Here’s a quick brain-buster for you:
Name one person you know, over the age of 18 and under 50, who doesn’t have a cell phone.
Yeah, tell me about it. You can’t do it. And if you were able to name somebody who doesn’t have a cell phone, I guarantee it took you a few minutes to think about it, right?
It’s understandable. There are 180 million cell phone users in the United States alone.
With that kind of market penetration, the cell phone companies have been making a killing on subscription services… especially because of their contract policies. And the competition between rival companies is hotter than ever.
Maybe you’ve notice this too. Every time I sign a new contract for cellular service, the subscription price goes down. In the great spirit of competition, cell phone companies are forced to lower subscription prices to keep existing customers and attracted new ones.
But now the cell phone companies have hit bottom.
Subscription prices simply can not go any lower. So they must focus on different ways to compete against each other for customers.
One way they’re doing this is by promising that their service has superior reception.
Recently, Cingular is running their "Allover Network; More Bars in More Places" campaign and Verizon has the "can you hear me now" guy.
Let’s face it. A cell phone is only as good as its provider. Bad cell phone reception is something that has affected most every person who reads this article. I believe good reception is the most important feature a cell phone can have. And I know that there are some out there who agree with me. Each time I need a new cell phone I always ask around to see which company has the best reception.
Behind all the hype and advertising schemes, premium cellular service is based on the quality and quantity of cellular antennas.
That’s why the companies who hold these antennas are going to make a massive fortune over the next few years.
Companies like Global Signal Inc (GSL), SpectraSite Inc (SSI), Crown Castle International Corp (CCI), and American Tower Corp (AMT) all stand to make a huge profit within the coming years.
I know, James Cramer loves the tower business. He may be nuts, but this time he may also be right.
You see, cellular antennas are too expensive to build. It’s much cheaper to lease space on existing antennas. If Cingular or Verizon really wants to provide their customers with a better reception, they’ll have to go to these companies to lease space on there existing antennas.
Like anything else, as the demand for space increases so will the leasing cost.
None of us can look into the future. But we can speculate what to expect given our prior information. And my prior information tells me that the cell phone industry is a cash behemoth.
-Luke Burgess
