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Medium Growth strategy

Telco Towers

#Telecommunications
ProHub Comment

This case tests the candidate's ability to develop a growth strategy by identifying new revenue opportunities while managing fixed upgrade costs. The key insight is recognizing that new customer segments (fixed wireless access providers like Blue Devil Broadband) represent a new use case beyond traditional wireless provider antenna leasing. The market sizing analysis is critical to determining which opportunities are worth pursuing.

Estimated Time 15 minutes
Difficulty Medium
Source Duke
50 / 100
Telco Towers is a cell tower company in the United States which leases space on its towers to wireless providers (i.e. AT&T, Verizon, etc.) who install their respective antennas / technology on its towers. With the advent, and expansion, of 5G across the country, Telco Towers is locked into a contract to upgrade its suite of towers to support 5G technology and now needs a strategy to grow its business to cover the cost of upgrading its towers.

Clarifying Information

  1. Leasing to wireless providers is currently Telco Towers sole form of revenue
  2. Fragmented market overall with new competitors entering the market and providing rental space on towers for a fraction of Telco Tower’s price; eroding the margins on these types of leases
  3. Wireless providers are also pursuing their own tower builds to minimize costs
  4. Telco Towers has ~20K towers across the United States (note to interviewer: this is not critical to case)
  5. Rental space is charged per antenna installed by the lessee; each antenna can support service to a certain number of households so at times the lessee needs multiple antennas to support service to all of its customers in a given area
  6. The contracts and costs to upgrade the towers have already been signed and are therefore not negotiable at this point