Tower Company CEOs See Good Times Ahead as Data Demand Increases
SBA Communications on Monday became the last of the three major U.S. tower companies to report Q3 earnings, releasing results after the close of the financial markets. In recent calls, American Tower and Crown Castle executives were positive on the outlook for their sector as U.S. carriers continue to deploy 5G.
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“Our carrier customers continued to invest meaningfully in the third quarter, leasing space on our sites as they expand and densify their networks,” said SBA CEO Brendan Cavanagh. The results reflect “significant network investment, primarily from construction projects focused on network expansion.”
SBA reported site leasing revenue of $656.4 million, up $30.7 million from Q3 last year. Net income was $240.4 million, down $15.5 million.
American Tower CEO Steven Vondran told analysts last week that in the U.S., “demand continues to drive robust levels of leasing activity.” Mobile data demand is “the backbone of our business model [and] continues to rise” rapidly. American Tower reported total revenue of $2.1 billion in Q3, up 7.7% from the previous year. Net income increased 216.9% to $913 million.
Vondran cited CTIA’s most recent market survey (see 2509080020), which found that mobile data consumption in 2024 increased about 35% year over year “for the third straight year, driven by growth in mobile customers, 5G-enabled devices, usage per device and fixed wireless access,” he said. “Experts believe that the rapid growth in mobile data consumption will require a doubling in overall network capacity over the next five years, which in turn will require a significant increase in cellsites that benefit our tower business.”
In addition, Vondran said he sees satellite connectivity as a potential growth area. Because American Tower Chief Technology Officer Ed Knapp serves on the AST SpaceMobile board, “we have a firsthand view ... and regularly evaluate satellite capabilities with engineers and technology consultants.” Vondran also sees opportunity ahead in 5G. On average, about 75% of the company’s towers have been upgraded with 5G gear, “so there's still considerable runway for growth.”
A healthy wireless sector overall is good for American Tower, Vondran noted. “The tower industry benefits when its customers become healthier,” he said. “Financially strong customers tend to invest more heavily in their networks to keep pace with demand for mobile data consumption, which in turn drives greater demand for our best-in-class tower portfolio.”
On Crown Castle's quarterly earnings call, CEO Christian Hillabrant similarly said the U.S. wireless infrastructure sector “is entering a period of significant opportunity, supported by solid fundamentals, continued growth and customer demand.” Crown Castle reported site rental revenues of just over $1 billion in Q3, $54 million less than the same period last year. Net income was $323 million, up $20 million.
The FCC plans to auction at least 800 MHz of additional spectrum beginning in 2027, Hillabrant noted. “As we saw during the early stages of the 5G deployment cycle, spectrum acquisitions by well-capitalized carriers tend to create significant opportunities for tower operators.”
Each major U.S. wireless carrier has acquired additional spectrum during the past year, “despite having collectively secured approximately 700 MHz of spectrum less than five years ago,” Hillabrant added. “As data demand continues to grow, it will require operators to expand network capacity by both deploying new sites and adding new spectrum bands to existing sites. We're seeing this dynamic unfold in real time."
Others see headwinds ahead for infrastructure companies.
During the previous quarter, American Tower “modestly reduced its 2025 domestic leasing guidance based on one customer, presumably AT&T, moving a bit slower than expected,” MoffettNathanson’s Nick Del Deo told investors last week. “Management described this as a timing issue, not a change in the amount of business that it would ultimately capture, and that struck us as sensible. AT&T will eventually need to get mid-band 5G on the vast majority of its towers.”
AT&T’s pending purchase of EchoStar spectrum (see 2510160041) “adds another wrinkle,” Del Deo wrote. “AT&T doesn’t currently propagate 600 MHz on its network, so that will entail upgrades and some incremental revenue for American Tower. … But AT&T has long emphasized combining tower climbs to perform work related to multiple spectrum bands in one shot to reduce deployment costs, in some cases holding back on one project until it can be done in tandem with another.”
MTN Consulting warned of downward pressure on network spending in a recent report, a spokesperson emailed Monday. “Capital spending just dropped to its lowest level since 2011,” they said. “Telcos are done building and have moved on to a new playbook: squeeze more from what they already have.”
SBA Communications, meanwhile, announced Monday a new long-term leasing agreement with Verizon. It “provides the flexibility needed for Verizon to be more nimble in managing its current infrastructure asset portfolio and deploying new technologies, ensuring coverage where customers need it and capacity when they demand it,” said a news release.