Though I don’t have a lot to say about this article about telecom service providers spinning off REITs, by Reinhardt Krause of Investor’s Business Daily, a couple of things struck me about it. It may be of more interest to me than to many of you, but it’s my blog, so I’m going to write about it. It’s a topic I may return to as I run across articles with additional thoughts on the financial structuring of assets in the telecom industry or chat with industry contacts about their thoughts.
First, at the end of the article, I learned that the big tower operators American Tower and Crown Castle were structured as REITs (real estate investment trusts). I didn’t know that before, but I wouldn’t have been surprised if I had thought about it; it makes perfect sense.
Of course, the key point of the article is the prediction that Frontier may follow Windstream down the path of telcos restructuring their network assets as REITs. And the article points out that, even if an REIT trend ensues, large carriers like Verizon and AT&T are unlikely to restructure using REITs, if only due to the regulatory difficulties they would encounter trying to get approval. The article lists CenturyLink, Cincinnati Bell, and TDS as other carriers who might follow Windstream into the REIT pool
In any case, it’s a concept worth keeping an eye on, particularly to those of us with interest in telcos, real estate financial structures, and the combination of the two.
And for those who’d like to read about the Windstream REIT spinoff that started all of this, I dug up this July 29 Windstream press release on Telecom Ramblings about it.