Crown Castle CEO Steven Moskowitz said Crown Castle was returning to a pure-play tower strategy following its fiber and small cells assets’ $8.5 billion sale. The towerco recorded a $5 billion goodwill impairment charge related to the fiber segment, resulting in a net income loss of $3.9 billion for the year.
Crown Castle Inc. has finalized a definitive agreement to sell its Fiber segment, marking a strategic shift to focus on its core tower business. The transaction, valued at $8.5 billion, involves EQT Active Core Infrastructure fund acquiring Crown Castle’s small cells business, while Zayo Group Holdings Inc. will take over the fiber solutions business. The deal is expected to close in the first half of 2026, pending regulatory approvals.
“This sale represents a significant step toward Crown Castle’s refined focus as a pure-play provider of multi-tenant tower assets,” said Crown Castle CEO Steven Moskowitz. “With our expansive and capital-efficient portfolio of approximately 40,000 towers across key U.S. locations, we anticipate durable and growing cash flows that will provide attractive returns to our shareholders.”
Last June, Crown Castle announced it would be cutting 10% of its workforce and closing certain offices as part of a broader effort to reduce costs and refocus its capital expenditures.
Strategic Review and Rationale
The sale follows an extensive strategic review initiated in December 2023, during which Crown Castle explored various options to enhance shareholder value. The Fiber Review Committee, in consultation with financial and legal advisors, determined that divesting the fiber business would best position the company for long-term growth.
By streamlining its operations, Crown Castle aims to maximize profitability through process optimization, reduced cycle times, and improved customer service. The company believes that the U.S. remains the best market for wireless infrastructure, with increasing mobile data demand driving long-term tower growth.
Financial Implications and Capital Allocation
Proceeds from the transaction will be allocated toward repaying existing debt and funding a $3.0 billion share repurchase program. Crown Castle’s Board of Directors will oversee the distribution of funds, ensuring financial flexibility while maintaining an investment-grade credit rating.
Additionally, the company announced plans to adjust its capital allocation framework. The annualized dividend will be reduced to approximately $4.25 per share starting in the second quarter of 2025. Moving forward, the company intends to set its annual dividend at 75%-80% of AFFO, excluding amortization of prepaid rent, aligning payouts with future earnings growth.
2024 Performance Highlights
Despite the strategic review and impending sale, Crown Castle reported mixed operational performance with considerable losses in 2024:
- Site Rental Revenues: Decreased by 2.7% ($174 million) year-over-year, impacted by a $165 million reduction due to the absence of Sprint cancellation payments.
- Goodwill Impairment: Crown Castle recorded a $5.0 billion goodwill impairment charge related to its Fiber segment, resulting in a net income loss of $3.9 billion for the year.
- Net Income: The company reported a net loss of $3.9 billion, compared to a $1.5 billion profit in 2023.
- Adjusted EBITDA: Declined to $4.2 billion from $4.4 billion in 2023 due to lower site rental revenues and advisory fees related to the strategic review and proxy contest.
- AFFO per Share: Fell 8% to $6.98 per share.
- Capital Expenditures: Totaled $1.2 billion, with $1.0 billion dedicated to Fiber and $100 million to Towers.
- Dividends: Paid $2.7 billion ($6.26 per share), unchanged from the previous year.
- Financing Activity: Issued $1.25 billion in senior unsecured notes in August 2024 to refinance commercial paper debt.
Outlook for 2025
Looking ahead, Crown Castle expects continued organic growth in its tower business, projecting a 4.5% increase in 2025, excluding Sprint consolidation churn. The company also anticipates a rise in lease and amendment applications as carriers expand their 5G networks to meet increasing mobile data demand.
With a stronger financial position and a more focused business model, Crown Castle is poised to capitalize on the long-term growth trajectory of the U.S. wireless infrastructure market. The company’s revised capital allocation strategy and operational efficiencies are expected to drive shareholder value while reinforcing its leadership in the industry, the company said.
Market Reaction and Analyst Commentary
Following the announcement of the fiber sale, Crown Castle’s stock rose by 9% to $102.17, regaining most of its losses over the past year. Analysts at KeyBanc Capital Markets viewed the move positively, highlighting the improved financial predictability and balance that a pure-play tower business will provide.
By shedding its Fiber segment, Crown Castle aims to enhance stability, maximize cash flow, and strengthen its competitive position as a leader in the U.S. tower infrastructure space.
