AT&T announces $4.85 bn tower transaction with Crown Castle

AT&T announces $4.85 bn tower transaction with Crown Castle and has agreed to lease the rights to approximately 9,100 of its company-owned wireless towers and has also sold 600 towers to Crown Castle.

Under the terms of the leases, Crown Castle will have exclusive rights to lease and operate approximately 9,100 AT&T towers. The average term of the lease rights is about 28 years. As the leases expire, Crown Castle will have fixed price purchase options, totaling approximately $4.2 billion, for these towers based on their estimated fair market values at the end of the lease terms.

AT&T will sublease capacity on the towers from Crown Castle for a minimum of 10 years for $1,900 per month per site, with annual rent increases of 2 percent. AT&T has the option to renew up to a total of 50 years.

AT&T will also have access to additional reserve capacity on the towers for future use. AT&T expects the additional capacity will help it continue to meet growing demand for mobile Internet services. The transaction will have no impact on the customer experience.

During the terms of the leases, Crown Castle will have full operating rights to and responsibilities for the towers. Crown Castle’s rights will include the ability to sublease other available space to other companies.

“This deal is good for AT&T and our shareholders,” said Bill Hogg, senior vice president — Network Planning and Engineering, AT&T Services.

“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,” added Hogg.

AT&T expects the transaction to close by year-end 2013, subject to standard closing conditions.

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