A colleague pointed me to an item from Bloomberg that says that, In effect, AT&T is making their towers available for the use of others.
Today, most of the carriers’ network deployments are associated with third-party towers. The reason for this is that companies such as American Tower and Fiber Tower are better able to navigate local ordinances – and thus deliver in a timely manner – due in great part to the fact that when the big carriers (particularly Verizon and AT&T) look to put up a tower, the local government sees it as an opportunity, which often results in significant delays.
Now in case you have not noticed, the carriers are shucking a lot of assets these days. Verizon has sold off whole states and some sections of their network, and Sprint effectively did the same when it divested Embarq (which is now part of CenturyLink). All of which reminds me of when Bellcore first worked with Kiewit to create the support systems for Level3. At the time, Level3 – which was formed on the strength of the conduit and fiber Kiewit had ownership of in their network – looked as though they had one upped Global Crossing, which had built their network incrementally on top of their build outs for other carriers. My Bellcore coworkers and I speculated on what makes a real carrier at that time, and settled on right-of-way and conduit. But what was the critical asset you had to own? After all, these two factors represent only the first layer and do not make a network.
In the early days of the Internet, original ISPs such as Digex, NYsernet and BBN were potential targets for acquisition at Nynex. Their networks were very small (and leased), however, and their value was based solely on customer “Good Will” (a valuable asset, of course, and at that time customer acquisition was considered “the unit of measure”). If you are acquiring assets based on this asset, though, and you know that a substantial number of customers will likely chose a different company at the hint of acquisition by a big name, you have to discount such “Good Will.”
In today’s infrastructure it’s difficult to determine exactly what constitutes an essential asset, as fiber and towers can be leased and personnel can be subcontracted. So what makes a wireless operator a wireless carrier and what comprises an MVNO? Today the vote would have to go to spectrum ownership. We have expanded the name “SuperWiFi” to “SuperWiFi and Shared Spectrum Summit”, however, because the spectrum ownership rules are changing, and today the reality is that many spectrum deals allow third parties to travel on one another’s networks, and thus even spectrum no longer represents a must-have asset.
I would advocate that an essential asset is the direct relationship to the customer, but that brings me back to “Good Will.” SIM Cards? There are simply too many dual SIM card phones out in the market now, and MVNOs have their version, so the bottom line is blurred as to what a real carrier has to own. Me, if I were a real carrier, I would be asking myself everyday what is essential, though the problem with that is I would be asking it as I was looking for assets to sell.
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