American Tower Corporation<\/a> (AMT, Baa3 stable), Crown Castle International Corp. (CCI, Baa3 stable) and SBA Communications Corporation (B1 stable). The proposed carrier consolidation would likely reduce T-Mobile\/Sprint\u2019s tower lease renewal rates and increase domestic tenant concentration in the REITs\u2019 portfolios because the tower operators would have only three major domestic tenants, down from four currently.<\/p>\nIn Moody\u2019s view, if the merger is completed, it would temper the organic growth rates of tower REITs and increase lease non-renewals, which would translate to the affected tower sites generating lower revenue, as compared to a scenario in which T-Mobile and Sprint remained independent companies. To streamline costs and achieve synergies, the combined T-Mobile\/Sprint plans to decommission 35,000 towers in the 2-3 years following the merger\u2019s close and to add 10,000 new sites for a total of 85,000 towers, down from the 110,000 towers that the two carriers used at the end of 2017.<\/p>\n
The merger between T-Mobile, the third-largest US wireless carrier, and Sprint, the fourth-largest, would also increase the tower operators\u2019 already-high domestic tenant concentration. The increased tenant concentration would likely also increase the tower REITs\u2019 exposure to the credit quality of their remaining primary tenants and the tenants\u2019 ability to invest in their wireless networks. Following the merger, the tower operators would generate most of their domestic revenue from only three major tenants, as compared to four currently, likely improving the remaining tenants\u2019 negotiating power.<\/p>\n
Mitigating factors<\/h2>\n
Moody\u2019s believes that the non-cancelable nature of the carriers\u2019 leases with the tower operators, however, would mitigate the negative credit effects over the next several years. The average remaining lease term for all three tower REITs on both Sprint and T-Mobile is between 3 and 7 years. In Moody\u2019s view, the risk of significantly higher churn from carrier consolidation in the U.S. is relatively low, given the carriers\u2019 track records of deploying more equipment following M&A activity in the sector.<\/p>\n
According to Moody\u2019s, despite the merger\u2019s negative credit effects for wireless tower REITs, continuously rising demand for data consumption is a strong positive for the tower REITs because increased data usage requires carriers to invest in their networks to boost wireless capacity. Given the commitment of the combined T-Mobile\/Sprint to spend $40 billion over the next three years to build out their 5G technology, the needs of all three major US wireless carriers to invest in 5G deployment and increase network capacity would mitigate the loss of revenue from equipment decommissioning.<\/p>\n
In addition, wireless tower REITs<\/a> would likely benefit from the combined T-Mobile\/Sprint’s massive spectrum holdings and its goal of adding equipment to make all spectrum available at all sites before significant equipment decommissioning. If the new company builds its joint network and makes the combined spectrum holdings available on all sites, it would need to move customers to a new network before decommissioning a significant quantity of the existing sites, which would translate into substantial amendment fees for the wireless tower operators.<\/p>\n","protected":false},"excerpt":{"rendered":"Following the merger, the tower operators would generate most of their domestic revenue from only three major tenants, which Moody’s believes could increase the new entity’s negotiating power.<\/p>\n","protected":false},"author":1041,"featured_media":1004246123,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21783,21742,21744,21787,21684],"tags":[33033],"class_list":["post-1004246114","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment","category-latest","category-people","category-technology","category-viewpoint","tag-moodys-investors-service"],"acf":[],"yoast_head":"\n
What Does the T-Mobile\/Sprint Merger Mean for Wireless Tower REITs?\u00a0 - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Does the T-Mobile\/Sprint Merger Mean for Wireless Tower REITs?\u00a0\" \/>\n<meta property=\"og:description\" content=\"Following the merger, the tower operators would generate most of their domestic revenue from only three major tenants, which Moody's believes could increase the new entity's negotiating power.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2018-07-31T14:46:43+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T09:53:05+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/07\/IMG_1493.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"496\" \/>\n\t<meta property=\"og:image:height\" content=\"526\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Dilara Sukhov\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/\",\"name\":\"What Does the T-Mobile\/Sprint Merger Mean for Wireless Tower REITs?\u00a0 - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/07\/IMG_1493.jpg\",\"datePublished\":\"2018-07-31T14:46:43+00:00\",\"dateModified\":\"2022-12-09T09:53:05+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/e0b03c346025da15dbd9d597ff912eaa\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/07\/IMG_1493.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/07\/IMG_1493.jpg\",\"width\":496,\"height\":526,\"caption\":\"Dilara Sukhov\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.commercialsearch.com\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"What Does the T-Mobile\/Sprint Merger Mean for Wireless Tower REITs?\u00a0\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/\",\"name\":\"Commercial Property Executive\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/e0b03c346025da15dbd9d597ff912eaa\",\"name\":\"Dilara Sukhov\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/e2db7224f88211050fd8421c8f9ca703a28971e3c6daf4e2ef27eb777e2efb77?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/e2db7224f88211050fd8421c8f9ca703a28971e3c6daf4e2ef27eb777e2efb77?s=96&d=mm&r=g\",\"caption\":\"Dilara Sukhov\"},\"url\":\"https:\/\/www.commercialsearch.com\/news\/author\/dilarasukhov\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"What Does the T-Mobile\/Sprint Merger Mean for Wireless Tower REITs?\u00a0 - Commercial Property Executive","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/","og_locale":"en_US","og_type":"article","og_title":"What Does the T-Mobile\/Sprint Merger Mean for Wireless Tower REITs?\u00a0","og_description":"Following the merger, the tower operators would generate most of their domestic revenue from only three major tenants, which Moody's believes could increase the new entity's negotiating power.","og_url":"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/","og_site_name":"Commercial Property Executive","article_publisher":"https:\/\/www.facebook.com\/CPExecutive","article_published_time":"2018-07-31T14:46:43+00:00","article_modified_time":"2022-12-09T09:53:05+00:00","og_image":[{"width":496,"height":526,"url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/07\/IMG_1493.jpg","type":"image\/jpeg"}],"author":"Dilara Sukhov","twitter_card":"summary_large_image","twitter_creator":"@cpexecutive","twitter_site":"@cpexecutive","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/","url":"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/","name":"What Does the T-Mobile\/Sprint Merger Mean for Wireless Tower REITs?\u00a0 - Commercial Property Executive","isPartOf":{"@id":"https:\/\/www.commercialsearch.com\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/#primaryimage"},"image":{"@id":"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/#primaryimage"},"thumbnailUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/07\/IMG_1493.jpg","datePublished":"2018-07-31T14:46:43+00:00","dateModified":"2022-12-09T09:53:05+00:00","author":{"@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/e0b03c346025da15dbd9d597ff912eaa"},"breadcrumb":{"@id":"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/#primaryimage","url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/07\/IMG_1493.jpg","contentUrl":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/07\/IMG_1493.jpg","width":496,"height":526,"caption":"Dilara Sukhov"},{"@type":"BreadcrumbList","@id":"https:\/\/www.commercialsearch.com\/news\/what-does-the-t-mobile-sprint-merger-mean-for-wireless-tower-reits\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.commercialsearch.com\/news\/"},{"@type":"ListItem","position":2,"name":"What Does the T-Mobile\/Sprint Merger Mean for Wireless Tower REITs?\u00a0"}]},{"@type":"WebSite","@id":"https:\/\/www.commercialsearch.com\/news\/#website","url":"https:\/\/www.commercialsearch.com\/news\/","name":"Commercial Property Executive","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.commercialsearch.com\/news\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/e0b03c346025da15dbd9d597ff912eaa","name":"Dilara Sukhov","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/e2db7224f88211050fd8421c8f9ca703a28971e3c6daf4e2ef27eb777e2efb77?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/e2db7224f88211050fd8421c8f9ca703a28971e3c6daf4e2ef27eb777e2efb77?s=96&d=mm&r=g","caption":"Dilara Sukhov"},"url":"https:\/\/www.commercialsearch.com\/news\/author\/dilarasukhov\/"}]}},"jetpack_featured_media_url":"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/07\/IMG_1493.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004246114","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/users\/1041"}],"replies":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/comments?post=1004246114"}],"version-history":[{"count":5,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004246114\/revisions"}],"predecessor-version":[{"id":1004246273,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/posts\/1004246114\/revisions\/1004246273"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media\/1004246123"}],"wp:attachment":[{"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/media?parent=1004246114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/categories?post=1004246114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.commercialsearch.com\/news\/wp-json\/wp\/v2\/tags?post=1004246114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"\"](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/07\/IMG_1493.jpg\")