Carrier-Neutral Network Operators Market Review, 3Q 2018 – CNNOS Now Operate 593 Data Centers, 2.3 Million Cell Towers, and Over 450K Route Miles of Fiber –

DUBLIN–(BUSINESS WIRE)–The “Carrier-Neutral
Network Operators: 3Q18 Market Review”
report has been added to’s

This market review provides a comprehensive assessment of the
carrier-neutral network operator (CNNO) market segment based on
financial results through September 2018 (3Q18). The report tracks over
25 financial KPIs for 32 individual CNNOs, across the cell tower, data
center, and bandwidth/fiber segments. It also provides an outlook for
the sector.

Carrier-neutral providers of network infrastructure are playing a
crucial role in the development of the telecom sector. From US$17.6
Billion ($B) in revenues in 2011, CNNOs recorded $53.7B in 2017,
reflecting a CAGR of 21%. In that same time, the sector doubled its data
centers under management, almost tripled fiber route miles, and
increased its cell tower count by over 10x.

Much of the CNNO sector’s growth has been acquisition-induced. In fact
from 2011-17, acquisitions have burned more cash than capex in the
sector. CNNO capex in the 2011-17 period totaled $73.5.0B, versus $95.3B
for M&A. However, M&A spending slowed to a trickle in 2018, and CNNO
revenue growth for the first three quarters of 2018 has been relatively
flat: 12 month revenues through September were $54B, up just 4%. Growth
in the data center segment remains strong, but the tower & bandwidth
segments have slowed; the latter is affected in part by CenturyLink’s
acquisition of Level 3.

Other findings from the 3Q18 analysis include:

  • Capital spending among CNNOs remains high as a % of revenues. In 3Q18,
    CNNO capex of $5.4B was 40% of revenues. Most CNNO capex is for the
    purchase of property and related construction costs, with telecom
    equipment & software taking up a small percentage. Some CNNOs are
    deploying more intelligence in their networks and evolving business
    models, though, such as Crown Castle and Zayo.
  • CNNOs have low employee costs (or high revenues per employee), but
    high capital costs. Most CNNOs reap benefits from REIT classification,
    but they still have huge debt loads. As of September 2018, CNNOs had a
    total of $137.7B in debt, and just $8.5B in cash & investments.
    Gauging their ability to manage this debt & raise new funds for
    expansion is essential to tracking the sector.
  • The number of data centers operated by CNNOs globally is now 593. Few
    would be classified as hyperscale or Webscale data centers, but this
    asset base is still significant. The CNNO data center segment has been
    driven by the growth of cloud & mobile computing, IoT, and increased
    telco & Webscale reliance on carrier-neutral players to complement
    their networks.
  • CNNOs’ tower count as of September 2018 was roughly 2.3 million,
    including China Tower. Many telcos have spun off tower assets over the
    years, leaving most towers now in independent hands.
  • In the bandwidth segment, CNNOs now operate over 461K route miles of
    fiber, used mainly for wholesale or similar services. This segment is
    the least stable of the three. There is a strong incentive for telcos
    to retain ownership and control of their fiber resources. The
    acquisition of leading CNNO bandwidth provider Level 3 by a telco,
    CenturyLink, illustrates this urge.

It is expected that CNNOs with a proven track record of acquisitions
will to continue looking for multi-billion dollar asset deals for the
next several years. That assumes a favorable financing & tax climate.
CNNOs are also expected to function as market consolidators when the
next market downturn hits. The larger CNNOs will push the envelope on
their business model as they grow, adding services on top of their
infrastructure and building further to the edge of the network. Top-line
growth will tick up again with M&A deals, and the continued growth of
new build CNNO networks such as NBN Australia.

Topics Covered

1. Abstract

2. Analysis

3. Key Stats through 3Q18

4. Segment Drilldowns

5. Company Drilldowns

6. KPIs by Company

7. Exchange Rates

8. About

Companies Mentioned

  • American Tower
  • Arqiva
  • Balitower
  • Bharti Infratel
  • Cellnex
  • China Tower
  • Crown Castle
  • EI Towers
  • GTL Infrastructure
  • Inti Bangun Sejahtera
  • Inwit
  • Sarana Menara Nusantara
  • SBA Communications
  • Solusi Tunas Pratama
  • Telxius
  • Tower Bersama Infrastructure
  • CoreSite Realty
  • CyrusOne
  • Digital Realty
  • DuPont Fabros
  • Equinix
  • Interxion
  • QTS Realty
  • Chorus Limited
  • Cogent
  • Internap
  • Level 3
  • Lumos
  • NBN Australia
  • Superloop
  • Uniti Group
  • Zayo

For more information about this report visit

Laura Wood, Senior Press Manager
E.S.T Office Hours Call 1-917-300-0470
For U.S./CAN Toll Free Call
For GMT Office Hours Call +353-1-416-8900
Topics: Networks