American Tower Corporation (reit) · NYSE:AMT
American Tower Corporation (reit) — American Tower — Investor Day (December 2013)
83 slides from American Tower Corporation (reit)'s investor day presentation, Dec 10, 2013
Slide 1: American Tower – International Analyst Day Introduction
American Tower – International Analyst Day Introduction December 10, 2013 Hal Hess EVP, International Operations and President, Latin America and EMEA
Slide 2: Forward-Looking Statements
Forward-Looking Statements “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements concerning our goals, beliefs, strategies, future operating results and underlying assumptions. Actual results may differ materially fr
Slide 3: ATC's International Business Provides Exposure to Multiple Stages of Wireless Network Development
ATC’s International Business Provides Exposure to Multiple Stages of Wireless Network Development Emerging Markets Rapidly Evolving Markets Advanced Markets VOICE-TO-DATA TRANSITION South Africa 150 MB/month data usage per sub 40% smartphone penetration DATA-CENTRIC VOICE-TO-DATA TRANSITION Unit
Slide 4: Global Expansion Considerations
Global Expansion Considerations ATC’s Three Pillar Analysis Approach to New Market Expansion Country Wireless Market Opportunity / Counterparty › Political stability › Competitive wireless market › Build-to-suit, merger, acquisition › Solid macro-economic › 3+ wireless carriers or joint venture fund
Slide 5: ATC has Diversified its International Portfolio
ATC has Diversified it’s International Portfolio which includes over 39,000 Sites(1) 2012 UGANDA & GERMANY 1995 2007 AMERICAN TOWER INDIA FOUNDED 2000 BRAZIL 1999 MEXICO 2013 COSTA RICA & PANAMA 2010 CHILE, COLOMBIA & PERU 2011 GHANA & SOUTH AFRICA 1995 2013 Year Market Launched 1995 2013 5 (1) Pro
Slide 6: ATC has Diversified its International Revenue Stream
ATC has Diversified its International Revenue Stream 2007 3Q 2013 PF(1) Top International Customers Top International Customers Other International 3% GVT America Telefonica 5% Telefonica Other 14% 11% Movil 19% 10% (70+ customers) Idea Cellular 3% MTN Nextel 12% TIM Cell C International 4% 4% 29% V
Slide 7: ATC International Segment – Historical Growth
ATC International Segment – Historical Growth Tower Count Rental Revenue Gross Margin(1) In $US millions In $US millions 31,789 $863m $549m $187m $154m 3,201 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Recent acquisitions of single tenancy properties pro
Slide 8: International Analyst Day Brazil Presentation
American Tower – International Analyst Day Brazil Presentation December 10, 2013
Slide 9: Forward-Looking Statements
Forward-Looking Statements “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements concerning our goals, beliefs, strategies, future operating results and underlying assumptions. Actual results may differ materially fr
Slide 10: Agenda
Agenda AMERICAN TOWER LATIN AMERICA OVERVIEW BRAZIL • INTRODUCTION • WIRELESS MARKET OVERVIEW • BUSINESS MODEL OVERVIEW • FUTURE DEMAND DRIVERS AND OPPORTUNITIES 10
Slide 11: American Tower's Presence in Latin America
American Tower’s Presence in Latin America Olivier Puech CEO, ATC Latin America
Slide 12: American Tower's Presence in Latin America
American Tower’s Presence in Latin America Mexico Brazil Other LATAM(3) 2010: Chile Colombia, Peru Year entered 1999 2000 2013: Costa Rica, Panama ATC Sites(1) ~8,500 ~7,500 ~5,600 Portfolio composition(1) Acquired BTS Top Customers: Nextel International Telefonica Iusa Group America M
Slide 13: Latin America: Wireless Industry Trends
Latin America: Wireless Industry Trends Growing Smartphone Penetration Growth in Data as a % of Service LatAm Mobile Subscriptions Year over Year Growth in 2012 Revenues 2008 - 2013E by Technology 120% 80% 166% 100% LTE 70% 80% WCDMA/HSPA 60% 109% 50% 60% GSM/EDGE - only 40% TD-SCDMA 30% 40% CDMA 20
Slide 14: ATC Positioned to be Provider of Choice for Major Customers
ATC Positioned to be Provider of Choice for Major Customers 15 countries 4 countries 17 countries Network Initiatives • LTE deployment in Brazil and • Continuing 3G Overlays • Focused on 3G overlays and Mexico • LTE rollouts in Rio / Mexico initial 4G build-outs • Focused on enhancing data • Seeking
Slide 15: Future Outlook
Future Outlook Compelling ATC’s position Key carrier Robust growth wireless as a leading partners opportunity trends tower operator 15
Slide 16: ATC Brazil
ATC Brazil Flavio Cardoso General Manager, ATC Brazil
Slide 17: ATC Brazil - History
ATC Brazil - History 2000 2003 2011 2013 American Tower enters Acquisition of ~400 Acquisition of ~700 Agreements signed to Brazilian market Nextel towers (2003-2008) towers add over 3,000 sites (1) 2001 2009 2012 Acquisition of Acquisition of 200+ Acquisition of ~1,700 150+ GVT towers CTBC towers V
Slide 18: ATC Brazil - Leadership Team
ATC Brazil - Leadership Team Olivier Puech CEO, Latin America 25 Years Experience Flavio Cardoso General Manager, Brazil 22 Years Experience Elias Godoy Luiz Mello Michel José Cassio Futuro Jeff Smith Alexandre Katz Suzana Tonin Finance Legal Sales New Products Implementation Operations HR 22 Years
Slide 19: ATC Brazil – Historical Growth
ATC Brazil – Historical Growth Tower Count Revenue Gross Margin(1) In $US millions In $US millions $198m 4,345 $148m $53m $43m 726 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 We have materially grown our Brazil business through a combination of organic g
Slide 20: Brazil Key Portfolio Characteristics
Brazil Key Portfolio Characteristics • Approximately 7,500 sites(1) • Portfolio largely urban and suburban in the large metros: • Sao Paulo, Rio de Janeiro and other top population centers • Direct correlation with Brazil´s GDP of >80% in Southeast, Northeast & South • Strategically located along ma
Slide 21: Brazilian Wireless Market Overview
Brazilian Wireless Market Overview
Slide 22: Brazil Represents the 4th Largest Global IT/Telecom Market
Brazil Represents the 4th Largest Global IT/Telecom Market 940 Market Size In USD Billions 315 340 159 180 UK Brazil Japan China U.S. Brazil represents over 50% of the total Latin American IT/Telecom market 22 Source: IDC Worldwide Black Book, Q1 2013
Slide 23: Brazil Wireless Market Characteristics
Brazil Wireless Market Characteristics Wireless Subscribers and Penetration Service Revenue and Data as % of Revenue (Subs in millions) (Revenue in BRL bn) 274 137% 65 122 38 64% 27% 7% 2007 2008 2009 2010 2011 2012 2013E 2007 2008 2009 2010 2011 2012 2013E Wireless Subscribers Wireless Penetration
Slide 24: Brazil Wireless Carrier Overview
Brazil Wireless Carrier Overview Spectrum holding Carrier-Announced Network Deployment Timelines ATC Spectrum Current Customer? Holdings Technology 2012 2013 2014 2015 Telefónica 124 MHz 3G/4G UMTS/HSPA+ LTE Current 4G coverage: ~70 cities Telecom Italia 104 MHz 3G/4G UMTS/HSPA+ LTE Current 4G c
Slide 25: Brazil Spectrum Landscape
Brazil Spectrum Landscape 2011 2012 2013 2014 2015 2016 2017 Auction: 3G 800MHz 1.8GHz Coverage expansion by all carriers as Winners: voice services continue migration from 2G Claro, Oi, TIM, Sercomtel Auction: Launch All capitals FDD 2.5GHz Confederations Cup + cities >500K Municipalities Municipal
Slide 26: Brazil Regulatory Landscape
Brazil Regulatory Landscape • Ministry of Communications • Oversees broadcasting, postal and telecommunications services – formulates and proposes national policies with oversight of related regulatory agencies such as ANATEL for telecom • ANATEL (Agência Nacional de Telecomunicações), created in 19
Slide 27: Recent Regulatory Developments
Recent Regulatory Developments 1. Antenna Law (PL 5.013/13) Backed by the Ministry of Communications and passed in the Senate in early 2013, proposes expedited and less bureaucratic processes for licensing, installation and sharing of telecommunications infrastructure • Defines a 60-day process for
Slide 28: Brazil New Builds: Zoning and Permitting
Brazil New Builds: Zoning and Permitting An illustrative timeline Month Activity 1 2 3 4 5 6 7 8 9 10 11 12 Pre-feasibility Urban & Environmental Impact Analysis Civil Aviation Authority Preliminary Analysis (Pre- COMAR) Site Acquisition & Ground Lease Construction Licensing Municipal Construction P
Slide 29: Business Model Overview
Business Model Overview / AMERICAN TOWER’
Slide 30: Single Interface for Shared Site Infrastructure
Single Interface for Shared Site Infrastructure Landlords Environmental Audits Assessment Government & Documentation Agencies ATC Operations & Security Maintenance ATC provides a valuable end-to-end solution to our customers 30
Slide 31: Tower asset
Tower asset Tenant Responsibility ATC responsibility Ground-based site Rooftop site 31
Slide 32: Key Business Model Characteristics
Key Business Model Characteristics Revenue Expenses Long-tenured customer leases: Secure Land: • Initial lease terms typically 10 years, with multiple • Initial lease terms typically at least 10 years, with five year renewal periods multiple five year renewal periods • Average remaining term of over
Slide 33: Structure Types
Structure Types Self-Support Guyed 33
Slide 34: Structure Types (Continued)
Structure Types (Continued) Monopole Rooftops 34
Slide 35: Sample Tower Lease-Up Case
meters Sample Tower Lease-Up Case 40 First Tenant 36.5m – 40.0 m 36 Second Tenant 31.5m – 36.0 m 31.5 First Tenant- Additional equipment: 31.0m 3RFs and 3 RRUs 28 3rd Tenant 24.0m – 28.0 m 24 35
Slide 36: Illustrative Lease-Up Example
Illustrative Lease-Up Example 1 Tenant 1 Tenant 3 Tenants 4 Tenants 36
Slide 37: American Tower – Legacy Site Growth
American Tower – Legacy Site Growth 4 3.2 3.2 2.9 # tenants per site 3 2.3 2.4 2.5 2.2 Sites in 1.9 2.1 1.6 1.7 Portfolio 2 1.4 Since 2002 1 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 • Have more than doubled tenancy on sites in the portfolio for over 10 years • Expect to replicat
Slide 38: Future Demand Drivers and Opportunities
Future Demand Drivers and Opportunities
Slide 39: Demand Drivers
Demand Drivers Broadband Spectrum Coverage Technology Devices 39
Slide 40: Demand Drivers: Devices & Broadband
Demand Drivers Devices & Broadband • Smartphone penetration continues to grow but still lags the U.S.: • Increased to 26% in 2Q 2013, compared to 49% in the U.S. • Brazil smartphone penetration grew 67% year over year • Significantly lower voice and data traffic than the U.S: • Voice Traffic: 131 MO
Slide 41: Data Usage Drives Need for Densification
Data Usage Drives Need for Densification Subscribers per Base Station - Comparison ~500 ~1,100 ~2,000 ~4,000 • Current network capacity insufficient to handle rapidly increasing burden of wireless data • As a result, we expect to see material cell splitting and collocation growth on our portfolio So
Slide 42: Demand Drivers: Technology
Demand Drivers Technology • Advanced technologies allow more efficient utilization of spectrum • Allowing operators to offer more with less, justifying network investment cycle for LTE • 2G still represents ~62% of active phones, with 3G at ~34% and 4G ~4% • Cell site and base station densification
Slide 43: Technology Migration in Brazil
Technology Migration in Brazil Age of Network TODAY 5–10 Years: 2G › Full network migration › Deployed across all cell sites › Fill in sites needed based on usage trends to address capacity needs 2–5 Years: 3G › Overlay existing network; fill in coverage gaps › Urban investment, followed by suburban
Slide 44: Demand Drivers: Spectrum and Coverage
Demand Drivers Spectrum and Coverage • Recent spectrum auctions have included geographic coverage build requirements • Network coverage remains an opportunity in Brazil • Large land area drives need for coverage, but still relatively low rural coverage • ~0.2M sq. miles greater in size than the cont
Slide 45: Key Demand Catalysts for ATC Brazil
Key Demand Catalysts for ATC Brazil › High data growth and rising voice MOUs demanding capacity investments › 4G auction for 2.5GHz requires deployment in major cities before the World Cup and Olympics › Rural broadband milestones require rollout to un-served / under-served areas by YE 2015. › Sever
Slide 46: Obrigado!
Obrigado! / AMERICAN TOWER’
Slide 47: International Analyst Day South Africa Presentation
American Tower – International Analyst Day South Africa Presentation December 10, 2013
Slide 48: Forward-Looking Statements
Forward-Looking Statements “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements concerning our goals, beliefs, strategies, future operating results and underlying assumptions. Actual results may differ materially fr
Slide 49: Agenda
Agenda AMERICAN TOWER’S PRESENCE IN AFRICA SOUTH AFRICA: • INTRODUCTION • WIRELESS MARKET OVERVIEW • BUSINESS MODEL OVERVIEW • DEMAND DRIVERS AND OPPORTUNITIES 49
Slide 50: American Tower's Presence in Africa
American Tower’s Presence in Africa Pieter Nel CEO, ATC Africa
Slide 51: American Tower's Presence in Africa
American Tower’s Presence in Africa(1) South Africa Ghana Uganda Year entered 2011 2011 2012 ATC Sites ~1,800 ~2,000 ~1,100 Portfolio composition Acquired BTS Top Customers: MTN Cell C Vodafone Airtel % of ATC Rental and ~3% ~3% ~2% Management Revenue % of ATC Gross Margin ~2% ~2% ~1
Slide 52: Africa: Where are we today?
Africa: Where are we today? Fixed line Mobile phone (SIM card) Internet user Households with Internet penetration penetration penetration connectivity penetration 2013 3% 69% 16% 7% The African wireless landscape represents a growing and dynamic market 52 Source: Blycroft, 2013, ITU, 2013
Slide 53: How does this compare with the rest of the world?
How does this compare with the rest of the world? Mobile Connections per 100 Inhabitants Internet Users per 100 Inhabitants 170 75 61 126 128 52 105 109 96 89 89 38 32 63 16 Europe Europe Developing Avg Developed Avg Asia & Pacific World Avg Commonwealth Asia & Pacific Commonwealth Arab States Arab
Slide 54: Africa: Wireless Industry Trends
Africa: Wireless Industry Trends Growing Wireless Penetration South Africa Fundamental Tower Demand Drivers YE 2012 Data as a % of Service Revenues Remain Strong Across the Region 135% 32% 100% › Low fixed line penetration and growing demand for broadband 19% drives opportunity for wireless 46% › Go
Slide 55: Key Enabler for Wireless Data Growth – International Fiber Connectivity
Key Enabler for Wireless Data Growth – International Fiber Connectivity Fiber connectivity provides complementary infrastructure to support wireless data deployments 55 Source: http://manypossibilities.net/african-undersea-cables
Slide 56: ATC Is Positioned to be Provider of Choice for Major Customers
ATC Is Positioned to be Provider of Choice for Major Customers 16 countries 9 countries 17 countries Network Initiatives • 2G/3G, LTE deployments in SA, • 2G/3G build-outs in SA and • 2G/3G build-outs in Ghana and Uganda. 3G in Ghana Ghana Uganda • Increased Capex spend to • LTE trial\deployment out
Slide 57: Future Outlook
Future Outlook Compelling ATC’s position Key carrier Robust growth wireless as a leading partners opportunity trends tower operator 57
Slide 58: ATC South Africa
ATC South Africa Marek Busfy COO, ATC South Africa
Slide 59: ATC South Africa - Overview
ATC South Africa - Overview • A leading independent wireless infrastructure company in South Africa • ATC Operational Background: • Head Office in Sandton, two regional offices in Cape Town and Durban • 100+ employees • South African company with local shareholders • “Center of excellence” for Afric
Slide 60: ATC South Africa - Leadership Team
ATC South Africa - Leadership Team Pieter Nel Andy Chapman CEO, Africa CFO, Africa 25 Years Experience 30 Years Experience Mia Campbell Marek Busfy Anne McLaren Chris Jonck HR COO General Counsel Power Solutions 8 Years Experience 12 Years Experience 7 Years Experience 9 Years Experience Limpho Mato
Slide 61: ATC South Africa Key Portfolio Characteristics
ATC South Africa Key Portfolio Characteristics • Over 1,800 sites • Portfolio largely urban and suburban in the 3 large metros: • Johannesburg • Cape Town • Durban • Large percentage of monopole and tree/camouflage structures Attractive asset locations yield solid lease-up opportunity 61
Slide 62: ATC South Africa Key Portfolio Characteristics (cont.)
ATC South Africa Key Portfolio Characteristics (cont.) • Cell C is our largest customer and an anchor on most sites • Current tenancy of over 2 tenants on original portfolio purchased in 2011 Tenant Revenue - March 2011 Tenant Revenue – September 2013 5% <1% <1% 14% 3% 6% 19% 16% 65% 54% 18% Average
Slide 63: South African Wireless Market Overview
South African Wireless Market Overview
Slide 64: South Africa Wireless Market Characteristics
South Africa Wireless Market Characteristics Wireless Subscribers and Penetration Service Revenue and Data as % of Revenue (Subs in millions) (Revenue in ZAR bn) 97 70 67 41 134% 30% 85% 10% 2007 2008 2009 2010 2011 2012 2013E 2007 2008 2009 2010 2011 2012 2013E Wireless Subscribers Wireless Penetra
Slide 65: South Africa Wireless Operators
South Africa Wireless Operators • Market dominated by 2 wireless carriers, with Mobile Subscriber Share 2013(1) over 80% share of subscribers • Cell C launched as 3rd mobile operator in 2000, 6 years after Vodacom and MTN Telkom Mobile Others • Government influential through several Cell C 17% 2% en
Slide 66: South Africa Wireless Operators: Investment Profiles
South Africa Wireless Operators Investment profiles Total Capex • Wireless operator spend dominated by Vodacom 20 (in ZAR bn) and MTN 15 Neotel • Spending on LTE just getting started 10 Telkom Mobile Cell C • Historically large spend on self-provisioning with MTN 5 fiber backhaul Vodacom • Future sp
Slide 67: South Africa Spectrum Landscape
South Africa Spectrum Landscape Background • Spectrum largely distributed between 3 wireless operators in the 900 MHz, 1,800 MHZ and 2.1 GHz bands • Some under-utilized spectrum in the 1,800 MHz band • Telkom making use of 2.3 GHz band for LTE TDD deployment • Sentech recently returned 2.6 GHz and 3
Slide 68: South Africa Spectrum Landscape: Potential Evolution
South Africa Spectrum Landscape Potential Evolution Prior to 2013 Currently in the process of transitioning from Step 2 to Step 3: • Most operators re-farming 1,800 MHz band for LTE • Telkom already making use of 2,300 MHz band • Spectrum auction for 800 MHz and 2.6 GHz expected in 2014 • Current fo
Slide 69: South Africa Regulatory Landscape
South Africa Regulatory Landscape Independent Communications Authority of South Africa – (ICASA) • Established by the Independent Communications Authority of South Africa Act of 2000 • Regulates telecommunications, broadcasting and postal services • Key focus areas: • Spectrum allocation with emphas
Slide 70: South Africa New Builds: Zoning and Permitting
South Africa New Builds: Zoning and Permitting An illustrative timeline Activity Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Civil Aviation Authority approval Environmental Impact Assessment Ground Lease Consent Use Build Permit Tribal Resolution Removal of Title Deed Res
Slide 71: Business Model Overview
Business Model Overview / AMERICAN TOWER’
Slide 72: The Tower Asset
The Tower Asset Tenant Responsibility ATC responsibility Operator Equipment American Tower Equipment Container: Compound: Radios, BTS’s Fence All internal RF Fly leads etc. Mast and site Lighting Rectifier and Batteries Fiber Duct MW TX cabinet and equipment Internal Distribution Board (DB) Air cons
Slide 73: Key Business Model Characteristics
Key Business Model Characteristics Revenue Expenses Long-tenured customer leases: Secure Land: • Initial lease terms typically 10 years, with multiple • Initial lease terms are typically at least 10 years, five year renewal periods with multiple five year renewal periods • Average remaining term of
Slide 74: Sample Monopole Structure
Sample Monopole Structure First Tenant 32.5m – 35.0m Second Tenant 28.5m – 31.0m Third Tenant & MW equipment 26.5m - 28m Fourth Tenant 23.5m – 26.0m Fifth Tenant 21.0m – 23.0 m Most tenants still making use of indoor equipment within shelters taking up 3m x 2.4m ground space 74
Slide 75: Typical Tower Structures in South Africa
Typical Tower Structures in South Africa Tree / Camouflage structure Lattice Rooftop 75
Slide 76: Outperformance to Investment Business Case
Outperformance to Investment Business Case(1) Cell C Acquisition - Adjusted EBITDA +27% +14% 2011 2012 2013E Actual/Forecast Acquisition Business Plan Outperformance vs. business case driven by: • LUR outperformance – added almost 700 collocations on original 1,364 site portfolio (which included 459
Slide 77: Demand Drivers and Opportunities
Demand Drivers and Opportunities
Slide 78: Demand Drivers
Demand Drivers Broadband Spectrum Coverage Devices Technology 78
Slide 79: Demand Drivers: Smartphone Penetration & Broadband Usage Growth
Demand Drivers Smartphone Penetration & Broadband Usage Growth Vodacom Active Smartphones • Operators continue to finance smartphone (in millions) devices for consumers 6.6 • Smartphone adoption linked to increase in 5.3 24% data consumption 20% • Vodacom average smartphone usage up 1H13 2H13 1H14 7
Slide 80: Demand Drivers: Technology
Demand Drivers Technology • Advanced technologies allow more efficient utilization of spectrum • Allowing operators to offer more with less, justifying network investment cycle for LTE • Advanced technology devices = higher bandwidth intensive wireless network usage = service revenue growth opportun
Slide 81: Demand Drivers: Spectrum and Network Coverage
Demand Drivers Spectrum and Network Coverage • Current focus in South Africa on re-farming existing spectrum • Expectation for spectrum auction in 2014 (both 800 MHz and 2.6 GHz bands) • Spectrum auctions may lead to: • New entrants • Wholesale Open Access Network Operator • Universal service obliga
Slide 82: Today: Key Opportunities/Lease-Up Catalysts
Today: Key Opportunities/Lease-Up Catalysts • Data: Exponential data growth fueled by new applications, devices, marketing and affordability • Network usage: Shift away from voice to data • Network density: Projected to increase by 20% over the next five years to address coverage and capacity needs(
Slide 83: Thank You!
Thank You! / AMERICAN TOWER’