T-Mobile USA has agreed to sell the rights to operate 7,200 of its wireless towers to Crown Castle International for USD2.4 billion to help fund a network upgrade and reduce debt at its parent Deutsche Telekom. Further, Crown Castle has the option to pay another USD2.4 billion to buy the towers outright from T-Mobile USA at the end of the lease term for each tower under the terms of the deal. The tower leases will expire in the period 2025 to 2048.
Ben Moreland, Crown Castle’s president and chief executive officer, commented: ‘We are very pleased with our agreement with T-Mobile, which strengthens our position as the largest provider of shared wireless infrastructure in the US, which we believe is the largest, fastest growing and most profitable wireless market in the world. Consistent with our focus on the top 100 US markets, the T-Mobile towers are similarly well-located, with 83% of the towers in the top 100 markets and 72% located in the top 50 markets. The T-Mobile assets are expected to provide significant growth driven by the continued demand for wireless data services, particularly in the most densely populated areas in the US. While this transaction increases our tower count by approximately 33%, the transaction consideration represents only approximately 9% of our enterprise value’.
Industry insiders have speculated that Crown Castle has paid over the odds for the assets, most likely because another bidder pushed up the price. The cash generated by the sale is expected to be ploughed into T-Mobile’s USD4 billion network upgrade.