SBA: CBRS is ‘now,’ but ‘niche’; C Band is centerstage

SBA Communications is seeing some current activity in building out deployments of CBRS spectrum, but the company anticipates a much larger uplift from the nationwide deployment of the C Band.

During the company’s quarterly call, CEO Jeffrey Stoops was asked by an analyst about the CBRS opportunity and responded, “The timing is now. The primary interest right now will come from municipalities, private networks.

“We are actually building some school systems to help bridge the digital divide that are focused on CBRS,” Stoops continued. “While some of our cable customers are also active, I think in terms of the national wireless carriers, they are going to focus really on the mid-band and use the CBRS stuff really as more of a niche solution for them. So the biggest opportunity is really, for CBRS in particular … outside of the national wireless carriers today.”

In terms of its results, SBA saw site leasing revenue increase 2.6% compared to the same period last year, while site development revenue rose nearly 77% compared to the same period last year. The company posted a net loss for the quarter of $11.7 million, substantially less than the $127.1 million loss that it recorded in the year-ago quarter. Total revenues were up more than 6% year-over-year.

On SBA’s call, CFO Brendan Cavanagh said that the new agreements with Dish Network and Verizon have meant “substantial increases” in SBA’s backlog, which will support significant increases in leasing activity the rest of the year. Most of that will come from Verizon, and prompted an increase to the company’s outlook on leasing activity for the rest of the year.

Most of the conversation during SBA’s call revolved around the opportunity ahead for the company as the national carriers deploy C Band spectrum.

“During the quarter, each of our largest domestic customers provided public disclosures expanding upon their 5G deployment plans, making it clear [that]upgrades to their existing background network should be a key component of their network investment strategies over the next several years,” Stoops said. “We have begun to see direct evidence of this with significant growth in our leasing application backlogs and increasing volumes in our services business.” He went on to say that SBA’s services businesses had its biggest quarter in nearly seven years and that the company is set up to have its “best services year in a very long time.”

Asked by an analyst about a timeline for the ramp-up of C Band deployment activity, Stoops said that he believes “as a practical matter, there will be a fair amount of just-in-time delivery of new C-Band equipment as it relates to when they get the spectrum cleared” and noted that AT&T has indicated that the majority of its C Band deployment spend will be between 2022-2024. The first tranche of C Band spectrum will be available in December 2021, setting up several years of increased deployment activity ahead and 2022 seen as a time period when all four of the facilities-based network providers are anticipated to be very busy.

Stoops said that the increasing activity level from carriers “gives us tremendous confidence in increased organic leasing growth over the next couple of years.”

During the first quarter of 2021, SBA acquired 731 communication sites, which included wireless tenant licenses on 697 utility transmission structures that were part of a transaction with utility company PG&E. The company also built 62 towers during the first quarter of the year.

As of March 31, 2021, SBA owned or operated 33,711 communication sites, of which 17,259 are domestically located in the U.S. and its territories, and 16,452 of which are located internationally. It has additional purchases and agreements on another 413 sites, the majority of which it expects to close by the end of the third quarter of this year.

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