American Tower CEO Steven Vondran has confirmed the tower company is in a dispute with AT&T Mexico over tower rental costs.

During last week's Citi 2025 Global TMT Conference, Vondran said that the mobile carrier has been withholding tower rents since the start of the year.

As reported by Guru Focus, this has led to American Tower to incur around $10 million in reserves during the second quarter of 2025.

Last year, AT&T Mexico accounted for approximately $300m in tenant revenue. American Tower operates more than 9,300 towers in Mexico.

Despite the payment stand-off, Vondran told investors the towerco has a strong defense against AT&T Mexico's claims and is actively defending the enforceability of its Master Lease Agreement (MLA) with AT&T Mexico. Arbitration is scheduled for a hearing in August 2026.

He referred to the situation as one of the "more one-off items that happen in the emerging markets, that happen in developed markets."

"Their [AT&T] annual rents are about $300m. And we took an additional reserve in Q2 on that because as part of that, they've stopped paying tower rents this year. So the AR has gone up there. And we feel really good about the contractual provisions, and we intend to fully defend ourselves in the arbitration and use all the legal remedies," said Vondran.

"But that's an example of the one-off item that can lead to more volatility in those earnings because we may have to book additional reserves if they keep withholding payment."

AT&T Mexico is the third-largest telco in Mexico, with around 23 million subscribers.

AT&T entered the market back in 2014 after acquiring Grupo Iusacell SA for $2.5 billion, before snapping up the Mexican business of NII Holdings a year later for $1.9bn, merging the two units to create AT&T Mexico.

Last month, reports suggested that the telco was looking to sell up in Mexico for around $2bn.