The towers have not found much love recently, according to Jennifer Fritzsche, Senior Analyst at Wells Fargo, in her year-end industry re-cap.
“In Q418, we saw some downgrades, likely due to the ‘party cannot continue to last’ view more than anything. But the tea leaves around us may be telling a different story,” she said.
Fritzsche cited on January 8, Kelly Services, a company that provides workforce solutions, announced the purchase of not one, but two telecom services companies: NextGen Global Resources, LLC and Global Technology Associates LLC (GTA). While terms were not disclosed, according to a press release: “The acquisitions expand Kelly’s presence in a niche engineering market, where there is tremendous room for growth….$500B will be spent between now and 2025 preparing for the onset of 5G technology.”
“As we have written before,” Fritzsche said “the towers represent a key component of the ‘core’ of the 5G infrastructure. If there is a growth in wireless services, those services need to work on something tangible. If history is our guide, growth in services is a leading indicator in demand for towers and small cells. Our strong guess is, this development this past week comes as not a huge surprise to our tower friends. So that party I mention above…it may be only just beginning!” she said.
January 17, 2019