After doing a series of channels checks in the metrics of private tower, wireless services and turn-key providers, Jennifer Fritzsche Senior Analyst with Well Fargo Securities has come to one conclusion: “Times are good in the tower world!” she said.
Fritzsche’s analysts believe Sprint’s focus has been on doing more modifications (i.e. massive MIMOs) and fiber. She writes in a client report, that Wells Fargo checks show the other players (T, VZ and TMUS) are active in investing in wireless network infrastructure with plans for continued spend in 2019.
As for what this means for the public towercos, Fritzsche noted, she believes organic growth can go higher in 2019. Crown Castle has an upcoming Q3 call, notes the analyst. Fritzsche said they are roughly in line with the Street modeling 2019 organic growth of 6.0 percent, up from 5.6 percent in 2018E.
Many potential catalysts for the tower sector are in play, according to Fritzsche:
- FirstNet remains in early stages but AT&T is now active
- TMUS continues to be aggressive in the 600 MHz deployment
- With fiber push, Wells Fargo expects VZ to continue to be active in network densification (through small cells and macro activity)
- Much of S’s 2.5 GHz spectrum remains unbuilt
- Depending on how the S / TMUS merger unfolds, her analysts believe there will be spectrum divestitures which could stimulate an additional round of activity on towers.
October 15, 2018