AMT All Over the World

American Tower has been tied to a few major deals lately, and Jonathan Schildkraut of Evercore ISI noted how three major news items relate to the tower company. AT&T announced that they would invest $3 billion into its network in Mexico. “We estimate that AT&T’s potential build-out in Mexico could provide AMT with a 77bps annual boost to total revenues (for the next three years),” Schildkraut wrote. American Tower closed their newest tower deal on July 1 with Bharti Airtel, acquiring 4,700 tower sites in Nigeria. “In our post 1Q note, we expected the Airtel acquisition to be immediately accretive to AFFO per share in the $0.05 range, or 1.1% accretive to the implied mid-point of the AFFO per share guidance ($4.90),” Schildkraut explained. “For those expectations, we had assumed a May 31 close. Given the close was one month later, we expect a moderation of the accretiveness of the deal to 2015 numbers.” Finally, it looks like American Tower is considering investing in the Middle East. Continue reading here. 

Tower Outlook for Second Half of 2015 is Bright

With the second quarter behind us, Amir Rozwadowski of Barclays recently updated investors on the firm’s outlook for the future, and it’s looking bright. It seems to have been a slow year thus far, but analysts are optimistic that the second half of 2015 will be busy. Rozwadowski explained that AT&T, Verizon, and Crown Castle provide the highest yield. “AT&T and Verizon have a more mature business model and have had the highest yield in our sector over the last three years. One of the key factors that bear monitoring is that both Verizon and AT&T can be viewed as bond-like securities and therefore tend to underperform when interest rates go up. Thus the pace of interest rate hikes need to be kept in mind – for good or bad – when considering these names,” Rozwadowski wrote. The analyst also noted that they believe there are several names within our coverage universe that have a propensity for an improving outlook in the next few quarters due to a variety of factors including organic demand improvement, benefits from M&A, and exposure to improving secular demand themes. Rozwadowski highlighted their thoughts for each tower company. Continue reading here. 

Crown Castle to Benefit from Sprint Upgrade?

Investor’s Business Daily noted that there could be an upside for Crown Castle now that Sprint has announced their network upgrade. “The next phase in Sprint’s 4G network upgrade will likely use small-cell technology, an approach Verizon Communications has also taken,” IBD explained. Crown Castle has stepped up their small cell game. “Similar to towers built in the late 1990s and early 2000s, we are focused on building small cell networks in the most attractive locations in the US, in places like Manhattan, Washington DC, Southern California and Chicago. As mobile data demand grows, the necessity of small cells increase as evidenced by our growing pipeline of over 2500 anchor builds and colocations on existing systems, which have been awarded to us, but are not yet in construction,” Jay Brown CFO at Crown Castle said on the April 23 conference call. “Today, inclusive of our acquisition of NextG in 2012, we have invested approximately $1.7 billion in small cells. Our current yield on investment is 7%, inclusive of our $1 billion investment in NextG at an initial yield of approximately 4%. With our leadership position of over 14,000 nodes on air or under construction, and 7000 miles of fibre, we are winning new opportunities and driving yields up on our existing investments in small cell networks.” Continue reading here. 

California Community Confronts Crown Castle

Residents in La Jolla, California, blocked a crew from Crown Castle who were on site to install a wireless antenna on Monday. The tower company was replacing a light pole with a cell tower near David Haney’s property when residents parked their cars to block the work site and stood together to protest the project. Haney told KSWB-TV that he had been fighting the tower since 2014 when he first contacted city councilwoman Sherri Lightner. Lightner told Haney that Crown Castle would have to go before the city council before anything progressed, but Haney and other neighbors had previously been told that Crown Castle already had an agreement in place with the city. Continue reading here. 

Aircraft Hits Corona Tower

A homemade aircraft crashed into a cell tower in Corona, California, Sunday afternoon killing one passenger and injuring another, KCAL-TV reported. The California Fire Department, and Riverside County and Corona firefighters were deployed to the scene shortly after noon. The single-engine plane hit a tower disguised as a tree on a hilltop near Lake Matthews. The wreckage of the plane was contained at the crash site, but continued to dangle from the cell tower hours after the accident. Authorities had to wait for Southern California Edison workers to come and switch off the tower’s electrical supply before removing the pieces. Continue reading here. 

Wheeler Doesn’t Want More Restrictions

FCC Chairman Tom Wheeler wants the agency to reject T-Mobile’s request that more airwaves be set aside for smaller wireless companies to bid on during the 2016 incentive auction, Reuters reported. “While some parties have petitioned the commission to increase the size of the reserve, the draft order on reconsideration I am circulating today would maintain the reserve size at the current level,” Wheeler said in a blog post. “The draft order concludes that the current reserve size of 30 megahertz balances the desire to make low-band spectrum available to parties with limited holdings while facilitating competitive bidding for all auction participants.” Continue reading here. 

AMT to Benefit from AT&T in Mexico

Yesterday, AT&T announced that it would invest about $3 billion in Mexico by year end 2018. Jonathan Schildkraut of Evercore ISI noted the firm had been expected an aggressive investment cycle from AT&T following its Iusacell and Nextel Mexico acquisitions. “We estimate that American Tower has roughly 1/3 of the towers in Mexico and any incremental network buildout presents a material opportunity,” Schildkraut wrote.”This investment by AT&T underscores our positive outlook for the region. In our June 1 Evercore ISI TelecomNewsletter “Mexican Plan to Boost Wireless Competition Could be Boon for Towers,” we highlighted the Mexican government’s plan for a wholesale network and the possible upside from a likely AT&T investment cycle. With AT&T committing to spending $3 billion, we believe American Tower will benefit. Continue reading here.