American Tower expects to see long-term benefits from the merger between T-Mobile U.S. and Sprint, the company’s CEO James Taiclet said during a conference call with investors.

“American Tower continue to expect that these developments will likely result in net positive impacts on our U.S. business over the long-term. While there may be some decommissioning of sites as the new T-Mobile optimizes its network and rolls out 5G, we would also expect significant demand from the combined company for our extensive U.S. portfolio during that process and well into the future,” the executive said.

Taiclet also said that American Tower also expects to see a positive business impact of Dish decision to acquire Sprint’s prepaid business.

“Dish is set to acquire Sprint’s prepaid business and has made a commitment to deploy facilities-based 5G broadband network capable of serving 70% of the U.S. population by June of 2023,” Taiclet said.  “As a result, we also expect to secure meaningful new business from Dish, as they transition their current narrowband IoT network design into a full-fledged 5G mobile architecture over the coming years.”

Taiclet also highlighted that the agreement recently announced between the Justice Department, T-Mobile and Dish, really positions the U.S. to accelerate its achievement of global leadership in 5G technology, while at the same time retaining a competitive industry structure that benefits consumers (…) I believe this will be an excellent environment for American Tower.”

Last week, The Department of Justice’s Antitrust Division approved T-Mobile US’ merger with Sprint, saying that the merger conditions will support the entry of a new, viable facilities-based market player, which will be Dish Networks. The terms for the New T-Mobile include divesting Sprint’s prepaid business, including Boost Mobile, Virgin Mobile and Sprint’s other prepaid operations, as well as some spectrum to Dish. T-Mobile and Sprint have to provide Dish with access to “at least 20,000 cell sites and hundreds of retail locations” and also has to make sure Dish has “robust access to the T-Mobile network for a period of seven years while Dish builds out its own 5G network,” according to the DoJ.

During the conference call, Taiclet also noted the deal is not expected to impact American Tower’s financial results in 2019.

Taiclet noted that U.S operators had been investing around $30 billion over the last several years and that the required investment for 5G would sustain the figure in the coming years. “We can’t really see a scenario where the US wireless industry would spend less than that transitioning to 5G.”

However, the executive predicted the merger “might actually bolster” capital spending, as competition between the top three operators and newcomer Dish Network heats up. “We feel good that capital spending is going to stay at the same level or better as we move from 4G to 5G.”

American Tower posted a profit of $434 million in the second quarter of the year, up 38% year-on-year. Quarterly revenues amounted to $1.9 billion, a 6.1% rise compare to the year-ago period.

During the second quarter of 2019, American Tower spent approximately $43 million to acquire 256 communications sites and other related assets, primarily in international markets. Also, last month, the company entered into a definitive agreement to acquire approximately 400 towers and other related property interests in the United States for approximately $500 million. The transaction is expected to close in the third quarter of 2019.


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