Carrier spending on DAS and small cells is currently 5 percent of RAN capex, growing to 10 percent near term, and does not represent an alternative to macrocells that will pressure revenues, American Tower execs said during the towerco’s fourth quarter earnings call.
The subject came up when an analyst asked about reports that carriers were using small cells as leverage to reduce tower leasing rates.
“We don’t discuss specific negotiations with specific carriers; we never have. But I think you could just turn to the results,” Thomas Bartlett, CFO, said. “I think the guidance speaks for itself as to how networks are really going to get deployed in this country in 2016 and for the next number of years.”
American expects U.S. organic core growth in revenue in 2016 to be between 5 percent and 6 percent, compared with 2015, which saw organic core growth near the middle of its five-year average target range at about 6.6 percent.
“While aggregate new business commencements are expected to be up year-over-year, the pacing of new business commencement activity in 2016 is expected to be distributed more evenly throughout the year,” Bartlett said. “It was more front-end loaded in 2015, which has a negative impact on the growth rate, as you would expect.”
Decommissioning revenue is projected to be flat year-over-year, but churn is forecasted to be lower. “So, while the rate is down for the year, we are excited about the increased new business activity on our portfolio in the U.S., as we finish up the year,” Bartlett said.
James Taiclet, president and CEO, said that the company achieved its goal of adding assets in 2015. American Tower secured the exclusive right 11,500 sites from Verizon Communications, acquired more than 4,700 sites from Airtel in Nigeria, nearly 5,500 sites from Telecom Italia in Brazil and 42,000 sites from Viom Networks in India.
“Our first strategic pillar is building the asset scale to exceed our return on investment goals in select major markets. In this, we made tremendous progress in 2015,” he said.
The second strategic pillar for American Tower was to maximize the cash flow from each tower and containing churn in our U.S. business. Taiclet credited “skilled master lease contracting, the rapid and effective integration of assets in the cases of Verizon and TIM transactions, and the efficient establishment of our new organization in Nigeria.”
To fund acquisitions in 2015, Taiclet said American Tower was able to effectively access the capital, including refinancings and new issuances totaling $21 billion.
Quotes courtesy Seeking Alpha.