Boom! AMT Closes Verizon Transaction

American Tower announced yesterday that they closed the previously announced acquisition of the exclusive rights to lease, acquire, or otherwise operate and manage 11,448 wireless communication sites from Verizon Communications for about $5.053 billion in cash. American Tower funded the Verizon transaction with proceeds from its concurrent registered public offerings of 25,850,000 shares of its common stock and 13,750,000 depositary shares, each representing a 1/10th interest in its 5.50% Mandatory Convertible Preferred Stock, Series B, borrowings under its revolving credit facilities and cash on hand.

So, How Good is the Tower Business?

Colby Synesael, Jonathan Charbonneau, and Gregory Williams, CFA of Cowen and Company took a closer look at returns in the telecom services industry in their most recent research note. The team noted that while towers don’t have the highest ROIC (return on investment capital), they do have the lowest WACC (weighted average cost of capital), which means they have high value creation.“The low WACC is arguably a result of their lower risk profile driven by 1) blue chip customer bases, 2) Long-term contracts with escalators, and 3) high barriers of entry, which combined, provide a high level of predictability to equity and debt investors,” Cowen and Company explained. They also shared that wireless value creation is once again a case of “have and have-nots.” Continue reading here. 

Sprint Takes on the Big Dogs

At the Competitive Carrier’s Association this week, Sprint CEO Marcelo Claure shared his idea to team up with the smaller carriers to take on AT&T and Verizon in next year’s 600 MHz broadcast incentive auctions. Claure said the idea is “potentially form a coalition and to go at this spectrum together.” At the lunch panel on Wednesday, the same concept was discussed about working together to compete against the “duopoly that is AT&T and Verizon.” Sprint has proposed joint-bidding agreements in Partial Economic Areas where the “agreeing parties collectively hold less than 45 MHz of below-one gigahertz spectrum on a population-weighted basis.” Continue reading here. 

T-Mobile Drones On

Deutsche Telekom AG’s T-Mobile unit in the Netherlands began using drones for antenna inspection on Tuesday. The company is the first European operator to do so, and plans to use the Unmanned Aerial Systems (UAS) to inspect 5,000 antennas in the Netherlands from mid-July. According to Jeffrey Leentjes, T-Mobile network specialist, with the use of a drone it will only take around 15 minutes to completely photograph the special stadium antennas and antenna masts. Traditionally, it would take a cherry picker a week to do the same job. Each drone will be equipped with an HD camera equipped with heat sensors and transmitters to provide real-time analysis of the data. Continue reading here. 

FCC Inches Toward Reform

After the designated entity program was used to secure $3 billion in discounts during the AWS-3 auction, the FCC is gradually moving forward with rule changes to prevent big companies from using the discount program that is intended for small businesses. Reuters reported, “Federal Communications Commission Chairman Tom Wheeler on Monday circulated a so-called ‘public notice’ to the rest of the commissioners, seeking further comments on specific proposals for how to reform a bidding discount program that has recently come under fire.” The potential problems with the rules came to light after two partners of Dish Network received $3 billion in discounts. Continue reading here. 

Another One for Alex

CiG Wireless announced the signing of a definitive agreement to be acquired by an affiliate of Vertical Bridge Holdings. Vertical Bridge will acquire CiG Wireless’ tower assets, including 200 tower sites. The all cash deal is valued at approximately $143 million. This deal comes after CiG Wireless reported an operating loss of $2.1 million during its fiscal third quarter. The company’s revenue was up due to acquisitions completed in 2013 and 2014. In May 2013, CiG Wireless acquired thirty communications towers from Southern Tower Antenna Rental. For the year, CiG announced two other acquisition deals, bringing their total number of acquired sites for 2013 to 74, and 252 in-progress sites, spending nearly $50 million. “This transaction brings together two complementary cellular tower operators, and the combined business will have a broad geographic presence across the United States,” said Paul McGinn, Chief Executive Officer of the Company. Continue reading here. 

Now is the Time to Raise the Bar on Safety

“Now is the right time to do this in our industry,” NATE Executive Director Todd Schlekeway said at the South Wireless Summit last week. He was referring to the initiatives taken by the National Wireless Safety Alliance that will provide thorough, independent assessments of knowledge and skills, and provide verifiable worker certification in order to enhance tower safety, reduce workplace risk, improve quality, encourage training, and recognize the skilled professionals who work on towers. It’s easy to think of this like the SATs. Every kid who wants to go to college, no matter where they were educated, has to take the SATs to be admitted to show the school that they have the baseline education necessary to succeed. “These credentials are portable. So often it’s that employees have been trained at different companies and at different companies. The safety training is not uniform. This program will raise the bar on safety and training,” Schlekeway explained. Continue reading here.