U.S. Cellular, as part of its Q1 2021 earnings release, today announced that it has signed a master lease agreement (MLA) with DISH Network enabling it to use U.S. Cellular’s 4.3k owned towers. The company states that revenues from DISH are expected to begin in 2022.

Tower Infrastructure Strategy – U.S. Cellular and DISH Network

The MLA with DISH Network comes as part of a heightened focus on entering into strategic tower partnerships by U.S. Cellular’s CEO, Laurent Therivel. Historically, U.S. Cellular would reserve a significant amount of space on its tower for its own network expansion. However, the company has now opened up additional capacity on its towers for partners like DISH Network.

Additionally, U.S. Cellular is willing to share its generators, shelters and backhaul capabilities, which reside at its tower assets.

U.S. Cellular – Owned Towers

Unlike Verizon, AT&T, and T-Mobile, which have all monetized their towers over the past years, U.S. Cellular still owns its tower assets. Indeed, U.S. Cellular’s towers portfolio is a strategic asset, which, if sold, would be valued at a $4.5bn+ enterprise value.

DISH Network – Shared Towers

To-date DISH Network has been relying on third-party tower infrastructure providers including American Tower, Crown Castle, SBA Communications, and Vertical Bridge to deploy its 5G network. However, today’s announcement is DISH’s first partnership with a wireless carrier to share digital infrastructure.

Towers Portfolio Overview – U.S. Cellular

As of March 31, 2021, U.S. Cellular had 4.3k owned towers, which represent 63% of the company’s 6.8k total cell sites in service. On its owned towers, U.S. Cellular has 1.9k colocation tenants, equating to a tenancy ratio of 1.45x.

Overall, U.S. Cellular has a significantly lower tenancy ratio than the U.S. tower divisions of the publicly-traded independent tower companies. Specifically, these tower companies have tenancy ratios in the U.S. of 2.6x at American Tower, 2.1x at Crown Castle, and 2.1x at SBA Communications.

Financial Metrics – U.S. Cellular Towers Portfolio

During Q1 2021, U.S. Cellular generated tower rental revenue, from third-party tenants, of $20.3m, growing 8.6% year-over-year. Therefore, on an annualized basis, the company’s third-party tenants produce $81.2m of tower rental revenue per year.

U.S. Cellular Tower Rental Revenue Q1 2021-min

Overall, U.S. Cellular’s financials imply colocation rates per site of $3.5k per month, based on U.S. Cellular’s 1.9k colocation tenants.

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.

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