CitySwitch plans hundreds of towers for AT&T
by Martha DeGrasse 5/3/18
CitySwitch said it hopes to build "hundreds and hundreds" of towers for AT&T, and that it could start adding radios and antennas to its first AT&T towers as soon as this year. AT&T announced its agreement with CitySwitch last month, saying the Atlanta-based infrastructure provider could provide an alternative to the traditional tower leasing model.
CitySwitch was founded more than a decade ago to monetize fiber assets buried along the railroad rights of way. The company built and managed hundreds of towers and microwave sites, and AT&T was one of its customers. In 2010 CitySwitch sold many of its towers to Global Tower Partners, which then became part of American Tower.
American Tower is one of the companies using the "traditional tower leasing model" that AT&T wants to circumvent. During its earnings call this week, AMT management took an analyst question about the competitive providers like CitySwitch.
"That market's always been there," American Tower CEO James Taiclet said. "When we can get our return we'll build towers and where we can't others will underbid us and they will get that opportunity. But with 40,000 plus [towers] I think we're in pretty good shape. So we don't really see any change from our perch in the competitive environment."
Taiclet also said the new build opportunity relates to the "very few sites that do get built here from the ground up on a macro basis," a characterization that stands in contrast to CitySwitch CEO Robert Raville's portrayal of his opportunity with AT&T.
"They have some pretty robust numbers," Raville said of AT&T. "This is a national build-to-suite arrangement for new tower development services where we would own and lease to them for their new buildout in and around their 5G growth plan." Raville said AT&T will also use the CitySwitch sites to deploy FirstNet radio equipment.
Raville said AT&T is looking for opportunities to move radio equipment from existing towers onto "newer assets that make more sense for them longer term." He said flexibility with respect to the use of real estate assets is a key goal for the carrier, and that CitySwitch's scope of work will extend far beyond the railroad rights of way.
AT&T and CitySwitch are still negotiating details related to volume, scale and timing for the new builds, Raville said. His team is busy staffing up to meet the anticipated demand.
"The idea is to work on hundreds and hundreds of towers," he said. "This is early innings."
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