For Industry Leaders

CLIMBER SAFETY TRAINING FOR INDUSTRY LEADERS

Special Tower Market Report Issue Public Tower Companies' Financial Strength View from the Top Market Outlook for Small Cells Trends and Forecasts

September 2014 /// Volume 11 /// No. 09

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“Building Better Wireless”.

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CLIMBER SAFETY TRAINING FOR INDUSTRY LEADERS

Special Tower Market Report Issue Public Tower Companies' Financial Strength View from the Top Market Outlook for Small Cells Trends and Forecasts

September 2014 /// Volume 11 /// No. 09

® TOWER SAFETY REACHES NEW HEIGHTS

VISIT: ______NATEHOME.COM/NATE-EXCHANGE

September 2014 /// Volume 11 /// No. 09

16 74

FEATURES 16 Industry Leaders Receive Authorized Climber Safety Training by Don Bishop 32 Silly Boys! Tower Work Is for Women (Too) By Dr. Bridgette Hester 38 Why Carrier Wi-Fi and Metrocells are Better Together By Soﬁa Flores CLIMBER SAFETY TRAINING FOR INDUSTRY LEADERS 42 Mobilitie Gives Churchill Downs a Massive DAS Upgrade By Christos Karmis Special Tower Market Report Issue Public Tower Companies' Financial Strength View from the Top Tower of the Month Market Outlook for Small Cells 46 AGL Trends and Forecasts Photography courtesy of Sabre Industries September 2014 /// Volume 11 /// No. 09 ON THE COVER TOWER MARKET REPORT Trends and Forecasts for the Wireless Todd Schlekeway (right) of the National 52 and Tower Industries Association of Tower Erectors prepares By Clayton Funk, Jason Nicolay and Ryan Carr to transfer to the tower face to perform a controlled descent, coached by Zach 74 The View from the Top Johnson of Shenandoah Tower Service. By Don Bishop 82 The Market Outlook for Small Cells See article on page 16. By Don Bishop Photography by Rusty Oatman Public Companies Maintain Financial Strength Cover design by Sara Bang 86 By Don Bishop

AGL Magazine (Above Ground Level) is DEPARTMENTS published 12 times a year by AGL Media Editorial Comment — Climber Safety Training Group Inc., P.O. Box 2090, Ashburn, VA 04

20146-2090, and is mailed free to qualified By Don Bishop TABLE OF CONTENTS individuals in the United States of America. 06 Publisher’s Note — Fear of Heights By Richard P. Biby, P.E. POSTMASTER: Send address change to AGL Media Group Circulation Department, P.O. Box 10 Buyers Guide — Quick-Guide to Legal 2090, Ashburn, VA 20146-2090. and Financial Service Companies Interested in advertising with AGL Media Group’s magazines, website or e-newsletters 90 Advertiser Index or sponsoring AGL Regional Conferences? Professional Directory Visit www.aglmediagroup.com/advertise 90 for information. aglmediagroup.com 03

/ DEPARTMENTS / Climber Safety Training

Nine men and women received If your role is to manage the men and authorized climber training July 21–23 women who climb towers or to lead the in Springfield, Virginia, when they companies they work for or the com- Exec. Editor/Assoc. Publisher participated in an activity arranged panies that contract for their services Don Bishop 913.322.4569 by the National Association of Tower directly or indirectly, use your role to [email protected] Erectors. Theh eads of organizations ensure that they are trained well, pro- Art Director active in the wireless infrastructure vided with superior equipment and Brian Parks industry participated, many of whom supervised properly. Take an autho- 423.710.3866 never climbed a tower before. OSHA rized climber training course to obtain Copy Editor representatives participated, too. a perspective and understanding of Martha Collins The training brought together leaders tower climbing that will serve you well Contributing Editors who are in a position to promote safety and that will help you to protect workers J. Sharpe Smith 515.279.2282 for tower climbers. They learned the through better decision-making. [email protected] challenges and opportunities faced by My thanks to the instructors, par- Ernest Worthman those who climb towers as part of their ticipants and sponsors for not only a 303.290.9700 jobs. AGL Media Group invited me to memorable experience, but also one that [email protected] observe the training and share an will help me in selecting information Publisher/CEO account of it with you. Look for the to publish to help you, the reader, Richard P. Biby, P.E. story on page 16. pursue a working environment that 540.338.4363 What we hope is that if you are not promotes safety and health. Look for [email protected] already convinced, this account and the names of the instructors, partici- Advertising Managers articles that will follow in future issues pants and sponsors on page 29. Mercy Contreras 303.988.3515 will convince you to take the best [email protected] available training, use the best avail-

EDITORIAL COMMENT Mary Carlile able safety equipment and follow best 484.453.8126 practices to prevent injuries and [email protected] Don Bishop, Executive Editor fatalities involving working on and Circulation Manager [email protected] near telecommunications towers. [email protected] ______Corporate Office AGL Media Group Inc. P.O. Box 2090 Ashburn, VA 20146-2090 540.338.4363 Press Releases and Advertising Materials

[email protected] Subscription Information To subscribe online, go to: www.aglmediagroup.com/signup

To subscribe by mail: AGL Magazine Circulation Department P.O. Box 2090 Ashburn, VA 20146-2090

During my time as an observer in a crane-operated personnel basket, Safety LMS President Copyright ©2014. AGL Media Group, LLC. Gordon Lyman (right) explained the tasks carried out by authorized climber trainees. A crane All Rights Reserved. held the basket at height near the tower for advantageous viewing. Photo by Rusty Oatman

04 /agl magazine

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/ DEPARTMENTS / Fear of Heights

So, I’m afraid of heights. That’s adjust antenna angles, install DC (see page 16). Being placed at the end ironic for a guy in the tower industry, power connectors and test for passive of a rope, dangling from a tower, and although I don’t climb towers as part intermodulation (PIM) interference, seeing a familiar face there to help, of my work. I was on one of all things that someone does when put John Paul Jones of Safety LMS, the old AT&T monster working at height on a tower. the instructor, in a special category microwave towers When I would be where people for me. about 20 years were climbing towers, my fear of Until you’ve done it, you ain’t done it. ago, but it was heights would cause me to sit in the I expect a lot of professional climbers for a short time, car and close my eyes more than I are going to give me a hard time about and it was too would like to admit. Watching them this activity; however, I wanted to much like climbing made my skin crawl. However, with get an idea of what climbing towers a ladder to be called age 50 staring me in the eyes, it was really like. I got the idea, not the climbing a tower. was time to face my fear. I needed to details. And I could never do it on a Covering the industry for as learn to climb. sustained basis, but at least I got off many years as I have, I felt a little Two industry leaders I know and the keyboard and saw a bit of what guilty that I had not experienced the respect are Todd Schleckeway, executive it’s like. To the people on the towers hard work of climbing. I thought I director of the National Association every day, my hat is off to you. It is a should know what it’s like. Through of Tower Erectors, and Jonathan hard, hard job. the years, I’ve seen offers for inex- Adelstein, president and CEO of I was totally surprised and so very pensive 10-hour OSHA courses and PCIA. My crazy idea was that if the pleased and grateful to the OSHA folks one-day tower climber certifications. three of us had never climbed a tower, who joined us: Regulatory Analysts Because I do a lot of amateur radio we should experience what it’s like. I Jessica Douma and Erin Patterson and work, I often find myself watching cornered Todd at the Wireless Infra- Occupational Safety and Health someone else climb and wanting to structure Show and asked him if he Specialist Eric Kampert, P.E. PUBLISHER’S NOTE be able to help. had ever been on a tower. His answer Tower climbing. Until you have I realized I didn’t know a lot of the was no, but he was willing. Together, done it, you only think you know how requirements, such as the OSHA we asked Jonathan, and he said that it should be. How it actually is, is regulations, insurance company he also had never climbed. The three totally different. requirements and how much training of us decided to take a climbing class, We need to do our best to make someone should have to feel comfort- although it turned out that Jonathan the wireless infrastructure industry able about climbing. I’ve watched couldn’t attend the class offered safer. Everyone deserves to go home enough tower construction projects, as part of the Industry Leaders every night. OK, or to a nice hotel cable and antenna additions and swaps Authorized Climber Training Event room (heck, this is wireless) and to and AM detuning skirt installations because of a previous obligation and be safe in the jobs they do. to have a good idea of how things a logistical conflict. work, but I didn’t know what con- I don’t have the space here to stitutes proper climbing equipment properly thank everyone who was and how to use it. involved in the amazing experience; I’m enough of a radio nerd to know however, AGL Media Group’s executive how tedious it is to install connectors, editor and associate publisher, Don weatherproof cables and connections, Bishop, covers the event in this issue

ground cables properly, orient and and details everyone’s involvement [email protected]

06 /agl magazine

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/ DEPARTMENTS /

Quick-Guide to Legal and Financial Services Companies

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8/agl magazine

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/ DEPARTMENTS /

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10/agl magazine

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/ DEPARTMENTS /

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12/agl magazine

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/ DEPARTMENTS /

Services: acquisitions, asset manage- attorneys handle a full range of matters tions companies, tower companies, ment services, consulting, dispute reso- including site development work, lenders and investors across the lutions, federal litigation, financing, leasing, zoning and land use, tower and United States. lease negotiations, local/state litigation, other infrastructure sales, construction See ad on page 37 purchasing/sales, real estate services, and other financing, federal and state zoning permitting tax, and litigation. They represent some Shulman Rogers Gandal Pordy & Ecker Phillips Lytle’s telecommunications of the world’s largest telecommunica- 12505 Park Potomac Ave. Potomac, MD 20854 Michael Higgs 301.945.9244

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14/agl magazine

® ANTENNAS

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/ FEATURES /

Standing, from left: Jim Goldwater, Todd Schlekeway, Rich Biby, Phil Larsen, Eric Kampert, Kelley Dunne, Erin Patterson, Jessica Douma, Pat Cipov and Gordon Lyman. Kneeling, from left: Dave Anthony, Sean Cooper, Tara Dunne, Leslie Thornton and John Paul Jones. The group includes training participants and observers. Photo by Don Bishop Industry Leaders Receive

CLIMBER SAFETY EDUCATIONCLIMBER SAFETY Authorized Climber Safety Training Nine participants from OSHA, NATE, PCIA, Warriors 4 Wireless, Washington Gas and AGL Media Group received instruction and training to qualify as authorized climbers of telecommunications towers. By Don Bishop

t began with a conversation learn what it’s like,” Biby said. NATE a project that drew many participants between Rich Biby, P.E., and members employ telecommunications and sponsors and that culminated in ITodd Schlekeway. tower construction and maintenance the July 21−23 Industry Leaders “Have you ever climbed a tower?” workers and technicians, and NATE Authorized Climber Training Event. asked Biby, the CEO and publisher at promotes safety. Among other John Paul Jones, vice president of AGL Media Group. “No. Have you?” themes, AGL Media Group covers Safety LMS, conducted the training in asked Schlekeway, executive director tower construction and maintenance Springfield, Virginia, using a classroom of the National Association of Tower subjects along with safety topics. and a telecommunications tower at Erectors (NATE). “Maybe we should Schlekeway and Biby embarked on the headquarters of Washington Gas,

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In a simulated rescue as a training exercise, instructor JP Jones watches Tara Dunne use two fall-arrest ropes and a descent rope with a descent controller to lower her husband Kelley Dunne to the ground. Kelley is playing the role as a victim of a fall that was arrested by his safety harness. The yellow crane basket carries observers and is available for actual rescue if needed. Photos by Don Bishop ANTENNAS

Dave Anthony of Shenandoah Tower Service selected this Washington Gas telecom tower as a site for training conducted by John Paul Jones of Safety LMS because the toweraglmediagroup.com conﬁguration with wide bracing members and climbing pegs at the lower level gave trainees more difficulty to overcomehan t a tower17 that could be climbed like a ladder.

/ FEATURES /

a utility that supplies natural gas elevation instead of a 60-foot elevation to the District of Columbia and the because of the obstacle the climbing surrounding region. pegs presented. Dave Anthony, president and CEO Trouble at Height of Shenandoah Tower Service of A training exercise challenged Schleke- Staunton, Virginia, a NATE member, way’s erstwhile college athleticism selected the Washington Gas location when he played the role of a climber for the authorized climber training. Rich Biby dangles from his safety harness’s dorsal needing rescue by a coworker. During “I wanted a neutral location,” Anthony D-ring during a rescue training exercise in which he plays the role of a climber who needs rescuing. the exercise, he dangled from a dorsal said. “This tower isn’t owned by a D-ring on his safety harness for too long. tower company or a wireless carrier.” He experienced fainting symptoms Anthony has served on NATE’s board and a feeling of impending nausea of directors. He takes steps to promote that led Jones to have Schlekeway safety for his workers and for workers lowered to the ground by a crane- at other companies, and he watches operated personnel basket instead intently, too. For example, when I stood of continuing the training exercise with a tripod-mounted camera near and coming down on a rope with a a vehicle entrance close to the tower, controlled-descent device operated Anthony walked over to me and moved Rich Biby dangles from his safety harness’s dorsal by a rescuer. Suspension from a dorsal traffic cones into position nearby to D-ring during a rescue training exercise in which he D-ring while in a safety harness can improve my visibility for drivers. plays the role of a climber who needs rescuing. cause a condition that restricts blood circulation. Avoiding injury calls for Key Shenandoah Roles speedy rescue. Shenandoah Tower Service provided a Another training exercise, one in crane and a personnel basket to el- which a climber rescues himself from evate observers to heights alongside the dangling position, taxed Biby’s the tower. In addition to Anthony, the strength in the heat of the day. As company brought Sean Cooper, quality a result, Jones directed Biby to use assurance manager, who assisted access to the tower to lift himself Jones in instructing trainees on the Biby makes three loops in his fall-arrest rope to anchor enough to release a locking mechanism tower. Zach Johnson, safety and his foot. Then, he will push his body upward to reach on the fall-arrest rope instead of training director, rigged ropes on the for the rope lock. using the descent rope in a strenuous tower for the training exercises. Eric maneuver to do the same. Severs operated the crane, and Brandan As one of the shorter trainees, Hardy monitored its operation and Leslie T. Thornton, vice president and warned people away from the area general counsel of Washington Gas beneath the personnel basket when and its parent, WGL Holdings, found Severs moved it near the tower. that her limited reach worked against Trainees included Schlekeway and her. She had difficulty using widely Biby, along with representatives of spaced pegs to climb a section of the U.S. Occupational Safety and tower leg below a permanent ladder Health Administration, PCIA – The In the heat of the day, Biby can’t quite muster the that started about 20 feet off the Wireless Infrastructure Association, strength to lift the handle to unlock the fall-arrest ground. She completed one of her Warriors 4 Wireless, Washington Gas mechanism. Jones directed him to maneuver over to the tower. Photos by Don Bishop training exercises at a 10-foot and the Bob Lawrence & Associates

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government relations firm. One of the trainees, Eric J. Kam- pert, P.E., occupational safety and health specialist for construction services in the OSHA Directorate of Construction at the U.S. Department of Labor, said he had some previous experience climbing towers. “I did some A sponsor of the Industry Leaders Authorized Climber Training Event, Shenandoah Tower inspection work for an engineering Service, brought a crane and a personnel basket to lift observers to heights alongside the firm, and that involved some different tower and to use for actual rescues if necessary. Photos by Don Bishop types of tower climbing experience, along with bridges,” he said. At OSHA, writes and interprets safety and health Kampert played the role of a climber Kampert deals with the enforce- regulations for the construction being rescued. ment side of construction standards. industry. She previously observed “It’s not the most comfortable Inspecting towers and investigating tower construction in Cove Point, thing,” Kampert said of being rescued. injuries and fatalities come within Maryland, performed by Shenandoah “It’s a little nerve-wracking, hanging his office’s responsibility. Tower Service. A marathon runner there. Jessica did a good job. She who also lifts weights and conducts performed a flawless rescue, very Simulated Rescue fitness classes, Douma seemed to timely, which is important. You don’t Another trainee from OSHA, Jessica have no difficulty carrying out the want to be hanging there for too long, Douma, is a regulatory analyst in the training exercises. In one of them, especially if you are injured. She got same directorate with Kampert. She she played the role of rescuer while me down to the ground quickly, which ANTENNAS

When the widely spaced pegs on the tower leg proved to be a climbing Thornton, vice president and general counsel, WGL Holdings and Washington Gas, obstacle, crane operator Eric Severs used the personnel basket to lift completes a training exercise as she leans back in her safety harness and lets go Leslie T. Thornton to an elevation that allowed her to participate in a com- of the tower. A lanyard connects the dorsal D-Ring on her harness with a locking panionaglmediagroup.com rescue exercise. Here, she plays the role of a victim who needs to mechanism on the yellow safety rope to provide fall-arrest protection.19 be lowered from the tower to the ground. Photo by Binh “Alex” Nghe Photo by Don Bishop

/ FEATURES /

is all I could ask for.” Kampert said a climber left hanging in fall-arrest apparatus for too long can suffer suspension trauma, which can lead to further injury and possible death. In the classroom, Jones detailed suspension trauma, also known as orthostatic shock while suspended and harness hang syndrome. “I was suspended for five minutes,” Kampert said. “The harness I wore was new to me, so I didn’t have it fine-tuned, and I felt some choking around the neck and constriction around the groin, so it was not the most comfortable. My breathing was fine, but I felt blood circulation cut off a little bit in my arms and legs.” Constriction of the femoral arteries Eric Kampert, P.E., an occupational safety and health specialist for construction services in the OSHA Directorate of Construction at the U.S. Department of Labor, completed a training exercise by climbing that deliver blood to the legs accounts to height while connected with a fall-arrest rope and placing another rope around the tower leg to secure for a substantial portion of the risk his position. Photo by Don Bishop posed by suspension trauma.

Controlled Descent Douma said that using the controlled descent device for the simulated rescue was a little nerve-wracking for her, ANTENNAS too. “Even though we had people who could jump in and take over if something went wrong, you still feel very responsible for the person who is limp and attached to your apparatus, and you need to get them down to the ground safely,” she said. “There’s a lot of steel you’re swinging around because of the wind, and you try to keep them from getting knocked too much. It’s a lot to think about all at once. Eric was a good victim. He remained limp and didn’t help out.” Asked what it felt like to conduct a rescue, Douma said she felt a sense As Zach Johnson, safety and training director at Shenandoah Tower Service, looks on, Jessica Douma, of urgency. “He wasn’t suffering from a regulatory analyst in the OSHA Directorate of Construction, prepares to descend. She is using a any injuries, but I still wanted to get controlled descent device on the red rope while connected with fall-arrest apparatus on the yellow rope. Photo by Rusty Oatman him down quickly and without any

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While playing the role of a climber to be rescued in a companion rescue training exercise, Todd Schlekeway said he began feeling faint. Dangling from the dorsal D-ring on his harness as a victim would, Schlekeway lacked the support the harness seat provides, alllowing the harness to constrict his neck and groin. Instructor John Paul Jones called for the crane-operated personnel basket to lower Schlekeway to ground level. Left photo by Don Bishop. Right photo by John Paul Jones via helmetcam. incident,” she said of the victim “This is valuable training in terms important. Summer is the peak time played by Kampert. “Individually, I of getting real-world experience in our industry, and that’s when performed the same type of descent from people who are in the industry,” crews tend to be the busiest. This is yesterday using the descent-control Patterson said. “That’s value I always the real deal, and the classic takeaway device, but it actually felt a lot easier find when I’m working with people is to make sure you’re hydrated. It’s this time. I felt more comfortable who do this type of work day in and not just a talking point that you cover with it, and I imagine that if I were day out. They have the experience, during your daily tailgate meetings using it on a regular basis, I would the knowledge and the stories to before you do your work. It’s the real feel very comfortable with that aspect illustrate why safe practices are deal. Stay hydrated.” of it. It’s easier when it’s just yourself implemented the way they are. We Reflecting upon his experience than it is when you have someone can always learn new things by talking later, Schlekeway concluded that it attached to your apparatus, too.” with folks like this.” probably was reduced blood circulation EDUCATIONCLIMBER SAFETY Erin Patterson, a regulatory analyst caused by the harness constricting his with OSHA’s Directorate of Construction, Importance of Hydration legs that caused his symptoms. Jones attended the classroom instruction Schlekeway’s experience playing the said he observed that Schlekeway and observed the training conducted at rescue victim did not go as smoothly started getting weak about five minutes the tower. As part of her work, Patterson as Kampert’s. “I experienced some into the rescue exercise. “By the seven- helps employers interpret OSHA fainting symptoms,” he said. Schleke- minute mark, he was in trouble,” Jones regulations and understand how the way initially attributed his symptoms said. “He was in the personnel basket regulations apply to the work they do. to dehydration, saying, “We talk all at the nine-minute mark. It shows just Her department creates new regulations the time about hydration and how how fast a person can get into trouble, and updates existing regulations and important that is in our industry, especially when the weather is hot.” standards to be more current. and this is Exhibit A for why that’s Jones called for the crane-operated aglmediagroup.com 21

/ FEATURES /

The personnel basket manned by Jim Goldwater and Zach Schlekeway was maneuvered into the basket, and Biby disconnected Johnson approaches. Schlekeway is at a level below Rich Biby his harness from Schlekeway’s and swang away. The door will (foreground), and his harness is attached to Biby’s. Biby will be closed, and the basket will be lowered to the ground. Photos swing Schlekeway over to the basket. by John Paul Jones via helmetcam.

personnel basket to be used to lower way’s rescuer, said it took time to had a request go out for a bottle of Schlekeway to the ground. descend from his starting position water, and then Todd wasn’t being “I had a queasy feeling, and I above Schlekeway. “It took some time for quite as funny, and it became clear recognized it as a warning sign,” me to get into the spreader bar. When that he was not having a good time. Schlekeway said. I made it down to Todd’s position, We had the man basket available, and Biby, who played the role of Schleke- everybody was having some fun. We JP Jones said, ‘It’s time to get him off the tower.’ We brought the basket CLIMBER SAFETY EDUCATIONCLIMBER SAFETY over, and it took all kinds of arms and legs and folks to wrestle a 6-foot, 2-inch, 200-something-pound guy into a man basket, but it was there and got him down, and he was fine a couple of minutes later. A simulated rescue turned into a real rescue.” “That’s the bottom line,” Schlekeway said. “This is reality.”

Experienced Climber The trainee with perhaps the most experience climbing towers, Phil B. Larsen, director of education and training at PCIA – The Wireless Infrastructure Association, came from the field and worked his way up Helped by Jim Goldwater (left) and Gordon Lyman, Schlekeway exits the personnel basket used by crane operator Eric Severs to bring him to ground level. Photo by Don Bishop to the management levels, and now is

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Phil Larsen, left, director of education and training at PCIA and a trainee with substantial prior tower climbing experience, helps Rich Biby with his controlled-descent device. Photo by Rusty Oatman CLIMBER SAFETY EDUCATIONCLIMBER SAFETY

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/ FEATURES /

Jim Goldwater, a lobbyist with Bob John Paul Jones (orange shirt), vice president of training at Safety LMS, gives instruction Lawrence & Associates who represents to authorized climber trainees. Photo by Don Bishop NATE, makes his way up the tower while connected with a safety rope. Photo by Don Bishop involved with the training aspect Goldwater said worker fatalities himself. “First-time climbers can expect caused by falls from towers mean to be overwhelmed,” he said, before everything to NATE. “There were 13 the training exercises at the tower fatalities in 2013,” he said. “There are began. “They will be excited and at the some tower industry employers who same time scared, especially when they are not members of NATE and there- put on the harnesses and it becomes fore not getting as much training and a reality. When they start climbing, education as they could and therefore CLIMBER SAFETY EDUCATIONCLIMBER SAFETY they’ll be frightened and yet eager. putting their workers at risk.” They’ll be worried about ratings and Goldwater said what brings him riggings and the positioning of their hope for tower workers is that there is feet and hands.” so much broadband telecommunications capacity to be built and so NATE Washington Rep much technological advancement Jim Goldwater, a lobbyist with Bob that the workers that make up the Lawrence & Associates, represents telecommunications tower industry NATE in Washington. He said he are doing much for the economy, for participated in the training as a way U.S. competitiveness and for home- of showing a commitment to the land security. “There is much to be tower workers who make up the gained by tower work,” he said. National Association of Tower Erectors. Warriors 4 Wireless Eric Severs from Shenandoah Tower Service “It’s good to learn firsthand what they operated the crane. Brandan Hardy do,” he said. Goldwater, who never Two representatives came from monitored the crane and personnel climbed a tower before, said before Warriors 4 Wireless, a nonprofit basket, keeping people away from the the training at the tower began that organization. Kelley Dunne, president area beneath the basket. Photo by Rusty Oatman the climbing might be challenging. and cofounder, and his wife Tara

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Erin Patterson, regulatory analyst, OSHA Directorate of Construction, helps From left: Kelley Dunne, CEO and cofounder, Warriors 4 Wireless; his wife Tara Dunne, employers interpret OSHA regulations senior recruiter for the organization; and Jessica Douma of OSHA in the classroom used for and understand how the regulations the Industry Leaders Authorized Climber Training Event at the Washington Gas head- apply to the work that they do. Photo by quarters in Springﬁeld, Virginia. Photo by Don Bishop Rusty Oatman

Dunne, senior recruiter, participated “I’ve always believed that well done is friends in fatal accidents involving in the classroom and tower training. better than well said, and it’s important tower work,” he said. “I became heavily Warriors 4 Wireless provides training, to seek to understand what you’re asking involved in tower safety training certification and transitional support others to do. This is an opportunity about 18 years ago. I conduct a lot of for military veterans to become wire- to see the industry from the top forensic investigations for tower less technicians as civilians. Some of down. I would highly encourage oth- accidents. I want to make a differ- the potential jobs include work that er industry leaders to do it.” ence, and I want the industry to would require tower climbing. He said the experience would allow change. We have to get our fatality Warriors 4 Wireless was originally Tara and him to speak with possible rate under control.” incubated inside of Dynis, but then was job recruits from a better frame The Safety LMS executive said that set up as an industrywide organization of reference. growth in the wireless telecommuni- after it was launched at the White Speaking of the training, Dunne cations business is not going to slow House in November 2013. MasTec said, “I thought JP Jones and Gordon down and, if anything, the rate of Network Solutions, which acquired Lyman did a phenomenal job. They infrastructure improvement is going

Dynis in January, has become a lead did the right mix of content material to increase. The only way to eliminate EDUCATIONCLIMBER SAFETY supporter of the organization, along and stories and industry experiences fatal accidents is through training with PCIA, American Tower, NSN, that made it all real, and then carried and safety, he said. Crosby and several other key industry it from the classroom out here to the “Preventable accidents are the players, Kelley Dunne said. tower. It probably is one of the better worst,” Jones said. “We’ve had some “I’m here because it’s important training events that I’ve been to.” rigging accidents this year with cata- for industry leaders to go through strophic failures, structural failures the authorized climber course and Serious Business of the tower, with men on them, understand how people are being Jones, who instructed the trainees, said working. A lot of times, for the most trained to do things the right way for he has been in the tower construction part, they are preventable.” both the challenges and opportunities and maintenance business for 39 years. Asked what brings him hope for in the wireless industry,” Dunne said. “Along the way, I’ve lost several the tower workers, Jones said, “The aglmediagroup.com 25

/ FEATURES /

Bigger Authorized Climber and Authorized Rescuer Course The two-and-a-half-day course includes Some topics covered include regulations a day of classroom instruction, a final and standards; anchorages and anchorage exam and one and a half days of on-site connectors; snap hooks and carabineers; instruction in basic climbing, rescue full body harness; energy-absorbing procedures and equipment use. Although lanyards; work-positioning lanyards; new climbers cannot write a rescue plan, vertical lifelines and rope grabs; self- every climber should be exposed to retracting devices; ladder climbing rescue procedures. Upon successful devices; inspection, care and mainte- completion of the final exam and nance; and horizontal lifelines. demonstration of skills in the field, the student will be issued a certificate of completion and a wallet card.

new wind that’s blowing through the “I’m encouraged that we have industry is the fact that we have tower owners, end users and large organizations like Warriors 4 Wireless general contractors talking about We’ve expanded our and the Wireless Safety Task Force, training and setting a baseline for and the tower training apprenticeship our industry,” Lyman said. “This facility to deliver We’ve expanded our program, and that company owners won’t happen overnight. We have more poles faster. facility to deliver are finally beginning to realize that some good documentation of risk training takes time. Time is money, analysis and the parties are talking,

CLIMBER SAFETY EDUCATIONCLIMBER SAFETY Get your monopole, ﬂagpole more poles faster. and an efficient crew is a safe crew, but it could take another year to or disguised monopole project a safe crew is a profitable crew, and solidify the process.” offGet the your ground monopole, with structures ﬂagpole it all comes back to them in the end.” Lyman said much of the tower fromor disguised EE. Our monopole new capabilities, project construction and maintenance indus- equipmentoff the ground and with personnel structures The Need for Training try is made up of small companies. from EE. Our new capabilities, provides the quality and service The president of Safety LMS, Gordon Conveying the need for training equipment and personnel that meets your needs. Give us a Lyman, attended the course as an through vendors, companies such as provides the quality and service call and let’s go.... bigger. observer. An experienced climber AT&T and Verizon Wireless, and tower that meets your needs. Give us a himself, Lyman said that the biggest owners such as American Tower and call and let’s go.... bigger. problem with the industry always has Crown Castle will help to reach the been a lack of training. “I truly believe small contractors, he said. that for training, whether it’s fall “AGL Magazine has the means to protection, rigging, RF safety or capstan get to the small contractors,” Lyman operation, there never has been a said. “Many of the small contractors foundation of training in our industry don’t really know everything they www.engend.com for people to learn from the grass- need to know about safety. There are 1-888-270-3855 roots so everyone has the same basic many good contractors. Whether

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From the vantage point of the personnel basket held at height by a crane, Gordon Lyman looks over at Todd Schlekeway as he puases during his ascent of the tower on the ﬁrst day of training at the structure. Photo by Don Bishop CLIMBER SAFETY EDUCATIONCLIMBER SAFETY

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don’t know. If we can overcome that, this industry will progress.” Asked about the participation by OSHA representatives in the training conducted at the Washington Gas facility, Lyman said, “OSHA just being here is a step in the right direction. Some in the construction industry think of OSHA as this big monster and they really don’t care. But in reality, OSHA does care. They do have a job to do. OSHA having representatives here shows that they’re interested in our industry. From my point of view, I want them to be interested in our industry so our industry can improve.”

Training Availability Pat Cipov, president of Cipov Enter- prises and chairwoman of NATE, also observed the training. Her company is Pat Cipov, president of Cipov Enterprises and chairwoman of NATE, watches trainees on the tower. a small family business that builds and “What thrills me is that all industry stakeholders are ﬁnally realizing the worth of the training, and you’re maintains communications towers. seeing a lot more of it,” she said. Photo by Don Bishop She climbed towers for many years before becoming a hoist operator. “Now, I’ve been around long enough, they let me stay in the office,” she said. ANTENNAS “Lots of manufacturers have come up with new devices and tools that are very helpful for tower technicians,” Cipov said, speaking of what gives her hope for the safety of tower climbers. “The training classes not only have improved quality and value, but the number of classes offered all over the country has increased. What thrills me is that all industry stakeholders are finally realizing the worth of the training, and you’re seeing a lot more of it.”

Training Conclusion Todd Schlekeway, executive director of the National Association of Tower Erectors, descends from the As the training neared its conclusion, tower using a controlled-descent device. “We wanted to demonstrate leadership in participating in Dave Anthony said it was an enjoyable the course from beginning to end. We’re putting our money where our mouth is,” he said. Photo by Rusty Oatman experience, watching industry veterans

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Sean Cooper, quality assurance manager Instructor John Paul Jones: “Time is Dave Anthony, speaking of the trainees: at Shenandoah Tower Service, assisted money, and an efficient crew is a safe “I think they’ve done amazingly well,” JP Jones with instruction on the Wash- crew, a safe crew is a proﬁtable crew, he said. “They showed fortitude. They ington Gas telecommunications tower. and it all comes back to them in the stuck with it. They’ve been attentive.” Photo by Don Bishop end.” Photo by Don Bishop Photo by Don Bishop

Industry Leaders Authorized Climber Training Event

Trainees OSHA Directorate of Construction, Sponsors •Todd Schlekeway, executive U.S. Department of Labor Shenandoah Tower Service director, National Association of – crane, crane basket and Instructors Tower Erectors tower rigging •Jim Goldwater, •John Paul Jones, vice president of senior vice president, •Dave Anthony, president and CEO training, Safety LMS Bob Lawrence & Associates (rep- •Sean Cooper, quality assurance •Sean Cooper, quality assurance resenting NATE) manager, training assistant •Phil B. Larsen, manager, Shenandoah Tower director of education •Brandan Hardy, crane/man basket Service (assisting) and training, PCIA – The Wireless monitor Infrastructure Association •Eric Severs, crane operator •Richard P. Biby, P.E., Observers CEO and pub- •Zach Johnson, safety and training •Pat Cipov, president, Cipov Enter- lisher, AGL Media Group director, and training assistant •Leslie T. Thornton, vice president prises, and chairwoman, NATE and general counsel, WGL Holdings •Gordon Lyman, president, Safety LMS GME Supply – fall protection and Washington Gas •Erin Patterson, regulatory analyst, equipment

•Kelley Dunne, construction standards and guid- EDUCATIONCLIMBER SAFETY president and •Beau Aero, president cofounder, Warriors 4 Wireless ance, OSHA Directorate of Con- •Tara Dunne, senior recruiter, struction, U.S. Department of Labor Washington Gas – training Warriors 4 Wireless •Don Bishop, executive editor location and hard hats •Eric J. Kampert, P.E., and associate publisher, AGL occupational •Orlando Spencer, manager, WAN Media Group safety and health specialist, operations construction services, OSHA Directorate of Construction, U.S. Tessco Technologies – food Department of Labor and beverages •Jessica Douma, regulatory analyst, •John Celentano, strategic mar- construction standards and guidance, keting manager

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/ FEATURES /

With the crane operating in the background, John Paul Jones, vice president of training at Safety LMS (left), speaks with Jonathan Adelstein, president and CEO of PCIA, who paid a visit to the Washington Gas tower site on July 22. “It’s great to see that a lot of people in the indusry are learning how to climb, safety, and basic techniques so when it comes to training others and ensuring safety, they have ﬁrsthand experience of how it actually works,” Adelstein said. Photo by Rusty Oatman

who had never been on a tower, climb in the past that he wasn’t supposed training someone should have before what he described as a difficult struc- to climb, and he found satisfaction they climb a tower for the first time.” CLIMBER SAFETY EDUCATIONCLIMBER SAFETY ture. “I think they’ve done amazingly in learning how to do it right, thanks Schlekeway said he used muscles well,” he said. “They showed fortitude. to the training offered in the Industry he hadn’t used in years. “I thought I was They stuck with it. They’ve been Leaders Authorized Climber Training in good shape,” he said. “I exercise, and attentive. They had to practice some Event. He was pleased to find that the in fact, I worked out the night before skill that they otherwise never would use of proper training and equipment the climbing. And I played basketball have had to engage in. helped to overcome his fear of heights. in college.” “The other thing is, this tower is a Participating in rock climbing after “That was a long time ago,” Pat challenging structure. It makes it receiving training and qualification Cipov teased. more realistic to have the training helped him to understand that Schlekeway said that as a result on a challenging structure than on activities such as tower climbing need of the wireless infrastructure industry something that would be more easily not be frightening experiences. being extremely busy, new companies accessible, a tower that anyone could “The class showed me that proper spring up to meet the demand for climb up and down as easily as you training is available for those who make tower construction and maintenance would a ladder,” Anthony said. the effort to identify the training they services. There is a shortage of tech- need and take the classes,” Biby said. nicians trained to climb towers. “On Wrap-up “What we wanted to do with this event certain occasions, these men and women Coming back to where things started, was to raise awareness of what proper are placed on the tower prematurely, Biby said that he had climbed towers training is and raise the bar for the before they are adequately trained,” he

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was to use platforms such as AGL today,” he said. “We provided some Media Group, NATE, PCIA, Warriors food and refreshments, and we’re 4 Wireless and OSHA to get the word here to support NATE and OSHA’s out and let the industry see what endeavors to promote climbing safety high-quality training looks like, this and safe practices on towers. The is what the men and women go concern has been elevated with more through to be able to work at elevated accidents on towers and the increased heights, and this is how long the need for training and safe practices.” course needs to last. Celentano said it was impressive to “This isn’t one of those fly into a see how the training brought par- market for eight hours and hand ticipants up to speed so quickly. “JP someone a card, and then leave. This is Jones and his team have a lot of the real deal, and we wanted to demon- experience,” he said. “You can see that strate leadership in participating in they’re passionate about what they’re the course from beginning to end. doing, trying to convey the best We’re putting our money where our knowledge to novice climbers. It’s an mouth is,” Schlekeway said. interesting group that these people aren’t in the business of climbing, Sponsors but they received the training and John Celentano, strategic marketing Together with others, Tessco Tech- are able to go 100 feet up on the tower manager with Tessco Technologies, a nologies sponsored the Industry and come back down and handle the sponsor: “The concern has been elevated with more accidents on towers and the Leaders Authorized Climber Training equipment and maneuver around the increased need for training and safe prac- Event. John Celentano, the company’s tower a little bit.” tices.” Photo by Rusty Oatman strategic marketing manager, paid a Another sponsor, GME Supply, pro- visit during the training on the tower. vided the fall-arrest safety harnesses said. “It’s both a quantity and a quality “We supply a lot of the type of equip- and other associated equipment. challenge from a safety perspective. ment used in tower construction and The other two sponsors, previously Our vision with this Industry Leaders maintenance, including climbing gear, mentioned, were Shenandoah Tower Authorized Climber Training Event although that wasn’t our primary role Service and Washington Gas. CLIMBER SAFETY EDUCATIONCLIMBER SAFETY

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/ FEATURES / Silly Boys! Tower Work Is for Women (Too) Interviews reveal women tower hands’ opinions about working in the wireless infrastructure industry and what they think of their employers, supervisors and male coworkers. By Dr. Bridgette Hester

illions of women work trainers. They know their jobs, they predominantly male industry, and in jobs that most might do their jobs exceptionally well, and two themes emerged from the answers: Mconsider to be male- they are held in high esteem not only frustration and adoration. No woman dominated, such as law enforcement, by other female climbers, but also by said she believed that working in a construction, plumbing, oil rigging male climbers with whom they worked. predominantly male industry was and commercial fishing. The telecom Moreover, these women are highly difficult. The women said they don’t industry is no exception. However, motivated to learn, they are willing mind proving themselves, but they from the interactions I have had with to endure the same elements as any found it could be frustrating to fight the climbers and some company owners, male climber, and they are not above against the stereotypes and prede- it appears that there are more women paying their dues to make the wireless termined notions based solely on joining the ranks of the telecommu- infrastructure industry their home. gender. Despite whatever frustra- nications industry. When I asked male climbers about tions might present themselves, every Historically and sociologically female climbers I interviewed, I never woman said she loved the industry, speaking, women are one of the most heard anything derogatory in reply. thoroughly enjoyed her work and loved ANTENNAS SAFETY underutilized resources in the work- On the contrary, more often than not working with her crews. place. The following information I was told that the women were focuses solely on the perceptions, valuable assets and that they would Physicality and Effectiveness ideas and opinions of the historically be sorely missed if they were not on What do the ladies have to say about underutilized resource in this industry a work site. One of the male climbers any employer’s general concerns — the women of telecommunications. I spoke with put it another way: about hiring women with respect to I asked female climbers about their “Some of the women in the field can the job’s physical requirements and number of years in the field, their work a tower like a boss.” how effective women might be? The experience, whether they believe I asked the women about the most women said that in their experience, employers have valid concerns about difficult aspect of being female in a employer fears of hiring women are hiring women, their advice to those employers and to women trying to More often than not I was told that the women were get into the industry, and what they believe they bring to the table. valuable assets and that they would be sorely missed if they The female climbers interviewed were not on a work site. One of the male climbers I spoke have from two months to 15 years of with put it another way: “Some of the women in the ﬁeld experience, and most are seasoned tower hands, supervisors and safety can work a tower like a boss.”

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unfounded. Some said women’s not harder, but any man could do that climber the opportunity, and if she natural tendencies were to be more as well. I think the fight is more for can’t effectively do her job for lack of communicative, focused, organized and gender equality in this industry, not physical capability to handle the load, prompt, and to work more effectively for gender acceptance. We’re just or because she has poor rapport with with customers. tower hands, period. We all have customers, you will know it quickly. Two said the question made them different strengths and weaknesses feel conflicted. “I’ve argued why we that every strong leader or foreman Men and the Workplace shouldn’t be treated differently based should take into consideration blind Almost all of the female climbers said on our gender, yet I am asked why I of gender when assigning tasks.” that concerns over relationships may be better than some males,” one As for physical ability, they all said between male and female tower hands of them said. “The question does have that just because they are women has been brought to the surface at some validity, yet I find myself trying doesn’t mean they can’t handle the least once in their past. One said, “I not to appear hypocritical.” demands. Strength, endurance and learned that one of my supervisors The second responded by saying, the ability for the body to handle the told my immediate supervisor not to “I think that I am better at some strain of such a physical job are not hire me because I’m a female,” she said. things than other coworkers, but I monopolized by males. Anyone who “He said he worried about me having never feel that it’s because I’m female, has been in the industry can certainly sexual relations with my partner just rather than because I’m me,” she said. say they have seen more than one because I’m a woman and he’s a man. “I generally show more attention to male climber who couldn’t handle the It doesn’t work that way. He has since detail and find ways to work smarter, physicality of the job. Give a female said he was glad the other supervisor SAFETY

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ignored his advice.” industries, female climbers would are invalid. All around, we’re able to Similarly, another said she under- agree that tower climbers have to earn handle it just fine.” stood the concerns. “If I were a company respect. In this industry’s environment, Another responded, “The truth about owner, my only concern with hiring there is joking, kidding, and down- boys: Get a bunch of guys together a woman in the field would be speed, right crude exchanges. The women isolated from anywhere they care quality and sexual lawsuits,” she said. interviewed expressed similar senti- about, and when they don’t think I’m “I would say it depends on the woman. ments about it, such as, “I knew what I within earshot, I hear things that If she does quality work and can avoid was getting myself into. If I couldn’t make me wonder if I’ve been way off having sexual harassment charges handle it, I wouldn’t be in the industry.” all along. It’s been disheartening at filed against the company, I would Moreover, one female climber said, times. I try to keep it all in perspective absolutely hire a woman.” “Employers worry about women not and hope that it’s just the industry Words spoken on the job by both being able to handle the joking and and not society as a whole. And yet, female and male climbers can be a little they worry about sexual harassment in that same scenario, sometimes I colorful at times. All climbers, regard- suits. Dear God, if they really knew hear things that are pretty adorable.” less of gender, will tell you that you had what has been tossed around in jest, better have a thick skin, and you had they might fall over dead. I dish it Temperament and Attitude better be able to dish it out as good as out as good as I take it daily, and I’ve Women offer an entire set of skills and you take it; it’s the nature of the beast. never complained. It’s quite fun. I attributes that is often overlooked In the wireless infrastructure would say most employer concerns and underappreciated — skills that industry, as with other “alpha” about throwing women in the mix make some employers skittish. Sen- ANTENNAS SAFETY

If you are building a new tower you must comply with the National Environmental Policy Act (NEPA) and the FCC National Programmatic Agreement (NPA) for Impacts to Historic Resources. In many cases, modifications to existing towers must also comply with the NPA.

We have been working with the tower and wireless industries since 1993. Our track record speaks for itself.

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The Proverbial Glass Ceiling “Don’t expect this to be easy. It’s one of the most difficult One woman I interviewed, a 15-year and dangerous jobs in America and traditionally composed veteran in the industry, concisely and of males. Just as we don’t want to be generalized by the men, eloquently summed up the general women shouldn’t generalize that all men are the same. You consensus of most respondents on whether they believed there was will encounter all kinds of men with a range of attitudes." a glass ceiling in the industry. “Absolutely not,” she said. “Look at sitivity and showing emotions and some sage advice. Mainly, don’t whine, Pat Cipov, chairwoman of the National empathy are often categorized as traits don’t complain, get out there and do it Association of Tower Erectors. The that show weakness or liability, but smarter, not harder, and the industry only glass ceilings in this industry or when applied directly and effectively isn’t for the faint of heart. in any aspect of your life are the ones by women in this industry, these so- One veteran climber expressively that you set for yourself.” called liabilities translate into being encapsulated the overall theme with One climber said she believed able to effectively read people and this advice: there is a glass ceiling regarding to manage crews and dangerous “Don’t expect this to be easy. It’s one her pay, but she also described her situations. They translate into an of the most difficult and dangerous experiences in a much more positive ability to understand customer con- jobs in America and traditionally light by saying, “I’ve come a long way. cerns more effectively. composed of males. Just as we don’t I’ve learned a lot. I’ve surprised a lot From the responses gathered, it was want to be generalized by the men, of people. I’ve impressed a lot of apparent that all of the women love women shouldn’t generalize that all people. And that feels awesome to their jobs; most love their employers men are the same. You will encounter anyone. I’ve had many foremen fight and their crews. One said, “The guys all kinds of men with a range of for me, and many tell me they think in my company respect me and still attitudes. Don’t let the males who I’m the best top hand in the company. joke with me. I love them. Yeah, there are intimidated or upset about your Top hands don’t generally work with are some chauvinists, but mostly presence discourage you. other top hands, so I don’t know much everyone is amazing.” “You may encounter sexual harass- about the others, but I’m taking their ANTENNAS SAFETY Others responded with similar ment and sexual discrimination. Don’t word for it.” choruses about their crews, employers expect special treatment because of The existence of the proverbial and coworkers being supportive. You your gender. Expect to lift the same glass ceiling has long been established are unlikely to ever find one of these amount of weight, climb the same by sociologists, and although there women behind a desk. For these heights and go to the bushes to relieve may in fact be one in the wireless women, the interactions with their yourself. You will get injuries, break infrastructure industry, it appears employers and crews; the physicality, fingernails, miss your families, work the women I interviewed probably and challenges and camaraderie of the tremendously hard, work in some won’t notice it when they crash job; and the hunger to learn more far nasty weather and hear some crude through it. outweigh the nuisances of a sideways and disgusting conversations. comment from a crew member who “Just remember that once you get Bridgette Hester, Ph.D., is a family and hasn’t caught up to the 21st century. past the potential issues and demon- workplace strategist. She is the founder strate that you can do the job, you are and president of the Hubble Foundation, Advice to Newcomers doing something most men can’t even which is dedicated to promoting the Without fail, the women interviewed do. You will form lifelong bonds and safety of tower workers, site crews and had encouraging things to say about friendships unlike any other. all workers at heights. Her email address is . more women entering the industry, “But never give up — it can and [email protected]______and with that encouragement came has been done.”

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Prior results do not guarantee a similar outcome. © 2014 Phillips Lytle LLP One Canalside, 125 Main Street, Buffalo, NY 14203 (716) 847 8400 2014 Phillips Lytle has been recognized by FORTUNE 1000 in-house counsel Client Service for delivering superior client service. A-Team

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/ FEATURES / Why Carrier Wi-Fi and Metrocells Are Better Together

By taking steps to deploy, collocate and integrate carrier Wi-Fi and cellular small cells, mobile network operators would move toward eventually implementing a single, seamless, wireless network model. By Soﬁa Flores

hat’s the best way to with their cellular networks. MNOs address this rate of growth. Traditional get more from carrier often try to make carrier Wi-Fi and cell-splitting in the macro network W Wi-Fi and metrocells? The cellular look similar to end users. But will lead to unsustainable business answer is simple: Put them together. cellular and carrier Wi-Fi are different cases. The scarcity and high cost of Mobile network operators (MNOs) technologies. Cellular small cells are spectrum will make adding carriers are already using small-cell technologies integrated into end-to-end, operator- unsustainable, too. Deploying all to increase capacity and efficiency owned networks that use licensed future LTE Advanced technologies and decrease total cost of ownership spectrum to cover a large geographical (carrier aggregation, eICIC, MIMO (TCO). Co-deploying or integrating area. Carrier Wi-Fi networks can be communications and CoMP) may carrier Wi-Fi and metrocells can multiply integrated with end-to-end operator- increase spectral efficiency by a factor their benefits and take a key step owned networks or can be owned by of 1.5, but this is far short of what’s toward delivering the high perfor- partners. They often are deployed to required in the next few years. (eICIC mance and seamless connectivity support high-density coverage in a stands for enhanced inter-cell inter- WIRELESS NETWORK that every customer craves. focused geographical area. ference coordination; MIMO stands for multiple-input, multiple-output, The Role of Small Cells The Small-cell Advantage and CoMP stands for coordinated Today, MNOs are using carrier Wi-Fi Alcatel-Lucent Bell Labs projections multipoint, which is used with LTE and cellular small cells to build more show that mobile data traffic will grow Advanced to coordinate the transmis- efficient heterogeneous networks. by a factor of 25 between 2011 and sion and reception for user equipment MNOs want to use all of the access 2015. Conventional macro-based from several points to ensure optimum technologies at their disposal to boost capacity-boosting strategies can’t performance, even at cell edges.) coverage and capacity and deliver a superior quality of experience (QoE). They view small cells, both cellular Highlights and carrier Wi-Fi, as a means to improve performance and reduce TCO. • Combining LTE, 3G and carrier Wi-Fi small cells amplifies network MNOs typically use cellular small capacity and density benefits and gives subscribers the freedom of choice. • The TCO per bit of a carrier Wi-Fi integrated small cell can be up to cells to provide public access to their 75 percent lower than when deployed separately. networks and support location-based • Integration of carrier Wi-Fi and metrocells is the first step toward a single services. They use carrier Wi-Fi cells seamless wireless network. to increase mobile traffic in conjunction

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2,000

Wi-Fi 1,500 3G Small Cell LTE Small Cell 1,000 Macro Cell Mb/s

500

0 0 3 6 9 12 15 Numer of small cells per macro cell

Figure 1. Deploying 3G, 4G LTE, and carrier Wi-Fi small cells within the same site signiﬁcantly increases the capacity contribution of small cells.

The only cost-effective way to site, capacity grows by a factor of 12 additional 75 percent. The cost per address rapid data traffic growth is to or more (see Figure 1). bit of a carrier Wi-Fi integrated 3G increase network density by adding When LTE, 3G and carrier Wi-Fi small small cell is less than one-quarter carrier Wi-Fi and cellular small cells. cells are combined within the same that of deploying the two technolo- Small cells boost capacity by making site, they make a greater contribution gies separately. the network more spatially efficient. to network capacity and density. This • If carrier Wi-Fi is integrated into an They decrease cost per bit by enabling increased contribution can improve an LTE small cell, cost per bit is slightly MNOs to add high-bandwidth capacity operator’s mobile business case. In ad- lower than for a carrier Wi-Fi cell on and coverage exactly where it’s needed dition, the ability to support multiple its own. The cost per bit of a carrier in all environments. They improve access technologies at one location can Wi-Fi integrated LTE small cell is QoE by bringing high capacity to simplify deployment and reduce TCO. less than one-quarter of deploying traffic hotspots and coverage to indoor the technologies separately. locations that aren’t well served by The Case for Integrated Cells traditional macro-only solutions. Mobile network operators can reduce In short, MNOs increase their cost TCO per bit even further by deploying savings with each additional access Common Deployment 3G and LTE metrocells that have technology they integrate into a single Carrier Wi-Fi and cellular small cells integrated carrier Wi-Fi support — in cell. For example, the TCO per bit of an deliver even greater capacity, efficiency other words, with one box that supports LTE, 3G, and carrier Wi-Fi integrated and cost savings when they are cellular and carrier Wi-Fi access. small cell is just slightly higher than WIRELESS NETWORK deployed together. For example, by On their own, 3G and LTE metrocells an LTE and carrier Wi-Fi-integrated deploying three multiple-standard (a can cut cost per bit in half compared small cell. These cost savings come combination of carrier Wi-Fi LTE and with equivalent macrocell technology. from several sources. For instance, 3G) small cells per macro site, an MNO When these cells are integrated with rental costs per bit go down when can more than triple the capacity of carrier Wi-Fi, the cost reductions are one site can support multiple access its network. With six small cells per even more dramatic: technologies. An MNO with an site, capacity increases by a factor of • If carrier Wi-Fi is integrated into a 3G extensive deployment of carrier 5 or more. With 15 small cells per small cell, cost per bit drops by an Wi-Fi access points can reduce site aglmediagroup.com 39

/ FEATURES /

rental costs per bit by replacing these “The only cost-effective way to address rapid data traffic single-technology access points with metrocells that integrate carrier growth is to increase network density by adding carrier Wi-Fi and cellular access technologies. Wi-Fi and cellular small cells.” Integrated cells can also help reduce site preparation costs. An integrated small cell typically uses a single or carrier Wi-Fi cells in a way that is with policies that ensure that users backhaul and power source for both transparent to the user. get a high QoS on every network. supported technologies. As a result, • Automatic user authentication: Where required, move users be- it costs half as much to bring backhaul Eliminate the need for manual tween carrier Wi-Fi access points or and power to the site. Integrated cells logins and ensure that valid user between cellular and carrier Wi-Fi. also help MNOs save on installation: equipment can automatically • Common charging: Simplify and One box typically costs less to install access the operator’s carrier Wi-Fi unify customer billing by extending than two boxes. and cellular networks. a common charging mechanism Carrier Wi-Fi integrated small cells • Secure Encrypted OTA transmission: across all access technologies. offer some intangible benefits, too. Secure carrier Wi-Fi-based over- For example, one box on a lamppost the-air (OTA) connections with the By taking steps to deploy, collocate is more aesthetically pleasing than two latest data encryption technologies and integrate carrier Wi-Fi and cellular boxes. This is important to commu- — for example, carrier Wi-Fi Certified small cells, MNOs can begin to fulfill nities that are concerned about how WPA2-Enterprise. these requirements and move toward their streets and buildings look. In • Handovers for seamless mobility: a single, seamless, wireless network some cases, it may be essential: In Ensure that users enjoy uninter- model. The most successful MNOs London, for example, only one box rupted service by supporting will be those that integrate all access may be installed on each lamppost. seamless handovers between carrier methods at the packet core network. Wi-Fi access points and between Moving Toward a Single Network carrier Wi-Fi and cellular. Sofia Flores is a senior product marketing Most mobile users aren’t concerned • Automatic roaming: Simplify the manager at Alcatel-Lucent. Her email WIRELESS NETWORK about what access method they use. user experience with technical and address is ______sofia.flores@alcatel-lucent.

Some want to control whether they commercial frameworks that allow com___. Reprinted with permission from use carrier Wi-Fi or cellular access. users to roam between cellular and Alcatel-Lucent TechZine. Copyright

All want simple, seamless connectivity carrier Wi-Fi networks. 2013. To subscribe, please go to www.____ and a superior QoE. • QoS with policy-based traffic man- alcatel-lucent.com/techzine. MNOs can give users what they want agement: Control traffic congestion by building a single seamless network that spans cellular and carrier Wi-Fi technologies. To succeed, they need to treat carrier Wi-Fi access the same way Seven Key Requirements they treat cellular access. This means delivering on seven key requirements: for Carrier Wi-Fi Access • Automatic network discovery and • Automatic network discovery • Automatic roaming selection: Through policy-empowered and selection • QoS with policy-based network access management, • Automatic user authentication traffic management ensure that user equipment can • Secure encrypted OTA transmission • Common charging automatically discover and select • Handovers for seamless mobility the operator’s macrocells, small cells

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______

/ FEATURES /

Mobilitie Gives Churchill Downs DISTRIBUTED ANTENNA SYSTEM a Massive DAS Upgrade With an upgraded DAS at Churchill Downs, AT&T carried a record amount of data during the Kentucky Derby. Fans expect to be able to use their wireless devices extensively before, during and after the Derby. By Christos Karmis

ince 1875, the first Saturday horse’s quest to achieve the Triple “the fastest two minutes in sports.” in May has been set aside to Crown. The backdrop for this famous Although the race hasn’t changed Shost a special tradition in the race is Churchill Downs in Louisville. much since 1875, the technology fans horseracing community, let alone Racing fans travel from around the rely on to enhance their experience the sports world. That event is the globe to see these thoroughbreds in at the race certainly has. Fans coming Kentucky Derby, the first stop on a what was affectionately coined as to the events expect to be able to send

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text messages, call friends and family, stream video and share pictures of their hats and outfits on Instagram. Having so many people in one location puts a tremendous strain on the wireless network. Because the fan experience is so important, last year Churchill Downs selected our company, Mobilitie, to install a neutral-host distributed antenna system (DAS) to deliver the increased capacity the wireless carriers needed to accommodate the ever- increasing wireless demands seen on race day. The company completed a significant expansion of the DAS just in time for the 2014 140th running of the Kentucky Derby.

Solution In order to meet the specific needs at Churchill Downs, we analyzed how the network was accessed during the Kentucky Derby in 2013. By understanding where the high-traffic areas were, we were able to fine-tune the system so that the network would be optimally balanced by placing capacity in exactly the right locations. This is the head end for the Churchill Downs upgraded distributed antenna system, which is This year’s DAS expansion more designed to support the yearly attendance at the Kentucky Derby and the anticipated con- than doubled the number of sectors tinuing increase in mobile network traffic. covering the six main floors and basement, along with the grandstands, work using transition zones in the upload photos to social networks, DISTRIBUTED ANTENNA SYSTEM temporary suites and infield. Part of the parking lot. As a result, both the macro tweet/post, send emails and make expansion included adding perma- and DAS networks can accommodate calls. The DAS provided a seamless nent sectors in the infield and adding far more capacity than before. wireless experience supporting Long coverage for the new Churchill Downs Term Evolution (LTE) and legacy party deck expansion area. Results technologies for the 60,000 spectators In fact, one of the key differences As a result of the massive expansion in the infield and more than 100,000 of the DAS upgrade could be noticed of the previous DAS, the coverage area in the grandstands during the before spectators even park their has been expanded and the overall Kentucky Derby. All gambling areas cars. In an effort to remove traffic capacity of the network has been located in the basement of the main from the macronetwork, we configured dramatically increased. The new structure accommodated wireless the system to transition easily from infrastructure supported spectators’ connectivity for the crowds and pro- the macronetwork to the DAS net- ability to stream and upload video, vided greater wireless connectivity aglmediagroup.com 43

/ FEATURES /

for those waiting in restroom lines. wouldn’t have been possible without Key statistics about AT&T and Verizon customers the cooperation of Churchill Downs, received wireless coverage for the Mobilitie and the participating the 2014 DAS updates 2014 event. After the races, AT&T carriers that can be accessed through reported that a record amount of data the expansion. Because the carriers •253 antennas installed crossed its network. Between the are an important factor in how the •152 omnidirectional Kentucky Oaks and Kentucky Derby network will be used, we made sure •101 directional races, AT&T saw a total of two tera- to do what was necessary so that all •1,200 amps needed to power the wireless bytes of traffic and a total of 180 carriers could take advantage of the infrastructure gigabytes of traffic during the peak network at the venue. As a result, the •40 tons of air conditioning needed to keep hour of the Kentucky Derby, which fan experience at the Kentucky Derby equipment cool (between 68 and 71 degrees was 5 p.m. to 6 p.m. on May 3. The has taken a giant leap forward since Fahrenheit) totals for AT&T are the most from any that first race in 1875. •More than 5 million square feet (about 115 sporting event at which the carrier acres) covered has provided coverage. Christos Karmis is president of Mobilitie.

•More than 1 million feet of fiber-optic cable The DAS upgrades will also support For more information, visit www.____ •56,700 feet of coaxial cable the roughly 30,000 people expected mobilitie.com. Photos courtesy of •67 days to build original DAS at each Churchill Downs event Churchill Downs/Kinetic Corporation. throughout the year. The installations DISTRIBUTED ANTENNA SYSTEM ______

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/ FEATURES / ANTENNAS AGL TOWER OF THE MONTH Photography by Sabre Industries SAN ANTONIO, TEXAS LOCATION MANAGEMENT TRAFFIC STORM WATER ALERT PUBLIC SERVICECITY DEPARTMENT SAN ANTONIO POLICE ADDITIONAL USERS CRICKET CARRIER 2011 CONSTRUCTED YEAR SABRE INDUSTRIES POLES, A DIVISION OF SABRE TOWERS AND MANUFACTURER 500 FEET HEIGHT SELF-SUPPORTING LATTICE TOWER TYPE OF SAN ANTONIO,CITY TEXAS TOWER OWNER FRIO TOWER SOUTH PUBLIC SAFETY SITE NAME

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® AGL TOWER OF THE MONTH ANTENNAS SEPTEMBER 2014 aglmediagroup.com 47

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Verizon AT&T Sprint T Mob 4G LTE 306 million 290 million 250 million 230 milli COVERAGE

SBA PUBLIC TOWER American Tower Crown Castle Communi- COMPANIES $49.8 billion $36.2 billion cations ENTERPRISE VALUE $22.9 billion

Wireless Subs (in Millions) Wireless P Postpaid Smartphone Subscribers

AT&T 45.7% 109 336 38.9% December December December 2000 2012 2000 Verizon 72%

Global Mobile Data Traffic by Regionr P

Postpaid Smartphone Subscribers Increase 18.0 16.0 North America 14.0 12.0 Rest of the World 10.0 8.0 6.0 4.0 2.0 0.0 AT&T Verizon

Trends and Forecasts for the Wireless and Tower Industries The View From the Top By Clayton Funk, Jason Nicolay and Ryan Carr By Don Bishop

ile on

CIG Wireless $46 million

Penetration

104.3% December 2012

rojections

The Market Outlook for Small Cells Public Companies Maintain By Don Bishop Financial Strength By Don Bishop

/ /FEATURESTOWER MARKET/ REPORT/

Trends and Forecasts for the Wireless and Tower Industries

Shared wireless infrastructure continues to be commonplace as carriers focus on enhancing the experience of their subscribers by providing reliable service throughout their networks. By Clayton Funk, Jason Nicolay and Ryan Carr

lthough the wireless industry to capital are the catalysts for installing • Ownership remains fragmented. and its related shared wire- more shared facilities. The entire small Carriers and tower owners publicly Aless infrastructure subsector cell ecosystem (femtocells, picocells, etc.) decry difficulties with zoning approval witnessed significant changes over has gained popularity in the wireless for antenna sites and changes to existing the last year, many previous themes infrastructure industry for a coverage sites. They both chafe at the limited remain. The shared wireless infra- and capacity solution as carrier net- access to prime locations to serve as structure industry continues to be well works continue to evolve and adapt coverage sites, capacity sites or both. positioned for future growth as to consumer needs and expectations. However, for investors in shared mobile video, music and data-intensive wireless infrastructure, those same applications continue to increase and Attractive to Investors barriers to entry assist in protecting strain network capacity. Projected data Over the years, some elements remain asset value by restricting competition. TOWER MARKET REPORT usage on wireless networks, according unchanged — the shared wireless infra- Meanwhile, carriers themselves to Cisco Systems, is forecasted to grow structure industry attracts investors have to overcome their own barriers by more than 61 percent annually because of these factors: such as access to spectrum, often from 2013 to 2018 (see Figure 1). We’ll • Investment-grade customers (i.e., acquired through Federal Communi- examine what has changed over the AT&T and Verizon) and other tenants cations Commission auctions, and last 12 months and discuss a few commit to long-term contracts that they are required to meet established developments that could affect the produce a steady, recurring revenue FCC license build out deadlines. Those shared wireless infrastructure and stream with minimal customer churn. expensive and lengthy processes the wireless industries. • Infrastructure owners can financially limit the carriers’ competition. Simply Several specific niches, collectively, and operationally leverage their assets. building out a network, even on a make up the shared wireless infra- • The businesses are capital-intensive, limited scale, can rapidly boost costs structure industry (see Table 1). requiring investors to continually into the millions and billions of dollars. Most of today’s shared wireless commit capital that will ideally earn Access to and the availability of infrastructure niches originally started an attractive return on investment. capital are yet additional factors that as single-use facilities. However, for • The industry has barriers to entry limit who owns spectrum utilized some carriers, depending on their requiring towers to receive regulatory for commercial services. budgets, speed to market, consumer approvals (zoning) and tower devel- Tower owners have an ability to demand for wireless services and access opers to have access to carriers. financially leverage their assets

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Towers Rooftops Small Cells Backhaul Distributed antenna system (DAS) net- Vertical real estate for Existing commercial, works and other types of microcells, in Wireless backhaul wireless carriers, mobile retail and multi-unit the past a technology of last resort, are (microwave) and wired private network operators, residential buildings now viewed by most carriers as another backhaul (ﬁber-to- government agencies for antenna placement method in the toolbox for achieving the-tower) and broadcasters in strategic locations desired coverage and capacity, especially in dense urban environments. Table 1. Several speciﬁc niches, collectively, make up the shared wireless infrastructure industry . because of the recurring, contractual many other industries. Although the wireless industry’s revenue the towers generate. The long- Fragmented ownership in the fundamentals continue to be sound, term agreements with investment- various shared infrastructure niches those who follow the space are watching grade, national wireless operators typically includes two or three larger to see if Sprint and T-Mobile USA provide stability. The barrier to entry companies and a large number of attempt to merge. At this writing, represented by zoning approval and smaller entities. With more and there continues to be a significant access to capital helps to keep the more companies establishing them- amount of rumor and speculation churn rate among tenants low. selves in these niches, a deeper pool with nothing formally announced. The abundance of capital to invest of potential acquisition targets results. Those in both the wireless and tower is favorable for entrepreneurs. Access These targets attract entrepreneurs industries know there could be a to both debt and equity capital for with private equity funding who can significant shift in the entire wireless tower owners tends to be easier and foresee an exit to a larger consolidator ecosystem if the Big Four — AT&T, more abundant when compared with at a future date. Sprint, T-Mobile USA and Verizon

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/TOWER MARKET REPORT/

Wireless — become the Big Three. The economic situation in Europe has crunch or recession. As a result, retail also improved, with the European spending is anticipated to keep on pace Macroeconomic conditions Union officially exiting a recession in and grow at approximately 4 percent Over the last year, the U.S. economy the second quarter of 2013. In during 2014, and unemployment has has continued to steadily improve, June 2014, consumer confidence decreased to 6.1 percent as a result with expectations for more economic remained strong and now is at its of federal spending and increased growth in the second half of 2014. highest level since before the credit corporate hiring. Another positive factor in the U.S. economy is that interest rates have remained low. Regardless of recent increases in 30-year mortgage rates and 10-year Treasury notes, Kiplinger believes interest rates will climb to 4.5 percent and 3.5 percent, respectively. As of this writing, there continued to be conflict between Ukraine and Russia in addition to increased conflict between Israel and Palestine. It remains undetermined if either of these events could derail or significantly affect the U.S economy, but these and other global factors cannot be ignored. Outside of any influences beyond the borders of the United States, what does a steadily improving economy mean for tower owners? Strong consumer confidence has historically TOWER MARKET REPORT translated into wireless subscribers continuing to demand a faster and more consistent consumer experience, motivating wireless operators to continue spending capital to upgrade and enhance their networks. Access to inexpensive debt should allow tower companies to continue to secure new credit facilities and debt issuances, allowing tower owners to pursue ______growth through organic development and acquisitions.

Wireless Trends Even with an improving economy, ______there are still key areas to watch as one attempts to forecast where the shared wireless infrastructure industry is

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headed. First, continue to watch the mance is a good barometer for the retail customers. AT&T reported performance and projections of the overall wireless industry. postpaid net adds were 625,000 to wireless carriers. Key metrics include First quarter 2014 results had AT&T reach 73.3 million, representing the average revenue per user or account adding nearly 1.1 million net connec- company’s best first quarter net (particularly the growth of revenue tions for a total of 116 million connec- adds in five years. Verizon Wireless from data plans), subscriber growth tions, while Verizon Wireless, with reported 539,000 retail postpaid net and capital expenditures. Second, 549,000 net adds, had 103.3 million additions during the first quarter, watch the credit markets and take note of the availability of credit and the pricing of that credit. Solid cash flow from high-quality tenants under long-term contracts underpins the trends for shared wireless infrastructure companies. A significant spike in the cost of that credit, a rapid shuttering of the credit markets or both would be likely to significantly derail the amount of money carriers will invest in their networks and, in turn, shared wireless infrastructure. Wireless carriers continue to see headwinds in growing their voice communications businesses. With the mobile phone market nearly completely saturated for voice-only subscribers, price-cutting has inten- sified for voice plans. However, data plans continue to remain stable with ample growth opportunities. Inexpensive pay-as-you-go wireless services that do not require contracts have been increasingly in favor, at the expense of the postpaid sector dominated by Verizon Wireless and AT&T. Given the continued explosion TOWER MARKET REPORT in the usage of smartphones as well as the increased number of consumers turning to tablets and e-readers, carriers that can offer consistently reliable, fast networks for data usage have been able to grow their respective market shares. Given that AT&T and Verizon Wireless are the two largest wireless companies, their ______operational and financial perfor- ______aglmediagroup.com 55

/TOWER MARKET REPORT/

growing its postpaid subscriber base to 97.3 million. Connected devices such as tablets, e-readers and other devices continue to boost both AT&T and Verizon Wireless’ net additions and served to attract new subscribers desiring access to the latest and most popular consumer wireless devices and services. Carriers will continue to focus on growing revenue from sources other than voice-only customers as they work to maintain and grow their average revenue per user or account. The good news is that 45.7 percent of AT&T wireless subscribers are postpaid smartphone subscribers as of March 31, 2014, an increase of 9.8 percent year there were numerous reports about an event that is relayed over a network over year. In its most recent quarterly cuts in spending and layoffs due to delivering data to another machine report, AT&T said that approximately significant cost overruns with AT&T that is programmed to receive and 31 percent or $5.1 billion of its wireless deploying their “cell site of the future,” react to the data. The sensors are revenue is derived from data services, which was supposed to integrate the typically embedded and can capture an increase of nearly 21 percent from 700-MHz, 850-MHz, 1.9-GHz and events such as temperature, location, the prior year. Verizon reported that 2.3-GHz spectrum bands on one consumption, heart rate, stress levels, more than 72 percent of its retail post- installation. Numerous news reports light, movement, altitude and speed. paid subscribers used a smartphone surfaced that the cost overruns of These sensors receive and transmit device, an increase of 18 percent over AT&T’s network upgrades were more the event data wirelessly to a central TOWER MARKET REPORT the prior year, which has assisted with than three times its budget. This is server where this data is translated Verizon’s total first quarter service of high interest to anyone in the into information that can be analyzed revenue increasing by 7.5 percent tower industry because AT&T and and acted upon (e.g., the temperature is year-over-year to $18.0 billion. These Verizon Wireless have been the most too hot and as a result a transmission metrics indicate that both AT&T and active carriers over the last 12 months. will be sent to turn the temperature Verizon continue to shift away from A prolonged slowdown or stoppage down). In the United States alone, their dependence on voice for revenue, by AT&T may erode investor confi- M2M connections are forecast to rise which is further supported by the dence in the industry despite all the from 33.6 million to 64.2 million fact that more than 73 percent of positive long-term wireless trends. between 2012 and 2018, according Verizon’s total data traffic goes A positive theme and key area of to AT&T. over its LTE network. growth for wireless carriers is increas- As mentioned earlier, those in both Earlier this year, AT&T announced ingly coming from machine-to-machine the wireless and tower industries will that it planned to build 1,500 to (M2M) data usage and companies watch what could happen between 3,000 macrocell sites per year for the also using carrier networks under the Sprint and T-Mobile. Merger and next few years as part of a wide-ranging moniker of the Internet of Things. acquisition activity among wireless effort to enhance its network and M2M communications are made carriers over the last 12 months has improve coverage and capacity. At possible by a device such as a sensor been extremely active and robust. the time of this writing, however, that is attached to a machine to capture From that period, there are five deals

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Global Mobile Data Traffic by Region Global Mobile Data Traffic by Device 18.0 18.0 Smartphones 16.0 16.0 Laptops/Netbooks 14.0 Tablets 14.0 12.0 Non-Smartphones 12.0 10.0 M2M Other Devices 10.0 8.0 8.0 6.0 6.0 4.0 4.0 2.0 2.0 0.0 2013 2014E 2015E 2016E 2017E 2018E 0.0 2013 2014 2015 2016 2017 2018 *Exabyte is a unit of information or computer storage equal to quintillion bytes.

Figure 1. Customers’ insatiable demand for wireless access to mobile Internet, data and other information will drive an increase in mobile data traffic by 10x over the next ﬁve years. Source: Cisco Visual Networking Index Forecast, February 2014

to highlight that are driving consoli- a $21.6 billion valuation, which pro- With the constant rumors sur- dation and resulting in an infusion vided an $8 billion capital infusion rounding a potential Sprint and T- of capital into the carriers. into the third-largest wireless carrier. Mobile merger in addition to the • Verizon/Cincinnati Bell Wireless: Despite Dish Network’s attempt to flurry of wireless and spectrum trans- Verizon agreed to acquire the wireless acquire Sprint, Softbank prevailed by actions over the last year, it is not assets of Cincinnati Bell in a $210 sweetening its offer to shareholders. unrealistic to assume there will be million transaction. Verizon acquired This deal closed in July 2013. further consolidation among large a wireless network covering approx- • Sprint/Clearwire: After multiple regional and local wireless carriers. imately 5.8 million people. This deal offers and counteroffers, Sprint Consolidation has historically provided is currently pending FCC approval. received shareholder approval to carriers with additional access to much • AT&T/Leap Wireless: AT&T agreed acquire the remaining interest in needed spectrum and supported the to acquire Leap Wireless d/b/a Cricket Clearwire it didn’t already own in a need for additional capacity in urban TOWER MARKET REPORT Wireless for approximately $4 billion. deal valued at $3.8 billion. Despite markets especially. There is little reason The transaction moves AT&T into multiple efforts by Dish Network to to think these would not be the same the prepaid wireless space in a mean- secure the opportunity to acquire a catalysts underlying any future tie-ups ingful way by acquiring nearly 5 significant stake in Clearwire, Dish between carriers. million prepaid subscribers and was outbid by Sprint. This deal The overall good news is that today’s greatly increases their spectrum closed in July 2013. fundamentals for the wireless infra- positions in many major markets. Similar to last year, the Big Four structure industry differ widely when This deal closed in March 2014. have been busy securing additional compared with fundamentals from over • Verizon/Vodafone: Verizon agreed spectrum. Most recently, T-Mobile a decade ago (see Figures 1 and 2). to acquire the 45 percent stake of announced a $3.3 billion purchase Verizon Wireless held by Vodafone from Verizon of 700-MHz A Block LTE for 4G networks for $130 billion. The transaction spectrum in New York, San Francisco, All of the Big Four wireless operators resulted in complete ownership Los Angeles, Miami and 19 other have selected LTE technology for their of Verizon Wireless by Verizon Com- markets covering a total population 4G networks. Over the last couple munications. This deal closed in of 149.5 million. In January 2014, years, the carriers have been busy February 2014. AT&T announced the acquisition of deploying LTE equipment to upgrade • Softbank/Sprint: Softbank agreed 49 AWS licenses from Aloha Partners and expand current networks. Verizon to acquire 72 percent of Sprint for covering 49.3 million people. Wireless is leading the pack and has

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substantially completed its rollout. Wireless & Tower: 2000 vs. Today Verizon Wireless covers more than THEN TODAY 306 million people with its 4G LTE, December 2000 December 2013 next is AT&T with 290 million people. Wireless Sprint, with more than 470 markets, Subs (in millions) 109 336 now covers 250 million people and Penetration 38.9% 104.3% anticipates completing its network roll out by year-end. T-Mobile USA MOUs/Month/Sub 309 650 covers more than 230 million people. MBs/Month/Sub NA 802 However, as mentioned earlier, AT&T ARPU $52 $47 has put on hold any further deploy- EBITDA Margin 26.7% 24.9% ment, and Sprint and T-Mobile USA Towers are active adding only a small handful Cell Sites 104,288 304,360 of new sites in select markets. If this Tenants per Tower 1.5 2.0 trend continues, Verizon Wireless will further distance itself from the EV/EBITDA 28.6x 20.3x other members of the Big Four. Leverage 10.4x 5.9x With 4G LTE network deployments Source: Media Venture Partners, CITA, company ﬁlings and industry news. well underway or nearing completion, Figure 2. In comparing today’s wireless and tower industries with the way they were in 2000, it what’s next for the carriers? All Big Four is important to keep in mind that there are large, fundamental differences between the charac- wireless operators have indicated teristics of the industries today and the characteristics of the industries more than a decade ago. their intent to further upgrade their networks to LTE-Advanced in coming Urban environments have already structure, especially towers, has shown years. LTE-Advanced is focused on seen carriers deploy capital into small incredibly robust valuations. Nearly higher capacity with increased peak cell deployments, but typically for every tower company is expressing data rates, higher spectral efficiency, an the carriers’ own use. Being able to strong interest in acquiring good- increased number of simultaneously tout they are the only carrier with quality assets ranging from towers active subscribers and improved coverage or capacity in a specific area to DAS networks to portfolios of performance at cell edges. These harkens back to the days when the A underlying ground leases. Other than achievements will be realized through and B Block cellular providers would CiG Wireless announcing two deals carrier aggregation, enhanced use of not collocate on one another’s towers. that totaled more than 85 towers, multiple-antenna techniques and It remains to be seen, outside of DAS early 2013 provided tower buyers support for relay nodes. Further net- installations in airports, stadiums, with limited acquisition opportunities work improvements that deliver a arenas and universities, if the small of any size and scale. However, there more consistent customer experience cell niche evolves into a shared wireless were some significant transactions TOWER MARKET REPORT could result in tower owners receiving infrastructure coverage and capacity completed later in the year. American additional modification requests from solution similar to what the tower Tower’s deal to acquire Global Tower their existing tenants and possibly industry has become for carriers. Partners (GTP) was significant in that new collocation interest as the net- GTP was the largest privately held works continue to become denser. The Tower Deal Environment tower company by a significant margin. The phrase “network densification” Consistent with the last few annual Also significant was Crown Castle’s has been thrown around as what carriers market reports that Media Venture announcement to acquire AT&T’s will focus on in order to deliver to sub- Partners has completed for AGL approximately 9,600 towers, one of scribers an ideal customer experience Magazine, the merger and acquisition the largest, if not the largest, carrier- with small cells being the solution. market for shared wireless infra- owned tower portfolios. Outside of aglmediagroup.com 59

/TOWER MARKET REPORT/

Major Tower Transactions From June 2013 to June 2014 Price Price Closed Date Seller Buyer Towers TCF Multiple ($ in millions) per Tower December 2013 Global Tower Partners American Tower 5,400 $4,800 ~18.5x $505,208 December 2013 AT&T Crown Castle 9,700 $4,850 ~22.5x $888,889 April 2014 Richland Towers American Tower 60 $385.9 NA $6,431,667 Figure 3. The tower merger and acquisition market during the last six months was extremely busy, with the three largest deals in the past 12 months having been completed during this period.

last year’s larger transactions, there Every deal is different, and various were reported, but dozens of smaller continues to be limited supply on the types of towers will be valued uniquely acquisitions have also been closed. market for buyers seeking to acquire depending on a variety of factors. Figure 3 highlights three larger inventory in the United States. Early Although circumstances will vary for domestic tower transactions that 2014 has seen American Tower each transaction and not every tower were publicly announced and closed acquiring Richland Towers, but few or tower deal is the same, in general between June 2013 and June 2014. other larger announced deals were most deals for telecom towers are to be found in the United States. being completed at historically high Trading Multiples There is a strong desire by both public multiples of tower cash flow. Broad- Public tower companies are trading at and private tower companies to deploy cast, government and microwave near historic highs and are currently capital into tower assets, and this is towers tend to trade at multiples trading over 20x forward EBITDA driving demand for nearly all types below where telecom towers are (earnings before interest, taxes, of tower portfolios. With the current bought and sold, but nevertheless depreciation and amortization). supply-demand imbalance, the deal are achieving historic highs. Despite these impressive multiples, environment remains extremely Over the last 12 months, only a private tower transactions continue competitive with more buyers trying few headline domestic tower trans- to receive strong multiples at or above to acquire towers than there are sellers. actions with more than 100 sites where the public tower companies have TOWER MARKET REPORT Historic Enterprise Value to EBITDA Multiples (12 Months Forward)

26x AMT GSL 24x CCI Average SBAC 22x

20x

18x

16x

14x

12x

10x

Figure 4. The historical enterprise value to EBITDA (12 months forward) shows how the multiples for the public tower companies have ﬂuctuated during the past decade. Companies represented are American Tower (NYSE: AMT), Crown Castle International (NYSE: CCI), SBA Communications (NASDAQ: SBAC) and defunct Global Signal (NYSE: GSL).

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Trading Multiples for Public Tower Companies Continue to be Strong ($ in millions, except share price) Enterprise Value / %of Stock Price Equity Enterprise 2014E 2015E 2014E 2015E Company 52-Week June 30, 2014 Value Value Revenue Revenue EBITDA EBITDA High Public Tower Companies American Tower $89.98 97.2% $35,777 $49,808 12.3x ll.2x 19.lx 17.2x Crown Castle $74.26 95.3% $24,808 $36,197 10.3x 9.8x 17.4x 16.4x SBA Communications $102.30 99.7% $16,310 $22,857 15.4x 14.lx 23.8x 21.2x Tower Average 97.4% 12.7x 11.7x 20.1x 18.3x CiG Wireless $0.51 11.3% $20 $46 2.1x 1.1x NA NA Sources: Consensus estimates and company reports.

Figure 5. Tower stock prices have grown by more than 85 percent since the beginning of 2012. As of June 30, 2014, shares of publicly traded tower companies were, on average, trading at 98 percent of their 52-week highs and 20.1x 2014E EBITDA. been trading recently (see Figure 4). For market volatility in early 2014, public (see Figures 5 and 6). tower companies, despite their high tower stocks are trading at 98 percent American Tower, Crown Castle In- valuations, low-20s EBITDA multiples of their 52-week highs as of June 30, ternational and SBA Communications have continued to be attractive. 2014. On average, public tower stocks have “buy” or “outperform” ratings. have seen their valuation grow by 21 Tower Index Stock Price percent since last year’s report and Wireless Capex Since last year’s Tower Market Report, by more than 85 percent since Jan. 1, Capital expenditures (capex) by wire- public tower company valuations have 2012. As of June 30, 2014, public less carriers continue to drive growth continued to experience an increase in tower companies traded at an average for shared wireless infrastructure their per-share price. Despite increased of 20.1x 2014 estimated EBITDA companies. Both public and private

Trading Multiples for Public Tower Companies Continue to be Strong

Public Tower Companies Composite Value Compared to S&P 500

S&P 500 Index Towers TOWER MARKET REPORT

Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14

Source: Yahoo! Finance and Media Venture Partners, LLC

Figure 6. The value of shares in public tower companies has signiﬁcantly rebounded since the most recent recession, which hit bottom during the fourth quarter of 2008. As of June 30, 2014, the value of public tower stocks has completely rebounded and signiﬁcantly exceeded pricing from mid-2008 prior to the credit crunch. aglmediagroup.com 61

/TOWER MARKET REPORT/

Carriers' Network Upgrade quarter results that the company 2G/3G 4G Future Deployment plans to spend nearly $21 billion on capital expenditures during 2014. • 700 MHz B • 700 MHz D & E Blocks • Cellular & C Blocks As of March 31, 2014, AT&T had • 700 MHz A Block • PCS • AWS already spent nearly $3 billion or 53 - Chicago (Leap) • WCS percent of its total capex on wire- • BRS/EBS less-related capital expenditures. • PCS • 8OOMHz • PCS G-Block AT&T’s wireless capex dollars are • AWS being used for network capacity and • PCS • 700 MHz A Block • PCS expansion and for the company’s 4G LTE deployments. The carrier has • 700 MHz • Cellular Upper C Block used these capex dollars to continue • PCS • AWS the build out of its LTE network. Despite the strong start to the year, • 700 MHz A, B • PCS • PCS & C Blocks AT&T has recently slowed its capex spending as a result of the DirecTV • 700 MHz A, B • Cellular & C Blocks • 700 MHz A Block acquisition and also reportedly due • PCS • AWS to cost overruns of AT&T’s network upgrades being more than three • TBD times its budget. • 700 MHz E Block • Sprint continues to be focused on its • AWS-4 Network Vision project, which con- • PCS H-Block solidates network technologies while Figure 7. The Big Four and other large wireless carriers are rapidly deploying their 4G also reducing the overall number of LTE networks. sites the company uses. The company’s LTE network, which launched sites again as carriers’ initial deploy- in 2012, currently covers more than TOWER MARKET REPORT market are consistently watching ment of LTE nears completion in the 250 million people. Sprint’s coverage wireless carriers for any signal of core population centers. and LTE build out will be further decreased capex spending. Publicly • Verizon Wireless launched its first enhanced with Sprint’s access to traded wireless operators are projecting 4G LTE markets in December 2010, Clearwire’s LTE network through the capex in excess of $50 billion during and by December 2013 Verizon purchase of the remaining shares of 2014, which will largely support the Wireless’ 4G LTE build out covered Clearwire. During the first quarter, carriers’ continued 4G network build more than 298 million pops in more Sprint spent nearly $930 million in out and anticipated upgrades to LTE- than 500 markets or 99 percent of wireless capex, which was 85 percent Advanced. As a result, tower companies, its existing 3G network footprint. of the company’s overall capex for both public and private, continue to In its firstq uarter 2014 results, the the period. receive an increase in the number of wireless carrier announced it had • T-Mobile USA announced substan- amendments and modifications to spent more than $2.6 billion on wire- tial progress in its integration and their sites, especially in urban and less capital expenditures or 62 percent expansion of MetroPCS and signifi- suburban markets where carriers are of the company’s first quarter capex cant growth in the 30 expansion mar- focused on building their 4G networks total. Verizon’s wireless capex dollars kets launched throughout 2013. and securing additional capacity. largely went to increase the capacity During the first quarter of 2014, Tower companies are also beginning of its 4G LTE network. T-Mobile spent $947 million in to develop new coverage and capacity • AT&T also announced in its first capital expenses and estimated that

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total capex for 2014 would be between an interest in becoming a major next generation of networks and its $4.3 and $4.6 billion. T-Mobile now player in the wireless industry, but deployment timeline. Towers are the covers approximately 230 million has not yet acquired or developed direct beneficiaries of any build out. people with 4G LTE including 95 of such a platform. See Figure 7 for a summary of each the Top 100 metropolitan areas in the Overall, rapid growth of data use carrier and major spectrum owner’s United States. The company expects is forcing carriers to upgrade network spectrum holdings and its announced to cover 250 million pops with LTE capacity and start planning for the plans for each band. by the end of 2014. • U.S. Cellular, during its first quarter earnings announcement, stated it anticipates spending $640 million during 2014 on capex. The company spent $89.6 million during the first quarter. U.S. Cellular covers approximately 58 percent of its subscribers with 4G LTE and expects to expand LTE to 93 percent of its subscribers by the end of 2014. • C Spire, an independent regional wireless operator in the South, began its LTE upgrade in the summer of 2012 and currently covers more than 2 million people in 96 markets. C Spire intends to expand LTE coverage to several other markets in Florida, Mississippi and Tennessee throughout the remainder of 2014. Although several more spectrum owners have sold a significant amount or all of their wireless assets — Cin- cinnati Bell Wireless, Revol Wireless, MobiPCS, Golden State Cellular, Aloha Partners, CableOne and Stelera Wireless — there is constant speculation as to whether a new wireless TOWER MARKET REPORT entrant will emerge. Dish Network, the most likely new entrant, continues to be busy inserting itself into any discussion on this topic because of its large spectrum holdings. Dish successfully lobbied the FCC to allow the company to utilize its 40 megahertz of former satellite spectrum for terrestrial use (AWS-4). Dish, with its various spectrum holdings, continues to exhibit ______aglmediagroup.com 63

/TOWER MARKET REPORT/

Spectrum Auctions and any broadcasters that submitted markets. Since June 2013, public tower The upcoming FCC spectrum auctions their spectrum into the auction in companies have secured $2.8 billion will be closely watched by anyone in return for a percentage of the proceeds. in senior debt capital and $3.8 billion or around the wireless ecosystem. Significant to tower owners and in completed term loans. FCC Auction 97 (AWS-3) is scheduled anyone in the shared wireless infra- • American Tower secured $1.25 to take place in November 2014 and structure space is that, historically, any billion in senior unsecured debt potential bidders may include com- new spectrum acquired by wireless and $1.5 billion through a term panies such as AT&T, Verizon, Sprint, carriers has resulted in increased loan over the last 12 months in T-Mobile and DISH. A larger auction deployment of network infrastructure. domestic issuances. American Tower on the horizon, however, is the This, of course, translates into lease announced in August 2013 its intent auction for the 600-MHZ band of amendments and modifications, new to raise approximately $1.25 billion spectrum, otherwise known as the collocations and new site development in new senior unsecured corporate “Incentive Auction” or “TV Spectrum for tower owners. bonds. The company issued the debt Auction.” Analysts forecast that the through two tranches — $750 million 600 MHz auction could raise as much Credit Environment at 3.4 percent due in 2019 and $500 as $40 billion; however, the proceeds With the U.S. economy improving, million due in 2024 at 5.0 percent. will be split among the U.S. government, albeit at a slow and steady pace, public In addition, the company issued a the nationwide public safety net- tower companies are continuing to $1.5 billion term loan with a work being planned called FirstNet receive robust access to the credit floating rate of London Interbank

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® ® ® M M M M q q q q M M M M M M q q q q q q / rch 2021. Bothrch An improving economy and an and an economy An improving TOWER MARKET REPORT TOWER SBA last Communications over the company wouldbillion$1.5 borrow in at 4.875 percent two tranches, both maturing in Ma tranches were in the second offered quarter of 2014. Proceeds from the to be expected were first tranche existing debt and down pay to used revolver; down the company’s pay proceeds from tranche the second fund the pending Oi acquisi- to were along in Brazil, withtion general corporate July Effective purposes. closed on 1, 2014, the company $750 million of senior unsecured debt, to due in 2022, at 4.875 percent, due in 2019 notes redeem used to be corporate purposes. general and for to 2.50 percent due in 2019. due in 2019. percent 2.50 to Most in April company 2014, the recently, corporate issued senior unsecured with an bonds of $850 million and of 4.875 percent rate interest a maturity in 2022. In May date used the pro- 2014, the company debt was that redeem to ceeds due in 2019. a $1.5 billion12 months has secured term loan and senior secured unsecured senior $750 million in debt. In February 2014, SBA Com- a senior into munications entered the term loan whereby secured constant speculation about a potentialconstant public rates, in interest increase to continuing are companies tower the to take advantage of their access and issue new notes capital markets to older ones nearing maturity repay to attractive wire- — shared asset class meant — have less infrastructure continuing are companies public tower rates interest favorable receive to Despite and ratings. credit excellent • / through a term loan and $850 million 12 months. over the last in senior notes Castle In August 2013, Crown received $800 million additional an term established a previously to loan with a rate of LIBOR 2.25plus ______Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page Previous Page | Contents | Zoom in | Zoom out | Front Cover | Search Issue | Next Page agl magazine / $800 million Castle secured Crown utilized the proceeds to repay its its repay to proceeds utilized the and for facility credit revolving corporate purposes.general Offered Rate (LIBOR) plus 1.13 RateOffered 1.13 plus (LIBOR) American percent. 2.25 Tower to • 66

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/TOWER MARKET REPORT/

extend maturity dates.

The Future Consumers continue to view wireless as an everyday necessity instead of a luxury or option. The tower market has and will continue to be a direct beneficiary of the wireless industry’s strong staying power, and as a result, the tower market has proven to be fairly insulated from macroeconomic issues. The tower deal environment, although slightly sluggish the first few months of this year in terms of the volume of deals, could see some sizeable transactions come to market the last half of 2014. Similar to the past couple of years, tower owners considering selling some or all of their assets in 2014 have the benefit of TOWER MARKET REPORT

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tablets and other handheld devices are being designed for multiple networks. Demographics show younger adults choose wireless over wireline with approximately 39 percent of households now being wireless-only. Wireless is an everyday part of life for the future of our country and does not seem to be going away, nor is it threatened to be replaced by any new modes of communication. We are quickly headed toward a day when being in a sellers’ market because of of decline. many people will only access the the limited inventory on the market Trends continue to show a move Internet via mobile devices. M2M and the depth of the interested buyers. toward everything wireless. There and the many different segments The wireless industry, overall, continues continues to be a robust market for under the M2M label are projected to have the underlying characteristics companies developing products to grow strongly over the next five of being a long-term winner as wire- specifically for wireless users, including to 10 years by compound annual growth less voice, data and mobile Internet mobile apps and dynamic, mobile rates of 10 to 50 percent. The global and video use do not show any signs Web content. Popular smartphones, M2M industry size is forecast to

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aglmediagroup.com 71

/TOWER MARKET REPORT/

grow to around $200 billion in revenue Upcoming FCC auctions, as men- facilities and small cells become more by 2020, according to Strategy Analytics. tioned earlier, could see new entrants of a neutral-host business like towers. Although subscriber penetration emerge into the wireless world and The tower industry as a business niche is currently at over 104 percent, become potential new tower tenants. emerged in the mid-1990s as carriers minutes of use remain high and data It will be interesting to watch over realized they could save both time and as a percentage of revenue has been the next several months to a year to money on the front end by having growing. Spending on wireless data see whether the increased use of third parties invest their own time continues to surge as consumers small cells by the various wireless and money to develop sites while the connect smartphones, tablets and carriers continues to be primarily carriers focused on network design, even cars to networks. U.S. mobile end-user driven and utilized by marketing and subscriber growth. data revenue climbed 20 percent to single customers or, in a fashion If it makes financial sense for both $24.8 billion in the fourth quarter of similar to the way the tower industry carriers and third-party owners, shared 2013, according to industry consultant evolved, whether the carriers end infrastructure will continue to become Chetan Sharma. up relinquishing control of these the rule, rather than the exception, as carriers respond to consumer demands. The macrocell site build out will continue to flourish while being complemented more and more by ______alternative sites, such as femtocells, picocells and distributed antenna systems. Backhaul demand, whether via fiber-to-the-tower or microwave, will continue to increase significantly as wireless subscribers use mobile devices for more and more data- intensive applications, such as mobile video streaming and data services, TOWER MARKET REPORT rather than just voice. Overall, the shared wireless infrastructure business continues to be a robust and viable business niche, complementary to and providing mission-critical solutions for the wireless industry.

Clayton Funk is a managing director, Jason Nicolay is a vice president, and Ryan Carr is an associate with Media Venture Partners, a division of Financial Telesis. MVP is a telecom-focused investment bank. Funk can be reached

at [email protected]______or 816.249.1630. Nicolay can be reached at ______jnnicolay@mediaven- or 816.249.1631. turepartners.com______Carr can be reached at ______rcarr@media- ______or 415.391.4877. venturepartners.com______

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® ® ® M M M M q q q q M M M M M M q q q q q q / Photo by Don Bishop Tower Market Report Market Tower American Tower closed closed American Tower Smith: TOWER MARKET REPORT TOWER on our of Global Tower acquisition in the fourth quarterPartners of is sub-2013, and the integration in ahead We’re stantially complete. terms of capturing our sales, general year. We’re about halfway through. about halfway We’re year. nine-month process to usually a six- It’s fully inte- are sites acquired before take applications and able to grated that we’re at the same speed and pace Castle. The support in Crown used to has been AT&T getting from we’re very helpful. / We’re up to our ears in the up to We’re Ben, how’s your integration Adelstein: going? And Rod, Towers of AT&T maybe you could talk about your Partners. integration of Global Tower Moreland: in the We’re integration right now. we 9,700 sites middle of integrating the end of last at AT&T from acquired Adelstein, PCIA’s president and CEO, and CEO, president Adelstein, PCIA’s was the host. high- The are following for the session, edited lights from length and style.

/ SBA Communications. Jonathan SBA Communications. Jonathan Division; Cavanagh, Brendan and and CFO president of vice executive of Crown Castle International; Rodney Castle International; of Crown and CFO president Smith, senior vice Tower U.S. of American Tower’s the Wireless Infrastructure Show, Show, Infrastructure the Wireless Benjamin W. were and the executives CEO and president “Ben” Moreland, questions at a session named “The The was occasion the Top.” View From S The View From the Top The View From site development and company operations for the coming year. the coming for operations company development and site By Don Bishop assess the state of the industry of the assess the state antenna for and make predictions Executives of three large telecommunications tower companies companies tower telecommunications large Executives of three 74

and administrative expense syner- gies that we originally had in our Rod Smith: “In the past several years, American Tower investment case. invested over $7 billion in U.S. infrastructure. We have We also posted strong growth on those assets in the first quarter of assets on four other continents in 12 countries. But 2014. The core organic growth for 64 percent of our acquisition capital has been spent the GTP assets that we acquired was in the United States over the last several years.” 9.9 percent, outpacing the core organic growth of the legacy of American Tower sites, which was 9.2 percent. Moreland: Our investment focuses markets that occurred four or five Both numbers represent strong on the U.S. market. In the past two years ago. growth, well ahead of the 68 percent years, Crown Castle invested $9 billion Smith: In the past several years, core organic growth range that we in adding infrastructure in the United American Tower invested over target long-term. States. We acquired the carrier towers $7 billion in U.S. infrastructure. We Strong growth from the GTP assets from T-Mobile USA and then AT&T as have assets on four other continents results from the high-quality locations well as a sizeable business in the small in 12 countries. But 64 percent of of the assets. When we acquired them, cell arena with NextG Networks. our acquisition capital has been the assets had, on average, two tenants We’re going to have a record ap- spent in the United States over the versus the two and a half tenants on plication volume this year. It’s playing last several years. our legacy sites. That facilitates quick out the way we expected with amend- Verizon has completed its initial and easy collocation with minimal ments and a continuing build out roll out of LTE. The network is a mile capital expense, and it helps with the of the original 4G deployments, wide and an inch deep. They’re going collocation process. depending on which carrier and which to have to densify the network. They market. We’re seeing significant col- cover 300 million pops, which is good Adelstein: Where are we in the 4G location activity return to the market, for the United States. build out? primarily with the industry leaders AT&T is also rapidly moving first, because their networks are the through the initial LTE upgrade, and Cavanagh: 4G deployments have a most loaded with 4G. They are adding they’re approaching 300 million pops. long way to go. Although SBA has capacity and coverage where they We see Sprint and T-Mobile actively seen record growth over the last didn’t previously have it and where working on upgrading their networks couple of years from all of our big they now need it based on the use to LTE. They’re a little behind Verizon four carrier customers in the United of the 4G networks. That’s going to and AT&T, but toward the end of the States, based on the backlogs that continue right through Sprint and year, they may have 225 million to we have today, which continue to T-Mobile over time. 250 million covered pops. remain at record levels, the growth One of the premises for our industry It’s been a long time since we’ve TOWER MARKET REPORT trajectory for continued deployment that is compelling to the carriers and seen all four wireless carriers as active is significant for the next few years. to Wall Street is that using wireless as they are today. We believe that will A lot of the amendments that infrastructure is an efficient way to continue, so it’s a great time in the we’ve been signing have been for 4G build and deploy networks. Sharing U.S. wireless space. upgrades. A lot of coverage build also is infrastructure is an efficient use of being done because carriers still have capital. We’ve proven that through Adelstein: What do you see favoring many areas with coverage objectives up and down business cycles when the wireless infrastructure development, to meet. We expect see continuing industry continued to grow and meet and what big obstacles remain? growth for several years at levels Wall Street expectations, notwith- similar to the past couple of years. standing difficult times in the financial Cavanagh: Many states have adopted aglmediagroup.com 75

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slow the process. An outdated regulation that’s been in place for more than a decade requires someone to climb a tower every quarter and inspect lighting kits. We have sophisticated network management systems with cameras that monitor everything without the need to climb the tower. The FCC grants waivers in some cases, but it would be nice to see the regulation upgraded to match what actually happens with monitoring today.

Adelstein: Do you see some revenue opportunities with Dish Network Jonathan Adelstein, president and chief Brendan Cavanagh, executive vice and FirstNet? executive officer, PCIA. Photo by Don president and chief ﬁnancial officer, SBA Bishop Communications. Photo by Don Bishop Moreland: What’s been clear since the industry began is that there are collocation-by-right laws. We’re now when they can look in their pockets, always parties on the outside that starting to see that happen at the find their smartphones and realize own spectrum or that have a product federal level. The FCC seems to how much everyone relies on them. that they ultimately want to launch appreciate what infrastructure does Smith: Regulations for collocating on a wireless network. Today, we have and seems to be doing things to try on existing towers and for building the four big wireless carriers. But and speed the process for deployment. new towers are far from perfect. But there are always new entrants that Some things fly in the face of that, we see a shift for the first time in which seek access to the consumer on a such as rules adopted regarding public the U.S. government recognizes the wireless device. With the innovation notice for migratory birds. value of bringing broadband services happening at the device level, I think Moreland: Generally, there’s been to people across the country. there’s really no end in sight for that. recognition of the value that our shared One of the things that exacerbates There are two spectrum blocks out infrastructure brings to the consumer the issue is the dramatically increased there, one with FirstNet and the and to the economy. Section 6409(a) volume and demand for new colloca- other with Dish Network, that hold in the Middle Class Tax Relief Act has tions and new towers. The big wireless undetermined future opportunities. been a big benefit that speeds the carriers and tower companies have Eventually, their spectrum will collocation process. the resources to upgrade infrastructure be deployed in some shape or form Three-quarters of 911 calls remain to deal with that. Government agencies that will result in further sharing on wireless networks. Things like that don’t. They’re being flooded with of our infrastructure, making the resonate with the public, particularly additional applications, and that can network available to consumers or first responders, depending upon how it goes. Ben Moreland: “Our investment focuses on the U.S. Cavanagh: Ultimately, that spec- market. In the past two years, Crown Castle invested $9 trum will be deployed, which will be a good thing for our industry because billion in adding infrastructure in the United States.” we almost definitely would require

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additional infrastructure in order to deploy it. The question of how that happens and whose hands it’s in when it happens remains uncertain to some degree. As a result, the relative effect on our industry remains uncertain. The significant opportunity remains with the four big U.S. carriers. We’re seeing growth opportunities today that we didn’t even see years ago. We’ll continue to see significant growth from the existing pool of carriers, and it’s nice to know that there are other guys out there with additional swaths of spectrum that will ultimately be deployed, whether it’s in partnership with an existing W. Benjamin “Ben” Moreland, president Rod Smith, senior vice president and and chief executive officer, Crown Castle CFO, American Tower’s U.S. Tower Division. carrier or independently. That will International. Photo by Don Bishop Photo by Don Bishop help to sustain the growth rate for years to come. Smith: When carriers upgraded the underlying demand is there to tional value and utilization of our networks to 3G, they didn’t have use that spectrum either way. infrastructure. It typically comes with handsets to use all the 3G capabilities. We believe there will be a public additional equipment on the sites, That made for a pause in between service network at some point, but which gives rise to amendments and the 3G and 4G roll outs. Today, the not this year. Maybe it will begin additional rent charges, and it gives handsets are there for LTE. There is next year, and it will be the latter rise to in-fill locations depending upon no pause, now that they’ve increased half of this decade before it makes a the frequency and its propagation the network capacity for LTE. We difference to revenue. The public characteristics, and the carriers need see no pause for carriers needing to safety network will come out with to match coverage with capacity in densify the networks. the government partnering with particular markets. We look at the Penetration for LTE devices was existing carriers, or FirstNet could auctions as bringing more of the same. 26 percent at the end of 2013 and is build its own network. Either way, We applaud the administration’s expected to reach the mid-30 percent we’re here to support that initiative. efforts to make more creative ap- range or more by the end of this year. proaches to spectrum availability With more people with more Adelstein: How do you see spec- come to fruition. TOWER MARKET REPORT smartphones, that will test the LTE trum auctions affecting wireless Cavanagh: The shift in spectrum networks and put a strain on them. infrastructure? from entities such as broadcasters to It’s not necessarily the number of wireless is positive for us. The fact carriers that are out there, it’s the Moreland: Additional spectrum allows that spectrum was a limited resource demand on those networks and the carriers to add network capacity in the early days helped to drive the number of customers that those net- efficiently and provide the consumer tower business because there are only works have to support. with more video, which is taking up two ways to deploy wireless services: For Dish, we’re agnostic whether a significant amount of available through spectrum or more antennas they partner with the carrier or they bandwidth. Spectrum sold at auction and more equipment. Spectrum limi- try to build out on their own because and ultimately deployed drives addi- tation was obviously a boon for the aglmediagroup.com 77

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Photo by Vasili Antoniou

wireless infrastructure industry. place unused or underused spectrum arena, the DAS operator wants all the As additional bands of spectrum in the hands of the wireless carriers, carriers active in that market or in have become available to wireless they increase their capital spending to that venue on the DAS. It depends carriers, each new wave of spectrum deploy it, and that drives amendments upon where each individual carrier deployment has required additional to our tower sites. is in its deployment phase. TOWER MARKET REPORT equipment and infrastructure to deploy DAS is a complementary architec- it, to expand the networks and advance Adelstein: What trends do you see ture that doesn’t replace macrosites. new technologies. Additional spec- for small cells and distributed an- Nevertheless, in many cases it’s the only trum that will be auctioned will con- tenna system (DAS) networks? way to obtain additional capacity in tinue to drive wireless infrastructure an indoor venue or in a high-density industry growth. Moreland: We’re in the small cell and urban or residential area with a macro Smith: American Tower is uniquely DAS business in a large way. Crown tower site that is 10 to 20 years old positioned as the largest independent Castle has 12,000 nodes fed by 6,000 and woefully insufficient to meet the broadcast tower owner in the United miles of urban fiber. The significant capacity needs of the consumers in States. And we bought 60 more big growth reminds us of the early days those areas. broadcast center towers in the first in the tower business when we used Today, DAS is about 6 percent of quarter. Taking spectrum from the to build them by the thousands instead our company and growing rapidly. broadcast industry and moving it of the hundreds. Cavanagh: Small cells are for real into the wireless industry is a net We see DAS as a neutral-host and are complementary to macro- positive. The spectrum was either not model with shareable fiber. Whether sites. They have a targeted or precise being used or was underused, so we the electronics are on the same pole coverage objective. We will continue to don’t see any incremental churn on or the next pole over in an outdoor see small cells deployed underneath the broadcast side. Whenever you setting or whether the DAS is in an the existing and growing macro layer

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of the network. SBA has an investment in ExteNet Systems, which has started to see significant growth in DAS network deployment. We’re starting to see some wireless carriers look to deploy small cells on existing macro towers at much lower levels. It’s an opportunity to use rental positions on assets that we already own that once were thought to be unusable because they’re at much lower heights. To be able to monetize a resource that we once didn’t believe we could is positive for the industry. Smith: Small cells and DAS are complementary to the macro towers, which is our core business, although Photo by Vasili Antoniou American Tower participates in DAS networks. I separate DAS networks from small cells. They are different The primary revenue for the tower the past couple of years. To the extent product lines. companies is on the towers, which is we see opportunities that make American Tower is the leader in where 98 percent of our revenue sense in overseas markets, we would in-building DAS, such as Las Vegas comes from. That’s where all of our invest. But it’s primarily a valuation casinos, big racetracks and the sporting future growth will come from. We’ll consideration for us. venues. The main four carriers, espe- participate in DAS networks, but DAS Cavangh: The United States is the cially AT&T and Verizon, aggressively won’t become a material part of our best tower market, and SBA has a go after in-building DAS locations. business anytime soon. substantial majority of its assets in We’re supporting them and further the United States. There has been a cementing our leadership position in Adelstein: How do you evaluate lot of consolidation in the United indoor DAS. making investments outside of the States and, as a result, it has become Our outdoor DAS networks average United States? difficult to move the needle with 1.5 tenants, and many have been in U.S. portfolio growth, in large part place for multiple years. Our in-building Moreland: We look at the opportunity because we’re much bigger. To make networks average 2.5 tenants, and cost of capital. The incremental dollar a material effect takes that much TOWER MARKET REPORT they lease up quicker in desirable we generate in cash flow we put to more and the opportunities are less venues. Other carriers want in more work on a risk-adjusted-return basis. as a result of having rolled up many quickly with indoor networks than The shared wireless infrastructure of the larger tower companies that with outdoor networks. model works well all over the world. existed underneath these three com- Small cells will play a part in future Crown Castle has an international panies here in the United States. wireless carrier networks, especially in business in Australia. We continue to focus on growth core urban areas with dense popula- Nevertheless, we see the U.S. market in the United States. The organic tions. Those areas don’t compete with as the No. 1 growth market on a risk- growth here is tremendous. But as a macrosites, so we don’t see small cells adjusted return basis. That’s where we way to expand the playing field and as a competitive threat to macrosites. made significant investments during increase our realm of opportunities, aglmediagroup.com 79

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Photo by Vasili Antoniou

we expanded into other countries. for us. Other places complement our in India and some other regions are For SBA, the focus has been on locations investments in the United States and building voice networks for the first not far from home. We’re based in provide long-term shareholder value. time. In many places, they will build South Florida, and we have a large We run a 10-year unlevered financial voice wireless networks before landline TOWER MARKET REPORT Latin American population upon model. We look for targeted, risk- networks are built. Uganda, Ghana and which to draw that helps us with the adjusted returns. The returns we expect some parts of India are like that. countries in which we decided to invest. differ by country. In more developed Having the right targeted invest- Primarily, we invested in Central markets such as the United States ments internationally will allow us America and most recently, in Brazil. and Germany, we’re comfortable to elongate our growth curve. As the We have many local people who can with a high single-digit or 10 percent United States begins to slow, we’ll have help us manage through that. return. In India and throughout Latin 12 additional markets at different We’re investing where wireless America, a mid-teens return works stages that will help us continue to networks are at least five and maybe for us. In Ghana and Uganda, we want grow our business. In the first quarter 10 years behind where they are in the higher risk-adjusted returns in the of 2014, our domestic business grew United States to see the cycle of high teens, maybe even 20 percent. with 9 percent core organic growth. growth of new technologies, 3G and International markets go through The international markets, collectively, 4G, roll out. different phases of network develop- grew about 14 percent. Smith: American Tower is the most ment. The advanced markets are at aggressive tower investor interna- one stage. The evolving markets are at The next Wireless Infrastructure Show tionally of the three public tower another, where they’re going from is April 27–30, 2015, in Hollywood, companies. Notwithstanding that, the finishing 3G deployments and starting Florida. For more information, visit United States is the primary market 4G deployments. The emerging markets www.wirelessinfrastructureshow.com.

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The Market Outlook for Small Cells

As regulators tussle over the definition of a small cell, deployment of small cell technology speeds up. Predictably, local governments want to regulate them, and developers want freedom from regulation. By Don Bishop

ount the cubic feet. That’s the wireless industry lined up on one such as definitions for terms used how you can tell whether side of the small cell regulation issue in the antenna collocation by right Ca wireless installation is a and state historic preservation officers legislation known as Section 6409(a) small cell. PCIA, a membership orga- (SHPOs) and local jurisdictions lined in the Middle Class Tax Relief and nization representing wireless tele- up on the other side. SHPOs administer Job Creation Act of 2012 and rules communications infrastructure the national historic preservation for temporary towers. “The FCC companies and wireless network program at the state level, review probably will provide guidance on operators, told the FCC what the nominations to the National Register Section 6409(a) and final rules for difference is. A small cell has equip- of Historic Places and consult with temporary towers in an initial order ment enclosed in a volume no larger federal agencies during Section 106 coming out of the NPRM and will than 17 cubic feet and uses an reviews, which pertain to the National deal with small cells in a later order,” antenna with a volume no larger Historic Preservation Act. Sill said. “The FCC probably will than 3 cubic feet. subject small cells to some form of Opposition Examples light regulation.” TOWER MARKET REPORT Regulations? Relax Sill gave as an example of opposition The FCC wants to know because it is to relaxed regulation a comment filed Network Operators looking into whether to relax regu- in the NPRM proceeding by the Seth Jones, senior manager of net- lations for small cells and preempt Massachusetts Archeological Society. work engineering at Sprint, said his small cell state and local regulation, The society said that the review company views PCIA’s volumetric too. How to do that without poten- procedures related to the National definition of small cells as appropriate. tially undermining the regulation of Environmental Policy Act and to the “We deploy femtocells in residences microcells might be tricky. As early NHPA for installation of distributed that support one to five users,” he said. as September but perhaps toward the antenna system (DAS) networks “We deploy picocells that support end of the year, the FCC may reveal and small cell wireless infrastructure 65 to 100 users. Beyond that, there how it’s going to do that when it hands should not be streamlined, lessened are microcells that tend to be base down one or more notices stemming or excluded. As another example, he transceiver station (BTS) systems from its inquiry in a proceeding it said that the city of Eugene, Oregon, where all of the white space, redundant started in September 2013 in a notice told the FCC that it would be ill systems and battery backup are of proposed rulemaking (NPRM). advised to adopt proposed expan- ripped out, leaving a miniaturized William J. Sill, a partner in the sions of regulatory exclusions for BTS that you can deploy more lightly Wilkinson Barker Knauer law firm, DAS and small cells. and effectively. So the volumetric said that in responding to the NPRM, The NPRM deals with other matters, drive makes a lot of sense.”

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Meanwhile, Laszlo Herczku, an RF planning engineer for the Verizon Wireless Northeast region, said Speakers from the AGL Conference Verizon Wireless uses PCIA’s dimen- sions as a standard in formulating in National Harbor, Maryland solutions for the small cell realm on a day-to-day basis. •William J. Sill, partner, Wilkinson Barker Knauer •Seth Jones, senior manager of network engineering, Sprint Small Cells as Tools •Laszlo Herczku, RF planning engineer, Verizon Wireless Northeast region Jones said small cells are tools for •David Bronston, special counsel, Phillips Lytle system designers. “For an arena, I •Sonny Pieper, area manager of national small cell business development, may choose to do a heavy-lift, multi- AT&T Antenna Systems Group BTS deployment with a DAS,” he said. “But that would be overkill for some other deployments. Small cells fill a gap that existed for quite some time in the industry where your choice he said. “The idea no longer is to mount cell deployments. The city issued a was either a half-million-dollar-plus an antenna or two or five antennas request for proposals to use thou- site and a monopole with a caisson sin a major arena, but instead to sands of pay phone kiosks for what to get to the in-building world, or you mount hundreds of antennas. The the city calls public communications had to go into a building with a BTS small cells have built-in RF transceivers, structures. Bronston said advertising with a fairly significant DAS. as would a DAS node. We want fewer would generate the revenue and that “As DAS matured and became and fewer users on each end node. Mayor Bill de Blasio wants free Wi-Fi more digital instead of just using It’s common to have 50 or 100 or more on all of the installations. “There will coax for delivery, and as macrocells antennas even in very small arenas also be, I believe, a port available for reached a point where you realisti- in order to keep the power levels more of a microcell,” he said. cally couldn’t build more macrocell down and to distribute the traffic New York owns 200,000 light coverage to support in-building wire- more efficiently.” poles, not including Verizon and less service, a tools gap occurred. Herczku said Verizon Wireless ConEd utility poles, Bronston said. That’s where small cells are filling in, analyzes its deployments whether The city franchises light poles to with more small- to medium-sized macrocell or small cell for compliance DAS providers such as ExteNet, businesses. With massive stadiums, with FCC guidelines for RF exposure. Crown Castle, Mobilitie, Lightower you’re more likely to use neutral-host, “When we test or integrate an in- and Xchange Telecom. “Time Warner multicarrier DAS systems because all building wireless system, we take put hotspots around the parks,” he of the network operators want to be measurements and ensure compliance said. “Google put a Wi-Fi system in TOWER MARKET REPORT there. Small cells are just a different so we won’t have potential problems Chelsea. Transit Wireless installed a size tool.” with RF exposure,” he said. “We even four-carrier, neutral-host DAS with have third-party reports written up Wi-Fi in about 50 underground New RF Levels if it becomes an issue.” York Subway stations. They have to Jones said that although small cells complete 277 underground stations bring access points closer to consumers Access Points by 2017.” than towers do, the RF they emit is David Bronston, a special counsel widely distributed and at a much in the New York office of the Phillips Air Interface Technologies lower level. “The approach is to have Lytle law firm, said New York is making Not all sources offer the latest available a massively distributed RF footprint,” street furniture available for small air interface technology, LTE, in their aglmediagroup.com 83

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be carried by one person. But the integration process, the engineering Sonny Pieper: "In the hotel industry, for example, guests are process, the access to power, the access demanding it. People don’t return for events or don’t bring to backhaul and the zoning regulatory conferences back if they don’t have a good experience. That environment don’t change just because the box itself is smaller.” goes right to the bottom line. So, wireless communications The network engineering manager has become like a utility." said that the industry may see small cells as elegant technical solutions. “But you still have to get them on the small cell products. bandwidth and Internet access, and ground. You still have to get them on Sonny Pieper, area manager of it needs to be a fairly robust pipe to the pole. You still have to get them national small cell business develop- support 3G, 4G, LTE and Wi-Fi,” Pieper in the buildings,” he said. “So really ment at AT&T Antenna Systems said. “This is different than a repeater cracking that site acquisition and that Group, said AT&T’s current product technology. It doesn’t require any deployment code is something I think is 3G-only. “We’re working with our ambient RF signal outside the venue. we’re all very competitively working original equipment manufacturer In theory, you can put this at the to figure out.” partners — Cisco, Alcatel-Lucent and North Pole as long as you can get a Bronston said that although the Ericsson — to come up with an LTE broadband connection there. It may contracts associated with small cell version,” he said “We call it a multi- not involve working with the local deployment tend to be smaller than standard metrocell that will support exchange carrier, whether that would those for macro towers, they still additional users and that would allow be our Verizon friends in the North- cover the system owner’s right to an LTE and a Wi-Fi component. east or Southern Bell in the South. It be there and whether the landlord That will be the Swiss Army knife could be a cable company. It could be can move system elements around. of metrocells, if you will. But it’s not a Comcast cable modem. It could be Moving cabling and antennas is one a reality today, so AT&T now has only some third-party provider. We want thing, he said, but the landlord taking a 3G offering, which creates challenges to have options.” the system’s equipment space would TOWER MARKET REPORT for us. You may have OK LTE coverage Herczku said Verizon’s small cells be much more expensive for the system in a building and you’re going to install are designed strictly for LTE 4G. owner. Access is a big issue for the small cells inside to improve the signal Jones said Sprint offers air inter- service providers, and so are the from one or two bars to four or five face technologies from 3G and 4G security protocols for the landlord. bars, but how you combat the LTE to LTE, and it has some existing “The landlord will want the right RF is another issue.” CDMA deployment. to review any alterations,” Bronston The multistandard metrocell with said. “They want to have a say on LTE will require LTE-type bandwidth Deployment where the equipment goes, although to support it. The dedicated Internet Jones said the early promise of small they may defer more to the system access that supports a small cell is more cells was that they would be what he owner about RF for antenna siting. robust than what AT&T can use with called lick it and stick it technologies. What are the rights and obligations 3G. Pieper said AT&T has made some “You show up to a building, plug it in on termination? Can they take over enterprise deployments where it and leave, and everything was done,” some of the equipment if they want shares the customer’s Internet access he said. “But what we have found is to and give it to a third party? Do they and its local-area network, plugging that the process for deploying them is want you to take it out? These matters into the customer’s Internet access not radically dissimilar from deploying are subject to negotiation.” and sharing the bandwidth. any other type of cellular infrastruc- Bronston said indemnification is “But we want to establish our own ture. They are smaller. Small cells can a big issue for arenas, universities,

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hospitals and campuses. Sometimes they want a timeline on the build out, although that can be difficult for a carrier to give. “Insurance clauses are important,” he said. “The landlord will say, ‘You’re taking this property as-is,’ so the carriers have to perform their due diligence. Most landlords will not perform any prework for the project.” Pieper said AT&T’s small cell agreement is thinner than agreements used for land leases, rooftop leases or DAS because the business risk is lower. “People are demanding a robust wireless experience where they live, work and play, and it’s not optional,” Pieper said. “In the hotel industry, for example, guests are demanding it. People don’t return for events or don’t bring conferences back if they don’t have a good experience. That goes right to the bottom line. So, wireless communications has become like a utility.” Pieper said that at AT&T, “we view this as a zero-ramp proposition. And that is a very eye-opening statement to some people. There’s an education shift. A lot of folks have inserted themselves in between the carriers and the customers. That has to change if we’re going to deploy fast and cover as many venues and buildings as we can.”

William J. Sill, Seth Jones, Laszlo TOWER MARKET REPORT Herczku, David Bronston and Sonny Pieper spoke at the AGL Conference in National Harbor, Maryland, on June 18. This article is based on information from their conference appearances. The next AGL conference is in Dallas on Oct. 9. For information about AGL conferences, visit www.aglmediagroup. com/aglevents. aglmediagroup.com 85

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Public Tower Companies Maintain Financial Strength

Seemingly similar at first glance yet different in some fundamental ways, three public U.S. tower companies benefit from low interest rates as they pursue investments for expansion within the industry. By Don Bishop

or tower companies, their tive rates and turn around and invest has an average tenure of 5 years at an own access to capital and the it in high-quality assets both in the average of 4 percent, which is a low Fspending by carriers on wire- United States and internationally,” cost of debt,” he said. “We’re about less networks pave the road to building Cavanagh said. “Our intention is to 80 percent fixed rate and 20 percent successful businesses that grow. continue to do that so long as we floating rate. I think all the tower Tower companies have ready access continue to see high-quality assets companies are experiencing low to capital at attractive rates, according available throughout the world.” interest rates.” to Brendan Cavanagh, chief financial Rodney Smith, chief financial officer of SBA Communications. He officer for American Tower’s U.S. busi- Rapid Growth said tower companies have been for- ness, said the ready access to capital Smith commented that although the TOWER MARKET REPORT tunate to have good access to low-cost hasn’t changed the company’s capital United States has seen slow gross capital for many years, and capital structure or balance sheet. “We’re an domestic product growth during the availability perpetuates portfolio investment-grade credit risk, and that’s past five years, the wireless and tower investments to further the growth important to us,” he said. “We have a industries have been growing rapidly. of the tower business. SBA is the most target leverage rate between 3x and He explained that the leasing demand highly leveraged of the three public 5x EBITDA. We stretched ourselves up for tower space is tied to network tower companies. SBA has focused to 5.8x for the Global Tower Partners development, which reflects a secular on a target leverage range of 7 to 7.5 acquisition that closed in the fourth demand that extends for multiple turns of net debt to EBITDA, which quarter of 2013. We’re in the process years. “Our business is specifically it has been able to maintain because of deleveraging to below 5x.” Having non-cyclical, so we’ve seen strong of the predictability and stability of the an investment-grade credit rating leasing demand even in spite of slow wireless infrastructure business and gives American Tower the flexibility GDP growth,” he said. the natural de-leveraging that occurs to act quickly with transactions, the With respect to American Tower’s in the industry. CFO said. foreign investments, Smith said the American Tower seeks to reduce company has properties on five Attractive Rates expense rates and interest rates and continents and 13 countries. “We run “We’ve been able to continue to incur to extend the maturities of its debt investment opportunities through a additional debt, raise it at very attrac- instruments, Smith said. “Our debt 10-year unlevered discounted cash

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Brendan Cavanagh, CFO, SBA Commu- Rodney Smith, CFO, American Tower’s U.S. Jay Brown, CFO, Crown Castle International: nications: “Even though carrier activity business, said FirstNet’s wireless network “All three of the public tower companies has been high during the past few years, construction project may provide business ... are really conservatively levered relative backlog levels remain unparalleled opportunities for tower companies in the to where the real estate investment compared with the past.” last half of this decade. trusts are.”

flow model, and we will look for places historically had good access to capital much leverage we have, are really where we can get the right targeted priced at low rates, but the way all conservatively levered relative to risk-adjusted rate of return,” Smith three have managed their balance where the REITS are.” said. “That’s different for all the sheets would suggest that they are markets in which we operate.” viewed more as a real estate business. Carrier Spending He said that American Tower is “There may even be benefits both in Smith said all four of the major carriers comfortable with a risk-adjusted terms of rate and ratings because the are spending capital and upgrading return in the high single digits in the ratings agencies evaluate tower busi- their networks. “Verizon Wireless is United States and Germany, the mid- nesses more akin to what typical real the furthest along with upgrading its TOWER MARKET REPORT teens in Latin America, and the high estate businesses are,” he said. existing network to full LTE,” he said teens or 20 percent in Ghana, Uganda “If you compare the three companies “It’s nearly finished, and Verizon now and some regions in India. “As long to a typical real estate investment covers about 300 million pops in the as we can find assets to invest in trust (REIT) — a typical REIT with United States with its LTE network.” where we can get our risk-adjusted a single-A credit rating would have Following close behind is AT&T, rate of return, then we’re willing to in the ballpark of 35 to 40 percent of which Smith said was likely to finish its make those investments,” Smith said. its enterprise value in the form of LTE deployment during the summer, Crown Castle International’s CFO, debt,” Brown said. “All three of the giving the carrier an LTE network Jay Brown, said that not only have public tower companies, although covering nearly 300 million pops. the three public tower companies there are some differences in how “We see a drop-off for Sprint and aglmediagroup.com 87

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T-Mobile USA,” he said. “They’re further will continue for some time to come, for leasing space on existing towers behind but still active. We think that not only for upgrades to existing sites and for building new towers. toward the latter part of this year, they’ll but also for in-fill. Sites that you From American Tower’s view. have their LTE networks substantially might think would not be touched point, Smith said he doesn’t believe complete, with Sprint at perhaps 250 by AT&T or Verizon because they FirstNet will generate any leasing million pops and T-Mobile at perhaps have nearby sites are seeing leasing or construction for the rest of this 225 million pops. activity because of capacity offloading. year and that any activity in 2015 They’re finding it necessary to lease will be limited. He said maybe First- LTE Networks space on sites where they weren’t Net’s construction project would “For the first time in a long time, all thought to need it previously.” provide business opportunities for four of the major carriers are active tower companies in the last half of and, at the moment, they’re active in Constant Investment this decade. getting their LTE networks up and Brown said that five years ago, carriers “We’re not quite sure if the govern- running,” Smith said. “What that’s spoke of 12- to 18-month deployment’s going to build a freestanding meant for us during the past several ment cycles that came to conclusions. network on its own or if it’s going to years is a lot of amendments. Now He said carriers have transitioned partner with wireless carriers, but that Verizon has finished its initial toward making a long-term, constant either way, we think that there will LTE upgrade, we’re seeing them tran- investment in their networks. “It’s be incremental revenue drivers that sition into more collocations. We consistent with the way they think will affect our tower base,” Smith said. expect the other carriers will follow.” about capital allocation, where on- From SBA Communications’ per- Cavanagh said that for the tower going capex spent on their networks spective, Cavanagh said, “It’s ulti- companies, a positive aspect of the is a part of their capital allocation, and mately positive to have the FirstNet carrier’s network deployment is that they don’t expect to be done spending network out there as a potential although they built out 4G networks, in a short period,” Brown said. “The additional source of organic growth they are a mile wide and an inch runway for growth in our industry is in the future.” deep, meaning that a lot of fill-in long and significant as the carriers cell site construction is needed to continue to improve and invest in This article is based on comments TOWER MARKET REPORT improve capacity to go with the their networks over a long period.” made by Brendan Cavanagh, Rodney coveage. “We’re continuing to see Smith and Jay Brown at the Wireless sites that were upgraded once for LTE FirstNet Investors Conference led by Clayton being touched again for LTE because Many tower owners express interest Funk, managing director, Media some of sites were upgraded years in plans the First Responder Network Venture Partners. The conference was ago and it’s become clear that the Authority (FirstNet) has for building part of the Wireless Infrastructure amount of equipment installed for a nationwide public safety wireless Show conducted in May. Photography the initial upgrade is insufficient communications network because by Don Bishop. for today’s traffic.” Because carriers the construction project has potential have to revisit some of the sites, Cavanagh said it is difficult to say exactly how far along the carriers are with 4G deployment. Rodney Smith: “We’re not quite sure if the govern- “Even though carrier activity has ment’s going to build a freestanding network on its been high during the past few years, own or if it’s going to partner with wireless carriers, backlog levels remain unparalleled compared with the past,” SBA’s CFO but either way, we think that there will be incremental said. “The carrier activity trajectory revenue drivers that will affect our tower base.”

88/agl magazine

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