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Opportunities in digital infrastructure
The telecom landscape is changing. New dynamics are in place, fueled by an abundance of private and public investment in digital infrastructure, evolving regulations, CSP strategies and ESG objectives. It’s a chance for infrastructure companies to expand their role and explore new digital opportunities.
Deploying high-performance networks will benefit consumers and enterprises with solutions enabling various experiences. Infrastructure companies – such as tower, fiber and data center companies – can play a critical role in this deployment.
By offering CSP and enterprise customers an innovative win-win model, they can provide multi-tenant, multi-domain infrastructure as a service at significantly reduced costs to boost or accelerate network deployments. Private Equity (PE) firms lead this business model shift, injecting considerable capital into “hard” network infrastructure.
Who are the Neutral hosts?
CSPs divesting their infrastructure assets to form a new independent Network Company or NetCo. The CSP, therefore, becomes a Service Company (ServCo) and leases the infrastructure from the spun-off NetCo. In turn, the NetCo opens its network for wholesale/open access, allowing the onboarding of other service providers on their infrastructure.
Tower companies (TowerCos) lease space on their towers to CSPs seeking to complement their coverage. Consolidating this segment and the ambition to diversify their business is pushing TowerCos to explore new multi-tenant use cases such as Connectivity-as-a-Service, RAN-as-a-Service, or Edge Cloud-as-a-Service, where they can take advantage of their highly distributed diverse asset base.
Fiber companies (FiberCos) own fiber networks and lease fiber capacity to CSPs and ISPs. Open access networks are an attractive way for FiberCos to improve the monetization of their transport and/or access fiber networks by leasing active connectivity services and termination equipment (ONT/OLT) to operators.
Data center companies lease space for servers in their premises to enterprises, webscalers and CSPs. They’re instrumental in multi-cloud and Edge deployments and are evolving toward the active domain by offering their tenants storage, compute and connectivity services.
The Neutral host model
In a Neutral host model, infrastructure companies lease their infrastructure assets to multiple tenants, recouping their network build costs by hosting various CSPs on the same foundation. This shared infrastructure model enables the following:
- Accelerated availability of advanced CSP services, such as in-building 5G connectivity, Gigabit fiber broadband and expansion of 5G coverage to under-served areas
- Environmentally-sound alternative to individual operator deployments in dense areas, such as in-building, venues, or outdoor urban settings
- Private 5G network operation for enterprises
- Simplified access to edge computing capabilities, unlocking critical, latency-sensitive and massively data-consuming applications in various industries such as healthcare, logistics, automotive, and manufacturing
Neutral hosts are constantly scouting the horizon and building proofs of concept for tomorrow’s use cases, forging partnerships for accelerated profitability maximization. Learn more about Neutral hosts in this article.
Evolution from passive services to Platform-as-a-Service
Traditionally, the core business of Neutral hosts, or infrastructure companies (InfraCos), has been the basic colocation of “passive” infrastructure assets, where they are leasing space for antennas on a tower or servers in a data center. Now, they’re digitally transforming and exploring new, more complex “active” offerings, which constitute elements of a Network-as-a-Service portfolio.
This evolution of the digital infrastructure business toward adopting new use cases allows Neutral hosts to maximize the monetization of their infrastructure assets and drive the increase of their tenancy ratios.
These can take the Infrastructure-as-a-Service (IaaS) model, offering parts of their infrastructure as a service to the CSPs or enterprises, e.g., dark fiber leasing. Moving further up the chain, these offerings can take the Platform-as-a-Service (PaaS) model, where InfraCos – in a similar business model to webscalers – offer an active network as a platform on which CSPs can provide their content and services to consumers and enterprises.
Eventually, Neutral hosts will become an integral part of an ecosystem, together with CSPs and webscalers, providing high-end active connectivity to end users, enabling the Metaverses for consumers and enterprises.
As an industry leader for Neutral hosts, Nokia is your trusted partner for digital transformation
Our mission is to help Neutral hosts in their digital transformation to evolve toward a profitable platform-as-a-service model that will benefit the whole telecom industry.
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Learn more about neutral hosts
Standards leadership in action: How Nokia convinced the 5G world that less is more
Digital Transformation World 2023
International Telecoms Week 2023
Cellnex Telecom and Nokia discuss the value of partnership
Neutral hosts: A route to greater 5G profitability for CSPs?