Tower Execs Expect Years of Big Spending on 5G

When areas seeing peak demand spread out, it’s good for tower companies, said Vertical Bridge's Alex Gellman. “That means you need more investment in coverage and capacity spread out geographically.” 5G is a “continuation” of the long-term trend, he said: “Everything will go wireless if it can. … It’s cheaper and more resilient.” When big carriers spend lots on spectrum “they have to deploy it,” he said.

“We had a big cycle for LTE” in 2010-14, “and now we’re entering another one,” Gellman said. “5G comes after that … so this could be a very long spend cycle.”

“It’s very early in the deployment cycle of 5G,” said Crown Castle's Jay Brown. Carriers will start by adding 5G to their sites, he said. “At some point, we get to densification, and we’ll see far more work on new sites.” Brown predicted carriers will use all the frequencies they have and need more. The companies will also benefit from Dish Network building a network (see 2110060062), he said. “We’re going to be busy … for years to come,” he said: “It takes a long time to build a nationwide network.”

The core work that tower companies are doing didn’t change during the pandemic, Brown said. “We had to figure out a way to continue to deliver for customers,” he said: “It has changed the way that we interact with some of our customers and go into those facilities, but we quickly pivoted" in March 2020. Crown Castle's offices are open, and some staff can work from home, he said.

“We were all deemed, in our industry, essential employees, so we had the ability to work through some of the lockdowns,” said SBA's Jeffrey Stoops. Field employees “were still driving around, doing the work. Towers were getting built. Antennas were getting collocated.” SBA employees are back in the office, but the company allows more flexibility in working remotely, he said.

“We are running as fast” as Dish “tells us to run, which is awfully fast,” Stoops said: “They are busy. They are prepared. They are organized. They are for real.”

People now realize how “critical” wireless infrastructure is, said Steven Vondran, America Tower president-U.S. tower division. The pandemic is driving “an acceleration of 5G,” he said. Remote work “has made some of the more suburban and rural areas even more critical for high-speed internet,” he said. The pandemic hasn’t been the only 5G driver, he said: “Demand for wireless services continues to increase exponentially.”

WIA's Jonathan Adelstein said federal infrastructure spending, if it passes Congress (see 2110010001), will mean more work. “We’ve never seen this level of private investment on top of public investment,” he said. “We managed to get wireless in the Senate bill, which is poised for action.”

If the money has to be spent in a year, “it would be hard to do all that,” Gellman said: “We are very fully employed right now as an industry. … It certainly could stress the system” with hiring enough workers the biggest challenge.

“If we’re really serious about bringing broadband services, whether it’s to rural or underserved areas … the best way to do that and to do it at scale and do it at speed is to do it via wireless,” Brown said. Tower companies benefited from Rural Digital Opportunity Fund spending on fixed wireless, Vondran said. “While there’s a digital divide, you don’t want to have a wireless divide as well.”

WIA Notebook

Industry needs to pay close attention to moves by states and the federal government, after California Gov. Gavin Newsom (D) vetoed a small-cells bill (see 2110050043), FCC Commissioner Brendan Carr told WIA. “That’s something we need to keep an eye on,” he said. “There is certainly going to be some momentum, whether it’s Washington or California, to try to reverse … common sense infrastructure rules.” As Congress looks at infrastructure spending, “we should be making sure that we have the policies in place to make sure those dollars go into the ground,” he said. Carr repeated calls to base USF contribution fees on digital advertising revenue (see 2109150055). “The system no longer makes any sense,” he said. The FCC is taking money assessed on traditional telecom services “and we’re using it, increasingly, to fund internet builds,” he said: “That’s effectively like taxing horseshoes to pay for highways.”