Many building owners, property managers, and enterprises have looked at ways to improve their in-building cellular coverage. Almost all have left that hunt with sticker shock and wondered how improving their cellular coverage could cost so much.
With 5G quickly picking up momentum and business moving towards a mobile workforce, cellular coverage is becoming invaluable; understanding the costs that make up this critical connectivity is key to understanding that value. To help shed some light on the costs of cellular enhancement, this article will break down what buyers are paying for, what role the Wireless Operators play, and the value of CapEx and OpEx pricing models.
“Good solutions aren’t cheap, but cheap solutions aren’t necessarily bad.”
What are you paying for?
Understanding all the costs of building a cellular coverage solution can be challenging. It is important to remember that the design and implementation of each solution is highly-customized to the individual building. In other words, solutions are generally more costly because they aren’t easy to replicate. For instance, commercial offices will have different layouts for different tenants, MDU’s and Hotels may be timber construction or poured concrete, and hospitals especially vary widely in their layouts and construction materials. This variability must be considered carefully and the coverage designed to meet each building’s specific need.
Equipment
Equipment costs comprise a high percentage of a project’s total cost, generally around 40%. This high cost is due to the hardware and structured cabling being specific to the mobile industry and manufactured to very high standards.
Engineering Services
Quite a bit of engineering goes into cellular solutions. First, the FCC regulates cellular signals (unlike Wi-Fi which is open for everyone’s use), so the design needs to comply with the FCC standards. Secondly, Wireless Operators have control over the spectrum used for mobile communications, which means that designs must be “approved” by their engineering teams before being built. Poor system design can lead to issues in coverage, low data speeds, or in the worst cases, make the in-building coverage worse.
Installation
Unlike Wi-Fi networks, which use category cable (ethernet), traditional cellular solutions use ½-inch coaxial cabling connecting each antenna. This coaxial cable is highly specialized, requiring certifications, special tools, and extensive testing to install correctly.
Maintenance and Monitoring
Maintenance and monitoring is one of the most overlooked and underestimated costs when budgeting for cellular enhancement. As with any building system, proper care is critical to getting the longest life and highest performance out of the solution. Depending on the type and size of the network, maintenance costs can range from several hundred dollars a month to several thousand dollars a month.
Hidden Costs
When considering deploying a cellular solution, some costs (outside of the hardware, design, and installation) may get overlooked. These can range from small costs like replacement ceiling tiles to higher costs like extending new power receptacles or additional security escorts for overnight work. And the time considerations of coordinating the installation process with different tenants or departments.
The Wireless Operators
Improving coverage means working with one or more of the Wireless Operators. In the past, it was likely the Operator (or Operators) would pay for the solution and in some cases, even agree to pay rent. Times have changed, however, and today the Operators’ budgets are refocused on 5G and improving their outdoor networks, leaving little funding for in-building projects.
Understanding Funding Models
As enterprise-focused products have evolved, so too have the methods to fund them. In the past, an enterprise would be responsible for the entire cost of the solution upfront. While large enterprises and some building owners could afford this, it left a large group underserved. Today those in need of cellular solutions have several options ranging from 100% CapEx to 100% OpEx and everything in-between.
Like deciding whether to purchase or lease a vehicle, choosing the best way to fund a cellular solution depends on several factors. Suppose the enterprise or building intends to occupy a space for a long period of time or has an internal IT group that can maintain the cellular solution. In that case, it may make the most sense to go with a CapEx funding method. On the other hand, if a solution is highly complex or a third-party maintenance agreement is needed, it may make the most sense to go with a more OpEx-focused funding method. Regardless of which approach an organization takes, it is essential to understand all costs and clearly identify needs and goals.
Understanding the costs of designing, building, and maintaining the cellular enhancement solutions, understanding the Wireless Operators’ role, and evaluating different funding methods; is crucial to identifying the value of the cellular solution to an organization.
NPN is here to help! Our team is well versed in the design, installation, and financancial models needed for best in class cellular solutions. Connect with us to talk through your cellular project.
NPN is here to help! Our team is well versed in the design, installation, and financancial models needed for best in class cellular solutions. Connect with us to talk through your cellular project.