[Beginning of Cramer's verbatim comments for this segment...]

Jim:          You want a great way to try to make money?... Find something we need, but don't have enough of... find yourself a shortage.

You've heard all about the mobile internet tsunami on this show... boy, did it make money today... holy cow... the smartphone revolution. Remember, yesterday, we had David Aldrich, one of our favorite guys, Skyworks Solutions Inc. (SWKS), up 10% today... and they make the power amplifiers for these phones. He came on the show to talk about how business is booming... he just raised his 4th quarter forecast... to genuine... much better than expected. As I said at the top of the show, when it isn't expected, it's huge...

Smartphones have gone from luxuries to necessities... as everyone wants to have voice, data, email, storage, photos, Facebook, Twitter, you name it... all in one gadget... and that's created a gigantic bandwidth shortage. We just don't have the mobile internet infrastructure to handle all the music and videos that people are downloading on their smartphones. I mean, I just witnessed... there was a great story last week in the New York Times about how the iPhone is overloading AT&T's cellular network. The average iPhone user takes up ten times the capacity of even the average smartphone user... causing dropped calls, spotty service, delays, slower download speeds... which is a big reason why AT&T plans to spend most of its $18 billion capital expenditure budget in 2009 on upgrades and expansions to its 3G network.

Of course, what I loved about the article is that they didn't give you the names of who is going to benefit. That's up to me... Now the reason I say that is that it looks like that includes erecting an additional 2,100 cell towers to boost coverage. AT&T's not alone here. Verizon's building out its own ultrafast LTE network for 2010. And even little old Sprint's throwing $1 billion into the pot in the 2nd half to build out its network.

And don't forget... when AT&T's iPhone exclusivity agreement with Apple expires... possibly as soon as next year, this data-hogging smartphone will come to other carriers, causing them to spend still more on wireless infrastructure to support Apple's data hog.

Okay, so who wins from this wireless infrastructure shortage?... Who benefits from all of this spending by the carriers?...

This is a side of the mobile internet tsunami that, frankly, I haven't spent much time talking about but, just likely the other mobile internet plays, I think the gains here could be multi-year, and I think the gains could be enormous...

When you look at where most of the problems are occurring and where most of the carriers are making their investments, it looks like the big bottleneck is in the mobile towers... The backbone of wireless communications... the offramp, the onramp of the mobile internet highway... that's where the money's going... the huge volume of data coming to and from the iPhone and other smartphones is creating this traffic jam...

I've got a solution for the traffic jam... or at least a solution for you to make money off of it... more cell towers... more antennas per tower... better connections to the wireless networks and stronger antennas... to handle the ever-increasing amounts of traffic. That means we want to buy the companies that own the towers, that control the bottleneck... and that can keep throwing on additional antennas to boost the signal... This is a very lucrative business to add antennas, because almost 90-95% of incremental revenue on the towers goes to cash flow...

There are two big players here. Again, I haven't talked about them... they're good stocks...

The first one is American Tower Corp. (AMT)... 19,600 towers in the U.S., 75% of them located in the top 100 wireless markets...

And the second one is Crown Castle Intl. (CCI)... with 22,300 towers owned or leased in the U.S., 72% in the top 100 wireless markets.

American Tower has less debt. Crown Castle said it expects new tenant addition to be significantly higher in the 2nd half of the year. Remember, the earnings per share numbers, in the case of Crown Castle at least - their reported losses - distort the true strength of these companies when you're going to do your homework... You'll see that. I want you to look at the amazing cash flow... a much better indicator of this kind of company's health.

They're both great. But perhaps the best case for one is made by a fellow named Brian Ashtenburg, who I work with at TheStreet.com... He does this "break-out stocks" newsletter... and gave me some of the ideas for this.

He came up with a name called SBA Communications Corp. (SBAC)...

This is the smaller one. It's smaller than American Tower or Crown Castle. It has just 7,800 towers... 80% of its revenue from leasing space on its towers to wireless service providers. They want to expand coverage and they need to put up more antennas. Once you have a tower, it's cheap and easy to put up an additional antenna, which gives your business model enormous operating leverage, especially considering the huge demand from carriers for more bandwidth.... Apple hog...

That's how SBAC gets most of its money. It also gets 20% of its sales from consulting and end-to-end construction services for its wireless carrier customers. When they want to put up a new tower, or 2,100 towers like AT&T is doing, SBAC tells them how it should be done, and then helps them build it. It's a fabulous play on the need for additional wireless infrastructure to accommodate the mobile internet tsunami.

SBAC is a serial outperformer, having raised guidance three straight times. Management has said that it expects activity levels to improve throughout the rest of the year.

How else?...

How about this?... How about a company that makes better antennas?...

That's a company like CommScope Inc. (CTV), a component of our mobile internet index. It's up about 12% since the index was created, in line with the index... and I think Commscope, which gets 60% of its sales from wireless infrastructure, including some of the best antenna out there, will exceed the Index's performance by a very big margin, as wireless carriers spend more to keep the wireless traffic flowing.

Tomorrow, on Speculative Friday, I will give you two other wireless infrastructure plays, but not today... They're small-cap, and you need a Taft-Hartley style cooling off period over the weekend before you hear them.

Here's the bottom line...

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Bottom Line:     The best way to play the wireless infrastructure shortage is with the cell tower companies. For the conservative among you, I want you to look at American Tower Corp. (AMT) or Crown Castle Intl. (CCI). For the more aggressive, go with SBA Communications Corp. (SBAC) or CommScope Inc. (CTV). And, yes, if you want to roll the dice on the concept, watch tomorrow night's show.

 

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