Crown Castle will buy 600 AT&T cell towers and lease out another 9,100.

HOUSTON,TX-AT&T has agreed to sell 600 of its wireless towers and lease another 9,100 to Houston-based Crown Castle International Corp., for $4.85 billion.

Under the terms of the leases, Crown Castle will have exclusive rights to lease and operate approximately 9,100 AT&T towers. The average term of the lease rights is about 28 years. As the leases expire, Crown Castle will have fixed price purchase options, totaling approximately $4.2 billion, for these towers based on their estimated fair market values at the end of the lease terms.

AT&T will sublease capacity on the towers from Crown Castle for a minimum of 10 years for $1,900 per month per site, with annual rent increases of 2%. AT&T has the option to renew up to a total of 50 years. AT&T will also have access to additional reserve capacity on the towers for future use. AT&T expects the additional capacity will help it continue to meet growing demand for mobile Internet services.

During the terms of the leases, Crown Castle will have full operating rights to and responsibilities for the towers. Crown Castle’s rights will include the ability to sublease other available space to other companies.

“This deal is good for AT&T and our shareholders,” said Bill Hogg, an SVP with AT&T Services Inc. “This deal will let us monetize our towers while giving us the ability to add capacity as we need it. And we’ll get additional financial flexibility to continue to invest in our business, maintain a strong balance sheet and return value to our shareholders.”

AT&T expects no significant impact to our financial results from this transaction. AT&T expects the transaction to close by year-end 2013, subject to standard closing conditions.

“We are very pleased with our agreement with AT&T, 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,” says Ben Moreland, Crown Castle’s president and CEO. “Consistent with our focus on the top 100 US markets, nearly half of the AT&T towers are located in the top 50 markets, where we expect the majority of network densification and upgrade activity to occur. With an average of only 1.7 existing tenants per site, we expect the AT&T tower assets to provide significant growth opportunities driven by the continued consumer demand for wireless data services. While this transaction increases our tower count by approximately 33%, the transaction consideration represents only approximately 15% of our enterprise value.”