The rationale for fixed network optical fiber deployment has in the past been driven by three different use cases: enterprise data networking; consumer TV/internet access and signal distribution (trunking or backhaul).
These days, spending on optical fiber in the U.S. market is driven more by distribution and enterprise apps than consumer retail services (at least in a direct sense, using fiber as the access media).
The reason is the coming use of millimeter waves to support 5G networks. Millimeter waves will not propagate as well as lower-frequency signals used to support mobile networks. That means much more “fiber deep” deployment of the trunking network, especially to reach small cell sites.
That, in turn, is pushing immediate spending towards trunking fiber that can support small cell deployments.
Crown Castle, for example, plans to deploy 25,000 small cells within the next two years, according to Guggenheim Equity Research. That, in turn, is driving Crown Castle efforts to secure much more trunking (distribution network) fiber.
“Among the three publicly traded tower companies, Crown Castle has uniquely chosen to focus on small cell development to supplement its macro site tower business,” Guggenheim’s Robert Gutnam argues.. “Currently, this segment comprises 16 percent of total revenue, and generates six percent return on investment, expected to grow to about 10 percent as second tenants are added.