How Phoenix Tower is expanding beyond the traditional towerco model

Blackstone-backed Phoenix Tower International boasts a tower portfolio over 15,000 towers, split across 18 markets across the Americas and Europe. Whilst historically having mainly focused on the macro-tower business, Phoenix Tower is expanding into new services and assets and has appointed Scott Lewis into the newly created Vice President of Next Generation Solutions role. In this interview, TowerXchange speaks to Scott to understand Phoenix Tower’s plans to diversify its business. 

 

Phoenix Tower is positioning itself for the next generation of wireless technology. We are broadening our product offering and addressing more of our customers’ needs in infrastructure market beyond towers. As a company, PTI has been successful in the tower space – we have been in the market for 8 years and now have a presence in 18 countries, having grown significantly over that time period.

 

Going forward, our role is clear – we want to invest in adjacent technologies, working with Blackstone, our lead investor.  

We have been involved in providing in-building solutions (IBS) for a number of years. We have been successful in Latin America where we have some preferential relationships with real estate owners and can act as an intermediary to help our customers expand their indoor coverage. In the US we have had success working with Blackstone’s real estate portfolio, and in Europe we have acquired some DAS networks. 

 

Whilst we have been active in the IBS space for a number of years, and it is not a new technology, the way that we approach in-building coverage and capacity, the types of business models in the IBS space are evolving. Going forward, providing IBS will involve more active components and managed wireless networks. The topic of shared radio infrastructure is becoming more important at trade shows and in conversations with carrier CTOs. Carriers are capital constrained and 5G rollout will intensify that further with massive deployments of technologies needing to be deployed. PTI is positioning to help our carrier customers with these opportunities.

 

This creates a significant opportunity for PTI to be the infrastructure and capital partner. MNOs are looking at may ways to monetise 5G and we want to work with them to facilitate economically viable solutions, deepening our relationship and mindshare. 

 

Beyond in-building solutions there are a wealth of opportunities, looking at shared street poles and even shared antenna upon the street poles. With emerging technologies like Open RAN, we can see the model evolving to offer shared radios – it has already been done in Europe but it is challenging to operate. Beyond this, other opportunities include fibre to the cell site or to the C-RAN hub, and there is also the burgeoning field of edge datacenters to explore. 

 

People like to talk about fibre in a homogenous way, whereas in reality, each fibre application is very different. PTI is a wireless infrastructure owner, we like the model of owning assets and those assets serving multiple customers over a long period of time. This is why towers and IBS are so appealing to us. 

 

Where fibre has those characteristics and offers exclusivity and a first mover advantage, we’re interested. Would we want to overbuild speculatively for FTTH applications? Probably not. Would we want to build a dedicated fibre network in a city for MNOs (with a lead operator) and public Wi-Fi applications that coincides with the development of a small cell or DAS network? Well those economics start to look more like the economics of a tower. 

We have strong relationships with our anchor MNOs and so where the opportunity arises, we will look hard at the existing infrastructure – such as fibre and datacenters – and where there could be an opportunity to monetise. 

 

Another first step is in-building solutions where we have relationships with real estate providers and then we will look into the densification of the urban environment, deploying small cell poles. 

 

Edge datacentres and the notion of owning resources where you can house computational processing, get spoken about a lot. The concept is, however, still very unclear. I have spent a lot of time meeting with the OEMs that supply and manufacture edge data centre facilities, and we have been speaking to our customers about their needs, but it is still too early for PTI to say where we will play. 

 

Certainly, there is an interest in building or acquiring such assets that share similar characteristics with towers – serving multiple customers (although in this instance, not necessarily MNOs) with some kind of preferential or protected arrangement. But I think it is fair to say that we see opportunities in edge computing as some of the furthest away opportunities that we could explore.

 

The 5G private network ecosystem is very active, and at Mobile World Congress I must have seen probably about 20 different stands with different private equity backed companies talking about how to service private networks. Even the big OEMs like Huawei, Ericsson and Nokia are in that space, providing end to end solutions from the SIM to the core network. 

 

PTI and our investors have a lot of interest in the private network space and we are actively looking into the role that we can play. Currently, I am of the opinion that, for enterprise applications, the opportunities are still very niche. When you look at more industrial segments such as manufacturing, this is where you see more commercial success. The model also becomes more attractive and more marketable when cellular licenses come along with it.

 

When it comes to the opportunities in facilitating RANsharing, it is a particularly interesting space. It is possible to do this today under 3GPP standards, but Open RAN architectures are really going to change things. We have already started to see the winds of change with Open RAN adoption, for example with Dish in the US rolling out their network based on OpenRAN technology.  Going forward, this is going to be a very interesting area to study. 

It varies country by country and operator by operator. When it comes to outdoor small cells for example, we see some opportunities emerging in Ireland, in Dublin specifically, and in France PTI have significant plans to help densify networks for 5G. In Central and Latin America we have seen keen interest from our customers in a few cities where there have been difficulties placing macro-sites for aesthetic reasons. In the US there is demand for outdoor small cells, and we are participating where we have a strong real estate position where one of our customers needs a site. 

 

There are differences between regions in terms of the maturity of markets, for example, it is very early days for 5G in Latin America but there are lots of opportunities to densify 4G networks with high levels of subscriber penetration. Plus in CALA in particular, we have found that with IBS there is still a lot of passive infrastructure and it is extremely price sensitive compared to other regions. 

PTI has been very successful in acquiring assets in the past and so there is no reason why we wouldn’t consider the strategy when it comes to new types of assets and service lines. It is likely that our strategy will be a bit more dependent on organic growth than it has been in the past. IBS, for example, is a very organic growth business. It is not common for large portfolios of IBS to come to market, and whilst we saw one large transaction close last year, that kind of deal is infrequent. 

Scott Lewis will be speaking at the 6th Annual TowerXchange Meetup Europe, taking place on 17-18 May 2022 in London. For more information, please visit https://meetup.towerxchange.com/europe