The deployment of VoLTE and the refarming of PCS spectrum (as well as the deployment of the AWS spectrum) are key initiatives for the U.S. wireless industry that could potentially result in $28 billion to $30 billion in business for American Tower over the next few years, according to the company's CEO.
Speaking at the 2016 Citi Internet, Media and Telecommunications Conference last week American Tower President and CEO Jim Taiclet said that VoLTE requires a stronger signal strength than circuit-switched voice and therefore operators must increase their network density with smaller cell sites.
At the same time, U.S. operators are also refarming their 1.9 MHz PCS spectrum and incorporating AWS spectrum assets into their networks, which also is resulting in the need for more cell sites. "Most of the traffic is on the 700 MHz low-band spectrum. But as you go up the spectrum ladder the cell radius will get smaller," Taiclet said. The move to higher spectrum, coupled with the deployment of VoLTE, Taiclet said, could result in an additional $28 billion to $30 billion in business over the next few years for the company.
Taiclet also said that while the company is hopeful that FirstNet, the first responder network that is currently in the planning stage, will result in additional business for American Tower, he believes there is still too much uncertainty surrounding the project for his company to count on that business. "FirstNet is coming and it's funded. There is an RFP [request for proposal] coming out. But there's a lot of uncertainty around it until we see the economics," he said.
Interestingly Taiclet also said that American Tower has about 300 distributed antenna systems (DAS) in the U.S. and while DAS and small cells are an important business for the company, they only make up about 3 percent to 4 percent of the company's revenues. "Macro tower is the first choice and where we experience the best economics," Taiclet said. "We are first and foremost a tower company."
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