DAS funding models
Operator funded:
Carriers or operators will do this if they have a "special relationship" with the owners (i.e., customers) of the building. "Special relationship" often means owners have multi-year, multi device contract with the carriers. Just to give you an idea, multi-device may mean couple of hundreds to thousands of devices. Often companies leverage this relationship if they are using the Carrier’s service in many locations nationwide – which typically result in thousands of devices.
All carriers have their own ROI (Return on Investment) model, and if they see that funding the DAS still allows them to break even on their investment and generate profit then they will fund the DAS. Sometimes carriers include long time loyalty within this ROI model. Based on this ROI model, carriers may choose to fund a DAS that can process just their signal source. None of the carriers reveal their ROI model. It’s not also uncommon for an operator to fund a multi-carrier DAS if their ROI model is met.
Unfortunately, operators are less and less interested in funding this model. This shift is happening mainly because some of the earlier ROI models did not produce the expected result.
BTS Funded:
Build to Suit (BTS, aka Third Party Owner or 3PO) takes the lead on the project and are responsible for funding, design, installation, turn-up and handle all phases of getting the carriers to plugin to the DAS. Majority of the DAS built by the BTS model are multi-carrier. These DAS can be either indoor or outdoor or a combination. Building owner or management companies sign agreement with BTS companies – there may or may not be revenue sharing. Carriers must pay (capital cost & monthly rent) to add signal source to these DAS solutions.
Public venues such as malls, stadiums, big casinos, hotel, resorts are common BTS funded DAS. Few of the well known BTS companies are American Tower, Black Box, Crown Castle, Extenet, InSite, Mobilitie etc.
Customer funded:
Often building owners or customers will decide to finance their own DAS. There can be several reasons or motivations for these funding decisions:
Customers don’t want to get tied to a long term contract with carriers.
They want to make their own decisions about the DAS. They may consult different parties (OEM, Integrators), but at the end, decide to build their own.
Building owners or customers are seeing DAS in a different light. DAS is no longer a nice-to-have system, but is seen as a utility that can provide enhance productivity, safety, customer service and is a retention tool::
Productivity Tool: Increasingly, CIOs of large corporations are seeing DAS as a service to increase Productivity. Principle rationale: Companies believe if they can own and run their own IT networks, why not build and run their own DAS?
Safety Tool: On several occasions large universities have funded new multi-carrier DAS as part of new construction, because providing ubiquitous DAS coverage is part of providing safety for students and faculty on the campus.
Customer Service & Retention Tool: The healthcare industry has recognized the value of providing good coverage to meet patients needs and physician productivity. This need to provide communication services has driven some of the largest healthcare providers in the country to build their own MC (Multi-Carrier) DAS.
Hybrid Model:
Ultimately DAS funding boils down to a win-win ROI models. Different carriers & customers have different types of ROI model. Tweaking the ROI model to make the hybrid model work is always complex – but we have seen this be successful in the past.
Hybrid funding happens when one or multiple carriers shares the cost of the DAS with the customer or building owner. The Hybrid model depends on the number of devices the customer is using, types and sizes of buildings, motivations for DAS, and even the customer’s industry.
There are many examples where customers (such as large health care campuses, university campuses, retail head-quarter campus) share cost of the DAS infrastructure with carrier(s) based on the deals they have worked out. For example, there have been several business deals where the building owners provided all the fiber, and racks for the equipment. Then the operator is responsible for providing the DAS equipment and other infrastructure materials (such as coaxial cable, connectors, couplers, and antennas).
Lastly, customers and carriers can equally share the cost of DAS equipment, and infrastructure materials.
Related posts: