American Tower: Continued International Investment Should Drive Growth

American Tower is the largest operator of wireless towers in the world, with over 220,000 sites across 25 countries. We maintain our narrow moat rating on American Tower, stemming from efficient scale and switching costs. The tower industry is driven by high operating leverage and the ability to locate multiple tenants on a single structure. Financial returns on a tower often only become attractive once a tower adds a second or third tenant, challenging the ability of a competitor to build a new tower and compete for the business. Switching costs are also prevalent for American Tower, as carriers are responsible for all cost associated with adding or removing equipment on a tower. Additionally, carriers sign long-term leases, frequently 10 years or more.