US tower company Crown Castle has identified carrier spectrum deployment as a significant growth opportunity in the coming years.

His comments come ahead of the C-band spectrum set to take place next year in the US, during which the Federal Communications Commission (FCC) has set out a plan to auction 160MHz of spectrum in the upper C-band by July 2027.

“Historically, new spectrum deployment has been an important driver of network investment, and we believe the industry spectrum pipeline remains supportive of long-term infrastructure demand,” said Chris Hillabrant, chief executive officer, Crown Castle, on the company’s Q3 earnings call this week.

While that spectrum is up for grabs next year, in the more immediate future, Hillabrant is bullish on some of the activity in the market that has already taken place.

He refers back to AT&T’s $23 billion acquisition of 3.45GHz and 600MHz spectrum from EchoStar, plus Verizon’s acquisition of AWS3 licenses, and SpaceX’s $17bn acquisition of AWS4, H Block from EchoStar, and 800MHz spectrum, most recently from Grain Management.

These sales, he notes, give the tower industry confidence that the mobile carriers are serious about network investment.

“These transactions demonstrate the commitments of the wireless industry to aggressively invest and to secure spectrum resources needed to support future terrestrial wireless network growth,” he said.

“The recent spectrum transactions, albeit somewhat delayed in the AT&T acquisition of 600MHz, Verizon’s acquisition of AWS3, and now SpaceX with the 800MHz. These are all positive catalysts for towers.”

When asked about AT&T’s deployment of its EchoStar spectrum, which the carrier is in the middle of deploying for its 5G network, Hillabrant said he expects it to be deployed quicker than the company’s 600MHz block.

“The customer just paid $23 billion for the spectrum. It’s highly valuable. I would think that they would look to deploy this as quickly as possible, given the value in the overall spectrum portfolio of what they’ve just acquired,” Hillabrant said.

The SpaceX carrier opportunity

Given SpaceX’s recent acquisitions and noise around efforts to establish a mobile carrier in the US, the company’s name was prominent during the earnings call.

At present, the US is served by three major carriers: AT&T, Verizon, and T-Mobile, and although a fourth carrier didn’t materialize in the case of EchoStar’s Dish Network, SpaceX founder Elon Musk is looking to go toe-to-toe with the ‘Big 3.’

During SpaceX’s own earnings call this week, Musk said the satellite launches and spectrum acquisitions will “pave the way for Starlink Mobile to become a major mobile carrier in the US.”

Specifically referring to SpaceX’s recent shopping, he adds that the company’s ambition to foray into building out a wireless network, beyond its satellite offering, could be a catalyst for tower companies for a couple of reasons.

“First, to invest directly by leasing towers to build their previously announced terrestrial network. Second, as a catalyst for network operators to achieve investment in their mobile networks to enhance performance and coverage against new entrants in the wireless marketplace,” he said.

When asked whether Crown Castle is in talks with the likes of SpaceX or Amazon over an MLA (Master Lease Agreement), the company’s chief executive officer, Chris Hillabrant, confirmed that Crown Castle has been in talks, as covered here by DCD.

“I don’t think I want to get into customer-specific detail, but you can assume that we’re talking to all parties,” said Hillabrant.

He noted the challenges of building out a mobile network, calling it complex, though said that Crown Castle would be able to support SpaceX in building out its own network.

“If SpaceX is serious, as it sounds like they are, in building a terrestrial network, I think we are a great partner for them in being able to help take a concept and turning it into reality of how to navigate through building a terrestrial network, which is, again, very different, obviously, than building a satellite network, as we’d be the first to admit,” added Hillabrant.

Edge deployments gather momentum

During the earnings call, Crown Castle also touched on its focus around Edge compute.

The company has been working with Edge data center providers, including working with Available Infrastructure on its own Edge AI network this year.

Available Infrastructure is currently building out a nationwide network of Edge neocloud data centers, with Crown Castle supporting the deployment.

Providing an update, Hillabrant said that more than 100 Edge sites have now been deployed as part of the trial, while “several concurrent trials” are also underway.

“While initial results appear promising, we continue to evaluate whether these Edge solutions will scale. Crown Castle is positioned well to serve this demand in a capital-efficient manner through its nationwide network of tower sites, each with existing power and broadband connectivity, and can provide select distributed move-in ready locations,” he said.

Elaborating further, he said that Crown Castle is using these trials as a learning curve to better understand both the demand profile from potential customers, but also gaining an inventory of what the company has that it can market to its customers.

He added that the business has identified around 5,000 existing structures where it could potentially offer further deployments.

Hillabrant said the traditional installation has been sub-1MW in a 0.2 to 0.5MW installation.

“It’s providing Edge data compute at the cell site, in the existing structures that we have,” he said.

“The sweet spot for us is between, say, a 0.2 – 0.5MW installation, utilizing the existing power on sites for customers to be able to utilize it.”

He adds that Crown has identified 25 sites that it has recently completed where it would be able to “bring up to 100MW in aggregate across those 25 sites.”

Financial highlights

For the quarter, Crown Castle reported a five percent drop in site rental revenue to $966 million from $1.01bn last year. The company put this down to losing out on $61m in Dish terminations and $5m in Sprint cancellations.

Sunit Patel, EVP and chief financial officer, Crown Castle, told investors that the company’s legal action against Dish’s parent company has been “placed on pause while the parties attempt to negotiate a settlement in a court-ordered mediation. There’s no specific update to report on the progress of that yet.”

Dish had its equipment on 12,000-plus installed sites, with the ability to go up to 20,000 over time as they developed their network.

Despite the difficult quarter for site rental, the company increased its full-year outlook for site rental revenue by $20m, noting that it expects to generate $3.835 billion for the year.

During Q3, Crown Castle also reported net income was down 12 percent to $283m from $323m year-on-year.