Refusing to be distracted by its protracted purchase off Nokia Siemens Networks’ [NSN] microwave business, DragonWave continues moving forward with new product announcements.
“[The purchase of NSN] has been a long time in the making but we believe it will be transformational for us,” Alan Solheim, vice president, corporate development, told DAS Bulletin. “Meanwhile, we have not just been sitting on our hands.”
The Horizon S-Series, a sub-6-GHz radio has been launched for non-line-of-sight applications up to 200 Mbps required by public safety and state and local governments, as well as certain microcellular backhaul applications. The S-Series asynchronous transmission provides added flexibility for operators.
“We are targeting this product at small cell backhaul and verticals like public safety and smart grid,” Solheim said. “We recognized that that we needed that kind of product to be integrated into our small cell strategy.”
DragonWave has also introduced the Horizon E-Series, operating in the licensed 70/80-GHz frequencies. The Horizon E-7000T provides up to 1 Gbps of asynchronous capacity per link and is designed for shorter-range deployments in urban environments, such as in a mobile backhaul scenario, microcellular backhaul applications or to provide enterprise connectivity.
“It serves two purposes. You can still use it for small cells and you can use it for enterprise and outdoor backhaul,” Solheim said. “We look at 80 GHz as an interesting frequency and a useful part of the toolkit but it’s same as the other bands (38 GHz, 28 GHz, 24 GHz or 23 GHz). It is nice because it is lightly licensed and offers high capacity but it does not have the same kind of reach as lower frequencies.”
The Horizon S-Series and E-Series radios, coupled with the Avenue radio, comprise DragonWave’s outdoor microcell backhaul line, using the three primary frequency bands used for microcell backhaul: 5.8 GHz, 60 GHz and 70/80 GHz.
DragonWave has also announced higher modulation of up to 2048 QAM for its Horizon packet microwave products. This higher modulation allows the radios to transport up to 37 percent more data through existing microwave channels. With data compression, spectral efficiency is further enhanced 25 to 100 percent depending on traffic patterns.
With 2048 QAM, users can achieve greater than 500 Mbps of transport in a Horizon Compact+ all-outdoor system and up to a gigabit with DragonWave’s bandwidth accelerator. Horizon Quantum can provide two carriers per radio each capable of 1024 QAM, delivering up to 2 Gbps in a single radio with bandwidth accelerator.
DragonWave Plans to Add Harmony Product Line
DragonWave, last week, shared further plans for the expansion of its portfolio to include the products to be acquired as part of its planned NSN acquisition, which closes June 1.
Following closing, the new products acquired from NSN would be marketed under the names Harmony Radio, Harmony First Mile 200, Harmony Hub 800 and Harmony Trunk. Under the terms of the amended agreement, DragonWave will continue the support and development of these products, which will also be sold via the existing channels of NSN under the FlexiPacket brand.
The Harmony Radio, Harmony First Mile 200 and Harmony Hub 800 products provide both hybrid TDM and packet solutions. The Harmony Radio is an all outdoor packet radio which can be coupled with either the Harmony First Mile 200 or the Harmony Hub 800 indoor units to provide support for a mixture of TDM and Ethernet interfaces. Multiple Harmony radios can be connected to a single Harmony indoor unit. The Harmony Trunk provides for high capacity Ethernet and SDH transport.
Aesthetics are important to most commercial buildings, including hotels, historic buildings, hospitals, colleges and restaurants. So, it begs the question, what is the best way to promote the deployment of DAS antennas, which can alter a structure’s look? Galtronics thinks it has the answer: hide them or at least make them less obvious.
Galtronics’ Pear DAS in-building antenna line, showcased last week at DAS Congress in Las Vegas, minimizes the visible size of the antenna or even conceals it from public view.
The challenge of developing the antennas, Ephraim Ulmer, president and CEO of Galtronics, told DAS Bulletin at International CTIA Wireless 2012 in New Orleans, was to make sure the performance of the antennas was not degraded.
“The new low-profile indoor antennas have been fully tested to operate above hard ceilings and drop ceilings,” Ulmer said. “To place an antenna above the ceiling, you have to make sure that it is designed to radiate at the right angles through the ceiling to get the coverage that the carriers need. Because of the metal grid in the ceiling that interacts with the antenna, we had to design the propagation patterns to minimize that interaction to maintain antenna performance.”
After launching the industry’s first MIMO indoor antenna last year, which helped aesthetics by reducing the number of antennas needed in a building, Galtronics then went to work on a form factor that would make those antennas more aesthetically pleasing and even hidden above the ceiling tile.
Ulmer noted that hiding antennas comes naturally for the company, which integrated the antennas inside of today’s cell phone handsets and inside of the Cisco router’s enclosure.
“In the same reason we hid antennas inside of handsets, we wanted to hide them inside buildings,” Ulmer said. “[Aesthetics] have been driving the strategy. Our ultimate goal is to please the building owner with an antenna solution that does not compromise the building’s interior design … and to make the system integrators’ and installers’ jobs easier.”
Pear in-building DAS offers several different options, including a through-ceiling mount, for the Pear S4935 and M4969 antennas, which conceals the antenna with only the nose protruding through the ceiling; an above ceiling mount (for antennas Pear M4772, M4969 and S4935), which conceals the antenna completely from public view; and a flush hard ceiling mount where the antenna is attached to a round plastic plate that is the only visible part of the antenna after installation.
Galtronics has received carrier approval for the in-building antenna line and is now marketing to building owners, carriers, neutral hosts and integrators.
“The next step is to make these integrations known to the venue owners — the people who care about the aesthetics of the building,” Ulmer said. “If you can get the performance that you need from the antenna and not see the antenna or only see a little bit of it, you are in the sweet spot.”
Public safety is an issue for all large venues. Everyone agrees that access to wireless coverage for public safety first responders inside of buildings will save lives. Not everyone agrees, however, on how to get there.
As an answer to this dilemma, members of the in-building wireless industry are forming the Safer Buildings Coalition to educate the public safety community, the building owners and the cellular carriers on why public safety radios should be accommodated on DAS networks installed inside of buildings.
“Coverage for public safety radio communications often fails when first responders work inside of buildings,” said Seth Buechley, SOLiD Technologies, a founding member. “We believe that DAS is an effective platform and cost-efficient way to solve the problem.”
Technology might be the easy part. The political landscape is more than daunting. Public safety agencies have no money to deploy inside buildings and have a tendency to want to control any system they use. Commercial carriers are more than a little concerned about technical compatibility issues with the high-power public safety two-way radios, system management and liability issues in case of system failure.
“Although the wireless industry emotionally supports public safety coverage, business matters tend to get in the way,” Buechley said. “It’s akin to motorists’ attitude toward a hitchhiker. The Safer Buildings Coalition wants to change the paradigm whereby public safety becomes viewed as a carpooler that responsibly pays its share to – following the analogy – be on the DAS.”
To achieve this goal, the Safer Buildings Coalition must execute a multi-prong approach that includes educating the market on the problems and solutions; influencing policy to ensure public safety coverage inside buildings by mandating that, when a building receives the installation of a DAS, the system be able to support public safety services; and establishing certification standards for integrators installing and for managing DAS networks that provide coverage for public safety.
SBA Communications acquisition of more than 2,300 Towers and DAS assets from Mobilitie in February was the first major M&A deal of 2012 (and maybe the largest of the year). We asked Clayton Funk, managing director, Media Venture Partners, to run the numbers of the $1.1 billion deal and give his take the impact the transaction will have on the tower industry.
AGL Bulletin: Were the multiples in this deal in line with previous tranactions:
Funk: The acquisition multiple was reported to be roughly 15x tower cash flow, which would make it slightly below where we’ve seen other towers sales prices during the last 18-24 months. What was unique about Mobilitie’s portfolio was that the anchor tenants shared in any incremental revenue that was added to the towers, as much as up to 50 percent for each new tenant. While Mobilitie’s leases were also triple-net in nature, which alleviates the tower owner of assuming expenses — such as ground leases, taxes and utilities — the valuation was likely suppressed compared with other recent sales since there was a large revenue sharing component that other towers don’t have.
AGL Bulletin: Are prices going up, down or are they steady?
Funk: We see tower M&A valuations and prices as holding steady during the last 18-24 months even since the brief drop during the late 2008/early 2009 financial crisis. Valuations right now are matching historic highs, because buyers and investors believe in the fundamentals of the wireless and tower industries. With easy access to low cost debt, both public and private tower companies have capital to deploy and acquisitions increase scale faster than development. How long will this hot market last? Not sure but there are more factors that could drive valuations lower (a rise in interest rates, the threat of carrier consolidation, etc…) than actually have them go up. We see them as remaining steady for the foreseeable future unless something unforeseeable happens such as an out of the blue announcement like what happened last spring with the AT&T and T-Mobile deal.
AGL Bulletin: How does the sale affect future tower transactions?
Funk: As I mentioned earlier, it is tough to say that the Mobilitie/SBA deal is a good “comp” given some of the characteristics of the Mobilitie deal and so the only “impact” that the sale may have on future tower transactions is it always raises discussions about what are towers selling for. Every tower is unique as is every portfolio of sites whether it be for three towers or 3,000 towers. Just because Mobilitie may have decided to sell for 15x tower cash flow doesn’t mean that 15x is the benchmark number for future sales. A tower owner should get a sense of what their towers are worth instead of just assuming that is the “market”. For the rest of 2012, I think it will be business as usual with buyers still interested in buying deals as they come to market.
AGL Bulletin: It looked like Mobilitie wanted to be the fourth major tower company. Obviously that was not the plan or the plan changed.
Funk:Arguably you could say they were on their way in terms of size but they and their investors determined that now was the best time to divest of their portfolio versus trying to get larger than 2,300 towers and several DAS networks. It is impressive they got to their size and scale in the amount of time they did, especially since it was done primarily through organic development instead of acquisitions. Getting to that size isn’t easy.
AGL Bulletin: Any sign of whether Mobilitie will continue on and develop more sites or is this it?
Funk: From what we hear, Mobilitie will continue to develop towers, which is not unusual in the tower business after a sale. It is probably more common than not that a management team or company remains intact post-sale to continue to capitalize on relationships and develop another portfolio of towers. MVP has had many clients who decide to sell all or a substantial number of their tower assets but stay in the business building towers for their long time clients. I can’t speak for Mobilitie’s plans with 100 percent certainty but I would be surprised if they left the tower business altogether.
Domestic rental and management segment revenue increased 10.6 percent to $465 million and operating profit increased 11.9 percent to $352.8 million for American Tower in the fourth quarter. Additionally, domestic core organic growth topped 8 percent, reflecting new leasing activity by AT&T and Verizon Wireless, according to a transcript of the fourth quarter earning call by Seeking Alpha
“This activity has been primarily generated by two of our largest customers as they continue to focus on deploying initial coverage for their 4G LTE networks nationwide,” said Thomas Bartlett, executive vice president, CFO and treasurer, on the fourth quarter earnings. “The remainder of our core growth was generated from the 850 sites we’ve acquired or constructed since the beginning of the fourth quarter of 2010, in addition to our newly acquired land interest.”
For the full year 2011, domestic rental and management revenue grew 11.4 percent to more than $1.74 billion, with domestic segment core revenue growth of 10.6 percent.
“We continued to see substantial leasing demand in the U.S. in 2011 … which along with the more than 450 communication sites and 1,700 third-party property interests we added during the year, led to these growth rates,” Bartlett said.
James Taiclet, American Tower chairman, president and CEO, noted that the tower company is set to achieve its goal of doubling its total site count from five years ago. In 2007, American had 22,400 sites in three countries, which is expected to have risen to 50,000 sites in 10 countries by the end of 2012.
“We still believe, based on direct interactions with many of our major customers, that tower-based macro sites will continue to be the primary choice for wide-area network development into the foreseeable future, with urban rooftops, distributed antenna systems and Wi-Fi offloads serving as complementary solutions,” Taiclet said. “As a result, we expect to continue to direct the bulk of our capex and acquisition spending to tower-based real estate.”
American Tower will continue to grow complementary coverage solutions, such as indoor DAS, on an organic basis, he added.