What Does the Future of the Tall Tower Industry Look Like to a Seasoned Professional?

Gary Hess, co-founder of American Tower Corporation and current Director of Vertical Real Estate at Clear Channel, took the time to talk to us about where he sees the tall tower industry going. There is always the question of whether or not towers will be replaced by a smaller technology. “When American Tower was being put together. Steve Dodge and I would meet with the lenders and the questions were always so predictable. ‘Are satellites going to put towers out of business?’ ‘Why do we need towers in the future, because isn’t everything going to be running off of satellites?’” Gary explained. “I’m starting to sense that the real tall tower days are behind us. I’ve witnessed this because the big manufacturing companies have folded their tents.”

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Gary Hess and American Tower Corporation: “It Started With Just One Tower”

Before the three major tower companies began consolidating the industry, there was just one man on a mission trying to save a radio station, Gary Hess. Gary believed in the success of the tower industry before it even existed and, as a result, he became a co-founder for one of the top three wireless tower companies in the United States: American Tower Corporation. The “aha” moment came to him while working at SJR Communications trying to take FM radio stations, improve them, and make them market competitive. However, this wasn’t easy. Broadcasters did not want to lease space to their competitors. “Back then you didn’t have a lot to work with other than the television towers in the same market. I got turned down left and right. It became quite a problem, and then the light bulb went off realizing that I’m not the only one doing this and everyone else is getting the same rejection. They had little or no interest in leasing their towers.” The TV market was booming during this time and Gary saw an opportunity and had the chance to test his theory when the company bought a Dallas FM from the legendary broadcaster, Gordon Mclendon.

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Why are U.S. Tower Companies Moving into Brazil?

With the announcement that SBA Communications would be acquiring 2,007 telecom towers in Brazil, you may be wondering what’s so attractive about the Brazil market. This acquisition will give SBA ownership or control over more than 5,000 towers in Brazil. American Tower acquired 4,500 towers in Brazil in August 2013. Well according to Reuters, the American companies are focusing on acquiring assets in Brazil for the 2014 soccer World Cup and the 2016 Olympic Games that will be held there. SBA said on Wednesday it expected the new towers to contribute about 110 million reais of cash leasing revenue and $70 million reais of tower cash flow to its results during 2014. Wireless carriers in Brazil have been making sale-leaseback agreements on their towers to help pay down debts and boost results in the face of an economic slowdown. (Source: Reuters)

Read more at InsideTowers.com. 

SBA Communications Expands in Brazil after Acquiring 2,007 Additional Sites

Yesterday, SBA Communications announced that they have entered into a definitive agreement with certain subsidiaries of Oi SA, which is one of Brazil’s largest telecommunications service providers. SBA will acquire 2,007 tower sites in Brazil and once the transaction is complete, Oi will enter into a long-term lease agreement with SBA with monthly lease payments for antenna space on each of these sites. The transaction is expected to close on or before March 31, 2014 and SBA will pay approximately R$1.525 billion, which is around USD $645 million at the current exchange rate. “We are very pleased to acquire these high quality assets and expand our relationship with Oi,” commented Jeffrey A. Stoops, SBA’s President and Chief Executive Officer. “These are very good sites, concentrated in the most populous areas of Brazil, with demonstrated attractiveness to tenants. With this acquisition, we will have established SBA as one of the largest and most capable independent tower operators in Brazil, a market which we believe is very attractive and will produce strong growth in the future.”

Read more at InsideTowers.com.

Alcatel-Lucent Launches Program to Remove Challenges of Site Acquisition and Backhaul for Metro Cell Deployments

Yesterday, Alcatel-Lucent launched a new initiative, the Metro Cell Express Site Certification Program, to remove the challenges associated with site acquisition and backhaul for metro cell deployments. Small cells have become a topic of conversation in the telecommunications industry, especially now that the mobile carriers are deploying small cells to expand their 4G LTE coverage in densely populated areas. Alcatel-Lucent believes that small and metro cells are essential to mobile operators who are working to address the demand on network capacity. Michael J. Schabel, Vice President of Small Cells at Alcatel-Lucent said, “Wireless operators have embraced small cells as an essential part of their ultra-broadband wireless network, but they must adapt to the new challenges associated with building, operating, and maintaining these new small cell networks. In order to accelerate and simplify the deployment of small cell networks, we have solicited the help from companies who have assets to contribute to the solution. While no company alone can address the 4P’s necessary for small cell deployment –people, power, poles and ports — the group working together creates tens of thousands of qualified and available small cell sites, and we will further add to that by continuing to add members to this program.”

Read more at InsideTowers.com.

Will American Tower Purchase More Towers in Brazil?

Bloomberg reported that Telecom Italia is working with Morgan Stanley to find potential bidders for their 7,000 towers located in Brazil. One of the potential bidders is American Tower Corporation, according to people familiar with the matter. The Brazilian assets could raise about 700 million Euros ($951 million), one of the people said. (Source: Bloomberg). In 2000, American Tower entered the Brazil market with more than 4,500 towers. In August 2013, American Tower announced they were acquiring an additional 2,790 tower sites from NII Holdings in Brazil for $413 million. Officials at American Tower Corporation declined to comment on their potential interest in these sites; however, it’s a market they are already participating in so it might be a good move for the company looking to expand their international reach.

Read more at InsideTowers.com.

How Can I Make More Money from my Cell Tower?

If you’re a tower owner looking to make extra revenue on your investment, look for opportunities to add tenants. Call the major wireless carriers and even the local ones and see if they’d be interested in renting space. Since the beginning of the 4G LTE deployment many of the carriers are looking for more towers. Updating the existing equipment isn’t 100% successful if there are gaps in the network coverage. This is why the 4G LTE expansion has caused the tower industry to grow quickly and investors are starting to take notice. The analysts at Seeking Alpha explain that, “Currently, AT&T and VZ are in the ‘densification’, or ‘cell-splitting’, portion of their upgrade cycle. The densification of 4G LTE requires carriers to place sites on new towers to ‘infill’ weak areas of the network. New leases result in higher revenue for the tower owners when compared to ‘amendments’, which occur on towers that already support a carrier’s equipment. Such amendments can create varying amounts of revenue based on the lease contract, but they are, in general, beneficial to tower owners as the carriers must leave on the previous technology equipment until all devices using that technology are out of circulation.”

Read more at InsideTowers.com.