Verizon’s Interest in Tower Sale Sparked by $5 Billion AT&T Deal

Verizon Communications Inc. Chief Financial Officer Fran Shammo said the $4.83 billion payout AT&T Inc. got for selling its wireless towers opened the company’s eyes to the potential benefits of a similar transaction.

The option to sell network towers has become more favorable over the past year, and Verizon is considering the move, Shammo said during a presentation to investors today at a Bank of America conference. Verizon has an estimated 12,000 to 15,000 towers, according to Cowen & Co.

Wireless carriers including AT&T and T-Mobile US Inc. have turned to tower sales as a way to raise cash at a time when tower operators like Crown Castle International Corp., American Tower Corp. and SBA Communications Corp. have been eager buyers. In December, AT&T sold Crown Castle 600 towers and the exclusive rights to lease 9,100 more towers for an average of 28 years.

Shammo didn’t say specifically what terms of the AT&T sale interested him. The AT&T deal with Crown Castle gave the carrier immediate cash for potential acquisitions, upgrades and spectrum bids. By leasing the towers instead of selling them outright, Dallas-based AT&T preserved its ability to get additional space on the sites to meet future demands for capacity.

Crown Castle acquired the rights to operate 7,200 T-Mobile towers for $2.4 billion in 2012, also for an average of about 28 years. In both deals, Houston-based Crown Castle has the option to acquire the towers at the end of the lease.

For tower operators, additional sites can be leased to multiple carriers to squeeze more profit out of the assets.

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