Shared infrastructure agreements and neutral host providers will probably play a role in industry’s move to 5G

Mike Dano

LAS VEGAS – FCC Chairman Tom Wheeler said wireless carriers should partner with each other to move more effectively and efficiently to deploy 5G services. And I suspect companies including Sprint, AT&T and others will probably take that advice, at least to some degree.

During a keynote speech here at the CTIA Super Mobility trade show, Wheeler argued that there is historical precedence for wireless carriers to unite to deploy new services.

“Back in 2001, Cingular and T-Mobile undertook a joint venture called Empire,” Wheeler said in his remarks. “The carriers agreed to share each other’s spectrum and infrastructure in three states, enabling each to quickly fill coverage needs while avoiding the costs of building out redundant infrastructure. The deal was dissolved when Cingular purchased AT&T wireless, but it was considered a success.”

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Wheeler pointed out that there are just over 200,000 cell towers in the U.S., but there may be “millions of small cell sites in the 5G future.” To address that challenge, he urged the industry to “think creatively about smart solutions to the deployment of the antennas necessary for 5G to benefit the public.”

“To be clear, I’m not endorsing shared infrastructure in every and all circumstances, and certainly not opening a door to consolidation,” Wheeler said. “But I am saying that if we’re talking about thousands of antennas in a city, and you’ve got four carriers, and we are serious about leading the world in 5G deployment in our very large and spread-out country, we ought to explore creative options on how best to build that infrastructure.”

So, are wireless carriers open to infrastructure sharing agreements?

“We would certainly look at it,” Günther Ottendorfer, Technical Chief Operating Officer at Sprint, told me.

Ottendorfer explained that, during his 20-year career in wireless, he’s seen a number of infrastructure sharing agreements, first in Australia during his tenure at Optus Singtel there and later in Austria during his time as Group CTIO of Telekom Austria Group. Indeed, infrastructure-sharing agreements are relatively common among cash-strapped carriers in Europe and elsewhere

“Some of them have worked, some of them have not worked,” Ottendorfer explained. “The devil in network sharing is in the details.”

Ottendorfer said that network-sharing agreements can be successful where the goals and business strategies of the two partners are largely aligned. However, he said such partnerships can quickly fall apart if one carrier has dramatically more customers or more network traffic than the other.

Although Wheeler pointed to the Empire joint venture between Cingular and T-Mobile as an example of a successful network-sharing agreement, that effort was relatively short-lived. T-Mobile in 2004 agreed to purchase Cingular’s network and spectrum in California and Nevada for around $2.5 billion, largely due to Cingular’s announcement that same year to acquire AT&T’s wireless business.

“Historically, they [carriers] like to own their own equipment and spectrum too,” Chris Pearson, president of 5G Americas, told me.

Although it’s true that wireless carriers in the United States have been largely reluctant to ink wide-scale network and infrastructure sharing agreements, there is precedent for at least some level of partnership. For example, MVNOs like TracFone and Consumer Cellular essentially piggyback on the networks of players like Verizon and AT&T because they don’t own spectrum and infrastructure of their own. Further, spectrum owners like King Street Wireless and Cook Inlet have licensed out their spectrum to U.S. Cellular and VoiceStream, respectively, to support wider network deployments by those players. (This may well be the model Dish Network will eventually employ for its vast trove of mid-band spectrum.)

Moreover, more recent developments in in-building wireless systems could pave the way for more targeted partnerships. Neutral hosts DAS systems, such as those deployed into football stadiums, allow wireless carriers to plug into an existing wireless network in order to offer their services to customers in the venue. These neutral host set-ups are typically built by third parties and then used by carriers that are willing to connect into the system.

In his keynote speech, Wheeler said that “there is a roadmap to chart our 5G future. Now is the time to make it happen.” Shared infrastructure, neutral hosting and other such teamings may well pave the way for quicker and more efficient 5G network deployments, particularly for wireless carriers concerned about ballooning capex budgets and the relatively limited geographic reach of high-band 5G systems. I would not be surprised at all if a player like Sprint inked a 5G network sharing agreement with T-Mobile so that both companies could more quickly build out 5G systems that would counter the efforts of their deep-pocketed rivals, AT&T and Verizon.

But if a wide-scale agreement like that doesn’t happen, you can bet that smaller, more targeted partnerships – perhaps around downtown areas that are built out by a neutral host 5G provider – will begin to spring up. Perhaps that’s the opportunity players like Comcast and Zayo are hoping for? – Mike | @mikeddano

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