Stefan L Schmitt, Group Director of Product and Innovation, BAI Communications
It didn’t come as a big surprise that a substantial majority of respondents to BAI’s recent research on smart communities considered themselves innovators or early adopters at the forefront of new technology. It was a little more surprising to compare those responses to actual technology adoption: only 25% are using 5G networks and just 9% are actively working towards 6G.
Our study also found that nearly all respondents are familiar with the technologies needed to move forward. So what’s holding them back? Often, the hesitancy is related to financing or ownership challenges and concerns. In this blog, we look at how embracing a new perspective on network infrastructure ownership and working with a neutral host partner like BAI can help organisations advance their technological transformations and achieve their smart community goals.
The pros and cons of the traditional approach to ownership
Many organisations we surveyed were eager to participate in smart community initiatives, and they recognise that the connectivity required to do so depends on a range of physical assets: distributed antenna systems (DAS), small cells, radio towers, fibre optic cabling, and more. When it comes to who should own those assets, two-thirds of respondents preferred a model based on capital expenditure (CAPEX), where they invest in and own their network infrastructure, rather than a model based on operating expenditures (OPEX), where they pay monthly fees to use infrastructure owned by someone else.
The CAPEX model often seems desirable as it offers some obvious advantages, such as the ability to retain full control of the network. When you own and manage your own network, you can configure it exactly how you want it, allocate network resources where you need them and make changes as your needs evolve.
But it also has downsides, which could help explain why many respondents were still using older network technology. Purchasing all the required assets incurs high upfront costs, which need to be budgeted for and can increase time to market. And it doesn’t stop with the initial purchase. When you own your network, you’ll have to buy new infrastructure assets every time you want to upgrade. Again, that requires substantial upfront capital, which can lead to upgrade delays, which leave you unable to provide the enhanced services end users expect. It could even increase your risk of security problems.
The CAPEX model also places the responsibility for managing your network assets squarely on your shoulders. That means you’ll have to coordinate with many different mobile network operators (MNOs) to ensure interoperability with their networks. Managing multiple MNO fit outs or upgrades to ensure universal compatibility can present real challenges for scaling coverage, as we’ve seen with many of our customers, including Crypto.com Arena in Los Angeles who had 4 different sets of carrier equipment to manage on a 22-year-old network. Plus, if something goes wrong, you’ll have to fix it.
When you own your network,
you’ll have to buy new infrastructure assets
every time you want to upgrade.
How a neutral host can solve the ownership dilemma
Partnering with a neutral host like BAI under an OPEX-centric model can solve a lot of these challenges. Under this model, we take on the initial investment, so all you have to pay is a manageable, predictable monthly cost. This approach is much easier to budget for and leaves more of your cash flow free to invest in your core business so you can focus on getting your own products and services to market.
As a neutral host, we serve as a single point of contact, handling planning and permissions, and securing the rights needed to mount equipment. This includes coordinating with all local carriers to connect a single set of on-site infrastructure to external networks and enabling full interoperability that can include hardware and software disaggregation and expanded cloudification.
Once it’s all in place, we take care of ensuring the correct conditions and physical security of the network assets, as well as ongoing maintenance and repairs. This keeps the network running as it should, avoiding unexpected equipment failure and the added costs of downtime. And when new network technology becomes available, we’ll upgrade the network, so you can continually offer the best and most secure experiences for your customers.
Our work with the Hong Kong MTR Corporation is a great example. We’ve been supporting the public transport operator since 1997, when we first built a ground-breaking 2G connectivity system throughout its transit network, including underground tunnels. Since then, we’ve seamlessly upgraded the system through 3G and 4G, with plans to move to 5G and enable even more advanced services.
A way forward to build smarter communities
Despite these advantages, some organisations may still be concerned that giving up network ownership means giving up too much control. But it doesn’t have to. Neutral hosting agreements are highly flexible and can be structured in whatever way makes an organisation comfortable. If that means guaranteeing that all network decisions remain in your hands, we’re happy to put that right in the contract.
Neutral hosting agreements are highly
flexible and can be structured in
whatever way makes you comfortable.
Our global expertise has made us a trusted partner for governments, network operators, transport authorities, and more. With BAI by your side, you can confidently move into the world of smart communities and focus your resources on offering better services and experiences for your customers.
This is the final blog in a series exploring the themes uncovered in our 2022 Smart communities report. To read more about how enterprises and venues are approaching smart community initiatives, download our 2022 Smart communities report: The building blocks of smarter, more connected communities, and be sure to check out the earlier blogs in this series:
- Building smart cities, one community at a time by Brendan O’Reilly, Group Chief Technology Officer
- Smart partnerships build smart communities by Sarah Palmer, Vice President, Digital Infrastructure
- Rethinking infrastructure to build smarter communities by Rui Inácio, Chief Technology Officer, Vilicom