The deal will see the infrastructure specialist add 25 data centres, 21 cloud on-ramps and 32,000-plus interconnections to its portfolio

American Tower Corp. has announced a $10.1 billion deal to purchase data centre real estate company CoreSite Realty Corp., aiming to leverage the company’s infrastructure to boost their own mobile edge compute business. 

“We are in the early stages of a cloud-based, connected and globally distributed digital transformation that will evolve over the next decade and beyond,” explained American Tower CEO Tom Bartlett.

Currently, American Tower already owns around 42,000 mobile tower sites across the US, as well as seven data centres. With the acquisition of CoreSite, American Tower will add a further 25 data centres, 21 cloud on-ramps and 32,000-plus interconnections to its US portfolio.

“We expect the combination of our leading global distributed real estate portfolio and CoreSite’s high quality, interconnection-focused data centre business to help position American Tower to lead in the 5G world,” said Bartlett. “As the convergence of wireless and wireline networks accelerates and classes of communications infrastructure further align, we anticipate the emergence of attractive value creation opportunities within the digital infrastructure ecosystem.”

The motivation for this deal is clear enough. The acquisition significantly American Tower’s assets to deal with the surge of 5G applications emerging throughout the cloud, enterprise, and network ecosystems, as well as the rise of mobile edge computing. In a recent earnings call, American Tower said that the mobile edge market opportunity was worth around $1 billion, suggesting the metro edge market would grow to $2 billion by 2026.

American Tower’s strategy appears to be to deploy edge data centres at key tower sites around the US. Last month, American Tower said it had deployed six such data centres, with American Tower’s VP of innovation product line management saying that the goal was to allow customers use of these centres and then “aggregate them back to some regional data centre”. This is presumably where CoreSite’s assets will bring a benefit.

It is worth noting, however, that this $2 billion market opportunity just a fraction of the retail data centre colocation market in which CoreSite has already found great success, with a report from The Insight Partners last month suggesting this market’s value already exceeds $50 billion.

Subject to regulatory approval, the deal will likely close around the end of the year.


Want to keep up to date with the latest developments in the world of telecoms? Subscriber to receive Total Telecom’s daily newsletter here

Also in the news: 
What’s the score? Total Telecom’s quarterly financial Score Board
Telstra to begin its push into energy resale next year
Sources suggest Drahi wants a bigger slice of BT