@PCIA: Tower execs optimistic on broadband buildout

NASHVILLE, Tenn. — The nation’s top tower company executives are optimistic on the outlook for their industry, in part because they survived late 2008 and early 2009 intact despite tight credit markets, but more so because mobile broadband services are taking off.
Speaking at PCIA’s 2009 Wireless Infrastructure Show, Jim Taiclet, CEO of American Tower Corp., told a packed audience that smart devices like Apple Inc.’s iPhone are giving a “true second leg of growth opportunity ” for the tower industry as wireless operators build out networks to accommodate the influx of data applications on the network.
For the first time, the device, not price, is driving consumer behavior, added Global Tower Partners CEO Marc Ganzi. This consumer adoption puts pressure on the industry to think about in-building coverage and smaller sites for outdoor coverage. Several industry executives noted throughout the conference that data applications are likely to change usage patterns as people consume more content wirelessly in their homes than driving down the highway. “We’ve got to think about DAS (distributed antenna systems) and smaller towers,” Ganzi said. “The device needs to be as close as possible to the antenna.” The mobile device has turned into an entertainment device, echoed SBA Communications Corp.’s Jeffrey Stoops.
The tower industry, marred by bankruptcies and massive consolidation after the telecom slowdown in 2001, today has a proven business model, several executives noted. The public tower companies hit their financial estimates this year and even increased guidance. The largest of the tower companies were able to access debt or equity financing, at a time when few industries could make such claims.
Regarding further acquisitions, the five executives on the panel said acquisitions are just one part of their capital expense strategies, and each acquisition is a case-by-case business. W. Ben Moreland, CEO of Crown Castle International Corp., said his company has been buying back stock, in essence acquiring more of Crown than looking outside the company. Moreland said about 5% of his company’s towers are in Australia and that the U.S. remains its main strategy, although Crown continues to look at international opportunities. Internationally, SBA has some Canadian investments while American Tower has explored some opportunities in Latin America, and the Middle East, Taiclet said.
Neither Taiclet nor Moreland mentioned any tower opportunities in India, but there has been a lot of speculation both companies will move into that market. TowerCo remains focused on the U.S. market.
The tower executives were also asked about the Federal Communications Commission’s inquiry into whether the wireless industry was competitive. All of the panelists seemed slightly amused by the question, since they compete fiercely with each other. TowerCo CEO Richard Byrne pointed out that independent tower companies effectively brought competition to this segment of the wireless industry.