American Tower in Latin America

The following interview was conducted at PCIA’s 2014 Wireless Infrastructure Show.
Olivier Puech, CEO of Latin America at American Tower
Jeff Mucci: Olivier thanks for joining us today, you’re the new CEO of Latin America for American Tower, tell us about the 3G to 4G transition in Latin America, maybe give us some examples by country.
Olivier Puech: What we see now in Latin America is no different from what we’ve seen in the U.S., Europe and part of Asia in the past 3 to 4 years, i.e. most of the operators now are trying to accelerate the migration from the older technology to the new one, so 2G is pretty much disappearing in some of these markets. You still have some legacy technology like CDMA or even iDEN with Nextel in some countries like Mexico and Brazil, as most of the focus from the operators is clearly between migration to 3G, a massification to 3G, and then starting to ramp up on 4G, so we see that they’re everywhere and most of the markets already have auctioned the first blocks in high spectrum, I would say in 4G. We see that in Chile and Brazil and Mexico and Colombia, Peru recently, Mexico as well, which of course is great, I mean for the consumers because you can finally have access to data-enabled content through better technology, so we’re trying to help the carriers as much as we can in this migration.
Jeff Mucci: Maybe give us a snapshot of where American Tower is in Latin America in terms of total towers, density by country.
Olivier Puech: Sure, so we have north of 22,000 towers serving every day, so we operate in seven markets, we started in 1999 in Mexico and then in 2000 in Brazil, which are kind of anchor countries in the region. Then Colombia, Chile, and Peru and more recently Costa Rica and Panama. I would say the biggest size of tower portfolio we have is in Brazil. Its around 7,200 towers we have in Brazil, north of eight thousand in Mexico, and then the rest in the other five markets that I mentioned. (Update: Shortly after this interview, American Tower announced its plan to add roughly 4,600 new towers in Brazil through the purchase of BR Towers.)
Jeff Mucci: How about towers and technologies? Fiber to the antenna, fiber backhaul, where is Latin America with respect to those two areas or other technologies?
Olivier Puech: I think that the idea is more the traditional model for now which is around new build-outs to make sure that 3G and 4G have the right coverage, at least in urban areas to start with, which is the case within the most established markets, San Paulo in Brazil, Mexico City, the big cities in Latin America. So that has been the focus of the carriers so far, and most of our time has been to help them to get this coverage. The second piece is to get the same technologies in the rural areas so we see a lot of focus from the regulators and the operators and us as well on trying to build new towers or co-locate the operators on more rural areas which are highly populated as well or over time becoming more and more populated, like the northeast of Brazil and some parts of Mexico, Colombia is a highly decentralized market as well, so we see a lot of opportunities there. And then in terms of new technology I think it’s a bit of a greenfield, work in progress and we see a lot of focus on DAS and small cells so at ATC at least we have invested quite some time and money on developing especially indoor DAS, I would say, with most of the carriers, because we see the potential for lease-up in most of the markets, a lot of potential and attractiveness in these iDAS systems in most of the markets, shopping, airports, stadiums, hospitals, a lot of venues which require a lot of density, capillarity regarding coverage, so a lot of investment there. Small cells I think it’s a work in progress, a lot of interest, regulators still looking at how to help the ramp up of this technology in most markets. Brazil is one that has started to regulate it a little bit more, the role of a company like ours in the value chain is still a little bit unclear, so we look with a lot of interest to help the carriers there and see if the tower business model somehow is applicable to this technology.