AT&T strikes tower deal with Crown Castle

US operator AT&T is to sell approximately 600 of its wireless towers to independent infrastructure management firm Crown Castle, and lease the rights to another 9,100 towers, for a combined up-front payment of $4.85bn. AT&T will lease capacity back from Crown Castle, for a minimum of ten years, for $1,900 per month per site, with annual rent increases of two per cent.

Crown Castle has the right to buy the leased towers when the leases expire for some $4.2bn. A typical lease term is 28 years, AT&T said. Meanwhile Crown Castle can also lease capacity at the sites to other network operators, although AT&T will have “access to additional reserve capacity on the towers for future use.”

“This deal will let us monetize our towers while giving us the ability to add capacity as we need it. And we’ll get additional financial flexibility to continue to invest in our business, maintain a strong balance sheet and return value to our shareholders,” said Bill Hogg, Senior Vice President, Network Planning and Engineering, AT&T.

Crown Castle has deals in place with Verizon, Sprint and T-Mobile as well as AT&T and owns or operates more than 30,000 sites. The firm reported 3Q13 revenue of $749m, a 21 per cent increase on the same period for 2012. Site rental revenue grew by 15 per cent to $621m, while EBITDA for the period grew ten per cent year on year to $441m.