Tower Company CEOs Predict Carriers Will Increase 5G Investment This Year
The top officials at American Tower and SBA offered a mostly rosy outlook on investments by major wireless carriers this year in calls with analysts. American Tower released financial results Tuesday; SBA did so Monday, after the close of the financial markets.
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“Macroeconomic uncertainty persists across the global landscape, but consumer demand for connectivity and bandwidth-intensive applications, and the associated work requirements, remain resilient,” American Tower CEO Steve Vondran told analysts. Carrier CEOs suggest “another active year of network investment in 2025,” with capital expenditures likely near $35 billion, or about $5 billion more than the average annual spend during the 4G era, he said. Macro towers remain “the most cost-effective manner to deliver a gigabyte of mobile data.”
Vondran also noted that the major carriers have “begun to highlight” the benefits of 5G, including enhanced network quality, customer retention and stronger revenue per user. But Vondran conceded that the U.S. is probably between 5G investment cycles. One major U.S. carrier has upgraded more than 80% of its towers to 5G, a second about 65% and the third less than 50%. Vondran didn't name names. “I think with some of their public statements, you guys can probably figure out who those are.”
American Tower reported Q4 net income of $1.2 billion, a 1,355.6% increase over the same quarter last year. Q4 revenue was $2.55 billion, a 3.7% increase over the year-earlier quarter.
“Our carrier customers continue to expand their 5G midband coverage, including adding capacity for fixed wireless access, as well as extend network coverage into areas of the country that have little to no cell coverage today,” SBA CEO Brendan Cavanagh said in its analyst call late Monday.
Cavanagh said that in the international markets SBA serves, carriers are “well behind the U.S. in terms of 5G coverage.” It expects “continued network investment to close that gap and to broadly expand coverage to underserved areas,” he said: “In many ways, wireless is an even more critical service in our international markets than in the U.S.”
In the U.S., mobile network demands continue to grow, and “limited new spectrum availability means more equipment at the cellsite,” Cavanagh said. Growth will be driven by fixed wireless access, greater use of next-generation AI applications and handsets, regulatory buildout requirements and the completion of 5G networks, he said.
“Carrier activity levels in the U.S. continued to grow, and we finished 2024 with our highest backlogs of the year for both leasing and services, setting us up well for continued momentum in 2025,” Cavanagh said.
SBA reported net income of $178.8 million in Q4, up 69.3% over the same quarter last year. Site leasing revenue was $646.3 million, up 1.6%.
“American Tower’s stock has been the best performing (a polite way of saying ‘least bad’)” among U.S. tower company stocks since the end of 2021, MoffettNathanson’s Craig Moffett told investors Tuesday. Long-term master lease agreements “helped to insulate its leasing from the industry-wide slowdown of the past couple of years,” he said: “This includes a deal with EchoStar that, like the others, entitles American Tower to minimum levels of new business irrespective of actual activity. … Management has also been extremely tight with cost controls, helping to deliver bottom-line improvements irrespective of top-line performance.”