Crown Castle International Corp. (NYSE:CCI) to purchase rights to AT&T Inc. (NYSE:T) towers for $4.85 billion. The two sides on Sunday have said that the wireless infrastructure provider will acquire the rights of approximately 9,700 of the US telecommunication operator’s wireless communication towers.
According to the deal Crown Castle International Corp. (NYSE:CCI) will buy some 600 towers and will acquire the exclusive right to operate and lease approximately 9,100 of its towers for an average tenure of approximately 28 years. Crown has also option to purchase the towers after ending of leasing tenure, but in this case it would pay approximately $4.2 billion to acquire the AT&T Inc. (NYSE:T) property.
The purchasing firm will acquire the right by cash payment, debt financing and equity, as well as borrowings according to its revolving credit facility. And the agreement expected to end at the end of current year.
The US second largest wireless carrier had declared previous month that it was looking forward to sale of its towers, the firm also added the final deal will depend on the conditions it is settle with the purchaser for its continuing use of the towers.
Generally when wireless service companies trade broadcast towers they normally lease back space from the purchaser in order to continue its services without interruption. The firm Network Engineering and Planning Senior Vice President, Bill Hogg, has said the current agreement will allow the company to monetize their towers while giving it the opportunity to add capacity that it need it. He also added the company will attain additional financial flexibility to keep on maintaining a strong balance sheet, to invest in its business and return cost to its investors.
Approximately 50% of the towers are located in the top 50 markets that will provide opportunity to the company to upgrade majority of network densification. The deal also allow the firm to keep use the towers for a least of ten years with rent on monthly of $1,900 for each site and permanent yearly rent escalators of 2%. AT&T Inc. (NYSE:T) share increase 0.49% to $34.61 in last trading session.