Towerstream eyes 'small snowball' on top of hill with Verizon, small cells

Towerstream expects to see growth from LTE-Unlicensed (LTE-U) and the Internet of Things (IoT) via 45,000 billboard locations, but small cells may be the real kicker.

The company notes that it is heading into the second half of the year as two carriers boast "some pretty robust plans" for small cells. The company, which bills itself as a leading 4G and small cell rooftop tower company, already is working on small cells with Verizon Wireless (NYSE: VZ), and with expectations for Sprint (NYSE: S) to deploy "tens of thousands" of small cells -- perhaps as many as 70,000 -- it's hoping to get a piece of that action as well.

Towerstream owns, operates and leases Wi-Fi and small cell rooftop tower locations to cellular phone operators, tower, Internet and cable companies and hosts a variety of customers on its network. It's been in the fixed wireless business for more than 10 years.

Now it's seeing small cell momentum growing every month. "It's early. We are looking at this as a small snowball at the top of the hill. We're excited that we're going to be rolling down that hill with Verizon, that snowball," said Towerstream President and CEO Jeff Thompson during the company's second-quarter conference call with analysts.

Speaking later in the week at the Canaccord Genuity 35th Annual Growth Conference in Boston, Thompson said it seems like everyone has been talking about small cells for a long time, and it seems as though "we're finally just seeing some deployments." A lot of that had to do with the latest auction, as people were not going to deploy until they got through that auction. "It all comes down to real estate, site [acquisition] and backhaul," he said. 

Towerstream has rooftops that are above 25 feet, which is above the traffic on the street that can block signals. "So just like small cells like to be between that 25 and 40 [foot] sweet spot, that's where a lot of our rooftops are. People can put devices, rent a spot on one of our rooftops and they could be either be putting beacons, certain antennas, cameras, almost anything that can do monitoring, surveillance, connecting to other devices," he said during the earnings conference call.

The company recently partnered with Syscom and they're working together on some 45,000 billboard locations for small cell, location-based services and supplying backhaul for electronic billboards. People are starting to look at billboards because of their height, Thompson said. 

Towerstream offers WiMAX-based fixed wireless service in around a dozen markets including New York City, Boston, Chicago, Los Angeles, San Francisco, Seattle, Miami and elsewhere. The company also deploys Wi-Fi hotspots, small cells, distributed antenna systems (DAS) and other technologies through its Hetnets Tower Corp. subsidiary. HetNets counts Verizon Wireless and Time Warner Cable (NYSE: TWC) as customers.

In summary, it's still early days. "We're starting to execute," Thompson said. "But we expect to continue to get more Wi-Fi business. The Wi-Fi first companies are out there. LTE unlicensed is also a large opportunity, where we see people really getting geared up for that." He added that some decisions need to be made between the Wi-Fi Alliance and the LTE Unlicensed backers, which include Verizon, Qualcomm (NASDAQ:QCOM) and T-Mobile US (NYSE:TMUS), but "I think there is a lot of room for everyone to play in that space, but a huge opportunity for us to offer a ton of capacity to the carriers."

For more:
- see this earnings call transcript
- see this webcast (reg. req.)

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