Leading wireless tower operator,
Crown Castle International Corp.
) has recently closed the ongoing wireless tower transaction with
). The deal has placed Crown Castle as the largest wireless tower
operator in the U.S., thereby outpacing its closest rival
American Tower Corp.
AMER TOWER CORP (AMT): Free Stock Analysis
CROWN CASTLE (CCI): Free Stock Analysis
AT&T INC (T): Free Stock Analysis Report
T-MOBILE US INC (TMUS): Free Stock Analysis
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Two months back, Crown Castle entered into an agreement with
AT&T to acquire its wireless towers. Per the deal, the tower
giant will buy 600 wireless towers of AT&T and receive the
exclusive right to lease and operate about 9,100 others for an
average of 28 years. Additionally, Crown Castle will have the
option to purchase the remaining 9,100 for approximately $4.2
billion between 2032 and 2048.
AT&T will lease network capacity from those towers for at
least 10 years for $1,900 per month per site with 2% annual rent
increase. AT&T has the option to extend this lease period for
another 50 years.
Crown Castle has decided to finance this deal through cash on
hand, equity and debt financing, which will include borrowing
from its existing revolving credit facility. AT&T operates in
the top 50 U.S. markets which will not only boost Crown Castle's
business but will also help the company to add at least one
additional tenet per tower, thereby increasing profitability.
In Oct 2012, the company acquired 7,200 wireless towers from
T-Mobile USA Inc.
) for approximately $2.4 billion. Hence, we believe that two
large acquisitions within a year will continue to expand its
leverage in the upcoming quarters.
Crown Castle carries a Zacks Rank #3 (Hold).