them,” Gellman said. “At some point. that’s going to back up. We haven’t seen it yet, but I am concerned and acutely aware of the potential. Interestingly, it’s not Nokia and Ericsson that are having the trouble, it’s all the other builders of materials that go into the site, where you start to run into these shortages”
Gellman raised an alarm on a regulatory issue: the FAA’s new rules, which regulate C-Band installation because of potential navigation interference.
“We’re getting notices from the FAA on any site where our customers are installing C-Band, asking a list of detailed questions about power output and antennas.”
Other AGL Summit sessions included “A Different View from the Top, in which a panel of wireless infrastructure women executives discussed the news, industry predictions and technologies.
In another session, “Venturing Out: Post-pandemic Investment,” panelists examined the types of wireless infrastructure opportunities that attract investors, including new business, mergers and acquisitions, and expanding industry subgroups.
A fourth AGL Virtual Summit session was “Out of Stock: Mitigating Global Supply Chain Issues.” The pandemic set off a chain of events that has industries scrambling to meet demand for their customers. In the supply chain session, panelists examined the areas of concern for the digital infrastructure industry and discussed how to navigate this unprecedented time of shortage.
Within several days, a video recording of the AGL Virtual Summit will become available for viewing on the AGL Media Group website at https://aglmediagroup.com/localsummits/.
Mike Harrington is a contributing editor.