AT&T looks 28 years into the future of cell towers

Crown Castle will pay $4.85 billion for purchases and long-term leasing rights on AT&T's towers

By , IDG News Service |  Networking

What will you be doing over a mobile network in 28 years? Whatever it is, AT&T and cell-tower company Crown Castle want a piece of it.

In a deal announced on Sunday, Crown Castle International will lease about 9,100 of AT&T's towers for an average term of 28 years. The agreement, under which Crown Castle will also buy about 600 AT&T towers outright, will bring AT&T about US$4.85 billion in cash up front. It's expected to close by the end of this year.

After Crown Castle takes over the towers, it will lease them back to AT&T, so the carrier says it doesn't expect the transaction to affect subscribers' service. But the arrangement does provide a hint of how much faith mobile companies have in the future of this still-young business.

At 28 years, stretching out until 2041, the average lease term for these towers is far beyond the horizon of most predictions about mobile bandwidth, apps or devices. But the trends underlying mobile data point to new capabilities coming online for years, and full-size cell towers are likely to be critical infrastructure for decades, according to Tolaga Research analyst Phil Marshall.

"It's a pretty good bet," he said.

Vendors are already looking at demand for the next generation of mobile networks, a so-called 5G that's not yet being hashed out as a standard. Vish Nandlall, Ericsson's CTO and senior vice president of strategy, said last week that 5G gear is likely to appear in commercial networks beginning in 2020. He sees it offering 10 times the capacity of 4G LTE, as well as features for low-power machine-to-machine communications.

If a new generation of mobile comes every 10 years, as Nandlall believes, then 28 more years may bring us to 7G. Even the most advanced technologies in labs today won't go that far, instead giving hints about the networks of just 15 years from now, Tolaga's Marshall said. Small cells will transform networks over the next few years, allowing carriers to serve more subscribers in areas of dense mobile use, but the kind of longer-range towers Crown Castle is buying into will still be needed for broad coverage, he said.

"There's no evidence that there's anything that will ... replicate the need for these macro cells," Marshall said.

Though it's hard to make detailed predictions, networks 28 years from now will probably feed increasingly powerful mobile devices with updated information and help users find what they need, he said.

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