Over the past 20 years, wireless carriers like Verizon, AT&T and T-Mobile have built out networks that provide coverage almost everywhere. As a result, property owners and managers take it for granted that building tenants can use their mobile phones inside their buildings so wireless coverage is not their responsibility.
But change is in the air. In the post-smartphone era, demand for wireless connectivity has exploded, as consumers use their mobile devices at work and play, viewing videos and listening to music. At the same time, energy efficient materials have made newer buildings more resistant to radio frequency (RF) penetration, creating wireless dead zones. In high-density urban environments, RF congestion has aggravated the problem still further with not only coverage issues but capacity overloads as well.
Wireless dead zones frustrate people in hotels, hospitals, and office buildings. Beyond frustrating, though, dead zones undermine public safety when residents don’t have reliable connectivity to make 911 calls in emergencies. Dead zones are so common, there’s even a web site devoted to them.
To address this problem, in-building wireless systems can enhance RF signals inside buildings and eliminate wireless dead zones. In-building wireless creates an opportunity for new business models, leveraging a combination of innovative technology and appropriate financing approaches.
At the largest indoor venues, such as stadiums, arenas and high rises, the wireless service providers have invested in distributed antenna system (DAS) networks to meet the demand for more bandwidth and speed. Adaptable to a wide variety of building challenges and evolving technology, DAS deployments will make up a nearly $30 billion market by 2018, according to iGR Research.
But the carrier-funded model only goes so far. Carriers don’t view mid-sized buildings less than 500,000 square feet in size as profitable opportunities since the subscriber base is relatively small. These “middleprise” sites demand a more creative approach to financing the wireless network.
Four financing models have emerged as viable approaches:
Carrier Owned – Service providers will step in to fund networks if the building affects a large subscriber base. For instance, a hotel chain located near a major sports venue for the Super Bowl could attract carrier interest. A single carrier might also fund the network for a large business campus, supporting the tenant’s wireless needs.
Third Party Operator (3PO) – Sometimes referred to as a neutral host, a 3PO can act as the integrator who builds out a DAS network that delivers wireless signals from multiple service providers. This approach reduces the upfront capital expense of the self-funded model, but will increase the property’s operational expense in monthly service contracts and, of course, the expense can trickle down to the tenant. The property owner must be vigilant to avoid hidden obsolescence that can lead to costly future upgrades.
Building Owner “Goes it Alone”– The owner can retain control of the wireless network. This approach has a number of advantages: the owner can future-proof the infrastructure, customize the capabilities and monetize the service. However, it demands significant carrier integration, as well as capital and operational expenses.
Hybrid Approach – An owner or manager can creatively blend these models to develop their scope of work. Sharing capital expenses with either a carrier or 3PO may be the key to making the network sustainable.
Wireless access technologies can also be combined creatively. DAS networks can be installed in combination with other small cells, creating a heterogeneous network dubbed a HetNet. The key is to tailor the network technology for your specific venue’s requirements.
Convergence is another forward-looking approach to consider. A single “converged” network, based on fiber and IP, can deliver a wider range of services at a lower cost of ownership. Services that can be converged on a fiber+IP network include:
- Building control systems
- Digital signage
- Location based services
- Sensors and beaconing applications
- Public safety radio
- Point of sale systems
The converged approach is attractive to wireless service providers, who are using converged networks to adopt new business models, offer innovative services, and enter new markets.
The good news is that in-building wireless technology is rapidly evolving and business models are falling into place, enhancing property values and marketability today.
Mike Collado is Vice President of Marketing for SOLiD.
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