AT&T Makes $4.85 Billion Tower Deal With Crown Castle

Posted Oct 21, 2013

AT&T will be leasing nearly 9,100 of their towers and will be selling another 600 to tower operator company Crown Castle International.  AT&T will receive $4.85 billion in cash upfront as part of the deal.  AT&T will likely use these funds for a new share buyback plan, the upgrading of their wireless and high-speed Internet networks, and for acquisitions in Europe.

“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.” stated AT&T SVP Bill Hogg.

AT&T is not the only major telecommunications company to make a large deal with Crown Castle.  Last year T-Mobile USA said that they would be selling the rights to operate 7,200 cellular towers to Crown Castle for $2.4 billion.

AT&T will sublease capacity on the towers from Crown Castle for at least 10 years for $1,900 per month per site with annual rent increases of 2%.  Crown Castle will have the right to sublease other available capacity on the towers to other tenants.  The towers were located in the top 50 markets.  Crown Castle will have exclusive rights to lease and operate around 9,100 AT&T towers.  The average term of the lease rights is about 28 years and Crown Castle will have the option to buy the leased towers for $4.2 billion once the lease expires.