Crown Castle Sells Off Fiber and Small-Cell Businesses for $8.5B
Crown Castle announced deals to sell its fiber unit to Zayo and its small-cell business to EQT for a total of $8.5 billion as the company focuses on the macro tower sector and 40,000 U.S. towers. The company also released financial results for 2024. Both announcements came after the close of financial markets Thursday. CEO Steven Moskowitz said the outlook for tower construction in 2025 is mostly positive.
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The asset sales close after a strategic review that the company began in late 2023, Moskowitz said on a call with analysts. “As we’ve conveyed in the past, the board of directors dedicated a tremendous amount of time to conduct[ing] a comprehensive strategic and operational review of our fiber businesses with the end game in mind to maximize shareholder value.”
Crown Castle is selling 90,000 route miles of fiber “located in the largest markets in the U.S.,” which Moskowitz called “great assets.” But fiber “has a different business model and different customer base than towers and requires different operational capabilities.” The company said it expects to use the sales' proceeds to pay down debt and repurchase about $3 billion worth of stock.
Moskowitz forecast organic growth of 4.5% in towers this year, “excluding the impact of Sprint consolidation churn,” with “customer activity levels” similar to 2024. Top officials at American Tower and SBA, the other major U.S. players, also predicted a solid 2025 as providers move forward on 5G deployments (see 2502250053).
Carriers are “busy fortifying their networks with new spectrum and new equipment,” Moskowitz said: “Most of the work on our sites continues to be 5G overlays. As our customers shift toward densification, we believe our towers are well-positioned to capture this activity.”
A news release Thursday said: “As a pure-play U.S. tower company, Crown Castle believes it will have a unique opportunity to enhance shareholder value by providing focused exposure to what we believe to be the best market for wireless infrastructure in the world, which is expected to continue to experience increasing demand for wireless data that is expected to drive tower growth for years to come.”
Crown Castle reported site rental revenue of $6.3 billion in 2024, down $174 million from 2023, with a net loss of nearly $4 billion, compared with earnings of $1.5 billion the previous year.
“Crown Castle returns to what it once was: a pure-play domestic towerco,” MoffettNathanson’s Nick Del Deo told investors. He said the assets sale was “pretty much as expected.” The fiber sale is “a very good deal for Zayo strategically, if the company can finance it prudently and integrate it without hiccups,” Del Deo added. “Zayo gains significant scale by picking up complementary assets (all of which Zayo wanted but was outbid by Crown Castle) and has the opportunity to realize meaningful synergies.”
Del Deo also said that “until recently, we never would have guessed that Crown Castle would eventually sell the Fiber unit for less than half of its cumulative investment” of some $17.5 billion. “But what’s done is done, and the market has baked in this sort of valuation for a while, given … leaks throughout the strategic review process that pegged its value in the $8-10 [billion] range."