Crown Castle International rules over a kingdom of radio towers. Through subsidiaries it provides broadcast, data, and wireless communications infrastructure services in the US (including Puerto Rico) and Australia. Wireless carrier customers lease antenna space on Crown Castle's owned or managed towers and distributed antenna systems (DAS); its 22,000 sites in the US cover 92 of the top 100 markets and its 1,600 Australian sites cover nearly the entire population. The company also designs networks, selects and develops sites, and installs antennas. Crown Castle is among the nation's largest tower managers and earns most of its revenue in the US.
The US is Crown Castle's principal market, accounting for about 95% of sales; Australia brings in the rest.
Sales and Marketing
Crown Castle markets its products directly to customers, including leading US wireless carriers AT&T Mobility (23% of sales), Sprint Nextel (21%), Verizon Wireless (19%), and T-Mobile USA (11%). Customers in Australia include Telstra and SingTel Optus.
Crown Castle has seen steady revenue growth over most of the past decade, including 8% growth in 2011 to $2 billion, as it expands its roster of tenants and focuses on contract renewals and extensions amid a continued boom in demand for wireless services. The company reported net income of $171 million in 2011, its first profit since 2004. In addition to the increase in sales, Crown Castle benefitted from not having losses from interest rate swaps and early retirement of debt as it has had in previous years (the company has nearly $7 billion in long-term debt, which is working to reduce).
Mergers and Acquisitions
Crown Castle, which began in 1994 with 130 towers in Texas, has grown organically through investments, new site construction, and share purchases, as well as tower acquisitions. In 2010 it bought NewPath Networks from Charterhouse Group for about $115 million. NewPath developed and operated distributed antenna system (DAS) networks. Crown Castle's interest in the company stemmed from its strategy of expanding further into the wireless infrastructure equipment space, broadening its reach past its core tower business.
In 2012 the company bought NextG Networks for about $1 billion, which expanded its wireless (primarily DAS) coverage. Crown Castle continues to focus on the US market while competitors look to emerging markets for expansion. Fortunately, the wireless industry in the US is showing no signs of slowing down, as network demand increases for integrated devices such as smartphones that offer data service. Later that year the company acquired rights to more than 7,000 T-Mobile USA towers for $2.4 billion.
Investment firms T. Rowe Price and SPO Partners own about 11% and about 10% of the company, respectively. – less