ORLANDO, Fla.--AT&T Mobility (NYSE: T), Verizon Wireless (NYSE: VZ) and other carriers are likely going to bid billions of dollars for AWS-3 spectrum in an FCC auction of those airwaves later this year. And as auction winners deploy networks over their spectrum during the next few years, that's going to translate into big business for tower companies, according to a tower executive.
In an interview with FierceWireless, Crown Castle CEO Ben Moreland said that he anticipates the auction will result in Tier 1 carriers deploying "several thousand" more cell sites in the years ahead. Initially he said, the AWS-3 deployments will likely inlcude additional equipment being added to existing towers and sites.
"I think it will certainly start with amendments" to existing sites, he said here at the PCIA wireless infrastructure conference. "But very quickly you'll find that by the time they get through that, they will have added probably several thousand more cell sites to their network than where we are today in mid-2014."
Moreland said that what Crown has seen historically is that as carriers have gained more spectrum, they usually add antennas "so they can maximize the spectral efficiency of what they have just acquired." While he said carriers certainly have the technical ability to combine frequencies into single-antenna arrays, "it typically has been sub-optimal, depending upon which frequency you are talking about."
Already carriers are adding to their existing deployments. Verizon is building out its AWS-1 spectrum, which now covers a little more than half of its LTE markets. And T-Mobile US (NYSE:TMUS) is adding more equipment as it refarms MetroPCS' AWS spectrum to create wider channels for its LTE network and move to 20x20 MHz deployments in major markets.
Moreland added that he thinks both of those projects are going to continue into 2015. He said Crown is currently seeing "a very significant" increase in site deployments where Sprint (NYSE: S), Verizon and AT&T are choosing to collocate their sites with those from other carriers. "They're adding across the entire industry several thousand new colocations," which Moreland said may be an effort to increase network density ahead of Voice over LTE launches.
Moreland said next year's planned incentive auction of 600 MHz broadcast TV spectrum could also result in more business. The FCC's rules for that auction are geared to ensure that smaller carriers get a slice of the spectrum, up 30 MHz in some markets. That is expected to fuel more rural LTE deployments.
The Crown Castle chief noted that because of the strong propagation characteristics of 600 MHz, "in a rural location you can cover a lot of geography." Moreland said he "absolutely" anticipates helping carriers deploy 600 MHz in the years ahead, and said he thinks it could spur fixed LTE services in rural areas. "I think that's a very compelling product," he said. "Because there's not a good alternative in a lot of rural settings for broadband Internet."
Many carriers and wired broadband providers find it too costly to lay fiber in rural areas, depriving rural customers from the high-speed broadband that consumers in the suburbs and urban areas can more easily access. "The LTE signal at the house is much better than anything else you are going to get through the alternative provider, whether there's satellite or copper," he said.
Moreland also addressed comments made recently by American Tower CEO Jim Taiclet, who said on the company's first-quarter earnings conference call that Sprint would need to roll out an additional 30,000-40,000 transmission sites if the carrier wants its 2.5 GHz TD-LTE network to reach coverage parity with its 1900 MHz networks.
Taiclet offered what he said was a "theoretical construct" regarding what it will take for Sprint to match its 1900 MHz coverage with its 2.5 GHz spectrum, which has much weaker propagation characteristics.
"I shy away from speaking on behalf of our carrier customers about what they need to do or what they should do," Moreland said. "I don't think that plays real well at Sprint when somebody shows up on a public call and says you need to build 40,000 sites. I suspect he was merely making the comparison of the spectral inefficiency of the 2.5 vs. the 1.9, and in theory what you'd have to have is that many more sites."
In other Sprint news, Moreland said he "would anticipate" Sprint to deploy its new 8T8R radio heads for its 2.5 GHz rollout on Crown-owned towers starting mid-year, "since we have largest concentration of Sprint sites of anybody in the country." Sprint is currently field-testing the new radios, which provide for 8 Transmitters 8 Receivers, hence the 8T8R moniker. The carrier has said the 8T8R radios deliver faster data speeds and improved overall coverage, both at the edge and in the middle of the cell, because they can send multiple data streams and provide better signal strength.
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