Base station giant American Tower said it will spend $10.1 billion to acquire CoreSite Realty, one of the largest data center operators in the United States. This news helps to highlight the interest in edge computing and the potential importance of data centers to future telecommunications networks.

American Tower is not the only company entering the data center. Also on Monday, investment firms KKR & Co. and Global Infrastructure Partners LLC stated that they will acquire data center operator CyrusOne in a transaction valued at approximately $15 billion, including debt.

American Tower owns and operates approximately 43,000 base stations in the United States, with a total of 175,000 base stations worldwide. At the same time, CoreSite owns and operates 25 large data centers (including 21 cloud computing portals) in eight major U.S. cities including Chicago, Boston, Los Angeles, and Miami.

American Towers officials explained that the company's acquisition of CoreSite and its data center will help the company take advantage of various opportunities, including the possible expansion of its data center business internationally. But company officials said that the most important part of the transaction involved "the convergence of wired and wireless networks in the context of accelerated global 5G deployment."

Specifically, company officials stated that American Tower hopes to operate data centers not only in major U.S. cities, but also in small cities. By placing mini edge computing data centers on the foundation, it may operate in thousands of locations across the country and around the world. data center. The cell phone tower of the American Tower. Company officials said that the deployment of a fast mid-frequency 5G network will help drive the demand for low-latency applications that require distributed computing capabilities, thereby driving the demand for edge computing data facilities.

American Tower officials said that the company's acquisition of CoreSite will help the combined company build computing services at the core, metro edge, and mobile edge of the network. Click here to view a larger version of this image. (Source: American Tower)

American Tower estimates that by 2026, the total potential market for the "mobile edge" will reach US$1 billion, and the total potential market for the "metro edge" will reach US$2 billion in the same time period.

Talk about advantages while core spending

During the conference call with investors to discuss the purchase of CoreSite, American Tower officials declined to discuss specifically how and when the company plans to expand its edge computing business beyond the core and metropolitan area networks. In fact, U.S. Tower officials have long been discussing the prospect of installing computing power at the bottom of the company’s cell towers, but in recent months, U.S. Towers have focused on purchasing large data centers in dense downtown areas. Just last month, American Tower acquired DataSite’s data centers in Atlanta, Georgia and Orlando, Florida—increasing the total number of data centers the company operates to nine.

Broadly speaking, due to COVID-19, the demand for data centers has soared in recent years. The pandemic has forced most of the world’s population to work and go to school from home, generating record-breaking Internet traffic for cloud computing services provided by companies such as Microsoft, Amazon, and Google. Although pandemic restrictions in the United States and globally have been relaxing, many people expect the use of cloud computing services to continue.

At the same time, as network operators increasingly virtualize their network services, many people expect data centers to play a greater role in future telecommunications networks. Doing so will allow them to run most of the network in the software in the data center, thereby significantly reducing costs. AT&T has agreed to put its core network in Microsoft's cloud, and Dish Network plans to run all of its network operations in Amazon's cloud.

American Tower is not the only cellular tower operator expanding into the data center field. For example, SBA Communications has purchased several data centers and is now selling computing services under its new SBA Edge brand. And DigitalBridge-which has everything from cell towers to fiber optic networks to small cell systems to data centers-recently announced the expansion of its Vantage data center business in Santa Clara, California.

Related post: All major tower companies are sniffing edge computing American Tower: Edge computing is worth "billions of dollars per year" SBA, American Tower redoubles its efforts at edge computing conferences

— Mike Dano, Editorial Director of Light Reading 5G and Mobile Strategy | @mikeddano

© 2021 Light Reading, part of Informa Tech, a division of Informa PLC.