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Crown Castle nabs Verizon's CTO

Crown Castle confirmed it hired Ed Chan, a former top Verizon executive, as its new EVP and chief information officer earlier this month. And that's just one of many changes to Crown Castle's leadership team.

Mike Dano

January 25, 2024

4 Min Read
 Ed Chan verizon crown castle
Ed Chan was previously Verizon's CTO.(Source: Verizon)

While it searches for a new CEO amid a "strategic review" of its fiber business, tower giant Crown Castle said it reorganized part of its leadership team. Interestingly, that reorganization also included the hiring of a top Verizon networking executive, Ed Chan.

Crown Castle confirmed to Light Reading that Chan joined Crown Castle as its EVP and chief information officer earlier this month. According to his LinkedIn profile, Chan worked at Verizon for more than three decades, ending his career there as CTO. Chan left Verizon shortly after Joe Russo took control of Verizon's networking operations from Verizon's longtime networking chief Kyle Malady.

Verizon officials didn't respond to questions by Light Reading about Chan's departure.

But Chan isn't the only Crown Castle executive getting new business cards. The company also said two longtime Crown Castle executives – Michael Kavanagh and Christopher Levendos – will take over leadership of the company's two main lines of business: towers and fiber. The company said Kavanagh will be Crown Castle's EVP and COO of its tower business and Levendos will be EVP and COO of its fiber business.

Longtime Crown Castle CFO Dan Schlanger is planning to stay. Schlanger had previously announced he would leave the company by March, but Crown Castle managed to convince him to stay (with thousands of additional shares in the company). "We agree Schlanger is important to help Crown Castle," wrote the financial analysts at Raymond James.

Running Crown Castle is Anthony Melone, a member of the company's board and Verizon's former CTO. He was named the company's interim CEO following the ouster of Crown Castle's longtime CEO Jay Brown late last year. Brown left amid a pressure campaign against him by Elliott Investment Management, an activist investor firm. Now, in response to that pressure campaign, Crown Castle is in the midst of a "strategic review" of its fiber business, which houses Crown Castle's small cell operation.

What's next?

It's unclear whether Chan, the former Verizon executive, is now in the running to become Crown Castle's permanent CEO. The move would make some sense considering Verizon is a top Crown Castle customer and Melone is also a former Verizon executive.

"I think it's too early to speculate on how it will play out," Melone said Thursday during Crown Castle's quarterly conference call. He said the company's search for a new CEO is tied to the company's strategic review process and that the "the two will naturally come together."

But Melone didn't offer much more insight into the company's CEO search or the options it's considering for its fiber business. "At this point it's too early to say a whole lot more about that," he said, noting that "all options are on the table."

The quarter and the outlook

Crown Castle reported fourth quarter results Thursday that mostly exceeded expectations. And the company didn't make any changes to the 2024 forecast it issued during its previous quarterly report.

"We generated full-year tower organic revenue growth of 5%, achieved 8,000 new small cell nodes for the year, with 2,000 additional nodes completed that are expected to begin billing in first quarter 2024, and returned to year-over-year fiber solutions revenue growth of approximately 3% in the fourth quarter," Melone said in a statement.

Analysts generally cheered the results, but continued to debate the ultimate future of Crown Castle.

"The change in management doesn't guarantee a change in strategy," wrote the financial analysts at New Street Research in a note to investors following the release of Crown Castle's quarterly results. "The strategy isn't wrong just because outsiders haven't seen the evidence that it is right. If a new team comes in and changes the strategy, we won't be surprised. But if they stick to the strategy, it will be fascinating."

"A buyer [of Crown Castle's fiber business] would assume a multi-billion-dollar small cell capex backlog, unless carrier counterparties are willing to renegotiate their contracts," explained the financial analysts at MoffettNathanson in a note to investors. "The size of a deal would also limit the number of financial buyers that might plausibly be able to consummate a transaction. There are other potential sources of upside, but it remains to be seen how compelling they might be. It seems to be a far more nuanced valuation and upside situation than one might typically expect with an activist at the wheel."

Finally, there was another trend floating through Crown Castle's earnings report and conference call: the notion that things are getting better. Crown Castle and other 5G vendors reported a bigger-than-expected decline in demand from 5G network operators during 2023. But now, many are hinting that demand will begin to improve during the second half of 2024.

"It will grow gradually throughout the second half and then into 2025," Nokia CEO Pekka Lundmark said this week, according to Seeking Alpha, in response to a question about improvements in the company's North American sales.

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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