A now highly disputed article from Re/Code reported Sprint would be moving away from traditional cell towers and instead focus on microwave backhaul and “government owned properties.” The report sent investors in tower companies and people all across the Internet into a panic, with the result being a severe drop in the stocks for American Tower, Crown Castle and SBA communications. American Tower’s dropped 3%, Crown Castle by 6% and SBA Communications was hit the hardest with a 8% drop.
Analyst are now striking back against the claim Sprint is moving away from towers this year, citing a couple of key data points:
Sprint currently has as many as 20,000 to 30,000 long-term contracts with Crown Castle and American Tower, with most having a lease that does not allow for cancellation or non-renewal for another seven to eight years.
Sprint still owns 6,600 towers that are being subleased to Crown Castle since 2007.
The tower companies have made no official statements regarding the news, but as the report is slowly being debunked, the stocks are now bouncing back. Crown Castle and American Tower were up 2% and 3% respectively. At the time of this report, SBA was still down 1.3%.
SBA strikes back in court
SBA Communications was also in the news this week with an update on the court case we’ve been following for quite some time. Just a reminder, this is the court case based on the tragic 2014 collapse of two towers in West Virginia that killed three people. Originally the case was filed on behalf of those who died and those who were injured, claiming all the companies involved were responsible to variable extents for the tragedy.
FDH Velocitel wanted to be dismissed from the suit altogether and even said the work contractors were doing was done negligently. SBA Communications claimed the work was happening without their knowledge or consent. It is probably due to this claim SBA has now struck back against those involved, filing a $1 million property damage lawsuit against S&S Communication Specialists of Oklahoma and FDH Engineering of North Carolina. FDH was the general contractor and S&S was the subcontractor in this situation.
According to SBA’s master subcontract agreement, FDH should have had one of its people at the worksite, yet only subcontractors were present at the time of the incident therefore FDH was in violation of the agreement, which should indemnify SBA from these proceedings. It is unclear whether SBA tried to collect on this breach from FDH’s insurance carrier, and despite this update both parties claim they have no desire to discuss the ongoing legal proceedings.