Real estate brokers and building owners alike have realized that today’s consumers — particularly commercial tenants — require top-quality indoor cellular connectivity, in no small part because 80% or more of voice and data consumption happens indoors.
That leaves one critical question: how do you provide that cellular connectivity?
The service or partnership model for connectivity is perhaps more important than the technology itself, which is typically a Distributed Antenna System (DAS). After all, that model will determine things like financing, upgrades over time, and even the range of gear available for you to choose from.
One of the most common connectivity models in real estate is a managed service. But what does that look like in practice? And what are the benefits of this model?
What are Managed Services?
Under a managed service model, the technology provider installs a DAS network and then oversees, maintains, and upgrades it for the course of its warranty. In other words, this model includes long-term system maintenance: you don’t have to worry about the technology itself.
Typically, this means costs are distributed over the course of the partnership, rather than front-loaded.
Some managed service partners go further, managing the carrier and vendor relationships as well, or providing alternate funding options — more on that later.
Why Managed Service?
The main benefits of management service are self-explanatory: costs are drawn out, and the DAS network is managed for you. But why is that so appealing to real estate professionals?
It boils down to a few key trends:
CAPEX into OPEX
With the pressures of COVID-19, more in the industry are looking to convert capital expenses (CAPEX) into operating expenses (OPEX). The key right now is less expense upfront and more bang for your buck long term.
This is particularly important as network carriers like AT&T, Verizon, and T-Mobile — the traditional source of capital for connectivity projects — are no longer funding the vast majority of in-building DAS projects.
Solution Complexity
The complex nature of the solutions and associated technologies require strong partnerships and insider expertise to navigate successfully. Going it alone actually raises costs both in terms of excess technology expenses and time lost to solution management.
That’s before you get into the different needs of specific buildings — compare a giant, one-tenant campus to a crowded multi-tenant office.
Focusing on Tenants
Real estate professionals excel at managing buildings and relationships, not overseeing and upgrading a complex technology like DAS. The more they can rely on a strong partner to take on technical work for them, the more they can focus on their people and ensure that the technology performs well for their end-users.
Which Managed Service Providers?
Of course, the benefits of managed service depend heavily on the provider you choose.
Basic managed service only accounts for the technology itself, and coverage only extends as long as the product warranty stipulates–usually no more than three years. In that case, venues are left to manage the carrier relationships and become responsible for the product after the warranty ends.
Those managed service providers may be also limited in the financing and capital options they can offer: though costs are distributed over time, all financing must come from the venue itself or an expensive institutional lender that doesn’t have the long-term interests of the DAS in mind.
Unfortunately, this type of “managed” service often leaves the venue on the hook for the vast majority of management of a 10+ year DAS network.
Next-Level Managed Service: Third-Party Operators
Third-party operator (3PO) models are essentially a more expansive version of traditional managed services. A 3PO partner does three things:
- Provides DAS management services — including managing carrier, vendor, and technician relationships on your behalf
- Acts as a neutral host that provides signal from all the carriers at once
- Supplies financing for the system via a variety of models
Because 3PO partners bring financing for the project, projects like DAS are better funded from the start and can be more extensive. Providers can cover more areas or floors in line with the venue’s preferences, rather than scaling back on design due to limited funding.
QMC’s 3PO model is particularly robust because it doesn’t rely on any carrier funding, ensuring warm carrier relationships and faster deployment speeds.
In addition, 3PO services extend for the lifetime of the technology, rather than just the warranty. This is a dramatic difference: a warranty might only cover the first three years, compared to ten years or more with a 3PO — with continuous upgrades made throughout that time.
This model includes end-to-end service with the support of the cell network carriers, which allows building managers and real estate agents to deliver Connectivity as a Service.
Learn More from a Panel of Experts
The debate over indoor connectivity is ongoing, and managed service plays a starring role in that conversation.
QMC’s own George Malkin dove into this debate with several other professionals from both the real estate and telecom world at a recent panel hosted by Connected Real Estate Magazine.
The talk ranged from the role and types of managed service to the benefits of different technologies. But one thing was clear: real estate pros want to provide tenants with the best network, from the best operator, without having to spend all their time focusing on running a cell network. It’s getting there that’s the challenge.
Sign up here to watch the full panel and hear the experts debate topics like:
- What are all the pros and cons of DAS management services?
- What are the differences between CBRS, private LTE, and more?
- How do you navigate available technologies while considering tenant needs and new requirements?
- How do you find the right managed service partner?
