Episode 6 of 6: Evolution of Multi-Carrier DAS
As we wrap up the Evolution of Multi-Carrier DAS series it seems fitting to turn our attention toward the evolving issue of DAS ownership. In-building DAS systems (iDAS), once installed, become the property of a carrier, a building owner or a third-party owner (3PO). Inextricably linked to the issue of ownership is the more important issue of control. We shouldn’t cynically assume a desire to control the DAS is only for the purpose of extracting profit or limiting competition. For example, building owners desire control because they feel ultimately responsible for delivering critical services, including public safety and commercial wireless, inside the four walls of their venue. Carriers desire control of the DAS so they can modify and upgrade systems without asking permission or aligning timetables with other carriers participating on the DAS. And finally, 3PO’s desire control of the DAS to generate a return on their investment and ensure they can live up to the terms of any SLAs they offer to carriers who lease space on their DAS.
At SOLiD, we see the tension around DAS ownership increasingly resolving itself naturally through a “Shared DAS” model focused on what each party already owns. In every case, the building owner owns the building and the carriers own the spectrum. Building owners are not accustomed to giving up control or rights to critical infrastructure and carriers guard their networks closely. Both are equally motivated to improve the experience of shared customers within the indoor environment. We see a trend toward building owners owning and maintaining a multi-carrier shared DAS, which is funded entirely by participating carriers.
When bucket plans were the norm, a DAS could be seen as an expensive drain on carrier networks. In today’s data-centric world carriers are migrating towards tiered-pricing data plans, meaning DAS finally has the potential to be considered a legitimate revenue generator, even at this early stage of the data consumption curve. Most building owners are grateful when a carrier provides a DAS and is willing to forego any type of rent. However, savvy building owners with high traffic locations are beginning to push carriers for commitments of adequate capacity and the latest network technologies.
This new reality of carrier willingness to invest in DAS presents a significant challenge for many third-party ownership models. When carriers are willing to fund DAS deployments through a direct alliance with building owners, how do the 3PO’s articulate the value of their involvement? The market seems to be revealing sharp distinctions between IDAS and outdoor DAS (ODAS) business models. ODAS more closely resembles the traditional tower model in that both are developed in a complex regulatory environment. The first ODAS developer to overcome the regulatory hurdle (zoning, public hearings, federal, state and local permitting) earns a built-in value for carriers unwilling to wade into an uncertain months-long regulatory process themselves. Sometimes it’s easier to pay rent and move on. Conversely, with IDAS, there is no regulatory hurdle or permitting requirement to overcome. Tower companies, Wall Street successes if ever there was one, have long-held DAS to be fertile ground for profitable business expansion. For 3PO’s, we believe the majority of the DAS action will be in the ODAS (small-cell) space for the foreseeable future.
Building owners, when they get some help with carrier licensing and DAS management, almost always prefer to own the multi-carrier DAS infrastructure in order to exercise some measure of control over their wireless destiny. Carriers, on the other hand, are embracing a variety of multi-carrier DAS ownership policies. AT&T’s Antenna Solutions Group, for instance, prefers to own multi-carrier DAS with the goal of bringing other carriers on board and generating a return on their investment. Many major venues, lacking a compelling alternative, have embraced this new program. Other venues are concerned about AT&T’s ability to attract and manage the other carriers and are choosing to accept AT&T’s financial investment on the condition that they retain ownership of the DAS infrastructure and the other carrier relationships.
With increasing demand for mobile applications and the need to upgrade thousands of DAS systems to support LTE, we will see a variety of models explored in the name of pragmatism. During the next five years, we expect to see the shared-DAS model, with building owners maintaining control of a DAS funded by participating carriers, come to prominence as the model of choice.
For more information on distributed RF and optical networking solutions, visit: www.solid.com
A version of this article was originally published on AGL Bulletin.shared das