Based on public financials that Moffett Nathanson compiled, China Tower has by far the most tower sites in the world, at more than 1.95 million sites. In comparison, the big three U.S. tower companies count tower sites as follows: American Tower 168,900; Crown Castle 40,100; and SBA Communications 29,800.
Bharti Infratel in India has 92,600 tower sites, and Cellnex Telecom has 24,100 tower sites across Europe.
Some tower companies around the globe are affiliated with operators. China Tower is owned by China Mobile, China Telecom and China Unicom. India's Bharti Infratel is affiliated with Bharti Airtel; and Mexico's Telesites is associated with American Movil.
In fact, China Telecom and China Unicom recently reached a tentative agreement to jointly build a 5G network and share network infrastructure. And it’s possible that China Mobile may join them. Their joint ownership of China Tower makes it easier for them to do network sharing for a new 5G network in China.
There are various forms of network sharing:
• Operators co-locate equipment on towers, but otherwise everything else is separate.
• RAN sharing where operators share all the equipment in the network as far back as the base station controller/radio network controller.
• Network roaming where competing operators agree to host one another’s customers on their network in certain geographic areas.
In the case of the Chinese operators, they are reportedly planning to build a stand-alone 5G network, not an upgrade of their existing cellular networks. And it appears that they would share everything from sites, masts, and RAN equipment.
Tower tenancy levels
According to Moffett, tower tenancy levels (one form of network sharing) are a main factor in the return on investment of tower companies. The research firm reports that as of the end of 2018 Crown Castle has the highest tenancy level of any operator at 2.2 tenants per tower. While American Tower’s tenancy rate is 1.9, and SBA has a 1.8 tenancy rate. As far as non-US towercos, China Telecom has a tenancy level of 1.5, and Bharti Infratel has a tenancy level of 1.9.
Although Crown Castle has the highest tenancy levels of any tower company, the Moffett report entitled “Towers ROICs: Scouring the Globe for Insights and Opportunities,” says Crown Castle’s return is brought down by its fiber business and the “under performance of its towers relative to American Tower and SBA.”
Compared to other tower companies, Crown Castle is unique in that it has non-tower assets blended in.
Mike Kavanaugh, SVP and chief commercial officer with Crown Castle, speaking with FierceWireless in the summer, said, “We’ve got 40,000 towers, 65,000 small cells and 70,000 route miles of fiber. We really went long on the fiber and small cells. We’re a real estate investment trust (REIT).” He said the company employs more than 5,000 people with “quite a few on the small cell and fiber side.” It counts about 9,000 fiber customers.
The Moffett report advises investors to keep an eye on Europe as “it will be the epicenter of the next round of material tower transactions.”
In July Vodafone Group said it was spinning off its European tower business into a separate entity named TowerCo, which will be operational by May 2020. Vodafone says TowerCo will have its own dedicated team to manage its 61,700 towers in 10 markets.
In September Telefónica announced it would speed up plans to monetize its tower infrastructure assets, giving itself a 12-month timeline to generate funds. Its strategy might include expanding to additional sites or striking infrastructure sharing arrangements with other local operators.