In a panel discussion at the recent ConnectX event, executives from private tower companies weighed the potential impacts of the proposed merger of T-Mobile US and Sprint on network infrastructure. With T-Mobile US having outlined plans to decommission as many as 35,000 towers — and add 10,000 new sites — to combine the two carriers’ networks, the eventual outcome (if the merger is approved) may be a mixed bag for the tower industry.
Panelists (pictured above) included (L-R) Clayton Funk, managing director in MVP Capital’s Telecom Group; Ron Bizick, CEO of Tarpon Towers; Tony Peduto, CEO of CTI Towers; Bob Paige, EVP of corporate development for Vertical Bridge; and Danny Agresta, president and CEO of APC Towers. The session was moderated by Jennifer Fritzche, managing director of Wells Fargo’s equity research group.
Paige was fairly optimistic about the overall position of a combined company to be able to invest in infrastructure.
“I do think a third heathy carrier who growing is a lot better than four, where two of them … don’t have the free cash flow to invest in 5G,” said Paige. “I think this gives them the opportunity by the two of them combining, to actually have the cash flow to actual vines in 5G.”
“The other piece is … I’m not sure there won’t be another fourth network,” he went on, saying that the major tech players — Facebook, Apple, Amazon, Netflix and Google — “have to do something at some point.” He also referenced Dish Chairman Charlie Ergen’s keynote address at ConnectX in which Ergen said that his company plans to invest as much as $10 billion in a 5G network. “Clearly, he’s going to do something with his nationwide spectrum,” Paige said. “And then you’ve got the cable companies. Comcast is in the wireless business whether they know it or not. When you’re going to sign up two million customers next year, you’re going to need owner economics sooner or later.”
Although the potential merger isn’t impacting current tower valuations, panelists said, Paige also said that when Vertical Bridge is considering buying tower assets, “we’re being very thoughtful if Sprint is a tenant on a tower, and we’ve got to do a deeper-dive analysis to figure out whether we think that’s a long-term tenant.”
Watch an excerpt from the panel session below:
