US telco Windstream has announced plans to spin off its fibre and copper networks, along with certain other assets, into an independent, publicly traded real estate investment trust (REIT). The transaction will enable Windstream to ‘accelerate network investments, provide enhanced services to customers and maximise shareholder value’.
The network operations business would then lease back the physical assets to Windstream through a long-term triple-net exclusive lease with an initial estimated rent payment of USD650 million per year. Windstream notes that the separation of its physical network from its services business will enable it to become a ‘more nimble competitor’, while accelerating network investments, and maximising shareholder value. The new REIT would be open to diversify its assets through acquisitions.
As a result of the transaction, Windstream notes that it will offer faster broadband speeds and more robust performance to consumers. The company said it would expand availability of its 10Mbps internet service to more than 80% of its customers by 2018. It also said it would more than double the availability of 24Mbps internet service by 2018, extending access to more than 30% of its customers.