US tower operator Crown Castle has canceled plans to build around 7,000 small cells.

The company said it has mutually agreed to cancel the builds due to the lengthy permit times and high costs. CEO Steven Moskowitz said the move will help the company to save $800 million in future capital spend.

Moskovitz made the comments during an earnings call this week, as seen on Seeking Alpha.

"These [7,000 canceled] nodes were largely greenfield builds in locations that had countless zoning and permitting delays or in high-cost markets that did not meet our investment parameters and required higher-than-normal capital investment from our customers," said Moskovitz.

Despite canceling the build-out of 7,000 small cells, Crown Castle said it remains on course to deliver 40,000 more small cells over the next few years, in addition to the 70,000 it already operates.

The comments come amid reports that Crown Castle is in talks to sell its fiber and wireless assets, which also includes its small cell business.

Reuters reported earlier this month that Zayo Group and TPG are the front runners to buy the assets, which could fetch as much as $10 billion.

Crown Castle has been seeking to shift the assets for some time, revealing in April that it had held talks with multiple parties over a sale.

The company's co-founder Ted Miller, who pushed to be appointed to the company's board earlier this year, has previously said the assets could fetch as much as $15bn.

Providing an update on its wider financials for the third quarter, Crown Castle reported that site rental revenues grew one percent year-on-year (YoY).

Net income for the quarter grew to $303m compared to $265m last year, which included $48m of charges incurred in the quarter, in line with its restructuring plans announcement in June.

“In the third quarter, we achieved solid operating and financial performance across our businesses and reaffirmed our full-year 2024 Outlook for Adjusted EBITDA and AFFO,” said Moskowitz.

“Looking ahead, we continue to be optimistic about the long-term value creation opportunities in our tower, small cell, and fiber solutions offerings.

Opportunities to take fiber to metro data center markets

During the earnings call, Moskovitz also said the company isn't interested in connecting AI-focused data centers in rural areas.

"So the idea of connecting large AI-focused data centers that are being built in more rural locations because land costs are cheap and then connected into the market, into the market, big markets where people are via fiber, we're not interested in building that type of fiber because we don't see that as supporting our overall strategy," he said.

He noted that the deals that other companies aren't bad ones, they just "aren't for us."

However, Moskovitz did outline an opportunity for Crown Castle to utilize its fiber to drive connectivity to data centers in metro areas.

"But we do see a tremendous opportunity ahead of us to connect data centers in metro markets that already exist that we think are going to be extremely valuable because we have a footprint that is very difficult to replicate in dense metro markets," added Moskovitz.

"We have lots of fiber under lots of streets already, and so connecting into where we can connect each data center to another data center and making a ring, we think we are well positioned for that type of demand."

He adds that he expects this to support the demand for the AI workloads that will be required in the future.