New MLA between American Tower, AT&T Good for Tower Industry
by Sharpe Smith- AGL, December 12, 2019

American Tower’s recently minted master lease agreement is not only good for the tower
the company, but good the tower industry, Rodney Smith, SVP, American Tower’s corporate
finance & treasurer said in his conversation with Batya Levi, UBS Investment Bank, at the
UBS Global TMT Conference, this week in New York City.

He noted the MLA that the tower company signed with AT&T defines a longer commitment
by the carrier. Previously, AT&T had voiced its displeasure with American Tower’s leasing
terms and has gone out of its way to having companies who build them new towers agree
that they never are sold to a public tower company.

“The deal with AT&T really increases their level of commitment on our towers,” Smith said.
“Our committed order book of revenue has gone up from $34 billion up to about $46 billion,
primarily because of this deal. So that — in a way, you look at that as kind of an extension of
all these sites. It’s really a longer-term commitment, which we think is really good for us,
and it’s good for AT&T.”

Within that deal, AT&T now has certain use rights on American’s towers, and it doesn’t have
to go through an individual application process every time it wants to work on a tower. So the
administrative side of amendments and collocations has been streamlined and the payment
mechanism is simpler for AT&T and more predictable for American Tower.

“I think it’s good for the whole industry, where the tower companies and the telecoms really
work together to make sure that all this infrastructure that exists is utilized and accessible and
efficiently used by all the carriers,” Smith said. “We price it out. We do discounted cash flows.
We figure out what it’s worth, and we make the payment mechanism much simpler.” However,
he added that the 3 percent escalator, which has caused consternation, is still in place.

https://www.aglmediagroup.com/relationship-between-american-tower-and-att-warms/