LONDON, March 29, 2018 /PRNewswire/ --
Right now, a $75.6 billion market opportunity is unfolding in an industry you've likely never heard of. It requires relatively little capital but provides near instant cash flow.
A mere $50,000 can be deployed in 30 days and soon after yield up to $180,000 over its life in "rent" from investment grade clients - including the largest telecommunications companies on Earth. Mentioned in today's commentary: Crown Castle International Corp. (NYSE: CCI), American Tower Corp. (NYSE: AMT), SBA Communications (NASDAQ: SBAC), Cisco Sytems (NASDAQ: CSCO), Snap Inc. (NYSE: SNAP).
The last time this industry opened up - it created $120 billion in market value for the companies who dominate it.
They've got the right team, at the right time. And, they're the only small cap entry point into this little known but highly lucrative investment opportunity.
Here are 5 key reasons why you need to pay attention:
- The Hidden Income Asset You're Not Following
- A Major Opportunity In The Telecom Revolution
- Profit Margins That Reach 80 percent With Massive Scale
- An $75.6 Billion Market… Open For New Players
- Their Highly Connected "Ace In The Hole" Team
Read on to hear why Tower One needs to be on your radar in 2018.
Income Assets Hidden In Your Neighborhood
It's one of the most profitable investment opportunities in the world, yet it goes virtually unnoticed by the overwhelming majority of investors.
Billions worth of income assets that are literally hidden in plain sight. I can practically guarantee you'll find at least one of them in your neighborhood.
This unusual real estate investment boasts profit margins that reach 80 percent, and a bevy of investment grade tenants at the ready to guarantee early and ongoing cash flow.
As we speak, a $75.6-billion market for these assets is being opened. Within the next three years - the winners will already have been decided.
Since the last major market opening for this hidden income asset in 2002, we saw three companies soar to incredible heights.
Crown Castle International Corp. (NYSE:CCI): CCI rose from about $1.15 to its current price of $111... handing investors a 9,552 percent return.
American Tower Corp. (NYSE:AMT): AMT rose from about $0.75 to its current price of $143… delivering an 18,966 percent return.
SBA Communications (NASDAQ:SBAC): SBAC rose from about $0.22 to its current price of $172... which is a whopping 78,081 percent return.
Every one of them has a multi-billion-dollar market cap.
A Little Guy Opportunity In Big Telecom
Cell phone towers are everywhere. Every year, more are installed. In 1985 only 900 existed in the United States. Now there are over 215,000.
What you might not know: very few are owned by the big telecom companies.
Companies like T-Mobile and Verizon rent them from "landlords" who build and operate the infrastructure. Owners can earn up to $180,000 per year, per tower.
Demand for wireless cell phone towers has skyrocketed over the past 10 years in North America. Now the entire planet is shifting to wireless communication.
Yet somehow, this low-cost, instant cash flow business model is still under the radar.
The beauty of this space? Demand is huge and profit margins can be too. That's why the three industry leaders have a combined market cap that exceeds $120 billion.
It's also what makes Tower One a stock to watch in 2018. They are the only small cap entry point into this highly profitable market.
An Incredibly Lucrative Business Model
The infrastructure for a cell tower can take as little as 30 days to build. A mere 15 days later, the 'landlord' can be collecting rent-on a beautiful 10-20-year contract.
They have an enormous advantage over other real estate conglomerates too: every single one of their tenants have an investment grade credit rating.
These are giant telecoms like AT&T, T-Mobile and Verizon.
Each tower costs from $50k - $220k and generates $12k-$15k per year per operator. One operator is often enough to cover direct costs. Additional operators (up to four) are pure profit.
The margins in this business segment are potentially phenomenal.
They reach to around 80 percent EBITDA.
Capital may not be a barrier to entry for upstarts like Tower One (TO; TOWTF), as they can rapidly pay off their infrastructure investments.
Assuming each tower serves at least two operators, it takes only two years for the tower to recoup capital costs. That's when the profits start truly flowing.
Even with one client, a $50,000 tower can return $120,000 over a ten-year term. A 4-client tower is close to $500,000, for a 10x return on initial investment of $50,000.
The key to this business is your ability to negotiate and secure "tenant" contracts with the major Telcos. Unsurprisingly - competition in the U.S. market is intense.
That's why, today, the real opportunity is deep south of the border.
The $75.6 Billion South American Market
Latin American states are racing to catch up to Europe and North America on reliable, high speed mobile telecommunications infrastructure.
Countries like Brazil and Argentina need thousands of cell towers by 2020.
With average lifetime revenue per tower of $180,000 - we're talking about a total market that will be worth $75.6 billion. Right now, it's entirely up for grabs.
They're already operating in Colombia, Mexico and Argentina.
That's amazing potential for a company with only an $19-million market cap.
It plans to have 100 towers by the first quarter of 2018, and up to 300 towers by the same period of 2019.
Tower One's "Ace In The Hole"
Tower One's CEO is Alex Ochoa, whose team has through previous companies pumped $150 million into the tower industry and created billions in shareholder value.
It's a great meeting of minds that includes advisor Rolland Bopp, a former CEO of giant T-Mobile and Germany's Deutsche Telekom AG.
Most importantly - they're very well connected in South America. This is a relationship business, and Tower One has the right network to execute.
Bopp's contacts in the very tight-knit world of telecommunications could be Tower One's ace in the hole, as he's worked both sides of the table in client negotiations for towers.
COO Octavio De La Espriella is the ex-COO of Continental Towers. He helped expand that company's portfolio to over 200 towers in a two-year period.
Espriella's strong connections with the major telecoms in Colombia (Claro, Tigo, Avantel, Movistar) is a major asset.
These connections should help Tower One punch well above its weight.
The cell tower business model can be staggeringly profitable. You can build a tower for as low as $50,000 in 30 days, and start earning $1,000 per client, per month.
Each tower might be worth $180,000 over its projected lifetime.
South America needs to build 10,000 of them. That's a huge opportunity, and Tower One has an "ace in the hole" team with the connections to seize it.
You don't want to sit on these guys. They're already moving fast.
Tower One recently announced the acquisition of 80 new wireless tower sites in Argentina.
In addition, they currently have 15 towers under construction.
Even more recently - on March 26th - Tower One announced it had entered into an agreement to acquire a 100 percent interest in Process Cellular Inc ("Procell").
This strategic acquisition gives Tower One significant exposure to the California and Arizona markets with current clients such as: Verizon, AT&T, Sprint and T-Mobile.
More importantly, Process Cellular had 2017 revenues of over $17 million USD.
It provides Tower One with both serious cash flow and economies of scale.
That's just one of several deals management is actively pursuing.
Right now, they're the runt of the telecom litter. That won't last long.
Cisco Sytems (NASDAQ: CSCO) is a major player in telecommunications hardware. With a market cap of more than $185 billion, the company earned $49 billion in 2015 and $48 billion in 2016. For years Cisco was a stable stock, though one that showed very little growth. But in 2018 the company plans on pivoting away from its old staples towards new products.
Cisco is about to make the transition from hardware to software. For years, Cisco sold the hardware needed to build and maintain telecommunications networks: internet routers, switchers and cables connecting thousands of offices and households.
Much of the U.S. national network is in dire need of an upgrade, but Cisco is diversifying to meet a range of new challenges as networking moves to the cloud.
Snap Inc. (NYSE:SNAP) To much fanfare, Snap IPO'ed last year and managed to surprise many analysts. Snap Inc., on its surface operates as a camera company. It offers Snapchat, a camera application that helps people to communicate through short videos and images. But that's only its surface applications. Snap's real promise is in the data it collects, making it a key player in the data boom that is being fueled by internet applications.
By. Meredith Taylor
This news release contains "forward-looking information" identified by the use of forward-looking terminology such as "plans", "expects" "intends" or variations of such words or indicates that certain actions, events or results "may", "could", "would", "might" or "will be" taken, "occur" or "be achieved". Forward-looking information includes, but is not limited to the POWTF's intention to have 100 towers by Q2 2018, 200 towers by Q4 2018 and 300 towers within 2 years; that cell towers can be built for as little as $50,000; that POWTF can close on its announced acquisitions; that the margins on cell tower operations are huge, generally around 80%; that a cell tower can be built in just one month, and a cell operator can be brought online two weeks later; that cell operators sign deals for 10 or 20 years; that shortly after construction on a tower starts, it can generate cash; that the tower value can be substantially higher than building costs based on demand and rental rates; that demand for the towers will continue to be strong; that 10,000 towers are needed in South America. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Tower One to be materially different from those expressed or implied by such forward-looking information, including but not limited to: risks related to not being able to agree with telecom companies on important aspects of tower rental; the estimation of personnel and operating costs; that the cell market in South America will not grow as expected; that POWTF cannot close it announced acquisitions; that Tower One may not receive required regulatory approvals; construction of cell tower risks, including cost overruns, labor issues, technology that doesn't work as well as expected; delays or problems in construction; the availability of necessary financing; cell operators may not come to quick or long term agreements as expected; competitors may offer cheaper, faster or better services, reducing expected revenues; general global markets and economic conditions; risks associated with currency fluctuations; competition faced in securing experienced personnel with appropriate industry experience and expertise; the reliance on key personnel; financing, capitalization and liquidity risks including the risk that the financing necessary to fund continued development of Tower One's business plan may not be available on satisfactory terms, or at all; the risk of potential dilution through the issuance of additional common shares of Tower One; the risk of litigation; and the risk that cybercrime, climate change including unusual weather, or changing technology may severely damage Tower One's business. There may be many other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. We undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by law. Investors are cautioned against attributing undue certainty to forward-looking statements.
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