American Tower Corporation History
Boston, Massachusetts 02116
Telephone: (617) 375-7500
Toll Free: 877-282-7483
Fax: (617) 375-7575
Incorporated: 1995 as American Tower Systems Corporation
Sales: $258 million (1999)
Stock Exchanges: New York
Ticker Symbol: AMT
NAIC: 513322 Cellular and Other Wireless Telecommunications
American Tower is a leading independent owner, operator and developer of broadcast and wireless communications sites in North America and Mexico. Headquartered in Boston, American Tower operates regional hub offices in Boston, Atlanta, Chicago, Houston, San Francisco and Mexico City. Our fully integrated areas of business--including site development, construction, components, monitoring, site management, and site leasing combine to form an indispensable resource center that serves the infrastructure needs of the wireless industry--everything from the ground up. As the burgeoning demand for wireless services continues to skyrocket, American Tower is committed to providing the most advanced technology, human support, and turnkey site solutions to meet these growing needs. Key Dates:
- Edwin H. Armstrong invents frequency modulation (FM) technology.
- AT & T creates the first mobile telephoneradio system to connect with the public telephone network.
- Pilot commercial mobile telephone system operates in Chicago and Baltimore.
- Stephen B. Dodge founds American Radio Systems Corporation (ARS).
- Federal Communications Commission auctions national licenses for mobile radio systems.
- Dodge and partners form American Tower Systems Corporation (ATS) as an ARS subsidiary.
- ARS merges with CBS Corporation; ATS emerges as an independent company traded on the New York Stock Exchange and changes name to American Tower Corporation (ATC).
- Television industry plans transition from analog to digital technology.
Boston, Massachusetts-based American Tower Corporation (ATC) is the leading independent owner, operator, and developer of broadcast and wireless communications sites in North America. The company operates a national network of over 10,000 sites in the United States and Mexico, including about 300 broadcast tower sites. ATC's primary business is the leasing of antennae sites. The company operates in three business segments: the TRM segment offers leasing and subleasing of antennae sites on multi-tenant towers for radio and television broadcasting and a wide range of wireless communication industries--such as cellular phone systems (computer-controlled systems that connect to a network of radiotelephones), personal communications services (PCS), and various mobile radio systems; the Services segment contributes network development, including network design, site acquisition and construction, zoning and other regulatory approvals, tower construction and antennae installation; the VVDI (video, voice, data, and Internet) segment provides transmission services in the New York City to Washington, D.C., corridor and in Texas. ATC Teleports, Inc.--an American Tower wholly owned subsidiary--is a leading provider of domestic and international satellite services. A teleport is the technical link for all video, voice, and data transmission to and from ground-based, terrestrial sources and satellites. ATC Teleports has Technical Operations Centers located in New York City, Dallas, and Alexandria, Virginia. The holding company's diversified base of customers includes most of the major wireless service providers--for example, AirTouch, Alltel, AT & T, AT & T Wireless, Bell Atlantic Mobile, Nextel, Omnipoint, PageNet, Sprint PCS, Teligent, WinStar--and a majority of radio and television broadcasters, such as ABC, CBS, Chancellor Media, Clear Channel, CNN, Fox, and NBC. ATC's net revenue rose from $17.5 million in fiscal 1997 to $200 million for the 12 months ending September 30, 1999.
1920-94: Genesis of Wireless Communications
The need for safety was the major catalyst for the growth of the wireless communications industry, according to AT & T's 'Brief History of Wireless.' In the 1920s, police departments in Michigan, New Jersey, and Connecticut wanted to equip their patrol cars with the radiotelephone technology that had improved the safety of oceangoing vessels. However, radiotelephone communication equipment that was easily housed on large ships was too large and unwieldy for installation in cars. Furthermore, bumpy streets, tall buildings, and uneven landscapes prevented successful transmission of radiotelephone signals on land. A major breakthrough occurred in 1935 when Edwin Howard Armstrong invented frequency modulation (FM) to improve radio broadcasting. This technology reduced the bulk of radio equipment and improved the quality of transmission.
During World War II the U.S. military used FM for efficient two-way mobile radio communications on the battlefield, and such companies as Motorola, AT & T, and General Electric began to focus on refining mobile and portable communications for commercial use. For example, Motorola's FM Handie-Talkie and Walkie-Talkie, products developed during the war years, carried over into peacetime use. By 1946 AT & T Bell Laboratories had created the Improved Mobile Telephone Service (IMTS), the first mobile telephone radio system to connect with the public telephone network.
Development of this sophisticated technology, tests for its commercial applications, formulation of Federal Communications Commission (FCC) regulations, introduction of new radio frequencies for 'land mobile communications,' and the breakup of AT & T&mdash¯ong other events--delayed the construction of a pilot wireless systems until 1983 when Illinois Bell/AT & T began to operate a pilot wireless system in Chicago, and American Radio Telephone Service Inc. introduced a pilot system to serve Baltimore, Maryland, and Washington, D.C. The U.S. commercial mobile telephony service developed from these pilots. On December 5, 1994 the FCC, in an attempt to help national development of evolving telecommunication, began to auction national licenses for narrowband PCS, a family of mobile or portable radio services that later evolved into voice paging and data services that could be integrated with a variety of competing networks.
1993-97: Creating Aerial Real Estate
Meanwhile, in 1993 Steven B. Dodge had founded Boston-based American Radio Systems Corporation (ARS). By 1995 ARS operated 19 FM and nine AM radio stations in markets extending from Buffalo, New York, to West Palm Beach, Florida. Revenue had increased 55 percent from 1994, and operating income had grown by twice its 1994 figures. In July 1995 Chairman Dodge and his partners formed American Tower Systems Corporation (ATS) to operate as an ARS subsidiary, thereby positioning the parent company to meet its needs for broadcast towers in order to benefit from the opportunities created by the predicted explosive growth in wireless communications. Envisioning nationwide operation, ATS soon began to expand by acquiring close to 100 tower sites and/or locations.
In February 1996, ATS purchased Skyline Communications and acquired eight towers, six of which were in West Virginia and two in northern Virginia. With the purchase of Skyline Antennae Management, ATS gained management of over 200 antennae sites, primarily in the northeast region of the United States. The following April, the company acquired BDS Communications, Inc. and BRIDAN Communications Corporation. BDS Communications owned three towers in Pennsylvania; BRIDAN Communications managed or had sublease agreements on approximately 40 tower sites located throughout the mid-Atlantic region. ATS also acquired ownership and operation of a tower site in Needham, Massachusetts, and several tower sites in Hampton, Virginia, and North Stonington, Connecticut. By year-end 1996, ATS had established itself in the Northeast, mid-Atlantic, and Florida regions of the United States.
Compared to what would happen in the future, ATS's 1996 acquisition program was modest, consisting of companies owning an aggregate of 15 communications sites and managing approximately 250 sites for others. During that year, however, the company entered into several other agreements that were consummated in 1997. For example, in May 1997 the company acquired 21 tower sites and a tower-site-management business operating in Georgia, North Carolina, and South Carolina and bought three other tower sites in Massachusetts. Other acquisitions included a tower site in Washington, D.C., six tower sites in Pennsylvania, and rights to build five tower sites in Maryland. July acquisitions included crossing the country for the purchase of a California-based tower-site-management business and 56 antennae sites located from the Mexican border to north of Santa Barbara. Then ATS acquired six tower sites in Connecticut and Rhode Island and another nine sites in Massachusetts, Rhode Island, and Oklahoma.
During October 1997 ATS acquired Jamieson, Pennsylvania-based MicroNet, Inc., one of the leading providers of antennae sites in densely populated areas of the mid-Atlantic states. MicroNet also owned 20 towers in California and 35 in Texas. Additionally, ATS bought MicroNet's transport operations, which included a teleport connecting New York City to Philadelphia and Washington, D.C., and a Dallas-based teleport that connected all the major cities in Texas. ATS further strengthened its position in California with the October purchase of Diablo Communications, Inc. Over and above 110 sites already in service and many others in various stages of development, Diablo operated a site-management business in California. Thus, in a few years ATS defined a national base to conduct business in the evolving field of telecommunication technologies: at the end of fiscal 1997, the company operated more than 1,775 towers in 44 states and the District of Columbia.
1998: Establishing a National Footprint
During the last years of the 20th century, according to ATC's 1998 Annual Report, the growing mobility of the U.S. population, increased awareness of the benefits of mobile communications, technological advances in communications equipment, decreasing costs of wireless services, favorable changes in telecommunications regulations, and demand for higher-quality voice and data transmission were spurring the growth of the wireless industry, ATS's special field of interest. Growing demand for higher-frequency technologies (such as PCS and mobile radio) required a denser network of towers. Furthermore, the television broadcasting industry was planning a transition from analog to digital technology. ATS not only continued strategic acquisitions of additional towers but also deployed new towers for wireless carriers, created tower capacity designed to accommodate digital antennae for television broadcasters, and developed 'build-to-suit' projects. The company also wanted to buy select site-acquisition companies, businesses engaged in tower fabrication, and providers of video, voice, and data transmission services.
Some of the significant activities by which ATS undertook to implement these plans in 1998 began when the company merged with OPM-USA, Inc., one of the fastest growing tower-construction companies in the southwestern United States. To provide non-broadcast wireless communication services, OPM had constructed 54 towers along major highways and had plans for an additional 160 towers. Next, ATS merged with Atlanta-based Gearon Communications. This company owned about 40 tower sites and was engaged in site acquisition, development, construction, and facility management of wireless network communication facilities. Gearon's customers included many of the larger providers of cellular and PCS services. ATS also purchased sites in Tucson Mountain, Indio Hill, and Montara Park in Arizona and 14 towers in Kansas. During April, in a build-to-suit project for Sprint, ATS completed construction of 27 towers in the Houston area and won a contract from Sprint PCS for 20 build-to-suit communications towers in the Chattanooga area. From BellSouth's Personal Communications Services Division, ATS won another build-to-suit contract to develop 200 towers in North Carolina. In May ATS acquired Washington International Teleport (WIT) and implemented a maintenance plan to upgrade all the WIT towers as well as those of MicroNet and Southwest MicroNet.
On June 4, 1998, CBS Corporation bought American Radio Systems Corporation and spun off American Tower Systems, which changed its name to American Tower Corporation (ATC) and began to operate under the ticker AMT as an independent, publicly traded company on the New York Stock Exchange.
In October ATC acquired a total of 322 towers in four transactions and a contract to build 100 towers in Michigan for NPI Wireless, a PCS provider. During November ATC purchased 15 sites in Oregon and Washington and won a contract to build 17 new sites for Central Wireless Partners. Then, in December, ATC contracted to build 115 tower sites in North Carolina, South Carolina, and Georgia for Triton PCS, which also contracted ATC's acquisition and zoning services for 175 sites in the same area. Furthermore, ATC completed contracts for the construction of 25 towers in the southwestern United States region and built 17 sites along the mobility corridors of Arizona and six new sites in northern California. The company also added a communication facility in West Tiger Mountain and another in Oklahoma. With these new components the company's net revenue for 1998 increased to $103.54 million from $17.5 million in 1997.
1999: Exponential Aerial and Terrestrial Expansion
During January 1999 ATC began what would prove to be a banner year. Among the first significant events of the year, ATC and American Electric Power (AES)--the second-largest utility company in the country--agreed on a co-development venture whereby AES would market its 175,000 transmission structures as telecommunications sites. A major development occurred in February when ATC merged with OmniAmerica, Inc. and with TeleCom Towers, L.L.C. OmniAmerica--a builder, owner, and operator of broadcast and wireless communications sites--also manufactured infrastructure components used in the construction and maintenance of wireless-communications transmitting and receiving facilities. TeleCom owned and operated national communications sites primarily serving wireless service providers. At the completion of these mergers, ATC owned and operated approximately 3,200 broadcast and wireless towers in 44 states and the District of Columbia.
In early March, ATC signed a contract with MariTEL Corporation--which provided VHF marine wireless-telecommunications services to the private- and commercial-boating industry. ATC agreed to develop a telecommunication-tower network of 250 to 300 sites along the coastal and inland waterways of the United States. MariTEL's subsidiary, MariNET, was to provide telecommunications services--including automated, encrypted, voice, fax, and data communications for up to 100 miles offshore. Then on March 16 ATC announced that it had begun construction of a broadcast tower in Missouri City, Texas, near Houston. The new state-of-the-art, multi-use facility was to support a maximum of seven television antennae, a master-panel FM antenna, auxiliary broadcast antennae, low-power television, a multitude of wireless and microwave gear--and accommodate television's transition to HDTV and other broadcast needs. ATC was in sync with the explosive growth of wireless telecommunications.
In April 1999, ATC's Broadcast Tower Group contracted with Sinclair Broadcast Group, a leading owner of television and radio stations in the United States, to develop broadcasting towers for Sinclair's digital transmission needs in 11 markets. ATC announced an agreement with Acrodyne Communications, Inc., a leading manufacturer and installer of television transmission systems, to offer television broadcasters the turnkey solutions required for analog and digital transmission.
In tune with its parent company's aggressive growth strategy, in May ATC Teleports signed a multi-year contract to provide U.S. teleport facilities and Internet backbone connectivity to Unitel, an Athens, Greece-based provider of satellite-communication services. Next, a 12-month contract with British Telecom North America Broadcast Services provided for bulk use of video services and of ATC Teleport's analog and digital services for coverage of the United States, Canada, and the Atlantic Ocean region. In accord with a three-year contract, ATC Teleport provided use of its facilities to DeTeSat Deutsche Telecom, a satellite communication company based in Germany. In May ATC also agreed to manage site acquisition and construction on some 80 communications sites in the Florida panhandle for Nextel Partners and won a contract from Tritel Communications--an AT & T affiliate based in Jackson, Mississippi--for 40 build-to-suit sites in Alabama.
In June ATC agreed to purchase close to 75 communications sites in central and southern Illinois from Illinois PCS (a Sprint PCS affiliate) and acquired a 1,151-foot broadcast communications tower in Philadelphia. ATC also agreed to merge with UNIsite, Inc., which owned and operated 600 wireless communication towers. UNIsite owned another 400 towers suited for co-location and held an exclusive build-to-suit contract with Omnipoint through the year 2012. In July came the completion of the ATC merger with Virginia-based CommSite International, Inc., an antenna-site development and site management company doing business primarily in Maryland, Virginia, Washington, D.C., and Florida. ATC also purchased Watson Communication Systems, Inc. This transaction included acquisition of 11 wireless and 10 broadcast communication towers in the San Francisco Bay area and a teleport for satellite transmission covering the full domestic arc and the Pacific international-service area. This transaction was followed by the acquisition of 108 wireless communication towers from Dobson Tower Company and a contract to build a minimum of 65 towers for Sygnet Communications, Inc.
On July 9, 1999, ATC Teleports signed a multi-year contract with a major telecommunications carrier, thereby enabling the U.S. military to obtain 24-hour-a-day surveillance of ongoing activities in the Middle East. ATC Teleports' next purchase of space-segment capacity on New Skies' satellite system made available greater international Internet connectivity via satellite to Africa, Eastern Europe, and the Middle East. Next came the acquisition of 192 wireless communication towers from Triton PCS (part of AT & T Wireless Network) and also a contract to develop a minimum of 100 build-to-suit towers and to provide turnkey services for co-location sites through 2001. On August 9, ATC signed an agreement with AirTouch Communications, Inc. (a unit of Vodafone AirTouch Plc, the world's largest wireless company). Through a master-lease agreement, ATC also acquired the rights to approximately 2,100 towers and an agreement for an exclusive three-year, build-to-suit project for 400 to 500 new communications towers. AirTouch served 9 million cellular and PCS customers residing in the top 30 U.S. markets of 25 states.
In early September ATC Teleports won a contract from Home Team Sports (HTS), a regional cable sports network serving the mid-Atlantic states. ATC Teleports agreed to execute HTS's complete transition to digital transmission. In mid-September ATC signed an agreement with AT & T, the world's premier provider of voice and data communications, to acquire approximately 1,942 microwave towers and to build 1,000 new wireless communications sites for AT & T Wireless Services over the next five years. This transaction provided ATC with a nationwide network of tower facilities in 47 states. On September 20, ATC entered into an agreement with TV Azteca, S.A. de C.V., one of two broadcast television companies in Mexico, for building some 200 towers strategically located throughout Mexico. ATC agreed to loan up to $120 million to the television network in exchange for annual net payments of about $13.9 million, plus the rights to all existing and future third-party revenue on the towers.
During October, the Canadian Broadcasting Corporation renewed its contract with ATC Teleports for an analog uplink of uninterrupted news feeds over the ANIK-E2 satellite and agreed to provide broadcasting and satellite downlink transmission services to Virginia-based Netcast Incorporated for its Internet webcasts. Then ATC completed the acquisition of ICG Satellite Services, Inc.--a major 24x7 teleport facility in Holmdel, New Jersey--and bought Maritime Telecommunications Network, Inc., an ICGSS subsidiary which functioned as a Florida-based global maritime telecommunications network. The New Jersey teleport and operations center had major fiber connectivity to the Internet and 12 antennae that gave customers more choices in satellite coverage to the Atlantic Ocean region. MTN provided Internet, voice, and data services to major cruise lines, the U.S. military, Internet-related companies, and international telecommunication customers.
In late December ATC Teleports agreed to purchase the assets of U.S. Electrodynamics, Inc. The merger, scheduled to close in early 2000, included acquisition of 52 antennae with teleport facilities in Brewster, Washington; Whitinsville, Massachusetts; and Kingman, Arizona. ATC customers thereby gained immediate access to the Pacific Rim and India and enabled ATC to expand digital services to such high-growth areas as China, South East Asia, and Australia. At the end of the 20th century the American Tower portfolio spanned 48 states and the District of Columbia and had tower clusters in 43 of the largest U.S. metropolitan statistical areas. The majority of the 1,000 towers constructed in 1999 were built along major roadways; they were predominantly self-supporting monopoles and could accommodate multiple co-location tenants. Upon completion of all its pending acquisitions, ATC owned and operated more than 10,000 communications sites in the United States and Mexico. The company operated from regional hub offices in Boston, Atlanta, Chicago, Houston, San Francisco, and Mexico City.
2000: Transcending Limits
As January 2000 opened the door to a new millennium, ATC had gone beyond its projection for construction of towers in 1999 and was ready to let its tower power defy the bandwidth and geographic limits that could restrict its growth and success. A case in point was ATC Teleport's January 10 agreement with Pronto, a leading international wholesale carrier of voice and data services. Pronto provided termination services to some of the largest phone companies in the world through its gateways in Africa, Central America, South America, Canada, and the United States. With this agreement, ATC Teleports also provided uplink services and satellite space segment for duplex voice-over IP (Internet Protocol) service. The circuits originated from New York and were uplinked from ATC Teleports in Alexandria, Virginia, for termination in Senegal, Kenya, Guinea, Cameroon, Zambia, and the Ivory Coast using the New Skies 803 satellite located at 338.5 degrees east. ATC Teleports already provided Pronto with circuits to Central and South America on the SatMex 5 satellite located at 116.8 degrees west. As of 2000, ATC Teleports in New York also housed Pronto's switch at 60 Hudson Street in New York.
As ATC's towers reached up into the sky, the company was well on the way to encircling the world with wireless services. In fewer than five years the company had grown from a fledgling enterprise to national leadership as an owner and operator of wireless and broadcast towers. American Tower Corporation was poised to meet future competition.
Principal Subsidiaries: ATC Teleports, Inc.
Principal Competitors: Crown Castle International Corp.; Pinnacle Holdings Inc.; Spectra Site Holdings, Inc.
- Bell, Robert, 'Pioneers of a Weightless Cargo,' Telecommunications International, July 1999.
- Conlin, Michelle, 'Tower Power,' Forbes, March 22, 1999, p. 56.
- O'Keefe, Sue, 'Mixing up the Right Blend,' Telecommunications America, January 2000.
- Russo, Anthony, 'Outsourcing: A Solution for Managing Network Evolution,' Telecommunications International, December 1999.
- Siwolop, Sana, 'Buying the Backbones of the Wireless Age, ' New York Times, August 8, 1998, p. 10.
Source: International Directory of Company Histories, Vol. 33. St. James Press, 2000.