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AT&T to sell and lease cell towers for $4.85 billion

Posted: , by Alan F.

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AT&T to sell and lease cell towers for $4.85 billion
A published report on Monday says that AT&T has entered into an agreement to lease a number of cell towers to Crown Castle International, and sell some outright, for a total of $4.85 billion. Last month, AT&T said that it was considering the sale of all or some of its cell towers. The deal with Crown Castle is expected to close by the end of the year. Under the terms of the deal, AT&T will lease 9100 towers while selling 600.

While Crown Castle won the bidding, it had some late competition when American Tower showed interest in the portfolio. Tower operators have been in consolidation mode and those companies that focus on the business have been willing to pay sellers well enough to get them to make these deals. The transaction with AT&T allows Crown Castle to lease and operate the towers for an average lease term of 28 years. After the term expires, the towers can be purchased for $4.2 billion. Meanwhile, AT&T has the right to sublease space on the towers for 10 years which can be expanded to as long as 50 years with a series of option renewals.

AT&T can use the cash to help with its purchase of pre-paid carrier Leap Wireless, owner of Cricket, for $1.2 billion and the assumption of $2.4 billion in debt. Meanwhile, we've recently seen an increase in deals involving cell towers. In September, American Tower agreed to buy MIP Tower Holdings LLC for about $3.3 billion in cash. Last year, T-Mobile sold the rights to 7,180 towers to Crown Castle for $2.4 billion.

source: WSJ

4 Comments
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posted on 21 Oct 2013, 03:34

1. reckless562 (Posts: 948; Member since: 09 Sep 2013)


cool ....

posted on 21 Oct 2013, 07:58

2. Shatter (Posts: 2031; Member since: 29 May 2013)


I doubt the government is going to let ATT purchase Leap Wireless. They will shoot it down like they did to them trying to buy tmobile.

posted on 22 Oct 2013, 00:43

3. clevername (Posts: 1431; Member since: 11 Jul 2008)


Why do carriers sell towers? Doesn't that put them in a situation since they'd have to pay to use them?

posted on 22 Oct 2013, 14:56

4. Maseison (Posts: 6; Member since: 22 Feb 2012)


i can answer that for you. i work for Crown Castle. Carriers sell because the aren't in the business of maintenance and upkeep for cell towers and sites. A lot goes into it and they'd rather focus on their core business. Crown castle focuses on the those other things primarily.

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