Crown castle cuts jobs, small cell expansion plans

　　As part of its ongoing strategic review, Crown castle said it will cut between 3,000 and 5,000 small cell nodes out of its 2024 construction plans. The company also announced it will cut 10% of its workforce.

　　Crown castle's move casts yet another shadow over the small cell industry in general. For years, companies in the US wireless industry have suggested that network operators would eventually invest heavily into densifying their networks with more small cells, as a way to improve their overall network capacity. But that big push hasn't materialized.

　　"With this shift in approach, Crown castle believes it can reduce the capital intensity of small cell projects by narrowing its investment focus to concentrate on a higher mix of collocations and continue building network-adjacent anchor nodes, while de-emphasizing greenfield locations the company historically targeted," Crown castle wrote in its announcement Tuesday.

　　The company's announcement comes just days after Crown castle's CFO Daniel Schlanger boasted of the company's small cell expansion plans. "What we've seen is a significant increase in the amount of small cells we believe that we will generate revenue," he said at a recent investor event, according to Seeking Alpha.

　　Earlier this month, Schlanger reiterated that Crown castle planned to build 16,000 new small cell nodes in 2024, doubling the 8,000 it built in 2023. But in its new announcement Tuesday, Crown castle said it would reduce that count by between 3,000 and 5,000. As a result, the company said it now expects organic growth from its small cell business of 10% this year, down from its previous outlook of 13% growth.

　　Crown castle counts a total of around 115,000 small cell nodes in operation or under contract across the country.

　　Crown castle's small cell cutback, along with a pullback in its fiber business, will reduce the company's gross capital expenditures by $275 million to $325 million in 2024. Overall, Crown castle increased its 2024 EBITDA (earnings before interest, taxes, depreciation and amortization) outlook by $5 million, primarily due to its planned staffing reductions and office closures.

　　The company's announcement doesn't necessarily come as a surprise. Crown castle has been working to overhaul its operations since cutting 750 jobs a year ago. The company also continues to work to sell its fiber and small cell business; one analyst firm believes DigitalBridge is in the running to purchase that $15 billion operation.

　　A moving target

　　In 2018, in the early days of 5G, trade group CTIA cited estimates predicting that the US small cell market would grow to 800,000 cells by 2026. However, new figures from the WIA trade association counted just 202,100 outdoor small cells in operation in the US at the end of 2023. Crown castle operates the lion's share of those small cells.

　　Nonetheless, CTIA continues to push regulators to cut red tape around small cell deployments. "Deploying additional wireless infrastructure, including small cells, can help to increase capacity for wireless networks," CTIA wrote in a new filing to the FCC.

　　The trade association urged the agency to make it easier for wireless networking companies to install small cells atop light poles.

　　Finally, it's worth noting that other companies in the US wireless industry continue to predict growth in the small cell sector. For example, the financial analysts with TD Cowen recently discussed the topic of small cells with officials from DigitalBridge, which owns small cell deployment company Extenet.

　　"In terms of densification, [DigitalBridge] management noted that densification will come in the form of both new search rings that will include macro towers, as well as small cells, while noting that it is constructive on Crown castle and Extenet's small cell business for a resurgence in small cell bookings in 2026-2028," wrote the TD Cowen analysts of their meeting with DigitalBridge executives.