Infrastructure vendor Crown Castle’s site rental revenue jumped by a third in Q3, as small cell deployments among US operators picked up pace and expanded beyond the country’s top markets.
The company reported site rental revenue for its macro tower, small cell and fibre assets increased to nearly $1.2 billion in the quarter, up from $893 million in the same period last year. Those gains helped propel a 43 per cent boost in profit to $164 million from $115 millon in Q3 2017.
During an earnings call, Crown Castle CEO Jay Brown said the company expects leasing activity to accelerate further, adding the company’s pipeline of contracted small cell nodes to be constructed over the next 18-24 months now stands at an all-time high of 35,000, a figure up 40 per cent year over year.
Brown noted all four major US operators are engaged in network improvements, fleshing out their 4G footprints and densifying ahead of 5G launches. He said deployments were historically focused in the top 10 markets in the country, but more recently grew to include roughly the top 30 markets. In Q3, Brown said operators began to expand beyond those markets, marking the beginning of a trend expected to grow moving forward into 2019.
Crown Castle raised its construction forecast for the coming year, saying it now expects to build 10,000 to 15,000 small cell nodes in 2019 rather than the 10,000 nodes it originally planned.
Company executives also highlighted an increase in colocation on its fibre assets thanks to the small cell rollouts. Brown said the company is still investing in building out new markets, but explained “colocation has occurred at a higher rate and faster than we originally anticipated”.
Typically when it plans fibre investments, Crown Castle assumes it will add one tenant over a 10 year period of time, or about 0.1 tenant per year. But Brown noted “what we’ve actually seen is colocation on fibre, from small cells in particular, is about twice that rate”.Subscribe to our daily newsletter Back