ATC eagerly eyeing India; SBA misses analysts' numbers while Global Signal meets expectations
November 8, 2006 -- The enticement of Asia could be one of American Tower Corporation's growth drivers as it looks for international market opportunities in India.
Replying to recent rumors that ATC was ready to ink a considerable tower contract in India, CEO James Taiclet told analysts today, "We are seeking, but have not concluded any agreement or arrangements with any specific carrier."
News reports have said that Reliance Communications is interesting in selling some of their 15,000 existing cell sites for CDMA and GSM services in India to ATC.
Although Taiclet said that there aren't any contractual agreements in India, he did say that the country is a vibrant market with low penetration and the country scores high on overall political and economic stability.
ATC has been actively seeking to strike a tower sale leaseback or build to suit or a combination that is meaningful enough in size to merit market entry into India.
ATC vies for fifth-largest market
India reached the 100 million subscriber mark in April, making it the fifth-largest market in the world. The subscriber base is expected to grow to 300 million by 2010. At the beginning of 2000, India had just 1.6 million cell-phone subscribers.
With nearly 1 billion citizens, India is the second most populous nation in the world. Cell phones are accessible to people at almost every income level, with most handset manufacturers aggressively playing the price-cutting high-volume game. Airtime rates in India are among the cheapest in the world.
ATC announced today that its third-quarter revenue rose 26 percent to $333.5 million, in part due to its acquisition of SpectraSite Inc.
Analysts polled by Thomson Financial, on average, were looking for revenue of $329.5 million.
The company said its rental and management segment sales climbed 25 percent to $326.4 million, with $113.2 million in sales from SpectraSite, which it bought last year.
Noontime trading of the company's stock fell .28 to 37.38.
SBA misses analysts' numbers
SBA Communications Corp., owner of wireless communication towers, said Monday its third-quarter loss widened. The company also said a review of its stock-option practices found "various deficiencies" but will not result in financial restatements.
Quarterly losses widened to $24.1 million, or 23 cents per share, from $14.4 million, or 19 cents per share, in the prior-year period. Total revenue grew to $98.2 million from $66 million.
Wall Street, on average, had been expecting a loss of 17 cents per share on sales of $95.2 million, according to an analyst poll by Thomson Financial.
Looking ahead, SBA Communications expects fourth-quarter revenue between $93.5 million and $97.5 million, compared with analysts' expectations of $99.1 million.
For the full year, the company expects revenue of between $347.5 million and $351.5 million, compared with prior guidance of $345 million to $353.5 million. Analysts predict revenue of $340.4 million.
AAT contributed $23.3 million and $15.3 million of the Company's site leasing revenue and Tower Cash Flow, respectively, in the third quarter.
Stock option grants found not to be fraudulent
The company said that their review of stock-option grant practices did not find evidence of fraudulent conduct related to the grants.
SBA Communications said the review found the company had unrecorded non-cash equity-based compensation charges of between $7 million and $9 million from fiscal year 1999 through the end of 2005.
The company considers the charges not material, and it will record a reclassification in its 10-Q financial form for the quarter ended Sept. 30 related to the charges.
Noontime trading of the company's stock fell 0.82 to 26.92.
Global Signal's loss met expectations
Global Signal narrowed its third quarter loss, but it was within analyst expectations.
The company recorded a third-quarter loss of $11.3 million, or 16 cents a share, down from a loss of $15.4 million, or 23 cents a share, posted in the third quarter of 2005. Analysts called for a loss of 16 cents a share, according to Thomson Financial.
Revenue came in at $127.8 million, up 4.3 percent when compared to the previous quarter and up 10 percent from a year ago. The quarterly revenue total did manage to beat analysts' on-average forecast of $124.5 million.
During the third quarter of 2006, Global Signal invested $28.4 million to acquire four wireless communication sites as well as the real estate under 156 towers that the company previously leased.
Last month, Global Signal signed a $5.8 billion merger agreement with Crown Castle International that will help Crown Castle to jump ahead of competitorl American Tower Corporation to become the leading wireless tower company in the United States.
The Crown Castle/Global Signal merger is set to close next year.
Global Signal's stock was at 53.67 at noon, down 0.83.