With the closure of the T-Mobile/Sprint merger, SBA Communications is as bullish as ever for its tower business, including the prospects of serving Dish Network.
SBA CEO Jeffrey Stoops was asked about Dish and its network build initiatives specifically during the company’s first-quarter earnings call on Tuesday. Dish last month named software provider Mavenir as its first announced vendor for a greenfield 5G network.
“We know Dish is for real,” Stoops said, according to a Seeking Alpha transcript. “They are extremely committed to this undertaking. There's a tremendous amount at stake and at risk for Mr. Ergen and his shareholders if they are not successful and they are certainly pursuing it in every way, shape and form to our visibility to be successful. We're very, very, very involved with them in all kinds of conversations. Recall from their prior disclosures that they expect this year to be a very, very big planning year with deployments really to commence next year.”
Based on those comments, SBA did not include “virtually anything in our leasing guidance and perhaps very little in our services guidance, but that does not mean that work relationships are not quite good and quite voluminous between the companies,” he said. “And I wouldn't bet against him.”
Charlie Ergen, a poker-playing billionaire who co-founded the satellite TV company Dish, has promised to build out a 5G standalone (SA) network to serve as the nation’s fourth facilities-based carrier, replacing Sprint. That was part of the government’s agreement to sign off on the T-Mobile/Sprint merger. With COVID-19 wreaking havoc on financial markets, Dish’s ability to raise capital to pay for the network has come into question, an issue that’s likely to come up during Dish’s first-quarter earnings call tomorrow.
Like other tower companies, SBA’s tower business generally is holding up during the pandemic. Total revenues in the first quarter of 2020 were $517.0 million compared to $493.3 million in the year earlier period, an increase of 4.8%.
The company did lower its full-year revenue outlook largely due to potential impacts from COVID-19 and slower activity levels in the first half of the year. Its full-year outlook still contemplates a pickup in its leasing and services businesses in the second half of the year, particularly with the closure of the T-Mobile/Sprint merger.
In prepared comments, Stoops said only a handful of SBA team members have tested positive for COVID-19 – it has a global workforce of almost 1,500 team members. “Thankfully, they're all doing okay,” he said.
Prior to the COVID-19 crisis, SBA was not a telecommuting company, but it learned to become a telecommuting company in 14 countries in less than a week, he said. For those team members in essential jobs where they could not work from home, SBA developed state-of-the-art health and safety protocols with the assistance of medical professionals. “I don't feel we've missed a beat, and I salute all of our team members for their dedication, service and commitment,” he said.