Wireless tower industry stocks soared this week, with major players’ shares rising above previous 52-week highs. American Tower Corp. was trading at $9.25 per share, Crown Castle International Corp. hit $7.94, SBA Communications Corp. was at $3.10 and SpectraSite Inc. was at $49.40 per share.
American Tower and SBA hit the analyst circuit with presentations at the Friedman Billings Ramsey Technology & Growth Investor Conference. Both described business plans and financial expectations, with American Tower zeroing in on free cash flow growth, and SBA focused on stable and predictable revenues going forward.
Questions posed to Anne Alter, American Tower’s head of investor relations, focused on tower growth. American Tower, continuing to cut capital expenditures, plans to build just 100 to 150 sites this year, Alter said. Meanwhile, the company plans to drive up the number of tenants it has, which now averages two tenants per tower, forecasting three tenants per tower by 2005 or 2006.
SBA’s president and chief executive officer, Jeffrey Stoops, agreed the driver for success for the industry is tenant growth. Although SBA experienced less than 3-percent new tower growth in 2002, its revenues still grew by 15 percent year over year, he said, noting that carrier upgrades to cell site equipment and annual escalators constantly increase average rent per tenant.
Alter added that when third-generation high-speed data networks are deployed in the United States, there will be a “significant amount of incremental demand” for new towers, with carriers requiring up to two times the number of sites they currently have.
