Transformative collaboration in the digital infrastructure market
Discover how the infrastructure market is changing quickly,
and neutral hosts sit at the forefront of an ecosystem that
could drive digitalization's future.
Neutral hosts provide a shared model for delivering infrastructure, aiming to develop an easier path for innovation, a faster route to solutions, and an accelerated road to value. In the second part of our three-part series on neutral hosts, we look at how working together could unlock the exponential potential of networks.
Snowbird, situated outside Salt Lake City in Utah, is renowned as one of the premier ski resorts in North America. Located in the stunning Wasatch Mountains, it’s an ideal destination for all kinds of events throughout the year but wholly relies on fast and dependable connectivity.
Yet at over 3,300 meters, delivering on the exacting data needs of Snowbird's guests and employees was no mean feat and ultimately required establishing a bespoke small cell network for the resort.
Based on a series of small, low-powered antennas, this specific infrastructure was only possible through Crown Castle – a neutral host provider – collaborating with resort operators, three wireless carriers, government agencies, and other stakeholders to achieve a collective result.
Neutral hosts provide shared infrastructure with the opportunity to build additional services on top. This means they sit at the heart of a growing ecosystem and enable the kind of connectivity businesses have come to expect in any environment or circumstance.
“As more industries become digital, the need to be part of a neutral host ecosystem increases,” explains Jim Poole, VP of Business Development at Equinix, which provides digital infrastructure to a wide range of businesses.
Neutral hosts need collaboration for their future
In its most basic form, the neutral host model emulates a real estate business model with few operational resources, allowing it to stay agile and focus on generating healthy returns on investment. Solutions that include managed services and automation are attractive so neutral hosts can keep a streamlined organization.
But as they branch out into more involved fields and offer more ‘active’ services, collaboration becomes key, and they must bring in partners to divvy commercial risk and address operational resource deficiencies. They can’t do it alone.
On a recent visit to Connectivity Expo, Connect (X), showcasing the leaders in 5G infrastructure, Phil Kelley, EVP at Crown Castle, was struck by how many different companies are working together to deliver tower-based solutions.
“You see tower companies, mobile carriers, equipment manufacturers, tower climbers, drone companies, analytics companies, field services companies, and stealth tower companies – an entire ecosystem has grown around the tower industry,” he says.
As neutral hosts look to move into more active infrastructure spaces, this ecosystem will only expand.
But how considerable is the risk for neutral hosts to adopt active services? Michel Chbat, who serves as Head of Global Strategy Execution for Customer Experience at Nokia, is well-acquainted with the question, as it frequently arises due to the standard model of TowerCos, and recently he discussed the topic during an interview with Telco Titans.
This model is based on real estate, meaning the contracts are long-term, low-risk, and provide steady returns. Additionally, the contracts have clear sets of clauses. However, when it comes to the active part of the business, there are commercial risks involved because active services must be provided.
“This introduces the possibility of equipment failure,” says Chbat, “and since the contracts are short-term, there is a change in how these companies usually operate. It’s a whole different ball game, so the conversation is different.” Therefore, upward movement on the value chain is feasible but can only be achieved through collaboration.
And this network of partners working together could provide numerous benefits across the industry. Neutral hosts can help drive innovation; by sharing resources, organizations can focus on the things that count rather than just keeping the lights on.
They can help drive new solutions; by sharing the burden of different technologies, organizations can offer new value-added services more easily. And they can accelerate the time to value; for CSPs especially, this can make it far easier to focus on becoming true digital service providers.
Our own model for creating collaborative advantage neatly mirrors the neutral host market and provides a blueprint to understand how neutral hosts can facilitate collective value.
Accelerating time to innovation
Because neutral hosts are developing from organizations that lease space to third parties to becoming active infrastructure providers, they can help accelerate the time to innovation in various ways. And their global and regional geographical spread favors cooperation and co-innovation.
For example, 5G networks could swiftly alter the relationship between operators and neutral hosts. With features like network slicing and dynamic spectrum sharing, 5G can more easily accommodate multiple operators and more effective resource allocation.
Phil Kelley believes the role of neutral hosts is to make it easier for enterprises to figure out what technology they need, who should deploy it, and who should maintain it. But it’s not just enterprises that stand to benefit.
Different equipment requires different skills and players, and these centralized host companies can do the heavy lifting of providing whatever is necessary without the headache for both enterprises and CSPs.
Neutral hosts deploy infrastructures that multiple CSPs can use, and the resulting reduction of upfront investment frees up capital for CSPs to develop innovative solutions and services for enterprises. Both enterprises and CSPs will be able to innovate in whatever ways they need to advance their business.
Accelerating time to solution
Mobile operators have collaborated to share parts of their infrastructures in multiple geographies for decades, allowing more cost-effective network deployments.
This trend is accelerating with the rise of an established neutral host model. The real benefit of this next generation of infrastructure sharing – with the neutral host as the provider – is efficiency. Faster network implementation and faster time to commercial agreements mean CSPs can speed up the delivery of value-added services to their end customers.
ASM Global recently announced Leeds’ First Direct Arena as the UK’s first 5G neutral host arena. The 5G multi-carrier wireless network, designed and installed by US-based neutral host provider Boldyn Networks, will streamline ticketing and introduce faster navigation around the venue.
As with Snowbird, Boldyn's neutral host model allows for collaboration between venues and mobile operators to create networks that cater to diverse users rather than just subscribers to one carrier.
The UK's four mobile network operators will collaborate on a single network, reducing equipment and power consumption while providing customers with that all-important dependable connectivity. It will also enable ASM Global to collaborate with CSPs, other new partners, and brands to bring promotions and experiences to the audience. Through such collaborative efforts, other use cases are likely to be generated, resulting in additional sources of revenue for the entire ecosystem.
By leveraging shared infrastructure, CSPs can also overcome the challenges of deploying networks in rural regions and create denser networks in urban areas. This not only saves resources and money but also promotes environmental sustainability. Collaboration can achieve more efficient and effective solutions for connecting communities and improving lives.
Accelerating time to value
Hilary Mine, VP of Strategy and Technology at Nokia, believes expanding market reach will broaden business opportunities with differentiated offers that accelerate value creation:
“With collaboration, service providers can focus on what they want to be: digital service providers. And this lets them spend less time on asset creation and maintenance.”
An example is the deployment of a FTTH-as-a-Service network by American Tower Corporation (ATC) in Argentina that started in 2019. The investment in this multi-tenant, open-access network has effectively accelerated the access by many households and business customers to valuable broadband services offered by multiple network operators.
In this deployment, Nokia’s Altiplano Open Access solution allowed ATC to provide network “slices” to their CSP tenants, enabling them to operate as if it were on their own network infrastructure. As such, the end customers could enjoy differentiated services, adding to the overall accelerated value resulting from this model – a triple win for end customers, CSPs, and neutral hosts.
Florian Christ, a Managing Director at KKR, a leading global investment firm investing in infrastructure since 2008, believes the time to value should be the key driver for the neutral host model.
“For new players, and even existing players, collaborations between providers means that the time to market is much faster,” he says.
Collaboration drives the future of business
Technology – and the need for seamless connectivity – sits at the heart of every business, whether it’s a ski resort catering to consumers, a manufacturing plant making cars, or a service company supplying solutions. Yet the requirements of every business are complex and varied, and the expectation is that the underlying infrastructure delivers.
It takes a wealth of different players working away behind the scenes to make connectivity ‘just happen’; not every organization has the time or resources to get to grips with this complexity.
This means that neutral hosts could rapidly create collaborative environments with CSPs and other partners to enable a simple and fast deployment and availability of that connectivity to tenants via new service offerings – who could then deliver valuable digital services to consumers and enterprise customers. The need for such an agile business ecosystem will likely accelerate the digitalization of neutral hosts and CSPs.
The infrastructure market is changing quickly, and neutral hosts sit at the forefront of an ecosystem that could drive digitalization's future.