Cincinnati Bell says small cell backhaul opportunities are slow, but it's prepared

Nokia small cell
A small cell fixed wireless point. Image: Nokia

Cincinnati Bell is in a good spot to serve as Cincinnati’s lead small cell backhaul provider, but the telco admits that wireless operators’ progress has been slow.  

Leigh Fox, COO of Cincinnati Bell, told investors during the UBS 44th Annual Global Media and Communications Conference that the service provider will be ready to respond to growing small cell capacity deployment needs as they come online.

“We effectively own a small cell network in Cincinnati and we have already negotiated with 48 municipalities on what that looks like,” Fox said. “We have relationships with all of the power companies and have wireless talent.”

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RELATED: Cincinnati Bell's Torbeck sees growing potential in small cell backhaul

Like other wireline providers that offer fiber-based backhaul, Cincinnati Bell was under the impression that there would be a large cycle of small cell investments, but it has not seen much investment apart from working with one operator.

Cincinnati Bell has built out a small cell network of 200 sites with one large wireless operator, with a target to scale the network to a total of 250 sites.

“I don’t know if those conversations have increased and there’s one provider where we do a lot with and they seem to be on the forefront on what’s happening in our area,” Fox said. “We see a little bit from the others, but no real tactical movement.”

Driving turnkey solutions

While Cincinnati Bell sold off its wireless business to Verizon in 2014, the service provider retained the engineers that ran that network.

By retaining this engineering crew, the service provider can not only provide wireless operators the necessary fiber to backhaul their traffic, but also a set of turnkey site services, including maintenance and site surveys.

“We’re very well positioned given our history running a wireless network and running a telecom network,” said Andy Kaiser, CFO of Cincinnati Bell, during the UBS event. “The carrier we work with and the other wireless carriers we talk with like that a lot because it’s largely a turnkey solution for them and they can negotiate all of the stuff is very difficult.”

What has held up wireless operators’ small cell deployments are issues with the technology and getting necessary rights of way and permits. Its main small cell customer has continued to see delays with rolling out small cells, for example.

“The contract with the carrier that we won thought it would be a 12 month contract and it has taken three years,” Fox said. “They had ran into difficulties they did not foresee.”

As Cincinnati Bell moves forward with its small cell backhaul plans, equipment vendors like CommScope will also benefit. The vendor plans to release a new small cell product in the first quarter of 2017.

During the Barclays Global Technology, Media and Telecommunications Conference, CommScope said it expects “fiber growth to continue to outpace that of wireless over the near-to-medium term given the amount of pent-up demand for fiber.”

Marco tower revenue headwinds

Today, Cincinnati Bell provides fiber and other services to roughly 70% of the 1,100 cell towers in its region. While it sees potential growth in small cells, Cincinnati Bell continues to face revenue pressures from its traditional tower backhaul business.

This is due to the telco’s wireless operators migrating off of TDM-based circuits to fiber-based Ethernet.

“Due to ongoing grooming and regulatory pressure, we’re seeing some revenue decline and that does not mean that downstream 5G rollouts that does not become an opportunity for us,” Kaiser said.

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