T-Mobile USA said it will sell the rights to 7,200 of its towers to Crown Castle for $2.4 billion. The deal is the culmination of months of speculation over a sale of the carrier's towers.
In the past few months Crown Castle had emerged as the most likely bidder for the towers. T-Mobile said the sale will give it additional funds toward its ongoing $4 billion network modernization project.
Under the terms of the deal, which is expected to close in the fourth quarter, Crown will have the exclusive right to lease and operate the T-Mobile towers for a weighted average term of around 28 years. Crown noted that 83 percent of the towers are located in the top 100 U.S. markets and 72 percent are located in the top 50 markets. The nation's No. 4 carrier has been looking to sell its towers as a way to raise funds since AT&T (NYSE:T) and T-Mobile parent Deutsche Telekom aborted their plans late last year for AT&T to buy T-Mobile for $39 billion.
"T-Mobile USA is working aggressively to make our 4G network stronger, faster and more dependable for consumers, and this transaction will support our ongoing $4 billion network modernization initiative that is the cornerstone of this effort as we work tirelessly to continue to deliver our amazing 4G services nationwide," T-Mobile CEO John Legere said in a statement.
Crown Castle CEO Ben Moreland said in a statement that the deal will increase Crown's tower count by approximately 33 percent, and that Crown will hold around 30,000 towers when the deal is closed.
Crown Castle said it expects to fund the transaction with cash on hand and debt financing.
T-Mobile is working to deploy LTE network technology by next year. Ericsson (NASDAQ:ERIC) and Nokia Siemens Networks are the vendors for T-Mobile's $4 billion network upgrade project. The carrier plans to deploy LTE on its 1700 MHz AWS spectrum and refarm its 1900 MHz PCS spectrum for HSPA+ service.
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