“I do want to make just a few comments on the anticipated merger between T-Mobile USA and Sprint, which was approved by the U.S. Department of Justice. Since then, T-Mobile and Dish have made public statements and filings regarding their agreements and plans for their respective networks. Based on what has been made public today, we at American Tower continue to expect that these developments will likely result in net positive impacts on our U.S. business over the long-term.”
Those thoughts were according to American Tower CEO Jim Taiclet on the firm’s Q2 earnings call. “While 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.”
Furthermore, he said that “Dish is set to acquire Sprint’s prepaid business and has made a commitment to deploy facilities based 5G broadband network capable of serving 70% of the U.S. population by June of 2023. As a result, we also expect to secure meaningful new business from Dish, as they transition their current narrowband IoT network design into a full-fledged 5G mobile architecture over the coming years. In the near term, we do not expect the recently announced transaction approval to material impact our 2019 results and we will provide you with ongoing updates as the situation develops going forward.”
When talking about the firm’s international business, for the portfolio of approximately 130,000 communication sites in 16 countries outside the US, he says that the REIT’s global scale diversity and reach is unmatched. “As a result, we are well positioned to work closely with the large multinational tenants, who comprised a significant majority of our international revenues and who together are on track to spend upwards of $25 billion on network CapEx in our served markets this year. In the second quarter, our business outside U.S. accounted for nearly half of our property revenue and about 35% of our property operating profit, generating an aggregate U.S. dollar NOI yield of over 11%.”
He also talked about the company’s most seasoned vintage of international sites, those built or acquired prior to 2010, and noted that they have yielding approximately 30% in U.S. dollar terms, illustrating the power of the company’s recurring organic revenue model overseas, he said.
“We’ve been growing this portfolio steadily through a combination of internal new build programs and selective acquisitions. The most recent example, being the Eaton Towers transaction that we signed and announced in May. The thesis underpinning our international expansion is a rapid growth in mobile data usage is not just the U.S., but a global phenomenon. And as a result, demand for communications real estate is expected to grow over an extended time horizon.”