& cplSiteName &

Towerstream Proposes a Small-Cell Alternative

Sarah Thomas
3/19/2014
50%
50%

Will wireless operators be content trading ease of deployment for revenues when it comes to public-access small cells?

Many of the cable operators that already have backhaul in major cities are banking on it, but -- as brought up in a recent Light Reading blog -- the question is, are the operators willing to cede control over owning and running the small cells to the cable providers? (See Small Cells as a Service? Not So Fast, MSOs... and MSOs Poised to Profit from Small Cell Rollouts – Research.)

Those might not be the only two options, according to tower company and broadband provider Towerstream Corp. (Nasdaq: TWER). It has an alternative to offer the wireless operators, and it even spun out a subsidiary, HetNets Tower Corp., last year to market the concept.

Here's the deal: Towerstream already has spent years acquiring real estate in prime locations like New York's Empire State building and MetLife center, a formidable challenge now for network operators. It also already has a high-capacity backhaul network -- with a fixed broadband network to back it up -- in Manhattan and its boroughs and is soon to be in San Francisco, Chicago, Miami, and other urban markets as well. (See Small Cells: The Battle for the Lamp Post, Poll: Backhaul Holds Up City Small Cells, and Towerstream Buys Small Cell & 4G Operator in Houston.)

To leverage this, Arthur Giftakis, VP of engineering and network operations, says the company is ramping up its small-cell play and offering carriers a way to connect on their own terms, leveraging its existing assets and the ability to more easily acquire facilities appropriate for mounting small cells. (See WiFi: Small Cells' Trojan Horse? and Know Your Small Cell: Home, Enterprise, or Public Access?)

"We're not held hostage by facilities, fiber rights of way, and things that give carriers problems and add months or years to build-outs," he says. "We don’t have to play by the same rules, which is a unique angle for us."

It's an angle the company is leveraging to lease space to the carriers. Giftakis says HetNets looks like a tower company and controls all the real estate assets Towerstream has access to for small cell activity. If the operator doesn't want to give up control of the small-cell service offering, that's fine, he says. It can structure a deal with HetNets however it wants. (See Public Access Small Cells: Off to a Slow Start.)

All of HetNet's sites have high-capacity, point-to-point backhaul with 200 to 800 megs of backhaul as needed, Giftakis says. "You can use our access points and just use our backhaul, or just our mounting space, or our power, or not."

Giftakis notes that in his discussions with vendors and carriers, the type of small cell they want to deploy varies by month. "One month they want a God-like device with LTE and WiFi, then they start to realize the limitations," he says, adding that one device that does everything doesn't do anything well. His opinion is: More singlemode LTE small cells will start to come out, as well as those with 3G/4G card slots, rather than the oft-discussed multimode devices. (See AT&T Readies LTE-Only Small Cells, Eyes Multimode by 2015 and MWC 2014: Single-Mode 4G Small Cells Ahoy?)

So when that day comes, will HetNets Tower Corp. be a more appealing model to wireless operators looking to crack the public-access small-cell market? The challenges might be enough to convince the operators to give it a try, even if it means giving up some control -- or cash -- especially in major urban markets like NYC.

The HetNets subsidiary has fared well in its first year in business. Giftakis says it has already signed up as customers two "top-tier wireless carriers" and saw its revenues grow 21% to $0.7 million in the most recent fourth quarter, its first full quarter with a cable MSO paying rent to use its WiFi network. While the bulk of its business is with the cable companies, Towerstream says HetNets is also the answer to carrier small-cell deployments in the second half of the year.

"Backhaul, at the end of the day, has been a problem for carriers anyway," Giftakis says. "They spent a lot of money bringing fiber to towers, and there's only 'x' amount of towers. You can't afford to bring fiber to all those types of sites. When you start looking at these small-cell deployments, it gives us a leg up."

— Sarah Reedy, Senior Editor, Light Reading

(9)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
chrisdress
50%
50%
chrisdress,
User Rank: Light Beer
4/3/2014 | 10:18:00 AM
Re: Towerstream
Not sure.

 

A BIG Problem for small firms like Towerstream is that huge companies like telcos and cable providers want to do business with BIG companies, especially for any customer facing applications.  They do this because they believe that big companies will have the resources to support their needs.

This fact is death to the small companies who believe if they can land an elephant their success will be assured and as a result pump resources into supporting their sales efforts to the exclusion of chasing more profitable and higher % wins.

At this point I think Towerstream's best outcome is to be acquired by a larger firm so that they can be more attractive to these telcos/cable companies. 
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
4/2/2014 | 2:32:03 PM
Re: Towerstream
What company do you see as filling that partner role?
chrisdress
50%
50%
chrisdress,
User Rank: Light Beer
3/29/2014 | 1:34:30 PM
Re: Towerstream
TWER has been a serial "disappointer".  Their CEO, Mr Thompson, has been promoting this concept with great fanfare for over 2 years and there is very little revenue to show for it; with the large investment, this has hurt the financials.

So far TWER has demonstarted that they have very little experience in understanding how these big companies make decisions and implement solutions.

TWER has been busy with the technology, which of course is critical, but these large elephants have a great ability to lead little companies like TWER around by the nose prior to doing it themselves in house.

I continue to stay in the name as I do think they have a good market position; however I think in order to maximize the return, the company needs a "strategic partner" with a track record in successfully dealing with the "big boys".

Best of luck to longs!

 
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
3/23/2014 | 11:15:48 AM
Re: Towerstream
That's true, Mark, and Towerstream wants to lease to as many operators as they can, so they will be on the same spots. But, that's inevitable anyway. ANywhere one operator improves, its competitors will want to as well.
MarkC73
50%
50%
MarkC73,
User Rank: Light Sabre
3/22/2014 | 11:56:55 PM
Re: Towerstream
I'm keeping an eye on this model, if a trust model can be worked out that the wireless carriers accept, it may also aid in the construction of the host carrier's wifi/wireless offering.  Not sure if that will be an aiding competition concern for the wireless folks since it's already competitive, I feel the main concerns will be enforceable SLAs, Security, and price.
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
3/21/2014 | 8:20:02 AM
Re: Towerstream
That could be one reason why it decided to spin out HetNets Towers as a subsidiary, to distance itself from the parent company. It has had this network and real estate for so long, so that's why it's training to repurpose it for WIFi and now small cells, to keep up with the changing industry dynamics.
DOShea
50%
50%
DOShea,
User Rank: Blogger
3/19/2014 | 9:58:43 PM
Towerstream
This company has been around for a long time, and has had some interesting ideas over the year. But, they've had a tough time of it financially lately, and i have to think that will affect how ready (or not) carriers will be to work with them. If carriers are going to lease, they are going to need a high level of trust in whoever they're dealing with.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/19/2014 | 5:49:47 PM
Re: lease versus own
Giving up control can be attractive if carriers get flexibility or cost savings in return. That's just basic business. 
Sarah Thomas
50%
50%
Sarah Thomas,
User Rank: Blogger
3/19/2014 | 3:45:48 PM
lease versus own
It seems to me that leasing access like this will have to be at least part of operators' small cell mix. They can't do it all in all locations, and they will need the coverage help in dense urban areas like NYC where Towerstream is up and running. It may not be the most lucrative path, but it's the path of least resistance.
Educational Resources
sponsor supplied content
Educational Resources Archive
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, July 27, 1:00PM EDT
The Changing Face of the Data Center World
Rodney M. Elder, Senior Solutions Architect, Equinix
UPCOMING COURSE SCHEDULE
Wednesday, August 3, 1:00PM EDT
The Central Office Re-Architected as a Data Center
Guru Parulkar, Executive Director, Open Networking Research Center, Open Networking Lab
Wednesday, August 10, 1:00PM EDT
Telcos & Open Source 101
Phil Robb, Senior Technical Director, OpenDaylight
Friday, August 12, 1:00PM EDT
The Role of Open Source in NFV
Jim Fagan, Director, Cloud Practice, Telstra
in association with:
From The Founder
The more things change, the more they stay the same for Juniper's next-gen comms solutions, and that's a good thing.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (0) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
LRTV Custom TV
NFV in 2016: Part 2 – Climbing the Virtualization Maturity Curve

7|19|16   |   06:56   |   (0) comments


Many of the initial use case implementations are single-vendor and self-contained. The industry is still climbing the virtualization maturity curve, needing further clarity and stability in the NFV infrastructure (NFVi) and greater availability and choice of virtualized network functions (VNFs). Interoperability between NFVis and VNFs from different vendors ...
Telecom Innovators Video Showcase
Versa Networks' Kumar Mehta on SD-WAN Managed Services

7|19|16   |     |   (0) comments


In Silicon Valley, Steve Saunders sits down with Versa's Kumar Mehta for an interview focused on why service providers are building SD-WAN managed services, and how Versa's telco customers are innovating.
LRTV Custom TV
Juniper Networks & The Evolution of NFV

7|19|16   |   06:01   |   (0) comments


Senior Juniper Networks executives talk to Light Reading Founder & CEO Steve Saunders about NFV developments and the recent independent evaluation by test lab EANTC of Juniper's Cloud CPE solution.
LRTV Interviews
CenturyLink Goes Beyond Managed WiFi

7|19|16   |     |   (0) comments


CenturyLink's managed WiFi allows enterprises, such as retailers and resorts, to track guest WiFi usage in order to help them better communicate with customers.
LRTV Interviews
AT&T Launches Network Functions on Demand

7|17|16   |   05:26   |   (0) comments


Roman Pacewicz, Senior Vice President, Offer Management & Service Integration, AT&T Business Solutions, discusses the operator's launch of its Network Functions on Demand service.
LRTV Interviews
Enterprise Pitch for Ciscosson

7|14|16   |   04:43   |   (0) comments


After seven months of near silence, Cisco and Ericsson executives publicly discussed details on their extensive partnership. Among the tidbits shared by Martin Zander, VP, group strategy programs, Ericsson, and Doug Webster, VP service provider marketing, Cisco: The partnership was initially launched to serve the service provider market, but is already gaining ...
Wagner’s Ring
Cisco Faces Up to Hypercloud Threat

7|13|16   |   02:42   |   (0) comments


Facebook, Amazon and Google mostly don't buy branded technology for their networks – they build their own. That's a threat to Cisco – and its competitors too – which face potentially dwindling demand for their product. Is Cisco up to the challenge? Light Reading went to the annual Cisco Live conference to find out.
LRTV Huawei Video Resource Center
Building a Better Connected Russia

7|13|16   |     |   (0) comments


At UBBS World Tour 2016, Alla Shabelnikova of Ovum shares the findings of a white paper outlining the challenges and opportunities of broadband rollout in Russia.
LRTV Huawei Video Resource Center
The Global Video Business

7|13|16   |     |   (0) comments


At UBBS World Tour 2016, Roger Feng of Huawei shares insights on the future of video business.
LRTV Huawei Video Resource Center
UBBS World Tour Moscow Highlights

7|13|16   |     |   (0) comments


At UBBS World Tour 2016 at Moscow, Huawei showcases its outstanding progress in video technology.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
September 27, 2016, Philadelphia, PA
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 6-8, 2016,
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Five of the Top 10 most targeted countries in Check Point Software Technologies' global Malware & Threat Index for Q1 2016 are in Africa.
Hot Topics
Ericsson 'Doubles' Savings Goal as Sales Slump
Iain Morris, News Editor, 7/19/2016
Kevin Lo's Move to Facebook: Sign of Things to Come?
Patrick Donegan, Chief Analyst, Heavy Reading, 7/20/2016
Verizon's Next With VNFs
Carol Wilson, Editor-at-large, 7/21/2016
Facebook Gets Its Drone On
Ray Le Maistre, Editor-in-chief, 7/22/2016
Is Dish Going Down the Drain?
Alan Breznick, Cable/Video Practice Leader, Light Reading, 7/21/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
I've enjoyed interviewing many interesting people since I rejoined Light Reading, but William A. "Bill" Owens certainly takes the biscuit, as we say where I come from.
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.