Well if there was one takeaway from the South Wireless Summit, it was that this is the business to be in. The Summit’s had an awesome turnout, with great exhibitors, and awesome panels. The panel that really highlighted what’s going on in the tower space was moderated by Ron Bizick of Tarpon Towers with panelists Danny Agresta from APC Towers, Neil Seidman of SBA Communications, Keith Walters of Media Capital Advisors, and Jason Nicolay of Media Venture Partners. One of the points that was noted was that this is the first year in a long while that all four carriers will be spending money building out their infrastructure. It was unanimous that there is a lot of people moving into the tower sector, but is there enough opportunity for everyone? “There’s a ton of opportunity for more people in the tower industry,” Walters noted. “People are building towers one at a time and selling a couple off at a time to fund their next project.” Seidman agreed that there’s a ton of money for new towers, but questioned the cost of those funds. “For years, we’ve been nervous about what’s around the corner but there is opportunity out there. The cost of towers is coming down so people have that chance to build towers,” he said. Bizick noted that tower multiples are at an all time high, but Seidman said that every company values towers differently. “Now we [SBA] can look at a tower site at 20x and say that will work because we can see that one carrier isn’t there and maybe another one is coming. But American Tower might value towers differently than we do.” Walters said that Media Capital Advisors has been seeing a 28x cash flow on average per tower for their last few deals, although noted it was a unique set of properties.
The topic of spectrum has been on everyone’s minds because each time there’s been an auction, there has been a significant investment in infrastructure. But what’s the time frame for that? Nicolay explained that the auction revenue when light years above what was expected. The AWS-3 auction netted $45 billion and was anticipated to bring in $25 billion. “It’s going to be years before that spectrum is deployed,” Nicolay said. “There’s also another auction coming up. Carriers don’t have a lot of access to spectrum so there going to be looking at the ‘beach front property’ of spectrum. They could spend another $60 billion. But there’s going to be a 5-10 year build out period. But after spending on spectrum, they [carriers] won’t have the capital to deploy right away.”
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