T-Mobile and American Tower have signed a new long-term agreement designed to drive significant value for both parties over its nearly 15-year term. The new 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. The agreement also provides long-term revenue growth visibility to American Tower.
“Wireless mobility has never been more critical for consumers and businesses alike, and as technology continues to advance into 5G and beyond, that will only increase,” said Neville Ray, president of Technology at T-Mobile. “Through our multiyear agreement with American Tower, we’ve secured T-Mobile’s ability not only to accelerate our aggressive 5G build, but also to continue to deliver connectivity for our customers well into the future.”
The MLA led American Tower to increase guidance for straight-line revenue in 2020 by $95 million, according to New Street Research.
Spencer Kurn, analyst, New Street Research, wrote in a research note, “The agreement is positive for AMT because it sets the groundwork for accelerating growth in 2021, provides visibility into T-Mobile’s growth for the next 15 years, and provides visibility into churn expected from decommissioning Sprint’s legacy network. All of Sprint’s leases with AMT were all set to expire in late 2021, which could have driven a large churn event in 2021 and 2022. Details of the MLA are sparse, but we believe the MLA has spread this churn over a multi-year period, which should soften the impact of the churn from Sprint and ensure positive organic growth for AMT over the next several years.