American Tower boasts strongest growth among tower giants

The nation’s three largest tower companies continue to benefit from demand for tower space driven by the transition to LTE networks, and by the seemingly insatiable consumer appetite for mobile data. American Tower, Crown Castle International and SBA Communications all reported double digit increases in both revenue and profits for the first quarter.
American Tower was the biggest winner, with total revenue up 22.6% versus the year-ago quarter, to $984 million. The company reported $960 million of that came from site rental and management, with the other $24 million coming from the company’s network development services segment, which offers site acquisition, zoning and permitting services as well as structural analysis services.
About one-third of American Tower’s revenue is now coming from its international sites. The company said the performance of these assets has been better than expected, with rental and management revenue up 23.9% to $324.3 million in the first quarter. American Tower said that organic revenue growth for its international business was 16.1%.
SBA Communications (SBAC) has also looked abroad for growth, acquiring towers in Brazil and Canada, as well as throughout Central America. SBA said total revenue in the first quarter of 2014 was $345.5 million compared to $313.1 million in the year earlier period, an increase of 10.4%. Site leasing revenue of $309.3 million increased 13.1% over the year earlier period.
Domestic cash site leasing revenue was $268.7 million in the first quarter of 2014 compared to $238.3 million in the year earlier period, an increase of 12.8%. International cash site leasing revenue was $29.6 million in the first quarter of 2014 compared to $17.7 million in the year earlier period, an increase of 67.2%.
Crown Castle, the nation’s largest tower owner with roughly 40,000 sites, said first quarter revenue rose 18% to $876 million. Organic revenue was up 8% year-on-year, driven primarily by leasing activity from the nation’s four largest carriers. First quarter results include revenue from the 9,700 towers that Crown acquired late last year from AT&T. For the next 20 years Crown Castle has exclusive lease rights for those towers, most of which are in top 50 markets.
Unlike American Tower and SBA, Crown Castle has focused primarily on the U.S. market. The company says the U.S. market offers the best risk-adjusted returns, and that it benefits from the spending roadmaps provided by the tier-one carriers. Crown Castle expects the four largest U.S. carriers to spend $34.3 billion on infrastructure this year, and $32.8 billion in 2015.
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