American Tower says its $10 billion CoreSite acquisition is already outperforming expectations and any edge business that it attracts will only be a positive for the company. In a research note outlining details of the Cowen Communications infrastructure event earlier this month, Steve Vondran, EVP President of American’s U.S. Tower Division, said that the company expects the edge opportunity to not just come from low latency applications but also from the enormous amount of data that will need to be carried in Tier 2 and Tier 3 markets.
Because carrying all that traffic will be expensive for network operators, American believes that many will turn to the tower company for help. And American, with its portfolio of towers, edge data facilities, and data centers in metro areas as well as Tier 2 and 3 markets will be able to more efficiently haul that traffic back to American’s cloud-ramp interconnect facilities.
Last November the tower company purchased CoreSite and its portfolio of 25 data centers, 21 cloud on-ramps and over 32,000 interconnections as part of its edge expansion.
At the time, American said it envisioned a hub-and-spoke model where its existing tower sites can serve as locations for edge data facilities, connected back to core data centers in major metros, as well as metro data locations in Tier 2 and 3 markets.
Since its acquisition, CoreSite expanded its reach to Atlanta and Orlando and also integrated American’s existing three data centers into its portfolio. In addition, infrastructure investor Stonepeak in July paid $2.5 billion for a 29% equity stake in the American Tower data center platform. The companies said that the deal is part of a long-term strategic partnership with American Tower overseeing the day-to-day management of the U.S. data center business while Stonepeak will obtain certain governance rights.
Vondran also said that the company is still testing six edge data centers. The company debuted these edge data centers in 2020 in Denver and Boulder, Colorado; Pittsburgh; Atlanta; Jacksonville, Florida; and Austin, Texas.
Interestingly, Vondran also said that the company isn’t worried about U.S. operators moving to a network sharing model in the future. Network sharing is something that is more prevalent in Europe and Canada. Recently UScellular CEO LT Therival said that he believes network sharing will be a necessity in rural areas because it’s too costly to deploy multiple networks in areas with low customer density.
However, Vondran said that U.S. carriers have different spectrum portfolios and also have a desire for control, which makes network sharing unlikely.