AT&T has signed a $4.85bn deal to lease the rights to about 9,100 of its wireless towers and sell an additional 600 to tower operator Crown Castle International.
As per the lease agreement, Crown Castle would be able to exclusively lease and operate approximately 9,100 AT&T towers for about 28 years, while upon the expiry of the lease, the tower operator would have fixed price purchase options, totalling about $4.2bn for the towers.
AT&T Services Network Planning and Engineering senior vice president Bill Hogg said that the latest deal is good for the company and its shareholders.
"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," Hogg said.
The US telecoms major will also sublease capacity on the towers from Crown Castle for at least 10 years for $1,900 per month per site, with an additional option to renew up to 50 years, while it will also be able to access additional reserve capacity on the towers for future use.
Proceeds from the latest deal would allow US telecoms giant to fund its planned new share buyback, in addition to a multi-billion dollar plan to modernise its wireless and high-speed internet networks.
Crown Castle's president and chief executive officer Ben Moreland said that nearly half of the AT&T towers are located in the top 50 markets, where the majority of network densification and upgrade activity is anticipated to occur.
"With an average of only 1.7 existing tenants per site, we expect the AT&T tower assets to provide significant growth opportunities driven by the continued consumer demand for wireless data services," Moreland said.
"While this transaction increases our tower count by approximately 33%, the transaction consideration represents only approximately 15% of our enterprise value."