This report does not constitute a rating action. Infrastructure is expensive. Over time, many mobile network operators (MNOs) have sold their telecommunications towers, choosing instead to lease capacity from specialist tower companies. This has given rise to a strong subsector within telecoms. In exchange for taking on an asset-intensive and costly aspect of delivering mobile phone services, towercos gain stable, recurring revenue and low operating risk. The towerco subsector has a strong record of robust and resilient performance, which it has again demonstrated over the past three years, and it has consistently outperformed the wider telecommunications industry. Because their business is capital-intensive, towercos often carry more debt than similarly rated companies in other sectors and frequently make debt-funded acquisitions. S&P
