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In order to fund a network upgrade and reduce debt, carrier T-Mobile announced Friday its decision to sell Crown Castle (NYSE:CCI) the rights to operate 7,200 wireless broadcast towers for $2.4 billion. Under the terms of the deal, Crown Castle has the option to pay another $2.4 billion to buy the towers outright at the end of the lease, which would come between 2025 and 2048.
Crown Castle, a Houston-based cell-tower company, said the company would acquire the cellular towers from T-Mobile to expand its wireless infrastructure in the United States.
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“We are very pleased with our agreement with T-Mobile, which strengthens our position as the largest provider of shared wireless infrastructure in the US, which we believe is the largest, fastest growing and most profitable wireless market in the world,” said CEO of Crown Castle, Ben Moreland, in a press release.
The towers, 83 percent of which are located in the top 100 U.S. markets, will increase Crown Castle’s total tower count by approximately a third.
While some analysts believe that Crown Castle overpaid for the towers, it was a good deal for T-Mobile. The company, which has been trying to raise money since AT&T’s (NYSE:T) proposed purchase failed last year, has already begun spending on a $4 billion network upgrade and has made efforts to become more financially independent from its parent company, Deutsche Telekom (DTEGY.PK).
T-Mobile is the fourth-largest wireless carrier in the United States, but the company has lost customers to competition with bigger and smaller rivals in recent years. Its current network upgrades will allow the carrier to provide customers with high-speed LTE service, which competitors AT&T, Verizon (NYSE:VZ), and Sprint (NYSE:S) have already done, to varying extents.
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