American Tower targets 500 build-outs in LatAm in 2022

The world’s biggest wireless infrastructure company, American Tower Corporation (ATC), will build 500 towers in Latin America this year, CEO Tom Bartlett told investors and analysts in an earnings call.

The figure compares to 600 build-outs that had been planned for the full-year 2021 and represents a small portion – of 7.70% – of the 6,500 new builds ATC is projecting globally for this year. 

Most of ATC’s new towers are due to be built in India, roughly 4,000. “The next largest region is going to be in Africa, in the range of 1,900 or so. And Latin America and Europe are pretty equal at around 500 sites each,” Bartlett said.

In Europe, ATC is building a sizeable number of towers through the acquisition of Telefónica’s Telxius tower business, with a 10-year build-to-suit commitment of 3,000 sites over that time period.

ATC reported US$1.46bn in property revenues for its Latin American operations last year, an increase of 16.5%, and US$372mn in Q4, up 14.3% year-on-year. The region accounted for around 16% of total sales, the second biggest revenue-generating geography after the US and Canada.

As of September, American Tower had over 45,000 sites (towers or distributed antennas systems) in place in Latin America. Nearly half of the sites, 20,768, are in Brazil, with the rest in Argentina (480), Chile (3,733), Colombia (4,981), Costa Rica (682), Mexico (9,787), Paraguay (1,438) and Peru (3,901).

FIBER PARTNERSHIPS

Despite having projects for fiber operations in countries such as Brazil, Argentina, and a pilot in Colombia, as well as datacenters, the core of American Tower's strategy outside the US market tends to remain primarily towers, according to the CEO.

Bartlett noted that the company has initiatives going on with regards to fiber, as well as smaller datacenters, in Latin America, but that they are on a very small scale.

That does not mean, however, that the company will be totally writing off having different classes of assets around the world, LatAm included.

In an interview with BNamericas in December, ATC’s senior VP and CEO for Latin America, Flavio Cardoso, said that the company was eyeing other markets in the region for fiber. 

“It's something we always look at. There is a lot of activity in this segment. Not all projects coincide with our interests and plans, but today we have experience and a proven model. It's something that can even have synergy with the tower business, which is very important,” he said.

CHURN

CFO Rod Smith said in the call that ATC expected a higher churn in 2022 related to Telefonica in Mexico as well as the continuation of Nextel churn in Brazil.

“With both events, we expect to receive settlement payments over the course of 2022, compensating us for the early termination of leases ahead of their expiration, where applicable. As is typical, these payments will fall outside of the organic tenant billings growth metrics.”

With Telefónica's agreement to lease AT&T's mobile network in Mexico, as well as the acquisition of Nextel by Claro Brasil, ATC lost tower contracts with the companies.

“We expect churn to be higher than historical levels in 2022. In the United States, this will be driven by Sprint churn we've discussed previously, with about US$160mn in year-over-year impacts in 2022 versus 2021. Additionally, in select international markets, a handful of carrier consolidation events are temporarily driving churn higher.”

This is the case, for example, of Brazil's Oi, a large customer of ATC whose towers were sold to Highline and whose mobile business, including antennas, clients and spectrum, is in the process of being acquired by rivals Claro, TIM and Telefônica Brasil.

According to Smith, however, eventual impacts from Oi's takeover do not play into the equation just yet. “We do have a long-term contract with Oi [but] that will play out over the next seven years or so.”