American Tower CFO Quits to Join Discovery Channel
The chief financial officer of cellular tower operator American Tower (AMT) resigned today after six and a half years in his job, the company announced, to become CFO of Discovery Communications LLC, which runs The Discovery Channel, and which is part of Discovery Holding (DISCA). In a press release, CFO Singer was quoted thusly: “I have enjoyed my years at American Tower, and I believe that this is the appropriate time to begin the next stage of my professional career. American Tower has great employees, outstanding assets and has the strategy in place to capitalize on them.” Singer will be replaced by company controller Jean Bua on an interim basis, American Tower said in its press release. Mr. Singer’s last day will be June 30.
Singer’s departure comes at a time when some analysts are bullish on the tower firms’ prospects for rising rents as cellular providers assure capacity in advance of increased wireless data usage. But, as some readers opined in the comments section to a post yesterday, there’s no guarantee that increased data usage alone will boost business. Could tower companies such as American be entering a period of diminishing returns as third-generation cellular expands available bandwidth? You know better than I, dear readers.
American Tower shares were down $1, or 2.5% today, to $42.23, while Discovery Holding fell 31 cents, or 1.2%, to $24.63.
Increased data usage shrinks the effective radii of cell sites relative to voice service. As a result, pervasive data usage by customers makes it necessary for carriers to add more cell sites to cover the same footprint that they covered with voice alone. Most of the cell tower companies have plenty of room to add more tenants to their towers so there is not a significant capital need by tower companies as they add new tenants (ie, carriers).
New technologies like WiMax and LTE won’t cause an end run around towers. The head of Intel’s Wimax group told me that while the cell radius of WiMax is significantly longer than conventional PCS networks, the cell radii of Wimax would shrink dramatically if Wimax networks were used for new services PLUS all the services that people use mobile devices for today.
Tech Trader Daily is a blog on technology investing written from Palo Alto, California by long-time Barron's West Coast Editor Eric J. Savitz. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields.
