The need for wireless connectivity keeps rising with every new smartwatch and self-driving car. But despite the rising demand, one of the country’s largest cell tower operators has recently seen its stock drop like a call in poor reception.
Crown Castle’s share price has fallen over 24% in the past year — a return almost ten percentage points worse than its primary competition in the tower REIT sector, American Tower (NYSE: AMT) and SBA Communications (NASDAQ: SBAC).
With a portfolio of over 40,000 cell towers, Crown Castle has separated itself by focusing solely on the U.S. tower market. This year, the company became the sector’s only major “pure-play tower company” in the United States after selling off its fiber and small-cell divisions in May.
But doubling down on U.S. cell towers has proven controversial. Tower companies have instead pursued growth opportunities by expanding into data center management and international cell tower markets. But investors are rewarding the companies that diversify beyond their traditional domestic market, showing the direction the broader wireless infrastructure sector is headed.
“[Crown Castle is being] penalized now by not having additional areas to expand into,” said Thomas Dolislager, the president of Sell Tower Consulting. “Now that they have sold their fiber business, they don’t have anything to replace that lost revenue or maintain high growth rates.”
Real estate investment trusts (REITs) own real estate properties that generate income. Tower REITs operate swaths of cell towers across the country. Instead of leasing out physical space, tower companies lease antenna space to major wireless carriers such as AT&T and Verizon. Their wide networks of cellular infrastructure enable wireless connections over large geographic areas.
Several of the headwinds faced by Crown Castle affect the sector as a whole, including a limited customer base. Reliance on so few tenants makes tower REITs beholden to mergers and bankruptcies in the telecom industry. A recent example was DISH Wireless’s attempts to enter the 5G network. The company signed multi-billion-dollar leases with the three major tower REITs in 2020 and 2021. But when the carrier filed for Chapter 11 bankruptcy earlier this summer, it left the tower REITs with almost $7 billion in broken lease agreements.
Satellite communication providers pose another threat to tower REITs. A network of low Earth orbit satellites can provide wireless coverage to areas without constructing terrestrial towers, worrying some investors that the sector might encroach on tower REITs. Most worrying is Elon Musk’s SpaceX. The company’s Starlink satellite internet division posted $7.548 billion in first-half revenue this year, up almost 50% from 2025.
Optimists believe satellite networks will upend traditional mobile networks by gaining new customers. Yet technological limitations could stifle the hype. Satellite connections suffer from poor indoor connectivity and latency issues that slow internet response times.
“What’s limiting you is distance and the speed of light, and those are not things you’re going to do anything about,” said Paul Drake, an investment analyst who started the “Focused Investing” newsletter on Substack after retiring as a professor of astrophysics at the University of Michigan.
“While we recognize these broader themes, we believe the share price movements were more closely linked to company-specific factors that happened to affect several businesses in the same sector at the same time,” said Lazard Asset Management, which manages a global infrastructure ETF with 14.7% of its holdings in Crown Castle and American Tower, in a June shareholders report.
SBA and American Tower are targeting new growth opportunities by expanding their tower operations worldwide. American Tower’s international portfolio contains over 100,000 cell towers across five continents and accounted for 37% of its total revenue in 2025. International operations similarly accounted for 27.4% of SBA Communications’s total site leasing revenue last year.
The two companies have also expanded into data center management, creating dedicated subsidiaries to capitalize on the A.I. boom. American Tower operates over 30 data center facilities in the United States. SBA manages two data centers in the U.S. and one in Brazil.
Analysts worry Crown Castle is betting on the wrong horse. While the broader rollout of 5G networks could generate new income, the need to construct new domestic cell towers is restricted as mobile networks already cover nearly 100 percent of the U.S. population.
“Crown Castle may have simplified the company at precisely the time when density and fiber connectivity are becoming more important competitive advantages for terrestrial wireless infrastructure,” said Alex Pettee, the president and director of research at Hoya Capital Real Estate.
Despite the concerns, Crown Castle remains a play for investors building a dividend-focused portfolio. The company has maintained a high dividend yield at 5.82%, outpacing both American Tower and SBA Communications at 4.12% and 2.8%, respectively.
Bryan Begun of Lake Tahoe, CA owns shares of Crown Castle in his dividend-focused portfolio. While he does not intend to buy any new shares, Begun does not plan to shrink his position. He believes both terrestrial and satellite providers stand to benefit from the Internet of Things — the growing network of physical objects that require a wireless network connection to function.
“Just wait until robots are in our midst,” said Begun. “I’m pretty sure they’re gonna need to be plugged into the internet.”