SBA Communications Corp RBC Capital Markets 2026 Global Communications and Infrastructure Conference

Welcome. Thanks for having me.

Yeah. I think I've been in that industry for 30 years, and it's a very cyclical industry. The cycle repeats itself. Wireless operators buy or receive a new spectrum band. They open a new generation technology and then harvest that technology until the next one comes along. I think if you go back 20 years, CapEx as a percentage of revenue for the big three operators, at the peak of the cycle, right after they receive the spectrum and deploy, is about 25% of revenue. In a harvest model, it drops to about 15% of revenue. In 2022, 2023, we were right at a 25% mark. Last year and this year, we were at about the 15% mark. I think the beauty for our company is that even at the trough in the cycle, we are still growing.

This year is going to be $35 million. 2022, I think it was $78 million. I think that's, kind of, the range. 6G of spectrum is going to be auctioned in the first half of next year. It's about 18 months clearing, so it makes it like late 2028, early 2029. I think the cycle will repeat itself, so I'm pretty excited about 6G. I also think that the FCC is auctioning 160 MHz of spectrum, which is interesting because 6G is probably going to be a 40 MHz band. They may be expecting more than three bidders for this, maybe four or five. I'm hoping that we'll see some satellite operator there and accrue more demand. That's really on a pure leasing side from the wireless operators. I'm excited about the use case.

I think obviously it's still unclear what the satellite operators are going to do. If you think of a base station, it's probably has a capacity of over 100 satellite. There are about 200,000 base stations in the U.S., so I just don't think you'll ever replicate that capacity in space. It'd be too expensive and it will take too long to build this. I think the other thing is, if you're in an office, a conference room, under a true downtown Chicago, Manhattan, you're not going to have an unobstructed view to the sky. I think you're going to need some terrestrial component in order to provide services. We have edge data centers. A lot of talk about edge data center. We have probably 50% of our site could accommodate a small mini data center, 2 or 300 MW of power.

We've seen companies that have raised a significant amount of capital to one of those mini data center at the edge of the tower, the bottom of the tower, and basically sell compute power directly to companies providing AI agent apps on mobile device. The big advantage there is that from day one, you have no zoning requirement because you are in a closed place. You have like this one concrete slab, you have power at the site, you have fiber to the site, and you have low latency because you're right sitting at the bottom of the tower. I'm pretty excited about those cases and 6G, so I feel good about the future.

The company have raised capital and are negotiating this lease agreement. When I ask them, "Have you signed any, basically a retail customer or people are going to use that compute?" I get very fuzzy answers. I thought they would want an answer and that they're paying Chris to the rest. But are people really looking to basically sign leases for the space and get access to the tower and the bandwidth? I assume that demand will show up in the next year or so.

Passive real estate company. We sell vertical space on the tower and we lease vertical space on the tower and we lease horizontal spaces on the ground. For these particular edge data center, we may provide power as well to the extent they want it, because their power demand are fairly limited.

LATAM for us is Brazil. That is 15% of revenue, 15% of TCF. I feel very bullish about Brazil for the long term. The country has a net balance of payment over $5 billion a month, large exporter of grain, commodity, minerals, energy. Very young population, fast-growing, and the population is probably 25% of the density we have in the U.S. The inflation was under control. Central Bank has done a great job, and I think Brazil is going to do well. Just like in the U.S., where Sprint was consolidated by T-Mobile, Nextel to all wireless in Brazil and was carved out to the other three wireless operators. So we are facing consolidation churn. It is hitting us in 2026. It is going to stay elevated in 2027. It is going to go away after that. But long term, 5G rollout in Brazil is less than 50%.

The carriers have 5G deployment requirement. They have coverage requirement. The regulator is really pushing the operators to deploy. You have three very well-capitalized operator, Claro, part of Mr. Slim enterprise. You have Telefónica, Vivo, and then you have TIM, Telecom Italia. So they are well capitalized, and they need to build capacity and coverage. So I feel pretty good about Brazil long term. It is like 2026 and 2027 headwind, but will go away over time. Then you have Central America. We built 7,000 sites for Millicom last year, 11 times multiple, 15-year contract in U.S. dollars, escalated with U.S. CPI. And we have from them for 2,500 BTS over the future. We locked in a net to ice single-digit growth rate in U.S. dollars. Those sites are very attractive to Claro.