American Tower (AMT) TD Cowen 12th Annual Communications Infrastructure Summit summary

Industry trends and network evolution

• Macro sites remain the backbone of U.S. network infrastructure, with densification and capacity upgrades driving current activity as 5G matures and data demand rises year-over-year.

• Densification is expected to be a long-term trend, extending from 5G into 6G, fueled by higher-band spectrum and increasing mobile data consumption, including AI-driven demand.

• Urban areas see more diverse infrastructure, while suburban and rural regions rely on macro towers for capacity and coverage.

• Fixed wireless and fiber to the home are contributing to network densification and spectrum usage, blending into overall demand.

• AI and software-defined networks are expected to enhance spectral efficiency, but physical densification and new equipment remain necessary.

Financial performance and growth outlook

• Organic growth is projected to remain durable, with a 3% escalator, 2–3% new business, and 1–2% churn, excluding one-time events.

• Service revenue guidance is steady, with 2025 as a peak year and 2026 expected to be strong but slightly lower, reflecting a diversified services mix including construction and end-to-end program management.

• Churn from a former anchor tenant has been absorbed, clarifying future growth projections and de-risking the business.

• Ongoing discussions with customers about master lease agreements (MLAs) focus on value creation and deployment efficiency, with upcycles often tied to spectrum auctions and technology transitions.

Spectrum, M&A, and market dynamics

• Upcoming spectrum auctions (Upper C-band, 2.7 GHz) and new spectrum releases are expected to drive future network investments and MLA activity, though deployment lags auctions by 1–3 years.

• M&A activity is ongoing, with interest in both small and large portfolios, but large deals require alignment of willing counterparties, economics, and regulatory conditions.

• Private market tower valuations remain above public market levels, though the spread has tightened slightly; private investors are attracted by long-term secular trends.

• Counterparty risk is managed with disciplined underwriting and contract structuring, maintaining low churn rates.