How a Triangle company plans to benefit from the rush to build out 5G infrastructure

It is one of the most well-funded startups in the Triangle, but chances are you probably have never heard of it.

That’s because, while it works in an industry that is vital to powering the smart phones we use every day, the company’s goal is usually to blend in as much as possible.

Durham-based Eco-Site, which owns, builds and operates wireless infrastructure all across the U.S., has become one of the largest builders of cell towers in the past few years.

Since it was founded in 2012, the company has built — or has plans to build — more than 600 towers across the U.S., which carriers like T-Mobile, Verizon and AT&T use to provide signal to their cell phones.

Those towers usually end up looking like trees or water tanks, in an attempt to blend into the urban landscape the infrastructure that brings us the ability to watch YouTube videos on our phones.

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An Eco-Site cell tower disguised as a water tank. Courtesy of Eco-Site

But as the wireless industry transitions to a 5G future, its investments could change — and the company is ready to spend $35 million of its funding to lay the groundwork for that future.

Since it was founded, Eco-Site has gotten $310 million in funding, in part from Atlanta-based private-equity firm MSouth, to invest in infrastructure. It has already has deployed $275 million of that and the rest should be drawn down in January, said Eco-Site CEO Dale Carey.

The money involved is so high in part because of how capital-intensive the industry is and because it’s a competitive landscape, with companies like American Tower, Crown Castle and another local startup, TowerCo, involved.

To explain the business more plainly, Carey said think of Eco-Site as a developer building 10 to 15 new commercial buildings every month — except those buildings are cell towers and the tenant is Verizon, AT&T or T-Mobile.

The company is growing, too. Eco-Site, which employs around 55 full-time employees and 20 contractors, is on the edge of Durham and Chapel Hill, but later this year it will move into a new, more spacious office at Perimeter Park, an office park near Raleigh-Durham International Airport.

After it draws down the rest of its funding in January, Carey said, the company will likely ask for more money from investors to help it make waves in building out fifth-generation, or 5G, wireless infrastructure.

“We think the next five is as strong as the past five,” Carey said in an interview.

“There will be different types of opportunities for 5G than there were for 4G,” he said. “The opportunity might be broader as there are other assets (for 5G) than just simply towers.”

Instead of being reliant on towers — usually built on private land and able to send signals out for miles — 5G requires much more close-range technology, such as small cells and antennas, which send the strong signals that make 5G so quick and powerful.

With current technology, your phone connects to whatever the nearest tower is, when it is attempting to make a phone call or connect to 4G wireless. Towers can pickup signals for many miles.

Small cells — which can be about the size of a pizza box or a large cylinder — can only send signals a few hundred feet, making it necessary to have lots of them, especially in places that are densely populated.

An apartment building would need more than one, for example, Carey said, because 5G wavelengths are shorter than 4G and don’t travel well through walls. Companies have placed them on top of light poles and utility poles, while making efforts to make their appearance not as obvious.

An example of a small cell tower in downtown Raleigh. Smaller installations like this will be necessary to make way for 5G connections. Zachery Eanes

The full advent of 5G wireless likely won’t be felt for several more years. Only one phone -- a Verizon-branded Motorola -- supports 5G in the U.S. at the moment, CNBC reported.

Just like the previous generations of cell-network technology, 5G promises vast improvements in speed and bandwidth. That could mean something as simple as replacing wired home broadband with wireless broadband to making automated cars a reality, The Wall Street Journal has reported.

Carey noted that 4G helped usher in companies like Uber, so “what’s the Uber of 5G?”

It is estimated that 500,000 to a million small cells will need to be built in the next few years to lay the groundwork for 5G, Carey said. More than 100,000 have already been installed, according to S&P Global. It will also require upgrading existing towers to handle some 5G capabilities.

Raleigh and Charlotte are among the first cities to be part of the 5G build-out for AT&T, The News & Observer previously reported. Carey thinks the nationwide build-out will go on for at least a decade.

He thinks Eco-Site could transition to focusing heavily on 5G infrastructure in the next 12 to 24 months, depending on the results of the proposed merger between Sprint and T-Mobile or if someone like Google gets into the carrier business, creating more demand for 4G infrastructure. The merger between Sprint and T-Mobile is looking more likely to be approved the U.S. Department of Justice, Bloomberg reported earlier this month.

A small cell on top of a light pole in downtown Raleigh. Zachery Eanes

Rather than renting or buying private land to install towers, which was the norm during the 3G and 4G roll-outs, 5G will require installation on existing buildings and many times within public rights of way.

That brings some challenges.

The installation of small cells in such public places has led to push-back from local residents and municipalities, who either don’t like the looks of them or don’t have the capacity to handle hundreds of permits to build them, The Wall Street Journal has reported.

But the federal government, which has said 5G adoption is critical, is passing rules that will make it easier to install small cells, Carey said.

If it does, that could speed up installation and the potential coverage area of 5G. But it’s still very early days in the 5G era, Carey noted.

“We are just seeing the tip of the iceberg,” he said.

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more.

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Zachery Eanes is the Innovate Raleigh reporter for The News & Observer and The Herald-Sun. He covers technology, startups and main street businesses, biotechnology, and education issues related to those areas.