Industry Trend Analysis - Fibre Backhaul An Important Component Of 5G - SEPT 2017

BMI View: Crown Castle ' s acquisition of Lightower aims to improve the company's small cells offer by increasing its fibre backhaul. As data rates need to be higher and more consistent, it will be crucial for operators to use fibre as their main backhaul technology, as well as being flexible to combine different types of networks to offer the best service possible.

Crown Castle, a telecoms infrastructure provider, has announced a deal to purchase Lightower, a dark fibre company, for USD7.1bn including debt. This is Crown Castle's second such deal in 2017, having spent USD600mn to acquire Wilcon in April. The company, which already owns 40,000 towers and 50,000 small cells sites, will double its fibre footprint, at 60,000 miles, with Lightower present in the greater North East of the US. Having an extended fibre backhaul will be key for Crown Castle to offer a resilient smart cells portfolio, and it reinforces our view that the US will be one of the first adopters of 5G services globally.

Mobile data traffic continues to grow at a rapid pace in the US market, with the CTIA reporting a 42.2% increase between 2015 and 2016, and Cisco expecting over five exabytes (5bn gigabytes) of data to flow over networks by 2021. Operators are looking to meet that increased demand through spectrum and new technologies, especially in dense urban areas, where data traffic will be the most intense. The need for capacity means that operators will look to combine different types of networks to meet that demand, under a HetNets, or heterogeneous networks, strategy.

Meeting Increasing Data Demand
US Mobile Data Traffic (EB/annum), 2016-2021
f = Cisco forecast. Source: Cisco

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