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Small Cell Connectivity Drives $1.5B Acquisition

Ray Le Maistre

Crown Castle is splashing $1.5 billion in cash on the acquisition of FiberNet to support future demand for small cell backhaul, the wholesale network operator announced Tuesday. (See Crown Castle to Buy FiberNet for $1.5B.)

FiberNet has about 11,500 route miles of fiber either already installed or under construction in Florida and Texas, including approximately 6,000 route miles of fiber in what Crown Castle International Corp. (NYSE: CCI) calls "top metro markets." Once the deal is closed, which is expected in the first half of 2017, Crown Castle will own or have rights to 28,500 route miles of fiber, as well as more than 40,000 cell towers, that it can use to service the data transport needs of its mobile operator customers, including all of the major US wireless service providers.

Adding FiberNet network assets "bolsters our fiber available for small cells in markets where we see significant demand from our wireless carrier customers," noted Crown Castle's CEO Jay Brown in the official acquisition announcement. "As demand for wireless connectivity continues to grow, small cells are playing an increasingly important role in adding the network capacity and density needed to provide ubiquitous high-speed, high-capacity wireless services. With a long runway of expected growth ahead for small cells, we believe our investment in FiberNet further strengthens our leading position in small cells and will enhance our long-term dividend growth," he added.

The potential demand for small cell connectivity was one of the drivers for another similar acquisition announced earlier this year. (See CS&L Buys Tower Cloud for $230M in Small Cells, 5G Play.)

Small cells have long been touted as the next big wave of radio access network roll-out, but the deployment of public (rather than in-building) small cells has not taken off as quickly as some market watchers had originally predicted. Now, though, with operators launching VoLTE services and planning for a 5G and IoT world, the addition of public small cells is becoming more of a strategic necessity. (See VoLTE Can Drive 4G Small Cells Adoption, M1 Deploys Nokia's Small Cells, Carrier Aggregation to Spur Small Cells Deployment for Airtel and Verizon Trumpets Network Densification Plans.)

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

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