AMT to Benefit from AT&T in Mexico


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Yesterday, AT&T announced that it would invest about $3 billion in Mexico by year end 2018. Jonathan Schildkraut of Evercore ISI noted the firm had been expected an aggressive investment cycle from AT&T following its Iusacell and Nextel Mexico acquisitions. “We estimate that American Tower has roughly 1/3 of the towers in Mexico and any incremental network buildout presents a material opportunity,” Schildkraut wrote.”This investment by AT&T underscores our positive outlook for the region. In our June 1 Evercore ISI TelecomNewsletter “Mexican Plan to Boost Wireless Competition Could be Boon for Towers,” we highlighted the Mexican government’s plan for a wholesale network and the possible upside from a likely AT&T investment cycle. With AT&T committing to spending $3 billion, we believe American Tower will benefit. As we noted in our AMT NaREIT takeaway note, the company sees MLAs as a way of both securing long-term business from carriers and smoothing out the impact of carrier spending fluctuations on site leasing and AFFO growth. This recent development reinforces our belief that management may work for an MLA in Mexico.”

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