5G is how CEO of wireless infrastructure company spells opportunity
Source: Chron | Ilene Basler | March 15, 2019
The coming 5G networks will revolutionize our lives in ways we know — 20 times faster data transmission speeds, an explosion in machine-to-machine communication, autonomous cars, augmented and virtual realities, smart cities — and in ways we have yet to imagine.
Jay Brown, is CEO Crown Castle International Corp., a company with a role in deploying this fifth generation of wireless technology. He spoke with Texas Inc. about how his progress.
Q. Could you tell us a little about Crown Castle?
A. Crown Castle International Corp., headquartered in Houston, was founded over 25 years ago. We started by providing cell phone towers to wireless operators and grew our portfolio through a number of acquisitions. We would acquire cell towers from wireless operators and then lease space on those towers back to them. Then we would share the assets with other carriers so they could build out their networks.
About eight years ago, we got into the small cell space and began constructing and building fiberoptic cables to deploy small cells for the wireless operators.
Over the last couple of years, we’ve made a significant number of acquisitions — a little over $9 billion of acquisitions since 2017. These have enabled us to provide fiberoptic cable across a number of markets. We have over 40,000 cell towers and 65,000 route miles of fiberoptic cable in many of the top metro markets in the US, and we use that to provide services to large enterprises — such as hospitals, schools and large financial institutions. We use the same fiber as the backbone for the deployment of small cells for the wireless carriers.
Q. Why is 5G so exciting?
A. It does primarily two things. 5G significantly reduces the amount of latency in a wireless network. Latency is the amount time it takes from when either a human or a computer requests information over the network. The significant reduction in latency has applications for things like virtual reality and augmented reality. Latency with 5G is likely to decrease about 10 times compared to 4G.
Secondly, 5G significantly increases the number of connections or users that can be on a given site at one point — it improves the number of devices that can be connected to the network by about 10-fold. That creates a lot more capacity in the wireless network. On a like-for-like basis, 5G can be as much as 10,000 times greater in terms of capacity than the existing 4G network.
The transformative nature of 5G is illustrated by the 10,000-fold increase in data traffic capacity it will support, while delivering more instantaneous and real-time access.
Q. How is the 5G infrastructure rollout going in Houston and other cities?
A. In Houston and other large cities, we’re focused on deploying 5G for all of the wireless carriers. As in any deployment cycle, carriers tend to focus on areas with the greatest population density (the greatest population where people live, work and/or shop). This activity is happening across the country in all the top 25-30 markets.
There’s significant investment currently to build networks that are 5G-ready. The equipment for 5G is not quite ready for mass deployment. We will most likely see significant amounts of equipment and devices that are 5G-enabled at the end of this year and in 2020. But right now we are getting the networks ready, which means we’re building fiber, making sites ready, and working with cities in order to gain access rights so that we can deploy small cells across the country.
Q. What equipment is not quite ready?
A. The combination of the base stations and antennas that will be used in most cases for 5G. The base station is the electronics that go in the base of the tower or the hub-sites connecting multiple small cells. Our devices are also not ready — the iPhone or Galaxy device that we have in our hands today is not yet 5G-enabled. So even if the equipment at the sites was ready for 5G, our devices are not.
Companies like Alcatel, Lucent, Nokia, Semens and Huawei make the equipment at the base of the tower. We’re an owner of infrastructure assets, a real estate provider, so our company owns the real estate infrastructure, which is necessary in order to deploy the wireless networks.
Q. So you are waiting for these other companies to be ready for you to install their equipment?
A. Yes.
Q. What companies are competing with you in Houston?
A. The biggest deployers of this infrastructure are the carriers deploying infrastructure directly, and Crown Castle. We’re deploying infrastructure in a way that can be shared across multiple carriers. The most active participants in the market are Verizon, AT&T, T-Mobile, Sprint, and us.
Our business model is to share the infrastructure across multiple providers. We want to share our assets with Verizon, AT&T, Sprint and T-Mobile and put all of them on the system. This lowers the costs for our carrier customers. It also has the benefit of reducing the amount of infrastructure that has to be deployed .
There are two other large companies that are in our space, American Tower, which owns cell phone towers worldwide, and SBA Communications which owns towers in the U.S. and Latin America. Unlike these two companies, we’re focused entirely in the U.S. and we own a significant amount of fiberoptic cable and small cells.
Q. Is there anything unique about Houston that affects your putting up towers and laying fiber in the area?
A. Houston has a terrific, business-friendly environment, and it has been a great partner. We’ve deployed 2G, 3G and 4G and are now in the process of preparing to deploy 5G deployment. The city has played a leadership role in enabling our company and the wireless carriers to smartly and efficiently deploy infrastructure. I would put Houston at the top of the list in terms of long-term thinking and ensuring that companies like Crown Castle have the ability to deploy leading edge technology.
Q. Will 5G find its way into rural areas that are currently underserved by 4G?
A. I think it’s likely that, in the early stages of the deployment, we’ll see the focus of capital investment in major metropolitan areas where there are the most consumers and a greater opportunity for the wireless operators to get a return on their capital investment. But over time, just like with 4G, investment and deployment will move from the more densely populated areas to the less densely populated areas. Wireless technologies are the cheapest, most cost-efficient way to deploy access to data networks. So while initial deployment will likely be centered around more densely populated areas, in time, I think 5G will be in less densely populated areas as well.
Q. Since becoming CEO, in July 2016, what are your goals and have you been successful in achieving them?
A. Our No. 1 goal is to be able to grow our dividend between 7 percent and 8 percent on an annual basis. We’ve accomplished that goal.
Secondly, we want to be a great place to work and our engagement scores and employee satisfaction scores are extraordinarily high. Well over 90 percent of our employees are satisfied or very satisfied with their jobs. We’ve become a great place to work and have been recognized by a number of different organizations which study that.
Lastly, we want to be a good corporate citizen and give back to the community, so a couple of years ago we launched an initiative called Connected by Good which is a company-initiative that involves our improving and enhancing parks across the nation. Parks are a place where people connect normally, reinforcing our business model — connecting people. We believe making sure parks are the best they can be in the communities in which we operate shows our commitment to connecting people and businesses with infrastructure.
Q. What advice would you give to other CEOs?
A. Focus on your customers, be obsessed about delivering for your customers, and make sure that your employees have a great place to work. Shareholder returns follow from delivering for your customers and being thoughtful about what’s best for them. We take that same approach with employees. Focusing on customers and employees’ personal development and career development work together to deliver great results for shareholders.
Q. Would you like to add anything?
A. In closing, we’re really excited about our position in the market, at the leading edge of deployment technology and 5G, and our position relative to the growing need for wireless infrastructure.