#375 of Fortune 500
American Tower Company, Inc.
TL;DR
(updated 08/05/2023)
American Tower Corporation is an integral part of the evolving technological landscape in the US. It all started when AMT snapped up many of AT&T’s old Long Line network of phone towers and repurposed them into what we know to be modern cell phone towers. AMT has proved instrumental in expanding 3- 5G cell phone service and internet service across the country.
Arguably, internet access was built on already entrenched patterns of the Long Line towers, which helped spur economic growth and social development in privileged neighborhoods to the exclusion of others. This tipped the socio-economic scales away from minorities in developing regions and could be a major historical reason why we still have the massive equity gap — including major disparities in internet access — between white and minority communities (check out this article from the Journal of Medical Internet Research).
As far as organizational development, AMT seems to run a tight ship — at least from the outside looking in — with plenty of awards like a spot on US News & World Report’s inaugural list of best companies to work for; other awards include most responsible company, most admired company, and best employers for diversity. The Glassdoor ratings and comments paint a different picture of middle management, which is not atypical for a company this size.
There have been disputes about a specific AMT policy that requires foremen to fire (or not rehire) line workers who decide to also work for a competing cell tower operator within a certain distance. Furthermore, plenty of consultancy firms advertise their re-negotiation services for those landowners who have land leases with AMT. The company banks on the fact that most landowners won’t read the fine print of these complex lease agreements. Meanwhile, AMT touts one of the largest REITs in the world.
The number generated today is 375. The 375th-ranked company in the Fortune 500 is American Tower Corporation. They describe themselves as “an operator of wireless and broadcast communications towers” and have recently “expanded further into emerging markets in 2019.” American Tower found its way to this prestigious Fortune 500 list first in 2017.
American Tower's net worth as of March 29, 2023, is $89.94B. American Tower revenue for the twelve months ending December 31, 2022 was $10.711B, a 14.47% increase year-over-year. American Tower's annual revenue for 2022 was $10.711B, a 14.47% increase from 2021. American Tower's annual revenue for 2021 was $9.357B, a 16.36% increase from 2020.
American Tower Corporation, one of the largest global REITs, is a leading independent owner, operator, and developer of multitenant communications real estate. In addition to leasing space on towers, they provide customized collocation solutions through our in-building systems, outdoor distributed antenna systems and other right-of-way options, managed rooftops, and services that speed network deployment. Headquartered in Boston, Massachusetts, American Tower has offices across the United States and in Argentina, Brazil, Chile, Columbia, Costa Rica, France, Germany, Ghana, India, Mexico, Nigeria, Paraguay, Peru, South Africa, and Uganda.
American Tower's annual/quarterly operating income history and growth rate from 2010 to 2022 are as follows. Operating income can be defined as income after operating expenses have been deducted and before interest payments and taxes have been deducted.
- American Tower operating income for the quarter ending December 31, 2022 was $0.192B, a 69.36% decline year-over-year.
- American Tower operating income for the twelve months ending December 31, 2022 was $2.352B, a 24.89% decline year-over-year.
- American Tower annual operating income for 2022 was $2.352B, a 24.89% decline from 2021.
- American Tower annual operating income for 2021 was $3.132B, a 8.47% increase from 2020.
- American Tower annual operating income for 2020 was $2.888B, a 7.41% increase from 2019.
(https://www.macrotrends.net/stocks/charts/AMT/american-tower/operating-)
Brief Overview
American Tower started in 1995 as a subsidiary of American Radio, a radio systems corporation that acquired a few radio stations in the tri-state area of NY-CT-NJ. American Radio was sold to CBS/Viacom in 1998 at a then record-setting price of $2.6 billion (adjusted for inflation, $4.2 billion in today’s dollars), at which point American Tower was spun off as its own entity and went public on the NYSE as ticker AMT.
In the years following, American Towers built towers all over the U.S. and did not stop there. AMT set up shop in Mexico and Brazil, and then in 2005 merged with its closest competitor to become the largest tower company in the U.S. AMT continued to grow, adding India, Peru, Chile, and Colombia to its operations, also expanding to South Africa, Ghana, Uganda, and Germany. In 2012, AMT became a Real Estate Investment Trust (REIT) that allowed them to pay regular dividend distributions to shareholders. By 2015, they upped their tower count to approximately 40,000 towers in the US and 180,000 towers in their global portfolio.
Currently, AMT boasts ~220,000 total communication sites globally, operates in 26 different countries, and 6 continents, and employs ~6,000 people around the globe.
“Hard” Elements: What do they sell, to whom, and why?
AMT sells wireless infrastructure systems that enable the very wireless networks used every day for our cell phones and for our internet access. Basically, they build, develop and rent out space on the towers that carry the wireless internet to the very palm of our hand. The towers usually range from 100 to 400 feet tall and the digital infrastructure equipment on the towers broadcasts the frequencies needed to provide the core mobile network coverage for a wide area, suitable to meet the demand of a large local population, for instance, say a suburb of Clevland, Ohio. There are four main sectors involved in digital infrastructure: the towers, data centers, fiber cable, and small cells & distributed antenna systems (DAS). So nowadays, AMT does more than just the towers; they have their hands in multiple pots of the data infrastructure market. I found this image that illustrates what these components look like in your average city.
AMT makes its money in a number of ways. They leverage the real estate of the tower assets, selling space on the towers to tenants who provide the wireless communications networks. They also purchase the land on which the towers sit, which means AMT owns the land & any leases attached to the land, as well as the electronics, cabling, shelters for equipment, and the energy generators for the towers. Because they own the land, AMT can sell shares of its revenue-generating properties through its REIT arm. AMT mostly sells its tower services to ISPs or WISPs (Wireless Internet Service Providers), LECs (local exchange carriers, which are a fancy term for local telephone companies), and RBOCs (Regional Bell Operating Companies).
According to an investor relation presentation found on their website, AMT lists the following as percentages of property revenue by tenant: AT&T (U.S.) 20%; Verizon 14%; T-Mobile (U.S.) 17%; international pass-through revenue 13%; international tenant revenue 30%; other U.S. 6% (which includes additional voice/data providers, broadcast companies, government agencies, local municipalities, etc.).
There can be multiple tenants that use space on a tower, and the rental charges are based on the property location, the vertical square footage used, and the weight placed on the tower. AMT has recently pushed its way into the edge data center business, using the real estate around its towers for new edge data centers in at least 5 major cities in the US. They buy the land they use from landowners to build towers and they do so in financially savvy ways that will help the landowner over time usually through a lease. AMT also sells solutions to radio and TV Broadcast companies. Additionally, AMT sells rooftop solutions that do not include towers, within the other sectors of digital infrastructure.
For what reasons does AMT sell its services? What value does this service bring and how does this service fit into the larger American economy?
AMT brings together integral pieces of the entire wireless internet, cell phone, and digital infrastructures. They constitute the backbone of America’s wireless communications. But they did not become that overnight. And there were very specific events that helped them get there.
It is important to remember that in 1984, a Supreme Court ruling was finalized that called for a divestiture of the monopoly carrier AT&T, and as a result, a new structure for telecommunications emerged: seven independent “Regional Holding Companies” called “Regional Bell Operating Companies” (RBOCs) were set up across the nation. Up until that point, AT&T was virtually the sole phone company operating in the States, thus why the Justice Department thought it prudent to bring an anti-trust lawsuit against them. Who could have competed with them when they owned this market? This is what it looked like in 1984 when each RBOC had its own region, after the divestiture.
The breakup of AT&T generated a surge of competition in the telecommunications market, which was one of the ultimate goals of the divestiture, and it created new ways of doing things. The long-wave radio transmission for TV and Radio broadcasting had relied on AT&T’s Long Lines for years, which were huge, microwave relay towers with coaxial cable infrastructure. They would soon become obsolete; satellite distribution was the future. When the CBS Corporation purchased American Radio Systems and spun-off AMT as its own entity soon thereafter, the company started acquiring AT&T’s old telephone relay towers that became decommissioned and defunct in the 1980s. They began to build on these towers antennas that could be leased out and used to build large wireless networks. This is how AT&T Wireless started to expand its networks across the country. Nowadays, AMT owns most of those former AT&T tower structures across the U.S.
With the advent of VoIP and eventually the internet in the 1990s, AMT was perfectly suited to gobble up market share across the US as it aimed to serve these newly established, locally and regionally situated RBOCs, the companies from which they receive much of their revenue today. The telecommunications industry stayed heavily regulated with huge fees on carriers that operated in local networks but who also made long-distance calls. As rates for long-distance calls dropped, however, local telephone rates went up because the FCC ordered carriers to pay “access charges” for local networks that both originate and terminate the call. This is where VoIP (Voice over IP) could skirt around these charges since VoIP relied on the internet to make calls, not telephone lines. The FCC eventually ordered in 2011 that VoIP companies had to pay the charges for nine years, which brings us to 2020. Nowadays, we don't really think much about alternatives to cell phones. Who still has a landline nowadays anyway?
As the demand for wireless started to take off, AMT took off — skyrocketed, really. It would be safe to say that American Tower has been and will continue to be an integral part of the shift to broadband wireless telecommunications, especially now with the onset of 5G networks.
How many of us truly understand what happens when we make a call from our cell phone, how the internet works (technically speaking), or where the data center is located from where our favorite Netflix show is streaming? I, for one, do not. To say the telecommunications network hierarchy is complex is the understatement of the millennia, and we will in no way attempt to successfully unpack all of the components involved. But for the sake of the task at hand — to understand the importance of AMT in the greater context of the American economy and its influence on the American public, and on other organizations — take a look at the breakdown of a telecommunications network through a diagram I found on one of AMT’s investor relations presentations.
Looks simple enough, right? If you want to dive deeper into learning about wireless telecommunications technology trends, these investor relations presentations are a great place to start. But the main takeaway here is that AMT’s main revenue stream comes from their property assets, approximately $9.1B in revenue in 2021. And their net income in 2021 was about $2.6B. The original towers from AT&T were brilliantly repurposed to fit the next technological advances in telecommunications.
5G technology is going to continue to prove to be a very important part of American society in the coming years: smoother mobile connections, faster downloading speeds, and quicker access to the internet on the go. But it doesn't stop there! 5G will help accelerate IoT adaption as well as increase usability for smartwatches, electric cars, and other wireless devices. The possibilities are endless.
According to the technology site WhistleOut, approximately 88.7 million Americans currently use 5G on their mobile phones, and it is expected to rise dramatically over the next years as Verison, T-Mobile, AT&T, and other carriers expand their 5G reach by setting up shop on newly constructed cell towers. Forecasters predict 222.3 million users in the US alone will be using 5G on their cellular phones (WhistleOut).
In a report titled “The Impact of 5G on the United States Economy,” researchers at Accenture predicted that the adoption of 5G will add up to $1.5 trillion to the US GDP. Ubiquitous 5G access allows industries like manufacturing, retail, and healthcare to create new end services and products that rely on bi-directional communication capabilities, for instance, allowing them to see a massive increase in sales growth of up to 50% in retail. Additionally, these industries will see an increase in employee productivity and process efficiency because of the strength of 5G connections.
Furthermore, customer service experiences will dramatically improve with the reliability of 5G. The advancements in the automotive industry will also be profound in that connected vehicle technologies could reduce the severity of non-impaired accidents by 80%, and also potentially reduce traffic by 25%. Lastly, the researchers at Accenture predict that 5G network deployment has the potential to create or transform up to 16 million jobs (full-time, part-time, and temporary jobs) across all sectors of the economy. These and other impacts of 5G on the economy are all detailed in the report cited here. (Accenture).
Soft Elements: Shared Values, Skills, Staff, Style
How do the company’s vision, mission, and core values relate to the operations of American Towers, and are they accurate representations of the company? Do they help to guide the company or are they just there to look good?
Our Vision
We make wireless communication possible everywhere.
Our Mission
1. Lead wireless connectivity around the globe.
2. Innovate for a mobile future.
3. Drive efficiency throughout the industry.
4. Grow our assets and capabilities to meet customer needs.
Our Core Principles
Understand our customers’ needs and satisfy them.
-Work as a team to build lasting customer relationships by understanding their requirements and exceeding their expectations.
Hire good people and empower them.
-Place the right people in the right positions, develop their talent and skills and provide opportunities for them to influence outcomes.
Focus on solutions, not problems.
-Begin with the end in mind and involve the right people. Stay positive and work together for desired results.
Do what we say we’re going to do.
-Set realistic expectations. Communicate clearly. Be accountable for your actions.
Have fun.
-Recognize our success, celebrate together, and contribute to a positive work environment.
Play to win.
-Put integrity first. Be competitive. Work together as a team to exceed expectations.
As an HR professional, I enjoy reading how companies put into words their missions, values, and core principles. These are essentially the beliefs of the leaders of the company, it's what they believe will propel this group of people to do the best work they can possibly do.
I like to describe it like this: it is as if the organization gets to pick out its wardrobe — they get to choose, from their available resources, how they want to look in the world. Of course, the clothes have to fit (if the company values aren't representative of what actually goes on at the company, then the clothes do not fit, and it will show); the particular fashion style chosen will please and attract certain people to it, both employees and investors (for instance, if the company puts an emphasis on incorporating their values into developing certain hiring practices and/or investor relations, as AMT does); and the quality of the material of the clothing (how well management actively backs up the principles laid out in the company values). Upon inspection, it seems like AMT has a pretty classy, modern wardrobe, which is not easy for a company their size, but perhaps it's a little too old-fashioned, and risks going out of style soon.
I found an article on Inc. discussing the values of the cumulative Fortune 500. Apparently, other people are interested in analyzing the Fortune 500, too. It led me to the work of Adam Fridman, founder of ProHabits, who looked to find the most frequently used values of companies on the Fortune 500. The author writes,
“Adam Fridman, founder of ProHabits, to dig deeper and uncover the link between lived values and organizational success. In their original research to discover core values, his team evaluated 2,057 values gathered from a total of 397 organizations (include the likes of Amazon, Apple, and Microsoft) and found five top values seen across Fortune 500 companies:
Integrity, Teamwork, Innovation, Customer Service, Respect
While these values are found almost everywhere it’s certainly not the case that they’re successfully lived out. Take integrity for instance. Fifty-five percent of Fortune 100 organizations have integrity as one of their listed core values — and the trend seems to trickle down to organizations of all sizes. But many of these same companies take actions that run counter to integrity. One of the most infamous examples of this was Enron — yes, Enron listed integrity as a core value, and we know how that story ended.”
Here are the top five again:
Integrity, Teamwork, Innovation, Customer Service, and Respect.
It was interesting to see the top five values of all of these businesses be so, well, generic, for lack of a better word. I would think all of these values to be self-evident in virtually any industry. Why the need to state them explicitly? So from here on out, I am going to use these top five values as a sort of baseline as I evaluate other companies on this list.
AMT’s “core principles” were stated as phrases instead of singular words but they were not far off from the meaning of the cumulative top 5 core values. The first is “Understand our customer's needs and satisfy them” which sounds a lot like Customer Service. The second, “Hire good people and empower them” sounds like Teamwork. The next, “Do what we say we’re going to do” sounds a lot like a more verbose version of Integrity. The final two are “have fun” and “play to win” which are a little more difficult to equate but they could fall under the values of Teamwork and Innovation.
John Paul makes a reference to research done on the value of corporate culture and summarizes the conclusions: corporate values have no real relationship to business outcomes. Any company’s advertised core values are only as good as its actual organizational culture. The factor that did influence a firm’s performance was the perception employees had of top managers as being ethical and trustworthy (The Value of Corporate Culture, 1).
Back to the concrete data about the staff: according to AMT’s 10-K Annual Filing for the fiscal year of 2021, there were 6,378 full-time employees including 2,291 based in the US and 4,087 based internationally. CrunchBase notes that AMT is a holding company and conducts its business through directly and indirectly owned subsidiaries and joint ventures. I think it's safe to assume that AMT’s subsidiaries indirectly employ many more people as contractors to work on their ~41,300 communication sites in the USA alone.
How well does management lead the company?
According to their 10-K, 91% of employees participated in a company-wide survey which found employee engagement and satisfaction measures all scored over 70% in favorability with engagement at 87% and D&I at 83%. So, in short, it seems AMT does a good job at managing its employees overall.
It has been a few huge years for American Tower as far as recognition goes; they won quite a few awards:
One of Newsweek’s America’s Most Responsible Companies 2022
One of FORTUNE Magazine’s World’s Most Admired Companies 2022
Named to Forbes America’s Best Midsize Employers List 2022
Named to Forbes America’s Best Employers for Veterans List 2021
Named to the Boston Globe’s Top Places to Work 2020 List
Named to Forbes America’s Best Employers for Diversity List
Are these awards and recognitions the best way to judge a company’s internal well-being and organizational health in all its nuances? Perhaps not, but they are a solid indicator of overall organizational health.
A useful tool in discovering whether or not AMT walks the talk is Glassdoor reviews. Glassdoor now has some cool features on its site that could be useful. They break down the reviews and measure how many times certain phrases or sentences are used, categorized by pro or con. Here is what you can find on the Glassdoor website:
PROS
“Benefits are great and so are the people” (in 82 reviews)
“Great people to work with and awesome managers!” (in 48 reviews)
“Work-Life balance is good and slogging is a rare phenomenon.” (in 27 reviews).
“The pay is good.” (in 26 reviews)
“The culture of ATC is great.” (in 14 reviews)
CONS
“Poor Management.” (in 56 reviews)
“Upper management is completely out of touch.” (in 18 reviews)
“Offshore managers have no powers; they are only there to blame you and for approving leaves” (in 18 reviews)
“Low salary and Low technology exposure” (in 15 reviews)
“There is absolutely NO training for new employees and they are set up for failure from day one.” (in 12 reviews)
Glassdoor also has some interesting rating features:
How is the company perceived by the average job-seeker?
I would say it's nearly impossible to accurately judge the performance of a company’s ability to uphold its core values from these Glassdoor reviews alone and ratings. But it does reveal at least a basic view of a company’s internal health. AMT seems to be operating at almost a 4 out of 5-star level, which I would call very good.
How does the company treat its employees, partners, and vendors, and how does it interact with relevant governments & institutions within its industry?
I am not sure how I can answer this question without writing another 5,000 words. In future posts, I will parse down this question and perhaps choose one business relationship to analyze either employees, partners, vendors, or governments & institutions.
The one piece of information I will mention here is the move AMT made to inhibit their contractors from working on competitor sites within 1/2 mile of an American Tower site. You can see the full article here. Like in many industries that involve the design, development, construction, and maintenance of physical assets, there will be a few parties involved to get the job done. In this case, AMT is looking to dissuade competitors from moving into ‘their soil’ by refusing AMT contractors to work for the competition's sites. But in actuality, the policy could be only hurting their own contractors and risking alienating them completely. The article quotes one of AMT’s Directors:
“Morely said in his letter that ATC believes that building towers within a half-mile of another one is “unnecessary, short-sighted and reckless. It harms existing landlords, needlessly clutters otherwise peaceful neighborhoods, wastes precious resources and does nothing to improve the coverage, capacity or quality of today’s stressed wireless networks. It could even delay the badly needed deployment of next-generation wireless technologies. This practice is not sustainable or scalable, is bad for our communities and bad for our country, and reflects poorly on the entire wireless industry.”
The stance taken by AMT seems a virtuous one when you take into account how quickly wireless technology is developing and the urgent need to practice environmentally friendly, sustainable business growth strategies and intentionally slow infrastructure development. Are these ambitious goals worth sacrificing jobs? If contractors do not comply and work on other sites near American Tower sites, AMT said they would revoke approved vendor statuses for those who do. Should we allow big businesses the power to refuse work for contractors looking to feed their families simply in the name of competitive advantage? If ever there was a justifiable reason to slash jobs, wouldn’t it be in the name of sustainability and progress?
The original inspiration for this project was to analyze the Fortune 500 through an organizational behavior lens to see what kind of influence the company and its products & services have on the American public. What I failed to originally define was who, in particular, I am referring to when I say American public. I now realize that I mean the aggregate stakeholders of the particular organization in question. This includes all full-time and part-time employees, all contracted employees, business partners, direct consumers, and indirect consumers.
What is the importance and impact of the company’s product and/or service on American society?
As I am progressing through this writing project, analyzing companies listed on the Fortune 500 and assessing how they fit into the American economy as a whole, I realize this last question directly above may be the most important: What is the importance and impact of the company’s product and/or service on American society?
And what, if any, contribution is the company making to a more equitable, sustainable economy in the future? Even from a cursory understanding of what AMT sells and what its service enables, and using as best a lens as possible into the organizational behavior of the company, it is easy to determine that AMT is an essential organization for the American Economy. I hope that as this project progresses, a useful framework will emerge for rating companies’ influence on the future of the American economy. Perhaps it would be best to come up with a rating system aimed at holistically gauging each organization’s impact on the American economy.
The most relevant piece in a macro-organizational analysis of AMT’s rise to the Fortune 500 was its purchasing of the decommissioned and defunct AT&T towers. At one point, these towers provided most of the country’s telecommunication services; virtually every phone call before the 1980s would be sent through one of these AT&T towers. Remember this picture?
The organization of these towers could reveal a lot about the development of American cities in the 21st century. In the cities that were introduced early to VoIP, would it be safe to assume that there was more business development than in those that did not have access to early VoIP? I imagine that in the cities that had a greater concentration of wealth, AT&T focused on building towers in those areas first.
When AT&T was divested and broken up into the seven “Baby Bells”, the new operating companies were given regions in which they could work. As the industry continued to grow, regulation of the market evolved and soon various “Local access and transport areas” were constructed as regional boundaries in which RBOCs could charge for long-distance services, essentially. My question is how was this particular organization of regional areas determined? And what effects did these boundaries have on the development of those areas? It could very well be that the development of certain areas that retained low inequality and retained low poverty were the ones that already had the infrastructure of microwave towers. So when they were repurposed into cell towers, those local economies stayed more resilient to economic hardship. Take a look at this GIF below:
Can you guess which state had the fewest AT&T microwave towers from 1960–1980?
Does this company, or its products/services, show up in our everyday lives?
Yes, presumably unknowingly, millions of Americans use AMT towers via their cell phone carriers. Remember, a large portion of AMT towers are used by Verizon and T-Mobile. Think of how many times the average American uses the internet, and how many gigabytes are downloaded or uploaded in a single day! Think of all the cell phone calls being made on AMT’s ~41,000 towers all over the US! Where would be without the infrastructure that AMT purchased and adapted for the tech innovations of cell and WiFi?
Will the development of this company impact how the average American lives her life? And if so, how much on a relative scale of 1–10?
The answer to this question is a big yes. As AMT continues to be a big player in the emergence of 5G, it will seek to add more tenants to its towers, perhaps with smaller and smaller devices that emit stronger WiFi signals. My rating here would fall around an 8 out of 10.
What is the importance and impact of the company’s product/service on American society?
The cell phone is no longer a phone. The term cell phone is still a relic of its technological ancestors, much like how the “save” icon in Microsoft Word is still an image of a floppy disc. What we have in our pockets now is a full-blown computer with wireless internet. Cellular is now in its 5th generation (hence the 5 in 5G) and now cellular devices are connected to both the internet and local phone networks via radio waves. Download speeds are blazingly fast and 5G’s increased bandwidths allow for lots of devices to connect at a time, which improves internet quality for densely populated places.
FINAL IMPACT RATINGS FOR AMERICAN TOWER
Impact on the American Public: 9 of 10
Impact on American Consumers: 10 of 10
Impact on AMT Employees: 7 of 10
Impact on Business Partners: 6 0f 10
Impact on Personhood: 9 of 10
TOTAL IMPACT: 41 of 50
The views and opinions expressed in these writings are those of the author and do not necessarily reflect the official policy or position of any other agency, organization, university, employer, or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author — and since we are all critically-thinking human beings, these views are always subject to change, revision, and rethinking at any time. Please do not hold me to them in perpetuity.
Works Cited & Additional Resources:
Google Finance: American Tower Inc
https://www.povertyusa.org/data/2009
Smart Cities in Application: Healthcare, Policy, and Innovation. Germany, Springer International Publishing, 2019.
