Warren Roll

Warren Roll is a Managing Director at Digital Colony and Digital Bridge where he leads the firms’ small cells and fiber investments globally. He has more than 20 years of experience in global private equity and infrastructure investing.

There is a lot of excitement around CBRS and private networks. What are some potential use cases and applications here? Is this an area where Digital Bridge/Digital Colony could become involved?

We’re excited about CBRS and private networks. Until now, there has been a very small market for enterprises to deploy their own wireless networks but CBRS will change that. The U.S.’s CBRS auction next year will see a lot of interesting players.

Once the spectrum is available, we’ll start seeing several applications for private LTE networks and we’ll see it most where reduced latency and increased security are most valuable. Trading desks for instance, where less than one second could mean millions of dollars. Hospitals are another example as there is a premium on securing patients’ information. Universities and blue-chip companies with large campuses are another. Is private LTE ever going to replace wi-fi? No, but there are certain use cases and applications where it makes sense.

In the U.S., in-building is another big application for CBRS. Carriers and real estate owners want to have better network connectivity indoors but neither want to pay for it. Something will have to give and that will allow CBRS to come into play.

In Europe, CBRS will allow large enterprises the ability to step back from MNOs and choose how they want to deploy wireless. It gives back some control. It will be interesting to watch how it plays out.

Where we see ourselves playing a role is like any wireless network – supporting deployment. The needs of a CBRS network aren’t any different from a traditional network. It still needs towers, small cells, data center and fiber, and we can provide that.

Fiber has a unique set of challenges when it comes to deployment. How does each region around the world compare to one another in its ability to build fiber and lay fiber and how are they overcoming these challenges? What roles does the local regulatory climate play in this?

The overall challenges are the cost and actual logistics of laying fiber. However, the challenges are different for each region and operator, and each one is attempting to solve it differently. In the U.K. fiber has really become a shared infrastructure asset due to cost. MNOs are forming fiber companies and then recommitting to them to help with the expense of it. Over in the U.S., fiber costs $60,000 to $80,000 per route mile—it’s not cheap and certainly not all the operators can afford it. Each carrier has a different approach. Some are selling fiber, others are partnering up and doing joint builds, while still others are building proprietary routes. No one has the same strategy.

It’s also very difficult to actually lay fiber in certain parts of the world. In Europe for instance, you can’t just tear up cobblestone streets or roads that have been in place since ancient times. However, in places like Asia and Africa, there is a lot of fiber being laid because it’s much easier logistically.

Regulatory agencies have a big role to play and are critical partners for deploying a network as well as protecting a community’s integrity. As an operator, we are always conscious of how we can best work with agencies around the world at a local, state and federal level. Network connectivity can change a community but it has to be deployed in the right way from the start.

What’s the importance and value of fiber in today’s market – is it being grossly undervalued by investors, is it viewed merely as a means to an end, is it heavily commoditized?

The importance of fiber can’t be understated. It’s the connective tissue of digital infrastructure. However, its market value is dependent on an investor’s timeline. More so than other digital infrastructure assets, we believe fiber’s value proposition gets more attractive over time and so its value really depends on your exit horizon. It’s not a “quick buck” asset, and if an investor is looking to do a quick flip then they won’t get a return. Comparatively, if you view a fiber investment as a long-term strategy, then even if you overpay at the outset, you’re still likely to see good returns.

That’s where fiber’s real estate characterics come through. For example, in traditional real estate, if you overspend on a commercial office building in a good market, but over the next 20 years take care of the property and keep increasing rent, then its value theoretically increases over time. It becomes a good investment. However, had you sold that same building after five years, chances are you come in neutral or at a loss. If you believe data will continue to drive massive amounts of business and consumer applications (which we do), then fiber is a great long-term investment.

Having said that, fiber investments are not all the same, and there are different investment models with different risks. From least risk and owner-operation to most risk and owner-operation, they are dark fiber, lit circuits and complete lit service. Good fiber investors have a balanced combination in their portfolio, because investment is a tradeoff. If you only have dark fiber for instance, there’s little operational risk but you don’t necessarily utilize as much of your network.

That’s where our history in the market comes in key. Because we have been operating within this space for decades, we can recognize what makes sense now, what should pay dividends in the long run and where it makes sense to pass altogether. If you believe data will continue to drive massive amounts of business and consumer applications, then fiber is a great long-term investment.