Mobile backhaul a pillar in TWCBC’s commercial services
While Time Warner Cable’s fate hangs in the balance, the business services division, which is called Time Warner Cable Business Class (TWCBC), continues to thrum along nicely. Prior to Comcast’s announcement that it wanted to buy Time Warner Cable, Time Warner Cable said in its fourth-quarter earnings report that business services revenue had increased by over $100 million year-over-year.
Time Warner Cable execs also said during the earnings call that their goal was to exceed $5 billion of annual business services revenue by 2018. One of the pistons driving the business services growth at Time Warner Cable Business Class is mobile backhaul. In this Q&A with CED, TWCBC's Thane Storck, group vice president, carrier services, spoke about the history of cellular backhaul, the state of the current market and more opportunities down the road.
CED: When did Time Warner Cable Business Class first start offering cell backhaul services?
Thane Storck: When we elected to get into cell tower we did go through about 18 months of just looking at the opportunity and understanding if our plant was capable of the requirements and planning for how we would scale this line of business. That period started around the mid to latter part of 2004. It was really in 2006 where we stood directly in front of the MNO (mobile network operator) community and the carriers and said “Look, we’re in this to help you; we’re bullish.” So around 2006 is when we really opened the line of business. I believe our first tower went active in January of 2008.
CED: You had to make deals with competitors in other areas, was that difficult?
TS: When you stand in front of the MNO community you are certainly looking at a competitive group. But the requirements, needs and demands that were coming out of the MNO community, and their evolution, were what we really saw as an opportunity. The opportunity we saw further outweighed our ability to walk away from a good partner in the industry. That’s exactly what this has been, just a great partnership.
CED: Who are the customers?
TS: We typically don’t call them by name, but you know them.
CED: Last year TWCBC wired its 10,000th tower, which was an industry first?
TS: In about the mid part of 2013 we achieved our 10,000th tower install. When you start thinking about installing a cell tower, it’s not like bringing an access loop to a building in mid-town Manhattan. You’re typically building to those towers from a fiber standpoint and last year we were slightly over 3,000 total towers installed.
I think at this point we’re north of 14,000 towers installed in our base. But to follow up I still do believe that we were the first cable operator to reach 10,000 towers. When we hit 10,000 we celebrated it for a minute then we moved on knowing the job ahead of us was big.
CED: You mentioned installs in Manhattan, what are some of the challenges in other areas of your footprint?
TS: We’re active in cell tower backhaul distribution in every single one of our operating regions. From Los Angeles to New York, and from Milwaukee to Dallas right across the U.S. we’re active in mobility.
Manhattan is a “vertical market.” Meaning we have to go up to get fiber to where the towers are.
In places like Kansas City, you’re going horizontal. You’re
dragging fiber down rights of way to get to a tower that is sitting
out in a parking lot, a vacant area or, in many cases, the middle of a farm field.
CED: How has the competitive landscape for mobile backhaul services evolved since TWCBC first started serving this sector?
TS: The competitive landscape has widened
significantly in the last five years. When five years ago there were four or five competitive threats bidding on an opportunity, in
many cases today that has tripled, and
I’ve even seen quadruple numbers in the market.
What we find in our competitive snapshots is that a good share of the organizations we compete against have a niche. We made the decision that we would go bullish on every market that Time Warner Cable operated in. But absolutely we see a lot of aggressive competitors that have hit the street and are interested in this business.
CED: What do you see in four or five years in regards to growth opportunities?
TS: There are challenges. There are challenges that are easily overcome with the right assets and planning. One of the challenges you hear about all of the time is spectrum availability and the need to reutilize or employ spectrum as efficiently as possible inside of their networks.
The main discussions right now are about evolving their networks by leveraging concepts in HetNet (heterogeneous networks)and addressing the capacity and coverage challenges in their spectrum with the employment of an integrated small cell strategy.
Above and beyond that is just the thirst for capacity. With 4G, and even into the evolution of the next phase of 4G and ultimately 5G, the capacity demands that are staring the MNOs in the face are strong.
We work very hard to insure that we have enough capacity in our infrastructure to be able to be there for our clients when they tip their scales. Those are the things that when you look at how the market is going to evolve potentially to an underserved infrastructure, the question becomes how do we stay out ahead of it and what advances are available on both sides?
CED: So over the same time frame, how will the services and technologies evolve?
TS: I think it’s logical that you could see the MNOs leveraging more in the area of dark fiber for potentially interconnecting large aggregation sites and the consolidation of MSCs (mobile switching centers) and leveraging regional transit capabilities.
Obviously it’s an operationally sound model and one that gives them the control of the capacity. HetNet does a lot of that where you’re potentially building a dark fiber ring and then filling in the gaps with various different small or micro-based services. For us we’re an either/or. We’re working on serving MNO organizations as a capacity provider and as a strategic thinker
CED: What will happen with pico cells?
TS: Small cell as a service is a big thing. Right now it’s relatively easy to stand at the base of a macro tower and look up 100 feet and say “Yup, there it is.” With small cell it’s going to be a very surgical deployment strategy that is going to be very tied to areas where people gather. Places like town centers and areas of high traffic with high users. The MNOs are becoming masters at understanding where their end user customers are and the types of throughputs they are asking for on their networks.
TS: When you look at small cell as a service there are a couple of components, one of which is real estate. Having the availably and ability to place these small cells in outdoor capacities – it could be a lamppost, it could be on the side of a building, it could be under the awning over the top of a coffee house – is a challenge.
The other challenge that you need to face is power. Power is always going to be a struggle in the deployment of small cell services because of how or where you have to bring that power to. There are a lot of things we don’t know about small cell, but we’re getting there quickly.
CED: We’ve heard about small cell for a while now, when will it take off, and is it more widely deployed overseas?
TS: This is purely my speculation, I see small cell in the domestic U.S. becoming a large part of the MNO network infrastructure over the course of the next two plus years. I think it’s going to be a reality, but it’s not going to be a tsunami effect. It’s going to be more of fixing areas of specific focus before the integration across the entire enterprise. You see a lot of MNOs right now that are just trying to solve their real time problems and leveraging small cell to do it.
I think Europe and even Asia-Pacific are probably deeper in the deployment of small cell given the bigger restrictions of macro capabilities in those geographies. But I’m confident that when I look out at the market small cell is going to be a massive factor for the MNOs to provide the best customer experience.
CED: Where does mobile backhaul stand in the grand scheme of business services at TWBC?
TS: It’s a strong growth engine for our commercial division, which is where the carrier unit reports into. We look at it as a very lifecycle rich opportunity that is going to go through many different advance technology changes. We’re excited about the opportunity.