American Tower Corp. is expecting its carrier customers to ramp up deployment of 5G technology to power the company's growth going to 2023.
"We continue to see 4G and 5G investments driving strong demand across our footprint, which translated into solid gross leasing growth in the quarter and we expect this trend to continue and further accelerate particularly in the U.S. as we approach 2023," Rodney Smith, executive vice president, CFO & treasurer, said Oct. 27 on the company's earnings call.
In August, the company signed a master lease agreement with Verizon, one of the company's largest customers, which is expected to help the carrier accelerate deployment of 5G networks over a multiyear period. The agreement raises expectations that American Tower's U.S. business will have a solid runway for growth over the next several years, Smith said.
The company also signed a new long-term master lease agreement with Airtel Africa, American Tower's largest customer in that region.
Asked whether Verizon and T-Mobile could nonetheless reduce capital expenditures, President, CEO and Director Thomas Bartlett said the master lease agreements provide a 70% to 80% visibility on the company's revenue growth. Bartlett expects the carriers to invest more in their market if "demand develops."
"Our MLAs [master lease agreements] do give us that kind of visibility. And over time, I would expect higher levels of capex being spent on 5G, just as we saw [expenditures on] 4G versus 3G," Bartlett said.