Cingular Wireless L.L.C. has identified more than 12,000 GSM sites that it plans to decommission as it integrates 30 of 63 GSM markets by the end of the year, according to Securities & Exchange Commission filings. In addition, the company said it had completed 30 of 47 major TDMA turndowns, removing radios from more than 6,000 sites of 10,000 that were planned.
The moves were the final phase of Cingular’s network integration plan to eliminate redundant network facilities that arose when it purchased AT&T Wireless Services Inc. in 2004. The company said it would integrate its GSM networks, decommission redundant cell sites and core network elements, and swap vendor equipment in various markets in order to have like equipment in each operating market. The company said in June it would decommission approximately 7,600 cell sites, of which around 5,700 were acquired from AT&T Wireless. Cingular also is working to decommission its overlapping TDMA networks this year and next. About 85 percent of those assets were originally owned by AT&T Wireless.
“It’s a matter of driving cost out of the business,” said Bill Hogg, vice president of Enterprise Program Management at Cingular. “In our GSM markets, we had some equipment overlaps, so we’ve been assessing market by market how to integrate our equipment. In some areas, we’re taking down equipment and using it somewhere else, where we need it.
“What we end up with is a better network experience for our customers.”
But in some areas, network assets are either sold off or sub-leased, whichever makes more sense, Hogg said, noting that 5,000 towers were recently sold to T-Mobile.
Analysts said Cingular is making all the right moves and that the booming tower industry can absorb Cingular’s tower sell-off or lease-re-structuring without as much as a wince of pain.
“There are about 185,000 cell sites in the U.S., so it’s not that big of a deal if Cingular says they’re selling off or buying out leases on 12,000 of their sites.” said Mark DeRussey, wireless analyst with Raymond James. “Other carriers will scoop up the facilities Cingular decides to let go of. And this absolutely makes sense for Cingular as they continue their `more-bars-in-more-places’ strategy of having a high-quality, ubiquitous network.”
“Where there is duplicate capacity, it just makes sense to take down gear that can be used elsewhere in the network,” said Jonathan Atkin, analyst with RBC Capital Markets. “Many of their sites were constructed for their own use, so if they can lease those sites to other carriers, they can bring in revenue, much like Sprint used to do with some of its sites.”
Cingular expects to complete activities associated with its network integration plans by Dec. 31, 2006.
