Crown Castle operates 40.1k towers, 80k route miles of fiber supporting more than 70k small cells. The company’s infrastructure is entirely based in the United States and it supports the significant improvement that 5G brings.

Crown Castle, led by Jay Brown, is harnessing 5G for the company by providing the communications infrastructure needed for the fundamental trends that 5G is driving. Consumers are increasingly using more bandwidth-intensive devices, including smartphones, laptops, tablets, and wearables. U.S. carriers are among the first in the world to begin offering commercial 5G mobile cellular communications services to further support such growth.

Crown Castle is working with U.S. carriers to continue to focus on network quality improvement and expanding capacity, through 5G initiatives. Crown Castle is facilitating these improvements to the 5G network by utilizing a combination of towers and small cells. The company’s towers and small cells provide a solution to the growing communications infrastructure needs of carriers.

5G: “5th Generation” Wireless Technology

The emerging technologies of 5G have the potential to fundamentally alter the role of wireless networks. 5G networks can increase connectivity from 300+ million people in the United States to connect billions of devices in the future. Therefore, as 5G develops and wireless networks expand from connecting everyone, to connecting everything, new use cases will develop. This will generate significant long-term demand for Crown Castle’s infrastructure, with towers remaining at the core of the wireless networks.

Over the last 20 years, there have been significant advances in the broader wireless industry. These advances include the rapid deployment of technology that has meaningfully moved the industry. For example, mobile penetration rates and voice minutes were tracked in 1G technology. Moving to 4G standards, where measurements are taken using unlimited data plans that feed an insatiable demand for data from consumers.

With the deployment of 5G during 2020, the industry is in the early stages of what is the next decade-long investment cycle. 5G will bring a step function change in the role that wireless networks play in supporting the digital economy going forward.

Demand for Crown Castle Towers Will Facilitate 5G Improvement

While technology generations have changed, there has remained one constant. The significant and sustained demand for tower assets in the United States. This steady growth has been driven by increased data traffic and investment to maintain and improve the wireless user experience. With continued strong data growth, the carriers will respond to pressure on their networks as they have over the last couple of decades. Responses by carriers takes the form of leasing access to Crown Castle’s infrastructure.

5G the Mobile “Industrial Revolution”

5G represents the very beginning of what the World Economic Forum has deemed the fourth Industrial Revolution. The first Industrial Revolution used water and steam power to mechanize production. The second Industrial Revolution used electric power to create mass production. The third Industrial Revolution used electronics and information technology to automate production. And the fourth Industrial Revolution will be the digital revolution. Indeed, this fourth Industrial Revolution will lead to long-term gains in efficiencies and productivity, impacting almost every person and industry.

The fourth Industrial Revolution is closely tied to the deployment of 5G. Billions of devices will be able to connect and communicate in real-time using 5G technology. This level of connectivity is unprecedented and will require a network that is denser and closer to end users than has ever been the case before.

5G’s Pillars of Improvement vs. 4G – Crown Castle View

Compared to 4G technology, 5G will offer faster speeds, lower latency (i.e., lower wait times) and many more connected devices to the network, known as higher density. The Internet of Things will particularly benefit from the higher density which 5G offers.

5Gs Pillars of Improvement vs. 4G

Higher Density – Critical Area of 5G Improvement and Focus for Crown Castle

In 4G and prior generations, there was scarcity value associated with a connection to a tower cell site. 4G technology facilitates ~2,000 connections per cell site, which causes each individual connection to be scarce in its value. This scarcity, in turn, drove a need for the carriers to generate a minimum threshold of revenue for each user connected to their cell sites.

5G, will offer a 10,000x increase in the number of connections per cell site. This means that the connection itself becomes less scarce. Thus, carriers are able to provide a service per device, at a much lower price point per month. 5G therefore eliminates the scarcity value of connections. Therefore, more sensors, more devices, and other Internet of Things devices can connect to a cell site, simultaneously. As these additional devices add to the network, in a 5G environment, traffic volumes will naturally uplift.

Overall, higher connection density will be one of the key factors driving further 5G adoption. Additionally, higher density will transition a portion of the uplift in traffic from being solely consumer-driven, (i.e., the consumer drawing down data), to much more industrial data traffic demand. Machine-to-machine and industrial applications will benefit from both the low latency and increase in the number of connections, which 5G has to offer.

Adam Simmons covers Towers for Dgtl Infra, including American Tower (NYSE: AMT), Crown Castle (NYSE: CCI), SBA Communications (NASDAQ: SBAC), Cellnex Telecom (BME: CLNX), Vantage Towers (ETR: VTWR), IHS Holding (NYSE: IHS), and many more. Within Towers, Adam focuses on the sub-sectors of ground-based cell towers, rooftop sites, broadcast / radio towers, and 5G. Adam has over 7 years of experience in research and writing for Towers.


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