Crown Castle (NYSE: CCI) has been through a lot in recent months, as Inside Towers reported. Activist investor Elliott Management first demanded changes to Crown Castle’s business model with a strategic view of its fiber and small cell business, prompting CEO Jay Brown to step down. The Board subsequently undertook such a strategic review. Then the company’s former founder and CEO Ted Miller and his investment vehicle jumped into the fray demanding similar changes along with four Board seats. The Board in the meantime recruited former head of American Tower’s U.S. Towers division, Steve Moskowitz, as its new CEO.
The company’s first quarter 2024 results showed year-over-year organic revenue growth of five percent across its tower, fiber, and small cell businesses, which Crown Castle says demonstrates MNO customers’ ongoing demand for its shared infrastructure assets. At the end of 1Q24, Crown Castle reported infrastructure assets of 40,023 towers, approximately 90,000 fiber route-miles and 115,000 small cells installed and under contract, all in the U.S. The company says it deployed 8,000 small cells in 2023, and is on pace to activate another 16,000 in 2024.
That positive growth excludes the negative impact of legacy Sprint lease cancellations, non-cash and one-time reductions, and the discontinuance of tower construction and installation services. Consequently, the company’s full-year 2024 guidance reflects YoY decreases of two percent in site rental revenues, six percent in adjusted EBITDA, and eight percent AFFO.
During the company’s 1Q24 earnings call, Crown Castle Board Chair Robert Bartolo updated analysts on the Fiber Review process. He said the committee formed in January undertook a strategic and operating review of the company’s fiber business with the goal of enhancing and unlocking shareholder value.
Relying on inputs from financial, strategic, and operating advisors and management consultants, the committee assessed Crown Castle’s businesses, core capabilities, competitive positioning, and organizational structure along with a market analysis and operational benchmarking.
Bartolo said the goal of these assessments was to determine how to optimize the company’s enterprise fiber and small cell businesses and determine the fit, value, and synergies both inside and outside of Crown Castle.
The Fiber review concluded that the company has premier assets in attractive markets throughout the U.S. Bartolo said the next step is to determine the optimal path to maximizing the value of these assets, both within and/or outside of Crown Castle.
He said the company has recently engaged with multiple parties, who have expressed interest in a potential transaction involving all or part of its fiber/small cells business. Discussions are ongoing and, without being specific, Bartolo suggested that such transactions could involve selling the entire fiber and small cells segment, selling them in part, or even entering into joint ventures with one or more parties on all or part of that business.
He said the Board believes there are opportunities for operational improvement in both the company’s enterprise fiber and small cell businesses regardless of the strategic review outcome. No decisions have been announced as to Crown Castle’s next steps.
By John Celentano, Inside Towers Business Editor
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