The tower industry is set for an upturn in the second half of 2020 with the resolution of the legal challenges to the Sprint/ T-Mobile merger and the birth of a new facilities-based nationwide carrier, said Jeffrey Stoops, president and CEO of SBA Communications during the fourth quarter 2019 earnings call.
“In order to meet their required 5G coverage goals, the new T-Mobile will require meaningful upgrades across their combined portfolio, deploying 2.5-GHz spectrum to legacy T-Mobile sites and 600-MHz spectrum to legacy Sprint sites. These efforts will drive amendment activity for SBA,” he said.
The Sprint/T-Mobile merger, however, still must get through the California Public Utilities Commission before the transaction closes. “I think they will go quickly [with tower deployment once the deal closes, but I think we’re going to have to wait and see as to when that happens,” Stoops said.
Another catalyst will be Dish’s heavy investment in a new 5G nationwide network. Stoops said Verizon and AT&T will respond with their own 5G initiatives, further driving additional collocation activity.
“We believe [AT&T and Verizon] will embrace the new competitive landscape and continue to invest significantly in their own [5G] networks,” Stoops said. The number towers built out by AT&T and Verizon, however, will not grow significantly year-to-year, he added.
The release of 5G-enabled handsets and new 5G apps will also spur the network investment required to support these technologies — not to mention the release of additional mid-band spectrum, which will make for a long deployment cycle.
“The initial 5G deployment cycle has really only just begun, particularly as it relates to macro sites and the deployment of mid-band spectrum and massive MIMO architecture,” Stoops said. “The anticipated auctions of CBRS [Citizens Broadband Radio Service] and C-band spectrum later this year will only serve to further support this upward investment trajectory over the next several years.”
Brendan Cavanagh, SBA executive VP and CFO, said SBA expects CBRS to be primarily a small cell indoor service but with some macrotower outdoor use, as well.
“But we don’t think, at least for SBA, the CBRS spectrum will be nearly as impactful as the C-band spectrum,” Cavanagh said.