SBA Communications: 2026 growth stalls as 6G waits beyond 2028

SBA Communications (SBAC), a real estate investment trust specializing in telecom infrastructure, outlined its outlook for 2026–2028 in a September 2026 conference presentation, emphasizing a period of financial discipline before potential growth resurgence. The company’s CEO, Marc Montagner, framed 2026 and 2027 as transition years marked by elevated international churn, increased cash interest expenses, and higher operational costs, though he projected a rebound in 2028 driven by advancements in 6G technology and direct-to-consumer wireless services via satellite and terrestrial networks. Key financial metrics underscored the near-term challenges: annual revenue losses from Dish Network defaults totaled $56 million, while mid-2026 international churn was expected to reach $38 million, with Brazil accounting for roughly $28.5 million of that figure. Domestic lease-up remained steady at $35 million annually, excluding Dish, while total claims against Dish—including unpaid lease services and decommissioning costs—were estimated at less than $200 million. Debt management remained a priority, with $3.5 billion in investment-grade financing completed in July 2025, reducing outstanding obligations by $1.1 billion in revolving credit and $2.3 billion in term loans. Upcoming debt maturities included $1.2 billion in asset-backed securities due in November 2025 and $1.5 billion in high-yield debt maturing in February 2026 at a 3.625% coupon, with refinancing expectations at low 5% rates. Cash reserves stood at roughly $500 million, and the company maintained $2.5 billion in untapped revolver capacity, though its leverage ratio hovered near 6.5x, within its target range of 6.0x to 7.0x. Projected annual EBITDA was $1.95 billion, with gross profit margins expected to range between 74% and 85%. Dividend payouts were stable at about 41% of earnings, with a 2.5% to 2.68% yield and modest growth anticipated in the low double-digits annually. Share repurchases in 2025 totaled $500 million at an average price of $200 per share, reflecting a stock price-to-earnings ratio of 19.79 and a PEG ratio of 1.44. The company’s international portfolio, representing 15% of revenue and EBITDA, faced consolidation pressures in markets like Brazil, where 5G deployment remained below 50% and base station density was 25% of U.S. levels. In Central America, SBA acquired 7,000 sites from América Móvil in 2025, with contracts denominated in U.S. dollars and CPI escalators extending through 2040, while Tanzania’s double-digit growth rate drove plans for 200 new sites in 2026. Montagner noted that while satellite solutions like SpaceX’s Starlink could expand coverage, terrestrial networks remained essential for capacity due to physical constraints, complicating infrastructure replication amid high construction costs and restrictive zoning laws. The company’s long-term growth strategy relied on 6G deployment, with potential launches expected in late 2028 or 2029, alongside handset spectrum and V3 satellite launches for direct-to-consumer wireless services. The outlook also included potential buyout discussions, as the board remained open to attractive offers while fulfilling fiduciary duties to stakeholders. Despite near-term headwinds, SBA’s balance sheet remained robust, with projected excess cash flow of $700 million annually and a focus on maintaining liquidity and operational efficiency through 2026 and beyond.