Industry Voices—Mun: Don’t leave mobile out in real estate infrastructure spend

Hotel Plaza Athenee in Paris
Venues like the Hotel Plaza Athénée in Paris could place a high value on mobile infrastructure. (Hotel Plaza Athénée)

I had the privilege of chairing the opening day of the DAS & Small Cell Congress last week. As I listened to industry participants including Distributed Antenna System (DAS) suppliers, system integrators, and enterprise users, it was clear that there is still a meaningful gap between supply and demand.

In economic terms, we haven’t yet reached an economic equilibrium in price and quantity in the supply-demand curve. While the DAS product and solutions fit nicely in the top segment of in-building wireless market such as large public venues like stadiums and airports, many smaller venues and vertical segments require less costly solutions to target these price-sensitive markets.

As I noted in my opening remark at the conference, real estate construction has been steadily growing in the United States since the Great Recession. The construction industry, which was lagging behind other parts of the economy, started coming back in 2012, with notable increases in the multifamily residential, hotel, office and retail segments.

Source: Mobile Experts
The construction boom is generally positive for the in-building wireless or enterprise mobile infrastructure industry, with many new construction projects incorporating DAS or other wireless infrastructure. Each vertical sector perceives the value of wireless differently, and some types of building owners (such as hospitals and hotels) place a high value on mobile infrastructure, as highlighted in our Enterprise Mobile Infrastructure report. Some enterprises can make a lot more money with good in-building wireless, and they are now willing to pay for it.
Providing seamless mobile coverage and capacity inside large enterprise venues is extremely hard. With multiple spectrum bands and mobile technologies across different operators, providing seamless mobile connectivity for multiple carriers is a tall order. Options can include DAS, small cells, booster/repeaters and Wi-Fi, with a different solution for each type of enterprise building. Some suppliers are stepping up to the challenge with “hybridized” solutions to meet the price-performance target for real estate and other enterprise customers.

With average U.S. adult mobile internet usage growing almost 4x over the past five years, according to KPCB’s Internet Trend report, and most of that engagement happening at home or at work, mobile connectivity for outdoor and indoor venues will become increasingly important.

Constant internet access is becoming an integral part of the way that people live and work. For instance, people often check online while shopping. Strong retail brands will need to expand their focus from the physical store experience to the digital experience as well.  And that means first being able to provide robust mobile coverage and capacity.

With carrier densification efforts, a certain portion of in-building wireless needs will inevitably be met with “outside in” small cell propagation. However, the enterprise need for cost-effective in-building wireless solutions will continue to grow as long as mobile usage and traffic growth continue to rise.

Over the next two years, we believe that multioperator solutions will start to reach a price point that is acceptable for hotel, retail and office environments. It’s important to also make sure that these solutions are “as easy as Wi-Fi” in terms of installation and setup.

When the product and the price point combine to make an attractive product for enterprises, the in-building wireless market should grow quickly to billions of dollars per year.

Kyung Mun is a senior analyst at Mobile Experts LLC. Mobile Experts is a network of market and technology experts that provides market analysis on the mobile infrastructure and mobile handset markets. Over the course of his 20+ years in wireless and cable industries in a dynamic range of roles from engineering to product management and technology strategy, he has contributed to the advancement of mobile communication, while working at leading companies in the mobile value chain including Motorola, Texas Instruments, Alcatel-Lucent and a few startups in between. He holds undergraduate and graduate degrees in electrical engineering from the University of Texas at Austin and Georgia Tech, and studied finance and strategy at Southern Methodist University.