2022 Q4 TMT Earnings Calls Summary

Across the wireless industry, fourth quarter 2022 earnings calls from MNOs and tower companies demonstrated that activity and investment in wireless infrastructure remain high – however, 2023 is projected to be a year of lower growth than 2022. The Big 3 incumbent MNOs (AT&T, Verizon, and T-Mobile) all had busy years upgrading their sites to 5G, while Dish continues efforts to build out their nationwide network, but this activity is expected to moderate in 2023 as the carriers get closer to reaching their network goals. Additionally, the wireless industry has proven resilient despite the headwinds of high-interest rates and slowing economic growth. Still, there remains some uncertainty about whether these macroeconomic conditions will eventually catch up to the industry.

Crown Castle reported 6.5% organic growth in 2022 but expects this growth rate to fall to around 5% in 2023. Crown is unique from other tower companies in that much of their Sprint churn has yet to occur and is expected in 2024 and 2025. Across their tenant base, Crown has seen high activity in urban areas and expects this activity to move to less densely populated areas in the year ahead. Finally, Crown estimates that about half of their sites have had mid-band spectrum upgrades.

SBA reported 5% domestic organic growth in 2022 despite a higher-than-normal 3.5% churn rate primarily due to Sprint. More Sprint churn is expected in 2023, and SBA anticipates wireless carriers will have higher activity in the first half of 2023 than in the second half. Finally, SBA has seen the acquisition multiples for cell sites remain high and stated there was uncertainty if the high multiples would be sustained or see some pullback.

American Tower reported just 1% domestic organic growth in 2022 due to 5% churn driven by Sprint but expects to bounce back in 2023 with a forecasted 5% organic growth. They anticipate organic growth will remain high through 2027 due to 5G upgrade activity and the Dish network buildout. Like Crown Castle, American Tower estimates that about half of its sites have had mid-band spectrum upgrades.

Verizon Wireless stated capex was $23.1b in 2022, but forecasts capex of just $18-19b and $17b in 2023 and 2024, respectively, as they look to complete their 5G upgrades.

AT&T reported capex of $24.3b in 2022 and expects their capex to remain elevated in 2023 before receding.

T-Mobile stated they believed 2022 would be their peak year of capex for 5G and are forecasting capex of $9.4-9.7b in 2023, which is more heavily weighted toward the year’s first half.

Dish reported they have started buildout at 17,000 sites nationwide and expect to continue at a rate of 1,000 new site starts per month until they reach their FCC-mandated 70% coverage goal, which is expected to occur later this year. They further stated that they wish to ramp up post-paid wireless subscribers onto their network later this year.

US Cellular reported they have covered about 50% of their POPs with low band 5G and will start their mid-band buildout later in 2023. Their capex is forecasted to moderate in 2023.

Comcast and Charter, the two legacy cable companies competing most materially in wireless, both saw their subscriber numbers reach 5.3mm in 2022. Still, neither has plans to build their own stand-alone networks.