Wireless networks increasingly will rely on data centers as part of the network core. New concepts such as Open RAN and virtualized RAN are software-based applications that represent a radical departure from the hard-wired aspects of earlier network infrastructure.
That software functionality is developed and maintained “in the Cloud.” The Cloud, of course, is hosted in data centers. Transitioning network functions and operations to the Cloud has significant technical and economic implications for mobile network operators.
Open RAN or v-RAN are enabled by specifications in the latest 3GPP standards that separate the control plane from the physical or infrastructure plane. (see, 5G Fiber-rich Networks).
With Open RAN, for example, MNOs now can substitute proprietary radio equipment supplied by established OEMs with commercial off-the shelf RF units that then can be programmed and controlled remotely.
Performance parameters of these RF units can be tailored in software for specific MNO applications. The software is maintained in the network core which in turn can be situated in a data center.
Japan’s Rakuten Mobile adopted a virtual RAN approach and claims to have reduced its capital expenditures by 40-50 percent compared to conventional network builds.
DISH Network (NasdaqGS: DISH) is adopting a similar approach to building the “first software-defined 5G wireless broadband network” in the U.S. DISH signed in April 2020, a multi-year agreement with network software provider Mavenir to deliver cloud-native Open RAN software. DISH believes an innovative software-defined network will provide the “flexibility, intelligence and scalability” to deliver novel applications to its mobile customers.
QTS Realty Trust (NYSE: QTS) operates as a REIT and is a leading data center operator that is well-positioned to support growing MNO core network needs. The company operates 26 data centers in strategic markets around the U.S. and in the Netherlands. These data centers cover more than 6 million square feet of “owned mega-scale data center space.”
QTS’ data centers accommodate both multi-tenant (hybrid co-location) and hyperscale (for executed leases that require significant amounts of space and power) environments. The company believes it owns and operates one of the largest portfolios of multi-tenant data centers in the U.S., by gross square footage, with the capacity to nearly double its sellable data center raised-floor space without constructing or acquiring any new buildings.
QTS offers flexible, scalable, and secure IT solutions including data center space, power and cooling, connectivity and value-add managed services. The company serves more than 1,200 customers in the financial services, healthcare, retail, government, and technology industries.
At the end of 1Q20, 51 percent of QTS’s monthly recurring revenues came from global internet, cloud and media companies. Large and small Enterprise customers in finance, healthcare and retail made up another 28 percent. Communication service providers accounted for 7 percent and is a growth segment. Government and security agencies tallied 5 percent of the total for the quarter.
Just five customers each accounted for more than three percent of QTS’ MRR.
Despite some COVID-19 impacts that slowed data center build outs, QTS provided full-year 2020 guidance for revenue growth to $530 million, a 10 percent YtY increase and capital expenditures of $575 million to support its data center development and maintenance activities.
By John Celentano, Inside Towers Business Editor