Opinion: Sprint Report Just One Reason I’m Not Bullish on Towers

January 21, 2016

By Ernest Worthman

January 22, 2016 — A few months back, I made some innuendos that the day of the cell tower may be limited. Announcements from companies like Qualcomm, with their “cell tower chipset for cell phones” have certainly sparked both interesting conversation, as well as some raised eyebrows. As well, the proliferation of low-power networks that are forecasted to handle 70 percent of data, going forward, and the IoE all seem to point in that direction.

And, while some of the “good ‘ol boys” that are still vested in the unlimited growth and expansion of the cell tower infrastructure, did a bit of good-natured mocking of what I wrote, now I think I might just get the last laugh.

Why? Because the stocks from Sprint, American Tower, Crown Castle and SBA Communications took a pretty good hit (they dropped 9, 3, 6, and 8 percent, respectively) on news that Sprint was pulling back from macro site deployment.

Of course, the reaction by the market is just knee jerking. But regardless of what Sprint intends to do, even if it is just abandoning existing collocations on American Tower and Crown Castle towers as part of its Next Generation Network buildout, the implications are interesting.

The report that presented this, Re/Code, also notes that Sprint’s new network plan “will rely on small cell technologies from equipment vendor Mobilitie at the expense of traditional cell tower vendors American Tower and Crown Castle.”

Whether the report is accurate or slanted really matters not. There is plenty of evidence, from a lot of directions, that small cells are poised to take a lot of the traditional cell spectrum traffic. The Qualcomm chipset is just the tip of the iceberg. And Qualcomm wouldn’t be putting money into it if they didn’t think it was a viable option.

Of course, cell towers are not going away anytime soon. But the fact is that the trend is shifting to low-power, smaller networks that will be glued together by things such as HetNets, SoNs and the like. And alternative interconnect platforms, such as cell phones acting as relay points, will become the predominant infrastructure, especially when 5G becomes a reality. The macro network may simply end up as nothing more than a relay network to connect the smaller cellular infrastructure. And for that, there are way too many towers.

Anyway, is it as simple as this? Not necessarily, but as I have said before, I’m selling my tower vendor stock in favor of emerging technologies that aren’t challenged by location, environmental issues and just plain ugliness.

______________________________

Ernest Worthman is the senior editor of AGL’s Small Cell magazine.