In an interview Monday with American Tower by Batya Levi of UBS Investment, the coming year is looking bright according to their Senior VP Rod Smith, merger or no merger. Smith cited massive MIMO antenna deployment, in particular, saying it will actually be as big, if not bigger, than low-band antennas put on towers.
UBS was hosting the Global TMT Conference on telecom in New York that featured, among others, T-Mobile’s Neville Ray, who confirmed that mid-band spectrum is going to be a force in 5G, and that it would be deployed from macro towers.
“Along with those mid-band spectrum that would be used,” Smith said, ‘they’re probably going to be deploying things like massive MIMO antennas and different types of antennas, so that would be a whole new cycle of hardware going up on the towers. Even though the mid-band spectrum uses smaller antennas, what the massive MIMO antennas do is they cluster lots of those smaller antennas into one panel, and it makes the actual antenna that goes up in the towers much bigger. So you think of a mid-band spectrum, the antennas should be smaller, but the reality is they’re actually going to be as big, if not bigger than 600 megahertz spectrum. So as those begin to get deployed and put on towers, that’s a revenue cycle for the tower companies,” he said in an interview recorded on SeekingAlpha.
Smith said with the carriers spending roughly $30 billion a year for the last several years, with much of that going into new antennas, cables, lines and new towers, he sees a fairly consistent organic growth for American at slightly above seven percent.
The Sprint-T-Mobile merger? Eh.
“We’re really agnostic on whether the deal happens or not,” Smith said. “So if the deal doesn’t happen, I would say, it — you could look at it as business as usual, and having the four major players here in the U.S. kind of organized the way they are, that’s what we’ve lived through for the last several years.”
Even should it go through, according to Smith, the effect of it still might not take place for two years as the companies are legally forbidden to do any detailed planning in advance. “I’m sure they’ll do great at it, but it will take time,” he said.
American’s new deal with AT&T for a longer term commitment was another bright spot for Smith saying it has already helped boost revenues from $34 billion up to about $46 billion. “Within that deal,” he said, “AT&T now has certain use rights on our towers, where they can get on. And the sites that they’re already on, they can use them in certain ways within like a defined bucket. And they don’t have to go through an individual application process, and everything isn’t priced individually…it cuts down the time that it takes for AT&T and American Tower to process applications and get them on the towers and get their changes done.”
December 13, 2019