AT&T Is Spending More On Small Cells, Backhauls, & Mods

AT&T is spending more on small cells, backhauls, and mods according to Wells Fargo, and it's thanks to its aggressive approach with tower companies which has resulted in them being able to cut costs. AT&T reportedly achieved spending less on tower technology by somewhat forcing the hand of tower companies, by seeking real estate developers to build new towers that were near existing tower locations. This led to them requesting a reduced cost for rental rates on towers from the owners, and it seems that AT&T's efforts have proved to be successful.

Part of that success may have also been due to the limited amount of options that were presented to tower owners, none of which were likely favorable, as it's reported that in the letters sent out by AT&T to the tower owners that in place of reduced rates on tower rentals, they were requesting the fair rights to terminate contracts, alongside two other options which were to be afforded reduce costs in price increases, or not be charged for upgrading tower equipment. With AT&T saving money on tower rates, they have more money to spend in other areas and that's exactly what they've been doing. Wells Fargo analysts state that AT&T's spending is also proving to be more of a benefit to them compared to previous years.

While AT&T's efforts to lower their spending on tower rates has improved their ability to spend elsewhere that they felt would be needed, such as on small cells, Wells Fargo analysts speculate that it may also benefit vendors of small cells that aren't very large as AT&T is spending more on this technology, and in turn it could allow these vendors to acquire more revenue. In spending more on small cells though, AT&T is essentially spending less on macrocell technology which could negatively affect the companies which primarily offer this type of tech. Although AT&T is saving on cost of tower rates which has allowed them to spend more in certain areas, they've also had a fairly decent year in 2016 which included 4th quarter, and that has also likely attributed to their overall ability to spend.

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Justin Diaz

Head Editor
Lover of food, craft beer, movies, travel, and all things tech. Video games have always been a passion of his due to their ability to tell incredible stories, and home automation tech is the next big interest, in large part because of the Philips Hue integration with Razer Chroma. Current Device: Google Pixel.
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