BellSouth suitor's foreign affairs may point the way

The anticipated sale of BellSouth's stake in its New Zealand network to Crown Castle International would probably mean business as usual for BellSouth - but it could also be a boon for other local telcos. Crown Castle's business is in infrastructure rather than service, and its recent dealings with BellSouth, which owns 65% of BellSouth New Zealand, in other markets could be a pointer to what happens here.

The anticipated sale of BellSouth's stake in its New Zealand network to Crown Castle International would probably mean business as usual for BellSouth - but it could also be a boon for other local telcos.

Crown Castle's business is in infrastructure rather than service, and its recent dealings with BellSouth, which owns 65% of BellSouth New Zealand, in other markets could be a pointer to what happens here.

Last month, subsidiaries of the two companies, Crown Communications and BellSouth Mobility, signed an agreement for Crown to take over marketing and leasing to third parties of BellSouth's cellular tower network in eight US states.

The agreement also provided for the two companies to "explore the formation of a more permanent entity to serve their mutual interests with regard to the ownership, management and utilisation of the tower sites".

Telstra already onsells BellSouth service in New Zealand and any deal between Crown and BellSouth International which allowed for the expansion and leasing to third parties of BellSouth's New Zealand network would undoubtedly be welcomed by Telstra, Clear and Saturn Communications, all of whom want a mobile presence in New Zealand and none of whom want to build infrastructure.

Another close alliance may be on the cards in Brazil, where in February Crown Castle announced the formation of a Sao-Paolo-based subsidiary which it said would acquire develop and manage sites for "Band B" cellular, and "evaluate build to suit and sale leaseback" opportunities in Brazil and neighbouring countries.

The BellSouth-led consortium BCP last year paid $US2.45 billion at auction for the Band B license for Sao Paolo, which, with a population of 18 million, is regarded as South America's largest single cellular market. Consumers there can wait two years for a wireline from the former state telco and teledensity is less than 15%. It recently launched all-digital TDMA services in Sao Paolo and northeastern Brazil.

In the lead-up to a $US300 million IPO, Crown Castle recently announced a share swap with major shareholders in its subsidiary Castle Transmission International (CTI), the former transmission arm of the BBC.

CTI chief financial officer George Reese told Computerworld during a recent visit to Australia and New Zealand that the company's businesses "relate to infrastructure assets. That's what our core business is. We have an overall strategy for Australasia and we're looking at various infrastructure assets", including BellSouth and BCL, TVNZ's transmission business.

Reese was then tight-lipped on the BellSouth deal, but acknowledged that "we have our eye on" BCL in the wake of its bid for Australia's National Transmission Authority. "We're anxiously waiting to see what comes out, what the government decides to do with those assets."

Reese confirmed that CTI had "a relationship" with Michael Fay and David Richwhite, stemming from Fay, Richwhite's investment in Crown Castle, but declined l to say what role the pair had been filling in negotiations for New Zealand assets.

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