In February of 2016, Cisco published The Cisco Visual Networking Index (VNI) Global Mobile Data Traffic Forecast Update, a white paper that they refer to as “an ongoing initiative to track and forecast the impact of visual networking applications on global networks.”

According to Cisco, “visual networking is where streaming video, high-speed networks, and interactivity come together to give you a richer experience. Using video to communicate, share or receive information over the Internet,… Visual networking combines social networking with high-def video. It is video chat, video on demand, video messaging, online video, Internet TV, and so much more.”

This white paper updates Cisco’s forecasts of the growth and demand for data over mobile networks, worldwide over the next five years. Admittedly, parts of this technical document are a bit heady; however, the findings that are noted are pretty interesting. Especially, when you consider that the wireless infrastructure industry must keep up with the demand for more underlying infrastructure for our customers as they race to keep their networks up to speed with the demand for anytime/anywhere data and video.

The following are some astounding statistics from the VNI forecast that got my attention:

1. Global Mobile Data Traffic Growth

In 2015 – Global mobile data traffic grew 1.7-fold, or 74%.

By 2020 – Globally, mobile data traffic will grow 8-fold from 2015 to 2020, a compound annual growth rate of 53%.

2. Global Mobile Data Traffic Growth in Exabytes Per Month

In 2015 – Globally, mobile data traffic was 3.7 Exabytes per month in 2015, the equivalent of nearly a billion DVDs each month or 10 billion text messages each second.

By 2020 – Globally, mobile data traffic will reach 30.6 Exabytes per month by 2020 (the equivalent of 7,641 million DVDs each month).



3. Global Mobile Data Traffic Compared to 2010

In 2015 – Globally, mobile data traffic in 2015 was equivalent to 15x the volume of global mobile traffic five years earlier (in 2010).

By 2020 – Globally, mobile data traffic by 2020 will be equivalent to 120x the volume of global mobile traffic ten years earlier (in 2010).

By any measure, the amount of capacity needed to support users’ needs of mobile data will continue to grow substantially, and the builders and managers of networks, mobile and fixed, need to have a plan.

4. Global Mobile Data Traffic Offload to Wi-Fi or Femtocell

In 2015 – Mobile offload exceeded cellular traffic for the first time in 2015. Fifty-one percent of total mobile data traffic was offloaded onto the fixed network through WiFi or femtocell in 2015.

By 2020 – 55 Percent of Total Mobile Data Traffic Will Be Offloaded to WiFi or femtocell by 2020.

Although the percentage is not that large, the takeaway is that Wi-Fi is, and will continue to be, a key component of mobile data traffic, and how Wi-Fi is integrated with the cellular networks is crucial to a good end-user experience.

5. Global Mobile Video Traffic

In 2015 – Mobile video traffic accounted for 55%–more than half—of total mobile data traffic in 2015.

By 2020 – 75% of the world’s mobile data traffic will be video by 2020.

This is an indication that video already is and will continue to be a huge driver of the need for adequate capacity in networks

6. Global Wearable Devices

In 2015 – Globally, 97 million wearable devices (a sub-segment of the machine-to-machine [M2M] category) in 2015 generated 15 petabytes (1 petabyte equals one quadrillion bytes) of monthly traffic.

By 2020 – Cisco estimates that there will be 601 million wearable devices globally.

Wearable devices typically do not have embedded cellular, but rather connect to the mobile network through an accompanying smartphone. Thus while the direct impact on mobile traffic will come from the smartphone itself, a 6X growth in wearable devices is a strong indicator of how innovation drives new uses and increased demand for bandwidth.


What does it matter if a bunch of statistics confirms historical growth and projects a lot of future growth?

Md7 operates in the wireless infrastructure space. The data that has grown, and is going to continue to grow, is transmitted over the very wireless infrastructure that we help build and support.

“Working without a net” is an expression denoting high risk for the user. With the historical and projected increases in demand and usage, working without an adequate internet (or a struggling mobile internet) may pose high risk for the user and the provider. If our customers’ customers (wireless subscribers of the network operators) are going to continue to use more video and buy more smart devices that consume more data for longer periods of time, then we will need to continue to innovate and develop new, faster and less expensive ways then ever before to help grow networks to keep up with demand.




The advent of the Ultra HD TV combined with the high cost to attend a major sporting event has drawn millions away from the stadiums and arenas to watch their favorite teams at home or in sports bars.   Now in response, many venues are getting savvier about wireless technology and smartphone apps in an effort to offset this trend.

Personally speaking, it started several years ago when I paid a lot of money for poor seats, parking and low quality concession food to watch an NBA game where Shaquille O’Neal didn’t even hustle back on defense. Over time, I found myself upgrading my TV and watching more games at homes. I also have discovered it is a lot of fun to watch my favorite team with other likeminded fans in a sports bar where I can watch several TVs, as well as have food and beer brought to my table.

And now, watching a game is becoming a multi device experience. We watch the game on TV while we use our phones, tablets and laptops to look up stats, track scores, tweet comments and monitor our fantasy teams.

But the venues are getting smart and beginning to counter with some attractive features to get us back in the seats.   For example, stadiums have been working to improve the food quality by offering food such as local BBQ or sushi. Stadiums have also worked to increase service by delivering food to your seat within the venue. And the cellular operators are significantly upgrading their networks in and around the venue while the stadiums are enhancing their own Wi-Fi for fan use. Additionally, stadiums are developing apps to enhance the fan experience. These apps manage ticket and parking access, allow you to order food for delivery to your seat and/or express pickup and also offer HD instant replays of the action.

The biggest challenge these stadiums face is keeping up with the fans’ demand for wireless data, which can substantially impact the overall fan experience.

It is estimated that the amount of data traffic consumed at the Super Bowl doubles every year. This year, the four major carriers are reporting that the fans in Levi Stadium in Santa Clara, California for Super Bowl 50 used a combined 15.9 terabytes on their networks and we are still waiting for numbers from the stadium Wi-Fi.[1] These early reports already indicate that this will double the data consumed at Super Bowl XLIX in 2015 at the University of Phoenix stadium in Glendale, Arizona, where fans used 6.5 and 6.23 terabytes of data between the four major carrier networks and the stadium Wi-Fi respectively. This essentially doubled the 2.5 TB of cellular and 3.3 TB of Wi-Fi consumed in 2014 at Super Bowl XLVIII in MetLife Stadium in New Jersey.[2]

While the typical sporting event does not consume anywhere near 15.9 TB, having adequate bandwidth in and around a stadium certainly impacts the fan experience.

Personally speaking I have experienced both poor and excellent in-stadium connectivity. I have attended some regular season college football games in campus stadiums where I could not even get a simple text to go through to ask if my wife if she wanted a soda while I was in line at concession.   What was really annoying at each of these stadiums was that I knew other people who subscribed to a competing cellular carrier and had no issues. One was even streaming video of another game on the other side of the country.

On the good side, I experienced fantastic connectivity at the University of Phoenix Stadium in Glendale, Arizona while attending the College Football Playoff National Championship game in January of this year. Since this was the same stadium that hosted the Super Bowl in 2015 I had high expectations, which I am pleased to say were exceeded. I was able to upload photos and short videos, participate in group chats with other friends in the stadium and even did a video call (albeit a bit choppy) with my son who was watching the game at home and was very excited about the outcome of the game.

As host of the most recent Super Bowl, Levi’s Stadium in Santa Clara is most likely the premiere venue in the world for wireless deployments. The stadium is divided into 40 coverage zones with 400 antennas (many under the seats by fans’ feet) and 450 remote radio units. The stadium also boasts its own Levi’s Stadium app. However I can only assume it will soon be eclipsed by NRG Stadium in Houston, Texas when it hosts Super Bowl LI in February of 2017.

So, the thousands of folks in the wireless infrastructure industry have done a great job of enhancing the fan experience inside some of the large sports venues. But not every stadium can deliver this superior connectivity. It is simply too expensive to put millions of dollars into every stadium and arena in the country.

And this combined enhanced experience of nicer stadiums, better food and high bandwidth comes at a cost to consumers. Meanwhile, the increased quality of TV’s combined with the comforts and food in homes and favorite sports bars gives us an equally enjoyable experience without fighting the crowds.

In my opinion, there is nothing more exciting than the atmosphere at a live game, but sitting in front of a TV with friends and food where I can get commentary to go with each play provides a better viewing experience. I guess I am still undecided.

[1] Mobile Sports Report, February 2016 –

[2] Mobile Sports Report, September 2015 –

T-Mobile’s John Legere – The UnCEO

Eight Months ago, I tweeted that I “like the pair that John Legere (T-Mobile CEO) has on him”.

The T-Mobile Super Bowl ad yesterday just confirms it.




In his keynote address at CTIA 2015, Wikipedia founder, Jimmy Wales told a humorous side story about the name “Wikipedia” somehow getting mistranslated into menus at Chinese restaurants (see the included photo).

Stir-fried pic 3


Next time I am in Beijing I’ll be sure to sample one order of the “Stir-fried wikipedia”, the “Stir-fried wikipedia with pimientos” as well as the “Fried special wikipedia” from the menu in the photo. I have no idea what I’ll get but I think I can muster up the courage to give all three a try.

Wikipedia, the web-based, free, editable encyclopedia, contains over 35 million articles written/edited by over 70,000 online contributors in 290 different languages.
So, as Wales tells the story, when he asked a team of Wikipedia’s contributors in China how this could have possibly been mistranslated, they collectively came to the conclusion of “we have no idea”.

A blogger named Jim Benson notes what he describes as a plausible etiology:

“Hey I’m making the new menu, what’s the English name for those flat crispy mushrooms?”
“Um, there isn’t one.”
“Well what should I put down here?”
“I don’t know, look it up in Wikipedia.”

I argue that Mr. Benson’s theory is as good as any. However, it doesn’t explain how other restaurants came up with a similar mistranslation since the one he ate at is not the only one with this mistranslation.

Another blogger, Mark Liberman also calls out a mistranslated use of the name Wikipedia – “barbequed congo eel with wikipedia and Fermented bean curd.” While it sounds like a great deal at only 68 Yuan, I simply don’t think I am adventurous enough to try an order of “congo eel” even if this place makes the best tasting “wikipedia” in all of Beijing. I don’t order eel sushi and I am not going to order “congo eel” either.Stir-fried pic 1

Blogger Chris Leo posts others that are funny too – the following are my five favorite. However, you can use Google to find a several more side-splitting translations, but beware, many contain vulgar language.

  1. “Chicken without sexual life” – Tong Zi Ji 童子(do you mean virgin chicken?)
    (Proper English translation should be “Spring Chicken” or “Poussin”/”Coquelet” in French). They refer to young chickens which have been bred for eating (for less than 3 months).
  2. “Red burned lion head” – Hong Sao Shi Zi Tou 红烧狮
    (Proper English translation should be “Freshly Stewed Pork-balls”) – note that it’s actually pork, but the fact that it looks like lion head, that’s why it’s called Lion Head (shizi tou) in Chinese. But in English, it would really be misleading if people mistake it as lion meat.
  3. “Husband and wife’s lung slice” – Fu Qi Fei Pian 夫妻肺片
    (Proper English translation should be “Spicy Pork Lung-slice”) – it’s a Sichuan food.
  4. “Government abuse chicken” – Gong Bao Ji Ding
    (Proper English translation should be “Chicken with Cashew Nut” or as it is known in the west, simply, “Kung Pao Chicken”). It’s actually a Chinese food of Shandong origin, but is often mistaken as a Sichuan food as it’s quite spicy. I don’t know its historical origin, but there must be a history anecdote that leads to why it was literally named “Court Abused Chicken”.
  5. “Bean curd made by a pock-marked woman” – Mapo Doufu 麻婆豆腐
    (Proper English translation should be “Bean curd with spicy minced pork”) – it’s a Sichuan food.





In October of 1984 I had just begun my senior year of high school in Tuscaloosa, Alabama and Ronald Reagan was running for reelection against Walter Mondale. President Reagan came to the University of Alabama on a campaign stop and I had the opportunity to hear his remarks.

I was one month under the voting age of 18, but more importantly to me, I was thirteen months under the old legal drinking age of 19 in the state of Alabama and now, thanks to President Reagan, I was 37 months under the newdrinking age of 21.

Reagan had recently signed a law that withheld federal funding for highway construction from states unless they had a drinking age of 21 so Alabama and several states raised the age to 21 to get the money. This law immediately added two loooong years to my desire to legally consume cheap beer in a can.

While at the time, I certainly was not very knowledgeable of the Tenth Amendment to the U.S. Constitution, I do know that Reagan had often spoke against the intrusion of the Federal government in matters belonging to the state and local governments. So I, of course, considered him a hypocrite for forcing the states to change their own laws.

President Reagan changed my mind with a response that he gave to a college student who asked him about this issue in a question-and-answer session following his speech. Reagan replied “…when we saw the difference in areas where the drinking age had been increased and the difference in the accident rate, that I just thought that your lives were worth it.”

On that day; with that simple, unrehearsed, well delivered statement the “Great Communicator” convinced me that waiting two more years was a good idea and I never complained about it again.

[See the entire exchange between President Reagan and the student in the inset included herein.]


You may have seen one of the many recent articles in the news that addressed the reduction in the number of drunk driving related deaths in cities after the introduction of Uber – the Ride Sharing service that works through an app on your smartphone. Articles appeared in a variety of publications across the political spectrum such as Newsweek, theLA Times, The Daily Beast and Fox News. Each of these articles is based on a study by Brad Greenwood and Sunil Wattal of Temple University where the authors note “we find a significant drop in the rate of (alcohol related vehicular) homicides after the introduction of Uber.”

The coupling of Uber’s disruptive technology with the company’s labor practices has made the ride-sharing app quite controversial. Uber has severely dented the market share of traditional taxi services despite the fact that Uber drivers are considered self-employed contractors rather than employees, thereby receiving no benefits such as health insurance.

A class-action lawsuit over Uber labor practices is playing out in California and protests have risen across the globe including one in France that forced Uber to suspend its service in order to protect its drivers from violent attacks.

Love or hate Uber, there is no denying that the company has rocketed from a start-up in March of 2009 to company which the Wall Street Journal notes as having a valuation of over $50 billon (yes that is a “b”).

I acknowledge that I am a fan of the Uber business model. I have used the service several times in many cities and compared to traditional taxi services I have had friendlier drivers, cleaner cars, faster pick-ups and no body odor issues.   But even if I weren’t a fan, the aforementioned news articles would sway me to support Uber for a single reason.

Just as I heard Ronald Reagan say over thirty years ago, “… lives are worth it.”


The following is an excerpt from the transcript of a question-and-answer session between President Reagan and students at the University of Alabama regarding the legal drinking age. – October 15, 1984

Q: Good morning, Mr. President. Welcome to the campus. I’m Ed Howard from Birmingham, and I’m representing the Crimson White—that’s the campus newspaper. And so, our question for you is concerning the legislation that you signed into law that requires States to raise their legal drinking ages to 21. Why is this action not a contradiction of prior stances you’ve had against Federal intrusion in the State matters? And if it’s a justifiable contradiction, does that now mean that the ends justify the means?

The President: I have to tell you that you’re absolutely right, that my concern was over—having been a Governor for 8 years—this intrusion that I’ve been trying to eliminate since I’ve been President of the Federal Government. But in this particular instance, there was a tangled question with regard to State borders—and interstate type of thing where some States with one drinking law, and the others not-and then you had the traveling across the State line to where it was available, and then driving back, sometimes intoxicated and the great loss of life that the accidents that we’re having because of that.

And I had to say finally that in this instance and with the kind of gray area that was there, I had to say that the—when we saw the difference in areas where the drinking age had been increased and the difference in the accident rate, that I just thought that your lives were worth it.




The following is an updated and slightly revised article that was originally published in AGL Magazine in April of 2009. Since the fundamentals of Supply and Demand are timeless and the wireless industry is even more competitive than it was when originally published, we thought this information was worth sharing again.


Everyone wants to get paid what they’re worth.

Whether it’s based on principle or pride, it absolutely galls us when someone else gets a better deal, or we lose out to someone who undercuts our asking price. While we steadfastly hold something’s worth as an absolute, we have often come to this determination by a subjective, mind’s eye calculation of what is commonly referred to as “the going rate.”

For cell site landlords, the determination of worth goes something like this: “My buddy is making $1,850 a month on his cell site lease and my site is in a much better location than his so I should be getting $2,000.”

Landlords are often irked and even angered when they are told that’s not the rate that the tenant wants to pay. They think they’re getting duped. They don’t understand why this tenant is not honoring the going rate. And therein lies the problem: never confuse the “going rate” with the “market rate.” The last house to sell on my street in San Diego almost a year ago has nothing to do with what a different buyer will pay for my house today.

The real market rate for cell site leases is not what another tenant paid down the street. In today’s business environment, it’s what the competing potential landlord across the street will accept. Thanks to a flattening industry growth curve, carriers’ escalating operating costs, the public’s voracious appetite for bandwidth and the network’s evolving engineering requirements, cell site leasing has become a competitive marketplace.



For years, it has been said that the going rate for a cell site lease is roughly $1,800 to $2,100 for space on a tower or rooftop and $500 to $600 for ground space to build a tower. Obviously, this varies widely depending on a downtown Manhattan location vs. rural farmland. But this dollar amount represents the “average rent” that tenants have been willing to pay over the last several years in a market where speed and coverage were a carrier priority, the high costs of which were off-set by an ever-increasing number of subscribers. With subscribers now reaching market saturation in tandem with escalating operating costs to meet technology demands, carriers are reevaluating their expenses and what they’re willing to pay for their cell site leases. Add to that new technology and network evolutions that have redefined “the best site in town,” and you’ve got a new model that will change the business of cell site leasing. This dynamic is slowly but surely redefining what is market rate rent.



Let’s refresh on how “market price” is determined. Market price is the price of a product or service as determined dynamically by buyers and sellers in an open market. Thinking back to Econ 101, it is simply where the demand curve intersects the supply curve. As the desire for goods increases while the supply of goods holds constant or decreases then the price for those goods rises (Exhibit 1). Conversely, if the desire for goods holds constant or decreases while the availability of goods increases, then the price falls (Exhibit 2).


Exhibit 1


Exhibit 2

In cell site lingo, if a potential tenant really desires a cell site and there is only one potential location for that lease, then the rent will increase. And if that tenant’s desire holds constant or decreases while the potential options for cell site locations increase, then rent will decrease.

The anatomy of the cell site network is rapidly changing to accommodate a progression in services that started with voice communication and now includes email, photos, music, video and more. This network evolution has redefined what “the best site in town” looks like, which dramatically affects the supply-and-demand formula of lease rates.


While one might think the Empire State Building may offer great coverage of Manhattan, it is actually not a useful cell site because a single site that high will not be able to handle the millions of calls made each day in New York. Obviously the best way to cover Manhattan is through several sites, much closer to the ground and spread throughout the city. Additionally, more cell phone users and more varied applications now require a greater bandwidth, which further increases the need for sites closer to the ground. Instead of one mountaintop site covering lots of users, carriers piece together lower elevation sites to accommodate greater bandwidth requirements necessary to meet technology demands. In other words, the average Rad Center is decreasing. As sites come closer to the ground and closer to each other, carriers are less particular about their location. This flexibility combined with an increasing ability to use non-typical cell sites (such as light poles) creates a competitive environment that drives cell site rents down.



In negotiating leases on behalf of tenants, the most common response we at Md7 hear is, “Another carrier just paid $X down the street so I want at least $X.” But the variables of site selection are unique to each site and situation.

Historically, tenants have focused on quick deals for “must have” locations as determined by radio frequency needs, rather than good deals. This has resulted in short-cutting the negotiation process which determines the market equilibrium. The saying “you want it bad, you get it bad” characterizes the situation carriers have created for themselves – over-inflated rents. Carriers are now beginning to manage their real estate assets with the same savvy indicative of corporations focused on maximizing their investments and minimizing their operating costs.

As a landlord, what can you control when it comes to your cell site? Site selection is based on a number of factors that tenants consider when determining sites to include in their network:

Constructability – Is the land or rooftop viable for developing and maintaining a cell site?

  • Zoning/Permitting — Will the tenant be able to obtain the necessary zoning approval and permits for site development?
  • Access – Is the location reasonably accessible for the development and ongoing maintenance?
  • RF Coverage — Will the site provide the desired coverage?
  • Rent — How much will the landlord charge?

Of all these variables, the only one you can control is rent. And to win, you may need to reconsider your perception of the “going rate” — especially when there are other sites in the search ring that are competing for the carrier’s business. Not to mention the fact that carriers are coming to terms with the fact that they have to live with this site for a long time and they’re willing to negotiate it correctly upfront. Remember that in a dynamic market, the market price is what BOTH parties will accept. What’s the guy across the street willing to do? Will you let him steal your deal? Will you put yourself at a competitive disadvantage by clinging to an outdated understanding of the going rate?

As one tower landlord told us when he saw a surveying crew staking out a site on his neighbor’s property, “I would have to look at that tower every day on my neighbor’s property, so I might as well do what it takes to get it on mine and get paid for it.”

The new realities in the wireless market place are putting more pressure than ever on what carriers are willing to pay each month. And both sides of the cell site negotiating table are much more aware of the need to negotiate hard for good rents. Let’s be smart with each new and or modified lease we touch.




Traditionally, wireless operators would build cellular networks that covered the overwhelming majority of the places that their subscribers live, work and visit while these same subscribers would frequently switch to private Wi-Fi networks at home, coffee shops, hotels and other places to lower their data charges or when the cellular network was congested. There were few in-building “cellular” systems.

The occasional exception would be a third-party Distributed Antenna System (“DAS”) system in a stadium, arena or other large venue such as a shopping mall that was installed and managed by either an operator, a venue owner or a third party that charged operators access to the DAS.

However, the exponential increase in demand for wireless data is now causing this traditional model to evolve. Cellular operators are racing to deploy DAS systems in large venues as fast as possible but these systems are expensive, often well in excess of $1 million. While this capital outlay makes sense for a Super Bowl stadium, campus environments or other high profile facilities, the economics simply do not work when scaled across multiple facilities, particularly office buildings and multi-family residential. And, while the still developing metro-cell and small-cell technology will make many more deployments more economical, it is still not yet serving as a single solution for all facilities that are beginning to have capacity issues. The economics of a small cell system are not yet fully developed but it is becoming apparent that it will work in some, but not all, buildings. And even if it did, the operators simply cannot build out every sports arena, concert venue, hospital, hotel, tourist area, office building (both large and small) and apartment complex in time to keep pace with demand.


Generally, the facilities that need in-building coverage fall into four categories.

  1. Large venues such as stadiums arenas and campus environments.

As mentioned above, there are certain venues that wireless operators are just going to build-out such as a football stadium that is hosting the Super Bowl. While it is not accurate to say that cost does not matter in a venue of this type, carriers are going to spend what is needed to make sure they have the capacity needed to make events at these types of venue seamless. There is no way a major operator that often sponsors events at stadiums and arenas is going to let tens-of-thousands of customers have a negative experience due to lack of capacity in an arena where they often even own the naming rights.

These are covered with a neutral host DAS. One carrier or a third party will build out the DAS with other carriers joining to share the network with some sort of cost sharing or other financial arrangement.

DAS networks of these types are common in facilities ranging from large stadiums and arenas to large office buildings and shopping malls.

Who Pays: – Typically the cellular operators pay either directly or through a recurring payment to the owner of the DAS system. However, some venues still have their own self-funded Wi-Fi installed as well.


  1. Large and medium-to-large buildings.

One step below the large venue, where providing enough capacity is a business necessity, are large hotels and office buildings where operators certainly would like to offer in-building coverage but simply may not have the time and/or budget to get to all of them. They will get to them if and when they can.

The challenge with buildings of this nature is that there are just so many of them. The owners and operators of these buildings realize they have capacity issues that may be affecting their customers and tenants.

Operators that are facing capacity issues do not need to build them all at this time. If an operator is having capacity issues in a particular area of town, they can build out a handful of in-building systems in the area and thereby reduce capacity on the macro network. The remaining buildings will need to either survive off of the existing macro coverage and/or install their own private Wi-Fi system.

Some of these buildings may in fact be large enough to justify a DAS installation. Others may be good candidates for the rapidly evolving small cell systems that can be installed for less money. But if the building owners know they need to improve connectivity and have no visibility into an operator’s build plan, they may opt to take measures into their own hands by developing a more robust, private Wi-Fi network.

They are faced with either waiting for the operators to come or building it themselves. And in a world where connectivity is now the fourth utility, they are finding it harder to wait.

Who Pays: – The operators do in some cases; the building owners do in others.


  1. Medium and small buildings

This category includes medium to small office buildings, apartment complexes, retail, restaurants, etc. They are starting to see the need for connectivity beyond that provided by the traditional macro network.

For example, the Md7 office in San Diego is on the third floor of a three story, 75,000 square foot building that overlooks the I-5/I-805 “merge” with 10 lanes of traffic. We are also next door to an apartment/condo complex with several hundred units that were recently constructed. We have seen a significant drop in bandwidth in the last year but our building is simply not large enough to justify an operator installing a DAS and we are probably several years away from an in-building small cell. Hopefully we will get a few adjustments to the macro sites near by, particularly as the new apartments begin to lease-up. In the meantime, we have to closely manage our Wi-Fi.

A second example is a new, fairly large, trendy restaurant and bar in downtown San Diego that was built in a very old, historic building where there was no 3G or LTE coverage available. While on a recent date night with my wife, the server gladly offered us the restaurant’s Wi-Fi password so we could post and tweet photos of our food and tell the world how much fun our date night was in their restaurant.   Social media is key to driving their business and the new reality is that if people can’t use their smartphone in an establishment, they’ll leave.

While in both of these examples, the renting tenant is paying for Wi-Fi, many building owners are starting to acknowledge connectivity as a utility and are funding it themselves to keep their tenants satisfied.

Who pays: The building owners and/or their tenants.


  1. Residential

In 2009, I bought a new Femtocell device from my cellular service provider. My family had noticed that we had begun having problems connecting to the network and calls were dropping more frequently so I swallowed my pride and paid $250 to solve my carrier’s coverage problem. I expected to get maximum “bars” in my house easily and seamlessly. But my experience was far from plug and play. Actually when I called the carrier’s help desk they said something to the effect of “oh it doesn’t work with data plans yet. You’ll need to turn off the data portion of your Blackberry each time you walk in the house.” I promptly packaged it back up and returned it to the retail store.

Since that time two things have changed, I no longer use a Blackberry and my high hopes for a private femtocell in my home have dissipated. But Apple has solved both of those problems for me. I replaced the Blackberry with an iPhone and my femto with an Airport Extreme. I even solved my extended coverage problem by buying an Airport Express to stretch the Wi-Fi to the back of the house and backyard. I rarely make traditional phone calls at home; I generally text, post and use FaceTime. All of which are easy on my apple devices and free over Wi-Fi.

Who pays: The resident of course.



Wireless operators are obviously enhancing capacity with the largest venues first and then working their way down from there. But it is simply not realistic to expect them to completely underlay their entire macro network with a variety of microsites, aka the HetNet.

Even if they could reach every building, the capital expenditure required would be enormous and the operators already have to learn to operate in a new environment of 100% penetration and intense price competition.

The insatiable demand for bandwidth by smartphone users will not cease.

Building owners need to consider the reality about the new “fourth utility” – connectivity. Whether residential or commercial, tenants and customers within these buildings will continue to demand connectivity and begin to factor it into their decision about where they choose to live, work, shop, eat and all other daily habits.

Connectivity is now an expectation. We need to develop connectivity everywhere and, if not, consumers will begin avoiding the areas that don’t.

If you do not build it, they will not come.





While attending the 2015 CTIA Super Mobility show in Las Vegas, I was once again reminded how great it is to work in the wireless infrastructure industry. While the CTIA show itself is more oriented toward wireless as a whole and includes a lot of things not related to network infrastructure, the accompanying events like the Tower and Small Cell Summit and the annual Raymond James Breakfast Roundtable are great places to huddle with industry colleagues to listen and learn about the latest developments in the infrastructure segment of wireless.

While the first half of 2015 may have been a bit slow and forced us all to closely manage our cash flow as we wait for the operators to rollout the next phase of their network development, there will be another phase, and another one after that.

While eating breakfast at the Raymond James Roundtable titled Chaos, Convergence and Capacity I was reminded that this really is a great industry.   The following simplifies and summarizes my own spin on their event.


Despite the recent volatility in the stock market, the refugee issues in Europe, the turmoil in the Middle East, uncertainty in the Chinese economy and what may be the most realigning election year since 1968, everyone has a phone and everyone continues to pay their phone bill each month. Said another way, the wireless industry does not endure economic cycles in the same way as other industries.


Telecom convergence – the combination of voice, data and video on our smart phones make this a very exciting place to work.

Let’s give ourselves some credit here. None of the cool things we now do on our phones will work without a sound network. And that network would not exist without good site acquisition, A&E, design, construction, EFI, and maintenance. We contribute to some cool stuff.


If everyone is going to continue to pay their phone bill each month despite turns in the economy and our phones are becoming the ultimate do-it-all device then a lot more capacity will be needed on the networks. That means there will continue to be spending on network development. There will be more upgrades and ongoing maintenance on existing network infrastructure.

This means more work for us all, even if we have to live project-to-project.


While the infrastructure segment of wireless may be beholden to the operator’s deployment schedules, the truth is that network upgrades will continue. As Ric Prentiss noted during the Raymond James session, carriers operate in a “keep-up or fall-behind” marketplace and this will continue to drive capital expenditure despite overarching economic conditions.

As far as we can see, we have lots of ongoing work to do.




The first time I was invited to a Women’s Wireless Leadership Forum (WWLF) event by Nancy Winch I had to ask her, “Why are you inviting me?”

I was at the Wireless Infrastructure Show (PCIA) in Nashville at the Gaylord Opryland Hotel in 2009, when Nancy asked if I was attending the WWLF breakfast the following morning. The event featured Anna Gomez, Deputy Assistant Secretary for Communications and Information for the National Telecommunications and Information Administration (NTIA) of the U.S. Department of Commerce (DOC). Ms. Gomez had previously served in the FCC and was newly appointed to the NTIA. She was a very impressive speaker for a group that I had only learned of the day before.

I had not planned on attending, but Nancy is a good saleswoman so she persuaded me to get out of bed very early the next morning, even if it meant I had to put on my suit. It was my own fault that I rolled in too late to get any sausage, eggs and grits.

To my surprise, it was a really good event, and as many men as women attended it.

Okay, WWLF, you got my attention.

Since then, I have met many women in wireless that I respect, like Patti Ringo and Md7’s own Lynn Whitcher. These smart and skilled women, who are also excellent networkers, have helped develop an impressive organization. WWLF hosts educational sessions available throughout the US, which include Lunch-and-Learns, online courses, guest speaker events and one-on-one mentoring programs. WWLF members certainly have a leg up in advancing in their careers.

Additionally, WWLF hosts the best networking events in the wireless infrastructure industry.

I am now a regular attendee at the annual WWLF events at PCIA (The Wireless Infrastructure Show) and at CTIA. Several members of the Md7 team attended the most recent event, which was held on the rooftop of the Cromwell hotel at Drai’s Night Club during the 2015 CTIA Super Mobility week in Las Vegas.

Simply put, these parties are excellent opportunities to meet and see many people in our industry. Each year, I make new acquaintances and catch up with old friends, all while exchanging knowledge and ideas.






Nomophobia – the fear of being out of mobile phone contact.

According to Wikipedia, Nomophobia stands for No Mobile Phone Phobia and is a phrase that was coined in a 2010 study by the UK Post Office which commissioned a UK-based research firm to study the anxieties suffered by mobile phone users.

Setting aside the question of why the postal office spends money on studies of this nature, some of the findings are very interesting.

  • 58% of men and 47% of women suffer from nomophobia.
  • 53% of mobile phone users feel anxious when they lose their phone, have a dead battery or are outside a reliable coverage area.
  • One in two people never cut their phone off.

This study was completed in 2010. Surely in 2015 the iOS and Android devices have only driven these stats higher.

Business Insider (“BI”) published an article that cites Dr. David Greenfield at the University of Connecticut School of Medicine who connected smartphone addiction to dysregulation of dopamine. BI quotes Greenfield as saying, “Every time you get a notification from your phone, there’s a little elevation in dopamine that says you might have something that’s compelling, whether it is a text message from someone you like, an email, or anything. The thing is you don’t know what it’s going to be or when you are going to get it, and that’s what compels the brain to keep checking. It’s like the world’s smallest slot machine.”

Personally, I often experience phantom vibrations on my belt and reach for my phone even when it is not vibrating.

Having my mobile phone at work is a necessity. Not only do the majority of people who call me for work purposes use my mobile number rather than my desk phone, I get countless texts and emails throughout the workday.

Having my mobile phone at the grocery store… well I do use a grocery app for my shopping list and if I don’t  have my phone handy I’ll end up going back to the store because I forgot something on my shopping list-app.

While I am completely capable of putting my phone in airplane mode when working-out or on vacation so I can still use it for music or as a heart-rate monitor without interruptions, I’ll be candid in saying that I feel a little naked if I don’t have my phone with me wherever I am and would probably go back to get it regardless just to keep it with me.




Wireless operators are seeking new ways to navigate through the perfect storm of 100+ percent penetration (market saturation), price competition and the insatiable demand for constant high-speed connectivity. In other words, everyone has a mobile phone and the carriers are in a price war to retain and/or get new customers who have an increasing expectation for the ability to upload unlimited photos and stream unlimited video anytime, and anywhere.

But if carriers are going to be able to supply the bandwidth to meet forecasted demand OTT video, and the many other demands for wireless data, then there will need to be ongoing development of both micro and macro sites throughout the United States.

However, the development and upgrading of traditional macro sites has slowed significantly in the first half of 2015 from the frenetic pace caused by the need to upgrade networks to LTE over the last few years. Also, optimistic forecasts for small cells have yet to be reached primarily because the deployment costs per node do not provide the return on investment required to justify the installations in large volume. Furthermore, most of the major operators paused in 2015 to digest acquisitions, contemplate future financing and restructure their operations to adjust to the new realities in the wireless marketplace.

The latest forecasts indicate that capital expenditure will begin to increase for more cell sites and upgrades over the next few quarters. But it is becoming much more obvious that this rebound in cell cite development of both new and upgraded cell sites must be deployed much faster, more frequently and at lower costs.

Traditionally, site acquisition has been a very inefficient and unpredictable part of the site development process. And because site acquisition is the first part of the process for new and upgraded sites, if a forecast date is missed, the entire construction and installation schedule is thrown out of forecast and out of budget.

The wireless infrastructure industry needs to find ways to streamline site acquisition and make it much more predictable. In other words, new deployment models are needed!


Trying to accurately forecast site acquisition for a new cell site or to upgrade an existing one is almost impossible because the typical functions are completely subject to human behavior and thus highly variable.

This volatility can throw timelines and site deployment cost models into total disarray. Construction Managers and Project Managers need to have equipment and crews scheduled in the right place at the right time and if a lease is not executed or a permit is not obtained, the cost of moving or storing equipment and redeploying a crew can destroy margins.

A number of factors can delay a Notice To Proceed (NTP) such as leasing, zoning, permitting, structural failures, etc.   Often these problems begin to snowball and throw an entire deployment budget out of whack, cost PM’s their jobs and cause heart and other stress related problems – literally.

At the beginning of any project, no one can tell you with a reliable degree of certainty when a given landlord will properly sign and return a lease or lease amendment, how long it will take a municipal employee to review and approve a permit application or zoning request or what the structural pass/fail rate will be on a group of towers – especially now that radios are mounted in the air with the antennas. We no longer operate in the days where a failed structural analysis (SA) just results in a check request. Now a failed SA leads to revisions of the RF Data Sheets to try and meet the load capacity of the existing tower which is much easier said than done and causes further delays. There is more back and forth between site acquisition and RF than I have ever seen in the industry.

One way to eliminate this wasted expense and inefficiency is to forecast more conservatively and thus give a site acquisition team more time to complete their leasing, environmental and regulatory tasks. But let’s deal in reality. Even if a reputable site acquisition vendor develops what they honestly believe to be a sound forecast, there are simply too many unknowns and unforeseeable circumstances beyond their control.

In short, meeting the forecast for NTP’s is difficult at best.



  1. Ready, Aim, Fire!
    Let’s be honest. Deployment projects rarely start on time. Budget approval takes longer than expected, the issuing of PO’s is delayed and RF data sheets are released late and often change. And while the start dates are often delayed, the on-air forecast is rarely extended to accommodate the delays. This throws PM’s into a frenzy of activity and forces them to seek corners to cut and interim milestones to meet so they “appear” to be on time. Late starts are just part of life but when they occur without subsequently pushing out the targeted completion dates along with the pressure to get sites on-air, our industry typically skips the most important, initial step – planning. Most projects develop a scope of work for billing and milestone purposes but lack a detailed step-by-step process flow to get the work completed. By preparing a detailed plan up-front, weeks and even months of inefficiencies can be trimmed off the timeline. At Md7, we begin every project in front of a wipe board where we map out a step-by-step process flow and then turn that into a Visio flow chart. After a few iterations, we end up with ten to fifteen pages of process detail that streamlines the entire project. There are literally hundreds of steps and sub-steps to get from PO to NTP and, if not planned and tracked in that same level of detail, then we fall into reactive mode – which is what typically happens in site acquisition. To successfully complete site acquisition, you must be proactive and well prepared in advance. Typically in our industry, we talk about being proactive, but rarely are we actually proactive. While this takes extra time upfront, the time saved throughout the entire project more than makes up for it.
  2. You can’t control (much less forecast) human behavior
    I have heard it said many times that the post-NTP phase (construction and installation are the most expensive part of a deployment process and also the most predictable, but the pre-NTP, site acquisition phase is much cheaper and far less predictable and can throw the construction and installation phase into a tailspin. No matter how good of a negotiator, you can’t make a landlord sign a doc before they are ready. And if you pressure a smart landlord to sign faster they will actually strategically slow down to apply pressure for rent and other concessions. Similarly, no matter how good of a relationship you have with a municipality, you generally cannot expect a government employee or official to approve your document faster as they typically have their own strict procedures to follow. Personally, I believe that if you submit a well prepared, well organized and error-free zoning request or permit application you will get what you need MUCH faster than if you have a great relationship with the municipal employee behind the counter. Often there are well-intentioned attempts keep the site acquisition process progressing by visiting a landlord or municipality in person with a bag of bagels and waiting for them until they meet with you and grant your request or just buy them a steak dinner or a bottle of scotch. While this sounds like a great idea on a deployment call to get a slow moving site going, it is really just confusing busyness with progress.Keep in mind the old saying “if you want it bad, you get it bad.” If you want it quickly, you get lower quality which in the end might help smooth over a deployment update, but will in the end delay on-air.
  3. The spreadsheet deployment tracker is relic from the 1980’s
    According to Wikipedia, Lotus 1-2-3 was introduced in 1982 and Microsoft introduced Excel in 1985. Since that time the handset has evolved from the car phone, to the bag phone, to the brick phone to the flip phone and now the smartphone. Similarly the mobile networks have evolved from analogue AMPS (now called 1G), to digital 2G to 3G and 4G. But, for some insane reason we still use spreadsheets to track cell site deployments. Really??? We can develop a phone that can open and close our garage doors and turn on/off an HVAC system but we can’t create a decent workflow application to track deployments??? Mike Fraunces, Md7 President, wrote an article last year outlining how spreadsheets fail to deliver quality project details, process workflow and shorter cycle times. He also wrote a second one about how large enterprise software systems are too broad, lack the level of detail needed for a specific project and are not flexible enough to be customized for a specific, unique project, Md7 has developed our own tracking software – LiveTrack™. Designed with the complex needs of site acquisition in mind, LiveTrack brings multidisciplinary information and milestones to a central location, providing end-to-end management oversight to all aspects of the process. And we don’t have to wait for version 2.0 or 3.0 for upgrades. We meet with the customer to fully understand their concerns and needs and design the workflow tracking to meet those concerns and needs for each project, every time. With date and time stamping, quality data management and parallel process flows, LiveTrack shaves weeks off deployment forecasts.
  4. Decreasing pay points without increasing volume
    Simply put, we need to break the cycle of giving a handful of sites to multiple site acquisition vendors, particularly based on price. In his book A Practical Guide to Training and Development, Michael Moskowitz (who also just happens to be the Director of Human Resources for Md7) writes an excellent summary of W. Edwards Deming’s 14 Points for Management. Therein, Moskowitz summarizes the fourth of Deming’s 14 points as “ ‘Move toward a single supplier for any one item.’ Multiple suppliers means greater opportunity for variation in source product quality.” In other words, by assigning more sites to a single vendor you can begin to standardize the product and quality. There are only two types of companies that can afford to survive on really low prices. The first is the small operation with limited overhead. The smaller the operation the less the overhead (self-employed people only have to pay themselves) but they also lack the resources to handle large volume. The second are companies who can produce in large volumes. Yes, they have more overhead, but they also can handle large volume and afford to refine and continuously improve processes so that costs decrease simultaneously as quality increases. The second is what we should be looking for in the site acquisition world. When site acquisition is performed in large enough scale, you can afford the resources necessary to develop and implement detailed plans of execution, develop the software to track the hundreds of details that must be managed to get a site on-air, reduce cycle times and lower costs. Another way to achieve economies of scale would be to assign all work on a single site to a single site acquisition vendor. Too many times the site acquisition work for a technology upgrade is assigned to one company, the generator upgrade to another and the lease renewal to third. Let’s get smart and consolidate the work.


  1. If you proactively plan and follow that plan, you can reduce errors and revisions, reduce cycle time and thereby reduce the number of issues that throw off a site acquisition forecast.
  2. If you prepare high quality documents and submit them correctly the first time rather than drafts and partially completed work (just to smooth over a deployment call) you will get a much faster response from landlords and municipal employees than if you sit outside their office hoping to talk them into pushing your work to the head of the queue.
  3. Trashing your spreadsheet and getting some flexible software that can track each deployment will certainly lead to better forecasting and reduced cycle times.
  4. Reduce the number of site acquisition vendors and allow one or a few to focus on quality and consistency, thereby reducing costs.

If you do these four things, you will not be able to forecast every site with 100 percent accuracy, but you will be able to significantly increase your batting average.



The great thing about a smartphone is that you can reach out to someone through multiple avenues anytime and virtually anywhere.  The bad thing about smart phones is that you can be reached by someone through multiple avenues, anytime and virtually anywhere.

– Bob Nichols, Md7 Lease Consultant in San Diego


phonesThe smartphone has made it possible to be reached anytime, anywhere for any reason.

There is an ongoing debate as to whether the constant contact through social media apps has broadened or damaged our personal relationships. Have tweets and status updates made us more superficial and lowered the quality and quantity of meaningful conversations in our lives or have they extended our communication worldwide to people we may not have kept in touch with or even known otherwise?

Md7 team members weigh in on the issue.

Drazen Toic, Md7 International – Manager for SEE Region

The way the smartphone affected my life could be both positive and negative.

While all the information I need workwise is now accessible on my phone anytime, the biggest struggle I find is to stop having my mind always “drag” on work related topics and issues. This aspect has impacted my life in a way that I have to limit myself reading emails when out of working hours.

Lately, when queuing for something in public, I tend to notice how much people in general are less aware of the society passing by and more focused on their smartphones, which I believe is not a great direction humanity is taking.

In addition, I tend to call less and use more messaging services (like Whatsup, email or Viber) which also generates detachment.

Svenja Preisler, Md7 International – Team Lead for D-A-CH Region

Messenger Apps: Who would have thought 10 years ago, that it would be so cheap and easy to keep in touch with friends and family far away.  Whatsapp, Telegramm, Viber… and all the other messenger apps make it possible that we are able to be in constant contact with the people who are far away from us and that we would miss a whole lot more if we would have to wait for their letter to arrive every 2 weeks. They seem to be much closer to us than the actual distance that separates us! Of course, everything has its pros and cons! So I do still write letters.

Pierre-Michel Bertin, Md7 International – Lease Consultant in Dublin, Ireland

I left France to come over to Ireland 8 years ago. Leaving my country, my friends and my family behind was not easy. Communication at the time was a real issue. I could not talk to them when I wanted and it was not free. Skype was great but smartphones did not exist and I had to be at home with a proper Internet connection to call them.

The first iPhone I got really helped me connect with my family and friends again. Then came along apps like Whatsapp that really keep us all close. I have friends in London, Tillburg (Holland), Beijing, Paris, Dublin, etc. and we are all chatting away like we use to do back in France.

The Wall Street Journal recently published a debate entitled “Is Technology Making People Less Sociable?” which addresses both the pros and cons of constant contact.

Personally speaking, I am 100% in support of this huge change in the way we communicate.

While I do have to discipline myself to not check my phone at rude times and focus on those around me, I know that social media has put me back in touch with hundreds of old friends from high school and college. I have also made several new contacts via LinkedIn and even some new industry friends like Patti Ringo who I have since gotten to know personally at trade shows. Without Facebook, LinkedIn and Twitter none of these new relationships would even exist.

I’d bet that in 1876 there was a lot of people who were concerned that Alexander Graham Bell’s newly patented telephone was going to negatively impact the amount of face-to-face communication. Today we are just experiencing the latest revolution in the way we communicate and in another 139 years (or sooner) when we can communicate telepathically, there will be many who lament the good ole days of simple social media.



Did you see the “Connection Lost” episode of Modern Family that aired February 25, on ABC? The episode starts after Claire drops her iPhone in the toilet and is forced to use her laptop at O’Hare airport to sync-up with her entire family to address a family emergency. The entire episode takes place wirelessly on Apple products.

If you missed it, be sure to stream it on Hulu or on iTunes.

While making me laugh pretty hard, “Connection Lost” made me realize just how much our lives have changed in the eight short years since the iPhone was introduced by Steve Jobs in 2007.  We used to hold the phone up to our ear with one hand and care about voice quality. Now we hold our phone with two hands while looking down and typing and care about speed/bandwidth.

Personally speaking, the apps on my smartphone have significantly changed my daily habits. The following are my personal top ten in no particular order.

  1. News apps have completely replaced print version of a newspaper. My favorite is the Wall Street Journal, particularly the editorial page.
  2. Google Maps has usurped the built-in GPS in my car. It is much better at helping me find an address, points of interest, places to eat and is easier to use.
  3. Facebook and Twitter have made posting Food Porn (not what you are thinking) a fun part of my business travel. When on business travel, you often eat alone. Posting photos of my meals and commenting on my favorite Bar-B-Que joints helps pass the time and usually strikes a few chords with people I don’t often speak with otherwise. Oh yeah, and speaking of eating out, Hello Vino helps a wine novice like me select the right wine with the meal in my photos.
  4. Lose It!, a calorie counting app has tipped the long-term battle with my weight in my favor.
  5. Digifit combined with a heart monitor has significantly improved my overall health.
  6. Evernote has finally given me a decent way to organize countless notes, including a few hundred of my favorite recipes.
  7. Uber!
  8. USAA has made mobile banking effortless.
  9. Games – I hate to admit it but yes, I have Candy Crush and Flow Free on my phone.
  10. Pandora and Spotify have personalized my music and iHeart Radio has kept me in touch with the local college sports talk shows back in Alabama.

Plus one more – as my colleague, Harry Kapp, reminded me, no list of top apps would be complete if it didn’t also include Happy Hour Finder. As Harry said, “nothing more is needed.”




In September of 2013, I wrote a blog called “Small Cells, Small Cells, Small Cells” about all the buzz and conversations around small cells. In short, I was saying that there was still a lot of uncertainty about small cells and that it may be a few years before we know how it would all play out.

Eighteen months later, we know a whole lot more, but we still do not have a single, simplified model for small cell deployment. We do know that deployment costs are forcing our industry to temper our high hopes for 2015 and 2016 deployment volumes and also forcing us to really think outside of the box.

Simply put, the biggest factor is of course cost. While it is generally agreed that the various versions of small cells are much cheaper than a Distributive Antenna System (DAS) to deploy, the ROI on individual deployments has prevented the deployment levels we anticipated a couple of years ago.

Demand for coverage and capacity is high enough that some venue and large building owners are willing to help share the costs of DAS installations, particularly in the case of neutral hosts systems. But the economics on a model of this nature only work in stadiums, venues and buildings generally over one million square feet. While the demand for data is also beginning to get the attention of the owners of medium and small buildings, a viable single financial model has not yet evolved far enough to allow scale deployment to the levels we hoped.

Additionally, Wi-Fi calling and the combination of small cells with Wi-Fi are changing the landscape. Wi-Fi systems that can be self-deployed by the customer could be packaged with traditional LTE service to increase bandwidth, particularly in small buildings like restaurants that thrive on the buzz of social media.

So, stadiums, arenas and large buildings are covered by DAS and Wi-Fi systems. Residences, and small buildings are being covered through a combination of the traditional, macro network, personal “Femto” cells and Wi-Fi. The biggest challenge/opportunity seems to remain the medium sized buildings (bigger than a restaurant but less than 1 million square feet), the area we assumed would cause the small cell revolution. This is where creativity is needed to develop new economic models to fund deployment.

  • Will operators begin to increase funding for large volumes of small cell deployments?
  • Will independent third parties fund small cell deployments much like they currently do many traditional DAS networks?
  • Will building owners fund deployments (or at least offset the cost)?
  • Will tenants that rent office space in these middle ground buildings begin to self-deploy Wi-Fi and LTE small cells?
  • Will OEMs seek new ways to finance design and installation costs to move their cool new systems from R&D to ceiling tiles??
  • Will more creative approaches to deployment evolve?

The short answer is yes to all of the above!

To quote the English proverb, “Necessity is the mother of invention.” The exponential increase in the demand for data is driving the necessity for new creative deployment models. New models will be invented. I speculate that one or two of the best are yet to come and that no single one will be the silver bullet we all hoped for.

Or said another way, the HetNet will require a Heterogeneous Deployment model – HetDep!


old phone


Do you still memorize important phone numbers?

Personally I know my cell phone number, my wife’s, and maybe one or two others. Oh yeah, I still know the number to the rotary phone mounted on the kitchen wall of my childhood home because I was taught to sing it in kindergarten in case I ever got lost. Speaking of which, my mom had a really, really, long cord on that phone so it could stretch out of the kitchen to the couch in the adjoining room where we had a TV with only three channels.

I would venture to guess that today most people don’t memorize many more phone numbers than I have. Why should we? We have various forms of one-touch dialing and even voice dialing to eliminate the need.

But, at the risk of sounding like Lemony Snicket, what would happen if there were an emergency or you lost your phone? Well, according to Connie Rim, a Lease Consultant at Md7 in San Diego, you might have a problem. As she tells it…

Years ago I moved to Las Vegas to live with some friends. Upon immediate arrival, I decided to venture solo to the Las Vegas strip. As I returned to my car, I realized I lost my iPhone. I panicked as I suddenly found myself without knowing my friends’ phone numbers, directions, or my new address. All the information I needed was in my Smartphone. After several hours of backtracking (and very sore feet), I was very lucky that someone had turned in my iPhone to one of the casino’s security offices.  Needless to say, I avoid being in such a vulnerable position by simply memorizing a few important phone numbers – and, of course, my address.

iCloud wasn’t around then, but if it happens to Connie today, she can simply log into her account from any computer in the world and pull up her key info. Tip: Make sure you know how to access your backup data before you need it.

In emergency situations, finding a place to access your iCloud account is not always easy or timely. Like the time my wife locked her keys, phone and our newborn son in the car at the park. She borrowed the phone of a jogger who was passing by and began dialing me the old fashion way. The only problem was that I didn’t recognize the jogger’s number in my caller-ID so I ignored it until she dialed it four or five times over and over.

Well… even if we fail to memorize a few key numbers, our modern problems are still better than only having a single phone for a family with five kids that was affixed to a wall.

Md7 is Built for the Current Data Explosion


When Md7 was formed in 2003, the company had one asset – Michael Gianni’s monochrome BlackBerry. We may have had a couple of laptops too, but it wasn’t Michael’s hardware that was valuable, it was his contacts from many years in the industry that he stored in that (at the time) high-tech phone.

Michael used that phone to call a lot of people to talk to them about the future of the wireless industry and seek out ideas that could become the core of a future business. As he reached out to his wireless friends and acquaintances he began to hear two common themes emerge.

  1. OpEx was becoming just as important as CapEx as wireless executives were beginning to forecast the decline in explosive subscriber growth.  It was Business 101 – the wireless industry would eventually flatten out as subscriber growth approached 100% penetration.
  2. Rent rolls for cell sites was going to become an increasing area of concern for operators. This was also Business 101 – if revenue growth flattens, operating margins become more crucial. And after payroll and backhaul, rent rolls were the largest OpEx line item in the network.

In 2004, Md7 got the opportunity to address these two issues when AT&T Wireless merged with Cingular. The new company had thousands of overlapping sites and we were contracted to renegotiate literally thousands of cell site leases. With private landlords located throughout the U.S., we simply could not follow the traditional site acquisition negotiation model of scheduling face-to-face meetings. So, we decided to handle everything over the phone. We had a lot of doubters because pretty much no one believed you could negotiate leases over the phone. But within days, the response to our efforts was so overwhelmingly successful that we kept maxing out our voicemail storage. We knew we were on to something.

With the subsequent Sprint and Nextel merger, we got a second bite of the apple. In 2005 and 2006, we began to refine our internal tracking software (which would eventually develop into the LiveTrack™ system) to enable us to manage literally thousands of negotiations from our central office in San Diego. We learned that a single negotiator could easily track and manage 150 negotiations and we began to truly master high-volume lease negotiations.

Oh yeah, and we were pretty good at keeping the rents down too.


After our early days in lease optimization, we transitioned into site upgrade amendments. The LTE growth boom had arrived and Md7 was ready for it. We proved that our newly developed processes and techniques, combined with well-trained lease negotiators, resulted in a better way to negotiate not just lease optimizations, but all cell site leases. We called this model “centralized leasing.”

By that time, Md7 had grown quite a bit. We traveled the country evangelizing the benefits of centralized leasing. Michael and Mark Christenson even took the message to Europe. But as any seasoned evangelist knows, not everyone believes the news is good – some do, some don’t. And no matter how much you believe it, not everyone will convert. Some people did, risking scrutiny within their own organizations to take a chance on Md7. Others politely passed on the idea.

Throughout the LTE build-out years, Md7 negotiated tens of thousands of lease amendments, including with private landlords, as well as processed site upgrade applications with each of the major tower companies. We showed that leasing can be scaled.

Md7 is now also scaling zoning and permitting services and all other site acquisition related services as well. We have discovered the balance between streamlining for large volume and utilizing a few people in the local market as needed (to maintain the local touch when needed, identify candidates and prepare SCIPS, close the final details with a local landlord, attend a hearing, or meet with municipal officials to get that final approval).


A funny thing happened recently. I noticed that our phones are now ringing more than we have to dial out. Maybe all those frequent flier miles we earned meeting with our customers around the world is starting to pay off.

We have all seen the forecasts for exponential growth in the demand for wireless data. We all know that with that exponential growth comes a need for a new deployment model. Whether indoor or outdoor, macro or micro, we need to scale our ability to acquire and manage wireless real estate like nothing we have ever seen before.

The sheer volume of small cells being deployed over the next three to five years in order to meet capacity demand has created a new reality and carriers can’t use the same financial and deployment models for indoor and outdoor small cells that they’ve traditionally used with macro sites. They’re going to have to keep costs down and move faster. And all this work on small cells has to be performed in addition to growing the macro network.

The wireless infrastructure industry is going to be strong for the foreseeable future, but it is also going to have to be more creative than ever before.

Md7 has long grown past that initial, single, valuable BlackBerry in Michael Gianni’s pocket. Currently, the Md7 team is working for 25 different operators, across 4 continents, in 10 different languages, within 13 different countries. We now have lots of great employees, with their own list of contacts in their own iPhones and Galaxies — we even have one, hard-core loyal BlackBerry user.

The Md7 team is very excited about the current explosion in wireless infrastructure and is extremely confident that we are ready for the challenge.

The Densification of America


If most people were to hear the term densification, they would probably assume one was referring in some manner or another to the growth (maybe even a plight) of population in urban areas. But if you work in the wireless infrastructure arena, the term densification refers to the rapid increase in the density of cell sites to accommodate the need for additional capacity.

The industry is abuzz about the need to increase the number of cell sites to keep up with the demand for capacity. In reality, we have been enhancing existing networks for quite a while – through cell splitting and building fill‑in sites – we are just doing it now at an unprecedented pace and with the addition of new technology (i.e., small cells and DAS).

The frenzy behind densification is being driven by the forecasts for exponential growth in wireless data traffic over the next few years. Some of my favorite statistics are published online by Cisco. A few notable ones are:

  • By the end of 2014, there will be more mobile devices than there are people on Earth. Thus, we will have reached 100% global penetration.
  • Traffic from wireless and mobile devices will exceed traffic from wired devices by 2018.
  • Over two-thirds of the world’s mobile data traffic will be video by 2018. Mobile video will increase 14 times between 2013 and 2018, accounting for 69% of total mobile data traffic.

This 69% comes from things such as: consumers demand a highly customized video experience on demand, 24/7, in real time; Facebook now auto-starts videos in your news feed; and we are fascinated by videos of celebrities and friends dumping ice buckets on their heads (but that’s for charity and so it’s okay).

For the first time, the industry is behind in meeting consumer demand. And, as we all know, we cannot wait for new spectrum to solve this dilemma. So, we must enhance the network in more creative ways than we ever imagined and at a pace that is faster than we ever dreamed possible. Oh yeah, and we have to do it cheaper than ever, because now that we are at 100% global penetration there aren’t that many people to sell new mobile plans to.

The wireless infrastructure industry will thrive and keep many of us employed for the next 3-5 years. But we will need completely new processes, tools and cost models to keep up. Time to be creative!

Why I Never Tell Lawyer Jokes

I never tell lawyer jokes.

While I would not describe myself as politically correct and I actually do find many lawyer jokes quite funny, my experience with lawyers in our industry is simply too valuable to make light of them. Not to mention the fact that I may find the butt of one of my jokes opposing me in a courtroom one day and I don’t want them to have any additional motivation to defeat me.

I hold lawyers in high regard because early in my career two lawyers from the Washington DC area that worked in wireless industry had a big influence on me – Caroline Kahl and David Lafuria. At the time, Caroline was the Vice President and General Counsel for Columbia Spectrum Management, the company that allowed me to break into the wireless industry after the PCS auction in 1995. Caroline taught me the significance of reading EVERY WORD of the microwave relocation contracts I was negotiating to clear the 1900MHz spectrum for the new auction winners. She was certainly a good enough attorney that I could have gotten away with letting her worry about the legal details after I negotiated the business terms, but she taught me that by fully understanding every word of the contract I became a much better negotiator. A couple of years later, David, who was and still is a Partner at Lukas, Nace, Gutierrez and Sachs helped me put together some ironclad buy-sell agreements and leases for towers that easily stood the test of time and an unexpected legal challenge. I remember reviewing some year-end financials in the late 1990’s and realizing how much we had paid David’s firm. I did not hesitate to acknowledge the amount we paid was far less than how much his strong agreements saved us in the end.

In early 2005 Md7 was transitioning out of start-up mode with our first big opportunity to negotiate some lease amendments and I put together the initial version of the Md7 training manual for the first thirteen Lease Consultants (LCs) we hired. While much of that training manual has evolved over time, one piece is basically the same as I wrote in January of 2005 – what we call at Md7 “Four Cornering a Lease”.

Technically speaking, Black’s Law Dictionary defines Four Corners as follows.

The face of a written instrument. That which is contained on the face of a deed (without any aid from the knowledge of the circumstances under which it is made) is said to be within its four corners, because every deed Is still supposed to be written on one entire skin, and so to have but four corners. To look at the four corners of an instrument is to examine the whole of it, so as to construe it as a whole, without reference to any one part more than another.

In the Md7 training manual, we say that the Four Corners Rule means

In contract law, the four corners rule is the doctrine that the meaning of a document is to be gathered from the entire (or all four corners of the) document. This includes all Exhibits, Addendums, Attachments, as well as all amendments.

We want our Md7 LCs to not only limit their understanding of a given lease to the contents of the document only, but we also want each one to understand that they must read and understand the lease in its entirety including exhibits, and amendments. NO EXCEPTIONS. Caroline Kahl taught me how to appreciate every word of a microwave relocation agreement, and I hope that I am passing along this appreciation to each LC at Md7.

But let’s be realistic. Md7 processes literally hundreds of lease agreements and amendments each month. It is not possible for every LC to read every word of every lease of each deal they negotiate. Over the last ten years, Md7 has refined a handful of technics that we systemically implement to allow each lease consultant to negotiate in volume without sacrificing the contractual quality of each deal.

1. Negotiate in general terms, then iron-out the details. While every LC has access to electronic copies of all relevant documents at his or her finger tips, you can’t ask someone to “please hold” while you read the entire lease agreement so you can discus a clients desire to modify the site. Thus we train our LCs work in general terms first, explain to the landlord what we are trying to in broad terms, thereby seeking to obtain an initial buy-in, then follow-up a later date (after having thoroughly familiarized themselves with the existing documents) to negotiate the final details.
2. Train and retrain on the key clauses in lease agreements. Most lease negotiations do not require a haggling over every word. Md7 trains each LC multiple times on the key paragraphs such as term, rent, rent escalations (an often ignored clause that often comes back to bite our clients down the road), use rights, premises definitions, upgrade rights and other key clauses that can save our clients tens-of-thousands (often even hundreds-of-thousands) of dollars over the life of a single lease.
3. Rigorous use templates. At the beginning of each new project Md7 works with a client to develop a lease template (as many in our industry do), but we actually load this document into LiveTrack (our proprietary software system) and lock it down so that only our legal team acting with client approval can make significant changes to the template. We then rigorously train and retrain our LCs and LPs (Lease Processors) on that specific template for the life of a given project. We also train our team to negotiate very hard to keep all deals “within the box” of that template so that we limit the amount of time needed by our counsel (and our clients counsel) to review and approve deals that fall outside of the template and pre-approved business parameters.
4. Rigorous oversight by our business and legal team. – Once a deal with Landlord is reached, it goes through an Md7 internal quality check process. All modifications to program template documents are reviewed by a lease processing manager to confirm such variations are strictly necessary. The LC must provide justification for any variations. Additionally, any additional language requested by a Landlord is reviewed by our legal department to ensure there is no other alternative available to satisfy the Landlord’s stated concerns. To the extent that non-standard language is required to close the deal, Md7 will work with the carrier’s counsel to obtain the necessary legal approvals. Throughout this process, wherever approval of non-standard language or business terms are required, Md7 documents the negotiations so that carrier has complete visibility into the negotiation process.
5. Use incentives to motivate LCs to keep deals “in-the-box” – One of the keys to Md7’s success over the last ten years has been incentive based pay. Our LCs are financially rewarded for keeping a deal within preapproved business parameters and all terms on the preapproved template document. You’d be surprised how well this works to limit unnecessarily high rent and lease terms that can significantly impact an operator long after the new or upgraded site is deployed.
6. Be smart – LCs at Md7 are well trained, and they know it. They are trained on the lease documents, the equipment being installed at a site, the industry, cell site economics and our software to track each of their deals. Md7 LCs do not read from scripts. They have been trained to master the key elements of their job and are comfortable negotiating the key clauses and business terms for each specific project they are assigned. They are confident in their ability because they have been recruited and trained specifically for their position.

At the conclusion of every training session on “Four Cornering a Lease” I ask our LCs and LPs-in-training to summarize the two-day training in one phrase. As you can imagine, initially I get a variety of answers such as:

• “Read every word, every time!”
• “Don’t try to BS your way through a negotiation”
• “Take your time because each deal is important”
• “If you don’t understand something in a lease, ask for help”

Typically, after three or four guesses, one of the trainees gives me the answer I am trying to draw out of them:

“Respect the Lease.”

That’s right… “Respect the Lease.” Each LC and LP at Md7 is trained to give each cell site lease agreement or amendment that he or she negotiates and/or processes its due respect to ensure a consistent, quality document that our clients can rely on for the long-term.

This training has been a standard practice at Md7 since February 2005 and I don’t see it changing anytime soon.

The Google Self-Driving Car Will Increase Demand for Bandwidth (and Increase my Waistline)

My old college roommate used to say, “if you want a sure winner, buy shares of Taco Bell, because Tommy eats there so much the profits are going through the roof.” It’s true; even now I still love Taco Bell! But a desire to try to maintain a healthier lifestyle than I did in college is only the second biggest reason why my consumption of Combo #1 with a Diet Pepsi has decreased. The biggest reason is that it is too hard to eat a Burrito Supreme and a Crunchy Taco Supreme while driving. No matter how careful I am I end up with sour cream, beans and grease stains on my shirt.

But those stains may soon be a thing of the past because we are probably living within a generation of the Google Self-Driving Car becoming mainstream. And when it is mainstream, I can eat all the Americanized Mexican food I want in my best suit and tie without any worries.

If you are skeptical, then watch this video of a man living his daily routine in a driver-less Prius. Pretty cool stuff!

Now, even I can only eat so many burritos and tacos in a given day. So what will I do with the rest of my time in my self-driving car on my daily commute?   That’s easy, I’ll do the same thing I do with the rest of my idle time – play with my iPhone!

There is a big need for the wireless industry to increase capacity in areas where data growth is driving the demand for bandwidth. The current thought is that smart-phone users eat up the greatest amount of bandwidth while stationary – at home, the office, coffee shops, airports, tourist areas, etc. Simply put, it is not a good idea to stream an episode of Game of Thrones while driving. But my son streams Sponge Bob Square Pants while my wife or I am driving. Take a minute to ponder how the need for wireless infrastructure will evolve if we all start streaming video and posting narcissistic comments and photos about ourselves while being driverless-chauffeured to and from work like a four-year old boy on his way to and from preschool.

Data demand (and subsequently bandwidth) will be needed along every road, not just in places where we are stationary.

That is a lot of cell sites! Better make sure your site acquisition partner is a good one.


Cell Sites: Coverage vs. Capacity

I have heard quite a few people complaining lately about their cellular coverage.  Some claim it has gotten worse.  While that is actually possible, it is probably unlikely.  While I am not a Radio Frequency (RF) engineer, I would argue that the problem is not an issue of coverage, but rather capacity.

What’s the Difference?

In a cellular network, coverage refers to the amount of area or land that a signal from a cellular network reaches.  Every carrier offers “coverage maps online or in their retail stores and you see the vast majority of the United States colored to reflect the carrier’s service area.  On the other hand, capacity refers to the amount of bandwidth for a cellular network within that service area.

Think of it is simple, hypothetical terms.  One cell site on top of the Empire State Building turned up to full power would radiate a signal covering most, if not all, of Manhattan.  But that does not mean that every person walking on the streets in NYC will be able to get a call through that single cell site. Instead, RF engineers design wireless networks with multiple cell sites at heights much lower than the top of the Empire State building so that each unique site covers a smaller area, thereby increasing the chances for each individual user to have his/her call go through.

So why does it seem like I drop more calls?

I don’t know if you are actually dropping more calls or not.  There is a reasonable claim that we have become more dependent on our cell phones thus we are less patient when calls are interrupted or fail to go through, thus we complain more. But we are definitely experiencing a capacity problem in modern cellular networks.  With the advent of more and more powerful smart phones we are not only using them to talk but to also download and upload music, video, photos as well as web surfing.  Thus each cell site must not only process voice, but also data – LOTS OF DATA! This is stressing the capacity of each cell site and thus the cellular network as a whole.  More cell sites are continually being built to increase capacity.

In short, future cellular networks will need thousands more small cell sites (called microcells and picocells) much lower to the grounds to manage our data crazy smart phones.  More to follow…


I love my Dongle!

Dongle.  It is a funny little word that is difficult to say out loud without cracking a smile – try it. 

If you want to see a few videos of people having fun with the word “dongle” click here, here or here.  If you do not know what a dongle is then click here – don’t worry, it is safe. 

I recently purchased my first dongle from Verizon Wireless and it has my attention.  It is a 4G LTE dongle manufactured by LG and I love it!  Verizon is claiming data speeds of 5-12mbps on the downlink and 2-5mbps on the uplink.  Actually I have no idea what that means, but I will say that I cannot tell the difference between it and the wired network in my office.  That is fast enough for me.  My dongle will not be the last 4G LTE device that I purchase – I can’t wait for a phone, tablet, or the numerous embedded devices that this is sure to lead to in a 4G world.

The monthly cost of my dongle is about the same as Wi-Fi in a hotel room for a few nights a month and it is much more portable.  In addition to hotel rooms, I use it in coffee shops, airports, client offices, and I even used it to send three large .pptx files on a Southwest flight where I stopped but did not change planes – the “in-flight Wi-Fi” was too slow for those files.  Previously those .pptx files would not have been received by my client until I got to my hotel that night well after the close of business. 

The 4G dongle is the next step in a smaller, faster, fully connected, wireless world. In short, it has shown me that 4G will be a major game changer for wireless industry.

Verizon iPhone has sparked the public race for “4G”

After all the speculation, all the anticipation, it is official – Verizon has begun selling the CDMA iPhone.  While I am a loyal Blackberry guy with no intention of switching, I must admit I am excited about the announcement.  You see, if you listened closely around the time of the announcement, you may have heard the shot fired from the starting gun for the race for the next generation of wireless coverage.  Actually it started long before that in the “war rooms” of each of the nationwide cellular operators but now the race is being run in public view – just watch one NFL football game for the ads they are running.

What is generally being marketed as “4G” will bring with it a massive expansion in the cellular networks – the largest infrastructure boom in the wireless industry since 1996 when the FCC auctioned off the PCS licenses releasing a lot of spectrum and networks began to upgrade from analogue to digital.  There is speculation that some iPhone users will jump from AT&T to Verizon because of the frustrations they experienced with AT&T coverage (actually it was a capacity problem, not a coverage problem). And some will wait to see if Verizon is prepared.  Regardless of your expectations or loyalties to one operator or another, one thing is sure – AT&T, Sprint, T-Mobile and Verizon all are in the process of upgrading their respective networks.  And, these upgrades will have two large impacts on their respective networks. 

First, each network will be substantially faster.  WiMAX, LTE, and HSPA+, will take each system to another level and that is great for consumers.  Whether you use the iPhone, Blackberry or Droid you are about to see an increase in speed which will in turn facilitate an explosion of even cooler apps and eventually machine-to-machine communication.

Second, the number of cell sites are about to significantly increase.  At first they will be overlaid on top of already existing sites and tower companies will see a big early bump in leasing revenue.  This initial overlay will establish 4G coverage nationwide.  But then the number of smartphones will quickly increase and so will consumers data usage and these initial sites will not offer adequate capacity because you can’t shove ten pounds of data through a five pound cell site.  While they can’t build ten pound cell sites, they can build two five pound sites.  Or go even further to manage capacity by building ten one-pound sites – one on every street corner and cul-de-sac.  All this because our appetite for data is about explode!!!

Cell Site Leases in the Future

Cellular history

I remember the first time I saw a mobile phone.  It was circa 1987 and it belonged to a sports agent that was visiting a couple of friends of mine who happened to be college athletes.  I drove them to the airport in my Honda Prelude to pick him up for lunch.  As he stepped off the private plane into my back seat I remember asking him “why he had two brief cases?”  He replied “oh no, the second one is my phone.”  At that moment I knew my buddies were going to sign with him – some guys just can’t resist a big battery. 

The cellular industry has come a long way since then.  The briefcase phone became the bag phone which evolved into the brick phone, then the flip-phone, the camera phone and now the smart-phone. Just as the handset has evolved so has the network – from analog to digital to 2.5G, to 3G…  And cell sites have evolved too.  From the first one at Soldier Field in Chicago and remote mountain top sites, to tall towers and the tallest building in town, to monopoles and lower roof-tops to light poles.  Shelters at cell sites have become cabinets and even suit-cased sized boxes. 

Cellular Future

If we look forward we will see that the iPhone is just the beginning.  The embedded wireless device is about to change it all again.  We are rapidly approaching a world where we’ll have hidden wireless devices inside everyday items such as HVAC, appliances, medical devices, even our dogs.  Farmers will remotely control their irrigation systems with apps on the smartphones, heart-monitors will notify you and your doctor before your heart fails.  Disposable, one-use-only devices will automatically reorder household items when packages are empty.  We are limited only by our own creativity.

But this post-modern technology won’t run on the current networks.  4G networks and beyond require more cell-splitting and lower rad centers. Cabinets and boxes are becoming remote radio heads.  And, while we will still have a lot of towers in rural and sub-urban areas, DAS and picocells on the side of buildings and light poles will sustain capacity in urban and dense urban markets. 

What about cell site leases?

You can’t have a technological explosion like this without updating the underlying cell site leases as well.  We are already seeing a large jump in the number of modifications to existing sites – many of which require amendments to the underlying leases.  These requests are coming at a more rapid pace than we have ever seen.  And the number of cell sites – particularly in urban areas – is about to significantly increase.

Let’s be smart about how we negotiate new and amended lease documents!  These deals need to be flexible and cost effective to sustain this rapid growth.  Expansion and modification rights must be ongoing, rents must be manageable for the long haul.  And cellular operators should rethink how they manage their massive real estate portfolios.  As we enter into the age of outsourced network administration, lease administration is a non-core function that should optimized too.

In short, as we approach 2011, let’s keep up with the times and rethink how cell site leases are negotiated and managed.

The Impact of 4G (on Cell Sites)

This past week I attended the CommNexus presentation called The Road to Long Term Evolution (LTE): The Next Generation of Wireless Technology featuring Tami Erwin, President – West Area for Verizon Wireless. And this coming week I am attending the Wireless Infrastructure Show which was recently previewed by FierceWireless as “The opportunity and costs of 4G.” I put these two events on my calendar to broaden my perspective on the impact that 4G will have on cell sites. And while I have only attended the first of the two, I am already pretty excited about the future of wireless and more specifically – cell site leasing.

From the CommNexus event, I learned two things.

1. LTE will revolutionize the industry. Ms Erwin convinced me that LTE will be much more dynamic than anything we are currently experiencing. While she openly acknowledged that the iPhone was a “game changer,” she also pointed out that LTE will go further – much further. This was not a dis on the iPhone, but rather an attempt to show the limitless options before us in a 4G world. A world where machine-to-machine (M2M) wireless will connect everyone and everything. Check-out this video by Alcatel-Lucent that she shared with us.

2. The impact of 4G has not yet been clearly defined. Verizon plans to allow their subscribers to define how LTE evolves rather than attempt to define it themselves. They do not want to limit the impact of LTE by attempting to define it or set an expectation. They are merely building a network that will facilitate it. I’d give that a “thumbs-up” on Facebook!

I anticipate that 4G will change how we communicate much more than analog-to-digital conversions, 2.5G and 3G. But what about the Opinion Pole’s specific niche – what about 4G’s impact on cell sites and cellular antenna leases? As stated in prior blogs, we already know it will significantly increase the number of cell sites, it will lower the average rad center for cell sites, it will increase the number of micro/picocells, it will cause RF engineers to look for ways to off-load traffic to Wi-Fi as often as possible, and it will cause the cellular carriers to evolve into a “dumb pipe.” It will also drive C-Suite executives to focus on OPEX over CAPEX. And all of these things will impact cell site rents.

However, I am anticipating learning much more this week at the Wireless Infrastructure Show. Stay tuned!

Multiple Candidates = Better Cell Site Leases

From coast to coast, from Canada to Mexico and everywhere in between there is a real estate principle that always applies. You get a better deal if you have two or more properties to choose between. You always get a better deal if you play two owners against each other. This is obvious right?

There is no way I am going to out-negotiate a car salesman because I do not have subject matter expertise. So when I buy a new car, I go to two or three dealerships and play them against each other – in the end the best price wins. You have to create a competitive situation.

This principle holds true for wireless real estate as well. I have negotiated a lease for a cell site covering Wall Street, and a microwave tower in Screw Bean Draw, Texas (yes that is a real place – it is about six miles west of Orla). And I have negotiated for just about every type of property you can think of in between those two. I have been told so many times that if you want the best deal you have to be “a local” (from NYC or SBD) and that if you are not “a local” then you need to hire someone who is from there to negotiate for you. That simply isn’t true. If the landlord wants the monthly rental income, and you treat them with respect, then they’ll negotiate with you no matter how fast or slow you talk. And if you tell them you are choosing between two or more sites you have negotiating leverage.

I had to lower the rent on my rental properties in Florida because there was a glut of vacant condos on the beach four blocks away and my tenants had options – they didn’t want to move, but they certainly had an opportunity to do so and I had to lower my rent to keep them. I have been on both sides of a negotiation where a tenant had legitimate options and it always works to lower the rent.

When negotiating a lease for a new cell site anywhere in the USA, (despite the fact that RF engineers have the option to trump one candidate over another) you will do well to have more than one candidate. Finding alternatives changes the dynamics of a negotiation.

Quote of the Month – Coverage vs Capacity – 4G Cell Sites

Quick shout-out to Phil Goldstein for his article posted here today on FierceWireless.  Here is an excellent quote from it. 

Coverage vs. capacity: Cisco’s Visual Networking Index predicted earlier this year that mobile data traffic will increase 39 times between 2009 and 2014. To meet that demand, Clearwire CTO John Saw said there needs to be an industry-wide paradigm shift away from coverage and toward capacity. “Our cell sites are not able to meet the needs when we become a capacity-driven business and not a coverage-driven business,” he said referring to the broader industry. “Is it time to move up.”

Tower companies, Saw said, need to think less about macro sites and more about micro sites, picocells, distributed antenna systems and rooftop deployments for urban areas.”

The Best Cell Site in Town

The best location for a cellular antenna isn’t always where you think it will be – especially in a rapidly evolving wireless network.

A lot of cell site landlords claim they have “the best site in town” to locate a cellular antenna. Whether it is the lone tower in a small town, the tallest building off town square, the mountain top with the longest line-of-site, or the office building on the corner of Rodeo Drive in Beverly Hills – many claim their site is unique and best. However this is often not the case – especially as cellular networks become more sophisticated.

As wireless telecommunications technology evolves from 3G to 4G and beyond, so does the definition of “the best site in town.” As I mentioned in a prior article in AGL magazine, (What is the Market Price for Cell Site Rent?) contrary to popular belief, the Empire State Building does not offer the best coverage in Manhattan. One high site can’t handle the millions of calls made each day in New York, nor can it accommodate the bandwidth needed to run voice communication, video, email, music, photo transfers, download apps and more. In other words, taller is no longer better. Today’s network relies on a greater number of low elevation sites to accommodate the growing number of users and the bigger bandwidth requirements necessary to meet technology demands.

Landlords often think that their site is more valuable because it is in a high-traffic area, or it’s the tallest, or it’s centrally located. As noted above, advances in technology are redefining what makes a good cell site. But further, as cell sites come closer to the ground and closer to each other, carriers are less particular about their location. This flexibility, combined with an increasing ability to use non-typical cell sites (such as light poles), creates a competitive environment that drives cell site rents down. The landlord who once had “the best site in town” must now acknowledge that carriers have many viable options to choose from.

“Dumb Pipes” Lower Average Rent For Cell Sites

The wireless “dumb pipe” is inevitable.  The iPhone is certainly accelerating its arrival and it is just a matter of time.  The entire strategy of new wireless entrant LightSquared is to be a wholesale dumb pipe. While many believe that the Verizon network is a competitive differentiator, even it is evolving into a commodity. And in a commoditized market, the low cost provider wins.

It is simple business school math. If all wireless networks have relatively comparable coverage that simply transfer bytes back and forth between a handset and the internet then the only differentiators are the handsets themselves and the price for access to the system. While the buzz on the FCC investigation into handset exclusivity has cooled for the time being, price competition is hotter than ever. And price competition means each cellular operator must get more aggressive on cost cutting or their margins will suffer and they will get priced out of the game.

One of the largest items in a cellular operator’s OPEX is the rent roll for tens-of-thousands of cell sites around the country. The largest operators have an estimated seventy-thousand cell sites at an average of $1,700 per month. With built-in rent escalators averaging between three and four percent per year it won’t be long before nation-wide cellular rent rolls top $1.5 billion annually. But wait, it will grow beyond that! The high-tech wireless dumb pipes are actually 4G LTE and WiMAX networks built on top of already existing cellular networks. It is reasonable to expect the number of cell sites in the United States to double or even triple over the next five to ten years.

That’s good news if you own the only zoned and permitted cell tower in Middle America and the mayor is your brother-in-law. But what about more congested areas where traditional roof-top sites and micro/pico cells can be flexibly placed in more than one location? In that scenario cellular operators have options.

With OPEX pressure, any prudent wireless CFO will be looking to lower average rents on their rapidly expanding portfolio of cellular real estate and you can expect that pressure to trickle down to lease negotiators. And those lease negotiators will be more closely weighing their options when negotiating new cell site leases. Expect that trickle down pressure to impact the average rent on new leases.

Extreme Service

Bending Over Backwards For Our Customers.

The mobile industry is tough. With only a handful of carriers each trying to parlay new customers out of a saturated and demanding marketplace, the business climate is competitive to say the least.  Wireless customers want cooler smart phones, more apps, more speed, more bandwidth, fewer dropped calls and they want it all for a lower monthly price. Being successful in this kind of environment requires extraordinary effort. So servicing this kind of a client can be a daunting task for the team at Md7 as we work with carriers to help them effectively manage their very large portfolios of wireless real estate in a way that’s never been done before.

When you’re helping people change the way they do business, customer satisfaction is no longer enough. A company must engender customer loyalty to make a difference. It’s not about responding to client needs, but anticipating them and then fixing any problems you encounter along the way. In short, it’s about giving a client more than they expect. In the end, a good deal or great results isn’t enough. At Md7, we call this “extreme service.”

A recent article “How Amazon Aims to Keep You Clicking” in BusinessWeek reminded me that it’s exactly this level of “extreme service” that distinguishes a company. BusinessWeek named Amazon #1 in this endeavor because of their overwhelming success in establishing trust with their customers who purchase products sight unseen. Because what we do is relatively new in the industry, Md7 works to earn this same level of confidence with our own clients by providing extreme service.

A comment we recently received from a client let us know we’re on the right track. He said, “I’ve never worked with a crew as fast as you folks at Md7…I feel like I’m sitting in a busy restaurant but I’ve got 10 waiters all focused on me.”

Whether it’s a cup of coffee or a 10-course meal, we want all our clients to feel just like this. It’s part of our core values and we intend to live up to it every time we gather around the table.

Rembrandt: The Descent from the Cross – Second Plate

Referred to as the “second plate” because as Rembrandt scholar Christopher White states, “it was, however, on this plate that he met his one and only technical disaster in a medium in which he was to become supreme master.” On Rembrandt’s first attempt the acid failed to properly bite the plate.  After attempting to rework the plate it was eventually discarded.  On his second attempt Rembrandt created what may be his greatest etching. 

The large image (52.7 cm x 40.8 cm) depicts wealthy Joseph of Arimathea overseeing the removal of Christ’s lifeless body from the cross while onlookers observe in awe.  In this print the master illustrates one of the most powerful moments of the Bible with tremendous emotion. Rembrandt uses an amazing contrast of light and dark to illustrate heavenly beams shining upon Jesus, thus create a moving image. 

Created in 1633 the plate was signed and dated on the bottom, center below the print.

Is That Salsa On Your Steering Wheel?

Time for the Way Cellular Antenna Leases Are Negotiated to Change.

The way cellular antenna leases are identified and negotiated is out-dated and has changed little since the cellular phone industry’s explosive growth began in 1995. Md7 Chairman and CEO, Michael Gianni, describes the traditional site acquisition process as agents “parachuting in, grabbing a rental car and driving all over town leaning over the steering wheel while they eat a burrito and look up in the air for potential cell sites.” Those traditional site acquisition agents had no incentive to negotiate a good lease with low rents and solid contract language that lasted the life of a traditional cell site. The traditional cellular antenna lease was just another “pay-point” on a fixed fee services agreement. Agents not only negotiated the lease but had to battle municipal administrators for permits and zoning approvals and many other pay-points before their work was done and a new site could be constructed. They were given as many search rings as they could handle and paid to get leases signed as fast as possible – there were few if any incentives to keep the rent down and negotiate solid lease terms.

While this strategy worked well in the short-term – it enabled cellular operators to build networks as fast possible, this was a classic case of “if you want it bad, you get it bad.” If you are in a hurry and don’t take the time to negotiate a lease properly you will pay for it in the long run. Cellular phone operators are now paying the long term price. The national average for cell site rent is estimated to be around $1,750 per month. If this is accurate, then for every 50,000 cell sites, a carrier has an annual rent roll of approximately $1 billion. The largest cellular operators in the United States have an estimated 65-70,000 cell sites. Thus they are pushing $1.5B and it increases by 3% every year before they even build one new site.

Carriers used competition to beat the site acquisition pay-point as low as it can go. Site acquisition agents are now commoditized and many of the good ones have moved on (or cashed out). But the leases are no better; the starting rents are still too high and language still has to be amended each time a site is modified. With the advent of 4G, our industry will double and maybe even triple the number of cell sites in the United States. Time to change the way cell sites leases are negotiated.

The Wireless Tipping Point

Why Wireless Operators are Shifting Focus from Capex to Opex

In the book, Tipping Point, author Malcolm Gladwell describes a tipping point as “the moment of critical mass, the threshold, the boiling point.” The point where the sociological scale tips and “ideas and products and messages and behaviors spread like viruses do.”  Gladwell gives interesting observations of how once unknown products and behaviors reach the “tipping point” and become wildly popular and eventually commonplace.  I argue that such a phenomenon will occur in the near future in the wireless industry.  No, I am not making some bold prediction but rather simply pointing out an obvious fact – with nearly everyone in possession of a cell phone, the cellular industry is nearing market saturation and is transitioning into the mature phase of the business life cycle. 

In the cellular industry, operators rapidly blew through the introduction phase and are deep into the growth phase where it has been for the last ten to fifteen years.  With the onset of the maturity phase, however, comes the cellular tipping point. 

Here’s Business 101. When companies reach the maturity phase of the business life cycle they attempt to prolong a product’s life span by stretching this phase for generations.  It is a business school fundamental that the best way to prolong this phase is to reinvent yourself as many times as possible and simultaneously optimize margins.  While struggling as of late, the auto industry is a classic example of success in this endeavor.  Each year they introduce new models of old cars aimed at getting consumers to trade-in for a new/improved version. But auto makers only paid attention to one side of the equation. It has been the mismanagement of opex over the last several decades that has caused American auto manufacturers to falter – they simply can’t compete with foreign manufactures that can produce an equal or better car with substantially lower labor costs per vehicle. 

Back to the cellular industry. Operators are making the same competitive adjustments to their products.  Each carrier is upgrading their networks to the next “G” in an effort to reinvent themselves faster than Madonna. They are introducing new über-cool handsets so quickly you’re in constant phone-envy and the end of your two-year contract comes slower than a child’s Christmas morning. 

But unlike the auto industry, don’t think operators are ignoring opex. FierceWireless recently published an article entitled, “Operators now playing the opex game”, which points out that mobile operators can no longer focus on subscriber acquisition to grow and that they are now focusing on opex in an attempt to manage margins. While I have been forecasting this phenomenon as “the perfect storm” ever since AGL published my first article, I want to declare again that the tipping point is very close.  Over the next twelve to twenty-four months I argue that key industry executives and Wall Street analysts will make the reduction of wireless opex such common speak that the masses will shift from focusing on capex and speed-to-market to scrutinizing operating margins.  Are you prepared for this tipping?

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Why Cellular Operators Are Building Smaller Cell Sites

Picocell in Beverly Hills

The most common thing I heard at the CTIA 2010 trade show this week at the Las Vegas Convention Center was that wireless operators will need more spectrum as they deploy WiMAX and LTE networks – generally marketed as 4G. This need was discussed twice within the opening hours of the show. First at the opening morning Raymond James Breakfast Roundtable which was part of the Tower Technology Summit co-located at CTIA and more notably in the opening key note address by Ralph de la Vega, President and CEO of AT&T Mobility and Consumer Markets. While earlier this month the FCC announced its plan to free up 500 MHz of spectrum in the next ten years, 300 MHz of which is expected within five years, the mobile operators can’t wait that long. New smartphones are fueling an insatiable consumer demand for applications that hog bandwidth, which in turn will require mobile operators to manage the spectrum they have more efficiently.

For me, this was the tone of this year’s trade show and thus raised the obvious question – what are carriers to do until they get the additional spectrum they need? Answer: Perform cell splits— decrease the cell radii and insert more cell sites to try to eek out more capacity with the limited spectrum they have. The simplified math works like this – you can have several users all downloading large amounts of data through one 4G cell site or you can break that site into multiple smaller cell sites to spread the consumer demand. By subdividing cell sites carriers can try to get more capacity out of their limited spectrum, at the risk of decreased efficiency and increased interference in the network.

These smaller cell sites are known as microcells, picocells and femtocells. Microcells usually have a cell radius of one mile or less. Picocells have a cell radius of a city block or less. The equipment for a picocell can be quite small, even deployed on light poles or street corners in dense, urban areas and are common in large public facilities like football stadiums, shopping centers, office buildings, airports, etc. And femtocells are typically private cell sites in a home or small office with four or less private users. Click here for a prior blog on femtocells.

One thing is for sure, none of these three types of small cell sites are found on top of the typical cell tower. While there will always be a need for traditional cell towers, particularly for rural coverage, and high rooftop cell sites in urban areas, they are going to become less critical as network traffic begins to get off-loaded to these sites.

Ready, Set, Rent!

Coke Bottle AntennaSee Full Article in PDF
When the A/B Block PCS Auction ended in 1995 an unusual real estate phenomenon occurred. Cellular operators paid way too much to lease it. No, this wasn’t driven by low interest rates, the refi boom, Option ARMs or teaser rate mortgages. It was driven by a race for market share.

And, boy, was it a doozy. An analog-based industry had just gone digital. Wall Street was throwing money at this new enterprise as they were starting to inflate the dot-com bubble, and the FCC found a new revenue source for something they had previously given away for free. 

Before there was an auction for spectrum, the government had employed an inefficient lottery system to allocate spectrum. When the government realized that they could be the ones making money out of thin air (as economist Peter Cramton quipped after the first auction 15 years ago), the wheels were set in motion for a new industry dynamic that would profoundly affect future operating costs and the way carriers do business.

I know because I was there. I watched as players like WirelessCo, AT&T, PCS PrimeCo, Pacific Telesis, GTE, American Portable Telecommunications, Ameritech Wireless, Western PCS, Powertel PCS Partners and others together paid in excess of $7 billion for spectrum and then turned around and spent billions more to build their network — all before even selling their first PCS phone. They needed the frequency to build the network. They needed the network to sell the phones. They needed to sell the phones to appease the investors. The race was on.

Continue reading – full article in PDF

500 Percent Penetration

As published in AGL Magazine (December 2009)

In his address at the CTIA Wireless 2009 convention regarding the future of the wireless industry, Verizon CEO Ivan Seidenberg made a compelling case that “500 percent penetration is not only possible, it’s probable. Imagine a day when you not only own a smart phone, but also a wireless card in your laptop, a service such as On-Star for your car, an Amazon Kindle that downloads books on Sprint’s cellular network, and a wireless MP3 player on which you can download music. Oh, wait! That day is already here. We even already have lifesaving devices such as wireless heart monitors that transmit your vital signs to your doctor before a heart attack occurs.

Actually, the advancements we will see in wireless health care go far beyond the medical e-records that President Obama promised as part of his push for health care reform. Donald Jones, an executive at Qualcomm and the chief wireless officer for the West Wireless Health Institute, told attendees at a recent CommNexus meeting in San Diego that we can expect to see the “Kindleization of healthcare.” Essentially, that means that not only will we have remote monitoring of all our medical conditions, but also we will even have wireless bandages, we’ll just push a wireless strip on the box when we are down to one bandage and a replacement box will be shipped to us. In other words, 4G is going to take wireless to an entirely new level. As Seidenberg pointed out, the day when cellular networks will not only connect people to other people, but also connect people to machines and machines to machines is upon us. And in our lifetime, we will see a house managed by wireless devices embedded in the HVAC, the oven and maybe even the toaster. So, it is not hard to imagine a world where each person has at least five wireless devices of some sort — thus, 500 percent penetration.

500 percent for cell sites

Multiple devices per user means more cell sites — lots more. No wireless operator will want to be the company that lost a connection just as grandma’s vitals were being transmitted to the doctor’s office. But, these newer cell sites will be much different from the sites built for traditional voice service. Cell sites for 1G and 2G networks were typically built for coverage, thus the tallest site available covered the greatest area. There weren’t as many subscribers, so capacity was not an issue. As penetration grew, however, fill-in sites with lower rad centers were built to increase the capacity of the network. As user needs develop and networks mature, RF designs tend to shift from coverage to capacity. Sites will be more subscriber focused, offering greater bandwidth, greater capacity and more flexibility. Currently, 3G and 4G technologies use various techniques to provide a tradeoff between capacity and range, so there are still a variety of high, low and in between sites. Technology has enabled carriers to increase the range of their sites by reducing the throughput of the devices. Technology combined with subscriber demand for faster data rates is necessitating the continuous building of more sites.

In other words, with only voice technology, you either had connectivity or you didn’t, and everyone within range of the mountaintop site had coverage. Now, as handsets evolve and subscribers expect greater data rates, sites are developed to support subscribers and are more capacity oriented. So, no single site is as important as it used to be. Although RF engineers avoid holes in coverage, the use of many more lower sites means smaller holes; thus, on average, individual sites are less critical. An analogy: If you have one car, it’s pretty valuable. Without it, you can’t go anywhere. However, if you have a fleet of hundreds of cars, any particular car isn’t as valuable because you have others that can temporarily take up the slack if necessary.

500 percent for tenants

Watching penetration climb past 100 percent (as it already has in many European cities) does not necessarily translate into a corresponding increase in average revenue per user (ARPU) for network operators. The $100 per month we pay for unlimited plans for our smart phones does not include the card for your laptop, which is a separate $60. Sprint doesn’t charge for the Kindle access — it is included in the purchase price of the device when you buy it from Amazon. com. Medical devices will most likely work the same way. Consumers won’t be willing to pay extra for the ability to reorder supplies — that is a cost that will have to be covered by the seller. Wireless carriers still have to figure out pricing schemes for embedded wireless. And while we wait for those pricing models to take shape, we can be sure that 500 percent penetration does not mean a 500 percent increase in revenue for carriers — and it never will.

In fact, for a multiple-device world to exist, devices and airtime must be cheaper — much cheaper. No one will pay $99.99 per month for a wireless link between their car and their microwave oven just to make sure their day-old pizza is warm precisely as they pull into the garage. It must be cost-effective to be attractive, and that means cell site tenants will continue to drive down costs to support their overall goal to reduce operating expenses to keep up with the cost of subscriber demands. And over time, the reality is that rent is the biggest carrier expense for a cell site.


500 percent for landlords

No one would question that needing more cell sites increases the demand for antenna locations, and that is good for landlords. But as previously mentioned, the new sites are different and more flexible. So don’t expect to see as many tenants begging for the same location. Just as the handset has evolved, so has the cell site and, thus, the cell site lease. Generally speaking, multiple, tall, rooftop sites have replaced the mountaintop site, and lower rooftop sites are replacing tall rooftop sites, and lightpoles and femtocells are replacing lower rooftop sites. If every house gets a femtocell, the tall tower is much less vital to the tenant. For a carrier, the big benefit of femtocells is that they improve coverage and capacity while reducing capital and operating expenses.

If the cell site network comes down to the level of one site per house, carriers are not going to pay $1,800 per month for that site. As a matter of fact, carriers are not willing to pay anything for a femtocell in your house — they actually charge for that.


So what?

As wireless innovation and growth become more deeply embedded in every facet of our daily lives, what does this mean for cell sites? Doesn’t rapid technological evolution mean the need for more sites, and won’t cell site owners expect t0 see more demand for access to their sites, thus increasing rents? Well, if all the new technologies operate on the exact same sites as existing equipment, yes. But that is not necessarily the case. There will be more telecommunications sites, no doubt about it, but the increased demand won’t necessarily be for the same types of sites. New sites will be smaller, with a lower rad center, and will require less square footage. For example, the equipment for a WiMAX network is much smaller than traditional cellular equipment, and a 4G network operator has much more flexibility about where that equipment is located. Thus, it is not reasonable to expect them to pay the same amount as a traditional voice carrier would pay to have its antennas 150 to 200 feet in the air. A 4G network operator’s antenna array is smaller and lighter, and the 4G base station is not much different in size from one of my wife’s suitcases.

The dynamics between cell site landlords and tenants are changing. Cellular operators are looking for long-term partnerships with their thousands of landlords. Landlords would do well to treat their tenants like partners and customers with a long-term view in mind — which is simply prudent business.

Cell Phones Are Like Hamburgers

CellburgerAs published in AGL (Aug 2009) – PDF of Full Article

Whether or not you are a McDonald’s restaurant fan, there is no denying that the foodservice retailer has one of the most successful business models ever conceived — and not for the reasons you think. When McDonald’s Corporation founder Ray Kroc asked a group of business students what business he was in and they replied “fast food,” he quickly corrected them and said, “No, I am in the real estate business.” Although McDonald’s Big Mac hamburgers may have been a tasty fast food novelty, it was Kroc’s well-selected real estate that actually sold burgers. But there is much more to that story.

In a similar manner, you could say that the operators of cellular networks are not in the “phone business” but in the real estate business. Without well-located cell sites, they would not have adequate coverage and thus could not sell much airtime no matter how cool the latest handset. Although well-managed real estate has proven to be the key to a successful business model, wireless network operators haven’t exactly followed Kroc’s path. Let’s take a look at the lessons operators could learn from hamburgers.

Kroc struggled to make money in what most consider to be his primary business, selling the method originated by brothers Dick and Maurice “Mac” McDonald for mass-producing hamburgers in less than a minute. Kroc credited Harry Sonneborn, a former vice president of finance at Tastee Freeze who became McDonald’s chief financial officer and later its president and chief executive officer, for McDonald’s “real moneymaking engine . . . its little-known real estate business,” wrote John F. Love in McDonald’s: Behind the Arches.

In 1955, Sonneborn suggested that McDonald’s should control the real estate used by franchisees, as the idea was described in Forbes Greatest Business Stories of All Time by Daniel Gross and the Forbes magazine staff. In 1956, Sonneborn helped Kroc create Franchise Realty. Through Franchise Realty, McDonald’s made money by “leasing or buying potential store sites and then subleasing them to franchisees, initially at 20 percent markup and then 40 percent markup,” the book said. Eventually, franchisees would “then pay McDonald’s either a minimum rate or a percentage of sales …and … the company would collect more and more rent as its costs remained constant.”

In the early days of McDonald’s growth, Kroc would fly over the growing suburbs looking for open land near a church steeple because he wanted to be where the people were. In the cellular phone industry, I am sure a site acquisition agent or two also have driven around looking for church steeples.

Besides the fact that cell phones don’t taste good even with cheese, the difference between the two industries is in those early days of rapid growth. Unlike Kroc, who flew the countryside looking for the best locations to lease to franchisees, tower site acquisition agents drove every back road and alley looking for the best coverage, as fast as they could. They weren’t focused on making a profit for their clients on the real estate itself. Most weren’t even given incentives to find the best deal, because signed leases were pay points on their service contracts, regardless of rent amounts. In the end, they were more interested just getting a site leased so the operator could offer coverage more quickly. But as they say, location, location, location is the key to real estate, and if the cellular operators weren’t going to watch the long-term dollars spent on those sites, someone else was. The two primary beneficiaries were the tower companies that started popping up nationwide and the thousands of real estate owners who just happened to own the tallest site in an area or the one at a critical roadway intersection. Because cellular operators were more focused on speed to market and coverage than they were on the price of real estate, debt was bound to fund tower development and building owners got insane deals for rents on what is, for the most part, unusable space — rooftops.

The hamburgers and cell phones comparison diverges further. There are far more cell sites offering coverage than there are McDonald’s locations offering hamburgers, and the operators built their networks as tenants rather than landlords.

This is the defining difference between cell phones and hamburgers. Kroc made more and more money from his real estate holdings as their leases transpired, but the cellular operators are experiencing ever-escalating rents costs and tighter margins. Over the long term, rent is by far the largest expense in operating a cell site. This is an expense operators didn’t pay much attention to when they were rapidly expanding networks and adding subscribers. Now they have no choice but to focus on it.

Think like Ray Kroc

Kroc followed Americans to the suburbs, and cellular network operators are following the world everywhere. There are more than 30,000 McDonald’s restaurant locations worldwide. That does not even begin to compare to the more than 242,000 cells sites nationwide, a number that will continue to grow exponentially during the next five years. And we are far more addicted to our phones than we are to our burgers — well, most of us, anyway. All this is said to make the point that operators of cellular networks would do well to think like Ray Kroc and take command of their real estate before the networks collapse because of untenable operating costs.

Ultimate competitor

Biographers describe Kroc as the ultimate competitor who was so ruthless that after buying the naming rights from the McDonald brothers for the outrageous price of $2.7 million, he opened a location one block from their original store just to drive them out of business. He was also obsessed with standards, such as his insistence that all potatoes be cut to exactly 9/32 of an inch to become a McDonald’s fry. Cellular network operators are obsessed with standards, too. They are constantly trying to “raise the bar” so you can “hear me now” when we “stick together” on the “now” network. But historically, they have not been competitive in the management of their real estate portfolios.

Real estate is the core asset for thousands of companies, and they manage it as such. With the exception of oil and gas exploration companies and railroads, rarely has a company had as large a real estate portfolio as cellular operators. From the beginning, the cellular network operators have focused on their “hamburgers” — that is to say, their technology — and have done a great job of it. But now they need to focus on their real estate assets either internally or through outsourcing, or their “hamburgers” won’t be worth a dime.

This realization is dawning on operators around the globe. I argue that President Obama is not the only change we will see in the next few years.

PDF of Full Article

What is the Market Price for Cell Site Rent?

As originally published in AGL (April 2009) – PDF of Full Article


Everyone wants to get paid what they’re worth.

Whether it’s based on principle or pride, it absolutely galls us when someone else gets a better deal, or we lose out to someone who undercuts our asking price. While we steadfastly hold something’s worth as an absolute, we have often come to this determination by a subjective, mind’s eye calculation of what is commonly referred to as “the going rate.”

For cell site landlords, the determination of worth goes something like this: “My buddy is making $1,650 a month on his cell site lease and my site is in a much better location than his so I should be getting $1,800.”

Landlords are often irked and even angered when they are told that’s not the rate that the tenant wants to pay. They think they’re getting gypped. They don’t understand why this tenant is not honoring the going rate. And therein lies the problem: never confuse the “going rate” with the “market rate.” The last house to sell on my street in San Diego almost a year ago has nothing to do with what a different buyer will pay for my house today.

The real market rate for cell site leases is not what another tenant paid down the street. In today’s business environment, it’s what the competing potential landlord across the street will accept. Thanks to carriers’ escalating operating costs, the public’s voracious appetite for new technology and the network’s evolving engineering requirements, cell site leasing has become a competitive marketplace. Let’s take a look at what landlords can do to protect their income. (Continue reading full article in PDF)

See full article in PDF

Rembrandt: 100 Guilder Print

Jesus Healing the Sick 100 Guilder Print

Most commonly known as the “100 Guilder Print” (c. 1649) and arguably one of Rembrandt’s most notable etchings, it is also referred to as “Jesus Healing the Sick” or “Christ Preaching” and occasionally “Jesus Calling the Little Children” (even though most in the print are not children). “100 guilder” is a reference to the story that Rembrandt paid 100 guilders, a large sum of money at that time, to buy back one of his own prints. According to a 2001 article in Forbes magazine, Rembrandt paid 9,000 guilders for his house in 1639.

The large (27.8cm x 38.8cm) and powerful image is an amalgamation of various stories from the Book of Matthew where we see Jesus addressing the Pharisees, healing the sick and caring for the poor, all with Peter closely observing.

Over 100 years after it was created, Irish art collector Captain William Baillie purchased and reworked the plate and sold several reworked images.  Baillie eventually cut the plate into four separate pieces in 1776 and sold the image in quarters, thus making original images from the plate as worked by Rembrandt substantial more valuable.  

Femtocells Are Not Just About Connectivity


I was pretty excited a few months ago when I bought a new Femtocell device from my cellular service provider. My wife and I had noticed that we had begun having problems connecting to the network and calls were dropping more frequently so I swallowed my pride and paid $250 solve my carrier’s coverage problem. I expected to get maximum “bars” in my house easily and seamlessly. But my experience was far from plug and play. Actually when I called the carriers help desk they said something to the effect of “oh it doesn’t work with data plans yet. You’ll need to turn off the data portion of your Blackberry each time you walk in the house.” I promptly packaged it back up and returned it to the retail store. I figured I’d wait a generation or two before trying it again. Maybe the price would come down in the meantime.

While I am still not ready to try again to solve my carrier’s coverage problems, I must admit my interest in femtocells is revitalized. At a recent CommNexus San Diego SIG focusing on “Femto Services” I got a glimpse into the future and like what I see. If femtocells live up to expectations it could become the link between your mobile phone and embedded wireless devices in your home such as your TV, HVAC, and utilities. Via a femtocell, you will be able to remotely communicate with your house to manage every embedded device such as turning on the oven, or responding to a SMS reminding you that you left the lights on. There will also be presence enabled capabilities that detect your phone as you walk through the door and immediately turn on the TV, air conditioner and appropriate lights as you move throughout the house. In addition to knowing when your kids are home because their phone comes within range of the femto, you can also leave them a “digital post-it note” reminding them to clean their room as soon as they get home.

There are several devices vying to be the hub of the future digital home but unless those devices connect to your smart phone then they won’t work. I can see a combination Femto/Wi-Fi device controlling those connections in our future homes where we live just like the Jetsons.

The Perfect Storm for Wireless Operators


According to Wikipedia a “perfect storm” is an expression that describes an event where a rare combination of circumstances will aggravate a situation drastically.” The term gained popularity when George Clooney stared in a film called The Perfect Storm (based on the book by Sebastian Junger of the same name) about the 1991 Halloween Nor’easter in which three weather conditions combined to generate a perfectly fierce and deadly situation:

• warm air from a low-pressure system coming from one direction,
• a flow of cool and dry air generated by a high pressure from another direction, and
• tropical moisture provided by Hurricane Grace.

Today in both Europe and North America, the wireless industry shows its own combination of circumstances which could create a future perfect storm:

market saturation – it is estimated that 85-90% of Americans own a cell phone and the number in many European countries are estimated to be at or over 100%,
cheaper “all-you-can-eat” rate plans – in the USA, all of the four major carriers offer voice/data plans for $99/month and Metro PCS offers voice plans for as low as $50/month, and
increasing OPEX – the two largest expenses for wireless carriers are payroll and rent roll and both are inflating.

It doesn’t take a meteorologist to forecast enormous pressure on cellular operating margins. And it is safe to assume that cellular operators have and will continue to focus on this issue.

On the revenue side of the equation, operators will battle it out for the final 10-15% of market share, and operators will continue to search for more ways to increase ARPU by adding cool apps and services as well as introducing cooler handsets to encourage subscribers to remain loyal and/or switch to their service. The iPhone/Blackberry battle is the classic example of this.

On the expense side, these conditions place pressure on payroll and rent roll and operators are looking for ways to lower OPEX. Expect to see more outsourcing and tighter cost controls. Also expect to see more rigorous scrutiny applied to lease costs. With annual rent rolls in the billions, operators will be keeping a close eye on the rent expense.

Wireless Healthcare – It is Great to Work in Wireless!

CommNexus of San Diego joined with CTIA, West Wireless Health Institute and Qualcomm last night to host a panel discussion on Wireless Healthcare at the impressive Irwin M. Jacobs Qualcomm Hall in San Diego.  While the panel’s discussion was not directly related to cell sites and cellular antenna leases, it was very interesting take a peek into our future to see the impact that the wireless industry will have on global healthcare.  The panel included a trio of fore-thinkers from the West Wireless Health Institute including its founder, philanthropist Gary West

West noted that by 2020 there will be major shortage of doctors to treat the rapidly aging population in the USA and that wireless monitoring of patients will significantly reduce the number of office visits.  Key vitals can be remotely monitored with the data being transferred and managed electronically whereby patients only come to see a doctor if their results are outside the norm.  Imagine it… not only implantable devices like pace-makers and heart monitors, but also wearable devices such as portable ventilators with wireless capability and even digestible devices.  The panel noted that this will lead to not only wireless monitoring but remote analytics and predictive modeling to forecast health issues before they occur. 

Additionally, the panel made the point that growth in this area will be consumer driven, rather than doctor or prescription driven as patients will most likely choose to purchase their monitoring devices as a preventative measure rather than waiting for their doctor to prescribe one for treatment. 

This is all pretty cool stuff!  While many of these devices will be Bluetooth based, I can still see a much greater need for cell sites as dropped connections will now become a liability – you don’t want to be the network that caused a person to die because the transmission of a patient’s vitals did not make it through to the doctor.  While my job of negotiating, documenting and administiring cellular antenna leases is not as sexy as developing wireless devices that will save future lives, I am proud to play a small part in maintaining the infrastructure that many of these devices will operate on.  I say it is great to be part of an industry that will revolutionize health care not only in the USA, but worldwide.

Discussing Cellular Leases at PCIA 2009

In my first Opinion Pole blog I commented that PCIA 2008 in Hollywood, Florida was silent on cellular leases – not the site acquisition process itself, but on the actual leases documents and what can be done to improve them for the betterment of the entire industry.  Well I am happy to note herein that PICA 2009 in Nashville, Tennessee was better.  The company I work for (Md7, LLC) pushed the topic and began driving the conversations a bit more than usual this year.  While it is not my goal to turn this blog into a promotion for my company, it was through the presence of Md7 on two panels and hosting a hospitality suite that we were able to have several public and private conversations about leases and how to make them better.

My colleagues, Thomas Dolislager and Sudeep Gupta both participated on panels in which improved leases were at least part of the conversation.  Thomas’ panel was called “Outsourcing to Experts: How to Reap the Benefits” and was sponsored by Message Center Management.  The biggest take away from this discussion was to trust experts and select specialists who do one or two things really well.  Lease documentation is no exception.  While lease negotiations and preparations have long been entrusted to site acquisition companies and law firms, I do see a trend to concentrate in this area even further. 

Meanwhile, Sudeep participated on a panel called “Innovative Strategies for Reducing Network OpEx” where he raised the very valid point that over time the single biggest cost of operating a cell site is the rent expense.  Monthly rent that escalates each year will eventually outweigh the cost of base stations, zoning, maintenance and even construction.  So if rent is in fact the largest expense, then it makes sense to concentrate on managing it and making the documents themselves more efficient and standard.   
While not everyone agrees with me that there is a LOT of room for improvement in the hundreds-of-thousands of cellular lease documents currently in existence in the United States and abroad, most agree that rents are high and leases have to be negotiated and renegotiated multiple times – especially each time and upgrade is made to a cell site.  Let’s find ways to improve this process.

The Silence Is Broken

In the middle of the 2008 PCIA show in Hollywood, Florida I asked Dustin Cahill who works with me at Md7 if he heard anything and with a strange look on his face he shook his head and said “I don’t hear anything.”  To which I responded “Exactly!”  He thought I was crazy, but I was making a point – the wireless infrastructure show (and the wireless industry as a whole) was noticeably silent on my favorite professional topic – cellular leases and how to how to improve them.

Oh, there is always plenty of talk about site acquisition, zoning problems, and regulatory issues.  That is the same ole stuff.  In 2008 I also heard a lot of talk about DAS, “drop and swaps” and of course the “Titans of Tower” hour was very interesting.   But no one was talking about the leases themselves.  Things like: What are the key terms in a good lease? How can these key terms be improved?  Can we bag CPI escalators forever? And the all important one our industry seems to never openly discuss, why are rents so high and what can be done about it?

I have committed the last five years of my career to these very questions and had some very interesting conversations – some positive and some not.  Some people liked what I was saying and some told me I was crazy – some even hurled a few personal insults.  But seriously, we need to be talking about this topic and others.

It took me several months since that inspirational moment in South Florida last year to figure out Web 2.0, social networking, tweeting, connecting, making Facebook friends and the hardest of all – WordPress. But you are reading the result; my first blog!  This is the introduction of my contribution to sharing information among wireless industry players to encourage what I call “mutually beneficial outcomes.”

I’ll try not to be narcissistic in here.  I am not blogging to change the world, self-promote or generate business for myself.  I simply would like to engage in legitimate, interesting, respectful conversation and make acquaintances within the wireless industry – whether we agree or not.  Let’s call it stimulating professional conversation.

So, I hope you’ll enjoy the Opinion Pole and check back in regularly.  I look forward to chatting with you!