American Tower snags deal with 1&1 network in Germany

American Tower reported its Q1 2022 earnings today, and during the call its executives revealed that it had struck a tower deal with the new German greenfield network 1&1.

American Tower’s CFO Rod Smith said, “We're really looking forward to help them build out their greenfield 5G network across Germany. The deal that we struck really is a framework around how the two parties will work together contractually…. and gives 1&1 kind of that framework to access our sites.”

In 2021, American Tower bought Telefónica’s tower business, Telxius Towers, for about $9.4 billion. 

Smith seemed to connect the dots between 1&1 and Telxius, saying, “We believe this further speaks to the quality and strategic positioning of our acquired Telxius assets, the opportune timing of the transaction and our optimism for the future.”

A press release that was issued earlier this month by 1&1, said that under the agreement, American Tower will provide 1&1 access to its communications sites for the installation of the 1&1 high-performance antennas.

“The parties will closely work together to identify colocation availabilities for sites that can be phased into operation in the near future. Each site will have a lease term of 20 years, which can be extended by 1&1 multiple times,” said the announcement.

Ralph Dommermuth, CEO of 1&1, said, “We are looking forward to the cooperation and to jointly driving the roll-out of Europe's first newly-built virtual OpenRAN." 

1&1 is also working with Rakuten Symphony to build its network. Rakuten Symphony  is acting as the general contractor, taking over the build of active network equipment and mobile performance.

There’s been a lot of tower activity in Europe, generally. 

Deutsche Telekom is planning to sell its 40,600-tower portfolio across Germany and Austria. Potential suitors include American Tower, Spain’s Cellnex, Vodafone Group’s Vantage Towers and Orange’s Totem, as well as private equity investors.

Today, Smith said, “We did have organic tenant billings growth in Europe in the high teens. A lot of that is driven by the Telxius assets, which is, again, a really high-quality asset across Europe, particularly in Germany.”

He said American Tower expects that momentum to continue in terms of leasing activity, and he expects organic tenant billings growth for Europe to settle in the 7% to 8% range later this year.

For its 1Q 2022, American Tower reported total revenue increased 23.2% to $2.6 billion, and net income increased 7.7% to $703 million.