Understanding industry developments and their market effects will be crucial in 2023. The fast deployment of 5G networks, the shift from traditional telecommunications companies to Internet companies, the expansion of the IoT (Internet of Things) sector, and the significance of data are our themes of focus.
With emerging trends and technology fueled by innovative ideas, it is important to know,
“How does this disruption affect me as a cell site owner?”
Trends in Telecommunications for 2023
A Shift from Telcos to Tech Cos
Increasing demand for digital services like cloud computing, smartphone applications, and the Internet of Things “IoT” has bloated the telecom sector to include both traditional telecom firms (telcos) and tech corporations (tech cos) using these instruments.
(5) Big Data is expected to reach an all-time high of $103 billion by 2023, and Crypto markets are slowly starting to grow again. Due to this growth, demand for communication infrastructure is growing & some of the prospective tenants are acting on their ability to deploy capital and build their own. Simply said, Big Data is exploring ways to use, construct and manage cellular instruments.
Enter a profitable tenant… and a capable competitor.
(7) Maturation of 5G
5G technology is rapidly maturing, promising faster speeds, lower latency, and more reliable connections. 5G is now poised to transform the telecommunications industry as we see new use cases ask for higher usage, in less physical space.
Symphony Wireless Vice-Chairman, Jorge Pedraza, penned a piece outlining the impact of 5G on cell site owners; “First, it means that your tenant will probably have every interest in keeping their site on your property active and continuing to pay rent.”
However, Jorge points out that with 5G’s growth, “Legacy sites” are being shut down and newly constructed 5G sites allow for significant consolidation compared to existing assets. “The full impact of site consolidation from network acquisition is only now being felt. Carriers need to recoup their enormous investments and pay down their debt.”
Meaning: now more than ever, knowing your cell site’s present and future value is crucial to the continued revenue stream.
Data + Artificial Intelligence
Data generation is accelerating day by day. Telecommunications companies keep massive volumes of client data to enhance customer experiences, network performance, and product development. Telecommunications companies are also poised to benefit from this influx of data as a conduit for transmission.
To keep up with massive influxes of data, the telecom industry is growing its asset footprint and working to ensure site efficiency. (4) Surveys show that telecom companies use AI (Artificial Intelligence) heavily for product and service development (45%) and service operations (34%). Ensuring growth, while focusing on efficiency in all facets. Further, AI can be instrumental in predicting tower equipment failures, and reducing network downtime.
(6) Big data’s growth has birthed many new industries with projected growth in 2023, creating revenue opportunities for cell site owners and telecom providers. In fact, some companies like AT&T are moving all of the 5G traffic to cloud services like Microsoft’s Azure service. This shift is providing more reliability to end-users with greater speed while also reducing the carbon footprint of the company.
(2) Data, AI, increased connectivity, all attributes of an ever-changing landscape of telecommunications infrastructure. According to McKinsey & Company, telcos allocate 60% to 70% of their operating budget to field and service operations. Symphony has its finger on the pulse of these changes, and working with experts can ensure your site benefits as well.
Leasing of telecom assets
Telecommunications leases are crucial to network service delivery. Telecommunications companies and real estate owners buy and sell leases to cell towers, fiber-optic networks, and other infrastructure. These transfers build portfolios of assets, like Symphony Wireless, whose goal is to be a better partner with the carriers and other potential tenants on cellular infrastructure.
Selling an asset with the intent of reaping future benefits of added leases has become a viable option, especially as the cost of capital rises with interest rates. Carriers today are looking to send multi-site proposals that can fill gaps in one contract, as opposed to working with multiple individuals.
This opens the door for Symphony Wireless to build buyout options for cell site owners.
Symphony Wireless’ role in the acquisition of leases
Symphony Wireless understands the value of a telecommunications asset lease as a reliable source of income for cell tower and rooftop site owners. We provide personalized buyout offers that help our customers secure their future lease income through a lump sum payment.
With years of experience in the communications infrastructure industry, our executive team and investors are committed to providing honest and fair capital opportunities. This experience and network aids in adding leases to a given instrument, if you sell an asset into Symphony’s portfolio you tap into its potential to add leases to that instrument and share that revenue with you down the line.
Symphony with a rolodex of telecom infrastructure professionals & a portfolio of sites is poised to be a source of capital for site owners while executing RFPs from the carriers.
Top Telecommunications Risks? What you need to know for 2023
Financial Risk
In 2023, players in the telecom sector could lose money due to increased competition and rising operating costs. Cell site owners must comprehend the dangers of the industry’s financial problems, which might affect cell site leasing values. Telecom giants have spent billions on infrastructure in the past 20 years, with disruption in the market comes focus on past decisions. (8) According to Statista “In 2022, telecommunication services spending is expected to amount to 1.46 trillion U.S. dollars, a growth of around 0.4 percent from the previous year, a more modest growth than in 2021, when the industry recouped some of the negative economic impact brought about by the coronavirus (COVID-19) pandemic”. Many operators are trying to recover financially, making the business vulnerable to financial concerns as consolidation looms.
Investors may bring elements of caution to investing in telecommunications due to this disruption, making it harder for cell site owners to attract fair and valuable purchase agreements. Symphony Wireless’ expertise, industry contacts and investor network are here to help you reduce this risk by providing transparency and clear value.
Failure to Maximize the Value of Infrastructure Assets
Cell towers and rooftop locations are essential to providing high-quality telecommunications services. Operators risk losing considerable income if these assets are not utilized. Often sites are left empty and decommissioned due to recent changes in carrier needs, upgrades to nearby existing towers or commissioning new tower sites locally by developers or the carriers.
Symphony Wireless offers comprehensive solutions to help operators optimize assets. We offer lease buyout opportunities that allow operators to extract maximum value from their investments while reducing their financial risk. Our connections and existing portfolio help keep assets alive, while funneling those new opportunities for revenue back to the initial owner creating a partnership, not just a sale.
Poor management of sustainability agenda
(1) According to EY’s Global Climate Risk Disclosure Barometer the quality of telcos’ climate change disclosures has worsened year-over-year, while reporting of environmental, social and governance (ESG) metrics such as renewable energy consumption and e-waste management is often lacking. What is more, 39% of telcos do not disclose a specific net-zero strategy, transition plan or decarbonization pathway. Customer needs are also evolving rapidly: 47% of large businesses do not think that vendor 5G and IoT use cases adequately address their sustainability needs Operators must raise their game if they are to adapt to a changing landscape of stakeholder expectations.
Inability to take advantage of new business models
(3) A combination of saturation in consumer markets and constrained average revenue per user (ARPU) development means that many operators are prioritizing B2B growth opportunities. But this focus has yet to deliver a meaningful upside, partly because the proportion of revenues coming from higher-growth offerings, such as IoT and cloud, remains small. There is also a lack of alignment between telcos’ new offerings and what enterprise customers are now looking for, particularly in emerging service domains such as network-as-a-service.
How Symphony Wireless Helps Mitigate Risks
Symphony Wireless works to accommodate all potential businesses that have a need for cellular instruments. Working with cloud, IOT (Internet of Things) & Crypto vendors to complement our vast portfolio of cellular leases. Symphony works with its vast portfolio and partners to make sure that its sites are in top shape and harnessing sustainable sources of energy, thus expanding the lifespan and output of our owned assets. We understand the financial risk that cell tower owner share, this risk is mitigated by the growth of our portfolio, as the partnerships we have given the carriers greater visibility and selection of our assets compared to individually owned ones. This partnership ensures that as we partner to create buyout with cell tower owners, that we add value to those towers a split that future revenue with the seller.