T-Mobile sells towers rights to Crown Castle
01 October 2012 |
T-Mobile USA has announced the sale of rights to 7,200 of its towers for $2.4 billion to wireless infrastructure provider Crown Castle.
Over 80% of the towers are in the top 100 US markets and 72% in the top 50 US markets.
Under the agreement Crown Castle will have exclusive rights to lease and operate the towers for approximately 28 years. At the end of their lease term, Crown will also have the option to purchase the towers in payments of approximately $2.4 billion, which would likely occur between 2025 and 2048.
John Legere, the former CEO of Global Crossing, who was appointed to lead T-Mobile USA in September, said that the deal would be mutually beneficial and was part of the companies Challenger strategy to solidify its competitiveness.
“T-Mobile USA is working aggressively to make our 4G network stronger, faster and more dependable for consumers, and this transaction will support our ongoing $4 billion network modernisation initiative that is the cornerstone of this effort as we work tirelessly to continue to deliver our amazing 4G services nationwide,” he said.
Crown Castle said that the transaction would strengthen its position as the largest provider of wireless infrastructure in the US and would produce approximately $125 million to $130 million in adjusted funds from operations before financing costs in 2013.
The provider also said that the infrastructure would have sufficient capacity to accommodate at least one additional tenant per tower without significant investment for growth.
T-Mobile will continue to use the towers for at least the next 10 years with rent including the right to complete its network modernisation programme on the sites.
The deal will have no impact on T-Mobile’s 51,000 site network, the majority of which are leased from third parties.
The transaction is expected to close in the fourth quarter of 2012.