AMT’s LatAm CEO Olivier Puech on the BR Towers acquisition and other opportunities in the region

With its recent announcement of an agreement to acquire over 4,500 towers from BR Towers, American Tower (AMT) will have more than 25,000 towers in LatAm and is firmly established as the region’s largest independent towerco. For a unique insight into AMT’s leadership priorities, and for views on the Brazilian, Colombian and Mexican tower markets, TowerXchange presents this exclusive interview with AMT’s LatAm CEO Olivier Puech.

TowerXchange: Olivier, what has been your career path prior to joining AMT? What does it take to be the regional CEO of one of the largest and most established towercos in the world?

My career path includes 11 years in management roles with Nokia in North America, South America and the Asia-Pacific region. Prior to that, I worked with Gemalto, an international digital security company, in Southern Europe and South America.

I joined American Tower in March 2013 as CEO for Latin America. I was intrigued by the towerco business model and the perfect combination of telecom, real estate and Latin America, a region of which I am particularly fond.

LatAm towercos operate in an extremely fast-paced environment and American Tower has been experiencing tremendous growth over the past few years. Therefore, a CEO must find the right balance between patience and creativity, as well as work with a strategic, long-term mindset and have complete trust in his local teams.

American Tower has been in LatAm since 1999, but today the market environment is changing faster than ever and we need to be very flexible and forward-thinking to adapt to new challenges and quickly seize opportunities.

I am always asking myself what is next and how is that aligned with our value proposition.

TowerXchange: What are your top three goals as CEO of AMT in Latin America?

My top three priorities and goals are related to sustainable growth, human capital and the future of AMT.

With a stable presence in seven LatAm countries - Mexico, Brazil, Colombia, Chile, Peru, Panama and Costa Rica - we strive to leverage our existing assets in a sustainable way. At the same time, each new investment needs to be assessed for its future potential and to ensure it proves profitable.

Our regional team is another top priority for me. I want to make sure our people have the competitive skills and right mindset to achieve our long-term goals and share AMT’s values. Being surrounded by people able to operate in such a fast-paced environment is key to me and is at the core of my activities.

Lastly, I am constantly challenged and intrigued by the future. Looking at new opportunities, defining the vision and asking myself where do we want to be next? is a fundamental component of my role.

TowerXchange: Upon the closing of the acquisition of BR Towers, AMT’s portfolio will be the largest owned by an independent towerco in Brazil. How many opportunities for acquisitions are left in the country?

Brazil is the perfect example of how swiftly the regional telecom industry is changing. Its operating environment is being modified by a data-hungry population, coverage and densification needs, and a reduction in the price of handsets.

The environment for towercos is extremely exciting and we look at opportunities both in terms of acquisition of existing companies and sale and leaseback opportunities.

There are still sizable portfolios potentially available, and the carriers’ landscape is evolving thanks to the imminent 700 MHz auction, which might result in new players entering the market. With the auction scheduled to take place in August, we are looking forward to the results.

TowerXchange: What are the key due diligence elements you took into consideration with respect to BR Towers? How is the portfolio additive to your existing assets in the country?

Key factors we took into consideration included the size of the portfolio - 4,500+ towers - as well as their locations. The portfolio includes a combination of urban and rural assets that appealed to us.

This portfolio serves various key carriers and gives us an interesting opportunity to diversify our pool of customers. At the same time, we believe the portfolio has very good potential for collocation.

Thanks to this transaction, we will expand our geographical presence, gain new customers and open up new sharing opportunities - all factors we deem fundamental when performing due diligence.

TowerXchange: Brazil has approximately 4,000 subscribers per site while the US has 1,000, suggesting a substantial requirement for densification. What’s your view of the build-to-suit opportunity for Brazilian towercos?

With approximately 65,000 existing towers and the estimated need for well over 100,000, it is clear that Brazil needs more communications infrastructure. Initiatives such as the imminent spectrum auction will intensify this necessity.

Our preferred way to contribute to expanding coverage is by offering existing assets to carriers looking at adding signal in a new location, or adding capacity in a high-traffic location. If the location is covered by towers, there is no real need for new infrastructure and this is where companies like American Tower are better placed to serve carriers.

However, we recognize that there are areas in need of new infrastructure and greenfield projects are constantly being developed. Along with macro-network solutions, we are particularly active in the heterogeneous networks field, where solutions such as DAS and Small Cells can address needs  in areas where towers cannot be erected.

TowerXchange: Beyond Brazil, what are the other top countries in the region for AMT for near-future business opportunities? And specifically, what is your view on the Colombian market?

We concentrate most of our efforts on expanding our presence in those markets where AMT is already active. Generally speaking, they are all stable countries with good macro-economics conditions and favorable penetration rates.

At the same time, we continue to look beyond our existing footprint at new opportunities. Towercos operate with long-term plans and are particularly influenced by the cost of capital. Therefore, we need to ensure political and economic conditions are favourable before entering new ventures. That said, we remain very open to new possibilities and are keeping an eye on the positive evolution some countries are undergoing.

Colombia is our third largest market and is also the third most populated country in the region. It presents a stable and sound economic environment which goes hand in hand with its industrial growth and the expansion of its middle class. The recent 4G auction has contributed to enhance an already competitive market that features several established telecom players such as Claro, DirectTV, Avantel, Millicom and Movistar.

TowerXchange: The Mexican market could receive a tremendous boost from the new telecom regulation pending approval, how do you foresee the market changing over the next 12 months?

The telecom reform is part of an extensive legislative package looking at amending fiscal, energy, education and telecom policies. It is a long process that requires time but if we look at the bigger picture, we believe the intent is to achieve an outcome that will be very positive for the country as a whole.

We also believe that AMT is in a strong position as one of the the largest independent towercos in the country and we are ready to contribute to the growth of the telecom sector through additional investment and our portfolio of 8,000 assets.

That said, we hope that changes planned as part of the telecom reform will be worked out by all parties involved and implemented fairly and effectively as soon as possible in order to proceed with much needed investments and projects.