American Tower bullish on US spectrum deployment opportunities

American Tower Corporation (ATC) CEO Steven Vondran said he is optimistic that the next wave of spectrum deployment will drive further growth for the tower giant, as carriers prepare for a new cycle of 5G expansion and begin laying groundwork for 6G.

Speaking on the company's second-quarter earnings call last week, Vondran struck a bullish tone on the upcoming spectrum cycle, which he said would generate significant leasing activity across American Tower's portfolio. The company reported total revenue of $2.7 billion for the quarter, a 4.7 percent increase year over year, driven by strong leasing demand across its tower portfolio and record leasing activity at CoreSite, its data center subsidiary. Data center property revenue grew approximately 12 percent during the quarter.

Much of the discussion on the call centered on spectrum, coming on the heels of the Federal Communications Commission (FCC) announcing plans to auction 160MHz of spectrum in the upper C-band by July 2027. The FCC has said the auction will pave the way for a harmonized 5G "super band," and Vondran said the company expects to see substantial activity as a result. "In terms of the Upper C-band, that will go on towers, and we do expect that over time, that we will get significant activity as a result of that," he said.

In total, roughly 800MHz of spectrum is expected to become available in the coming years as carriers continue upgrading their 5G networks and begin looking toward 6G. Vondran also highlighted lower-band spectrum as a key opportunity, noting that carriers have used it as a complement to higher-band spectrum in their networks. "It's the layer cake of spectrum that I think people have talked about as part of 5G in terms of how they're meeting that need. We absolutely expect those lower bands to be deployed, and that will generate some revenue for us, just like every spectrum deployment does," he added.

The more spectrum utilized by equipment at American Tower's more than 40,000 sites across the U.S., the better positioned carriers will be to meet growing demand for mobile data, Vondran said. "The real driver for us is mobile data growth. The carriers will continue to deploy spectrum. As the mobile data growth goes up, they're going to need to add more equipment with that to meet that demand," he said.

Looking further ahead, Vondran said the eventual transition to 6G will bring another meaningful infrastructure investment cycle, with early indications pointing toward architectures that leverage higher frequency spectrum, greater intelligence at the network edge, and more distributed deployments. "These characteristics would likely require both additional equipment and increased site density across wireless networks," he said. He noted that the 6, 7, and 8GHz frequency blocks will be deployed on towers to support 6G. "Towers will be the backbone of 6G, just like it was the backbone of 5G, 4G, and 3G. We think that will drive significant activity on towers over time as those bands become available. We also think that's going to require more densification."

Vondran also pointed to the emergence of AI applications as one of the most exciting catalysts, noting that AI-RAN is being explored as a potential driver for edge compute opportunities. American Tower, which owns data center operator CoreSite, is developing a number of edge data centers at cell tower sites across the U.S. The company has identified more than 1,000 plots of land it owns or holds long-term leases on for potential development into multi-megawatt data centers.

American Tower recently launched a 1MW facility in Raleigh, North Carolina, and has filed to develop another in San Antonio, Texas. Vondran said the Raleigh site has generated significant interest from companies looking to place equipment there. "I'd say the biggest learning we've got from Raleigh so far is there is demand out there for capacity. We've seen a lot of interest in that facility, that was probably a little bit more of a surprise to me, given that we were kind of building that as a test bed for innovation," he said.