Hope permeates WIA show, but 5G downturn persists

A slowdown in 5G spending continues to drag on companies at the Wireless Infrastructure Association's (WIA) annual trade show. But show attendees believe the situation will improve, eventually.

Mike Dano, Editorial Director, 5G & Mobile Strategies

May 16, 2024

7 Min Read
Accenture's Jefferson Wang, AT&T's Cheryl Choy, Dish Network's Eben Albertyn and T-Mobile's Ankur Kapoor.
Speakers during a WIA keynote (from left to right): Accenture's Jefferson Wang, AT&T's Cheryl Choy, Dish Network's Eben Albertyn and T-Mobile's Ankur Kapoor.(Source: Mike Dano/Light Reading)

The reality of the 5G slowdown is crystal clear here at the Wireless Infrastructure Association's (WIA) annual trade show. WIA represents many of the nation's cell tower owners, and its show is ground zero for many of the companies that have been struggling to stay afloat amid a downturn in wireless network operator spending.

"It doesn't feel like [5G] reality has lived up to the hype," said David Yacoub, CEO of cell tower construction company Site Link. He said 5G technology hasn't upended everyday life with autonomous cars and robot surgeons, as early 5G proponents promised it would.

Nonetheless, many WIA show attendees, including Yacoub, remain upbeat about the future.

For example, Yacoub said that his company is not embarking on a cost-cutting program involving layoffs. He explained that it's difficult to hire quality employees, and it will ultimately be less expensive for his company to simply retain its existing workforce rather than firing them and then trying to hire them again later, when network operator spending resumes.

In that regard, he's rejecting the strategy employed by big players like Ericsson and Crown Castle, which have both engaged in layoffs in order to reduce costs.

Network spending "inevitably has to come back," Yacoub said. 

Predicting the uptick

5G "has not yet lived up to the hype," agreed Melissa Mullarkey, SVP of business development for Boldyn Networks, a company that builds indoor and outdoor wireless networks. "People don't need to download a Netflix video in two seconds," she said, in reference to the speedy connections enabled by 5G.

But Mullarkey believes that 5G operators will resume spending on their networks, and will see new 5G revenues as a result. "The big wave is coming," she said.

"The hard part is, when. When will it come?" wondered Alex Gellman, executive chairman and co-founder of Vertical Bridge, one of the biggest cell tower owners in the US. 

Gellman – a longtime tower executive who often provides blunt assessments of wireless industry trends – said he too believes 5G infrastructure spending will eventually pick back up after more than a year of sluggish activity. He said such spending is almost inevitable as AT&T, Verizon and T-Mobile implement new spectrum bands like 3.45GHz and C-band. 

Indeed, such spectrum may ultimately require the construction of thousands of additional transmission sites given its relatively diminutive propagation characteristics, he said.

But when operator spending might pick back up is anyone's guess, Gellman said. He speculated that it could happen next year, the year after, or the year after that.

Pivoting to other opportunities

While waiting for wireless operators to resume spending on their networks, some companies in the digital infrastructure space are looking for other action.

Some, like MasTec, have embraced work in the renewable energy business. After all, building charging stations for electric vehicles (EVs) is very similar to building cell towers.

Charlie Kennamer, VP of telecom for Sitetracker, said that many companies in the wireless industry began pivoting into the market for EVs starting three years ago. He said work on EV charging sites now comprises most of his time. Sitetracker sells software for infrastructure project management.

Similarly, Chiaren Cushing, a VP with tower company Crown Castle, said that revenues from EV sites can help companies in the wireless industry smooth out their quarterly revenues.

Another possible growth area: AI.

"All human-machine interactions are about to change," predicted Mullarkey, the Boldyn executive. She said that AI services like ChatGPT will eventually become a part of everyday life for many Americans. And that, she said, ought to increase the need for AI-capable data centers and the networks that deliver AI services.

"That will drive massive demand," she said.

The operator viewpoint

"The demand is growing," acknowledged Ankur Kapoor, SVP of network strategy and evolution for wireless network operator T-Mobile. Kapoor said traffic continues to increase on T-Mobile's network, particularly as the operator expands into the market for fixed wireless access (FWA) products and services.

However, Kapoor explained that the economics supporting expensive 5G network upgrades can be difficult, particularly in rural areas where there might be few paying customers.

Interestingly, Kapoor and Cheryl Choy, SVP of network planning and engineering with AT&T, both pointed to the opportunity for satellites to cover rural areas rather than traditional cell towers.

"We see a lot of potential" in satellite coverage, Choy said. "We're really excited about it."

Indeed, just this week AT&T inked a formal commercial agreement with AST SpaceMobile to connect AT&T customers to AST SpaceMobile's satellites. The deal is similar to the one T-Mobile inked with SpaceX in 2022.

However, both Choy and Kapoor said satellites will be complementary – rather than competitive – with their terrestrial network operations. That likely comes as a relief to the cell tower executives at WIA concerned that demand for cell towers might be overshadowed by phone-to-satellite connections.

Regardless, it's clear that operators remain laser-focused on the bottom line. Officials from AT&T said that was a driving reason for that company's recent $14 billion open RAN agreement with Ericsson.

"We had to pivot to a cost structure that was more simple," said Todd Zeiler, VP of wireless engineering at AT&T.

The open RAN angle

Zeiler explained that AT&T spent a year evaluating vendors for its open RAN project, before selecting Ericsson for the task. A critical component was ensuring that Ericsson supported open RAN specifications in a way that would allow AT&T to slot in other vendors. That would prevent AT&T from being locked into a relationship with Ericsson's proprietary equipment.

Broadly, Zeiler said that Ericsson's service management orchestration (SMO) will run across all of AT&T's network. But the company will work to insert equipment like radios from other vendors, like Fujitsu.

Further, he said the company hopes to evaluate network software – in the form of rApps – from a variety of vendors. In that regard, Ericsson will play the role of app store operator, thereby allowing other vendors to submit rApps into AT&T's network.

"The rApp is a great vehicle for doing that," said Paul Challoner, CTO at Ericsson.

Zeiler said AT&T has already started swapping out some Nokia equipment with Ericsson equipment as part of its new agreement with Ericsson. He said the company is also working to replace some proprietary cell site equipment with off-the-shelf servers from Dell running Intel silicon.

Zeiler said AT&T is using digital twin technology – where it creates digital 3D representations of its cell sites – to help speed up those installations.

"That's speed to market. Speed to market is money," Zeiler said.

But other operators remain on the fence when it comes to open RAN technology. For example, T-Mobile's Kapoor described open RAN as "absolutely critical." He also said open RAN could help create more secure networks through a reliable, domestic supply chain. Indeed, that's what officials in the Biden administration are hoping to support through the NTIA's $1.5 billion open RAN fund.

"I think the technology is advancing," T-Mobile's Kapoor said of open RAN. But: "It will take some time for the technology to mature."

He said open RAN deployments – ones that span multiple vendors – can be difficult to administer when problems arise. Which vendor should accept the blame?

For AT&T, Ericsson is the company taking on that role.

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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