SBA Communications Corp Citi’s 2026 Global TMT Conference
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We begin. Disclosures are available at the registration desk. For those of you I haven't met, I'm Mike Rollins and I cover communication services and infrastructure for Citi. We're pleased to welcome Marc Montagner, Chief Financial Officer of SBA Communications. Marc, it's great to see you. Thank you so much for being with us today.
Thanks for having us. So maybe jumping in, when you think about the opportunities for SBA, what are the initiatives that are the most critical to enhancing your financial performance and shareholder value?
Not just as you look at the balance of this year, but as you think of the multi-year opportunity for your company.
Right. That's a good question. I think we look at creating value for our shareholder for the long term. There are a number of levers we use. One is growth. I think we are very focused on generating long-term growth- by either basically selling more services on our existing portfolio of towers or doing accretive M&A.
The second lever really is capital allocation. In terms of growth, we obviously have a great reputation for providing superior quality of service to our customers. I think our operating team does a great job in operating those towers, maintaining those towers. We have a very, I think, active leasing team to generate more revenue on those towers. In terms of avenues of growth, we are down to three carriers, three customers in the U.S., all investment grade. We have long-term MLA agreement with them, which I think makes it easier for them to deploy and easier for us to support them. There are new, I think, use case for our towers going forward. Obviously the LEO operators, the satellite operators, if you just look at the physics of it, you probably need 100 satellite to get the same capacity as one base station.
There were about 200,000 base station in the U.S. I think at some point they are going to have to deploy some form of a wireless terrestrial network in the U.S. Don't ask me when or how many sites they will need. I don't know what their plans are. But, if you look at Amazon, really, I think being aggressive on the LEO side, SpaceX, if you look at the physics of operating LEO, providing coverage by satellite in a metro, if you're in an office building, in a conference room, the view of the sky is basically obstructed by a tall building. You're in a suburban environment under a tree, you're not going to have coverage and you're not going to have the capacity. I think some form of wireless terrestrial network is going to be required.
Maybe since you brought it up- Sure double click on this for a moment.
Because I feel like there's two questions in what you're describing with satellites. One is, if a satellite company, a LEO, a Starlink, for example, if they're just going to do direct to device like complementary to mobile, so they're not looking necessarily. In this scenario, we'll move aside mobile for a moment as a direct competitor. So they're direct to device. They have a broadband business as well that's been a growing, expanding business. Is that the piece, just before we even get into mobile, that you think might need some terrestrial coverage and help over time? Or when you think about the opportunity set from LEOs, is it the idea that they do want a slice of the core mobile pie and that's what they need to invest in towers and terrestrial infrastructure?
I think it's really difficult to do a direct to device without having a device with a dual mode chipset.
In order to have a dual mode chipset, you need to use probably a different spectrum band.
Therefore you need terrestrial wireless spectrum.
SpaceX bought spectrum, or you need an MVNO with a wireless operator.
I cannot speculate it yet. I don't know which way the industry is going to evolve.
But it seems to me wireless is a very competitive industry.
And having a better device, if you market a device that this device is going to work on a wireless terrestrial network in the U.S., and you could travel anywhere in the world or in remote areas in the U.S. on a boat, you're going to be able to make a call or send a text or access mobile data through satellite. You suddenly have a much better product to market to your customers. So if you are one of the big three, you may have an incentive to do an MVNO. If you are afraid of being cannibalized, you don't give them an MVNO, but then they're going to feel the pressure to build it themselves. So I don't know which way the industry is going to evolve, but the next two years I think are going to be very interesting.
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