Although 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.
Six weeks ago, few people knew there even was a Mobile Infrastructure Hall of Fame. But as WIA President and CEO Jonathan Adelstein took the stage for the first induction ceremony in a crowded room of 500 of the industry’s leaders, it felt like there has always been one. Or at least there was a pent-up demand for one.
“Today, these five honorees come from companies with a combined market cap of around $200 billion. They employ nearly 100,000 people and growing. And they’re driving the innovation economy with wireless broadband few dreamed possible in the flip phone era,” Adelstein said. “These five leaders are inducted tonight because of their foresight, their vision, and their tenacity. Each faced down challenges — and overcame them all.”
Gathering the top wireless CEOs and others at a ballroom in Washington D.C. on a Wednesday night in mid-November to honor its best had another altruistic goal. It raised $500 thousand for the WIA Foundation in support of training, education and apprenticeships.
“Tonight, the [inductees] lend us their presence because each believes — with us — that another challenge lies ahead for the wireless industry. To build world-class 5G networks — we need a world-class 5G workforce. Together, we’re taking steps to meet that challenge — building a workforce that’s worthy of this great industry,” Adelstein said.
The evening was attended by such notables as FCC Chairman Ajit Pai, Commissioners Michael O’Rielly and Brendan Carr, U.S. Sen. Steve Daines, and other guests from the FCC, Congress and the Administration.
The inaugural class of Hall of Fame inductees included: Neville Ray, CTO, T-Mobile; Steven Bernstein, founder, former CEO and current board member of SBA Communications; Steven Dodge, founder, former CEO, American Tower; John Kelly, former CEO, Crown Castle; and Jose Mas, CEO, MasTec Network Solutions.
John Legere, president and CEO of T-Mobile, lent his star power and sense of humor in a heartfelt tribute to Ray, who has 25 years of wireless experience and has led the carrier through the LTE roll out, from the zero POPs in 2012 to 324 million POPs today. The first 200 million POPs were built in six months. He also pushed new technology into the field, including Wi-Fi calling, VoLTE, License Assisted Access and 4X4 MIMO and 256 QAM.
“Neville Ray is truly a genius,” Legere said. “This is a guy that gets things done. You give him the goal and the resources, and you just know that it will be done. You get out of the way.” He joked that Ray’s budget of $50 billion also played a key role in the success. “Give the guy some cash and he makes it happen.” Ray later clarified that he only got $40 billion.
Jeffrey Stoops, president and CEO, SBA Communications, praised Bernstein’s decision-making ability and leadership qualities.
“He can quickly and incisively distill complex issues down to straightforward decisions has been a critical part of our success,” Stoops said. “More importantly, it’s his entrepreneurial spirit and his values, including honestly, integrity, fair play, quality, customer service and hard work, that Steve instilled in SBA that remains a driver of our continued growth and success.”
Jim Taiclet, chairman, president and CEO, American Tower, said Dodge has been a “true trailblazer” for the tower industry, and has served as innovator throughout his 40-year career, which included banking, media and telecom.
“He founded and took public three pioneering companies. The first was American Cable Systems, which he grew into an industry leading position and sold to Continental Cable. Then he went on to American Radio Systems, which was sold to CBS, and then American Tower Corporation. The only flaw in Steve’s plan was an apparent lack of creativity with company names.”
Ben Moreland, former CEO of Crown Castle, introduced Kelly as the “most wonderful person” he has ever known. Kelly served as a mentor to Moreland and “set a high bar as a humble leader and a really nice guy,” Moreland said. Kelly was CEO of Crown from 2001 to 2008 and remained on the board for a number of years afterward.
“He inspires people to be the best they can be,” Moreland said. “He instilled a very customer-centric focus that required us to always think about a win-win situation with the carriers.”
After Mas became CEO of MasTec, the company grew to 22,000 professionals nationwide, quadrupled its revenues, increased earnings six-fold, and reached a ranking of 428 in the Fortune 500, O’Rielly said in his introduction.
Additionally, Mas diversified MasTec beyond telecom construction into renewable energy, oil & gas and electric transmission, among others.
“Mr. Mas is not just as successful businessman. He is a long-time leader in the Miami-Dade United Way’s Toqueville Society, which donated $15 million to improve lives last year. Most recently Mas and his brother Jorge joined a consortium with David Beckham to raise $25 million to bring a new Major League Soccer team to Miami,” O’Reilly said.
In 2007, American Tower set a goal of quadrupling both the size of our communications site portfolio and its financial performance over a ten-year timeline. Based on its 2017 results, the tower company achieve that goal, and then some. It has 150,000 sites versus a goal of 100,000 sites, and $6.72 per share of consolidated AFFO versus a goal of $6.00 per share.
“Moreover, in 2017, we delivered growth of nearly 16 percent in consolidated AFFO per share, expanded our return on invested capital, increased our common stock dividend by more than 20 percent, and repurchased approximately $770 million in stock,” Jim Taiclet, American Tower’s CEO, said during the company’s fourth quarter 2017 earnings call.
American’s guidance for 2018 included organic tenant billings growth of more than in the United States, driven by unlimited data plans, increasing mobile video consumption, announced spectrum build-outs in the 2.5 GHz and 600 MHz bands and the planned FirstNet deployment.
“We also expect consistent demand for tower space in Latin America, notably in Mexico and Brazil, as well as robust activity in our key markets in the EMEA region,” Taiclet said. “Finally, we have incorporated into our 2018 outlook the expected impacts of the ongoing carrier consolidation process in India. We continue to have a high level of confidence that once the consolidation activity concludes, the Indian mobile industry will be positioned for major network investments to bring 4G service to the country’s 1.3 billion people, providing strong growth opportunities for our extensive portfolio in India.”
Nick Del Deo, analyst with MoffettNathanson, expressed skepticism about the Indian tower market.
“Over the past year, American Tower has maintained a stiff upper lip, focusing on the long-term benefits of getting over this hump while ratcheting up expectations for the pain that is to come,” he wrote. “From here, there are really two pertinent questions as it relates to India. First, how do expectations compare to the guidance American Tower has laid out?”
February 27, 2017– In the fourth quarter 2016, American Tower saw total revenue increase 20.3 percent to $1,540 million and property revenue increase 21.6 percent to $1,521 million. Those results were in line with the full year 2016 numbers, which included a 21.3 percent increase in total revenue to $5,786 million and property revenue increase of 22.1 percent to $5,713 million
“In 2016, we once again generated double digit growth in our property revenue, Adjusted EBITDA and Consolidated AFFO per share,” Jim Taiclet, American Tower’s CEO, said. “At the same time, we continued to expand our asset base through our active tower construction program and accretive acquisitions like the Viom transaction in India and ended the year with nearly 145,000 towers and small cell systems.”
Tower growth is being driven by increases in smartphone penetration and monthly data consumption, including in the U.S., where the average smartphone user now consumes over 4.4 gigabytes of data per month, according to Taiclet.
“We expect that these trends will in turn result in continued network investment and underpin our expectations for 2017, which include organic tenant billings growth of over 7 percent and consolidated AFFO growth of over 10 percent,” he said. “Further, we continue to target annual dividend per share growth of at least 20 percent, remain committed to our target net leverage range and expect to evaluate both accretive acquisition opportunities and a reinstatement of our share repurchase program during the course of the year.”
May 5, 2016 — Enjoying a solid start to 2016, SBA Communications reported that carrier activity was consistent with the last three quarters of 2015, featuring mostly amendments to existing macro sites, according to the towerco’s first quarter earnings call. Aside from normal churn and an iDEN de-commissioning hangover, which will last most of 2016, SBA achieved organic leasing revenue growth of 8.1 percent in the first quarter.
“By application and executed contract volume, the activity is substantially amendments,” said Jeffrey Stoops, president and CEO. “We expect the investments in macro sites by our U.S. customers will remain heavily weighted towards amendments for the remainder of this year.”
SBA projected increased growth in the long term (by 2020) through new sites and amendment activity, but conservative short-term estimates led Wells Fargo Securities to maintain its Market Perform rating for its stock.
“While this is a positive, SBAC continued to speak to a more muted domestic spending environment, which does not seem to be changing near term,” wrote Senior Analyst Jennifer Fritzsche.
During the quarter, carrier activity centered on the AWS-1 (Advanced Wireless Services at 1.7 GHz and 2.1 GHz) and 700 MHz deployments, as well as refarming of 2G and 3G spectrum to LTE,
“We are in the very early innings of AWS-3 (1.6 GHz, 1.75 GHz, 2.15 GHz), WCS (Wireless Communications Service at 2.3 GHz) and 2.5 GHz spectrum deployments all of which remain opportunities ahead of us,” Stoops said. “The amount of activity around an investment in our customers’ existing macro sites continues to be robust and underscores the importance of macro sites in our customers’ network plans.”
SBA lowered its services guidance to reflect reduced work from Sprint, while other carriers are expected to remain steady, compared with last year.
Carrier activity reported by American Tower in the first quarter took place in the AWS-3, WCS, and 2.5 GHz bands, as well as through refarming 2G and 3G spectrum into 4G in the 800 MHz and PCS bands. Refarming drove amendments as old antennas were swapped out for more advanced antennas, according to James Taiclet, American president and CEO.
“This shift drives further investment into cell sites through technologies such as carrier aggregation as well as adding new cell sites to reduce the transmission radius and, therefore, the quality improvement for each signal,” he said. “This increase in cell site density is expected to drive incremental collocation opportunities on macro towers, as customers like us demand higher and higher peak speeds to enhance our user experience.”
Organic growth of U.S. property revenue is projected to be 5.5 percent by American Tower, compared with 12 percent for international properties.
Crown Castle International
Crown Castle saw organic site rental revenue grow 7 percent plus 3 percent cash escalations minus 2 percent from churn in the first quarter.
Jay Brown, Crown Castle CFO, also said carrier activity won’t increase in 2016. Additionally, the execution of new leases and amendments will be backloaded, 40 percent in the first half and 60 percent in the second half.
“Our view is that leasing activity in the full year of 2016 is going to be very similar to what we saw in 2015. And we continue to hold that view,” he said.