Crown Castle Sees AI, Spectrum Deals Powering Future Tower Demand

Key Points

• AI-driven data growth could increase mobile network traffic, particularly uploads, supporting larger antennas, radios and additional tower investment. Crown Castle expects urban and suburban markets to benefit first, while its low-power edge-computing initiative remains in an early trial phase.
• Spectrum transactions and auctions are expected to boost future leasing demand after Crown Castle’s projected 2026 low point. Recent AT&T and Verizon purchases, along with an upcoming upper C-band auction, could require network densification and larger tower deployments.
• Crown Castle is targeting 200 basis points of margin improvement through 2030 through workforce reductions, technology upgrades and ground-lease buyouts. The company is also prioritizing investment-grade credit metrics and expects potential AFFO growth to support future dividend increases.

Crown Castle NYSE: CCI Executive Vice President and Chief Financial Officer Sunit Patel said artificial intelligence is expected to be a “clear positive” for mobile data demand, potentially supporting additional network investment and tower activity over the coming years.

Speaking at an investor event hosted by RBC analyst Jon Atkin, Patel said AI applications could alter the mix of mobile network traffic by increasing the amount of data uploaded from devices and infrastructure. Historically, mobile and home-network traffic has been weighted toward downloads, at roughly 80% download and 20% upload, he said. Research suggests that mix could shift toward 60% download and 40% upload.

“A lot of Physical AI will rest on mobile data traffic transmission,” Patel said, adding that AI also requires more information to be gathered and transmitted for inference purposes.

AI Could Support Larger Network Deployments

Patel said rising data volumes generally require more power, which can translate into larger antenna and radio installations. While equipment manufacturers continue to shrink radios and antennas, mobile network operators have historically occupied more space on Crown Castle’s towers as network requirements have grown, according to Patel.

He said urban and suburban markets are likely to see earlier and greater benefits from AI-driven mobile traffic demand than rural areas, though he characterized the opportunity as broad-based.

On edge computing, Patel said Crown Castle is focused on applications below one megawatt of power. The company has 40,000 towers, each with fiber and power connections, and can lease available horizontal space at tower sites to customers deploying equipment.

“The way to think about it is it’s having one more tenant like we have on the towers,” Patel said. Customers would provide and pay for their own power and computing equipment, he said.

Patel described Crown Castle’s edge-computing activity as an early-stage trial. Potential applications for lower-power deployments could include inference, quantum computing and cybersecurity, he said.

Spectrum Activity Seen as a Tailwind

Patel said Crown Castle continues to expect 2026 to represent a low point for its U.S. site-rental leasing activity, with improvement expected thereafter. He cited recent spectrum transactions and upcoming auctions as potential sources of future tower demand.

AT&T’s purchases of low-band 600 MHz spectrum and 3.45 GHz spectrum, as well as Verizon’s acquisition of AWS spectrum, could support deployments, he said. Patel noted that lower-frequency spectrum can require large equipment installations; radios and antennas for 600 MHz deployments can exceed 6 feet in height.

He also pointed to an upper C-band auction expected to conclude by July of next year, involving approximately 165 MHz of spectrum around the 4 GHz range. Higher-frequency spectrum can require either network densification or more powerful radio and antenna structures on existing macro towers because of lower signal propagation, Patel said.

He added that spectrum expected to support future 6G applications could also benefit the tower sector.

Margin Initiatives and Ground-Lease Buyouts

Patel said Crown Castle has “fairly aggressive ambitions” for margin expansion and is pursuing several operational initiatives. On the tower side, the company reduced its workforce by 20% at the beginning of the year, he said.

The company is also modernizing its information-technology infrastructure. Crown Castle deployed two operations systems this year and plans to deploy customer lifecycle management and human-capital management systems next year, followed by an enterprise resource planning system the year after that, Patel said.

Those systems are intended to improve efficiency, productivity and cycle times while reducing spending on older platforms. Patel also cited a companywide transformation program addressing headcount and non-headcount expenses.

Another focus is buying out ground leases. Patel said 70% of Crown Castle’s 40,000 towers have landlords under the sites. He said the company has stepped up its efforts to acquire those leases, particularly as power availability becomes more important.

Patel said Crown Castle has stated it expects to improve margins by 200 basis points from its guidance for this year through 2030.

Satellite and Capital Allocation

Patel said satellite networks could represent an opportunity rather than a threat to Crown Castle’s business. He said satellite providers seeking to offer services comparable with mobile network operators may need macro towers to address in-building and in-vehicle coverage challenges in urban and suburban areas.

On capital allocation, Patel said Crown Castle’s dividend is $4.25 per share and that the company remains focused on maintaining investment-grade credit metrics. He said the company targets a leverage ratio of 6% to 6.5% and reported leverage of 6.3x in its most recently reported quarter.

The company also aims to pay dividends at a 75% to 80% coverage ratio of adjusted funds from operations, Patel said. While Crown Castle is currently above that range, he said growth in AFFO could support dividend growth over time.

About Crown Castle (NYSE:CCI)

Crown Castle Inc NYSE: CCI is a communications infrastructure company that owns, operates and leases wireless communications assets in the United States. Its infrastructure helps wireless carriers, government agencies and other customers expand network coverage and capacity for voice, data and other wireless services.

The company's portfolio includes cell towers and fiber-based infrastructure. Crown Castle provides space on its towers for wireless equipment and offers fiber solutions that support small-cell networks, distributed antenna systems and other high-capacity communications applications.

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