Chart of the Day: Making Money off Mobile Data
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- Published on Thursday, 28 June 2012 08:00
- Written by Adam English, Associate Editor, Inside Investing Daily
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The entire body of written works of mankind, in all languages, from all of recorded history, would be about 50 petabytes of data.
As the Chart of the Day shows, within 48 months, six times that amount will scroll across the screens of mobile devices each month.
There are two direct ways to make money off the mobile device boom. The obvious way is to sell devices or data plans. The other way is to rent tower space.
It isn't exciting to own a tower but it is easy and profitable. Simply buy or build a tower and rent out space for antennas.
The boring way to make money off of mobile data is heating up this year. A lot of mobile data growth is on the horizon and a small handful of companies are poised to capitalize on it.
On Tuesday, SBA Communications Corp. (SBAC:NASDAQ) announced it purchased 3,252 towers in the U.S. and Puerto Rico from privately held TowerCo. The $1.2 billion cash and 4.6 million SBA share purchase will boost SBA's tower count to more than 15,000.
It is the fourth major tower acquisition in the U.S. this year and the second for SBA. It purchased 2,300 towers from Mobilitie LLC for about $1 billion in February.
American Tower (AMT:NYSE), which has 28,000 towers, spent $500 million to buy 2,500 towers from Telefónica's Mexican unit in December.
The third-largest U.S. tower company, Crown Castle International Corp. (CCI:NYSE), acquired NextG Networks Inc. to expand its business earlier this year.
All of these deals are a prelude to the main act.
T-Mobile USA will put 7,000 towers up for sale later this year. That accounts for about 3% of the estimated 250,000 towers in the U.S.
If fortune truly favors the bold, the company that can pony up the cash for the towers within the next five months will be well positioned to collect an immense stream of recurring revenue from the exponential growth of mobile data.