Crown Castle Predicts Huge Increase in Small-Cell Deployments in 2019

Crown Castle said it installed a record number of small cells in 2018 and expects to double that to 10,000-15,000 nodes in 2019. “We have a line of sight into meaningful small cell revenue growth beyond 2019,” CEO Jay Brown said Thursday on an earnings call. “Our customers continue to invest heavily in their 4G networks to keep pace with data demand growth from existing technologies, while the deployment of 5G is just getting started.” The scale of data growth is “staggering” with mobile data traffic in 2022 expected to be five times the volume of all internet traffic in the U.S. in 2005, Brown said. “I get even more excited when I consider how early we are in the digital transformation of the U.S. economy and the critical role mobile infrastructure will play. I think we’re just scratching the surface.” The tower owner reported earning $213 million for Q4, compared with $98 million in the year-ago quarter. Revenue rose 15 percent to $1.21 billion. The revised outlook for 2019 "reflects a consistent march toward small cell densification with a growing pipeline of ~25k nodes over the next 18-24 months," Macquarie Research analyst Amy Yong wrote investors Thursday. "Though municipality/FCC approvals can create a bottleneck, it appears to be easing. T-Mobile/Verizon-insourced small cells also present a threat." Crown Castle "continues to ramp small cell volumes and revenue, but again, higher costs ate into returns because colocation economics are much worse on small cells than on towers," wrote New Street Research's Spencer Kurn Wednesday night.