Following up on rumors that AT&T would sell off some of its cell tower holdings for up to $5 billion, the carrier has confirmed it has entered a deal with tower operator Crown Castle for the towers. The deal will see AT&T lease the rights to operate about 9,100 cell towers in the U.S. to Crown Castle, and sell another 600 towers outright to the company. The deal totals $4.85 billion in up-front cash to AT&T, which gives Crown Castle exclusive rights to the towers.
The average lease term for the towers is 28 years, and as the leases expire Crown Castle will have the option to purchase the towers for another $4.2 billion. The deal won't reduce AT&T's coverage or network quality at all, however. The carrier will sublease capacity back from Crown Castle for a minimum of 10 years at the rate of $1,900 per month per site, with rent increasing by 2 percent per year.
The end result for AT&T is a big infusion of cash that can be used for other endeavors, while not effecting the end user's network performance. It also gives AT&T the ability to expand its network in the future by simply leasing additional capacity from Crown Castle on the very towers they sold. The deal should be finalized by the end of 2013.
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