Crown Castle International Corp. sealed its second deal to manage a large wireless carrier’s tower
portfolio with last week’s announcement that BellSouth Corp. is selling 1,850 towers to the company for $610 million
in cash and common stock.
Crown in December formed a joint venture with Bell Atlantic Mobile to manage more
than 1,400 of the carrier’s existing towers. Including the tower assets of Bell Atlantic Mobile and BellSouth, Crown
will own or manage more than 3,700 sites with more than 750 additional sites in the United Kingdom.
According to
the agreement with BellSouth, Crown will be responsible for managing, maintaining and leasing the available space on
BellSouth’s wireless towers located in Florida, Georgia, Tennessee, Kentucky, Alabama, Mississippi, Louisiana and
Indiana. The deal does not include BellSouth Mobility DCS’ personal communications services towers located in North
Carolina, South Carolina, coastal Georgia and eastern Tennessee, said Jeff Battcher, a spokesman for
BellSouth.
BellSouth and Crown also reached a build-to-suit agreement calling for Crown to build 500 towers for
BellSouth during the next five years.
Battcher said the contract includes a provision that would return the towers to
BellSouth in the event Crown goes bankrupt or defaults on the contract. As part of the contract, BellSouth will retain
control of its communications components at the towers, including switching equipment, shelters and cell site
facilities.
BellSouth will pay Crown a monthly fee of $1,200 per tower for rent and tower maintenance
services.
Battcher said many of the towers involved in the transaction already are collocated, and most of the
company’s tower inventory has been built to accommodate collocation of between two and six carriers, depending on
factors such as engineering for wind and weight.
Battcher said around 50 BellSouth employees who have been
involved in the company’s tower siting activities to date could be affected. However, part of BellSouth’s negotiations
with Crown included a stipulation that all qualified employees would be offered jobs at Crown for the same salary,
seniority and benefits they received at BellSouth.
“We made all efforts to make sure the impacted employees
would be taken care of,” said Battcher.
Crown’s past dealings with BellSouth may have contributed to the
carrier’s ultimate selection of Crown to manage its sites. Crown and BellSouth Mobility last summer signed a
marketing agreement calling for Crown to market BellSouth’s tower sites in Kentucky. The agreement called for the
two companies to explore future opportunities related to the ownership and management of BellSouth’s
towers.
Crown also provided build-to-suit services to BellSouth Mobility for a portion of its PCS buildout in
Louisiana.
Crown said it will finance the transaction through an offering of equity and/or debt securities. The deal
requires approval by BellSouth’s board, and the transition of assets from BellSouth is expected to begin during the
second quarter. The towers will be transferred to Crown and paid for on a state-by-state basis, said Battcher.
