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The Edge

BAI buys Mobilitie amid 5G infrastructure consolidation

Canada's BAI Communications said it will acquire Mobilitie in the US in a further indication of continued consolidation among providers of 5G infrastructure like small cells, data centers and cell towers.

The move is essentially an attempt by BAI to expand its business in the US market. The company already operates cellular, Wi-Fi, broadcast and radio networks in locations in Canada, Australia, the UK, Hong Kong and elsewhere. In the US, BAI is the majority shareholder of Transit Wireless, which operates cellular and Wi-Fi networks including in the New York City subway system.

The terms of BAI's deal for Mobilitie were not disclosed. The Canada Pension Plan Investment Board (CPP Investments) has owned BAI since 2009.

BAI in its announcement disclosed the extent of Mobilitie's portfolio of cell towers and other 5G infrastructure assets: The company owns networks in 220 venues across 39 states, 10,000 small cells across 45 states, and 300 tower sites across 14 states, as well as public transit system agreements in Seattle and San Francisco. Shamrock Capital is Mobilitie's majority owner.

Mobilitie's small cell network makes it one of the largest small cell operators in the US. For example, Crown Castle – widely considered the nation's largest independent small cell operator – counts around 50,000 commercially available small cells today. Meanwhile, ExteNet Systems operates around 32,000 small cells across the country.

"BAI's acquisition of Mobilitie establishes us as a leading telecommunications infrastructure provider in the United States and the most relevant provider of public transit wireless connectivity solutions in North America," Igor Leprince, CEO of BAI, said in a release. "This reflects our ambitions for the US as well as the other markets in which we operate globally and puts us in the perfect position to capitalize on the growing prioritization of connected infrastructure in regions such as the UK and Europe."

Mobilitie has a long and storied history in the US wireless industry. The company rose to prominence as the main vendor for Sprint's ill-fated efforts to improve its network starting in 2015. The Wall Street Journal reported in 2016 that Sprint hoped to deploy up to 70,000 small cells in cities across the country, largely through Mobilitie.

However, that venture failed to produce any results. Sprint in 2018 reported a $180 million loss in abandoned equipment due to the situation. In that same year, Sprint and Mobilitie agreed to jointly pay an $11.6 million fine to the FCC because the companies did not obtain the proper permits to build small cells.

In recent years, Mobilitie has been working to raise money. In 2019 the company announced a $1 billion exclusive arrangement "with a foreign investment fund." And in 2020 it scored $325 million in a financing round headed by CIT Group.

BAI isn't the only company snapping up 5G infrastructure companies around the US. For example, DigitalBridge (formerly Colony Capital) has been working diligently to consolidate the 5G infrastructure space. DigitalBridge's most recent purchase was of Boingo, but it also owns data center, small cell, tower and fiber providers ranging from ExteNet to Zayo to Vertical Bridge. Other companies buying up those kinds of assets include Crown Castle, American Tower, Melody Investment Advisors and others.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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