Towering debt knocks down a telecom leader

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s wireless mania was sweeping the US telecommunications sector up through the late 1990s, Boston-based American Tower soared among investors who viewed it as a sort of arms-merchant play.

Why bother figuring out whether AT&T Wireless or Nextel, Verizon, or Sprint would come out on top, when you could buy stock in one of the main providers of the towers they all need to install transmitting gear to serve their customers?

Buoyed by that line of thinking, American Tower shares soared past $50 for several weeks in early 2000. Then the once-explosive growth of the wireless business settled down, and investors began worrying about the company's $3.6 billion debt load. American Tower's shares began plunging -- losing 70.3 percent of their value in the 12 months that ended March 31.

American Tower tried to diversify, into satellite services and professional services for companies trying to site and erect towers. But the cash cow of its $1 billion-a-year business remains its 13,100 wireless telecom towers, and 330 towers rented to television and radio broadcasters.

Last month, mindful of Wall Street's anxiety, chief executive Steven B. Dodge assured investors that American Tower had hit a peak of debt leverage this past winter. By cutting capital and operating expenses, Dodge said, by December the company will reduce its debt-to-cash flow ratio from 12 to 9, measured by earnings before interest, taxes, depreciation, and amortization.

Dodge, who made fortunes in cable TV and radio before focusing on the unsexy but lucrative tower world, isn't just all talk. At the end of February, he bought 500,000 shares at about $5 each. (He had, of course, cashed in 500,000 stock options in June 2000, near the company's all-time peak, for a tidy $10 million.)

PETER J. HOWE