New Tower Joint Venture With SoftBank Could Have Bigger Implications, Wells Fargo Says

An agreement between Australia’s Lendlease and Japan’s SoftBank to develop and own telecom infrastructure assets in the U.S. was a surprise, Wells Fargo analyst Jennifer Fritzsche said in a Wednesday note to investors. Both companies plan to contribute $200 million to the new joint venture, said a Tuesday news release. “The joint venture, to be known as 'Lendlease Towers', will focus on partnering with major US carriers to roll out further phases of their infrastructure expansion plans to meet growing demand for data,” the companies said. “The aim is to create a geographically diverse portfolio of rooftop and tower assets through both a development and an acquisition-based strategy.” The initial agreement “is more around Sprint's rooftop sites but macros seem to be part of the eventual plan,” Fritzsche wrote. “We may have a new tower [company] on the come. … Yes it will take a long time and a lot of money (but Softbank has MUCH capital behind it).” The announcement also could speak to SoftBank’s long-term strategy if its key U.S. asset Sprint eventually merges with T-Mobile, she said.