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First Quarter Revenues Look Good For American Tower

By The Editors of AGL

Like the other public tower companies, American Tower experienced a solid first quarter. The comm-infra firm’s total revenue increased 8.3 percent to $2,159 million in the first quarter 2021, while net income increased 55.8 percent to $652 million, adjusted EBITDA increased 13.3 percent to $1,440 million and consolidated AFFO increased 23.8 percent to $1,123 million.

“Looking forward, in the U.S., we expect that the gathering 5G momentum will enable us to leverage our extensive site portfolio and mutually beneficial relationships with key tenants to drive sustainable, predictable, recurring long-term growth in cash flows,” Tom Bartlett, American Tower’s CEO, said in a prepared statement.

Internationally, American Tower began 2021 by entering into the Telxius Towers transaction, which Bartlett said he expects to transform the company’s European business.

“Internationally, large multinational carriers are aggressively investing in their wireless networks to keep pace with rapidly growing mobile data usage as smartphone penetration accelerates and network technologies advance,” Bartlett said. “Our global teams followed that by delivering a strong quarter, highlighted by elevated demand for our sites, the construction of nearly 2,000 new towers and highly attractive growth in consolidated AFFO per Share.”

Analyst’s Take

Spencer Kurn, analyst for New Street Research, wrote that American Tower’s results, along with Crown Castle International and SBA Communications, are confirmation that “activity levels are rising sharply as carriers accelerate 5G deployments, which bodes well for growth later this year and into 2022.”

In a U.S. Communications Infrastructure Research note, Nick Del Deo, senior analyst, MoffettNathanson, noted that, like the other public tower companies, American Tower benefits from T-Mobile’s 2.5 GHz buildout, the C-band deployments and Dish Networks’ nationwide 5G build. However, he wrote about some wrinkles will set American Tower apart.

“First, American Tower is set to get hit with Sprint-related churn much earlier than its peers, with the first slug coming in Q4 of this year,” Del Deo wrote. “We try to focus on churn over the cycle in our work, but the market also cares about annual growth rates. Second, American Tower’s greater embrace of [master lease agreements] MLAs is likely to mute the benefits of the coming leasing upswing (and mute the deceleration on the other side), as more of its revenue is already locked in.

“And third, American Tower seems to be taking the most deliberate steps to try offsetting the pain of the Sprint churn to minimize its impact,” he added. “These include: ramping up new tower construction overseas; driving cost efficiencies within its business; and stepping up accretive M&A activity, most notably InSite Wireless Group and Telxius.”


American Tower Metro Data Center Expands Facility

American Tower Metro Data Center in Atlanta adds square footage, capacity in response to growing customer demands

The American Tower Metro Data Center recently expanded its facility at 55 Marietta in downtown Atlanta. The addition brings nearly 20,000 square feet and two additional megawatts of capacity to the facility. American Tower recently fully integrated the data center, formerly Colo Atl, into the American Tower brand and announced the expansion, both of which demonstrate the company’s ongoing investment into the data center space and commitment to customers.

“Expanding in the telecom hub of Atlanta gives us the opportunity to provide our customers with more power and capacity, giving them a vehicle to provide stronger connectivity options,” says David Fox, Director of Business Development, U.S. Innovation for American Tower. “Since acquiring our facility at 55 Marietta nearly two years ago, we’ve been committed to providing state-of-the-art collocation facilities in downtown Atlanta, and this expansion is the latest step we’ve taken to fulfill that promise.”

With the completion of the expansion, the American Tower Metro Data Center now has a total footprint of ~44,500 square feet across the second, fifth and eighth floors. The added capacity brings the total capacity to four megawatts. Last year, additional improvements were completed, including renovations on the fifth floor, the addition of a new dedicated Meet-Me-Area, upgrades to the security and surveillance system, revamped workspaces on each floor for customers, and more.

“Our top priority continues to be providing the best possible customer service,” says Fox. “We will continue seeking out ways to offer optimal connectivity options to our customers, so we may keep providing one of the fastest, safest, and most secure collocation environments in one of the top data center markets in the U.S.

American Tower, Dish Enter Long-Term Master Lease Agreement

By The Editors of AGL

American Tower has become the latest tower company to enter into a master lease agreement with Dish Network through the carrier will lease space on up to 20,000 American Tower communications sites.

Dish has previously announced MLAs with Crown Castle International, SBA Communications, Vertical Bridge, Harmoni Towers, Mobilitie, Parallel Infrastructure, Phoenix Tower International, Tillman Infrastructure, Tower Ventures and Vogue Towers.

Dave Mayo, Dish’s executive vice president of network development, said through the American Tower agreement  the carrier may lease space on up to 20,000 American Tower communications sites to support its nationwide 5G network deployment.

“Our team has already developed colocation plans for American Tower sites across the country to bring a new generation of connectivity to Americans,” he said.

Under the agreement, cash lease payments from Dish to American Tower will commence in 2022 and grow over time as Dish’s network deployment progresses. In addition, Dish may lease shared generators from American Tower on select sites and will have the ability to use American Tower’s zoning, permitting and other pre-construction services.

“We look forward to this agreement evolving into a long-term, mutually beneficial strategic partnership,” said Steve Vondran, American Tower’s executive vice president and president, U.S. Tower Division.  “We believe that our nationwide portfolio of communications sites is optimally positioned to continue to serve as the backbone of today’s critical mobile broadband networks while assuring a meaningful share of new leasing activity in the marketplace.”

Back in July 2019, Dish agreed to acquire Sprint’s prepaid businesses and customers, including Boost Mobile, Virgin Mobile and the Sprint-branded prepaid service, as a part of the merger agreement of Sprint and T-Mobile, which was under scrutiny by the U.S. Department of Justice. At that time, Dish also agreed to become a national facilities-based wireless carrier, deploy the nation’s first standalone 5G broadband network.

Dish Buys Republic Wireless

In a separate deal, Dish Network acquired Republic Wireless, an MVNO service operating on the T-Mobile network. Upon close, DISH will assume 200,000 customers, the Republic Wireless brand and other supporting assets.

After the acquisition closes, the existing Relay division of Republic Wireless will continue to operate as a standalone company and will become a wholesale customer on Dish’s 5G network. Relay provides communication and productivity solutions for frontline teams in hospitality, facilities management, manufacturing, healthcare and education, and will remain headquartered in Raleigh, NC.


Towers Will Host Future of Network Convergence: Bartlett

By J. Sharpe Smith, Senior Editor

Tom Bartlett, American Tower CEO, told the Q3 earnings call last week how American Tower aims to use its neutral-host real estate portfolio to help customers deal with the convergence of wireless and wireline networks, which will lead to numerous additional services that call for mobile data centers.

“We believe that this convergence along with increasing digitalization, network virtualization and cloud-native software-defined services will lead to increasing demand for distributed, interconnected global edge compute processing,” Bartlett said.

Infrastructure at the edge should remain a critical component of the network architecture as it evolves, according to Bartlett, which is where American Tower’s real estate assets reside.

“We are focused on developing communications infrastructure business models that augment the value of our existing assets, expand our revenue base beyond traditional tenants, and enhance our leadership role in the wireless ecosystem,” Bartlett said. “At the highest level, our goal is to selectively extend our digital infrastructure core capabilities to further encapsulate neutral hosted wireless connectivity, transport, and compute functions as part of our comprehensive platform.”

American Tower plans to offer tenants an integrated suite of complementary solutions to fit within the increasingly complex network designs.

American Tower will focus its investments on business models with contracted long-term revenue commitments from Tier 1 customers; multi-tenancy and multi-service offerings with low ongoing maintenance capex; operating leverage characteristics similar to towers; and synergies and adjacencies to existing American Tower assets and skillsets, Bartlett said.

In the United States, as 5G deployments accelerate, American Tower expects an increasing number of lower latency applications and more cloud-based customer demand for application-level and network compute functions at the edge.

“There are two distinct solutions within this emerging ecosystem: distributed compute and mobile edge compute,” Barlett said. “We believe that these two offerings will develop on different timelines and will allow us to provide differentiated valued propositions for our customers.”

On the distributed computing side, enterprise workloads continue to move to the public cloud. In the near term, on- or off-premise private cloud computing is also being used as a hybrid solution. American Tower has begun deploying micro data center facilities at select tower sites and has seen early indications of solid demand in collaboration with partners like Flexential, a nationwide data center platform.

“Small and medium-sized businesses are often willing to move legacy workloads to more responsive, proximate, cost-effective data centers, and we believe that many data centers at some of our macro towers can represent optimal locations for these installations,” Bartlett said.

In the long term, however, 5G mobile edge compute solutions at the tower to represent a much larger opportunity to fulfill the need for low latency, according to Bartlett.

“The foundational concept of our mobile edge strategy is the expectation that localized neutral host, multi-operator, multi-cloud micro data centers can be the most cost- and technology-efficient means to which latency can be reduced,” he said. “These facilities can be optimally located at select macro tower sites that already have power, fiber and multiple wireless tenants, rather than each cloud provider and carrier forging ahead with their own connectivity arrangements.”

Colo Atl, an American Tower company and provider of carrier-neutral colocation, data center and interconnection solutions, is in the early stages of small-scale deployments at the tower sites.

“At this point, we think a scaled solution is still at least a few years away, but there is tangible progress being made, and we are excited about the possibilities,” Bartlett said. “Underlying this excitement of the potential future 5G related use cases that we expect to drive rapid uptake of mobile edge compute functions.

American Tower Expects Boost from Sprint/T-Mobile in Back Half of 2020

By J. Sharpe Smith, Senior Editor

American Tower CorporationAlthough the tower company will see some churn related to network rationalization, Jim Taiclet Jr., American Tower’s chairman, president and CEO, reiterated his expectations that the merger of T-Mobile and Sprint will be “net neutral to net positive” in the mid- to long-term. Taiclet spoke during the company’s fourth quarter 2019 earnings call.

“This optimistic perspective has been driven by our belief that the combination would speed up the deployment of multiple band spectrum, including a number of mid-band assets, and that the accelerated nationwide 5G coverage requirements associated with this transaction will drive further demand for tower space,” Taiclet said.

Tom Bartlett, American Tower’s chief financial officer, agreed, saying that the new business activity is expected to increase in the second half of this year and into 2021.

“With all that said, we remain incredibly constructive on the long-term demand trends for tower space in the United States, and given the forecasted demand growth, anticipated spectrum deployments and opportunities associated with 5G,” Bartlett said.

American Tower anticipates even stronger long-term upside from Dish’s commitment to building a new full nationwide network.

“We anticipate that [network rationalization] will be more than offset by incremental industry network investments in coverage, capacity and densification over time,” Taiclet said. “We’re excited to partner with all of our tenants, including the new T-Mobile and Dish, to help speed the deployment of fast, efficient 5G broadband service to consumers throughout the country.”

Meanwhile, in the United States, American Tower is revamping master lease agreements and working with its tenants to optimize service levels to support both 4G and 5G deployments, reducing cycle times and increasing efficiency in network deployments. The tower company’s goal is to reduce its run-rate SG&A (selling, general and administrative) expense as a percentage of revenue, while adding scale, growing revenue and improving business processes.

“Among the contributors to this are our master lease agreements that provide for more streamlined administrative processes for site applications and our highly capable in-house zoning and permitting and structural engineering teams,” Taiclet said.

Bartlett said the post-merger New T-Mobile will bring American Tower roughly the same organic tenant billings growth it would have had before the merger, or perhaps slightly higher in the first quarter. He said he expects more of the billings growth to fall into the second half of this year, which will be positive for American Tower ahead of 2021.

In the United States, Bartlett said, American Tower is well positioned to benefit from the new wireless industry structure, working with existing and new tenants to deploy 5G wireless communications equipment. He also commented on other areas that represent growth possibilities, such as edge compute.

“As far as edge compute is concerned, my vision long-term is that there’ll be a lot of value to being able to interconnect at the cell site for multiple mobile operators and multiple cloud providers to benefit from the latency improvements and the throughput and responsiveness of 5G in the future,” he said.

American Tower is testing edge compute with Colo Atl in the laboratory and at six sites at American Tower locations in the Southeast.

“This year we decided to go ahead and test this out with a few very well-regarded parties in those fields,” Barlett said. “We hope to lead the infrastructure definition of what it is going to take to do these kinds of edge compute solutions.”

Quotes Courtesy The Motley Fool.