Sprint said today that it had completed the sale of about 3,080 towers to TowerCo for $670 million. Sprint will lease the towers back, freeing up cash to pay down its debt.
The two companies have signed a long-term leasing agreement for TowerCo to provide Sprint with towers to support its CDMA, iDEN and WiMAX networks.
Sprint will use the money raised from the sale to pay down some of its $24 billion in debt. It had fallen far behind rivals AT&T and Verizon Wireless in subscriber growth and profitability in recent years.
"Leasing rather than owning these network facilities is a more efficient use of resources and allows us to focus more closely on our core business of providing communications services to our customers," said Bob Azzi, Senior Vice President of Sprint. "This deal also gives Sprint additional liquidity and greater flexibility in managing our business."
"Given that demand and the major metropolitan market concentration of the towers, we have every expectation the portfolio will perform exceptionally well," said Richard Byrne, CEO of TowerCo.
In recent years, carriers moved away from owning their own towers. Instead, companies like American Tower, Crown Castle International and smaller players like TowerCo, have taken over ownership of towers and leased them to carriers.
So MVNO is the future of the wireless world. who'd have thought.
2. Posted by McGirk
Sun Oct 05, 2008 7:10 am
What is really interesting is, if most of the major networks are doing it . . . then new players now have a better chance of getting involved, with solid networks, this by itself could put an end to roaming unless there are exclusive deals involving those towers when sold.
3. Posted by IOWA
Mon Oct 06, 2008 8:34 pm
This is interesting indeed. now what keeps towerco from going into direct competition once they own all the towers lol
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