GTE, Crown Castle Form $900 Million Wireless Venture
Irving, Texas, Nov. 8 (Bloomberg) -- GTE Corp., which is being acquired by Bell Atlantic Corp., said it formed a $900 million joint venture with Crown Castle International Corp. to manage and lease space on GTE's wireless-communications towers, freeing GTE to focus on developing new products.
GTE said it will contribute 2,300 towers valued at $900 million to the venture. GTE will get $700 million in cash and a 25 percent stake in the company and pay a fee of $1,400 a month for services and space on the towers. Houston-based Crown Castle, one of the largest wireless-tower management companies, will own the rest of the venture.
Crown Castle will be responsible for monitoring and maintaining the towers, which are used to send and receive wireless calls, and for leasing out space to other companies. Having outsiders manage their towers allows companies like GTE to concentrate on sales and product development.
``The formation of this joint venture allows us to focus more of our resources on customer service and adding new products,' Mark Feighner, president of GTE Wireless, said in a statement.
Irving, Texas-based GTE may contribute as many as 150 more towers, valued at $275,000 each, to the venture over 18 months. GTE, which expanded into wireless with its $3.25 billion purchase of half of Ameritech Corp.'s cellular-phone business, may contribute those towers as well. The venture also plans to build 500 towers over five years.
GTE shares rose 2 1/8 to 75 3/8 in New York Stock Exchange trading, while Crown Castle rose 3 3/16 to 23 3/8.
Separately, Reston, Virginia-based Nextel Communications Inc. signed a three-year agreement to lease space on Crown Castle towers. The company didn't say on which towers it would put its equipment, and terms of the agreement weren't disclosed.
Nextel and its subsidiaries agree to lease space on at least 1,264 sites owned or managed by Crown Castle over the next three years.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Crown Castle (TWRS) seems to have the lock on the wireless tower market
-DavidCG |
