In a move that leaves plenty of room for interpretation and speculation, Softbank and Lendlease Group have announced plans to form a joint venture as a wireless infrastructure consolidator in the United States. The aim is to create a geographically diverse portfolio of rooftop and tower assets through development and acquisition. A Japanese company, Softbank is known in the United States as the majority owner of Sprint. An Australian company, Lendlease Group will manage the joint venture, develop new projects and manage acquired assets.
The companies have committed $200 million each toward equity in the joint venture with an eye to acquiring and strategically restructuring 8,000 existing telecom sites. Named Lendlease Towers, the joint venture will target $5 billion of telecom assets.
The move places Lendlease Towers in competition with all other tower companies that do business in the United States. Lendlease Group previously acquired wireless antenna site developer and owner Parallel Infrastructure as an initial foray into the U.S. market.
Lendlease Group has been rumored to be a build-to-suit vendor for one of the Big Four wireless carriers, according to Clayton Funk, who spoke at the AGL Local Summit in Fort Worth. Funk is a managing director of MVP Capital. He said Lendlease Group was rumored to have offered what he called a very carrier-friendly deal.
“If you have a player in there, disrupting some of the tower business model by giving unlimited loading to a rad center and maybe below-market escalators, it could be a big disruptor,” Funk said. “The other side of it is, if you’re Lendlease and you have a carrier as your partner, some would question whether the other carriers would want to have Lendlease build their towers.”
Also speaking at the Summit, Bernard Borghei, senior vice president of operations at Vertical Bridge, said that Lendlease bought leases from Sprint for antenna sites on rooftops that companies such as his manage. “We still control the marketing and management rights to the rooftops,” he said. “We hear they made some commercial concessions to Sprint.”
Borghei said that mature wireless infrastructure companies have crafted leases with carriers in such a way as to prevent a new entrant from totally disrupting the business.
The Lendlease announcement quoted its CEO for the Americas, Denis Hickey, as saying, “Consistent with our strategy of focusing on growing demand for infrastructure, we’ve identified the telco infrastructure sector as an opportunity to deploy our integrated business model. “
If competition is good for business, as some say, maybe the tower business just got a little better.
Don Bishop is Executive Editor and Associate Publisher of AGL Magazine. He joined AGL Media Group in 2004 and helped to launch and was the founding editor of AGL Magazine, the AGL Bulletin email newsletter (now AGL eDigest) and DAS and Small Cells magazine (now AGL Small Cell Magazine). He served as host for AGL Conferences from 2010 to 2012, appearing at 12 conferences. Bishop writes and otherwise obtains editorial content published in AGL Magazine, AGL eDigest and the AGL Media Group website. Bishop also photographs and films conferences and conventions. Many of his photographs have appeared on the cover, in articles and in the “AGL Tower of the Month” center spread photo feature in AGL Magazine. During his time with Wiesner Publishing, Primedia Business Information and AGL Media Group, he helped to launch several magazines and edited or managed editorial departments for a dozen magazines and their associated websites, newsletters and live event coverage. He is a former property manager, radio station owner and CEO of a broadcast engineering consulting firm. He was elected a Fellow of the Radio Club of America in 1988, received its Presidents Award in 1993, and served on its board of directors for nine years. Don Bishop may be contacted at: email@example.com.