Tower Titans

October 16, 2008 - On a day when shares across the world were being pummeled by signs that the world's biggest economies were headed for recession after a month of financial sector turmoil, the chief executives of the country's four largest non-carrier tower companies depicted a healthy 2009 for the industry.

Ben Moreland
Jeffrey Stoops 

Speaking during the PCIA's final day of The Wireless Infrastructure Show in Hollywood, FL yesterday, the titans of towers were enthusiastic about lease-up opportunities for the coming year.

Most see 2009 as an excellent year
Although Marc Ganzi, CEO of Global Tower Partners, said that 2009 may be "a little bit less rosier" than 2008, he noted that GTP is coming off of a remarkable year.

"We had an exceptional year, and I've been doing this for a while and I'm not afraid to tell folks that this has been the best year of lease-ups that I have seen in this industry," he said, also noting that GTP is expected to grow cash flow in 2009 by 20%.

Last week, GTP announced that it is acquiring 50 towers from SureWest Communications for approximately $10 million.

Stating that capital markets will be very challenging in 2009, Benjamin Moreland, CEO of Crown Castle International, explained that the industry is "going to see continued activity for all of the right reasons. All of the economic drivers are still present in wireless."

He said that he expects next year to be every bit as robust as this year "and we hope and expect that the Clearwire transaction will flood us and that will potentially be an upside for next year."

Agreeing with Moreland, SBA Communications CEO Jeffrey Stoops said that "next year will be as good as this year and this year was pretty darn good."

Stoops said he is taking the potential opportunities that might become available once the Clearwire deal is done at face value, but mentioned that in preliminary conversations he knows that "they're ready to go and they'll move quite quickly."

And that might start by year-end. Clearwire expects its shareholders to approve its merger with Sprint Nextel by mid-November, CEO Ben Wolff said in an e-mail to employees that was filed with the SEC on Tuesday. Also, FCC Chairman Kevin Martin recently said that approving the transaction ranked among the agency's highest priorities. It has been placed on the FCC's Nov. 4 agenda.

Stoops said that he doesn't see a slowdown of AT&T Wireless and T-Mobile work next year.

"T-Mobile has a lot to do with where they want to be with their 3G and they're banking a lot on this Android phone and they have a lot of work to do to get their network up," Stoops said.

Although American Tower Corporation CEO Jim Taiclet said that the company was going to do its formal guidance in three or four weeks, he stated that incremental revenue for 2008 was going to be better than 2007 and that 2009's revenue was going "to be as good or better than 2008."

Taiclet was selected by the Board of Directors of PCIA to serve as the association's Chairman for the second year in a row.

Taiclet also said that there would be some additional opportunities from Sprint Nextel that would benefit the industry if their build-out program begins again in 2009.

Stoops agreed, stating, "We've had a year where Sprint's been virtually inactive. That could change next year and that would certainly be an upside for everybody in the industry."

"We've never seen that extended period of multi-year time where a major carrier like that has not invested in their network," said Stoops.

Not a full house, but show seen as successful
The Titans of Towers presentation played to a smaller group of attendees than previous conferences, partly because this year the event was scheduled on the last day of the show, a period when some people are traveling.AM Consulting

In addition, the disruptive economy may have curtailed some people from attending.

"We've had a very good show this year with very good attendance at all of the sessions and on the show floor, and I'm sure that we've had a little bit of a drop off over the last couple of weeks just because of the economic chaos and people deciding that they didn't want to travel in that situation," said PCIA President Michael Fitch.

The show had a number of new exhibitors and sponsors, including T-Mobile Towers and AT&T Towers.

Noticeably absent at the event was American Tower Corporation and their normally large contingent of management and marketing employees. The former platinum sponsor neither contributed to the infrastructure show nor exhibited at the event.