Wireless Industry News » Carrier spectrum spending could impact tower sector
As the FCC’s Auction 97 apparently enters its final stages, many in the tower industry are no doubt breathing a sigh of relief. Carrier spectrum spending coupled with relentless mobile data price wars could mean higher costs and lower revenues, leaving less capital available for adding new antennas to cell towers.
“Technical and financial questions have arisen and we believe these have partially pressured the tower stocks,” said Canaccord Genuity analyst Greg Miller in a recent note. “Chief among these concerns are a limited or nonexistent equipment refresh cycle and the incremental carrying costs of capital that will have been raised to finance spectrum bids, which have far exceeded initial expectations, limiting the carriers’ ability to spend capex to build out the spectrum. The fear is that these factors will mean amendment activity – and, therefore, incremental revenue – will be limited and overall growth will be slower than expected. We believe such concerns are overblown.” Read the full article