In my old analyst days we always used to start the year with a “Top 10” list which consisted of key themes to watch.  While that consisted of a 20+ page report – and this piece will linger ~ 1000 words – I thought I would give it an attempt!  So here is my shot at Top 10 themes to watch in 2022, in CliffsNote version of course.

  1. WIFI GETS A WHOLE LOT BEEFIER – With the 6GHz spectrum WiFi now has access to, this group should not be underestimated. Recall in 2020, the FCC voted to allow 1,200MHz of spectrum in this band – increasing the spectrum available to WiFi by 5x.   
  1. EXPECT MORE FIXED WIRELESS ACCESS NEWS FLOW – While we believe fiber is always the preferred solution (see Theme # 10), expect FWA to get more airtime in 2022.  Both T-Mobile and Verizon have started to break these sub numbers out.  It is no wonder that carriers would talk about another revenue line as the pressure to find growth in ‘traditional’ wireless only continues to grow.
  1. SMALL CELLS WILL SEE MORE LOVE – 2021 was not the year of the small cell.  There is very little debate here.  Yet recall the spectrum we are now calling mid-band (C-Band; 3.45GHz) used to be called high-band.  Most RF engineers agree this spectrum is best supported through greater densification of small cell infrastructure.  Why has this not happened yet?  Digesting two spectrum auctions in a year put a lot of pressure on the carriers.  The fastest, most expedited way to get the spectrum live was to put equipment on towers. This will continue (see Theme # 9) but if physics still works, densification is key.  And small cells will have their time in the sun.
  1. PRIVATE NETWORKS AT THE BASE OF THE HOCKEY STICK –  We expect the private 5G network size to experience the MOST growth of any silo of communications infrastructure in the next year and decade.  In 2020, the estimated market size of this sector was $1.2B.  Some industry experts expect it to see a CAGR of close to 40% between now and 2028. Industries embracing this concept include: manufacturing, utilities, transportation and logistics and many more.  Our view has always been 5G will be first embraced by the enterprise – not the consumer. Private networks support this view. Key actors to watch are AWS and Microsoft.   How they play in the proverbial sandbox with the carriers (see Theme # 8) will be telling. 
  1. FURTHER BLURRING OF THE COMMUNICATIONS INFRASTRUCTURE SILOS WILL BE SEEN – American Towers’ recent purchase of Coresite was yet another domino to fall in the blurring of the lines between the communications and infrastructure spaces.  We expect many more to fall.  What will be most interesting is to see if the data centers actually take the lead here.   
  1. NEW HORSES WILL STAND ON THEIR OWN IN A MEANINGFUL WAY IN COMMUNICATION INFRASTRUCTURE SPACE  – In the past there was basically just three main “buckets” of digital infrastructure: fiber, towers / small cells, and data centers. But looking at the coming deal flow – it is clear that many new silos will emerge.  Key horses to watch include (but are not limited to): in-building wireless, edge players and the renaissance of the satellites.   In fact, I predict that the 2023 Top 10 list will have themes dedicated to each of these silos! 
  1. MIDBAND SPECTRUM = THE “YUMMIEST” PART OF THE LAYER CAKE – T-Mobile once described the spectrum bands as a beautiful wedding cake – low band being the base layer, midband being the middle and mmwave being the top layer of the cake.   The middle band is key to holding the cake together.  An analogy could be made it will also be key to holding together the 5G plans for many carriers! In 2021, the industry went through two major midband spectrum auctions, freeing up an additional 380 MHz of midband spectrum.  While the US still lags some of its international peers in terms of the amount of midband spectrum, we expect it to become the ‘work horse’ of each of the carriers’ 5G networks.  The $90B paid in C-Band auction offers evidence of this!
     
  2. THE TECH / TELECOM TIES THAT BIND: FRIEND OR FOE?  – Expect more and more cloud / telecom announcements in 2022.  The recent Google and Verizon commitment to bring the ‘power of the cloud’ to mobile could provide interesting clues as to future paths.  However, one has to wonder if telecom must watch their back and if the two groups may actually be “frenemies”.  Recall, in December, AWS announced a service to help enterprises “set up and scale private 5G mobile networks.”   
  1. TOWERS: THAT WONDERFUL MOAT IS ONLY GETTING THICKER – Tower stocks had a great year, up 33 percent in 2022.  While the macro risk of higher interest rates always looms, we expect the continued tailwinds (new spectrum deployments, 5G rollouts and new carrier builds) to offset these risks.  There is much more wood to chop in towerland in 2022.
  1. A ‘FIBER RICH’ DIET IS NOT A FAD – EXPECT IT TO BE HERE FOR MANY (MANY!) YEARS TO COME – Fiber, fiber, fiber.  We have written much about this but it continues to be true in almost every segment of the Communications Infrastructure space.  Simply put, more is needed.  More fiber to the home, more fiber to backhaul and fronthaul wireless connections, more fiber to feed small cells, more fiber deep architecture for cable players and more fiber to support further data center deployment.  With regulatory tailwinds supporting this rollout, fiber enthusiasm will only continue to grow. Now the supply chain just needs to ‘behave’ to allow this!