Crown Castle, a leading independent owner and operator of shared wireless communications infrastructure completed a deal this week to acquire CPS Energy’s communications towers for $41 million.
CPS Energy has used the proceeds from the sale to pay down existing debt.
“Managing cell tower assets, which includes leasing space to other companies, is not part of our core business, so after analyzing our options, it became clear selling would be the most beneficial for our customers,” said Fred James, senior vice president of energy delivery services.
“There was pent-up value in those towers we weren’t able to realize,” added David Jungman, who manages business planning and development for CPS Energy. “We’ve got that value now, with the sale, plus we still have access to the towers.”
CPS Energy began building cell towers in the 1990s for its communications needs, because at the time there weren’t existing towers to lease space from. Additional capacity on the towers was leased to others, often large communications companies.
Crown Castle will now own and manage the towers and take over those leases.
CPS Energy retained the land where the towers are built, and will keep its own infrastructure on the towers. It also retains rights for enough capacity for future needs. Jungman said those leasing costs have been covered by the sale.
Houston-based Crown Castle “offers significant wireless communications coverage to all of the top 100 US markets and to substantially all of the Australian population. Crown Castle owns, operates and manages over 40,000 and approximately 1,700 wireless communication sites in the US and Australia, respectively.”
The company recently purchased the rights to about 9,700 AT&T towers for about $4.85 billion.
“AT&T is expected to lease capacity at many of the towers back from Crown Castle,” according to a Dec. 17, 2013 story in the Houston Business Journal. “However, since it doesn’t own the towers or the leasing rights anymore, it does not have to pay to maintain and operate the towers.”
Jungman said CPS Energy made a similar calculation — to let a company that specializes in managing cell towers do just that, allowing CPS Energy to focus on its core mission of providing reliable, affordable power to its customers.
“We’re always reviewing our assets as they relate to our core business,” he said.