ExteNet Systems, which builds distributed wireless networks, owns more than 245 fiber miles in Manhattan as part of the company’s effort to supply backhaul connections to its distributed antenna systems, small cells and other distributed wireless networks. And that’s only a small part of the company’s overall fiber holdings.
“There seems to be a perception ExteNet does not own much fiber,” Wells Fargo analyst Jennifer Fritzsche wrote of the company in a recent research note to investors. “We disagree with this view and the company confirmed even outside of NYC it owns 99% of its fiber. This is not only in top NFL cities but also in Tier 2 type markets.”
When questioned by FierceTelecom, however, ExteNet declined to provide details on its nationwide fiber holdings. ExteNet’s interest in owning fiber nonetheless underscores the importance of fiber connections in wireless operators’ efforts to densify their networks with small cells and other technologies. Indeed, T-Mobile CTO Neville Ray recently announced that the nation’s third-largest wireless operator currently operates 15,000 small cells around the country, with plans to activate another 25,000.
In her tour of ExteNet’s small cell efforts in New York City, Fritzsche noted that “each of the Big 4 carriers is actively putting their money where their mouths are in densifying their networks. We believe this densifying ‘tide’ is lifting all small cell ‘ships’ and is also likely benefiting both [Crown Castle] and Zayo.”
(It’s worth noting that Sprint last year touted its deployment of 200 small cells in Manhattan that the carrier said boosted its median download speeds by 43% and its median upload speeds by 56%. ExteNet Systems was the vendor for that small cell deployment.)
Indeed, ExteNet isn’t the only small cell vendor keen to own fiber. Cell tower company Crown Castle purchased privately held Wilcon earlier this month for approximately $600 million from Pamlico Capital and other unit holders, a move the company said would enhance its dark fiber capabilities in California for small cell backhaul. Wilcon has built a fiber services arsenal of about 1,900 route miles of fiber, mostly in Los Angeles and San Diego. Upon completing the proposed acquisition, Crown Castle will own or have rights to more than 28,000 route miles of fiber.
And that’s just Crown Castle’s most recent fiber purchase. In the past two years, Crown Castle purchased three fiber operators: FiberNet, Sunesys and 24/7 Mid-Atlantic.
Vendors’ small cell buildouts—and their related interest in owning the fiber connections to those small cells—come as the wireless industry moves toward 5G technology, which many believe will rely heavily on small cells. “From an industry wide perspective, the demand for small cells remains quite strong. What is unique here is it is coming from ALL carriers,” Fritzsche wrote. “This is a difference from past years you would see one carrier spend and then others pull back given capital constraints or other internal issues. As carriers learn more about 5G and the need for fiber and small cells in this 5G architecture, it seems their urgency has only continued to build.”