Third-generation networks in Latin America are evolving, and the needs of wireless carriers are evolving along with them. One of the major trends in the industry, particularly in Latin America, is fiber-based backhaul, currently a key demand driver for the neutral host colocation solutions at cell sites. Most major wireless carriers are rapidly deploying fiber in urban and suburban areas, and many cell sites have, or soon will have, one or more fiber providers serving the locations.
Fiber providers generally have two installation options at cell sites when providing backhaul service. The first option is to run the fiber directly to the carrier’s leased space and install the fiber facilities within the wireless carrier’s cabinet or shelter. This approach is called a “home run,” and in this situation the service and the equipment are dedicated to that individual customer. If the fiber provider needs to provide service to other tenants at the site, they need to repeat the installation process for each additional tenant. If they are serving four carriers, they would have four installations and four pieces of equipment at the site.
Still, fiber providers often prefer the home run approach because they would rather not invest capital in their own cabinet, and a shared cabinet may not offer visibility to additional demand from other tenants. Many carriers, however, agree that having a neutral host colocation facility — with leased rack space for fiber termination equipment and access to power — is ideal because it saves time, frees up valuable resources and conserves capital.
American Tower is focused on developing solutions to support the changing needs of its customers. Driven by strong demand, American Tower has created a solution that enables multiple parties to share a common enclosed structure — a Colo Hut. A hardened cabinet is installed at the site, with a conduit running to every potential backhaul customer and a single piece of equipment to service all customers.
Currently, there is a tremendous amount of capital investment taking place in Latin America to support the deployment of wireless and wireline networks. Many companies deploying these networks view leasing space and managing the physical facilities as a distraction from their core business. The Colo Hut solution allows carriers to focus on their core business and allows companies like American Tower to do what they do best: effectively manage real estate and provide high-quality shared infrastructure.
Security and reliability are also major concerns for many telecommunications providers in Latin America, and equipment vandalism is a significant issue in many markets. This has created a stark need for secure, leased cabinet space from CLECs, incumbents LECs and cable companies. Cell site compounds offer a more secure location than general public right-of-way locations while providing access to power, and in most instances, adequate room to expand the ground facilities if required.
In addition to the benefits for wireless carriers, the Colo Hut provides a low barrier to entry and accelerated time to market for alternative fiber providers, CLECs, or even incumbent LECs, to set up network facilities at our sites. American Tower is actively working with providers to facilitate the expansion of this concept in the market because investing in this infrastructure helps everyone in the industry more efficiently utilize scarce ground space.
In fact, often the target Colo Hut user is not the wireless carrier. Some Colo Hut clients do not provide service to tenants and instead their focus is selling commercial and residential service to businesses and residents in close proximity to cell sites. American Tower’s site locations are ideally suited for access to nearby urban markets or suburban neighborhoods. Again, a key value driver for the Colo Hut is the location and access to secure real estate. As the market continues to evolve, there will be innovation in the use of such facilities.
Given the high level of network expansion and fiber deployment activity currently taking place, Colo Huts just make sense. They save the carriers time and money, facilitate efficient fiber service delivery, and make cell sites more attractive to incoming tenants while creating an additional site revenue stream for the tower owner. It’s a win-win-win situation for all stakeholders. The key is developing the right solution at the right time, and in certain Latin American markets that time is now.
