American Tower (NYSE: AMT) is bracing for a slower growth period this year before an anticipated acceleration begins to take hold in 2027.
CFO Rod Smith told a Citi event hosted by analyst Mike Rollins that 2026 represents a trough year for organic tenant billings growth as customer churn moderates.
Smith said U.S. carriers have largely wrapped up their initial 5G coverage deployments, reaching roughly 90% to 95% nationwide coverage across the country.
As mobile-data usage and new applications continue to grow, Smith expects carriers to add capacity at existing sites and densify networks through additional colocations on towers.
With churn running at about 1%, Smith said that level supports organic tenant billings growth of roughly 4.5%, when excluding the impact of Dish.
He estimated that carriers invest between $30 billion and $35 billion annually in their networks, with a meaningful portion of that spending flowing to tower sites through antennas, radios and related equipment.
Despite the longer-term optimism, Smith acknowledged that application volume has pulled back from the peak levels seen during the initial 5G deployment cycle.
American Tower expects services revenue of approximately $245 million this year, a notable decline from $345 million in the prior year, reflecting softer application activity across the business.
Smith said the company does not yet see the multiyear catalysts it is anticipating reflected in its current application pipeline, suggesting the recovery remains a forward-looking story.
Future demand could be supported by 5G capacity expansion, higher-band spectrum deployment, AI-driven uplink traffic growth and the eventual rollout of 6G networks worldwide.
CoreSite, American Tower’s data-center business, is also seeing rising demand tied to growing bandwidth needs and increased cloud-interconnection activity across enterprise customers.
Smith said higher revenue conversion and disciplined expense management should support adjusted funds from operations, or AFFO, per-share growth even during the current slower period.
American Tower is targeting between 200 and 300 basis points of tower-business margin expansion alongside mid- to upper-mid-single-digit long-term AFFO-per-share growth over time.
The company also flagged that ongoing Dish litigation and a Mexico arbitration proceeding could provide additional financial upside to shareholders if either matter is resolved favorably.
Near-term priorities for management include protecting the value of existing tower contracts, controlling operating costs and positioning U.S., European and emerging-market assets for the next wave of network upgrades.
