Crown Castle has today (June 11) outlined plans to implement cost-saving measures, which will lead to some job cuts at the company.
In a statement, the tower company said it will lower its capital expenditures on what it calls "lower-return opportunities," this year by $275 million, to $325 million.
Crown Castle notes that it will do this "while maintaining our expectations for revenue growth across towers, small cells, and fiber solutions over the next several years."
The company operates more than 40,000 towers, 120,000 small cells on air or under contract to go on air; and around 85,000 route miles of fiber.
"As we have continued to progress the strategic and operating review of Crown Castle's fiber business, we are implementing changes designed to drive operational efficiencies and to enhance returns in fiber solutions and small cells," said Steven Moskowitz, Crown Castle's president and CEO.
"These changes are being implemented, regardless of the outcome of the strategic review, which remains active and ongoing."
According to Moskowitz, who was appointed CEO in April, the reduction in capital expenditures will lead to reduced activity, meaning the company has decided to reduce staffing levels and close certain offices.
He said he expects such a move to deliver approximately $100 million of annualized run-rate operating cost savings, approximately $60 million of which is expected to benefit full year 2024 results.
"We believe this increased focus on cost discipline and capital efficiency will enable us to generate higher returns and reduce our reliance on external capital to fund organic growth opportunities," he added.
Crown Castle didn't specify what offices would be closed or how many jobs would be lost in the statement, but did say it will "primarily impact the fiber segment and corporate departments."
Last July, the Houston-based telecommunications infrastructure company said it would cut 15 percent of its entire workforce.
The company confirmed that its strategic fiber review is still ongoing. Earlier this year, the firm said that it was in talks with multiple parties over a potential sale of its fiber and small cell businesses.
Small cells opportunity
Crown Castle added that it sees an opportunity in small cells to increase the number of collocation nodes and increase returns on new anchor nodes by focusing on locations nearer to its existing network.
Through doing this, the firm said it expects to reduce the capital intensity of small cell projects by narrowing its investment focus to concentrate on a higher mix of collocations and continue building network-adjacent anchor nodes while de-emphasizing greenfield locations the company historically targeted.
"The company expects these operational changes, in combination with other delays in delivering some in-process small cell projects, to result in a reduction of 3,000 to 5,000 new revenue-generating small cell nodes in 2024 and a reduction in new leasing activity of approximately $15 million in the year," it said, adding that such changes could lead to small cell revenues by double digits over the next several years.
Last month Crown Castle won its proxy fight against its co-founder Ted Miller, after it announced that its shareholders voted for all 12 of its nominees to be elected to the company’s board of directors at the 2024 annual stockholder meeting.
Crown Castle's current board has clashed with Miller, who ran the tower firm between 1996 and 2002, over the direction of the company.
Miller nominated himself and three other nominees to be voted onto the company's board and was supported by Proxy firm Glass Lewis, which backed his challenge, via his investment vehicle Boots Capital Management, LLC.
However, another proxy advisory firm, Institutional Shareholder Services (ISS), gave its recommendation that shareholders vote in favor of all of Crown Castle’s director nominees.
