5G is the gift that keeps giving to the top three U.S. tower companies. Although most agree that 2022 was the year of “peak” 5G deployments, executives with American Tower, SBA Communications and Crown Castle told investors during their Q1 earnings calls that they are still seeing continued 5G activity as operators like Verizon build their C-band 5G network and Dish Network rapidly expands its nationwide greenfield 5G network. Plus, all operators are expected to densify their 5G network with small cells.
Jay Brown, CEO of Crown Castle, told investors during the company’s Q1 earnings call last month that Crown expects its customers’ network and investment in 5G to exceed what they spent on 4G. He added that Crown expects at least 5% organic tower revenue growth and also is expecting an acceleration of its small cell business with the addition of 10,000 nodes this year.
“I think in terms of the number of small cells that we’ve seen thus far in 5G commitments from the carrier customers, as well as the conversations that we’re having about what is to come in the future suggests that the opportunity is significantly more than what we saw during the 4G era,” Brown said.
Likewise American Tower CEO Tom Bartlett said that his company is seeing customers make significant investments in 5G but have so far mainly focused on the broader coverage requirements. “We believe our customers’ networks will need to provide at least two times the network capacity they have today in three to four years or roughly three times today’s capacity as we approach the end of the decade,” Bartlett said.
Plus, the tower players are looking to the second half of 2023 for more movement from AT&T and Verizon as the remaining C-band spectrum licenses that the two companies purchased during the 2021 auction are expected to be cleared and available for their use. SBA Communications CEO Jeff Stoops said during the company’s 1Q earnings call earlier this week that less than 50% of tower sites have been upgraded with C-band radios so far, leaving more room for growth.
Stoops also said that his company is expecting to see more activity now that the FCC is approving requests from vendors so they can manufacture single radios that support by 3.45 GHz and 3.7 GHz/C-band spectrum. Ericsson received a conditional approval from the FCC in March to make its single radio that supports both 3.45 GHz and 3.7 GHz/C-band.