In their latest blog, Vertix Consulting (A darn good source for telecom insights – not the fluffy stuff) outlines how the major wireless carriers are vocalizing their frustration with the “Big Three” tower companies – American Tower, SBA, and Crown Castle – as tower rents continue to increase in an environment of ARPU pressure and it is becoming increasingly difficult for them to accept the status quo of increasing operating costs.
Here’s some snippets…
…the Big Three have all responded to the carriers hyping potential wide-scale adoption of small cells in very different ways. American Tower, the largest player in the space, believes these new technologies are not an alternative to towers, but rather a complement to be used in special cases, especially densely populated areas with at least 10,000 people per square mile. Less than 1% of the company’s towers are found in these locations, so small cells would not be replacing the traditional model, but supplementing it.
Are American Tower and SBA turning a blind eye as the technological foundation of their industry undergoes a cataclysmic shift? Or are they disciplined investors that are continuing to place bets on the assets that drive the most favorable returns for their shareholders? Analysts believe mobile network operators may rein in their investments in traditional macro cells as they densify their networks with small cells and DAS deployments, but they’ll have to ramp up their spending on towers eventually to keep pace with demand for mobile data.
…it’s clear they’re willing to start the conversation about the changes required to disrupt the steady increase of tower rents. Early this year, Sprint indicated that it plans to relocate some of its towers from space leased from Crown Castle and American Tower to government owned lands, hoping to save as much as $1B. It has since backed off of this claim as investors feared the impact to their network and questioned the allocation of capital, but the motivations haven’t gone away.
For more insights from Vertix, please click here.