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  "documentTitle": "American Tower (AMT)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
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  "presentationDate": "2013-07-17 00:00:00",
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  "notes": "The slide details structural headwinds including counterparty risk, infrastructure competition, zoning issues, non-linear revenue growth due to rent abatements, and regulatory/legal hurdles.",
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      "text": "We do not believe that ATL, with only 10,000 towers, can compete with Bharti and Indus, which own approximately 150,000 towers between them.",
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      "text": "The Indian Department of Telecommunications is expected to impose an annual 8% of revenue license fee on tower operators. In our discussion with local lawyers we understand that the fee is currently in abeyance and a date for its introduction is yet to be set. Nevertheless, this license fee is another cost that tower companies are going to be facing which they cannot pass on to customers.",
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      "text": "anchor tenants will be the smaller carriers with higher counterparty risk. With Indus and Bharti Infratel having substantial access to the three largest carriers (62% market share) it means that smaller tower companies, such as AMT, may be more reliant on smaller operators that have greater counterparty risk.",
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      "text": "Another issue facing smaller tower companies is the lack of stringent zoning laws in India. Tower companies are free to build towers close to a competitor's tower, which has led to a large number of towers being situated in close proximity to each other. As a result, the carrier has stronger pricing power as it can move towers without a material effect on its network. Additionally, one can see a number of towers that have no tenants. We understand that some of these are AMT towers.",
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      "text": "Tower companies including American Tower have recently been given notice by the National Green Tribunal that its towers may have been constructed in violation of stipulated guidelines. We understand from local lawyers that due to the gravity of the allegations and potential health hazard, the Tribunal has directed that there should be no construction of towers without following the mandatory provisions of law, and without",
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      "text": "We understand from local industry sources that there is talk the tower companies may also face increased competition from power transmission operators, such as Power Grid Corporation of India Limited, which might let its existing infrastructure be utilized by wireless telecommunications service providers for installation of their active telecommunications equipment.",
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      "text": "We understand from Bharti Infratel's management that it offers additional discounts on top of this rent abatement in order to attract more tenants. We do not believe that ATL, with only 10,000 towers, can compete with Bharti and Indus, which own approximately 150,000 towers between them.",
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      "text": "There are also significant rent abatements in India, that come into effect when an additional tenant co-locates to a tower. We understand that a carrier can save up to 15% if there is one other tenant on the tower and this discount will increase with any additional tenants. This means that even when additional tenants co-locate to an AMT tower, there is a heavy discount on the rent, and revenue growth is not linear with tenant growth.",
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      "text": "62 http://www.business-standard.com/article/economy-policy/govt-considering-8-licence-fee-on-telecom-tower-firms-113021300776_1.html\n63 http://www.indianexpress.com/news/green-tribunal-issues-notice-to-american-tower-corp-on-mobile-towers/1050137/",
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