American Tower continues to “collect and be pleased” with the way its clients are “paying in India,” says Rod Smith, executive vice president of American Tower. Smith in the first quarter earnings call on April 29, 2021, said that American Tower is “watching” its clients across the globe including a “couple in Africa and a couple in India.” However, the executive vice president of American Tower said that the company is “doing really well” in terms of its accounts receivable and that American Tower hasn’t had a “significant increase in accounts receivable.” American Tower is said to own and operate around 76,000 sites across India with Bharti Airtel, Vodafone Idea and Reliance Jio said to be all engaged with the company. In the previous quarters, American Tower had said that the payments from Vodafone Idea could be “interrupted or delayed.”
American Tower Continues to Watch India
Smith said that American Tower ended up “unwinding a bad debt reserve in India” in its first quarter of the current financial year by “just under US$10 million.” Crucially, the executive vice president of American Tower said that the unwinding is “certainly a good sign” but that the company will “continue to watch India.”
American Tower earlier reported its financial results for the quarter ended March 31, 2021, with the company recording an 8.3% year-over-year (YoY) increase in its total revenues. Smith in the earnings call said that the company saw a 1.6% decline in its organic tenant billing growth in India in line with its expectations. The executive vice president of American Tower said that the company continues to “work through the latter stages” of adjusted gross revenue (AGR) judgement and “consolidated churn in the market.”
Further, Smith said that American Tower continues to “expect roughly flat organic tenant billings for the year” in India as the company believes the market is in “very late stages of the consolidation process.”
“We maintain our expectation that we will see elevated churn this year as the post-AGR environment sorts itself out,” Smith said in the earnings call. “With that said, we remain optimistic that the long term growth trajectory in the market should be more favourable, particularly given that the structural framework of the wireless sector today is probably the most constructive it has been in the last decade.”
ATC Expects Timing Issue for New Tower Sites Construction
Meanwhile, Tom Bartlett, president of American Tower in the first quarter earnings call said that there could be “some timing issues associated” with the building of new tower sites. While American Tower’s outlook is said to be building 6000 to 7000 new tower sites, Bartlett said that the “timing” will be an issue.
“The need is there, I’m certain that the sites are going to be built, but particularly in a market like India who are suffering so significantly right now, there can be a timing issue in terms of having essential people out in the marketplace to be able to build,” Bartlett said in the earnings call. “Clearly lives saved is more important than towers built, so there could be some timing issues there.”
However, the American Tower president said that the “same implications” are not seen by him in his company’s other global locations such as Africa “at this point in time.” Smith said that the business of American Tower is “quite resilient” as “people need connectivity.”
“I think that’s been more obvious than ever over this past year, particularly in many of our global markets, and so our customers are doing everything possible that they can to be able to maintain that kind of connectivity,” Bartlett said.
Further, the American Tower president also said that the telecom operators across the globe “need a wider swath of spectrum” to roll out 5G in an “effective” way.
“Spectrum is the lifeblood of being able to roll out any of these new technologies, and for 5G to be able to truly realize the full 5G experience in terms of speed and latency, you need significant amounts of it,” Bartlett said.