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The Wall Street Journal’s report of a possible Crown Castle International purchase of T-Mobile USA’s towers is “entirely plausible,” because of the tower company’s recent activity consolidating carrier portfolios, according to an investing note by Jonathan Atkin, analyst, RBC Capital Markets.
“We think Crown Castle is a logical buyer given its greater focus on the U.S. market and relatively recent experience in integrating a large carrier portfolio (Sprint sites) following its acquisition of Global Signal in 2006,” he wrote.
The total number of towers in the deal is reported to be more than 7,300, although Deutsche Telecom has said it owns more than 8,700 towers in the states. The current bid for the towers is likely to be $2 billion or more, according to published reports.
“We believe that a successful acquisition will strengthen Crown Castle’s leading position in the tower industry,” Zacks Equity Research wrote. “If the company manages to acquire T-mobile’s tower arm, it will … help it achieve better operational efficiency.”
The Wall Street Journal reported on July 31 that American Tower and Global Tower Partners were still being considered, according to its source, but Crown Castle had a leg up after final bids were submitted in July.
American Tower focused on global acquisitions during the first half of 2012, which is where it sees the most opportunity. It purchased 1,920 international towers versus 80 domestic sites.
“More than 95 percent of our new communication sites are located in our international markets where we expect to see continued demand as new technologies are deployed, new spectrum is issued and wireless carriers support the growing demand for wireless data on their networks,” said Tom Bartlett, chief financial officer, American Tower.
SBA Communications might not be bidding on T-Mobile’s towers because it has been pretty busy buying everything else on the market. Its purchase of 3,252 towers from TowerCo for $1.45 billion dominated the most recent quarter, and it bought 2,300 towers and DAS assets from Mobilitie for $1.1 billion in the first quarter.
“SBA has been busy issuing debt to both clean up bridge financing from the Mobilitie acquisition and to prepare for the TowerCo acquisition. The company ended the quarter with $4 billion of net debt and has issued over $1.4 billion of new debt since the end of the quarter. SBA’s guidance includes a $14 million increase in net cash interest expense,” according to Piper Jaffray.
Conn. Gov. Dannel Malloy signed in a new state law that gives local communities an increased opportunity for input when it comes to determining where cell towers should be located.
“The idea behind this bill is not to slow down the process for siting cell towers, but to allow for better input from the community so that we can meet the demand while at the same time take into consideration a number of possible concerns that host communities may have on a given project,” Governor Malloy said.
The law, Public Act 12-165, however, does increase the lead time for consulting with towns affected by the location of a tower from 60 to at 90 days before applying to the Connecticut Siting Council for approval of the tower application, allowing more organization of opposition.
Components of the bill have been opposed by PCIA and the New England Wireless Association, according to Christopher Fisher, chairman of the telecom practice of Cuddy Feder, but there was some improvement as it went through the process. The first version of the bill contained a prohibition of cell siting within 750 feet of schools and day care centers, while the final measure was softened. It keeps cell towers 250 feet from schools and child day care centers unless the location is acceptable to the chief elected official of the municipality or if the council finds that the facility will not adversely affect the aesthetics of a neighborhood. Additionally, the bill did not have an impact on rooftop antennas.
“The initial bill was extremely concerning,” Fisher told AGL Bulletin. “Through the process there were modifications that made it less of a pragmatic concern for siting purposes and less of a concern compared with an out prohibition.” In the end, Fisher believes that the distance between a cell tower and a school cannot be regulated.
The law also requires the tower developer to provide towns with more information concerning a cell tower is proposed in certain area and give towns will more opportunities to offer their own location preference. Additionally, residents will play an increased role in the councils’ hearing processes.
“This new law proves you can make progress and still honor and respect the things that communities value most. The law offers additional protections for residential neighborhoods, schools, child daycare centers and scenic treasures, and it allows telecom providers to meet the fast-growing demands for expanded services,” State Rep. Lonnie Reed (D-Branford), bill co-sponsor, said.
State Representative Pat Widlitz (D-Branford, Guilford), who also co-sponsored the bill, said, “This new law will not only greatly improve our ability to influence the siting of cell towers, but will also encourage the use of the least obtrusive technology. It’s an important step forward for the protection of our shoreline vistas.”
With spectrum constraints causing network congestion, AT&T has announced additional plans to improve network performance and add capacity. The carrier intends to redeploy spectrum currently used for basic 2G services to support advanced mobile Internet services on its 3G and 4G networks by 2017.
Customers will be transitioned from GSM and EDGE networks on a market-by-market basis. Currently, 12 percent of the carrier’s postpaid customers are using 2G handsets.
“We expect to fully discontinue service on our 2G networks by approximately January 1, 2017. Throughout this multi-year upgrade process, we will work proactively with our customers to manage the process of moving to 3G and 4G devices, which will help minimize customer churn,” the carrier said in a filing with the Securities Exchange Commission.
The carrier said it will use tiered data plans to facilitate moving users over to 3G and 4G. It noted that 61.6 percent of its postpaid smartphone subscribers were on tiered data plans at the end of June, up from 44.8 percent at the same time last year.
“Such offerings are intended to encourage existing subscribers to upgrade their current services and add connected devices, attract subscribers from other providers, and minimize subscriber churn,” the company said. “In July 2012, we announced new data plans that would allow subscribers to share data among devices covered by their plan.”
As AT&T pledged to continue investing in its network capacity, it added that it still needs FCC action on spectrum to advance its broadband capacity goals.
“Spectrum constraints could affect the quality of existing voice and data services and our ability to launch new, advanced wireless broadband services. Any spectrum solution will require that the FCC make new or existing spectrum available to the wireless industry to meet the needs of our subscribers,” AT&T wrote.
Tower operators should expect to see less rent from AT&T as it removes its 2G equipment from sites.