March 1, 2016 — SBA Communications had a strong fourth quarter in 2015 with carriers active in several bands, the company reported in its earnings call last week. Amendments provided 62 percent of domestic lease up revenue and 96 percent of new domestic leasing activity came from the big four carriers.
“Carriers were and are still very active with their networks, particularly with amendments to existing macro site infrastructure,” said Jeffrey Stoops, SBA president and CEO.
Stoops highlighted activity in the AWS-1 and 700 megahertz bands, refarming of spectrum from 2G to LTE and adding equipment for capacity.
“We believe this dynamic continues and as a result we remain very optimistic about the future,” Stoops said. Present activity will be supplemented by deployments of additional spectrum bands in 2016, added.
Although 2015 was below average in terms of revenue added per tower domestically, SBA logged amendments to more than one-third of its tower portfolio where equipment on macro site was added or replaced. Stoops cited mobile data demand as the chief driver in carrier capex.
“The large percentage of our sites which received additional investment from our customers is proof positive to us of the importance of additional infrastructure as a primary solution in our customers’ efforts to satisfy the growing demand for mobile data,” Stoops said.
Jennifer Fritzsche, Wells Fargo senior analyst, wrote in a Wells Fargo Equity Research Note, “SBAC experienced 8:1 amendment activity to new collocation, which represented 62 percent of revenue mix. While this is a positive – SBAC noted it needs the backlog to materialize into signed contracts in order to reach the high end of its guide.”
SBA acquired 292 communication sites for $183.4 million in cash and built 100 sites during the fourth quarter. SBA owned or operated 25,465 communication sites, at the end of last year, 15,778 of which are located in the United States, and 9,687 which are located internationally.
The Company’s full year 2016 Outlook projects new tower builds in the United States and internationally of 590 to 610 towers.
Stoops said 2016 has yet to see activity in the AWS-3, WCS or 2.5 gigahertz deployments, but he gave guidance that the second half of this year will be stronger.
“We expect to see more total activity in the second half of the year and our guidance at the top half of the range assumes it,” he said. “Our backlogs are growing, so we believe the assumption is valid, but the confirmation will only come in the form of a pick-up in signed contracts.”
Quotes courtesy Seeking Alpha