Wells Fargo Securities analysts last week downgraded the growth rate for the tower sector. The concern is carriers are avoiding network contracts until 5G standards are finalized, and the FCC’s incentive auction is complete.
In a research note, quoted by Fierce Wireless, the analysts noted, “Bottom line — we believe the industry is facing some growing pains right now in the U.S. Will it pass? Yes, we believe so.” They went on to say, “We believe the carriers are pushing back and new incremental growth will be harder from here as we wait for the spectrum auctions, FirstNet, and 5G decisions and standards all get sorted out.”
Many of the national carriers have already cut back on their spending to expand their wireless networks. Instead, they are bolstering fiber optic networks, and cutting spending on other infrastructure to save for the auction.
However, the analysts did not address the FCC’s spectrum auction which, in all likelihood will launch most tower crews into overdrive. The possibility of not having enough, well-trained and experienced crew members already has professional groups such as NATE dotting the country with safety training programs over the remainder of 2016 .
The bottom line? There are a few unknowns for the tower industry, but those will pass. As 5G develops and the auctions finish, the industry is expected to start expanding once again as the number of mobile devices continues to increase.