FiberTower Debuts Last-Mile Alternative for Mobile Operators

By Khali Henderson

Just as Diana was said to have sprung fully formed from the head of Zeus, so it seems FiberTower has made its debut at the CTIA conference in New Orleans this spring. The company is live in eight markets with a facilities-based last-mile alternative network built expressly for wireless operators.

And, like the Greek myth, there is much more to this upstart’s story. FiberTower has been a work in progress for four years and began as a research project of its CEO and co-founder Scott Brady, then a student at the Stanford School of Business. The project was to understand the cost of service delivery for wireless operators looking at growing their voice and data minutes of use (MOUs).

“One of the key things we came upon in the analysis was … the growth in the cost of [transport] as they were adding MOUs was actually growing much quicker than the growth rate in revenue,” says Brady, in an exclusive pre-launch interview with PHONE+. “The next obvious question was what they could do to affect the cost structure and the quality of the network they were getting from the LEC. That led to the creation of FiberTower.”

FiberTower’s mission was to create an alternative facilities-based network that would offer improved quality of service and cost savings for growing wireless operators. The solution was to build a network overlay on superset of cell sites in a market, enabling FiberTower to configure individual networks over a shared infrastructure.

In summer 2000, the company formed with $10 million in first-round funding. Invested capital to date totals $72 million. Among its investors have been leading tower companies - American Tower Corp., Crown Castle International Corp. and SpectraSite Communications Inc. - which also have pledged access to their assets (some 35,000 tower sites) to the project.

“We look to FiberTower to assist the wireless carriers getting back to the public network or getting back to their switch as efficiently as possible,” says Tim Blitz, COO and director for SpectraSite, which he says owns about 6 percent of the company. “To do that, a series of tower companies have invested in the company. They give FiberTower a nice portfolio of sites and access to those sites.”

While the tower companies are competitors in many markets, cooperating in support of FiberTower makes sense, says Blitz. What we get out of it as a tower industry is lower cost for our customers and not only lower cost, but a more reliable network. It’s a way we can make our sites more valuable.”

FiberTower claims to have contracts with three of the five major wireless entities, and a trial with a fourth. None of these companies were named nor provided as references.

However, Brady says the company is building thousands of sites across the country. Presently eight markets - Austin, Texas; Boston; Cleveland; Dallas; Denver; San Antonio; Waco, Texas; and New York - are live and carrying traffic. The Texas locations have been online for nearly 18 months, he says.

While replacing the LEC incumbent business for a LEC-owned wireless operator is not an easy marketing plan, FiberTower is providing “a very high level of reliability and provisioning of services that currently are not the market standard,” says SpectraSite’s Blitz. “Many of the carriers are going to be looking to have multiple and redundant solutions coming out of many of their critical sites. It’s not only a cost savings, it’s a dramatic improvement in network reliability.”

FiberTower uses digital radios for the lastmile portion and aggregates back to fiber, which it leases - usually lit but sometimes dark - from competitive fiber service providers, utilities and cablecos.