Crown Castle expects 5G technology to represent a growth opportunity for the company next year, the company’s CEO Jay Brown said during a conference call with investors.
“We expect the elevated level of tower leasing to continue into next year. As 5G becomes a reality and wireless networks expand from connecting everyone to connecting everything, we believe new use cases will develop that will generate significant long-term demand for our infrastructure, with towers remaining at the core of the wireless network,” Brown said.
“In 2019, we are seeing a significant acceleration in tower leasing, as our customers add capacity to their wireless networks in response to the rapid growth in mobile data traffic. The current demand environment is largely tied to our customers investing heavily in their 4G networks to keep pace with 30% to 40% annual data demand growth,” he added.
Brown also highlighted that Crown Castle continues to see a high demand for tower assets in the U.S market.
“While technologies have changed, there has been one constant: the significant and sustained demand for tower assets in the U.S.,” he said. “This steady growth has been driven by increased data traffic and investment to maintain and improve the wireless user experience. With continued strong data growth, we believe the carriers will respond to pressure on their networks, as they have over the last couple of decades by leasing access to our infrastructure.
“In addition, future networks will need to be significantly more dense than current infrastructure can handle, which brings me to my second point. I see a long runway of growth in front of Crown Castle, as our customers continue to invest heavily in their 4G networks to keep pace with data demand growth from existing technologies, while the deployment of 5G is just getting started.”
Brown also said that the company has been expanding its small cells business, in which Crown Castle already operates nearly 40,000 small cells.
“According to CTIA, the number of small cells deployed in the U.S. is expected to increase nearly tenfold from 85,000 at the end of last year to 800,000 by 2026. Against that backdrop, we see tremendous opportunity to increase the returns on our fiber investments over time by adding new small cell tenants to existing fiber networks as we’re doing today,” the executive said.
The company currently has nearly 30,000 small cells under construction in the U.S market, he added.
The executive also said the U.S. wirelsss carriers will increase the density of the wireless networks, particularly in the top 30 markets in the country, where there’s greater density of users in order to provide 5G. “5G is going to require a greater density of the network and we think that will really benefit small cells,” he said.