Office Building Conundrum: Enhancing Cellular Coverage One Tenant at a Time

Office Building Conundrum: Enhancing Cellular Coverage One Tenant at a Time

Building owners and property managers all face the same conundrum: needing to enhance in-building cellular coverage to attract and retain tenants, but not having the CAPEX or OPEX to fund a solution. Sure, you might be one of fortunate few who obtain a free distributed antenna system (DAS) from a carrier or third-party owner/operator. But chances are, you’ll need to resolve the coverage issue on your own. While I’m a firm believer in the value of investing significant dollars toward the installation of building-wide, multi-carrier solutions, I recognize that it’s not the answer for everyone. Therefore, I’m suggesting an alternative approach, one that’s flexible, affordable, and deployable today: leveraging new technology to add coverage one tenant at a time, with some tenants gladly picking up the tab.

Small cells

Overhyped for the past two years, this new technology is far from a realized panacea, but it’s getting there. And if you can accept a few trade-offs, it may solve your problem soon. Small-cell technology overcomes three significant limitations that made enhancing cell coverage cost-prohibitive:

  1. Small cells eliminate the expense of installing half-inch coax throughout the building, they are deployed similarly to Wi-Fi access points, and best of all, you can often share the cable serving your Wi-Fi APs.

  2. Small cell deployments do not require an expensive headend room full of carrier base-station equipment.

  3. Small cells can be deployed now, or very soon. You no longer need to wait months or years to build out a neutral-host DAS solution covering the entire building.

Digital DAS

Small-cell technology is not ideal when you need to support three or more carriers and multiple frequency bands. Digital DAS is a better solution, and similar to small cells, it doesn’t require half-inch coax. Depending on the manufacturer, you’ll deploy CAT6A cable or fiber. But digital DAS also has trade-offs. You may still need the headend room full of base stations, as well as the longer deployment time needed to construct the headend. Base-station hoteling or other options might alleviate this, but they have yet to catch on. The better solution is a connection to the carrier’s network via Common Public Radio Interface (CPRI), which unfortunately is not widely available—more on that later.

Now you understand how small cell and digital DAS can lower the cost of adding in-building cellular coverage, but the cost is still likely over your budget, and here’s where the new transaction model comes into play.

Two types of tenants

Let’s classify your tenants as “existing” and “prospective.” Similar to meeting-planners who inquire about cell coverage in a prospective hotel conference space, prospective tenants are now frequently including cellular coverage as a must-have amenity. Small cell is your cost-effective solution to meeting coverage requirements on an individual-tenant basis; digital DAS is the solution to exceed it. Who pays for the “cost-effective” solution will ultimately depend on lease negotiations. Bottom line: you won’t lose a prospective tenant because you couldn’t afford to provide cell coverage.

Your lease terms likely reflect the direct costs to support the tenant for the term of the lease. The cost of providing enhanced cellular coverage was not built into the lease terms, so it’s reasonable to expect that your existing tenants would cover the cost to enhance coverage. Your responsibility can be limited to making the coverage an available option. Small cell is that solution, and at a reasonable cost. (If your tenant provides employees with cell phones, it’s likely that the carrier will install a small-cell system at no charge to the tenant.) My experience indicates that the typical tenant who leases a few floors is amenable to spending a reasonable figure to enhance cell coverage. Historically, there simply wasn’t any option with this issue, regardless of cost.

In 2016, in-building cellular coverage is no longer an all-or-nothing decision. With the advent of new technology and a different funding model, you have the ability to address the need on a tenant-by-tenant basis, with financial terms that fit your budget.  If you have millions to invest in a buildingwide, neutral-host DAS, great. But if you need a cost-effective solution that can be deployed today, small cell, and possibly digital DAS, may just be the solution you’re seeking.

Cell Sites, Lease Rates, and the Emergence of Small Cells

Cell Sites, Lease Rates, and the Emergence of Small Cells