Everyone knows where those dead spots are. Sometimes they’re in a church basement, other times they’re on the top floor of an apartment building. Sometimes they’re deep inside a sprawling hotel, or maybe in the locker room of the local recreation center.
They’re the places that cell signals can’t reach because the building itself is too big and thick.
In-building wireless, or IBW for those in-the-know, has been described as the final frontier for wireless: It’s one of the last places where carriers haven’t yet reached. And IBW may—or may not—grow into a major opportunity for wireless players including network operators, equipment suppliers and installation technicians.
It all depends on who ends up paying the bill.
The IBW problem
“There are only so many buildings you can build,” explained Neil Boyer, the national director of antenna solutions business development for AT&T. “The bank account is only so big. There’s only so much we can do.”
Historically, the nation’s wireless network operators have focused on outdoor, geographic coverage, primarily by building big cell towers that can blast signals across a neighborhood or small city. That setup can work well if there are no large buildings in the area because cellular signals, particularly those working on low spectrum bands like 700 MHz or 600 MHz, can penetrate most smaller structures.
In the case of a big hotel, stadium, office complex or other building, there is simply no way for a signal to get through tons of steel and concrete. Yet wireless customers still expect their phone to work, no matter where they are.
As a result, carriers and their equipment suppliers have worked with larger venues to install in-building networks like Distributed Antenna Systems (DAS), essentially creating a bubble of indoor cellular coverage by putting a mini base station in the basement and antennas in various rooms. In some cases, such as those in major sports stadiums, these installations can cost millions of dollars to build and maintain.
That’s the cost of doing business, though, explained Bill DelGrego, VP of sales and business development at tower and small cell company ExteNet Systems. For example, football fans who can afford Super Bowl tickets and $2,000-a-night hotel rooms are customers worth keeping, so network operators are willing to plunk down the cash necessary to keep them connected during their travels. “They don’t want them to churn,” DelGrego noted.
And wireless operators spend a bunch of money on their networks: Collectively they’re expected to dole out roughly $30 billion on their networks this year alone.
However, as AT&T’s Boyer explained, at a certain point, it’s simply not worth it for a network operator to install an expensive DAS in a church or apartment building just to connect a few customers for a few hours a week.
So those churchgoers or apartment residents should just get used to the “no signal” warning on their phones, right? Maybe not.
Landlords to the rescue?
“The inbuilding problem has been changing,” explained Piyush Raj, the director of technology innovation at tower company American Tower.
Real estate companies, building owners, landlords and others are beginning to see wireless as a “fourth utility” behind water, power, and heating and cooling. The argument, at least for those who are making it, is that reliable wireless connections actually make a building more valuable, such that a venue owner may want to open up their own checkbook to pay for it.
“It’s flipping the idea upside down,” said Ray La Chance, the CEO of network installation company ZenFi Networks.
Indeed, ExteNet’s DelGrego said that one major building owner in New York paid the company to install wireless connections on the top three floors of a swanky apartment complex because it couldn’t charge $25,000 a month rent for locations where residents couldn’t Instagram their new digs.
“I’m getting calls daily to get a quote [for an in-building wireless system],” DelGrego said. “The real estate owners are calling all of us” in the network business.
Cheytec Telecommunications is a New Jersey startup that specifically targets this area. Its customers are building owners who want to install wireless networks and can’t get the wireless carriers to pay for it. In those cases, Cheytec steps in to work with the network operators to obtain the rights for their licensed spectrum, and then it purchases equipment from Nokia and Ericsson “to supply the same RF base station and radio equipment that the carriers use themselves,” the company said.
“A building owner doesn’t put flowers in the lobby unless they understand why those flowers make them money,” said Jarrett Bluth, CEO of Cheytec. He said the company created a return-on-investment model specifically for the in-building market that he said can help real estate companies calculate the value that they can add to their buildings if they pay to install wireless connections themselves.
AT&T’s Boyer said the carrier recently created a new “venue funded model” that allows building owners to contact the company in cases where they want to pay for the deployment of a network themselves. “They’re engaged. They want to do it. They’re signing up,” he said. “Our pipeline, in the number of projects funded, is substantial.”
That’s likely a welcome development to AT&T, which Boyer noted has pulled back from deploying extensive in-building systems itself.
CBRS at the right time
Another major factor that’s increasingly playing into this discussion is the CBRS 3.5 GHz band. The FCC is expected to issue final rules on cellular operations in that spectrum band this summer, and companies ranging from Verizon to Google to Federated Wireless are hoping to quickly deploy wireless services on 3.5 GHz.
But the FCC’s proposed licensing rules for the band also pave the way for a variety of providers to deploy 3.5 GHz services, including potentially building owners.
“It’s a great opportunity for in-building,” noted Raj. “It enables so many things.”
CBRS proponents hope to create an entire in-building ecosystem around the spectrum band that could potentially allow venue owners and other landlords to plug in a full-blown wireless system much like they would deploy Wi-Fi. The CBRS Alliance, a collection of companies supporting the technology, is currently at work on specifications to support these kinds of in-building installations, so that they can work alongside carriers’ outdoor, macro networks. Already Verizon has made it clear it will support 3.5 GHz operations.
The FCC hasn’t yet issued final rules for the 3.5 GHz band, and even after it does it will still likely take years for the industry to fully embrace an in-building model around CBRS that real estate companies can make use of. “I think it’s going to take a while for this paradigm shift to happen,” said Dominic Villecco, president of V-Comm Telecommunications Engineering.
Challenges, concerns… and 5G
Although many in the wireless industry hope that building owners will take on the in-building challenge—and will open their checkbooks in cases where wireless network operators won’t—some aren’t convinced it will happen.
“I wish it was more of a trend, honestly,” said Mike Kavanagh, SVP of sales and chief commercial officer of tower company Crown Castle. “I have not seen as much uptake because I think that’s a pretty big leap” for building owners to pay for wireless connections.
“The landlords have a hard time paying for a lot of things,” he said, noting that traditional in-building wireless systems can be very expensive. “You have to say, where’s the return?”
That said, Kavanagh believes it may happen eventually: “As you educate folks, I think we will see some landlords stepping up.”
Even if building owners do decide to install a wireless system, they can’t expect to engage in a “one and done” project, said V-Comm’s Villecco. Unlike plumbing, wireless systems need to be managed, maintained and upgraded to the latest equipment. After all, a 2G system wouldn’t meet today’s Facebook and YouTube demands.
But the wider in-building question could take on added significance as the wireless industry rushes toward 5G network technology. Building owners, landlords and others may see the move to 5G as an opportunity to install the latest and greatest technology in their locations—if equipment and spectrum is easily obtainable. On the other hand, the industry’s latest G could actually serve to dampen the in-building push if real estate companies see it as another reason to withhold a major investment into wireless, for fear that it will quickly become obsolete in a potential 6G world.
Either way, it’s clear that wireless companies are hoping that, at least in some cases, building owners will take on cost of network deployments that wireless carriers are shying away from.