I attended CTIA in Las Vegas in late May. What struck me was the de-emphasis on macro sites and tower-based infrastructure in the agenda and (much) heavier focus on small cell sites. Small site infrastructure means both DAS and simply small sites – what I used to call patch antennae on the side of buildings to provide local coverage of streets and parking lots. The carriers and towerco’s view small sites as both additive to current coverage schemes and replacements in some cases for large, expensive macro sites designed to cover broader geographic areas. 50% of the CTIA infrastructure conference agenda was focused on small sites and this emphasis will continue. We see an opportunity in the future as AT&T mentioned in a recent press release they expect to deploy 40,000 small cell sites in 2013 to supplement/replace existing coverage. – Dewey K. Shay, CEO
So the good news is the strong are strong and getting relatively even stronger! The bad news? The weak are getting even weaker. Bids for MetroPCS and U.S. Cellular leases are few and far between and no one buys Nextel. Metro’s network will be subsumed by T-Mobile after the merger and U.S. Cellular’s network will be decommed in the markets where they overlap with Sprint. If anybody is buying Nextel leases, sell! – Dewey K. Shay, CEO
What is absolutely true in the world of tower ground leases and rooftop antennae leases is that the stronger carriers’ leases are becoming relatively more valuable as the lesser carriers’ leases become less valuable. Why? AT&T and VZ are the behemoths of the industry with over 100 million subscribers each. Even players such as Sprint and T-Mobile have fewer than 50 million subs these days. The AT&T and Verizon scale gives them the ability to invest more in network development making their sites (and leases) relatively more valuable. Next time – what if your lease is from MetroPCS, U.S. Cellular or a lesser carrier?
Since my last posting, it is now entirely clear that T-Mobile’s network upgrade is that company’s most important priority – and this make MetroPCS rent very, very vulnerable. T-Mobile will be able to service the former MetroPCS subscribers with their new truly 4G network. Also in the vein of consolidation, Sprint will decommission the U.S. Cellular sites in those newly acquired markets in the Midwest and will do the same with Clearwire nationally if they can get control (as they inevitably will). DISH networks bid for Clearwire is only a hindrance in my view – Sprint must win this battle for any number of reasons. The articles in the Unison Newsletter are quite worth reading. – Dewey K. Shay, CEO
There have been 2 major cell site industry events in the past few weeks: (1) the merger of MetroPCS into T-Mobile, and (2) a sale of USCell customers and network to Sprint in certain Midwest markets. Both events will result in substantial decommissioning of cell sites. T-Mobile made public their intent to decommission approximately 10,000 MetroPCS cell sites – virtually the entire 11,500 site MetroPCS network. And it is all but certain that the USCell markets in question will see the decommissioning of all USCell sites (rooftops and towers). These events support our thesis that the Unison business proposition is a good one for cell site owners – tax efficient proceeds now and less consolidation and technology risk in the future. – Dewey K. Shay, CEO.
Contrary to recent buildup, small cells are not always the best solution. Read more…
There are several key events that have happened recently in the wireless industry but the biggest is Softbank’s investment in Sprint and T-Mobile’s backdoor IPO through MetroPCS.
Both events will mean network consolidation.
T-Mobile and MetroPCS will now have overlapping networks in many markets therefore the result will be a merged network. Why have 2 networks when only one is necessary? Of course, consolidation will not happen overnight but you can be sure that T-Mobile and Metro will not both have free-standing 4G LTE networks in 2 years.
Sprint’s new cash infusion from Softbank will hasten the Network Vision project and accelerate the decommissioning of the Nextel network which is now in full swing. Probably more important is that the new Network Vision architecture will enable network sharing arrangements among carriers – my bet is with T-Mobile. – Dewey K. Shay, CEO.
Many argue that mergers and acquisitions in the wireless industry are more probable and powerful today than ever before. Read more to find out why…
The disclosure in May that AT&T and Cricket held merger talks recently underlines an important point – a principal risk to cell site value in the next year to 5 years is all forms of network consolidation. For example, it is public knowledge that Sprint and T-Mobile considered combining their wireless networks prior to the AT&T buys T-Mobile deal. While this deal did not happen for anti-trust reasons, the pressure on the number 3 (Sprint) and 4 (T-Mobile) carriers will not go away. They need to reduce costs to compete against industry giants AT&T and Verizon. To give a sense of relative size, both AT&T and Verizon now have more than 100 million subscribers – Sprint has only 55 million and T-Mobile has 35 million. AT&T and Verizon are GM and Ford – Sprint and T-Mobile are like Chrysler – they will be bought, merged or otherwise subsumed. As will the even smaller wireless providers like Cricket and MetroPCS (which tried to sell itself to Sprint). Watch out for major events like these which will dramatically change the value of cell sites. Not long ago, Unison was offering considerable sums for Nextel leases which will all be decommissioned by 2013. These Nextel leases now have zero economic value. – Dewey K. Shay, CEO.