Key Points
- 2026 is expected to be American Tower’s organic growth trough, with tenant billings growth projected to accelerate in 2027 as Dish Network churn fades and carrier network investment improves.
- Future demand could be supported by 5G capacity expansion, higher-band spectrum, AI-driven uplink traffic and eventual 6G deployments. CoreSite’s data-center business is also benefiting from rising bandwidth and cloud-interconnection demand.
- American Tower is targeting 200–300 basis points of tower-business margin expansion and mid- to upper-mid-single-digit long-term AFFO-per-share growth, while Dish litigation and a Mexico arbitration could provide additional upside if resolved favorably.
American Tower (NYSE:AMT) CFO Rod Smith said the company expects 2026 to represent a trough year for organic tenant billings growth, with growth expected to accelerate in 2027 as customer churn moderates and wireless-network investment catalysts emerge.
Speaking at a Citi event with analyst Mike Rollins, Smith said American Tower’s near-term focus includes protecting the value of its tower contracts, controlling operating expenses and positioning its U.S., European and emerging-market assets to benefit from future network upgrades.
Network Investment Catalysts
Smith said U.S. carriers have largely completed their initial 5G coverage deployments, reaching roughly 90% to 95% coverage. As mobile-data usage and new applications grow, he expects carriers to add capacity at existing sites and densify networks through additional colocations on towers where they do not currently operate.
He also cited expected demand for new towers to support higher-band spectrum, nearly 800 megahertz of additional spectrum expected to become available over the next several years, and the eventual transition to 6G later in the decade.
Artificial intelligence could create another source of demand, according to Smith. He said AI applications may require networks to handle more uplink traffic, rather than the current structure that largely favors downlink traffic. That change could require network upgrades that generate amendment activity for tower operators.
“We think there’s a lot of demand yet to come for our business,” Smith said, adding that American Tower’s CoreSite data-center assets are also positioned to benefit from rising bandwidth consumption and interconnected cloud demand.
Churn Expected to Improve After 2026
Smith said the company expects its global organic tenant billings growth to inflect higher after 2026, driven in part by the absence of recurring Dish Network churn. He also pointed to expected improvement in Latin America, contracted stability in Europe and continued network build activity from major African carriers.
In the U.S., Smith described a framework in which a 3% contractual annual escalator, combined with approximately 2.5% contribution from new business activity, would produce 5.5% growth before churn. With churn of about 1%, he said this supports organic tenant billings growth of roughly 4.5%, excluding Dish.
Smith said carrier investment is underpinned by growth in mobile-data consumption and network competition. He estimated carriers invest $30 billion to $35 billion annually in their networks, with a portion of that spending reaching tower sites through antennas, radios and related equipment.
However, he acknowledged that application volume has declined from the peak of the 5G deployment cycle. American Tower expects services revenue of about $245 million this year, down from $345 million in the prior year, reflecting lower application activity. Smith said the company does not yet see the multiyear catalysts in its current application pipeline.
Margin and AFFO Outlook
Smith said higher revenue conversion and expense-management efforts should support adjusted funds from operations, or AFFO, per-share growth. The company has created a global chief operating officer role focused on site operations, deployment, leasing processes and procurement efficiency.
American Tower is targeting 200 to 300 basis points of margin expansion in its tower business over the next couple of years, Smith said.
He said the company believes it can grow AFFO per share at a mid- to upper-mid-single-digit rate over time, excluding foreign-exchange effects and interest-rate headwinds. Interest rates can create about a 100-basis-point headwind, he said, while currency movements can also affect results.
CoreSite is growing at a double-digit rate, Smith said, and is expected to become a larger contributor to attributable AFFO. He added that Europe is growing faster than the U.S. based on American Tower’s portfolio and current cycle, while Africa has been producing high-single-digit to double-digit growth and Latin America is recovering.
Mexico Arbitration and Dish Litigation
Smith said American Tower continues to await resolution of an arbitration with AT&T Mexico concerning the calculation of rent increases under its contracts. He said a decision could arrive by the end of the year or extend into next year.
AT&T Mexico is paying most of its revenue directly to American Tower while reserving approximately $8 million per quarter in escrow, according to Smith. He said the company had about $70 million reserved between the prior year and the current year. Smith characterized the potential outcomes as narrow and favorable to American Tower, while noting that the arbitrator will decide the matter.
On Dish Network, Smith said American Tower has assumed zero revenue and profit from Dish in its 2026 outlook and has not included recoveries in its balance-sheet forecasts. He said any settlement or recovery would be additive.
Smith estimated that Dish owes American Tower between $1 billion and $2 billion based on the net present value of future leasing, while American Tower’s potential share of an escrow recovery could be roughly $500 million to $600 million. He said the litigation remains ongoing.
Capital Allocation and Satellite Outlook
Smith said American Tower is comfortable operating leverage in the upper-4x range while remaining below 5x, a level he said supports its BBB+ credit rating and preserves flexibility for share repurchases or acquisitions.
The company may buy back stock when it views the valuation as attractive, he said, and continues to evaluate M&A opportunities. Smith added that American Tower could temporarily increase leverage for an acquisition before deleveraging, as it has done in the past.
Smith also said low-earth-orbit satellite services, including satellite broadband, are complementary to terrestrial networks rather than a material threat to American Tower’s tower business. While satellite service could reduce the need for some rural sites, he said any impact would be immaterial and could allow the company to redirect capital toward suburban and urban locations that support more tenants.
About American Tower (NYSE:AMT)
American Tower Corporation (NYSE:AMT) is a global owner, operator and developer of wireless communications infrastructure. The company leases space on communications sites, including towers, rooftops and other structures, to wireless carriers, broadcasters, government agencies and other customers. Its infrastructure supports wireless networks and the transmission of voice, data and video services.
In addition to traditional macro towers, American Tower provides distributed antenna systems and other in-building or venue-based communications solutions designed to improve wireless coverage and capacity.
