In the last two weeks alone, Crown Castle International Corp. has more than doubled its tower
portfolio in the United States and United Kingdom, securing a top position for itself among independent tower
companies.
The most recent transactions with Powertel Inc. and the U.K.’s One 2 One add a total of 1,471 towers to
the company’s portfolio, and a deal with BellSouth Corp. earlier this month added 1,850 towers. The company also
forged a joint venture with Bell Atlantic Corp. last year that added 1,400 towers to its inventory.
Crown’s total tower
portfolio exceeds 6,000, while its closest competitors, American Tower Corp. and SpectraSite, each control between
2,000 and 3,000 towers.
“This makes Crown one of the two major tower companies with American Tower,
although I think both are a little different in what they own,” said Mark Ein, a principal at the Carlyle Group, a
Washington D.C.-based private equity firm. “Crown has been aggressive at getting carrier deals while American
Tower has been more aggressive at consolidating tower owners.
“This is smart for Crown Castle because in
the end, scale and access to cheap capital are the key determinants to succeeding,” continued Ein.
Crown’s
arrangement with personal communications services carrier Powertel calls for the company to pay $275 million cash
for 650 of Powertel’s wireless towers. Kevin Inda, a spokesman for Powertel, said the deal encompasses a majority of
the company’s owned towers, although it has retained some sites. The deal includes a 10-year lease with three five-year
renewal terms, under which Powertel will pay $1,800 per month per tower, subject to a 15 percent rent increase at the
end of each five-year term.
The arrangement with One 2 One gives Crown 821 towers in the United Kingdom.
Crown will pay nothing for the towers, instead allowing One 2 One eight years of free rent on the towers, as well as
two years of free rent on about 160 Crown sites already shared by the carrier.
Crown will finance the BellSouth and
Powertel transactions through a public offering of $475 million of its common stock.
“The key challenge for
Crown right now is managing this incredible growth,” said Ein, who noted the company might begin to acquire
capabilities rather than continuing to acquire towers.
