Boston-based American Tower Corporation today published its financial results for the first quarter ending March 31, revealing a bumper revenue of $1.29 billion which is a 19.4 percent jump over its revenue in the previous quarter. The revenue figures indicate that even though smartphone sales have slowed down a bit in the past few months, the demand for increased bandwidth from network operators hasn't shown any signs of slowing down. American Tower Corporation's favorable financial results followed that of Crown Castle who revealed that it generated $934.4 million in revenue in the second quarter and also earned up to $395 million from its existing operations.
"The global proliferation of smartphones is driving significant growth in subscriber demand for higher bandwidth applications. As a result, during the first quarter, we continued to experience solid leasing demand across our served markets as mobile operators invest in their networks to manage key performance factors, including coverage, capacity and peak network speed," said Jim Taiclet, CEO at American Tower Corporation. Aside from its services in the United States, the tower company is also investing heavily in assets abroad. During the first quarter, the company acquired 1,350 communications sites from Airtel Tanzania for $179 million and also acquired a 51 percent stake in India's Viom Networks Limited by spending $1.2 billion in the process.
Taiclet has also indicated that just like it did in its recent acquisition in Africa and India, the company will continue to work towards diversification of its operations in free-market democracies around the world. In its financial outlook for the rest of the year, the company estimated up to $5.5 billion for property revenue, including $515 million from its acquisition of Viom. In the United States, the company recently entered into a deal with Verizon to lease over eleven thousand cell towers for a period of 28 years for a sum of $5 billion. Verizon has also sold its wireline assets in three states to Frontier Communications for $10 billion.
The picture has not always been rosy for tower companies in the United States with investors living in a constant state of concern that if any of these companies invested heavily in any new technologies, the move could threaten the entire industry. Recently, shares of both Crown Castle and American Tower Corporation slipped when it was rumoured that Sprint was moving its equipment to leased government land and was overhauling its network. With 5G networks threatening to take over existing 3G and 4G networks in the coming years, investors will need to prepare themselves for several ground-breaking decisions that may be taken by the respective managements of tower companies.