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Vertical Bridge Acquires Towers from Alaska Wireless Network

By J. Sharpe Smith

Vertical-BridgeMay 5, 2016 — Vertical Bridge has acquired 275 sites and secured a build to suit arrangement for new towers from Alaska Wireless Network (AWN), the wholly owned subsidiary of wireless carrier General Communications, Inc. for $91 million. The transaction is valued at approximately 20 times tower cash flow and is expected to close in mid-2016.

AWN will be an on-going tenant on all of the sites in this sale-leaseback transaction. The majority of the towers are fiber ready and are expected to be upgraded from 3G to LTE.
The towers cover Anchorage, Fairbanks, Juneau, Ketchikan, Kodiak Island, Wasilla and the Kenai Peninsula, which includes 90 percent of the Alaska population. Coverage also includes the corridors between the population centers.

On nearly 80 percent of the sites, AWN is the only tenant, leaving significant upside for a second and third tenant on each site. In the next five years, Vertical Bridge expects to serve all the major carriers.

“We think these towers will be very attractive to the big four as they think about network expansion and densification,” said Bob Paige, senior vice president of mergers and acquisitions, Vertical Bridge.

Verizon has built out in Fairbanks, Anchorage and Matanuska-Susitna Borough, which includes Wasilla. “We think Verizon will be one of our best partners in the long term,” Paige said. “They have done a pretty good job of building out, but there are still a lot of gaps in coverage given the vast territory.”

“AT&T’s presence is pretty modest in Alaska, and T-Mobile has stated they want a bigger presence, as well as Sprint,” he added.

While Alaska is a vast state, Vertical Bridge’s newly purchased tower portfolio is dense, according to Paige. For example, it has 76 sites in Anchorage, 26 sites in Wasilla and 30 sites in Fairbanks.

“When AT&T decides to make a meaningful entry into the market, it only has to make one phone call to Vertical Bridge to complete a lot of its network buildout,” Paige said. “That was one of the appeals to working with AWN.”

Global Tower Partners, from which many of the Vertical Bridge principals originated, had a significant portfolio in Alaska and a lot of experience in the state. Even though the price was a consideration, Paige believes that Vertical Bridge won the bidding process because of its experience in the state and in working with sale-leaseback partners.

“We own the towers; they own the network. It is a marriage. We need each other to coexist,” he said. “They wanted to make sure they were hitching their wagon to someone they can work with in the foreseeable future, and we know how to get things done in Alaska.”

GCI Upgrades Networks in Rural Alaska

ANCHORAGE, Alaska, June 10, 2015 /PRNewswire/ — This summer, General Communication, Inc. (GCI) (NASDAQ:GNCMA) will upgrade its networks in rural Alaska. These upgrades will support increasing demand for terrestrial broadband service and substantially improve mobile wireless service in numerous rural communities.

First, GCI will increase the backbone capacity of TERRA, its terrestrial broadband network, from Levelock to Bethel by deploying new microwave radio technology. Second, GCI will deploy 3G wireless data service in 28 rural Alaska communities (listed below).

Upgrade work began on June 8 and is expected to continue throughout the summer.

“The TERRA and 3G upgrades confirm GCI’s ongoing commitment to rural Alaska,” said Greg Chapados, GCI’s executive vice president. “The upgrades will fortify the TERRA backbone, increase network efficiency and enable faster Internet speeds for wireless customers. Access to up-to-date communications technology increases opportunity for rural Alaska residents and businesses.”

The TERRA upgrade is expected to be complete by June 19. During the upgrade, GCI Internet customers on the TERRA backbone from Levelock to Kotzebue may notice some slowdown in upload and download speeds. As a courtesy, GCI customers in the affected communities will be mailed a voucher for $25 off their monthly bill. Mobile wireless voice and data services should not be affected during the TERRA upgrade.

The 3G upgrade is supported by an award from the Federal Communications Commission (FCC) called Tribal Mobility Fund Phase 1. As part of the award, GCI will deploy 3G and 4G wireless services to a total of 48 rural Alaska communities by 2018.

GCI is the largest Alaska-based and operated integrated telecommunications provider offering voice, data and video services statewide. Learn more about GCI at www.gci.com/about.
Rural Alaska communities to receive 3G wireless data service in 2015:

Alakanuk Aniak
Chefornak Chevak
Eek Emmonak
Goodnews Bay Hooper Bay
Kipnuk Kongiganak
Marshall Kwigillingok
Mountain Village Mekoryuk
Nightmute Newtok
Nunam Iqua Pilot Station
Pitkas Point Quinhagak
Russian Mission Scammon Bay
Shaktoolik St. Marys
Togiak Toksook Bay
Tuntutuliak Tununak

CONTACT: David Morris, GCI, (907) 265-5396, dmorris@gci.com