U.S. tower execs express optimism despite the economy

DENVER — The panel of executives from the big tower companies was upbeat on prospects for their industry at the Wireless Infrastructure Association (WIA) Connect(X) conference today. They noted that even though the stock market has corrected in the last couple of weeks, tower stocks have done okay. And they’re also optimistic about all the work that will be coming their way from U.S. carriers deploying C-band, and from Dish Wireless building its new network.

Alex Gellman, CEO of Vertical Bridge said, “Our industry has a very strong outlook with three strong carriers, and we have a fourth carrier building out. The outlook is extremely good for towers.”

Gellman was also bullish regarding Dish. “In the last year or so, bankers would say, ‘Are they for real?’ We’re past all that,” said Gellman. “They’re deploying the network. I think Charlie is unique, and I don’t think anybody else would have done this.”

Jeff Stoops, CEO of SBA Communications, noted that Dish is on track to hit its goal of 20% population coverage by mid-June and work toward its promise of 70% population coverage in 2023. “That’s a lot of equity,” said Stoops. “In terms of commitment to the build and the professionalism and energy – it’s all top notch. Several years after that when the network is built out, it will be interesting to see how the business model fares. Between now and then, we’re all busy.”

The tower execs were also happy about their finances even given the turmoil on Wall Street recently.

Stoops said, “In the last week, we all did relatively well because the market is turning to picking which stocks are going to do well in a recession. Nobody thinks wireless is going away, or that our customers are going to stop spending money.”

Jay Brown, CEO of Crown Castle, said, “The tower business is a phenomenal business proven through all kinds of cycles. Many of the private owners of these towers are willing to ride through those cycles because they know they’re good assets.”

The one caveat was that the cost of debt could cut into total returns.

A few other concerns

One negative thing the panelists noted is the fact that the National Telecommunications and Information Administration (NTIA) this week indicated that when distributing funds from the Infrastructure Investment & Jobs Act, it will favor fiber deployments.

Brown said that from a public policy perspective it would have been more cost-effective to include wireless along with fiber as a top technology. “We’ve shown for a long period of time we can deploy the infrastructure most effectively over large areas. From a public policy perspective it is a disappointment.”

But Stoops said, “I’m disappointed by the NTIA, but I’m not necessarily surprised.” However, he noted that two of SBA’s largest customers are also deploying fiber, and they have made it known they want to increase their plant. “I don’t necessarily see it as a zero-sum game,” said Stoops. “I mean 5G requires fiber. Yes, while it might have been better to be more balanced, I think we’re still going to benefit as an industry.”

NTIA chief Alan Davidson just yesterday spoke at the Mountain Connect conference in Colorado. He indicated that while NTIA has expressed a preference for fiber, he expects satellite and other non-fiber technologies will receive plenty of funding.

“This is an infrastructure project that’s designed to last for years. And we do put our thumb on the scale on the most resilient, future-proof technologies that we can,” he said. But NTIA knows “there has to be an escape valve for states. And for the really high-cost areas we fully expect that there will be states who have significant portions of other technologies.”

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Another challenge for the tower industry that was mentioned on the panel was the shortage of workers.

Steve Vondran, president of the U.S. Tower Division for American Tower, said, “I think we have a lot of work to do to increase the available workforce. Part of it is our workforce is getting a little bit older. We need to embrace different communities. We need more outreach, more young people coming into wireless.”

But all in all, the panel of executives was very upbeat about their prospects for the foreseeable future.