Why Is AT&T Selling Their Towers?

When buzz started spreading about Crown Castle International buying AT&T towers, many people may have questioned AT&T’s motive behind this sale. While AT&T’s main focus is providing their customers with exceptional mobile service, they have also taken to constructing cell sites in order to broaden the mobile coverage in many areas across the U.S. So why sell them now?

According to Trefis, “the sale of towers will help AT&T better allocate its cash to more important strategic ventures and take advantage of the surging data demand in the U.S. as well as abroad, it is not without its long-term risks.”

AT&T will be able to take the cash from the sale of its towers (reported to reach around $5 billion) and invest it into expanding their 4G LTE network. AT&T believes that they will generate more revenue through their LTE transition and possible overseas acquisitions than they can by keeping their towers.

“With subscriber growth stagnating, AT&T is looking to drive LTE adoption and promoting its Mobile Share data plans at the same time to increase ARPU levels. While shared data plans lock in users by allowing them to add more devices to their service plan, increasing 4G LTE adoption will incentivize the usage of more data-intensive applications and drive data consumption. Further, LTE as a network technology not only supports higher speeds but is also more efficient than current 3G networks at handling data, reducing AT&T’s maintenance and handling costs as LTE usage grows. However, all this will require continued 4G investment to not only increase LTE coverage but also improve network capacity,” Trefis says.
While AT&T will continue to build up their 4G LTE network throughout the U.S., they may also look into expanding the network into Europe. Oversees, less than 2% of people are on an LTE connection where as approximately 19% of the American population is on the network.