(Bloomberg)—American Tower Corp. Chief Executive Officer Jim Taiclet expects international revenue to top U.S. sales in three to seven years as the company, the largest U.S. operator of wireless towers, expands further into Asia and Europe through acquisitions.
“We would like to deepen our position in the anchor markets and then enter the adjacent markets,” Taiclet said in an interview. “We want to create significant strategic operations in democratically governed regions around the world.” South and southeast Asian countries like Bangladesh are especially attractive, as is Australia, he said. The company has more than 58,000 towers in India.
American Tower, a real estate investment trust, or REIT, operates more than 40,000 cell sites as part of its 150,000 or so antenna properties worldwide. The Boston-based company has acquired tower companies in India, Africa, Europe and South America, increasing its global presence to 15 countries.
The company got 41 percent of its $5.79 billion in revenue last year from international operations, an increase from 32 percent in 2015, according to data compiled by Bloomberg. Latin America contributed 17 percent while Asia amounted to 14 percent.
In the U.S., investors have been debating the potential for future tower spending. The potential combination of T-Mobile US Inc. and Sprint Corp. could put a chill on outlays, while the possible entry of cable companies into the wireless business could fuel the need for additional capacity.
American Tower was down 0.9 percent $134.49 at 12:37 p.m. in New York. The shares are up 27 percent this year, compared with an 8.9 percent gain for the S&P 500 Index.
Bullish on India
With fewer U.S. tower properties available for purchase, Taiclet has turned his attention overseas.
“India is the largest free market democracy in the world and the government there is doing all the right things,” he said. “The government is asking industry for inputs and they are listening.”
The country is going “through a disruptive looking phase” as consolidation in the industry picks up, Taiclet said. India is about 10 years behind the U.S. on wireless technology and represents a once-in-a-lifetime opportunity for investment.
Carriers in India are seeking to consolidate after Reliance Jio Infocomm Ltd., backed by billionaire Mukesh Ambani, introduced free services in September, undermining industry revenue. Vodafone Group Plc agreed in March to merge its Indian unit with Idea Cellular Ltd., joining forces with a local partner to confront a price war in the world’s second-largest mobile-phone market.
The number of operators in India has declined to 11 this year from 15 in April 2011 and could be cut to seven if all the announced deals go ahead. Consolidation of carriers will spur the sale of tower assets as the companies seek cash to invest in upgrades. This will open the door for an independent tower sector, in much the same way the U.S. market fostered the growth of American Tower and rivals Crown Castle International and SBA Communications, Taiclet said.
American Tower acquired 51 percent of India’s Viom Networks Ltd. for $1.2 billion last year. It will have about 61 percent of the combined company once its assets are merged with Viom in India, Taiclet said. The company has options to buy out the remaining Viom stakeholders over the next two years, he said.
Canadian alternative asset manager Brookfield Asset Management Inc. is vying with American Tower for the wireless towers of Idea Cellular Ltd. and Vodafone Group Plc in India, which could fetch a combined 100 billion rupees ($1.36 billion), people with knowledge of the matter said March.
Other Markets
In April, American Tower acquired around 1,400 towers in Paraguay from a unit of Millicom International Cellular SA for $125 million. In February, the company completed the acquisition of about 2,400 towers in France from FPS Towers for about $700 million along with Dutch pension fund manager PGGM.
The company is exploring a bid for Cellnex Telecom SA to expand in Europe as the Spanish tower operator’s main shareholder considers selling assets as part of a merger, people familiar with the matter said May.
PGGM, American Tower’s partner in Europe, is patient, like-minded and has an option to join the company in other European markets, Taiclet said.
“We are open for business in Europe,” Taiclet said.
To contact the reporters on this story: George Smith Alexander in Mumbai at [email protected] ;Scott Moritz in New York at [email protected] To contact the editors responsible for this story: Ben Scent at [email protected] Rob Golum, Jessica Brice
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