AT&T announced today that Tillman Infrastructure has built “hundreds of new macro cell towers” for AT&T’s network equipment, and that “hundreds of [additional] tower builds nationwide are underway, completing on a monthly basis.”

The announcement by AT&T is a thinly veiled shot across the bow to the rest of the nation’s tower companies. The message? If you don’t lower prices, Tillman Infrastructure or other tower companies will build a tower that AT&T will use instead of yours.

“Our work with Tillman Infrastructure exemplifies our future model for the cell tower industry,” Susan Johnson, AT&T’s EVP for global connections and supply chain, said in a release from the company. “We’re committed to working with vendors who offer a sustainable cost model while also delivering best in class cycle times and tower construction.”

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“We’re bringing a real alternative to the tower infrastructure space for all mobile operators, with competitive pricing and flexible lease terms that accommodate sustainable growth,” added Bill Hague, CEO of Tillman Infrastructure, in the release. “We will continue to work aggressively to construct and operate thousands of additional sites.”

And if that wasn’t clear enough, AT&T said in its release that the Tillman towers would “serve as an opportunity for AT&T to relocate equipment from current towers with other landlords as leases expire.”

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AT&T has made no secret of its desire for better pricing by tower companies. As reported by FierceWireless in 2016, the company initiated a widespread effort to reduce the rental and leasing rates it pays to cell tower owners, in some cases by simply asking for a cheaper price.

Then, in late 2017, Verizon and AT&T announced a joint venture with Tillman Infrastructure to build and share hundreds of cell towers in more in a move that was geared to be a threat to more established tower companies. Following that agreement, AT&T inked a similar deal with CitySwitch, and then shortly thereafter it announced a deal with Crown Castle for a “market-based framework” for a new tower and small cell deal.

At stake is a major network buildout by AT&T; the carrier is in the midst of adding WCS, 700 MHz and AWS-3 spectrum support to its network as it moves to 5G technology. (It's worth noting that industry trade group CTIA estimates that there were 323,448 cell sites in the United States in operation at the end of 2017.)

Interestingly, some tower companies appear to have become concerned. For example, American Tower earlier this year launched a program to prevent its contractors from constructing new towers within a half-mile of one of its existing tower sites, though the company quickly backtracked on those plans.

Although AT&T sought to demonstrate progress with its Tillman announcement today, most Wall Street analysts remain unconvinced that the effort will dramatically cut into most public tower companies’ earnings. “We understand the carriers' frustration with rising tower leasing costs, but we think their negotiating position is weak,” the Morgan Stanley Research wrote in a report earlier this year. “Like premium content providers or other types of real estate, the tower companies should maintain pricing power (though they may use it to achieve a different mix of results).

More recently, the Morgan Stanley analysts reported that most tower companies may not need to worry about direct competition in terms of tower sites. “On a national basis in a 0.5-mile radius, ~65% of towers have no competitor and just ~15% have more than one competitor. Within a 1-mile radius, ~45% of sites nationally have no competitor and just ~35% have more than one competitor,” the firm wrote in a report.