Cellular service throughout Latin America is about to get a jolt as wireless operators deploy advanced-generation networks capable of carrying all kinds of content across the airwaves. From Brazil to Mexico, governments are auctioning off new 3G and 4G spectrum bands to try to fill the increased demand from their citizens. Operators charged with having to build out these new networks would be wise to use a third-party neutral-host provider to help them with their tower builds, which should allow them to get to market faster and preserve capital for their core businesses – selling wireless services to customers.
Third-party neutral-host providers can play a key role in helping both governments and telecoms get new broadband services to market more quickly. For governments trying to accommodate the needs of their citizens, collocated towers that house equipment from multiple telecom operators bring competition to the marketplace faster, ultimately resulting in lower costs for telcos that can be passed on to consumers. Collocated towers also require fewer towers to be built, which is better for the environment and community aesthetics. From the operator perspective, speed to market also helps them find new revenue streams from new services and customers, as well as lower capital requirements and operating expenses through shared infrastructure.
Consumers are embracing their cellphones like never before, not only for making voice calls, but also increasingly to share photos, exchange text messages, email and find content on the web. But 2G networks cannot adequately handle all of increased traffic that consumers are producing. As such, governments are auctioning off new wireless frequencies to allow operators to roll out advanced networks to keep pace with people’s hunger for accessing information on the go. Operators, meanwhile, will race against each other to build out these new networks quickly, enticing potential customers with devices like smartphones and tablets that can make business workers more productive and consumers happier with their chosen wireless provider.
These advanced-generation networks require new and more cellular sites. Besides filling in missing coverage areas, increased traffic on cellular networks also creates more demand for new towers to increase the capacity of the network.
However, building a new cellular tower from scratch can take a lot of time and financial resources. Operators have to find suitable property, lease it from the owner, and get necessary siting permits and other licenses required from the local governments before they can even start to build. In many cases, operators need to get the community to approve the towers as well. Even though people demand seamless wireless connectivity, they don’t want more standalone towers in their neighborhoods. As such, a new tower build can take anywhere from 90 days to a year or more, depending on the obstacles the operator faces. Instead of building their own towers, operators can become tenants on a neutral-host system operated by a tower firm like American Tower and have a new site operating within weeks rather than months. The sooner a telecom operator is up and running, the sooner it can begin to recoup some of its investment from buying the new spectrum and equipment. In the United States, collocating on towers with other wireless operators has been an ongoing trend because operators find it easier to manage their customer-facing initiatives, like selling devices and plans, marketing and customer service, and leaving the back-end processes to the companies that make it their primary business.
More traffic on front end means more backhaul needed
Independent tower firms can help operators both on the RF signal and on the backhaul, i.e., hauling traffic back to the core network. As customers load the network with more traffic, bigger pipes are needed to efficiently handle all of that traffic. With the explosion of data across the network – including music, photos and the biggest bandwidth hog of all, video – bigger pipes are needed on the back end. Operators traditionally used copper and T1 or E1 lines to carry that traffic. Going forward, fiber and microwave backhaul are the favored methods to bring traffic back to the core network because they can handle more data. Tower companies are hoping to help operators with their increased backhaul demands as well, so operators don’t have to negotiate on their own with companies to carry that bandwidth. In fact, backhaul is often mentioned as one of the bigger bottlenecks in rolling out new technologies. Fiber is often the preferred choice in high-density areas, while microwave-based backhaul can make more financial sense in rural areas.
As operators win new spectrum at auctions across Latin America, telecom operators should consider using independent third parties to help them with their technology rollouts, both for new sites and as they direct traffic back to the core network in order to speed their deployment times and free them up to concentrate on other areas of their operations. Government regulators also should encourage the use of neutral-host providers because they can bring competition to the marketplace faster, save the environment and can better address community aesthetic concerns.
