Financier №4 (40) 2025

Telecommunications towers, steel structures as tall as multi-story buildings, have long been a familiar feature of the urban landscape. Mobile operators rely on them to house equipment essential for everyday phone calls, video calls, and messaging. US telecom companies lease space for their equipment from Real Estate Investment Trusts (REITs).

Mobile Infrastructure Map

According to UnivDatos, the global telecom tower market reached $33 billion in 2020. The United States accounted for about a third of this segment, setting the standard for the rest of the world.

Network traffic is increasing year after year, which leads to rising demand for towers, so operators prefer long-term leases. This gives funds a guaranteed revenue stream for decades to come. A typical example: in 2020, T-Mobile (TMUS) signed a 15-year contract with American Tower (AMT), a leading real estate investment trust, with annual escalation of 2–3%.

Each tower has a feature that makes tower REITs one of the most stable segments of the real estate market: it can accommodate equipment from multiple operators. This dramatically changes the economics.

According to American Tower’s calculations, leasing to a single operator yields approximately a 40% gross margin. But if three operators share a tower, the figure rises to 74%. The cost structure remains virtually unchanged: the foundation, steel structure, and electricity are shared. This is precisely why funds strive to scale: the more towers they own and the higher their occupancy, the more stable the cash flow.

This scale effect explains why the stock market considers tower REITs one of the most stable infrastructure segments. Unlike traditional commercial real estate, where tenants can move out or renegotiate terms, telecom operators are technically tied to specific locations: relocating equipment, even to a neighboring site, changes coverage geometry and requires network reconfiguration. This increases the cost of failure, extending contract terms and making cash flows more stable.

Another advantage of the tower model is the predictability of infrastructure. Tower frames remain virtually unchanged for decades, while upgrades primarily involve equipment. Operators replace transmitters, configure systems, and carry out maintenance after power outages. These processes inevitably lead to temporary shutdowns, but this is standard industry practice.

However, despite regular downtime, the financial model remains sustainable: lessees typically pay for site access even during maintenance periods. For tower owners, this means stable income and the ability to maintain margins without the need for constant investment in new construction projects.

As of 2025, there were an estimated 154,000 telecom towers in the US, according to Research Nester. They are owned by 126 companies, but the market is largely divided among three: American Tower (AMT), Crown Castle (CCI), and SBA Communications (SBAC), which together own more than 80% of US towers.

Three Market Leaders

American Tower is the largest player, with a network of over 149,000 towers, almost 43,000 of which are in the US. As of early November 2025, the company’s market capitalization exceeded $86 billion. The trust is actively developing a new business line: data centers, which account for approximately 10% of AMT’s revenue. The idea is straightforward: operators already lease towers from the trust, so offering related services—data storage and request processing—strengthens customer relationships and improves network efficiency.

From Q4 2024 to Q2 2025, American Tower’s financial results consistently exceeded analyst expectations. The company’s revenue has grown at an average annual rate of 10% over the past decade, reaching $10 billion in 2024. Its presence in Africa, Asia-Pacific, and Latin America makes the business less dependent on any single market.

Crown Castle was valued at $42 billion and operated 40,000 facilities by November 2025. Ten years ago, the trust focused on the domestic market, selling its international assets to acquire Lightower, a fiber optic operator. This enabled the development of a combined infrastructure model: towers and cable internet. However, Crown Castle announced its exit from the fiber optic segment in 2025, redirecting resources toward expanding its tower network. The trust is also considering acquisitions of regional companies, with targeted deals aimed at strengthening coverage in fast-growing areas.

SBA Communications, with a market capitalization of approximately $20 billion, rounds out the top three. The company is expanding its network not only in the US, where it operates 17,000 towers, but also in South America and Africa, where it owns more than 39,000 facilities. SBA also provides network design and equipment maintenance services, diversifying its revenue streams. In Q2 2025, the trust recorded its sixth consecutive period of bookings growth—a metric that often precedes revenue acceleration.

Photo: open sources

5G as a Driver of Demand

5G networks are increasing not only data consumption but also the number of technological processes that require stable and instantaneous connectivity. These include smart transportation systems, industrial telemetry, high-definition video streaming, and the connection of previously unconnected household devices. In developed countries, mobile data volumes have grown by 15–20% annually over the past five years. Crown Castle expects this growth rate to persist for another 10–12 years.

Rising internet traffic creates a need for infrastructure multiplexing. Even when operators do not build entirely new towers, they require additional equipment, which is installed on existing REIT-owned towers. This allows tower owners to increase both revenue and profitability.

American Tower is seeing accelerating demand: in H1 2025, the volume of requests from major US operators increased by more than 50% compared with the previous year. This reflects a long-term trend: traffic growth inevitably requires expanded coverage.

According to the Cellular Telecommunications Industry Association (CTIA), the average US household of four has 50 internet-connected devices.

Spectrum Swaps

Innovations can not only facilitate operators’ work, but also undermine the tower industry’s core model. One of the most discussed tools is spectrum swaps, which allow operators to use the same equipment across different frequency bands. This technology enables network optimization without expanding physical infrastructure.

This idea was long viewed as a theoretical risk for tower owners, but the risks are now materializing in practice. Some lessees have begun refusing contracts, citing underutilized frequencies. Legal disputes have emerged between partners, and rent payments do not actually reach the funds. For operators, this is a cost-cutting measure; for infrastructure owners, it represents a blow to revenue stability.

It remains impossible to fully eliminate communication towers: signals must reach a certain height to provide coverage. However, the degree of dependence on leased infrastructure is already changing. Where new equipment once had to be deployed, operators can now rely on existing capacity.

If spectrum swaps continue to spread, demand for new towers could decline significantly. Networks remain dense and equipment volumes continue to grow, but the economic logic of lessees is shifting toward greater flexibility and lower long-term commitments. This is precisely what has become the main source of pressure on the industry.

High Stability

Mobile communications remain one of the few sectors where core infrastructure is required under any economic conditions. In this area, REITs combine predictable rental income, long contracts, and high scalability potential, offering investors stable dividend yields.

Traffic growth, the rollout of 5G networks, the spread of AI, and the rising number of connected devices together form a solid foundation for the long-term development of real estate investment trusts operating in the telecommunications tower market.