Wireless Carrier consolidation finally starting to effect cell tower leases?Posted October 31, 2014 by admin
Yesterday Crown Castle International (CCI) announced its quarterly results. I want to focus on one part of the results that will be a direct impact to some current cell tower lease owners.
Crown Castle Reports Third Quarter 2014 Results, Provides Outlook for 2015 and Announces Increase to Common Stock Dividend
– Announces increase in dividend rate to $3.28 per common share annually, or 75% of 2015 expected AFFO
– Exceeds third quarter Outlook for Adjusted EBITDA and AFFO
– Provides 2015 Outlook with growth muted by headwinds from tenant non-renewals associated with carrier consolidation
More specifically this statement:
“….based on recent conversations with AT&T, Sprint and T-Mobile, we are now expecting a significant amount of tenant non-renewals as the carriers integrate the networks of their respective acquisitions of LEAP, Clearwire and MetroPCS…. our expectations that these non-renewals will impact our growth over the next three to four years”
AT&T purchased LEAP
Sprint purchased Clearwire
T-Mobile purchased MetroPCS
What could this mean to cell tower lease or wireless rooftop lease holders?
At Cell Site Capital, most of our clients understand the possibility of losing a lower tier tenant like LEAP, Clearwire or MetroPCS but never think about losing the acquiring wireless carrier lease. In some cases, if both AT&T and LEAP wireless have wireless cell sites that are overlapping, one of those cell sites will get decommissioned. The cell site that’s the greatest risk of decommissioning is the highest rent site, regardless of which carrier it is.
Crown Castle has now confirmed based on the recent conversations with the carriers that decommissioning is happening. They expect to lose $60M in revenue for these non-renewals and decommissioning of cell sites.
At Cell Site Capital we specialize in evaluating each cell site and help cell tower lease holders to better understand the movements in the market. Let us give you a free wireless appraisal for your cell site lease to help to understand the value of your cell tower lease and location.