Public Tower Company Exposure to AT&T/T-Mobile Merger

We went through the annual reports for 2009 for Crown Castle, American Tower, and SBA Communications to gauge which of the tower companies might have the greatest amount of risk due to the AT&T and T-Mobile merger.   Below is a graph showing the percentage of net revenue that each company generates from the various big 4 carriers.

By comparison, SBA has 40% of its 2009 net revenue from AT&T and T-Mobile, Crown has 34%, and American Tower has 28%.    On this basis, SBA stands to lose the most due to the merger and future consolidation of the carrier’s equipment.

2 comments

  1. You sure know your stuff. They will start taking down the duplicate sites over the next year. Looks like American Tower will be least impacted but all three tower companies will lose revenue.

    Hope to see you soon,

    CC

  2. The percentages can be a bit deceiving in that American Tower and Crown Castle have 2-3 times more towers in the US than SBA. AMT is better situated from a risk standpoint because they have diversified more effectively than CCI and SBA to other countries. So the percentage of net revenue attributed to AT&T and T-Mobile should be less.

    There are two ways that this is a negative:

    1. First, the tower companies will have some lease terminations over the next few years. It might take more than a year for the terminations to commence due to the need to migrate custemers from T-Mobile to AT&T systems.
    2. Secondly, not only will you reduce the number of new cell sites needed by T-Mobile, but AT&T will also need to build fewer sites instead focusing only in areas where there aren’t existing T-Mobile or AT&T sites.

    All in all, this isn’t good for the tower industry.

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