The void in small cell sites in the USA
WorkBench recently conducted two business planning exercises for an edge computing business and a new REIT property startup in the United States. In both projects the sheer scale of the small cell revolution took the team by surprise. Despite great progress in 2019 and the first prototype 5G network deployments, it was clear that there is an enormous gap in the number of small cell sites available, the readiness of local planning and procedures and the amount of off grid electricity (eg. solar power) required to keep the costs of installing 5G cells and computing capacity at the edge of the networks. For the roll out to reach anywhere near the volume of sites required in time to support the lofty ambitions of the smart city technology, IoT ad 5G projections, it is not just the network operators that are under pressure to gain momentum.
Bursts in the forecasted demand are valid. Traffic management, online gaming, smart health, security, autonomous vehicles and drone deliveries, and the nation’s ever growing and hungry desire for more and faster mobile data to fuel their consumption of video is already well understood.
However, for the best smart city applications and the lowest latency for video streaming and online gaming, edge computing capacity is required approximately every 4 blocks in urban areas. 5G networks require at least a 5G mast or antenna every 200m metres for their best results. The high frequency airwaves 5G require cannot travel through walls, windows or rooftops and get considerably weaker over distance.
So while the network operators are preparing rapidly, WorkBench still sees a gap in the supply to be provided by tower companies and other REIT firm’s as well as local government to enable these network to grow with the density required. Deloitte’s recent research shows that whilst China has built over 350,000 new sites since 2015, the USA has only built around 30,000. In fact, their research concluded that U.S. tower companies and carriers added fewer sites in the last three years than China Tower added in three months.
Analysts are predicting the number of sites to be in the millions to cover the USA. Yet the best prepared REIT firms currently, the tower companies of American Tower and Crown Castle International are talking about sites under 100,000 each. So who will fill the void? WorkBench views the situation as an incredible opportunity.
For further information about the WorkBench business planning for edge computing and small cell deployments please contact us at andrew@workbench.ltd.