5G Reality Isn't Matching the Hype, Former Tower Executive Says

Grupo TorreSur, a Latin America-focused tower company, and a founder of American Tower, the largest U.S. player. The U.S. tower market is “very mature” and “you’re not seeing significant growth,” he said. At this point 80% of growth is coming from existing carriers adding equipment to towers, he said. In each previous generation of wireless “the carriers had something new, conceptually, to sell” and “something that people really wanted,” Eisenstein said: “That doesn’t exist for 5G -- there is no silver bullet. We can talk about smart cities and things like that, and AI, but the reality is the carriers aren’t making any more money.” The carriers have also “painted themselves into a corner” by hyping 5G since 2019, he said. A lot of people still don’t have 5G phones and customers who do “really don’t notice a difference” over 4G, he said. Carriers in reality “are building out 5G more slowly than they hype, or than they talk about,” he said. That means the top-line growth for major tower companies also isn’t as high as expected, he said: “Then you’ve got Dish [Wireless] not building out as quickly as people had thought.” Eisenstein blames in part rising interest rates, which mean less capital available, and adjusted free cash flow and other indicators “have dropped significantly." Carriers worldwide are seeing the same issues and aren’t building out 5G as quickly as expected, he said. The only significant growth is coming in developing nations like India, Eisenstein said. “It all depends on where the tower industry has gotten off the ground,” he said. Despite industry complaints, U.S. carriers have all the spectrum they need for 5G, he said: “It’s not as if they can’t build out”; they’re just choosing not to deploy that quickly.