DAS Business Model
Initially wireless carriers deployed Distributed Antenna Systems (DAS) to expand their service into buildings. The carrier funded, installed, and maintained the DAS anticipating increases in their revenues. The carriers realized that their investment in the DAS could be leveraged by leasing the capabilities of the DAS to other carriers, thus creating a neutral host DAS.
The deployment of a DAS can benefit the building owner and the wireless carriers. With the building having a DAS, the tenants and occupants of the building have enhanced cell coverage resulting in reduced complaints and service calls. The DAS also improves the marketability of the property for the building owner by increasing connectivity and increases building safety by improving emergency services. The carriers' benefits include
Figure 11.2 Cell tower.
Figure 11.3 Multiple antennas in a large building.
increased data and voice usage of their wireless networks, leading to additional revenues.
One projection is that DAS installations could grow by 300% by 2017 (iGR Research). Driving this growth is user demand for ubiquitous reliable connectivity, rising bandwidth requirements, and quality of service expectations. The cost for typical DAS systems now range from $5 to $10 million. Worldwide distributed antenna system (DAS) revenue reached $2 billion in 2013. The major DAS leaders are Commscope, Corning Mobile, and TE Connectivity. (Data from Infonetics).
DAS business models vary. In one model the building owner owns the DAS and takes on the responsibility for service, maintenance, and upgrades. Another option is a third party that could provide a neutral-host multi-carrier network; the provider would own, operate, manage, and monitor the network relieving the building owner from having to invest in the DAS. A third option is for the building owner and the third party to split the capital of the DAS with the third party owning the network and being responsible for all maintenance service and carrier relationships.
Generally wireless carriers are hesitant to finance the installation of DAS in office buildings and malls, they look instead at larger venues such as airports, stadiums, and corporate campuses as they seek to concentrate their efforts only on the most high-profile, profitable opportunities. The costs to install and operate the DAS networks are significant and typically cannot be justified by the wireless carriers from a return on investment perspective. The carriers may install and operate a DAS in stadiums and airports, but cannot justify it in smaller buildings.
Finally, another DAS variant is the large building which has an anchor tenant, often the building owner. The anchor tenant occupies most of the building but leases out unused space. The wireless carrier for the anchor tenant would probably bring in a single carrier but could benefit from the additional revenue for the leasers. Under the terms of most commercial real estate leases the building owner can pass through the cost of operating and maintaining the building to the tenants in the form of additional rent, common area maintenance (CAM) or utilities cost, including, but not limited to communication systems and other equipment used in common. If the DAS infrastructure is paid for by the DAS provider, and the wireless communication service is sold back to the building as a utility, a commercial lease would cover this charge as a tenant utility expense. In these cases the DAS provider should be a licensed competitive local exchange carrier (CLEC) with the transaction structured as a utility easement in gross, with a utility service agreement provided by the CLEC for a fixed term. In this scenario the DAS provider gets its return on investment and the building owner collects fees for utility charges since the tenants are the beneficiaries of the improved wireless service.
The business considerations for these models involve: (a) who owns the network, (b) who provides the capital, (c) agreements with each carrier, and (d) the service level agreements (SLA) for the DAS including their scope, quality, responsibilities and a contracted delivery time (of the service or performance). Part of ongoing service and maintenance includes changes to the building over time due to renovations and space modifications; such alternations could affect the performance of the building antennas. Also the latest technology changes (such as the recent shift from 3G to 4G) will impact updates and changes to the DAS deployment.
Below are some examples of real world DAS implementations:
b Merchandise Mart in Chicago: When it opened in 1930, the Merchandise Mart in Chicago was the largest building in the world, with 4 million square feet. The Merchandise Mart now has a distributed antenna system. The system is neutral host, allowing competing carriers to connect their radios and send out their signal. The DAS head-end or central distribution is in a 2,000-square-foot space, located on the 18th floor. Initially AT&T funded the installation. The leasing agents for the Merchandise Mart use the DAS as a sales point.
b Olympic Stadium in Baku, Azerbaijan: The DAS was installed to support the first European Games held at the 68,000-seat stadium in 2015. The DAS supports multiple radio frequencies for three mobile operators and ensures that capacity crowds at the Games received strong mobile services throughout the event.
b Gautrain Railway Systems: Gautrain Railway Systems is an 80-kilometre (50 mi) mass rapid transit railway system in Gauteng Province, South Africa, which links Johannesburg, Pretoria, Ekhuruleni and OR Tambo International Airport. A DAS was designed and installed in three underground Gautrain train stations. One of the challenges for the DAS deployment was that construction could not interrupt the train service. The master unit is located in one of the three train stations with the other two covered by remote units. The project supports both data and voice services for Vodacom and MTN subscribers in the Gautrain underground stations at Sandton, Rosebank and Park Stations. The next phase of the project addresses wireless coverage and capacity to the tunnels via leaky feeder and retrofitting the train cars.