Tim Courtney: We see equipment sharing in Europe. You know we work together in this industry in the U.S. We heard no one was going to share a tower. We share towers today. No one was going to share a stadium, only one carrier was going to get in this stadium. We have distributed antenna systems out there as well. You could play that model out. Can we share a radio? Can we share a backhaul? Can we share electricity? The analogy I give a lot is there’s 10,000 trucking companies in America, but they all share one road network.
Jeff Johnston: That was Tim Courtney, president of Wavsys, a broadband network design and staffing company, talking about some of the out-of-box ideas the wireless industry could explore to manage costs and maintain margins. Hi, I’m Jeff Johnston, and welcome to the All Day Digital podcast, where we talk to industry executives and thought leaders to get their perspective on a wide range of factors shaping the digital infrastructure market. This podcast is brought to you by CoBank’s Knowledge Exchange group.
The wireless industry is saturated, as most Americans already own a smartphone, and postpaid subscriber growth is coming from either switchers or the prepaid market. A natural question for this industry is, where does it go from here, and how will it sustain its margins? I invited Tim onto the podcast to talk about this. He spent the entirety of his career in the wireless industry.
He’s a very creative and strategic thinker who has the ability to look around the corner to see what’s coming. He’s my go-to guy for this kind of conversation. Without any further ado, pitter-patter, let’s see what Tim has to say. Tim Courtney, great to see you. Great to have you back on the podcast. How have you been?
Courtney: I’ve been doing well, Jeff. Great to chat with you, as always. Looking forward to talking some tech with you today.
Johnston: I appreciate your time, man. I know you’ve got a lot going on. One of the things-- well, a lot of things I like about you, Tim, but certainly one of the things is you’ve always had this ability to look around the corner when it comes to tech or communications or wireless. I want to take advantage of your unique skill in that regard. I want to talk about starting with the wireless industry. Looking out five years or so, you pick your timeframe, but a more futuristic view, very high level, how do you see the wireless industry evolving from where it is today?
Courtney: That’s a great question. I still think there’s a lot of growth as we wait for 6G. I would tell you, fixed wireless is still a big priority. The carriers a few years ago, that wasn’t even on their quarterly earnings presentations. It is now. That’s a big growth driver for the carriers out there. I would say in-building is important. You’re seeing the FCC mandating more accurate response and location for 9-1-1 calls. That’s going to force building owners to facilitate coverage solutions, either themselves or from the carrier. Back to your question, what do I see in wireless, we’ve seen some lawsuits already with building owners being sued because they didn’t provide an adequate wireless signal for folks to call 9-1-1. That’s why I put that up high on the priority list.
Then if I could indulge you and say the satellite providers now need to be part of the equation. There’s a lot of chatter as it relates to cell phones connecting to satellites as a primary means. I don’t think that’s the answer. I think that’s outdoors and backup, as Apple has spearheaded and shown that emergency calling, SOS-type text messaging is hugely successful. Why wouldn’t you want to be connected out in the non-cellular coverage areas?
One of the interesting announcements I saw today is Viasat and BMW are doing a partnership. Now, if you play that out, I could see every car in the future being a mobile cell site. What’s the use case? Imagine a hurricane hits Miami, New Orleans, and the cellular networks and the terrestrial networks all die. Imagine if you told people, “Hey, get within a quarter mile, 100 meters of this car brand, we’re going to connect you via Wi-Fi or CBRS or some unlicensed spectrum from the user to the car, the car to the satellite, the satellite to the cloud, so you can do texting, emergency communications.”
Imagine the same thing, you’re hiking in the middle of nowhere, there might be some parking lots. I go to a lot of national parks, and they say, “Be warned that the cell phone coverage isn’t going to work out here.” But if they’re cars or 4x4 vehicle,s that could relay a signal from a user’s phone up to the satellite. I’m seeing all these siloed use cases, but important use cases nonetheless.
Johnston: That’s fascinating. I never thought about the mobile tower car concept, if you will. I want to go back and just put a finer point on something you mentioned. This is this whole thing of cell phones connecting to satellites. Some people suggest, “Well, is this the end of the wireless operators? Jeff Bezos and Elon Musk, are they going to build out these satellite networks? Verizon and T-Mobile, are they going to be all out of business?” I don’t think that’s really realistic from a cost perspective, is it?
Courtney: Possibly, but just the physics, right? The indoor coverage. 80% of the usage is indoors. Right off the bat, just the user profile, forgetting about the cost for a second, I would say that just the basic physics would prevent that from happening. People may say, “Oh, I’m just in my car. I’m using my cell phone.” No, you’re not. You’re sitting around at an airport, a restaurant, something indoors that you’re on the cellular network, or in some cases, Wi-Fi, obviously. That’s a big technology to carry that traffic. I would say, number one, the physics, but I would turn it around and say the biggest threat the satellite providers are putting on the marketplace would be internet users.
Now, there, the cost could be prohibitive, but you could argue, what could those satellite providers bundle to “hide the cost, hide the price”? Obviously, Amazon is getting into the marketplace with LEO. Could there be some sort of Prime Plus deal that has satellite plus Prime, just like Prime today is video? What kind of bundling could you put together that would take the cost equation off the table from the consumer?
I would think this is going to work rural to suburbia to urban eventually over time. I think the satellite networks right now work pretty well. I know the government has a higher threshold in terms of speed, but I think realistically, most users are probably going to be pretty happy with a consistent 50 megabits per second speed.
Johnston: This industry is changing very, very quickly. Back to the wireless folks, you mentioned, Tim, a little bit about what they can do to grow their business from a top-line perspective, whether it’s fixed wireless and other things. Talk to me a little bit about what can they do from a cost perspective because it’s a saturated market. You’re seeing a lot of layoffs at the national wireless operators, but are there other creative, more shared-type cost structures or situations that you think we might start to see that will start to drive some more cost out of the business?
Courtney: It pains me to answer that question due to the fact my day job at Wavsys is designing, building, and operating networks. But if you take some examples, 20, 30 years ago that I worked on in South America, there was equipment sharing. We see equipment sharing in Europe. We work together in this industry in the U.S. We heard no one was going to share a tower. We share towers today. No one was going to share a stadium, only one carrier was going to get in this stadium. We have distributed antenna systems out there as well.
You could play that model out, to answer your question, we share a radio. Can we share a backhaul? Can we share electricity? The analogy I give a lot is there’s 10,000 trucking companies in America, but they all share one road network. Obviously, they compete on a lot of different avenues except for the road network, but I would say if they can share on that huge macro level, a base station, I’m not sure the government will go for that, and the workforce would go for that.
But in terms of ultimately saving money for the carriers, which will trickle down and allow us to have lower prices for our cell phones and our data, that’s probably the next equation to explore here in the USA.
Johnston: You’re seeing it in certain parts of the country with fiber, right?
Courtney: Correct. 100%. The wholesale retail type model there. One person builds the fiber, and 50 carriers can get on that and market that to the homeowner or business user. Absolutely. That hasn’t come to fruition outside the indoor type networks. It really hasn’t happened yet on the macro build-out here in the USA.
Johnston: It’s not a technology question, right? It’s more of a policy business decision, really, right?
Courtney: Yes. If you could start over, the government might have thought, hey, look, we’ll let one company build out a wholesale network. They can’t do retail. Then the government wants competition. They always talk about three, four carriers. You could have 3,000 carriers, 5,000 carriers, right? That’s competition. Maybe every retail store has a cell phone play. Maybe every credit card company has a cell phone play. Maybe every car company has a cell phone play, if there was one wholesale network. It’s really hard to go backwards now.
There are quasi models that have been deployed. Then there’s one company that manages every single phone number in the U.S., right? There’s no competition except for when it’s re-bid. There’s parts of our telecom network, we’ve done this. The only way to do significant savings is, I would say, in some sort of sharing concept, moving what they’ve done from the indoor landscape to the outdoor landscape.
Johnston: Got it. Then 6G, where are we with that? What do you think about further cost reductions from a network ops perspective with 6G over 5G? Any thoughts on that?
Courtney: Yes, I think it’s way too early. We don’t have a standard really cooked. I would say the handset makers will probably drive the next G, as opposed to the infrastructure players. If a couple of large handset makers can show a use case that they can sell their phone, saying, “Hey, here’s what you get when you buy this phone in a year that’s going to have 6G.” It’s the chicken and the egg. We used to build the infrastructure first, then the phones came. Now I’m thinking, because we’ve run out of gas between the G’s here, what can the phone providers give us outside of a better screen, better battery life that has nothing to do with the radio technology, right?
Johnston: Tim, back on fixed wireless because that’s very topical right now. Carriers have done extremely well growing that business. Correct me if I’m wrong, but I think the strategy, so far, with the national wireless operators is really one of just using excess capacity—a very deliberate and focused effort by market, where they have excess capacity. I guess that’s just to confirm that that’s true.
Then, if it is true, how do you think about this product long-term from a network capital perspective? Meaning, do you think that the national wireless operators could start deploying dedicated capital to expand network capacity to grow this product?
Courtney: Again, as someone that’s biased and want to see CapEx spend, I would say I hope so. Now, on the excess capacity, I think that ship has sailed. I think AT&T announced, when they bought some spectrum, they’re specifically buying it for fixed wireless access. We’re moving up the food chain, so to speak. I hope to see dedicated fixed wireless networks out there, but right now I’m seeing the fixed wireless and mobile show up on the same compound, same tower.
Johnston: What does the future look like for fixed-line broadband operators? I’m personally pretty optimistic about some of the rural broadband operators where there’s less competition right now. That doesn’t mean that there won’t be fixed wireless competition in some of these rural towns. I’m sure there will be, but just generally speaking, how do these HFC operators and other fiber operators that are in competitive markets that are dealing with these threats from wireless operators—what do they do differently, or do they just continue doing what they’re doing? Because they’ve been bleeding subscribers pretty heavily here for the last couple of years.
Courtney: If I was advising those folks, I would say, “Hey, can you do the wireless fixed bundle?” Easier said than done—the economics, which carriers. When you go out in rural America-- I said, in urban, every carrier is good. When you go out to rural, you can’t pick carrier X when they don’t have any coverage in your small town. That would be a poor bundling strategy. You need to have flexibility with the three major carriers.
Again, easier said than done. Can you do the bundling strategy? Have you seen the major carriers have reported lots of layoffs? At some point, you’ve got to believe that’s going to slow down the build out in rural America. Now, that’s going to buy you some time. Then, if I was an owner of some of these networks, is the exit strategy to the big guys?
If there’s more than one carrier in that city, can I show the big guys, the big folks, “Hey, I know what I’m doing from a marketing standpoint. Here’s my growth story. I didn’t have flat subscriber growth or negative subscriber growth. Oh, man, I’ll keep running it. I’ll keep building it. It’ll just maybe have a different name on the phone bill.” If I was in their shoes, that’s what I’d want to do.
Johnston: That’s a good point. Marketing and product positioning and just being more deliberate, I think, is really important for a lot of these broadband operators. They’re used to just inheriting customers. They just got them because competition wasn’t as stiff. Now they need to get in the mindset of how are we going to acquire customers because we no longer just get to inherit them anymore.
Courtney: We were just talking before we kicked this off. AT&T is running national ads on NFL football games that are national fiber provider and wireless provider, and you should use them because you can bundle those services anywhere and everywhere. They’re going to have to step up their game, the rural folks, to compete with that, is my point.
Johnston: We put national in air quotes, though, don’t we?
Oh, Tim, this has been great. Before we wrap it up, I just want to give you an opportunity to share anything that we didn’t talk about or make any last closing comments or thoughts as you think about the future.
Courtney: No, I just think, like you asked me early on, there’s a lot of different use cases for wireless that are outside the normal phone. More people are looking at personal safety and security. Mobile cell sites, as we talked about, that’s going to be a possibility. The satellite players, there’s going to be more options, more creative solutions around those options. All those technologies are going to work well together. Satellite, wireless, fiber, we need all three of those to protect consumers and our loved ones as they go about their day at home, work, and play.
I think a bright future. I continue to see investment in these fields. Even as we wait for 6G, as we talked about, I think there’s a lot of good things between now and in 2030.
Johnston: Great stuff. Let’s leave it there, Tim. Thanks again for making time to chat with me today. I really appreciate it, man.
Courtney: You’re welcome. Good to catch up with you, my friend.
Johnston: A special thanks goes out to Tim for being on the podcast today.
It’s pretty clear that fixed wireless will continue to be a major strategic focus for the national wireless operators, given the growth opportunity of the service. I think Tim made an interesting point regarding the mass layoffs we’re seeing, and how that could impact fixed wireless expansion in rural America, which gives incumbent rural operators time to think about what their future looks like.
I also think that out-of-the-box ideas will be needed for the entire communications industry as they navigate the evolving landscape.
Hey, thanks for joining me today. And a special thanks goes out to my CoBank associates, Christina Pope and Tyler Herron, because without them, there wouldn’t be an All Day Digital podcast. Watch out for our next episode.
