In Agile agreement, Indiana throws in additional assets to meet tower leasing shortfalls

In Featured News by Wireless Estimator

Indiana Governor Mike Pence is hoping that the second time around will be a charm.

Indiana Governor Mike Pence is hoping that the second time around will be a charm. Agile is required to pay an upfront payment of $50 million to the state and share revenues on 341 towers.

Agile Networks announced today, along with Indiana Governor Mike Pence, that negotiations have been finalized on an agreement that will license the state of Indiana’s communications infrastructure to Agile. The Indiana Finance Authority board approved the agreement this morning, pending review by the state’s legislative budget committee.

The deal will have Ohio-based Agile put up $50 million immediately to Indiana for a 25-year lease on their communications assets. Agile will also pay the state an undisclosed amount of their revenues.

Following the initial term, Agile could request to extend the agreement for another 25 years but would need to make an upfront payment of $10 million and share revenue with the state at a higher rate.

Agile will manage the towers and tenants, but Indiana will contribute to maintenance costs of $27.5 million if the agreement runs for all 50 years.

The agreement is expected to yield the state $260 million over the next half-century.

It is likely that other states will monitor the agreement and consider their options as well.

In February, Dan Huge, the director of the Finance Authority announced that the state was looking to increase revenues from their towers.

“We’re progressing with the discussion phase with carriers at this point, and we’re working to match need with available capacity,” Huge said in a statement. “It’s a process that takes time, but we anticipate a good response to this effort.”

“Indiana is a national leader in partnerships that deliver sound financial returns and long-term benefits to Hoosiers,” said Governor Pence. Agile echoes the enthusiasm that this agreement will put underused assets throughout the state into full play and enhance Indiana’s communication capabilities.

In 2015, Governor Pence announced that $53.5 million Indiana had earmarked for new projects to celebrate the state’s 200th birthday would be mostly paid for by leasing excess space on the state’s towers. The projected revenues from leasing was pegged at $50 million.

However, the state’s nonpartisan Legislative Services Agency said that revenues from tower leases would most likely be $10 million to $12 million over the next 10 years.

Rep. Greg Porter said four cellphone service carriers were approached about leasing the towers, but that three said they weren’t interested.

“The governor is betting on the come and things did not roll his way,” Porter said. “We said that from day one. Here you are betting on the come with the cell towers, and we don’t think that’s going to happen,” Porter told the Indy Star.

The Agile agreement, is designed to opens up new revenue streams for the state from hundreds of traditional and non-traditional vertical assets, fiber optic cables, and streamlined right-of-way access.

Agile is providing an innovative approach that will empower telecom participants to utilize assets previously inaccessible. By making an investment to unify Indiana’s existing infrastructure and assets, Agile will establish a statewide network that will transform broadband access throughout Indiana, including rural areas.

“We’re looking forward to seeing the state’s communication infrastructure fully utilized, and Agile has demonstrated through the proposal process that it has the experience and expertise to do that,” said Huge.

“With a qualified firm driving the management, operation, and marketing of the state’s communication infrastructure, Indiana stands to gain significantly upfront and in the long-term for our rural communities and economic-development efforts.”

Agile has a history of success in working with the public and private sectors to significantly increase broadband availability, the company said in a statement.

The Agile Network is a hybrid network that, in partnership with asset owners, brings together wireless and fiber technologies to enhance asset value through investment and innovation, and provide an integrated “Pipe Power Tower” solution. This expansion will allow telecommunications and infrastructure providers to take advantage of Agile’s open access model, making it easy for wireless and other providers to enter new urban and rural markets in Indiana.

“This expansion will enhance broadband service as Agile Networks’ open access model will give wireless carriers and providers the ability to easily enter new urban and rural markets,” said Micah Vincent, Director of the Indiana Office of Management and Budget. “The impact of significantly increasing broadband availability in underserved areas will facilitate economic development, increase educational learning and telemedicine opportunities, increase growth for rural businesses, advance agricultural technologies, and provide reliable broadband for residents.”

“Agile Networks is looking forward to working with Indiana to make telecom assets within the Hoosier state fully accessible and ready for use by the public and private sectors,” says Kyle Quillen, founder and CTO of Agile Networks. “This will accelerate the advancement of Indiana’s infrastructure and position the state as a telecom policy leader.”

“Through this innovative plan, Hoosiers in underserved areas will have improved access to a key tool for innovating and launching new businesses, which will also help maintain and enhance the quality of life in rural Indiana,” said Victor Smith, Indiana’s secretary of commerce in a statement.

Earlier this year, Ohio’s Department of Administrative Services authorized Agile to sublease space on up to 82 state-owned communication towers that form part of the state’s Multi-Agency Radio Communications System. In what is being described as a sweetheart deal, the lease options accorded Agile allowed them to keep the revenues and not have to pay the state one cent.