American Tower CFO sees potential for U.S. tower M&A

There are opportunities for further consolidation of the U.S. cell tower market, including carrier-owned towers and other assets, according to American Tower CFO Tom Bartlett.

Speaking at the Oppenheimer Technology, Internet & Communications Conference, Bartlett said that while he could not comment any on specific deals, the pipeline is active. "There are still quite sizable portfolios of towers that are available," Bartlett said.  He noted that Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) each own more than 10,000 towers and that smaller carriers could look to monetize their towers as well (U.S. Cellular (NYSE:USM) has said it is considering selling its towers in markets it has divested, but not in its core markets). He also said there are "independent tower companies that are owned by private equity" that could be acquisition opportunities.

Bartlett's comments are notable in light of recent reports that Macquarie Infrastructure Partners, a unit of the Australian investment bank Macquarie Group, is shopping Global Tower Partners, the largest privately held operator of U.S. cell towers. The sale could net as much as $4 billion, according to the reports. The sale of GTP is just getting underway, according to reports from Reuters and the Wall Street Journal. GTP operates or leases 16,000 wireless sites, including around 6,400 cell towers in the United States, Mexico and Costa Rica.

Macquarie declined to comment on the recent reports, as did GTP CEO and founder Marc Ganzi. "We are very focused on our core business, which is the best it has ever been with record leasing levels and new [base transceiver station] originations," he told FierceWireless. "We will stay focused on that part of our story."

American Tower recently agreed to buy around 2,790 towers in Brazil and 1,666 towers in Mexico from NII Holdings for a total of $811 million. Bartlett said the company is "trying to grow in existing markets."

In the U.S. market, he said the majority of American Tower's revenue is coming from cell site amendments, as carriers add new antennas and equipment as part of LTE coverage deployments and efforts to boost capacity. Over time, carriers will split cells, Bartlett said, which will lead to new leasing agreements and more revenue.

Bartlett said he thinks the U.S. market is still in the "early innings of 4G" LTE deployments, and that small cells do not represent a threat to the company's business, since the vast majority of American Tower's cell sites are not in dense urban markets where small cells are most likely to be deployed right now.

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