It looks like Uniti Towers is cashing in on the feud between the carriers and the top public tower companies. Thanks to a newly minted MLA with one of them, the towerco is set to eventually have the sixth largest U.S. tower portfolio.
Uniti Towers plans to build 1,500 towers during the next five years, according to comments made by Mark Wallace, Uniti chief financial officer, during the Uniti’s second quarter earning call. The surge in building sites would almost quadruple its portfolio of towers, which currently stands at 767 towers, including . Uniti’s tower business is also projected to grow to $50 million in annual revenues in the next five years, according to Wallace, up from $15 million projected in 2018.
Uniti Towers also announced a newly signed a five-year master lease agreement with a major national wireless carrier to collocate its equipment on our macro towers and small cell locations within the United States. The name of the carrier was not disclosed.
“[The MLA is with a carrier that is] an existing collocation tenant on existing towers in the United States. And they have a growing number of collocation applications for towers as we’re growing our portfolios,” Kenny Gunderman, Uniti CEO, said. “So because of the backlog because of the existing relationship on fiber, it led to a logical discussion about a comprehensive MLA between the two of us and we eventually added small cells to the discussions.”
2018 Projected to be Banner Year
Uniti Towers expects to complete the construction of about 300 towers this year with a capital spend of $85 million to $90 million. Additionally, revenue is projected to vault from $10 million last year up to $15 million this year. Driving organic growth is lease up on the company’s Latin American holdings and build-to-suit towers. Adjusted EBITDA is projected to grow from a loss of $1 million last year to $1 million in the black this year.
Small Cell Demand Strong, But Uniti Still Faces Municipal Permitting Delays
Uniti reports robust demand activity for small cells and backhaul from all the carriers in its markets. The company currently owns 2,550 small cells and is pursuing large anchor wireless backhaul small cell deals.
“Our sales funnel remains strong for these types of transactions and as a result we expect bookings levels to be higher in the second half of the year when compared to the first half,” Gunderman said.
Uniti has run into delays in municipal permitting concerning its small cell deployments in its markets, which are mostly Tier-2, due to local government reluctance. Dark Fiber and small cell delays reduced Uniti’s quarterly revenue by $1.3 million and adjusted EBITDA by $1 million.
“We’re really the first ones deploying small cells in those markets, Gunderman said. “And so there’s really some lead time associated with educating the municipality on what the product is.”
Gunderman said Uniti is having success explaining small cells to local officials by making analogies to towers and to fiber deployments.
“When you explain the benefits of 5G eventually the light bulbs go off and progress is made,” he said. And so, the most important thing with respect to your question is that we are now moving forward in all of these markets. So, we’ve worked through the real time delays and we’re now progressing.”
J. Sharpe Smith
J. Sharpe Smith joined AGL in 2007 as contributing editor to the magazine and as editor of eDigest email newsletter. He has 29 years of experience writing about industrial communications, paging, cellular, small cells, DAS and towers. Previously, he worked for the Enterprise Wireless Alliance as editor of the Enterprise Wireless Magazine. Before that, he edited the Wireless Journal for CTIA and he began his wireless journalism career with Phillips Publishing, now Access Intelligence. Sharpe Smith may be contacted at: [email protected]