Crown Castle bullish on carrier spectrum deployment, says it can support SpaceX's terrestrial dreams
US tower company Crown Castle has identified carrier spectrum deployment as a significant growth opportunity, highlighting recent major spectrum acquisitions by wireless carriers as positive catalysts for the tower industry.
US tower company Crown Castle has identified carrier spectrum deployment as a significant growth opportunity in the coming years. The company's CEO, Chris Hillabrant, highlighted this during Crown Castle's Q3 earnings call, noting that new spectrum deployment has historically been an important driver of network investment.
His comments come ahead of the C-band spectrum auction set to take place next year in the US, during which the Federal Communications Commission (FCC) has outlined a plan to auction 160MHz of spectrum in the upper C-band by July 2027.
Historically, new spectrum deployment has been an important driver of network investment, and we believe the industry spectrum pipeline remains supportive of long-term infrastructure demand.
Major spectrum acquisitions
Hillabrant pointed to several significant spectrum transactions that have occurred recently, including AT&T's $23 billion acquisition of 3.45GHz and 600MHz spectrum from EchoStar, Verizon's acquisition of AWS3 licenses, and SpaceX's $17 billion acquisition of AWS4, H Block from EchoStar, and 800MHz spectrum from Grain Management.
These sales, he noted, give the tower industry confidence that mobile carriers are serious about network investment. Regarding AT&T's deployment of its EchoStar spectrum, Hillabrant expects it to be deployed quicker than the company's 600MHz block due to its high value.
The customer just paid $23 billion for the spectrum. It's highly valuable. I would think that they would look to deploy this as quickly as possible, given the value in the overall spectrum portfolio of what they've just acquired.
SpaceX carrier opportunity
SpaceX's recent spectrum acquisitions have raised speculation about the company entering the mobile carrier market in the US, where it's currently dominated by AT&T, Verizon, and T-Mobile. SpaceX founder Elon Musk has indicated that satellite launches and spectrum acquisitions will "pave the way for Starlink Mobile to become a major mobile carrier in the US."
Hillabrant confirmed that Crown Castle has been in talks with SpaceX about potential partnerships, including Master Lease Agreements (MLAs), though he declined to provide customer-specific details. He acknowledged that building a terrestrial network is complex but expressed confidence that Crown Castle could support SpaceX in this venture.
If SpaceX is serious, as it sounds like they are, in building a terrestrial network, I think we are a great partner for them in being able to help take a concept and turning it into reality of how to navigate through building a terrestrial network.
Edge deployments progress
Crown Castle also reported progress in its edge computing initiatives, highlighting a partnership with Available Infrastructure on its Edge AI network. The company has deployed more than 100 Edge sites as part of trials, with several concurrent tests underway.
Hillabrant noted that Crown Castle has identified around 5,000 existing structures where it could potentially offer further deployments, with a focus on installations between 0.2-0.5MW utilizing existing power on sites. The company has also completed 25 sites that could collectively support up to 100MW of capacity.
Financial performance
For Q3, Crown Castle reported a five percent drop in site rental revenue to $966 million from $1.01 billion last year, attributing this to $61 million in Dish terminations and $5 million in Sprint cancellations. Despite this, the company increased its full-year outlook for site rental revenue by $20 million, now expecting $3.835 billion for the year.
Net income for Q3 was down 12 percent to $283 million from $323 million year-on-year. Crown Castle also reported that its legal action against Dish's parent company has been "placed on pause while the parties attempt to negotiate a settlement in a court-ordered mediation."
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