Tower firms eye 5G mid-band and small cells to boost 2023

5G is the gift that keeps giving to the top three U.S. tower companies. Although most agree that 2022 was the year of “peak” 5G deployments, executives with American Tower, SBA Communications and Crown Castle told investors during their Q1 earnings calls that they are still seeing continued 5G activity as operators like Verizon build their C-band 5G network and Dish Network rapidly expands its nationwide greenfield 5G network. Plus, all operators are expected to densify their 5G network with small cells.

Jay Brown, CEO of Crown Castle, told investors during the company’s Q1 earnings call last month that Crown expects its customers’ network and investment in 5G to exceed what they spent on 4G. He added that Crown expects at least 5% organic tower revenue growth and also is expecting an acceleration of its small cell business with the addition of 10,000 nodes this year.

“I think in terms of the number of small cells that we’ve seen thus far in 5G commitments from the carrier customers, as well as the conversations that we’re having about what is to come in the future suggests that the opportunity is significantly more than what we saw during the 4G era,” Brown said.  

Likewise American Tower CEO Tom Bartlett said that his company is seeing customers make significant investments in 5G but have so far mainly focused on the broader coverage requirements. “We believe our customers’ networks will need to provide at least two times the network capacity they have today in three to four years or roughly three times today’s capacity as we approach the end of the decade,” Bartlett said.

Plus, the tower players are looking to the second half of 2023 for more movement from AT&T and Verizon as the remaining C-band spectrum licenses that the two companies purchased during the 2021 auction are expected to be cleared and available for their use. SBA Communications CEO Jeff Stoops said during the company’s 1Q earnings call earlier this week that less than 50% of tower sites have been upgraded with C-band radios so far, leaving more room for growth.

Stoops also said that his company is expecting to see more activity now that the FCC is approving requests from vendors so they can manufacture single radios that support by 3.45 GHz and 3.7 GHz/C-band spectrum. Ericsson received a conditional approval from the FCC in March to make its single radio that supports both 3.45 GHz and 3.7 GHz/C-band.

Plus, Samsung recently asked the FCC for a waiver so it can manufacture and sell a 3.7 GHz 5G base station that also supports CBRS for customers who are deploying both C-band and CBRS spectrum.

“Right now, the deployment is a separate radio and antenna for c-band and 3.45 MHz,” Stoops told investors. “It’ll be a more efficient form factor when they are combined,” he added, noting that when combined the radios will require just one truck roll making it faster and more affordable for operators. “We think it’s going to be a positive development when that equipment is available.”

Dish remains diligent in deployments

Not surprisingly, investment analysts peppered tower executives with questions regarding Dish’s network build out to see if the company has altered any of its plans. Crown’s Brown said that Dish is consistently building its network and that Crown is helping them get sites on air as quickly as possible.

SBA Communications’ CFO Brendan Cavanagh said that Dish is still signing up new business, but not at the same pace they were a year ago. However, SBA added that this is not unusual as the company is currently deploying equipment on towers that they already signed up for last year.

And American Tower's Bartlett said that Dish remains very active in the market. “They have always been a good partner,” he added.

Private networks and edge
American Tower, which acquired data center firm CoreSite in late 2021, as part of its edge computing initiative, said that the company continues to have discussions with service providers as well as hyperscalers and cloud players about its edge computing proposition. However, Bartlett said that it’s still early days for edge computing.

Another new area that is also generating buzz is private networks. Barlett said that while American Tower isn’t seeing a “surge in deployments” of private networks, the company’s sales teams are having discussions with carriers and enterprises that are interested in deploying private 5G networks.