American Tower is pursuing edge opportunities with the view that a neutral host model, similar to towers for terrestrial wireless networks, is going to be the most efficient method for edge deployments.
The company has performed trials and had conversations with multiple stakeholders as part of internal initiatives to figure out how to make its tower sites the preferred location for what American Tower expects to be micro edge data center facilities, according to Igor Khislavsky, VP of Investor Relations.
“Our thesis is that neutral host that brings together multiple cloud players and multiple carriers in one location is going to be the most efficient way to deploy the edge over the long term,” Khislavsky said, speaking Tuesday at a Raymond James investor event.
Not all of the 40,000 sites in American Tower’s U.S. portfolio are going to be ideal, he noted, but a subset, likely those located closer to highly populated areas, have all the right makings.
That includes access to power, fiber connections, and carriers or communications operators that are likely already located at the site.
“I think at select tower sites all the precursors are there to house this type of a solution,” he said.
American Tower already has six edge data centers. Those are located in Atlanta; Austin; Boulder, Colorado; Denver; Jacksonville, Florida; and Pittsburgh.
On Tuesday, the company announced a new channel program to support its Edge Data Center solution, signing XaaS1 as its first master agent for customer service
“With the focus on enterprise network elasticity and network disaster recovery, demand for bandwidth and connection from users at the edge is rising,” says David Fox, director of Business Development, U.S. Tower Innovation, American Tower, in a statement. “The strategic location of our Edge Data Centers will help meet this demand. Because of XaaS1’s established relationships, our first master agent agreement will be a great vehicle to extend services to users who need critical data-intensive applications to work quickly and efficiently at the edge.”
American Tower hasn’t included any significant contributions from edge efforts in its growth rate projections or long-term financial guidance, and Khislavsky said it’s difficult to explicitly quantify the size of the opportunity for American Tower.
“To this point, some of the challenge has been 5G is just very early, and so the demand case for these edge deployments is at the very very beginning stage,” he noted.
That said, considering American Tower is continuing conversations, “it’s safe to assume that our view internally is this can be something material over time.”
At a high-level Khislavsky tied the need for edge deployments with low latency and related high processing power required for 5G applications like AR/VR and autonomous driving. With computing power moving out closer toward the edge and end users, and micro edge data centers as a complement to what have historically been large data centers potentially hundreds of miles away.
Carriers, particularly Verizon, have been pursuing mobile edge compute combined with 5G alongside cloud players. Verizon launched MEC in 10 cities in partnership with AWS.
Getting an edge from a global presence
Another factor in American Tower’s edge ambitions is its international portfolio of infrastructure sites.
“The edge is not going to only be a U.S. phenomenon,” Khislavsky said. “You’re going to see the edge deployed across the world eventually, I think in developed markets first just like any other technology.”
He pointed to Germany as an example of where an edge solution will crop up and a market that holds long-term opportunity as American Tower significantly expands its presence.
American Tower is buying Telefonica’s tower business, Telxius, in a $9.4 billion deal announced earlier this year covering more than 30,000 sites. That includes Germany, as well as Spain, Brazil, Chile, Peru, and Argentina. Plans also call for construction of about 3,300 additional new sites in Germany and Brazil through 2025.
As for the edge opportunity overall, American Tower remains excited, Khislavsky said. And when it comes to baseline growth projections, “something like the edge probably plays a meaningful role in that upside case.