American Tower is making the amendment process more straightforward for carriers through its master license agreements (MLAs), company CEO Tom Bartlett said at the Goldman Sachs 29th Annual Communacopia Conference, the same day the towerco announced the signing of a 15-year MLA.
Not much has been revealed about the MLA, but in an interview with Brett Feldman, a managing director with Goldman Sachs, Bartlett said the agreement enhances T-Mobile’s access to American Tower’s U.S. sites while locking in synergies and facilitating T-Mobile’s continued rapid, efficient deployment of broad and deep nationwide 5G.
With the T-Mobile signing, American Tower now has comprehensive agreements with all the big three public tower companies, which makes leasing more cell towers more predictable for carriers.
“So [the MLAs] gives the [carriers] the ability to really be able to have that kind of flexibility to meet their own demands and to be able to engineer their network as easily as they possibly can,” Bartlett said. “And we think those kinds of relationships that we have uniquely positions us with them that our other towercos don’t.”
Having MLAs with the top three infrastructure-based wireless carriers should give American a window into the leasing trends for the next 10 to 15 years, but Feldman asked whether there is enough flexibility to grow revenue beyond what the MLAs cover. According to Bartlett, although some prospects remain to obtain more revenue through additional initiatives, such as indoor networks, American crafted the MLAs to keep costs in check.
Bartlett said he is unsure how much the possible additional revenue will total. “Our customers are very savvy,” he said. “They’re very smart in terms of how to build out the networks to be able to kind of live within the infrastructure that we’re allowing.”
MoffettNathanson’s analyst, Nick Del Deo said he was impressed by the size of the MLA, which extends for nearly 15 years and adds about $17 billion to American Tower’s contracted revenue backlog. However, according to Del Deo, most MLAs end up being revenue-neutral over time. Thus, the MLA may bring with it simplicity to the American Tower/T-Mobile relationship and increase predictability for future wireless infrastructure costs, but no windfall for either side.
“T-Mobile is likely to pay, and American Tower is likely to receive, rent that is, in aggregate, about what an a la carte arrangement would have yielded,” Del Deo said. “Our estimates suggest T-Mobile’s payments to American Tower are likely to be somewhat lower than observers were expecting after working through the noise of the integration process.”