The smartphone market in the United States achieved a 50 percent penetration rate in 2012. The two largest operators, AT&T and Verizon (News - Alert), have 64 and 53 percent of their customers using smartphones, respectively, chewing up a lot of bandwidth. With the implementation of 4G LTE, operators will need additional infrastructure to meet the growing demand from consumers and businesses. Cell towers hold the cellular transmission and reception equipment, and are one of the most basic requirements of this infrastructure.

In the U.S., the three largest cell phone tower providers are American Tower (News - Alert) (AMT), Crown Castle International (CCI) and SBA Communications (SBAC). All three companies have enjoyed a steady rise in their stock prices in the past year, boosted by telecom services. The growth the companies are experiencing is not only in the U.S., but around the world.

This growth is going to continue to expand across the spectrum of all wireless providers as they are in the midst of an upgrade to 4G and 4G LTE (News - Alert). This process is going to benefit tower companies as demand in subscriber growth and data usage continues to grow.

The tower business provides services to wireless companies, radio and TV broadcasters, government organizations and other industries. Tower companies own and maintain towers usually by renting the space in which it is located. This has been one of the biggest issues this industry has had to face, as property owners demand higher rates, resulting in lawsuits.

Each power can handle around four or five tenants, and once tenants find a suitable site, they lock in long-term leases because renewal rates are high. Operating and maintenance costs are very low the minute a tower is up and running, and an estimated 35 percent of the rental income is free cash flow.

The Wireless Association (CTIA (News - Alert)) said there were more than 322 million active cellular subscriptions in the U.S., which is more than the U.S. population. These subscribers are covered by more than 285 million cellular transmission sites.

Wireless industry capital spending in 2012 was around $29 billion, which was up from the $26 billion of the previous year. Experts forecast this expenditure will continue at this rate over the next several years.

"Clearly the mobile Internet is the most pervasive trend driving consumer behavior today and we are well positioned to benefit from this growth in mobile data traffic," said W. Benjamin Moreland, president and CEO of Crown Castle.