Taking Advantage Of The 5G Revolution With Hugh Odom

You're not going to want to miss today's show with Hugh Odom. Listen up. He was going to share how 5G is one of the most exciting technologies of this decade, whether you're an investor or if you're a property owner. Welcome to the Next level Income show where it's our goal to raise your income, your investments and your life to the next level. I'm your host, Chris Larsen. You, you can get a free copy of our book at nextlevelincome. Com. If you click on the book link and put in your address, I'll even send you a copy. On today's show, we have Hugh Odom, founder and president of Vertical Consultants. Hugh is a former ATT attorney and now consults for the likes of Walmart, McDonald's, Disney, the US Postal Service, and even cities like Atlanta and Charlotte where we own multifamily properties. Today, Hugh's going to be talking about the rollout of the 5G network and how it's one of the most exciting opportunities of this decade. Hugh, welcome to the show.

Appreciate it. Glad to be here.

Yeah, I'm really excited to have you on the show today. We were, we were chatting before and we were talking about how I can, I can look up the mountain I live on. I see these 5G towers sitting up there, which is awesome for some reception. And it's just something I've had a real interest in is I've kind of seen the full cycle of telecom here change over my few decades on the planet. But for our audience that may not know about you, they may not know about this technology, if you don't mind, give the audience a little bit more information about your background, your history and how you ended up getting here.

Sure. Well, I'm the president, founder of Vertical Consultants. My background is being a real estate and telecom attorney for over 20 plus years. I was an attorney inside AT&T for almost 11 years. I work with them throughout the western United States and negotiation and structuring of telecom deals for owners on the other side of the table. Of course, for that period of time and about almost 11 years ago now, we founded Vertical Consultants. And basically what we did, we swapped sides of the table. We start working on behalf of property owners, everybody from individuals to small towns to small businesses, all the way up to being providing counsel for Walmart, Disney and McDonald's, et cetera, when they are either approached to put on the property in the way of a cell tower lease or a something on top of the rooftop, or they have an existing agreement with an AT&T verison, et cetera. And they're being trying to renegotiate those, restructure those, to not only get more money out of those deals, but to protect their property, which is most valuable.

Ass. Yeah, no, I love it. I mean, a lot of people don't realize that with your property rights they go up to a point, but they only go up so high and it changes based upon where they are. I think it's really wild. We just got back from Puerto Rico on spring break not too long before this recording, and down There you see 5G cell towers on a building that's two stories high. It's really wild how they're doing that. So maybe before we kind of dive deeper into the 5G technology, talk about, you know, in a nutshell, because I know we could probably have multiple episodes just on this, just how the telecom industry has changed over the past couple decades.

Well, we've gone from a situation back 20 plus years ago where the wireless industry was about providing phone service and people would say, hey, I lost service, don't have service anymore, I'm out of range. And people there wasn't enough cell towers, they were building cell towers to. And so that basically got done probably back in the late 2000s where there are enough cell towers provide service. But people who use their cell phones, they understand besides air, water, food, you rely upon that thing most of anything for communication. And we have. Right, exactly. And so what's going on? We've gone from a situation where you had a cell phone to now you basically have a small computer. And that's a data device. Yeah, supercomputer. Yeah. And so that really the emphasis now isn't to build out to provide coverage, it's to provide data capacity. Because we've gone where that we want more and more data, more and more accessibility, more and more ability to use those phones for a lot of different things. We go everything from our playing games to texting, picture watching movies, to telehealth and education and other things through those phones or wireless license. So the evolution has been from a phone service to a data service now to an essential services service, which is a utility. You have to have it to keep up a lot of different levels. So that's kind of the progression that we have right now. And the big thing we work on our behalf is, you know, all that stuff on your phone, all those apps, all those things you can do, from controlling your home to your car, to everything you might imagine work, unless the infrastructure is there, unless the backbone is there and that's the cell towers and the cell sites all across the United States. And that's what we work to help people negotiating those deals on the side of leasing their landing, people using our land to provide that backbone for those, for those services.

Yeah, so I want to get into that here and one last thing before that. So talk let. So you had 3G LTE right? Yeah. Is that right? 3, 3G.

Yeah.

And then is LTE 4G, is that correct?

That's correct.

And then you have 5G. So what, what is the difference in power or transmission?

The number of G's. No, I'm kidding. Basically the progression. It's the simple way I can. It's two things. It's a lot of things, but two basic things. Capacity, the amount of data and I kind of like I was telling before, and latency and what latency is. Very simply if I push a button, it takes a second for it to react versus 5G. I push a button, takes a 100th of a second for that to happen. And so the, the difference in the generations are basically all these different things but they come down to data capacity and also latency. So that's why you see people talking about self driving cars and all this technology. That is because your latency gone down from that, from you know, tremendously. But also that capacity to pump all that data out has also increased. So your lazy down.

It's incredible. And we like, to my knowledge we wouldn't be able to have the self driving cars and everything that's coming through without 5G and making and increasing the capacity and the speed with all this is happening.

Yeah, it's a lot of things are you know, you all this is available and all technology that's coming up and if we you know, 6G is being tested already so we're talking about another level in another 10 years or so. But it provides you all things that you're available to do. The connection points and the ability. That's what we're going into a digital economy, a digital world and, and we're so fixated, fixated on hardscape things, you know, roads and bridges and all the things which are important. But we're going to be in a digital world and that there's no turning back from it. We're too far down that road.

Yeah. So again I'd love to just go on and on and on in kind of the history and the technology because I'm kind of a nerd there being an engineer. But Hugh, let's talk more about the real estate and what you do, what your company does and what the opportunities out there. So you mentioned working with companies like Walmart, McDonald's, Disney from what I recall from your website. Even like the United States Postal Service, Charlotte Atlanta Authority, everything. Yeah, yeah. So I mean these are household names. So okay, so I'm a property owner, I'm a city, I'm a municipality, I call you. So help the audience understand what your company does for real estate owners and companies.

Well, we're usually contacted by two types of entities. I mean what I mean by or two types of situations. I should say all of entities from individuals all the way up to the large companies. But it's either they've gotten contacted and saying hey I'm at and T, I'm Verizon and whoever want to put something on your property, I want to put a cell tower out there, I'll put something on your rooftop, et cetera. That's situation. One second thing is they have an existing sell side agreement and they're looking at saying hey, I don't think I'm getting fair value for this. I need to restructure this and we're able to go back and listen things and understand what the true value of the use or the utility is being generated from those, those leases or those sites. And and really it comes to you're leasing space, but really you're leasing utility and you need to structure these like a utility agreement. So just to give you an example, over the last five years our immediate increase in revenue for our clients with existing agreements has been over 300% immediate. Immediate. So just because of the undervalued nature of these agreements. And so it's understanding that not only the front end when you're somebody's come out to you for a new agreement and how to structure that correctly and get full value today and going forward. But also if you have an existing agreement, if you have those people from individuals to towns, all the way to large corporations. Because the thing about the industry is there are a lot of smart people out there on the property owner side. The problem is they're playing wrong game and they're expecting to win and they're never going to win because they just don't have the information, the background and it's a look the other side of this game from the carriers and the cell tower companies spend tens of millions of dollars every year, if not more to get things set up in a way that benefits them and not the property owners.

Yeah, no, I mean that's how it works.

Right.

You have the big companies, they have all the information, they have the attorneys in house, then you've come outside. So who better to talk to than somebody that's played the game on the inside, now comes on the outside. So I guess one of the big questions that is in my head here and you say that is do we need more space, do we need more real estate, do we need more locations for 5G? What's driving, you know, some of, some of these opportunities and some of these actions?

Well, it's twofold. The existing cell sites, there's about 500 exists, 500,000 existing cell sites out. Right. Give or take.

That's in the U.S. right?

In the U.S. in the U.S. okay. And those, the majority of those need to be upgraded for 5G equipment. That's the first thing. And that provides opportunity of people who have existing sell side agreements to renegotiate based upon that upgrade. And in the end to 5G, provide some opportunities there because the value of the site goes up. The second thing is for 5G you need one of the elements of 5G build out is densification. That means you have to have more cell sites. You have to densify the network. The only way you do that is build more cell sites. It's projected somewhere over the next three years, somewhere between 700 to 700,000 to 1 million new cell sites need to be built.

Wow. Wait, so you're talking about tripling? Doubling to tripling?

Correct.

Wow.

You have to, that's the only way the network works because you have to densify, you have to put a cell sites out there a lot closer together because the range for 5G is a lot narrower with regards to the transmission of that signal. You have to basically almost be on top of each other. So. So you're going to see a lot of build out. You're going to see initially a lot of build out in urban areas because the quickest method to get a return on investment, the wireless carriers. And then you're going to kind of see out to the suburbs and the rural areas. So but you're going to see opportunity for property owners first of all from the municipal level because that's the easiest way to do it. Build in existing right of ways or existing areas. And then you're going to see it trickle down to the private sector with regards to businesses and then also down to the public, I'm sorry, to the, to individuals who own land as well.

All right, so we have a lot of investors that listen to the show. They own real estate, Hugh. Some are direct owners, a lot of business owners as well. So if you're listening, what are some types of properties out there? Whether it's private, so let's skip the municipalities. So private individuals. What are some optimal sites that you would look out for that you may say, hey, I have a site that, you know, maybe I should discuss this with you and see if it's, it's viable?

Well, if you have any, if you have an existing. I wouldn't, I would tell nobody to go out and buy a property during a sell site on it. Just the odds are too long to do that. You're not going to do. You're good. If you have an existing site, you can always determine there's two ways to go about getting something on your property. And so it's a, it is a stretch. There's not, you know, even with the build out of another, let's say million sites, there's a lot of properties out there.

Gotcha.

First is if a site is needed for the build out, the carrier will come to you and say hey, we have a need. The second is get in contact and we provide a referral service to put, put property owners in contact with build out companies for towers and rooftop sites. So get your, get your property on that list. If there's a need in that area, they're building out in the next 12 to 36 months, they have a connection point with a property owner who's open to it and that kind of narrows the odds a little bit. So I wouldn't tell anybody to buy property for that, but it's a great, great way to generate ancillary or additional revenue and you know, and based upon a small amount of space and usually not being used for other purposes.

Yeah. So what can you give us an.

Example of that for with regards to a site that you can put some rooftop sites or if you're a commercial property owner, you own, let's say an apartment buildings, office building, shopping centers, just usually what. First of all, rooftop space. You know, if you have something over three stories tall, usually you're going to be available to possibly put something on your, on your rooftop. Usually you're talking about square footage wise, somewhere between 80 to maybe 150 square feet total, sometimes less. If it's a commercial property cell tower or 5G tower, looking probably 500 square feet to a thousand square feet of raw land. Usually it can go in the back of the property and they just run utilities down the boundary lines to the street Interesting, interesting.

You got my wheels turning here. So yeah, we got a, we got a lot of commercial office buildings in the portfolio here across the United States. So makes me think about some stuff like that. So one of the things as I did a little research here before you mentioned that Covid, the pandemic last year has really had a big impact on 5G and how that's going to change and we're going to have this new normal. So share your thoughts on that and why that's the case.

Well, we already had dependency based upon services for Internet services, for just wireless services. I mean there's just a, like I said, every day you're using your phone and you're using for different needs. When Covid hit, the dependency ramped up because now you're in, you're working out your house, you have to, you know, employment opportunities. Yeah, right. You work out your house, employment opportunities. You know, those situations depend upon wireless services. So 5G provides that telehealth. You know, we, let's say 18 months ago telehealth was telehealth compared to now. Now that's the big thing that people are going online to provide services for health services. Third is education. I mean that's the big thing out there is that kids are a huge amount of children are now in house and at their home online. So 5G, the spotlight just got emphasized because again going back to the thing we talked about earlier is the data, your need capacity and 5G provides that capacity. Right now you just have an overload on the networks that are out there right now. There's and there's so many areas across the country. So if you're in a, I'm here in Nashville, Tennessee. If you're in downtown Nashville, in the area, immediate area, you're not going to have issue. If you start going outside 5 miles, 10 miles, 15 miles outside, then you are a different level of living your day to day life for health, employment and education just because you don't have the services available to you compared to somebody just 10, 15 miles up road. And so you have this what we call a digital dividend. So Covid has really emphasized that and put a spotlight on that. There is a have and have not society with regards to wireless services and services.

Is there anything in the new infrastructure bill that the Biden administration put out, to your knowledge, that addresses that?

There is. They put about $200 billion proposed to build out infrastructure for broadband. Now broadband and 5G services, we think it's a, should be geared more toward the 5G side if we believe it's not the right approach. Yeah, well truly, because it's just your broadband provides you a level of services, but it's like putting a band aid and say, well this provides you the right amount of services today. But hold on, what's going to, we're going to rely three years from now. It doesn't make any sense. You're just, you're putting something in there that's going to be outdated by the time it gets in the ground. So, so that's number one. And so there are some other things we believe the biggest solution for this is and especially for small to mid sized communities is to build their wireless networks, to build their own cell tower networks, to build those. It provides them control of that equipment up there, what's up there, the nature of the equipment. Also ability to lease backspace to the carriers on those that infrastructure the cell towers, etc. So it provides a win win. It enables them to the security of those networks as well. So we believe that's a better solution long term and hopefully President, give me a call and I'll help him out with that.

Yeah, I hope so too. But so just you know, to help me understand and probably the audience as well. So I have, I have Internet running to my house. How does 5G speed compare to that.

Comparatively? You're. If you had a one gig Internet service at your house, which most people basically have, if they're in an urban area, you're looking at five fully built out. You're probably 10 to 25 times faster depending on where you are and the nature.

Faster, Faster. That's incredible.

Yeah, because you could think about this way. You could not think of trying to run a self driving. Let's say you had a go kart that was self driving and you're in your backyard. Turn that off your system right now. You couldn't do it, right, 5G, you could. So that just. And it's not only, like I said, it's not only the speed, it's the latency. It's not the data for its latency. That's the big thing. It's just how long it takes from you know, push that button to action. And so that's how much faster that you get to. And so and that's just projections of when 5G gets to normal capacity at the end of 5G. Just like 4G now you have a little bit probably we think it's going to be double that capacity by then. You get through 5G cycle to 6G that's incredible.

So this is, to me, when I hear this, I think it's a really big opportunity for undeveloped countries or developing countries, I should say. I remember reading the stories about Africa and how they just skipped over the landline phase and went straight to cell phones. They didn't even get built out these landlines before they got to cell phones. And you know, we have broadband. I was at Virginia Tech when we were the first campus in the country to have Ethernet. So, you know, we were like the most wired small town in the country, if not the world at the time. So it seems like there's a real opportunity, like you said, for small, small cities that can, that can use this and you know, they can attract entrepreneurs. And it is amazing. I've been in hotels and I just click off the WI fi and it's faster running the 5G off the, you know, building that I'm looking at next door, which is pretty, pretty amazing. So, I mean, I think some people that are listening could kind of infer opportunities in the future. But Hugh, talk about the opportunities over the next decade for people that are looking at this space.

Well, I think the big thing is if you're talking about the wireless space, you're talking about, I believe we're infrastructure guys and we love infrastructure. And I tell people, people love, are kind of like road. People love talking about the actual train. I like talking about the track. So if you're looking at this from a space, from a general investment space, if you control cell sites on your side of the equation, you're controlling infrastructure and you're going to have a recurring revenue and things of that nature. From an investment side, just general investment side, we would tell people, invest as much money as you can in telco. Infrastructure is the backbone of our economy. It's a backbone of our society. I hate to say going forward because we are relying upon it more and more. Our advice is understand, if somebody comes to you, understand what their value they're getting, what you're offering them. Understand the value of this. Understand how you can maximize. If you're a private property owner, a company who has many properties or just a single property, or your municipality, understand the value of that data is comparable to the oil industry, the data industry is comparable. The oil industry of 100 years ago that people consume, consume, consume oil and gas products consume to consume because they couldn't get enough of it. You drive forever you do. We are consuming data at such a rate exponentially growing every year, year after year after year. If you own, if you can somehow get tied into the data industry and, and more particularly the infrastructure that provides that data. It's a great investment.

I love it. Any companies in particular we should be looking out for?

Well, I would tell you the people most look to the carriers. I tell people, look at the tower companies, the big American Tower, Crown Castle, SBA Communications, those are the three largest. We compete directly against them in negotiations, but I would tell you, I mean, we negotiate, but they're smart guys. We disagree in negotiations, but if you're looking to invest, I would tell you those guys to invest in because they, they, they're building railroads and that's really, that's what, that's what you're, that's what you want to be invested in.

And that was Crown, SBA and American.

Crown, Crown Castle, American Tower and SBA Communications.

American Tower, that was it.

Yeah. American tower is up 25 since March. Just to let you know they're already up for. They're smart guys.

Smart guys, yeah. Very cool. Well, like I said, Hugh, before the show, I was really excited to have you on and talk about this. It's just really neat. See how my generation that grew up on rotary dial phones and then my four year old son, I'll never forget when he was four at the time, he picked up a telephone in a hotel room and he said, hey dad, what's this? He'd never seen it, he'd only seen a cell phone. And that was the difference between two years. My older son and my younger son seen that. So I always chuckle. I actually made him repeat it and took a video of it because I just thought it was so, so wild. And now, you know, they don't, you know, they know what WI fi is, but you know, now they get in the car and they're like, hey, I don't have WI fi. I'm like, actually, you're on the cell service now. It's pretty wild to see that. So, Hugh, you've really had a really interesting career in the telecommunications space during one of the most exciting times for this industry. If you could go back and give your 25 year old self advice, what would it be?

Be more patient. Be patient. Understand? I mean, listen, listen more than you talk. I think that's the first. I mean, if you, you listen, you learn when you listen and then you, then you apply when you talk. So, but I think, you know, luckily I, to an industry that has had tremendous growth and we're really good at what we do. And so that's, that's a good combination. But I would tell, I always tell anybody, be more patient. Listen. Listen more than you talk, and you'll be a lot more successful.

I love it. That's what they say in sales. You got two ears and one mouth for a reason. You need to listen twice as much. And, yeah, this podcast has definitely taught me to shut my mouth and listen to the experts. But I'll also say Simon Sinek has a great, great piece out there on YouTube. So if you're younger and you're listening, take Hughes advice, be patient. And Simon Sinek has a great thing on there talking about patience and how these millennials get in the space. And, like, I've been here and I haven't gotten a promotion. And he says, well, how long have you been there? He's like, they're like four months. So, yeah, patience is key. So, Hugh, you shared a lot of really interesting stuff with the audience today. We appreciate your time. If anybody wants to get in touch with you, what's the best way to do that?

Simplest way is go to our website, which is selltowerleaseexperts.com Again, that's Cell Towerlease. Leasexperts. Com.

Wonderful. Hugh Odom, thank you so much for being on the show today.

Thank you. I appreciate the opportunity.