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Color on Tower Prices

As previously reported, American Tower made two very big international acquisitions sector over the weekend. The company agreed to purchase ~6,480 towers from TIM Celular S.A. in two transactions, as well as agreed to acquire Bharti Airtel Limited’s ~4,800 towers in Nigeria. We reached out to Caleb Stein, an analyst at Wells Fargo, for some color on the valuations. The Brazilian tower transaction was 16.0x gross margin ($75 million) with AMT paying approximately $185,000 per tower totaling $1.2 billion at current foreign exchange rates.

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Velocitel Appoints New CEO

Velocitel, a wireless network services company, announced the appointment of Kevin G. Hostetler as new CEO. Hostetler has a background in working with private equity firms and has held leadership roles at highly engineered product companies IDEX and Ingersoll-Rand. His skills have led to improved strategic development, double digit growth and award winning product developments for past employers. James Estes, who was the CEO and is now the Chairman of the Board, made the announcement internally on Friday, November 21.

More Carrier Portfolios Exist

Keith Walters of Media Capital Advisors brought to our attention that there are a number of carrier portfolios with more than 20 towers. “C-Spire has a few hundred towers and a fantastic portfolio, nTelos has 100+ sites, and Shentel also has 100+ towers,” Walters noted. This is in response to a statement made by another investment banking group who stated that the next biggest carrier portfolio of towers, behind Verizon (12,000 towers) and U.S. Cellular (500 towers), is only made up of about 20 towers.

Spectrum Auction Raises Over $35 Billion

The FCC’s AWS-3 spectrum auction has surpassed presale estimates, so far earning more than $35 billion in Round 30. There is still bidding left to do too! However, according to Jonathan Chaplin at New Street Research as the auction progresses things are getting worse for the carriers. On Friday, the bidding closed at $2.10 /MHZ-POP for the paired spectrum netting the $34 billion. “The pace of bidding is slowing, but with bids on 260 licenses in the last round it looks like we have a way to go (auction closes when no new bids),” Chaplin explained in a research note. “Things are getting steadily better for the owners of capacity (DISH; GSAT; Sprint) and steadily worse for the carriers. We have assumed AT&T and Verizon will each acquire 10x10MHz and they will split the remaining 5x5MHz with T-Mobile (with each getting about 1/3).