American Tower to shine despite telecoms consolidation in US and India

American Tower CEO Jim Taiclet has revealed why the global telecom tower company is optimistic about the bright future despite the recent consolidation among operators in the US and India.
American Tower revenue Q2 2019
ATC reported 6.1 percent increase in revenue to $1.89 billion with net income of $434 million (+38.1 percent) in the second quarter of 2019.

ATC, one of the leading telecom tower companies in the world, reported single-digit growth despite challenges in the Indian telecom market due to the recent consolidation between Idea Cellular and Vodafone.

The $26 billion merger between T-Mobile USA and Sprint, which was approved by the U.S. Department of Justice last Friday, will have a mixed impact on ATC.

“There may be some decommissioning of sites as the new T-Mobile optimizes its network and rolls out 5G, we would also expect significant demand from the combined company for our extensive U.S. portfolio during that process and well into the future,” Jim Taiclet said during earnings call.

American Tower highlights

— capital expenditures of $248 million in Q2
— spent $43 million to acquire 256 sites in international markets
— to buy Eaton Towers for $1.85 billion targeting 5,500 sites across five African markets
— to buy 400 towers in the United States for $0.5 billion
— to hike stake in ATC Telecom Infrastructure, its India business, for $359.4 million

Dish Network is set to acquire Sprint’s prepaid business and additional spectrum and will deploy facilities based 5G broadband network capable of serving 70 percent of the U.S. population by June of 2023.

“We expect to secure new business from Dish, as they transition their current narrowband IoT network design into a full-fledged 5G mobile architecture over the coming years. We do not expect the deal to have any material impact on our 2019 results,” Jim Taiclet said.

American Tower in international business

American Tower has approximately 130,000 communication sites in 16 countries outside the U.S.

American Tower’s mobile operator customers are expected to spend $25 billion on network Capex in its served markets this year. ATC’s business outside U.S. accounted for nearly half of property revenue and about 35 percent of property operating profit in the second quarter.

American Tower has nearly 38,000 telecom sites across eight countries in Latin America. For comparison, American Tower has about 40,000 sites in the U.S. ATC will gain from carriers’ spending on 4G network deployments in Latin America – especially in Brazil and Mexico. AT&T, Telefonica, America Movil and others are some of the customers of ATC in the region.

American Tower has nearly 17,000 sites across EMEA, on top of another 5,500 reserve site coming with the Eaton Towers transaction. Vodafone, MTN, Airtel Africa and others are the customers of ATC.

ATC expects to invest more than $50 million in 2019 to enhance the uptime performance of telecom sites in Africa.

India’s Vodafone Idea, Bharti Airtel and Reliance Jio will be making more investment in 4G network. ATC has approximately 75,000 sites to garner solid organic growth.

“We anticipate constructing of more than 2,000 sites this year as 4G deployments ramp up in India,” Jim Taiclet said.

America Tower CEO said initial 5G deployments are picking up in the U.S. and the global telecom tower company is seeing increasing signs that low and mid-band spectrum on macro towers will serve as a substantial component of next generation networks.