SBA Communications Corp. (NASDAQ:SBAC) Q1 2018 Earnings Conference Call Transcript
Apr 30, 2018 • 05:00 pm ET
(Operator Instructions) Rick Prentiss, Raymond James.
Obviously we had a busy Sunday with the Sprint T-Mobile merger announcement. Jeff, you talked about it there. Can you update us a little bit on also what the remaining life is that you have on your Sprint and T-Mobile leases? And is the new MLA with Sprint, is that take-or-pay? Is that kind of a guarantee? I'm just trying to think through their synergy slides and what it means for you guys.
Yes. Rick, it's Brendan. In the press release, we actually did disclose some information regarding our Sprint and T-Mobile contracts, including the stair of revenue that they each represent for us as well as on the overlap site how much revenue comes from each, just to give you those numbers quickly on the sites where we have both Sprint and T-Mobile today. Sprint represented 5.9% of our total cash site leasing revenue and T-Mobile was 6.2%. In terms of the remaining terms, Sprint has on average approximately six years left and T-Mobile, approximately three years left. But the range of those is quite broad. So in the case of Sprint, it's between one and 13 years. And in the case of T-Mobile, it's between one and 10 years.
We did get some nice average term elongation from that MLA, Rick. And that is, in fact, a hard obligation, which will not be impacted by the news of yesterday.
And then we got a lot of questions about acquired network churn. Obviously, it's coming down. But if you look back to the days when Leap, Metro and Clearwire got acquired like in 2013 and 2014, how long was it before you -- when the deal was closed or when you started getting notification of churn and then the churn started occurring? We're just trying to gauge if the Sprint T-Mobile deal is approved, what sort of time frame we should be thinking about given those average lives and your past history with other transactions?
Well, I think it's hard to generalize what happened with those deals and with this deal given the disparate spectrums and the large number of folks that need to be migrated over. I think the commentary that was given yesterday that talked about really making sure they had all the spectrum available at all the sites that were going to remain before they started any decommissioning, I think is going to -- take it at face value. I think that is going to make this a longer process than what we saw with -- certainly with AT&T Leap, for example, and then even the case with T-Mobile and Metro. But even in those cases, it was several years after closing before you really started to see any type of termination notices.
Okay. And final question for me is as you look at AT&T, FirstNet and Sprint starting to ramp their applications, how long is the process from application to revenue getting booked? I know you said it varies but