This article was first published by MyWallSt.

A study conducted by Deloitte last year found that smartphone penetration has risen to 85% of the U.S. population. This means that an estimated 270 million Americans own a smartphone. The same study also found that the average American checks their smartphone 52 times a day.

It isn't surprising to learn that Americans love their smartphones and that this is a trend only likely to grow in the future. But apart from the obvious companies that stand to profit -- such as Apple (NASDAQ:AAPL), Samsung, Verizon (NYSE:VZ), and AT&T (NYSE:T), to name but a few -- there are other businesses working away behind the scenes that have a huge interest in an increasingly connected world.

One of the most exciting of these is American Tower (NYSE:AMT).

A cellphone tower

Image source: Unsplash.

American Tower

American Tower is an industry giant that you have probably never heard of but likely have used its services countless times as your phone beams up to the nearest cellphone tower.

The company describes itself as "a leading independent owner, operator, and developer of multi-tenant communications real estate." To put that in layman's terms, American Tower is one of the biggest owners of the broadcast towers that are used to host telecommunication equipment for companies like Sprint and T-Mobile.

American Tower is like a landlord to these companies, owning the actual tower structure and land underneath. Tenants lease this space from American Tower to position their own equipment on. According to American Tower, it can facilitate an average of four or five tenants per tower structure.

The strength of the company's business proposition is quite simple: If you're the only player with a tower in an area where others need cellphone coverage, you have a strong hand when it comes to rental negotiations.

American Tower currently owns about 170,000 communications sites -- 41,000 in the U.S. and 130,000 abroad. With this global portfolio of assets, the company is well-poised to take advantage of various global trends, including the continued improvement of connectivity standards in the U.S. and the increasing availability of low-cost smartphones in developing regions.

This is a business with extremely low customer churn because finding another location for an antenna can be tricky. The nature of the industry also means that there is a conveyor belt of new wireless technologies that will require more panels and dishes, making this a safe long-term investment with incredible barriers to entry. These barriers are evidenced by sustained earnings increases and dividend hikes -- most recently 20% -- with further gains promised.

Of course, it's impossible to talk about telecommunications at the moment without mentioning the ever-expanding shadow of 5G. In fact, the argument could be made that a company like American Tower might stand to profit more from the rollout of 5G than others as telecommunication companies will need to lease more and more space for their 5G infrastructure. These steady rental payments and the demand for new tower space mean that a company like American Tower should be able to wring more money out of clients going forward.

It's also important to note that American Tower operates as a real estate investment trust (REIT), meaning it gets special dispensation on federal income tax as long as it pays a high percentage of its income out to shareholders as dividends. While many REITs focus on office buildings, shopping malls, or even timberlands, American Tower is truly a business built for the future.

Although it's a company that will never set the world alight with excitement, American Tower is a critical cog in the global telecommunications infrastructure. The stock has grown by more than 130% in the past five years and -- between global diversity, dividends, pricing power, and barriers to entry -- it's one of the safest long-term investments around.

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MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in American Tower. Read our full disclosure policy here.

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