The fundamental component to the return on investment (ROI) in the tower business is the tower itself, according to Ed Knapp, chief technology officer at American Tower. Operational excellence plays a role in supporting ROI, Knapp explained, as does the use of drones, providing power to antenna sites, fiber-optic cable connectivity and edge data centers. Knapp spoke during an AGL Virtual Summit in June at the session, “Increasing ROI at the Tower,” moderated by Spencer Kurn, an analyst who leads coverage of U.S. towers for New Street Research.
American Tower improves ROI by questioning how it could be a better provider of the tower asset to its customers, Knapp explained, and part of the answer is achieving operational excellence, which in turn leads to using drones. The company uses drones to examine tower integrity, inventory assets around the tower and reveal what antenna space could be available, he said.
“The main goal is to cut down the time from an application to lease-up,” Knapp said. “That’s beneficial for our customers in getting service. It’s beneficial for us to get additional revenue streams sooner.
American Tower has trained 170 drone pilots in a program it initiated with PrecisionHawk, Knapp said. The tower company has conducted tens of thousands of flights, he said, and it is making progress with inventorying a dataset for future applications and uses of the towers. He described the project as a primary business opportunity for the company.
Because American Tower has 210,000 towers in 23 countries, other initiatives to increase ROI take place abroad. Power as a service is one such initiative Knapp cited, explaining that the company provides power in some markets in Africa and India with no electrical grid power.
“We started out dealing with diesel generators running 24/7,” Knapp said. “We realized that, logistically, both from a cost and operations standpoint and from a sustainability and environmental component, diesel was not the best way forward. Thus, in the last few years, we invested several hundred million dollars in renewables. We’ve added solar facilities to those sites. We’ve added battery storage to those sites. We have artificial intelligence and machine learning techniques where we can sit on top of this mini power plant that we built and combine the AC sources from the grid and the generator, combined with some of these DC components. and optimize reliability and service-level agreements for the uptime for those customers.”
American Tower is taking the same concept and is considering it for use in developed markets such as the United States where the electrical grid is reliable, and Knapp said it raises questions about the optimal way to deliver energy storage systems and how to obtain combined economics when removing old lead-acid batteries from some of the base station equipment.
“Moving that together and looking at large energy storage systems that scale,” Knapp said, “are part of a whole bunch of things you can get into behind the meter, in front of the meter, in different ways in which industry at wholesale might create virtual power plants.”
With respect to fiber-optic cable connectivity, Knapp said American Tower has fiber in a number of markets in Latin America. He said fiber is a key component for the transition to 5G wireless communications in the United States.
“We believe fiber is pervasive and widely available,” he said. “Most of the customers deliver it themselves. However, ROI improves when you bring fiber not already present in markets that are just developing and maturing 4G.”
The final piece involving improving ROI is data centers, Knapp said.
“We’ve spent a lot of time in the last few years, investing in edge data centers,” he said. “We have a whole concept around micro edge and metro edge data centers and where those reside from an overall timing perspective. Most of that is in the path toward how operators are going to deliver 5G and low-latency use cases.”
Knapp said that drones, power as a service, fiber and data centers are the areas in which American Tower is investing to improve ROI.
“Those are the areas that we’re investing in that we believe that putting capital to work can deliver tower-like returns,” Knapp said. “Our goal is to say, ‘Can we achieve tower-like returns? Can we create neutral-host, multitenant facilities with digital infrastructure that folks would benefit from economically by essentially sharing those assets as opposed to doing it themselves?’”
For the June 8 AGL Virtual Summit, Total Tech sponsors included Raycap, Valmont Site Pro 1, Vertical Bridge and B+T Group. Tech sponsors included Alden Systems and Aurora Insight. Viavi Solutions sponsored the keynote address. Additional sponsors included Gap Wireless, NATE, VoltServer and WIA.
J. Sharpe Smith programmed the Summit, and Kari Willis hosted. AGL Media Group has scheduled the next AGL Virtual Summit for Sept. 8. To register, click here.
Don Bishop is executive editor and associate publisher of AGL Magazine.