If the big four carriers morphed into three majors through an acquisition, American Tower EVP/CFO Tom Bartlett believes that no matter how it all shakes out, “it’s all good for the tower industry and our business, in particular, here in the United States.”
Bartlett was interviewed by Batya Levi yesterday at the UBS Global Media and Communications Conference in Manhattan, N.Y., and was asked if American Tower was positioned to be successful if there is carrier consolidation in the U.S.
Addressing the possibility of a Sprint and T-Mobile merger, Bartlett said, his company has “some pretty good” experience on consolidation in the industry over the last 10 years or so, and in major mergers, American Tower was getting 20% to 25% more business from the combined entity than from the total of both carriers about a year after the merger.
He said that in the case where both carriers were on the same tower, if one carrier were to remove their platform, additional space would be required to service the increased subscriber base.
Bartlett said, “I think if that, in fact, happened, I think it would strengthen the overall industry.”
Levi asked if American tower could continue to justify a 3% to 3.5% escalator in their lease agreements, and Bartlett said that all of the new leases that are getting rerated today and coming up for renewal are all in that range.
“There were three large portfolios that were traded, T-Mobile, AT&T and Verizon in the last several years. And as part of that bid, a 2% escalator was included. And so that was then what was used to underwire, determine what the value of that portfolio was. But absent those transactions, everything is at that 3%, 5%,” Bartlett said.