American Tower Corporation (NYSE: AMT) is in talks with Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and Pelephone Communications Ltd. to buy all their mobile sites and lease them back to the carriers. The talks between the parties could solve the objections of the Antitrust Authority to the carriers sharing their networks, allowing them to carry out their plan to lower costs another way, which should not face regulatory objections. American Tower's representative in the talks, Ronen Barel, declined to comment.
American Tower's concept, which it sells in many countries around the world, is to take from mobile carriers the need to invest in telecommunications infrastructures. This is a real estate-accounting idea that benefits both sides, because the carriers are paid for their past investment in infrastructures, and can book the renting of the infrastructures as an expense.
For American Tower, every additional antenna of a carrier that is installed on a pole is net profit. As a real estate company, it seeks to cooperate with as many carriers as possible on its infrastructures, thereby reducing the total number of sites, which is in everyone's interest.
American Tower sent out feelers to the carriers last year to see which of them was interested in such a deal, and now, in view of the Antitrust Authority's objections to Cellcom and Pelephone's network sharing agreement, its offer is back on the table.
As "Globes" reported, the Antitrust Authority opposes the carriers' agreement to build a joint 4G network, and the carriers are waiting for its official answer. They are also waiting for the Ministry of Communications policy document, on the basis of which they will decide their next steps. Pelephone and Cellcom will reportedly try to find other ways to enable them to cut costs through collaboration in infrastructures. One option is to increase their passive collaboration; i.e. 3G network sharing through antennas alone, with no sharing of electronics or frequencies.
American Tower said in reponse, "The company has no interest in responding to media speculation."
Published by Globes [online], Israel business news - www.globes-online.com - on May 4, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014