Cell tower owner’s growth is driven by 5G
Cell tower owner and operator Crown Castle is No. 3 on the Chronicle 100 list for public companies for 2019, riding a boom in tower and fiber growth as major U.S. telecommunications providers gear up for a 5G future.
Consumers’ and businesses’ demand for reliable, faster internet access is driving Crown Castle’s fortunes, as cellphone companies order more equipment to mount on its towers and connect to its fiber-optic cables.
Jay Brown, Crown Castle’s chief executive, says the trend should continue into the next two years as
U.S. providers expand nascent 5G networks and more handset makers offer more smartphones that work on them.
“We are focused on the U.S. market, and the U.S. is the largest and fastestgrowing wireless market,” Brown said. “5G is a key driver of our long-term growth.”
Although 5G has been a long time coming, buildouts got serious in 2019. All the major providers launched networks that support the next-generation wireless data technology.
As a result, Crown Castle’s profits jumped 38 percent in 2019 to $860 million from $622 million the previous year. Revenues rose 7 percent to $5.8 billion from $5.4 billion in 2018.
“We were able to increase our dividends to 7 percent in 2019,” Brown said, “and over the last three years, dividends are up by 26 percent.”
That was after Crown Castle was forced to restate earnings for calendar years 2017 and 2018 after a Securities
and Exchange Commission investigation into how the company accounted for some aspects of its services business.
Brown said that, so far, the company’s business has not been affected by the coronavirus pandemic, as telecommunications companies are considered essential. He said the buildout of 5G networks has not slowed, even as most of the company’s office staff are working from home. Workers in the field continue to lay fiber, build towers and mount clients’ equipment on them, he said.
Work also continues on the company’s new headquarters on Interstate 10 near Chimney Rock. Brown said it should be finished in 2021.
Crown Castle was recently the target of a challenge earlier this month by activist investment firm Elliott Management, which argues the company is underperforming because of a strategic emphasis on its less-profitable fiberoptic cable business. Elliott also seeks changes to Crown Castle’s board, calling its members “entrenched.”
Brown would not take questions on the Elliott letter. The company has pointed to the growth in returns and dividends as proof Crown Castle is delivering value for shareholders.