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  "documentTitle": "American Tower (AMT)",
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  "authorName": "Carson C. Block",
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  "presentationDate": "2013-07-17 00:00:00",
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  "notes": "Discusses diesel reduction mandates, $128m estimated capex, 13% CAGR decline in ARPU, and Reliance 4G rollout impact.",
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      "text": "It should be noted that this expenditure will not improve ATL’s margins as energy costs are all passed through to carriers who will solely benefit from this expenditure.",
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      "text": "Our local sources also insisted that cost saving pressures coming from carriers is one of the main threats facing tower companies in India. From 2007 to 2012, ARPUs in India have fallen at a 13% CAGR and there has been intense competition in a market that is oversaturated with carriers. These sources have informed us, that to combat falling margins carriers are starting to pressure tower companies to cut the costs that are passed through to them, fuel being the main component. We understand that carriers are willing to move equipment from their current towers to any tower that offers the greatest cost savings. In order to retain their tenants, tower companies will be forced to invest significant capital expenditure to achieve the required cost savings. Unfortunately for shareholders, these large expenditures will have little if any benefit on ATL's margins.",
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      "text": "Carriers are suffering from margin squeezes and have been looking to decrease the rents they pay on towers. We have heard from a number of local industry experts that the rents in some of the contracts coming up for renegotiation are as low as half of what they use to be pre the 2011 crisis. This has not come through in ATL's revenue yet as leases have not come up for renewal yet but once they do they will find significant pressures on rental prices received.",
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      "text": "The Indian government has recently approved the Telecom Regulatory Authority of India's recent suggestions to reduce the carbon footprint of the telecom sector by mandating the reduction of dependence on diesel.64 We understand from local sources that Indus is expecting that it will cost INR1 million per 5KW tower to come in line with government expectations. Based on this and assuming that AMT have a 50:50 split between rural and urban towers, we believe that the India operation will have additional capital expenditures of approximately $128m over the next ten years. It should be noted that this expenditure will not improve ATL's margins as energy costs are all passed through to carriers who will solely benefit from this expenditure.",
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      "text": "obtaining necessary permission from the competent authority. The hearings are currently in process and we are not able to assess the potential impact, however, this could be significant if the Tribunal require towers to be pulled down.",
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      "text": "The smaller tower companies, including ATL, had been hoping to benefit from Reliance Industries' 4G roll out on their towers, however, Reliance has recently made a deal with Reliance Communications to collocate on their towers only to the exclusion of any other tower company.65",
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      "text": "64 http://www.igovernment.in/site/telecom-towers-be-powered-renewable-energy\n65 http://in.reuters.com/article/2013/06/07/reliance-industries-reliancecomm-towers-idINDEE95603P20130607",
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      "text": "Carrier Effects on Growth and Pricing",
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