AT&T* (NYSE: T) and American Tower (NYSE: AMT) signed a new long-term agreement structured for mutual growth through a simplified leasing process and expanded site development services. The new agreement streamlines wireless network deployments on American Tower’s U.S. sites, enhancing AT&T’s deployment of 5G and other next generation technology across the U.S., including FirstNet, public safety’s dedicated, nationwide communications platform.
According to Jennifer Fritzsche, Senior Analyst at Wells Fargo Securities, the deal came one year and five months after Crown Castle (CCI), the owner of the majority of AT&T’s legacy towers, announced a similar deal in April 2018.
“Also it is important to note,” Fritzsche said, “when CCI signed its MLA with T it did NOT raise FY2018 guide for any straight-line impact, unlike AMT did today. SBAC has not publicly announced such a deal with AT&T,” she said. The bottom line Fritzsche said is while tower checks have come in fairly weak in terms of recent activity from TMUS and VZ of late, AT&T’s wireless activity seems quite robust.
“We believe [yesterday’s] announcement offers further evidence that AT&T is looking to streamline the process to make it easier to move forward with its “one touch” initiative (centered around its 700 MHz FirstNet push). While financial terms were not fully disclosed, it is curious to us that T struck this deal after being fairly vocal as to their aggravation with the tower companies (especially public ones) and felt the economics needed to be changed,” she said.
Fritzsche said AT&T has made no secret of the fact that it has embraced working with many of the private new tower developers, many of whom are likely best in line to acquire the 1,000-plus U.S. towers which AT&T has publicly announced its intention to sell.
“This comprehensive agreement is expected to drive mutual value and growth through a simplified leasing process designed to drive efficiency and flexibility improvements directly benefiting our speed in deploying the latest technologies,” said JR Wilson, Vice President of Tower Strategy and Roaming, AT&T. “This is essential for executing on both our 5G and FirstNet network builds. It ultimately helps us better serve our customers and first responders nationwide.”
The new agreement aligns with AT&T’s commitment to provide its customers, including FirstNet public safety subscribers, with better speeds, reliability and overall performance. This includes a focus on keeping up with booming mobile data usage while improving capacity and coverage across the entire country, especially in underserved rural areas.
“We look forward to this new phase of our long-standing relationship with AT&T,” said Steve Vondran, President, U.S. Tower Division, American Tower Corporation. “This agreement provides for an extended mutually rewarding strategic relationship, and we’re excited to help AT&T deliver the next generation of wireless technology to consumers, businesses and first responders quickly and efficiently.”
September 4, 2019
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