{"id":349,"date":"2013-10-22T06:48:47","date_gmt":"2013-10-22T06:48:47","guid":{"rendered":"http:\/\/www.asadkarim.co.uk\/?p=349"},"modified":"2013-10-22T08:54:56","modified_gmt":"2013-10-22T08:54:56","slug":"att-and-crown-castle-4-85-billion","status":"publish","type":"post","link":"https:\/\/www.asadkarim.co.uk\/?p=349","title":{"rendered":"AT&T and Crown Castle: $4.85 Billion"},"content":{"rendered":"

On Sunday 20th Oct 2013, AT&T<\/strong> announced the plan to raise $4.85 Billion = \u00a32.99 Billion<\/strong> by leasing the rights of its wireless (base stations) to Crown Castle<\/strong><\/p>\n

[http:\/\/www.att.com\/gen\/press-room?pid=24913&cdvn=news&newsarticleid=37107&mapcode=att-business-news|mk-att-wireless-networks<\/a>]<\/p>\n

AT&T will lease its 9,708<\/strong> towers.<\/p>\n

Reading the financials from Crown Castle gives an insight to the business:
\n[http:\/\/www.crowncastle.com\/investor\/presentations\/Q3-2013EarningsPresentation.pdf<\/a>]<\/p>\n

Crown Castle pays $4.85 Billion<\/strong>, to operate the towers for an average of 28 years, and AT&T commits an initial lease term for 10 years.
\nAT&T will pay $1,900<\/strong> per site.<\/p>\n

This means each month Crown Castle will earn from AT&T \u00a31900 x 9708<\/strong> = $18,445,200<\/strong> ($18.445 million<\/strong>) which is $221,342,400<\/strong> per year ($221 million = \u00a3136 million<\/strong>), and get this for 10 years.<\/strong><\/p>\n

And in this each year Crown castle will increase the charge by 2%<\/strong>.<\/p>\n

A nice monthly revenue from AT&T, for Crown Castle running and maintaining the radio towers, and AT&T gets a cash injection of $4.85 Billion.<\/p>\n

Crown Castle who own the 7,100 T-Mobile USA<\/strong> tower network could have the option to manage the overlap, and optimise the 2 networks, and bring cost savings, and after 10 years, has the option from AT&T to buy the network too.<\/p>\n

Crown Castle is clearly an infrastructure company, that is getting stable returns each month.
\nThe share price is about $75<\/strong> a share
\n[http:\/\/investor.crowncastle.com\/phoenix.zhtml?c=107530&p=irol-stockquote<\/a>]<\/p>\n

They are proposing an annual\u00a0dividend of $1.4<\/strong> a share which equate to a yield of 1.86%<\/strong>.
\nSo in these low interest rate times, the US Federal Reserve Base Rate is 0.25%<\/strong>, so by investors investing in Crown Castle, they are able to obtain a return of 1.86%.<\/strong>
\nThe ability to fund this dividend comes from the stable and safe monthly rent obtained from the leases from AT&T and USA T-Mobile, and other carriers whose radio towers it runs.<\/p>\n

Also what will be interesting to see, is what AT&T does with the $4.85 Billion. It could use the money for a share buy back, pay down some debt, or perhaps use it buy strategic assets, like more spectrum, or perhaps buy another carrier in Europe.<\/p>\n","protected":false},"excerpt":{"rendered":"

On Sunday 20th Oct 2013, AT&T announced the plan to raise $4.85 Billion = \u00a32.99 Billion by leasing the rights of its wireless (base stations) to Crown Castle [http:\/\/www.att.com\/gen\/press-room?pid=24913&cdvn=news&newsarticleid=37107&mapcode=att-business-news|mk-att-wireless-networks] AT&T will lease its 9,708 towers. Reading the financials from Crown Castle gives an insight to the business: [http:\/\/www.crowncastle.com\/investor\/presentations\/Q3-2013EarningsPresentation.pdf] Crown Castle pays $4.85 Billion, to operate […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-349","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=349"}],"version-history":[{"count":3,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/349\/revisions"}],"predecessor-version":[{"id":352,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/349\/revisions\/352"}],"wp:attachment":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}