Carrier mergers bode well for the tower industry because they lead to network densification. That’s according to American Tower EVP/CFO Tom Bartlett. Speaking at the UBS Global Media and Communications Conference on Wednesday, the executive said his company has seen many carrier mergers over the past decade, like Sprint-Nextel, AT&T-Cingular and more recently Verizon-Alltel. There’s a “limitation as to how a carrier transmits a call to the device. That physical limitation will require customers to place more things,” like antennas and radio heads, “on towers,” he said.(see AT&T/Time Warner merger story below)
Asked about M&A, and the odds a new administration would look more favorably on a combination like Sprint-T-Mobile, Bartlett said they could probably combine efficiently, and would still need more infrastructure. “This overbuild drives up capital requirements. Anything that strengthens things from a carrier perspective is a positive for the [tower] industry.”
The trend of cable getting into wireless delivery also bodes well for towers. “Cable has been wireless for many years. When I managed Verizon properties I was competing against Comcast. Whatever that content will be is going to find its way to a mobile device and needs to be supported by additional infrastructure,” said Bartlett.
December 7, 2016
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