19th Annual Technology, Internet & Communications Conference
Reports on the impending demise of the tower industry, to misquote Mark Twain, are greatly exaggerated. American Tower CFO Tom Bartlett, while speaking of his own company, reflected an overall growing and dynamic market both at home and internationally for the tower community.
Bartlett was speaking at the Oppenheimer 19th Annual Technology, Internet & Communications Conference in Boston on Wednesday, and echoed the opinion of many market analysts when he said they had a good second quarter.
“We raised guidance with double digit growth across all metrics,” he said. “And the M&A pipeline is strong.” Bartlett also cited ATC’s small footprint personnel-wise with only 4,000 employees serving a $6 billion dollar company.
Much of the conference focused on the international tower market citing 14 percent growth rates outside of the U.S. that almost double their national rate. “ATC wants to be the preferred infrastructure player with global carriers like Vodafone and Telephonic,” Bartlett said. “Dynamics are the same globally. It’s the same business model and customers. And we can create the same Master Lease Agreement.” Internationally, he said, they can adjust the risk by adjusting the escalators. In Africa, since most sites are diesel power generators, the cost of fuel for instance, gets passed through to the client. “With over 140,000 sites world-wide our master lease agreement is the key to insure value all round with faster customer speed-to-market around the globe,” he said.
Internationally data growth is being projected at 30-to-50% per year, much of that due to lack of land lines in developing countries (2% served by wireline in some cases) so they have to rely on wireless to communicate, he said. But also driving that according to Bartlett, are the hundreds of new apps being written every day and their ready acceptance by consumers.
But can carriers meet the demand, he was asked. With advanced technology, more spectrum and broader bands of spectrum along with the aggregation of carriers on a single band, they may be able to keep up, he said. “Carriers are putting more electronics on the tower instead of it all being in the base station like before. Now more is going on the platform itself,” Bartlett said. “That feature alone can help decrease signal loss.”
With the radius of signals declining and densification intensifying, towers will be taking on a bigger load on all fronts. “The model gets exciting from the standpoint of ROI.” Said the CFO, ‘when that second customer comes on.”
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