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US Wireless Carrier Unlimited Data Plans To Stretch Network Capacity

|Includes: AMT, CCI, S, SBAC, T, TMUS, Verizon Communications (VZ)

Summary

T-Mobile USA CEO John Legere has "blown it up" according to Bloomberg, as US wireless carriers take off the gloves to compete.

While Verizon's capex is much larger than its peers, the spend per subscriber is in-line between AT&T and T-Mobile.

"Can you stream me now?" VZ has touted a superior network, but will it last until 5G can be deployed?

While Verizon will begin 5G field tests, commercial roll-out is not expected until about 2020.

Analysts: Verizon's reputed network at risk with unlimited data

SA news editor Jason Aycock, in his note mentioned several analysts take on the new "all you can eat" US carrier data plans. 

There is additional discussion and an interesting video in this referenced article:

https://www.bloomberg.com/news/articles/2017-03-06/verizon-s-reliable-reputation-on-the-line-in-coming-data-deluge

"Moffett estimates that of the $22 billion Verizon has committed for capital spending this year, about $11.3 billion will go toward wireless. By contrast, Sprint will spend $2.97 billion, excluding costs of leased phones, AT&T $9.47 billion and T-Mobile $5.1 billion, he said.

But while Verizon’s overall capital outlay might seem impressive, spending per monthly phone-equivalent subscriber is actually in line with peers. Verizon will spend $9.12 in capital expenditures per subscriber this year, less than the $9.67 by AT&T, and slightly more than $9.04 by T-Mobile, according to Moffett. Sprint will lag the industry, with $6.78 per subscriber," according to Bloomberg report.

The analyst discussions are on the same page that I am with one notable exception: The lack of mention regarding how this carrier war started by the T-Mobile One unlimited data plan will impact the third-party infrastructure landlords: American Tower (NYSE: AMT), Crown Castle International (NYSE: CCI), and SBA Communications (NASDAQ: SBAC).

The need to increase network density and bandwidth creates opportunities for wireless tower REITs to sign lease amendments, and add additional carriers to existing macro tower masts.

Additionally, Crown Castle (which has a 100% US markets footprint), has been aggressively acquiring fiber and small-cell networks in urban areas which can be used to add bandwidth and coverage in major cities where zoning prohibits proliferation of additional towers.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in AMT, CCI, over the next 72 hours.