When it comes to densifying a network, small cells is the most popular solution. We covered small cells in depth last year, to put it simply, small cells are little towers that can be mounted on utility poles throughout cities and towns to extend coverage and increase bandwidth. Carriers have typically kept to using them in heavily populated areas like downtown areas, stadiums and the like. With carriers focusing on densifying their networks, particularly Sprint and Verizon, small cells have been a pretty popular product for fiber companies. Which include Zayo and Lumos, both of whom talked about small cells on their recent quarterly earnings calls. However, they also noted that it's tough to tell what the demand will be for small cells in the immediate future. But do believe that T-Mobile and AT&T will be relying on them soon enough for their own networks.
Zayo's CEO Dan Caruso stated on his company's earnings call this week that "small cells are interesting because it's live, it's all over the map right now." Caruso also mentioned that there is a bit of a learning curve here with small cells. Mentioning that those bidding on projects, implementing them, and investors are not too sure where the prices should be. "We've seen some deals in pricing out there that frankly we scratch our head at" Caruso stated. The company's CFO, Kenneth desGarennes added to the conversation and stated that Zayo has been working on a deal in Texas for small cells that it just completed in March, after taking 18 months to work on. This was to drive the point that it's not out of the ordinary "to work on some of these deals for a long period of time before they get inked."
Backhaul is pretty important for carrier's wireless networks. It essentially opens up capacity for everyone to get more out of their wireless network. Small cells has been a great way to increase backhaul for carriers because it's cheaper than getting another tower, and it doesn't require much maintenance. While analysts believe that small cells are going to continue to be a popular topic over the next year or so, it's tough for fiber companies to gauge just how big of a deal it is at this current point in time.