5G adoption in mobile devices has been propelled by the success of Apple's ( AAPL) lineup of 5G iPhones. While 4G networks gave us the 'streaming' and 'e-commerce' age, pioneered by Amazon and apps like Uber ( UBER) and Spotify ( SPOT), 5G networks are expected to spur a new wave of technological innovation fueled by 'fiber-like' speeds and ultra-low latency over wireless nodes. This commanding competitive positioning has given these REITs substantial pricing power amid the roll-out of 3G, 4G, and 5G wireless networks, which has translated into enviable long-term shareholder returns. Given the industry skepticism over DISH’s viability, any level of success is incremental for tower REITs and not “baked in” to the numbers or guidance.

DISH – which acquired Boost Mobile as part of the T-Mobile/Sprint merger - plans to compete as a low-cost provider by leveraging its existing satellite subscriber base and its network sharing agreement with T-Mobile and AT&T to provide immediate nationwide services as it deploys its 5G network. This week, DISH Network announced that it indeed partnered with Amazon to sell postpaid wireless plans for $25 a month for unlimited talk, text, and data services. Last month, Bloomberg reported that Amazon has been talking with wireless carriers about offering low-cost mobile phone service to Prime subscribers. The past several months also saw the emergence of tech-heavyweight Amazon ( AMZN) onto the cell carrier scene. Cellular ( USM ), and private equity firms Peppertree Capital, Diamond Communications, Palistar Capital, and Tillman Infrastructure. Six additional companies own portfolios of at least 2,000 towers, including DigitalBridge ( DBRG ), U.S. These REITs are the landlords to the four nationwide cellular network operators in the U.S.: AT&T ( T ), Verizon ( VZ ), T-Mobile ( TMUS ), and DISH Network ( DISH ), and own 50-80% of the roughly 140k macro cell towers in the United States and a significant share of multi-tenant 'small cell' infrastructure.

and more than 50% in several major international markets. Cell tower REITs comprise roughly 12% of the market capitalization of the REIT sector - the single-largest real estate property sector weight.Ĭell Tower REITs' relative dominance over the real estate sector is dwarfed by its even more impressive dominance over the telecommunications sector, as these REITs control nearly 75% of wireless communication infrastructure in the U.S. We also track Uniti Group ( UNIT ), which owns a fiber-optic cable network that connects digital communications infrastructure. Within the Hoya Capital Cell Tower REIT Index, we track the three Cell Tower REITs which account for roughly $160 billion in market value: American Tower ( AMT ), Crown Castle ( CCI ), SBA Communications ( SBAC ).

See all our investments here »Īfter producing sector-leading returns from 2015 through 2021, Cell Tower REITs have been the weakest-performing property sector since the start of 2022 – lagging even the battered office sector - and bringing valuations to levels below the REIT industry average for the first time ever amid a telecommunications industry-wide slump inflamed by tight monetary conditions. Hoya Capital Income Builder members get exclusive access to our real-world portfolio.This disintermediation has trended on a path from wired to wireless infrastructure - a path that includes the increased adoption of Fixed Wireless Access (home broadband via cell networks) - disruptions which serve to further solidify the longer-term favorable competitive positioning of these cell tower REITs.

Industry headwinds are rooted primarily in the ongoing disintermediation of legacy wireline business segments towards fully wireless deployments and the mounting competition on the two industry juggernauts from within the wireless industry itself via T-Mobile, Amazon, and DISH.The latest selloff was intensified by an expose alleging that century-old abandoned phone lines owned by AT&T and Verizon are leaching toxic lead into drinking water, potentially requiring costly remediation.Cellular carriers have curbed their capital-intensive network expansion plans in recent quarters following a significant wave of investment and tower equipment upgrades from 2019-2022 to deploy nationwide 5G networks.Cell Tower REITs have been the weakest-performing property sector since the start of 2022 - lagging even the battered office sector - amid a telecommunications industry-wide slump inflamed by tight monetary conditions.

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