Is 4G Roll-Out Stalling or Accelerating? A Wall Street Transcript Interview with Benjamin Lowe, CFA, of Stifel, Nicolaus & Co., a Vice President in the Internet, Media and Telecom Sector Covering Telecom Services

Wall Street Transcript

67 WALL STREET, New York - January 21, 2014 - The Wall Street Transcript has just published its Wireless Communications & Telecom Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: 4G Infrastructure Capital Expenditures - Tower Cell Splitting - Global Wireless Spectrum Allocation - Consolidation of Components - Integrated Wireless Platforms - Increased Competition in Wireless Space - Next Phase of 4G Buildout - New Site Leasing Activity

Companies include: American Tower Corp. (AMT), Crown Castle International Cor (CCI), SBA Communications Corp. (SBAC), AT&T, Inc. (T), Sprint Nextel Corp. (S) and many others.

In the following excerpt from the Wireless Communications & Telecom Report, an expert analyst discusses the outlook for the sector for investors:

TWST: When we last spoke, we talked about the fact that the tower companies could benefit from the 4G buildout. Is that still a major theme in the space?

Mr. Lowe: Yes, it is. It is still a key trend when you are looking at the U.S. market. When you think about the buildout of the 4G networks from a tower perspective, there are multiple phases involved. We are getting toward the latter innings of the first phase. That first phase primarily drives amendment activity, where carriers come back and add new equipment to existing cell sites so that they can simultaneously offer both 3G and 4G services in that area.

As the demands on the network increase and they need to increase capacity, that leads to the next phase of the buildout, which we are starting to see early signs of. With the next phase, the mix shifts toward new site leasing activity where instead of adding additional equipment to an existing site and amended the existing lease, carriers deploy a new cell site which results in a new lease with the tower operators. So that's where we're transitioning right now, from that first phase of the buildout to the second phase, and we saw meaningful amount of backlog activity last year for all of the tower operators start to increase in terms of the contribution from new site leasing activity.

My expectation going into 2014 is we will continue to see that mix shift occur. As we think about organic growth in the U.S. market over the next two to three years, we will start to see more of that driven by what is referred to as cell splitting, where the carriers are putting up whole new cell sites to try to increase the capacity and the density of their networks.

TWST: Are there constraints on putting up new towers?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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