Verizon to sell telecom towers, follows AT&T and T-Mobile strategy

Verizon will follow the footsteps of AT&T and T-Mobile as its Chief Financial Officer Fran Shammo is keen to sell its telecom towers.

Verizon Communications Chief Financial Officer Fran Shammo today said the company is ready to sell its telecom towers.

Verizon has an estimated 12,000 to 15,000 towers, according to Cowen & Co.

The main motivation behind Verizon’s new telecom tower strategy is its rival AT&T that received $4.83 billion for selling its wireless towers.

The option to sell network towers has become more favorable over the past year, and Verizon is considering the move, Shammo said during a presentation to investors today at a Bank of America conference, Bloomberg reported.

Wireless carriers including AT&T and T-Mobile US have sold towers as a way to raise cash.

Tower operators such as Crown Castle International, American Tower and SBA Communications are some of the buyers in the market.

Telecom Tower

In December, AT&T announced its deal with Crown Castle to sell 600 towers and the exclusive rights to lease 9,100 more towers for an average of 28 years.

Verizon, which completed $130 billion deal to buy Vodafone’s stake in Verizon Wireless, previously announced plans to trim some aspects of its portfolio, Reuters reported.

“The AT&T deal was a good deal for them. It opened our eyes and we said ‘OK, maybe there is a way to get through this and protect our interest and get a deal that is palatable to us’,” Shammo told investors at a conference in Los Angeles, adding that Verizon wants to protect its ability to expand its network when necessary.

AT&T has benefitted from the telecom tower deal with Crown Castle as the carrier received cash for potential acquisitions, upgrades and spectrum bids. By leasing the towers instead of selling them outright, Dallas-based AT&T preserved its ability to get additional space on the sites to meet future demands for capacity.

Crown Castle acquired the rights to operate 7,200 T-Mobile towers for $2.4 billion in 2012, also for an average of about 28 years. In both deals, Houston-based Crown Castle has the option to acquire the towers at the end of the lease.

In both these deals, telecom service providers have got more time to manage their mobile users than telecom towers.

In Africa, Bharti Airtel is also following similar strategies. But the main objective of selling telecom towers is to reduce debt.

Baburajan K
[email protected]