Small Cells Included in New, Expanded AT&T, Crown Lease Deal

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AT&T and Crown Castle signed an agreement to simplify and expand their long-term wireless network infrastructure lease arrangement. The new pact will help the carrier speed up both its 5G deployment as well as FirstNet, an AT&T spokesman tells Inside Towers.

This new deal is a departure from the historical macro tower model, the carrier announced. In addition to macro sites, the deal covers the small cell deployments needed to keep up with ever-increasing mobile data usage.

Leasing management and operations are streamlined to improve the efficiency and flexibility under which AT&T can deploy new technologies and increase network capacity. AT&T EVP Global Connections and Supply Chain Susan Johnson says the market-based framework “simplifies the lease management and administration process,” which, in turn, allows the carrier to streamline network projects to provide customers with better speed, reliability and overall performance.

Crown Castle is pleased with the arrangement, with Chief Commercial Officer Mike Kavanagh saying the towerco looks forward to continuing “to support AT&T’s growth by providing our infrastructure assets to meet their network needs for years to come.” Wells Fargo Senior Analyst Jennifer Fritzsche, too, thinks well of the deal. As of year-end 2017, AT&T made up22% of CCI’s LQA site rental revenue (or ~$925MM annualized), and had a weighted average term remaining of five years, according to the analyst.

Financial terms of the revised agreement were not disclosed, but Wells Fargo believes the announcement is a net positive for the towercos, particularly CCI. “It marks the first announcement (that we know of) that AT&T is planning to deploy FirstNet and small cells in earnest,” states Fritzsche in a client report.

“Recall, CCI bought AT&T’s ~9,700 towers portfolio back in October 2013,” she notes. “We have long thought CCI stands to uniquely benefit from providing a more holistic approach to carriers’ network builds by offering macro tower AND small cell solutions in the U.S.” Wells Fargo predicts this to add “tailwinds” to CCI’s organic growth “(some in 2018 but likely more in 2019), and be a big focus” when Crown reports Q1 2018 results on April 18 after market close, Fritzsche adds.

April 12, 2018

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