AT&T's Smith: We can control small cell deployment costs in our wireline footprint

AT&T (NYSE: T) is building out its own small cell network in locations where it also operates a fiber network, an effort the carrier said will help it better understand the small cell opportunity and the costs associated with deployments. AT&T for years has been deploying small cells to improve the coverage, speed and reliability of its wireless network.

Bill Smith, president of technology operations for AT&T, told investors at the Wells Fargo 2016 Convergence & Connectivity Symposium this week that the carrier can control costs by building out small cells in its own 22-state wireline footprint.

"I insisted with my team that we do some of our own builds so we completely understand what those [small cell] costs are," Smith said. "I believe in our wireline footprint, we should be able to do it more cost effectively than anyone else."

AT&T isn't the only telco hoping to use its own fiber footprint to power a small cell deployment; Verizon (NYSE: VZ) has said it is employing a similar strategy as it rolls out FiOS in Boston.

However, Smith said that AT&T isn't opposed to working with third-party suppliers outside of its wireline footprint. The carrier already works with a range of providers to power its distributed antenna systems (DAS) in enterprises and sporting venues.

"Much like we have done with DAS systems in the enterprise and venue space, we have no problem doing this as a neutral host," Smith said. "This is not a religious war, but rather using economic common sense to find the right solution."

Smith added that "outside of our wireline footprint where we don't have the infrastructure that we do in our footprint, I am completely open with having dialogue with third parties, and we're doing that as we speak."

It's no surprise that carriers like AT&T and Verizon are working to lower the cost of their small cell efforts. Research firm IHS Technology recent said that the global outdoor small cell backhaul market is forecast to reach $2.2 billion in 2020, with a five-year compound annual growth rate (CAGR) of 80 percent.

Further, outside of AT&T's wireline footprint, there are a large and growing number of providers that can supply backhaul connections for small cells. Those playing in this space include telcos, cable operators and fiber infrastructure specialists like Lightower, Lumos Networks, Zayo and CS&L.

Indeed, earlier this week CS&L announced it is acquiring Tower Cloud, which has plenty of experience providing turnkey small cell services and dark fiber for the likes of Verizon (NYSE: VZ) and other large wireless operators.

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