Crown Castle, in response to pressure from investor Elliott, unveiled a strategic revamp on Wednesday, including a review of its fiber business and a reshuffle within its board.
Crown Castle has more than 40,000 cell towers and 85,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market.
In 2024, Crown Castle is targeting capital expenditures of $1.5 billion to $1.6 billion in 2024, including $1.4 billion in the Fiber segment and $180 million in the Towers segment.
Crown Castle is targeting capex of $1.3 billion to $1.4 billion, including $1.1 billion to $1.2 billion in the fiber segment and $200 million in the tower segment for 2023.
The company has established two committees as part of the agreement with Elliott. One committee will oversee the review of its fiber unit, while the other will look for a new CEO. This decision follows the resignation of former CEO Jay Brown earlier this month. Crown Castle has appointed Anthony Melone, a member of Crown Castle’s Board, as interim CEO.
Anthony Melone has over three decades of experience in the telecommunications industry, including having served as Executive Vice President and Chief Technology Officer for Verizon Communications from December 2010 to April 2015. In addition, Anthony Melone served in a variety of positions with Verizon Wireless from 2000 to December 2010, including as Senior Vice President and CTO from 2007 to December 2010.
“Today’s announcements mark a significant step forward toward a stronger and more valuable Crown Castle,” stated Elliott’s Senior Portfolio Manager, Jason Genrich, reflecting on the developments.
As per the terms of the agreement, Genrich will secure a position on Crown Castle’s board, alongside former T-Mobile executive Sunit Patel. This move results in the replacement of directors Benjamin Moreland and Maria Pope.
With these changes, Crown Castle’s board will now comprise 12 members, with 11 being independent individuals.
Despite a 4 percent revenue uptick in the last reported quarter, the fiber business witnessed a decline of approximately 25 percent from the previous quarter. Notably, this unit contributes nearly one-third of the company’s total revenue.
Elliott has persistently emphasized various areas for improvement, including the potential sale of the fiber business, enhancements in corporate governance, and optimization of incentive plans.
This isn’t the first time Elliott has publicly pushed Crown Castle to act. In 2020, the activist investor urged a reconsideration of the company’s fiber infrastructure strategy and criticized its shareholder returns, indicating a long-standing dissatisfaction with Crown Castle’s strategic direction.