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Crown Castle (CCI): Wireless Prospects Bright (revised)

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On Nov 30, we issued an updated research report on Crown Castle International Corp. (CCI - Free Report) . An extensive tower portfolio, high demand for tower infrastructure, strong business outlook, healthy leasing activity and growing demand for mobile broadband which are likely to benefit the company going forward.

Wireless Demand Strong

Wireless services are advancing rapidly in terms of additional features and capabilities. Much of the infrastructure and upgrades require effective site management of cell towers and equipment. Crown Castle effectively addresses this opportunity as over 90% of its quarterly revenues come from wireless service providers like Verizon Communications Inc. (VZ - Free Report) , AT&T Inc. (T - Free Report) and T-Mobile US Inc. (TMUS - Free Report) . Additionally, wireless consumer demand is expected to increase considerably over the next several years which should bolster the company’s top line going forward.

Small Cell Investment

Last year, Crown Castle completed the acquisition of Sunesys – a major fiber service provider with a portfolio comprising around 10,000 miles of fiber. We believe that the Sunesys acquisition should further strengthen Crown Castle’s leading position in small cell networks.

Internet of Things, 5G Prospects Bright

As wireless network providers work to make 5G network services a reality, the deployment of the same will drive growth on both the company’s tower and small cell assets as wireless carriers look to expand their networks to provide the coverage, capacity and speed needed to support mobile video, the Internet of Things (IoT) and fixed wireless broadband services. Notably, IoT is touted as the next big thing in the evolution of technology and higher investment by the wireless carriers will in turn bring increased revenues going forward.

Potential Headwinds

CrownCastle faces high customer concentration. Notably, the four major wireless service providers account for majority of the company’s revenues. Further, evolution of new technologies like Voice over WiFi may reduce demand for site leases.

(We are reissuing this article to correct a mistake. The original article, issued November 30, 2016, should no longer be relied upon.)



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