Comcast Brings New Competition Into Towers Space (CMCSA, AMT, CCI, SBAC)

Comcast Corporation (NASDAQ: CMCSA) has formed a new portfolio company out of its Comcast Ventures unit that will own and operate telecommunications towers throughout the United States.  The company is called CTI Towers, Inc. and it will be new competition for the likes of American Tower Corporation (NYSE: AMT), Crown Castle International Corporation (NYSE: CCI) and SBA Communications Corporation (NASDAQ: SBAC).

CTI Towers is said to be launching with approximately 800 towers that were previously owned and operated by Comcast Cable subsidiaries. The unit will actively lease tower space to wireless operators and other tenants.

This may be noise to some and may be common sense to others.  If the company already had the towers as is, then it is only logical.  American Tower Corporation (NYSE: AMT) also probably knew this was coming.  Comcast named Anthony Peduto as the CEO of CTI Towers, and he has prior experience as the COO of Optasite (which was in the acquisition and development of telecommunications tower sites) and he was also Vice President of the West and Northeast regions of none other than American Tower Corporation.

Comcast has an extensive network and this seems to be only a continuation of how to add some revenues and profits on top of existing infrastructure that was already in place. 

American Tower  is worth nearly $22 billion in market value today.  Its global solutions include over 37,000 towers (about 25,000 in America), 2,300+ managed rooftops, in-building and outdoor Distributed Antenna System networks.  American Tower is also reorganizing into a REIT as well, indicating that the company will be shelling out almost all of its income as dividends.

Crown Castle International Corporation (NYSE: CCI) is worth just over $12 billion.  It said on its most recent release that it owns, operates, and manages more than 22,000 U.S. sites (in 92 of the top 100 markets) and about 1,600 wireless communication sites in Australia.

At SBA Communications Corporation (NASDAQ: SBAC), it owned 9,290 tower sites and also noted that it manages or leases approximately 5,200 actual or potential communications sites as of March 31, 2011.  SBA’s value is put around $4 billion.

Putting a raw value on a new unit with assets in place but without the knowledge of who will be customers is difficult to do immediately.  A ballpark of value add could be as little as $500 million or as much as $2 billion, but those numbers would be highly subjective and the true valuation could fluctuate wildly from source to source.  Comcast currently has a market capitalization of more than $61 billion.

JON C. OGG