Crown Castle International experiencing the highest level of tower leasing activity in more than a decade and expect similar new leasing leves from towers in 2020, according to the comm infra companies third quarter earnings report.
“We delivered terrific results in the third quarter and increased our annualized common stock dividend by 7 percent to $4.80 per share,” stated Jay Brown, Crown Castle’s CEO. “We believe our ability to offer towers, small cells and fiber solutions, which are all integral components of communications networks and are shared among multiple tenants, provides us the best opportunity to generate significant growth while delivering high returns for our shareholders.”
Organic site rental revenues grew 6 percent, year over year, or $70 million for Crown Castle in the quarter, a number that comprises 9.7 percent growth from new leasing activity and escalations minus 3.7 percent churn.
Crown Castle is also constructing small cells for its customers as they invest in their current networks while beginning the early stages of 5G deployments, and it expects to deploy a similar volume of small cells in 2020 as its deploying in 2019. Jay Brown, discussed the speed about which small cells are being zoned and built out. He noted that owning and operating shared wireless infrastructure is a long term investment.
“While we want to deliver a small cell node for our customers as quickly as can, ultimately, as we look at the business and whether or not it makes sense to own this shared asset and what the returns are, we are less focused on the exact timing for getting the small cells on line and more focused on the addressable market and what is the opportunity,” Brown said. “As we have learned from the tower side, the patient adding of tenants of the shared asset over a long period of time is effectively how you drive great returns in the investments we have made.”
Crown Castle is dominating the small cell buildout, according to Brown, who said his company has won 50 percent of the business opportunities, in terms of small cell deployments. He noted the company’s built in advantage in areas where it owns fiber.
“If Crown Castle is not building the small cell, the most likely scenario is the work is being self-performed by the carrier,” Brown said. “With the scale of what we are going to need in small cells in the coming decade, we are going to see the carriers self-performing a significant number of small cells are we are going to do pretty good in the areas where we have fiber, adding tenants.”