DALLAS: AT&T is leasing or selling the rights to 9,700 wireless towers for US$4.85 billion (RM15.4 billion) as it generates cash to buy back stock, fund an acquisition and upgrade its cellular telephone system.
The Dallas company said on Sunday it will lease about 9,100 towers and sell another 600 to Crown Castle International Corp in a deal that is expected to close by the end of the year. AT&T, the nation's largest telephone company, said in a statement the deal won't have any impact on its customers.
AT&T will sublease capacity on the towers from Houston-based Crown Castle for at least 10 years, with an option for 50 more.
Crown Castle, which operates wireless communications towers across the United States and in Australia, said the deal gives it the ability to add tenants to the towers. It will fund the deal with cash on hand, and equity and debt financing.
The move gives AT&T cash to fund a plan announced in July to buy back 300 million of its shares on top of a repurchase plan that it was just completing. The newest stock buyback could cost the company US$10 billion or more.
In addition, AT&T said last month that it is investing US$11 billion to US$12 billion this year to upgrade its wireless and high-speed Internet networks, and in July, it announced a plan to buy Leap Wireless International for US$1.2 billion.
Company officials have also hinted at interest in acquisitions in Europe.
"This deal will let us monetise our towers while giving us the ability to add capacity as we need it," AT&T senior vice-president Bill Hogg said in a statement.
"We'll get additional financial flexibility to continue to invest in our business and maintain a strong balance sheet and return value to our shareholders."
AT&T said it doesn't expect the deal to have any significant impact on its financial results.
It said last month it was close to making a deal for its towers.
The company will sublease capacity on the towers for US$1,900 per month per site, with annual rent increases of two per cent per year, the statement said. The company will have access to reserve capacity on the towers for future use.
After the leases expire, Crown Castle can buy the towers for about US$4.2 billion. The average lease runs for about 28 years. AP