Press release from Business Wire
AT&T and Crown Castle Announce $4.85 Billion Tower Transaction
<p class='bwalignc'> <i>Crown Castle to lease about 9,100 towers, purchase about 600 towers from AT&T</i> </p>
Sunday, October 20, 2013
AT&T and Crown Castle Announce $4.85 Billion Tower Transaction17:00 EDT Sunday, October 20, 2013
DALLAS (Business Wire) -- AT&T* announced today that it 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. 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 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. AT&T expects the transaction to close by year-end 2013, subject to standard closing conditions.
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*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.
AT&T Inc. (NYSE:T) is a premier communications holding company and one of the most honored companies in the world. Its subsidiaries and affiliates – AT&T operating companies – are the providers of AT&T services in the United States and internationally. With a powerful array of network resources that includes the nation's fastest and most reliable 4G LTE network, AT&T is a leading provider of wireless, Wi-Fi, high speed Internet, voice and cloud-based services. A leader in mobile Internet, AT&T also offers the best wireless coverage worldwide of any U.S. carrier, offering the most wireless phones that work in the most countries. It also offers advanced TV service with the AT&T U-verse® brand. The company's suite of IP-based business communications services is one of the most advanced in the world.
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Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise.
Roberta Thomson, 214-205-4102