LAS VEGAS-The agreement between Crown Castle International Corp. and GTE Corp. by many accounts eliminated the last major carrier tower portfolio on the market and capped off a year of massive and frenzied consolidation of tower assets into a handful of increasingly large hands.
Several tower company executives and industry analysts speaking at last week’s 1999 Tower Summit & Trade Show in Las Vegas, sponsored by Shorecliff Communications Inc. and RCR, indicated a shift is beginning to occur in the tower industry. The focus, they said, is changing from trying to gain critical mass through large acquisitions to execution, including integrating towers and leasing them.
The show drew 1,350 attendees, compared with last year’s attendance of 870.
“I wouldn’t describe (our footprint) as done, but I think we’re substantially through aggregating major carrier footprints,” said Ted Miller, chairman and chief executive officer of Crown Castle, speaking about the company’s agreement with GTE.
“Our focus now is to add value, at least in the near term, by leasing these towers,” he said. “Our focus now is to be able to provide quality coverage for existing and new technologies.”
Many tower industry executives agreed that major carrier deals are likely coming to an end, with regional acquisitions and selected fill-in deals, such as AirTouch Communications Inc.’s San Diego and Los Angeles towers, becoming more widespread. They also indicated more activity on the international front is likely.
While still interested in favorable domestic acquisitions, American Tower Corp. said it is making a conscious shift to focus on building its portfolio more through new construction rather than via large acquisitions. The company expects to build up to 1,000 towers by the end of this year and between 1,000 and 1,200 next year.
Steve Dodge, chairman and CEO at American Tower, said the company’s goal is to exceed 15,000 towers by 2003, with its portfolio consisting of about half new builds and half acquisitions from carriers and other tower consolidators.
Now that a handful of tower companies have amassed large portfolios of towers, the biggest challenge is execution. Tower companies are tasked with verifying the information on file about every tower they acquire and adding value by providing useful and simple data about the towers to potential collocators.
“The challenge is execution,” said Jim Eisenstein, chief development officer at American Tower. “The problem hasn’t been acquisitions.
“We have shown the ability to raise capital,” said Eisenstein. “Now the Street is saying `Show us that you can lease up these towers.’ “
Stephen Clark, chairman and CEO at SpectraSite Communications Inc., said one of the most important challenges tower companies will face is meeting carriers’ needs by turning around lease applications quickly. To that end, SpectraSite has set an internal goal for next year to take no more than 30 days from the date of an application to get a carrier on-air on its towers.
The major tower owners also indicated they each have developed systems for auditing, integrating and maintaining their towers.
Eisenstein said in addition to developing systems to keep track of their portfolios, tower owners need to hire salespeople that understand towers and wireless carrier needs, and to anticipate carrier needs for unbuilt towers.
