AT&T signs lease and purchase agreement worth USD4.85bn for its wireless towers with Crown Castle
Oct 21, 2013 (M2 EQUITYBITES via COMTEX) --
AT&T Inc (NYSE:T), a communications holding company, signed an agreement to lease the rights to about 9,100 of its wireless towers to Crown Castle International Corp, which will also buy about 600 AT&T towers and pay up-front cash of about USD4.85bn total.
Pursuant to the leases, Crown Castle will exclusively lease and operate those 9,100 AT&T towers for an average term of about 28 years and as the leases expire, it will have fixed price purchase options that total about USD4.2bn for these towers, as per the estimated fair market value at that time, the company mentioned.
Accordingly, the company will sublease capacity on the towers from Crown Castle for a decade at the minimum at USD1,900 per month per site, with annual rent increases of 2%; have the option to renew up to a total of 50 years; and have access to further reserve capacity on the towers for future use.
This additional capacity will help the company to continue to meet growing demand for mobile Internet services, it said adding that the transaction will not impact on its customers.
During the terms of the leases, Crown Castle will have full operating rights to and responsibility for the towers such as being able to sublease other available space to different companies.
Finally, AT&T expects no major impact on its financial results from this transaction and the transaction is scheduled to close by year-end 2013, subject to standard closing conditions.
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