Light Reading

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. 
SarahReedy
50%
50%
SarahReedy,
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!

 
SarahReedy
50%
50%
SarahReedy,
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.
SarahReedy
50%
50%
SarahReedy,
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. 
SarahReedy
50%
50%
SarahReedy,
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.
Flash Poll
From The Founder
Network architects aiming to upgrade their networks to support agile, open, virtualized services in the 21st century need to consider new criteria when choosing between technology suppliers.
Live Streaming Video
BTE 2015 Sponsor Keynote: HP
Dr. Prodip Sen, CTO, Network Functions Virtualization, HP
LRTV Custom TV
Red Hat Demo

7|2|15   |   10:53   |   (0) comments


Red Hat's Nicolas Lemieux demonstrates how Red Hat is driving innovation through open source communities.
LRTV Custom TV
Red Hat's Approach to OpenStack Adoption

7|2|15   |   5:17   |   (0) comments


Red Hat's Radhesh Balakrishnan outlines his company's open source strategy for both enterprises and telcos.
LRTV Custom TV
The New IP Goes Mobile With vEPC

7|2|15   |   1:12   |   (0) comments


Heavy Reading's Gabriel Brown discusses results of a Light Reading survey sponsored by Brocade that shows a clear commitment by mobile operators to move quickly to virtual EPC deployment.
LRTV Custom TV
Making Business Sense of SDN

7|2|15   |   1:42   |   (0) comments


Results of a Brocade-sponsored survey show that CSPs have a clear sense of SDN use cases but are wrestling with the business case. Sterling Perrin of Heavy Reading looks behind the numbers.
LRTV Custom TV
NFV Will Be Here Sooner Than You Think

7|2|15   |   2:22   |   (0) comments


Forget the usual ten-year cycle for new technologies – NFV will be a core part of CSP networks in five years, based on results of a Brocade-sponsored survey, says Heavy Reading's Caroline Chappell.
LRTV Custom TV
The New IP Gains Traction With CSPs

7|2|15   |   1:42   |   (0) comments


Roz Roseboro of Heavy Reading analyzes results of a Light Reading survey sponsored by Brocade showing that CSPs are getting serious about making the transition to the New IP era.
LRTV Custom TV
It's (Real) Time for Analytics

7|2|15   |   1:42   |   (0) comments


Heavy Reading's Jim Hodges looks at how CSPs say they plan to use analytics to deploy new services in real time as part of The New IP, based on results of a survey sponsored by Brocade.
LRTV Documentaries
IoT in Action

6|30|15   |   1:39   |   (7) comments


Two co-workers discuss the benefits of IoT technology.
LRTV Interviews
Ericsson Opens Up on OPNFV

6|30|15   |   14:16   |   (1) comment


Martin Bäckström, VP and head of industry area Datacom at Ericsson, talks to Light Reading founder and CEO Steve Saunders about the emergence of OPNFV, the importance of standards and Ericsson's OPNFV plans.
LRTV Custom TV
NetNumber Founder Discusses NFV/SDN Impact on SP Networks

6|26|15   |   4:15   |   (0) comments


NetNumber Founder Doug Ranalli examines why SPs need a new network infrastructure for service agility. While NFV and SDN are the tools, the old ways of thinking about signaling control are inhibitors. Doug provides his recommendations.
LRTV Custom TV
Orchestrating NFV vCPE Services Across Multivendor Networks

6|26|15   |   5:46   |   (0) comments


Nirav Modi provides an overview of vCPE, the fastest-growing NFV use case, showing how Cyan's Blue Planet orchestrates vCPE services across a multivendor infrastructure to rapidly deliver new managed services for business customers.
LRTV Custom TV
ZTE at LTE Summit Amsterdam 2015

6|26|15   |     |   (0) comments


As one of the leading global telecommunications providers, ZTE presented its cutting-edge technology at LTE World Summit 2015 in Amsterdam. On display at ZTE's booth were the latest R&D achievements in wireless, 5G development, HetNet, deep convergence of FDD and TDD, and RCS/IMD/iSDN/vCN.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
All Upcoming Live Events
Infographics
Hot Topics
Who's Feeding Fiber to LinkNYC Hotspots?
Mari Silbey, Senior Editor, Cable/Video, 6/29/2015
Colt to Jettison Ailing IT Business
Iain Morris, News Editor, 6/30/2015
Eurobites: Activist Investor Takes Stake in AlcaLu
Paul Rainford, Assistant Editor, Europe, 6/30/2015
What's a Gigabit Good For?
Carol Wilson, Editor-at-large, 7/1/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Casa Systems has been going from strength to strength over the last couple of years. In 2013, it became the first vendor to ship an integrated CCAP device -- the ...
Cedrik Neike, SVP of Global Service Provider, Service Delivery, at Cisco, talks to Light Reading founder and CEO Steve Saunders about solving service provider customer problems in a virtualized, DevOps world, including multivendor support and the future of network procurement.
Cats with Phones