Reports that Sprint Nextel Corp. (S) is talking to cable companies about an investment that would help it buy the rest of Clearwire Corp. (CLWR) is good news for the tower sector because Clearwire’s buildout plans have stalled in 2011, according to Gary Powell, senior analyst at Wells Fargo.
AT&T Mobility (T) and Verizon Wireless (VZ) have dominated the tower-leasing business so far this year, according to public tower firms in their second-quarter financial results. AT&T plans to spend $20 billion on capital expenses this year as it rolls out its LTE network and AT&T as a whole has spent $9.4 billion on capex through the first half of the year. Verizon Communications Inc. noted it spent $9.8 billion through the first half of the year. Sprint, by comparison, spent $995 million through the first six months of 2011. Clearwire spent $186 million in the first half of the year.
“Thus – if some resolution to the Sprint/ Clearwire situation is reached – we could have a third carrier aggressively deploying 4G technology, which would help leasing demand improve in 2012 from 2011 for the tower sector,” Powell said in a research note.
Meanwhile, Reuters is reporting that Reliance Communications has hired UBS to sell its tower holdings for $5 billion.