Analysis of Q4 2024 Earnings: ATC, SBA, and Crown Castle

The 2024/Q4 and full-year 2024 financial results for the "Big 3" U.S. publicly traded cell tower companies—American Tower (ATC), Crown Castle, and SBA Communications—have recently been released, revealing strategic shifts.

Notably, ATC is withdrawing from India, Australia, and New Zealand, while SBA is exiting the Philippines and planning its departure from Colombia.

Crown Castle has finalized the long-anticipated sale of its small cell business to EQT and Zayo. In contrast, ATC's investment in CoreSite has delivered exceptional returns.

JW Tower & Telecom Consulting will soon release an analysis of recent financial reports and analyst calls, focusing on the 'Big 3' cell tower companies' strategies for securing long-term land and lease rights through amendments, buyouts, easements, and acquisitions.

American Tower

• 5x debt leverage (acceleration from Core-Site de-leverage)

• Exited India, Australia, and New Zealand markets

• Divested fiber investment in South Africa

• ATC's investment returns from purchasing Core-Site have been excellent:

  • 29 data center facilities across 10 markets in the United States

  • Additional $600 million allocated to data center campuses

• ATC portfolio of cell towers includes 42,222 communications sites in the United States and Canada

• Belief that there will be a a future convergence to edge computing, and cell site locations will be utilized

• "The macro tower remains the most cost-effective manner to deliver a gigabyte of mobile data, and our global portfolio of assets and leading capabilities exceptionally equips us to support our customers' multiyear investment need." - Steven Vondran, American Tower, CEOs."

SBA Communications

• Exited the Philippines, and plan to exit Colombia

• As of close of 2024, owned or operated 17,464 towers in the United States

• 6.1X debt leverage at year end 2024 (lowest in their history)

• SBA plans to build up to 800 new towers in 2025, with a significant number of those in Central America, driven by the Millicom tower portfolio acquisition

• Re: Impact of AI on towers: "Well, if I could answer that as explicitly as I'd like to, that would be good. It's hard to say for sure, Rick, is the honest answer. We do believe that there certainly will be a positive impact as we mentioned in the prepared comments as you see these generative AI functionality embedded into the handsets. And that's really because it's a driver of incremental usage and incremental network capacity that we expect will actually be taken up as a result of those solutions. So it's not that different from other things that have been introduced in the past that have driven greater use of the network." - Brendan Cavanaugh, SBA Communications, CEO

Crown Castle

• Crown Castle recently announced it has entered into a definitive agreement to sell its small cells and fiber solutions businesses to affiliates of EQT Active Core Infrastructure fund and Zayo Group Holdings Inc. for approximately $8.5 billion

• Zayo Group Holding, a company under the umbrella of Digital Bridge Holding, led by industry veteran Marc Ganzi will be acquiring Crown Castle's Fiber Solutions business in a transaction valued at approximately $4.25 billion

• EQT Active Core Infrastructure fund ("EQT") will be acquiring Crown's small cell business in a separate transaction valued at approximately $4.25 billion

• Crown Castle has indicated that it will utilize the proceeds from the transaction to "debt reduction, dividend payments, and stock buybacks ($3B announced)"

• Target debt leverage of 6.0-6.5X

• Greater than 40,000 cell tower locations at year end 2024

• Sprint Cancellations are expected to be $205 million for full year 2025

  • 2025 will be the last year for Spring Cancellations to fall outside of historical churn rates of 1% - 2% of annual site revenues

• "And while towers and small cells share similar market dynamics, we ultimately decided that the operating capabilities needed to run a tower business and a small cell business were dissimilar enough that the synergies between the two businesses were more than offset by the enhanced value we believe we will unlock in the tower business by creating a focused and premium pure play U.S. Tower company. - Steven Moskowitz - CEO, Crown Castle

  
  

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