- Cash-strapped ExteNet is pushing for a sale of its outdoor business and a forbearance deal to survive
- The company troubles follow Crown Castle's exit
- Carriers are shifting their requirements for small cells, putting pressure on providers
ExteNet Systems is trying to find a buyer for its outdoor DAS and small cell business, and has asked lenders to be patient as the company works to avoid a cash crunch.
The company disclosed plans to pursue “a sale or other strategic transaction” related to its outdoor line of business, according to a letter from CEO Richard Coyle to two of the firm's banking partners, Wilmington Trust and Midland Loan Services, dated June 15. Bids were due from potential purchases by June 6, a deadline extended to June 12 "to accommodate certain interested parties who indicated that additional time was needed to submit proposals. The sale process has generated meaningful market interest,” Coyle wrote.
ExteNet management planned to meet with noteholders last Wednesday, June 17, Coyle's letter states. Prior to that meeting, funds were very tight.
“Based on its current liquidity position, the Company anticipates that, effective as early as June 25, 2026, it will not have sufficient funds to continue to operate,” Coyle wrote.
The letter requests “that the Noteholders enter into a temporary forbearance arrangement with the Company, including an interest holiday during the Sale Period.”
ExteNet sold its metro fiber business to Pilot Fiber for an undisclosed amount earlier this year.
ExteNet is partially owned by DigitalBridge, which is being acquired by SoftBank. Other major ExteNet investors have included Stonepeak Infrastructure Partners and John Hancock Life Insurance Company.
Fierce reached out to ExteNet for an update but there was no response by press time.
ExteNet Systems built outdoor small cells in New York, Boston, Northern New Jersey, San Francisco, Las Vegas and Dallas, according to its website. In the early days of LTE, outdoor small cells looked like a promising business to several wireless infrastructure players, including ExteNet, Mobilitie and Crown Castle. Crown Castle recently sold its small cell business to private equity firm EQT, and sold its fiber business to Zayo. Mobilitie was acquired by BAI Communications in 2021.
As carriers have shifted their requirements for small cells, the value of some existing small cell infrastructure is changing. Carriers often want a single small cell to support more than one 5G spectrum band, leaving less room for multiple carriers to install their radios atop a single pole. Some poles that were expected to support two or three carriers still have just one tenant.
For carriers, one tenant per pole is just fine. For those that own fiber, building their own small cells may offer a better return than leasing space on someone else’s site. All three of the nationwide carriers now own thousands of small cells. But after EQT bought Crown Castle’s small cell portfolio, some investors started to speculate that at least one wireless carrier might try to make a similar move.
There are investors who are interested in buying small cells, said Clayton Funk of Signal Strength Advisors. “Is there interest in buying small cells? The short answer is yes,” he said, speaking on a panel at the Wireless Infrastructure Association’s Connect (X) show. “The carriers still predominantly own a lot of their small cells. We could see them start to spin those out. There could be some consolidation there.” Speaking on the same panel, Joshua Broder, CEO of Verta, estimated there are 125,000 carrier-owned small cells in the United States, “give or take 50,000.”