SBA Communications (SBAC) BofA Securities Leveraged Finance Conference 2025 summary

Key business drivers and industry trends

• Site development activity is strong, driven by carrier coverage requirements for 2026 and ongoing 5G expansion, with lease-up momentum increasing each quarter.

• Fixed wireless access (FWA) is significantly increasing network capacity demands, with FWA users consuming 20-25 times more capacity than handset users, and over 10 million new FWA customers expected this year.

• Satellite entrants like SpaceX/Starlink are seen as positive for industry competition and may push carriers to expand rural coverage, potentially leading to hybrid networks combining terrestrial and satellite infrastructure.

• Hybrid wireless-satellite networks provide carriers with data to identify underserved regions, supporting new tower builds.

• Direct-to-device satellite connectivity is viewed as a long-term positive, likely to drive further industry innovation and tower demand.

Strategic agreements and U.S. market outlook

• Recent long-term master lease agreements (MLAs) with major carriers provide volume commitments, better pricing, and minimum growth rates, facilitating faster network rollouts and simplifying relationships.

• Exposure to DISH is limited, with $55 million annual revenue and contracts winding down by 2028; current lease payments are up to date.

• U.S. organic revenue growth is expected to be mid-single-digit, factoring in escalators, lease-up, and churn.

• EBITDA margin is around 68%, with potential for further improvement as bad debt is resolved and Central American lease-up flows through to the bottom line.

International expansion and portfolio management

• Acquisition of Millicom towers in Central America positions the company as the region's largest operator, with 15-year USD leases and mid to high single-digit growth rates.

• No current plans for further M&A in emerging markets; focus remains on Central America and Brazil, with Brazil expected to be a long-term growth market after near-term churn.

• In developed markets like Europe, consolidation and churn make acquisitions less attractive compared to stable, contracted growth in Central America.

• Ongoing portfolio review has led to divestitures in non-core markets; further sales possible if valuations are attractive.