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Monday, October 21, 2013
AT&T and Crown Castle Announce $4.85 Billion Tower Transaction
AT&T has agreed to lease the rights to approximately 9,100 of its company-owned wireless towers to Crown Castle International Corp. Crown Castle will also purchase approximately 600 AT&T towers. In exchange, AT&T will receive about $4.85 billion in cash up-front proceeds.
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.
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 Inc. "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."
AT&T expects no significant impact to our financial results from this transaction. The
company also expects the transaction to close by year-end 2013, subject to standard