American Tower Corporation: Difference between revisions
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== Risk == | == Risk == | ||
'''<u>Risks related to Ability to Sell:</u>''' | '''<u>Risks related to Ability to Sell:</u>''' | ||
* A significant decrease in leasing demand for American Tower communications infrastructure would materially and adversely affect their business and operating results, and this demand cannot be controlled | |||
* a substantial portion of our current and projected future revenue is derived from a small number of customers, and we are sensitive to adverse changes in the creditworthiness and financial strength of our customers | |||
* increasing competition within our industry may materially and adversely affect our revenue; | |||
* competition for assets could adversely affect our ability to achieve our return on investment criteria; | |||
* our costs could increase and our revenues could decrease due to perceived health risks from radio emissions, especially if these perceived risks are substantiated; | |||
'''<u>Risks related to Finance & Corporate:</u>''' | |||
* if our customers consolidate their operations, exit their businesses or share site infrastructure to a significant degree, our growth, revenue and ability to generate positive cash flows could be materially and adversely affected; | |||
* our expansion initiatives involve a number of risks and uncertainties, including those related to integrating acquired or leased assets, that could adversely affect our operating results, disrupt our operations or expose us to additional risk; | |||
* our leverage and debt service obligations, including during a rising interest rates environment, may materially and adversely affect our ability to raise additional financing to fund capital expenditures, future growth and expansion initiatives and to satisfy our distribution requirements; | |||
* restrictive covenants in the agreements related to our securitization transactions, our credit facilities and our debt securities could materially and adversely affect our business by limiting flexibility, and we may be prohibited from paying dividends on our common stock, which may jeopardize our qualification for taxation as a REIT; | |||
* the transition to SOFR based loans may adversely affect our cost to obtain financing; | |||
* rising inflation may adversely affect us by increasing costs beyond what we can recover through price increases; | |||
'''<u>Risks related to Legal and Regulatory:</u>''' | |||
* our business, and that of our customers, is subject to laws, regulations and administrative and judicial decisions, and changes thereto, that could restrict our ability to operate our business as we currently do or impact our competitive landscape; | |||
* if we fail to remain qualified for taxation as a REIT, we will be subject to tax at corporate income tax rates, which may substantially reduce funds otherwise available, and even if we qualify for taxation as a REIT, we may face tax liabilities that impact earnings and available cash flow; | |||
* complying with REIT requirements may limit our flexibility or cause us to forego otherwise attractive opportunities; | |||
* we could have liability under environmental and occupational safety and health laws | |||
* if we are unable to protect our rights to the land under our towers and buildings in which our data centers are located, it could adversely affect our business and operating results; and | |||
* if we are unable or choose not to exercise our rights to purchase towers that are subject to lease and sublease agreements at the end of the applicable period, our cash flows derived from those towers will be eliminated. | |||
'''<u>Risks related to Tech & Innovation:</u>''' | |||
* new technologies or changes, or lack thereof, in our or a customer’s business model could make our communications infrastructure leasing business less desirable and result in decreasing revenues and operating results; | |||
* if we, or third parties on which we rely, experience technology failures, including cybersecurity incidents or the loss of personally identifiable information, we may incur substantial costs and suffer other negative consequences, which may include reputational damage; | |||
'''<u>Risks related to Macro & Political Reasons:</u>''' | |||
* our foreign operations are subject to economic, political and other risks that could materially and adversely affect our revenues or financial position, including risks associated with fluctuations in foreign currency exchange rates; | |||
* we may be adversely affected by regulations related to climate change; | |||
* our towers, fiber networks, data centers or computer systems may be affected by natural disasters (including as a result of climate change) and other unforeseen events for which our insurance may not provide adequate coverage or result in increased insurance premiums; | |||
In the most recent earnings report American Tower disclosed 24 risk factors, two more since last quarter's report, including the following risk distributions: | In the most recent earnings report American Tower disclosed 24 risk factors, two more since last quarter's report, including the following risk distributions: | ||
{| class="wikitable" | {| class="wikitable" |
Revision as of 08:15, 11 August 2023
Summary
American Tower Corporation, one of the largest global REITs, is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of approximately 219,000 communications sites.
Team
Member | Current Role | Career Path |
---|---|---|
President and Chief Executive Officer |
| |
Executive Vice President, Chief Administrative Officer, General Counsel and Secretary |
| |
Executive Vice President and President, Asia-Pacific |
| |
Senior Vice President and Chief Technology Officer |
| |
Senior Vice President and Chief Strategy Officer |
| |
Senior Vice President and Chief Diversity, Equity and Inclusion Officer |
| |
Executive Vice President and President, Latin America and EMEA |
| |
Executive Vice President, Chief Financial Officer and Treasurer |
| |
Executive Vice President and President, U.S. Tower Division |
|
All the images and data has been taken from the AMT website.[5]
Market
Total Addressable Market
Here, the total addressable market (TAM) is the global commercial real estate market which, based on a number of assumptions and in terms of revenue, was valued at $35.0 trillion in 2022.[1]
Serviceable Available Market
Here, the serviceable available market (SAM) is the global telecom tower market which, based on a number of assumptions and in terms of revenue, is valued at $50.4 billion in 2022.
Fastest Growing Region
Asia-Pacific
Largest Region
Asia-Pacific
Market Drivers
- Increase in demand for highspeed internet services across the world.
- Digital transformation of businesses.
- Growing adoption of IoT-based devices.
- Launch of 5G connectivity.
Market Trends
- Development and deployment of green and sustainable towers
- Solar powered towers
- Energy efficient construction and installation methods
- Infrastructure sharing between telecom providers (tower sharing and tower leasing)
- Lowers capital investment
- Boosts operational efficiencies
- “Smart” towers
- Remote monitoring
- Predictive maintenance
Competitors
Company Name | Logo | HQ | Founding Year | No. of Towers (excl. Sites) | Revenue (FY 2022) | Market Cap. | Operating Regions |
American Tower | Boston, US | 1995 | 245K | $10.7B | $89.5B | Worldwide | |
SBA Communications | Boca Raton, US | 1989 | 39K | $2.6B | $24.8B | Americas, South Africa | |
Crown Castle | Houston, US | 1994 | 40K | $7B | $49.5B | USA | |
Helios Towers | London, GB | 2009 | 13.8K | $0.56B | $0.88B | Africa and Middle East | |
China Tower | Beijing, CN | 1993 | 2006K | $12.8B (¥92.2B) | $23.16B | China |
Competitive Advantage:
American Towers is one of the only to provide data centre services in addition its tower-based infrastructure offerings.
Occupancy Rate:
American Towers has an occupancy rate of 84.3%. This indicates the ratio of its assets which are currently being used, and the proportion of assets which are wasted/unused.
Finance
Sources:
Risk
Risks related to Ability to Sell:
- A significant decrease in leasing demand for American Tower communications infrastructure would materially and adversely affect their business and operating results, and this demand cannot be controlled
- a substantial portion of our current and projected future revenue is derived from a small number of customers, and we are sensitive to adverse changes in the creditworthiness and financial strength of our customers
- increasing competition within our industry may materially and adversely affect our revenue;
- competition for assets could adversely affect our ability to achieve our return on investment criteria;
- our costs could increase and our revenues could decrease due to perceived health risks from radio emissions, especially if these perceived risks are substantiated;
Risks related to Finance & Corporate:
- if our customers consolidate their operations, exit their businesses or share site infrastructure to a significant degree, our growth, revenue and ability to generate positive cash flows could be materially and adversely affected;
- our expansion initiatives involve a number of risks and uncertainties, including those related to integrating acquired or leased assets, that could adversely affect our operating results, disrupt our operations or expose us to additional risk;
- our leverage and debt service obligations, including during a rising interest rates environment, may materially and adversely affect our ability to raise additional financing to fund capital expenditures, future growth and expansion initiatives and to satisfy our distribution requirements;
- restrictive covenants in the agreements related to our securitization transactions, our credit facilities and our debt securities could materially and adversely affect our business by limiting flexibility, and we may be prohibited from paying dividends on our common stock, which may jeopardize our qualification for taxation as a REIT;
- the transition to SOFR based loans may adversely affect our cost to obtain financing;
- rising inflation may adversely affect us by increasing costs beyond what we can recover through price increases;
Risks related to Legal and Regulatory:
- our business, and that of our customers, is subject to laws, regulations and administrative and judicial decisions, and changes thereto, that could restrict our ability to operate our business as we currently do or impact our competitive landscape;
- if we fail to remain qualified for taxation as a REIT, we will be subject to tax at corporate income tax rates, which may substantially reduce funds otherwise available, and even if we qualify for taxation as a REIT, we may face tax liabilities that impact earnings and available cash flow;
- complying with REIT requirements may limit our flexibility or cause us to forego otherwise attractive opportunities;
- we could have liability under environmental and occupational safety and health laws
- if we are unable to protect our rights to the land under our towers and buildings in which our data centers are located, it could adversely affect our business and operating results; and
- if we are unable or choose not to exercise our rights to purchase towers that are subject to lease and sublease agreements at the end of the applicable period, our cash flows derived from those towers will be eliminated.
Risks related to Tech & Innovation:
- new technologies or changes, or lack thereof, in our or a customer’s business model could make our communications infrastructure leasing business less desirable and result in decreasing revenues and operating results;
- if we, or third parties on which we rely, experience technology failures, including cybersecurity incidents or the loss of personally identifiable information, we may incur substantial costs and suffer other negative consequences, which may include reputational damage;
Risks related to Macro & Political Reasons:
- our foreign operations are subject to economic, political and other risks that could materially and adversely affect our revenues or financial position, including risks associated with fluctuations in foreign currency exchange rates;
- we may be adversely affected by regulations related to climate change;
- our towers, fiber networks, data centers or computer systems may be affected by natural disasters (including as a result of climate change) and other unforeseen events for which our insurance may not provide adequate coverage or result in increased insurance premiums;
In the most recent earnings report American Tower disclosed 24 risk factors, two more since last quarter's report, including the following risk distributions:
Risk Distribution | Description | Risks | Overall Percentage |
---|---|---|---|
Ability to sell | Risks related to the company’s ability to sell goods and services | Demand - 13%
Competition - 8% Sales & Marketing 4% Brand / Reputation 0% |
25% |
Finance & Corporate | Financial and accounting risks. Risks related to the execution of corporate activity and strategy | Debt & Financing - 17%Corporate Activity and Growth - 4%
Share Price & Shareholder Rights - 0% Accounting & Financial Operations - 0% |
20.8% |
Legal & Regulatory | Litigation, compliance, new legislation, and taxation risks | Regulation - 8%Environmental / Social - 8%
Taxation & Government Incentives - 4% Litigation & Legal Liabilities - 0% |
20.8% |
Tech & Innovation | Risks related to the company’s reliance on technology and ability to make innovative products | Technology - 8%Trade secrets - 4%
Innovation - 0% Cyber Security - 0% |
12.5% |
Macro & Political | Risks related to catastrophic events or geopolitical conditions that may disrupt the company’s business | Economy & Political Environment - 4%Natural and Human Disruptions - 4%
Capital Markets - 4% International Operations - 0% |
12.5% |
Production | Risks related to the company’s ability to manufacture goods and services | Cost - 8%Manufacturing - 0%
Employment / Personnel - 0% Supply Chain - 0% |
8.3% |
References
- ↑ https://www.statista.com/statistics/1189630/commercial-real-estate-market-size-global/#statisticContainer
- ↑ https://www.americantower.com/Assets/beta.americantower.com/uploads/images/company/GlobalPresenceMap2023-1.png
- ↑ craft.co
- ↑ https://www.digitaljournal.com/pr/news/newsmantraa/telecom-towers-market-2023-is-booming-with-top-key-players-china-tower-corporation-american-tower-corporation-mer-sba-communications-crown-castle
- ↑ https://www.coherentmarketinsights.com/market-insight/telecom-towers-market-2826#
5. ↑ https://www.americantower.com/company/leadership-team/index.html
6. https://www.tipranks.com/stocks/amt/risk-factors
7. https://americantower.gcs-web.com/static-files/01aa59a6-d202-4bcf-b8d6-8ef19df4c3ef