T-Mobile

T-Mobile tower sale could net nearly $3 billion for Deutsche Telekom

posted by Alan F. / Jan 21, 2012, 1:51 AM

T-Mobile tower sale could net nearly $3 billion for Deutsche Telekom

A sale of T-Mobile's tower system could net parent company Deutsche Telekom as much as $3 billion in an auction. According to Macquarie analyst Kevin Smithen, American Tower Corp., Crown Castle International Corp. and SBA Communications Corp are all interested in the towers. The analyst estimates that the towers could fetch $2.25 billion although competitive bidding could bring the price to as much as $3 billion. T-Mobile is looking to sell the towers to fund the purchase of additional spectrum, and an LTE network and to sign Prince Fielder according to Deutsche Telekom's CFO Timotheus Hoettges. The carrier would then lease back the same towers from the company that buys them.

The 7,500 cell towers owned by T-Mobile is the largest number of such towers currently up for sale. Sprint did a sale-leaseback three years ago when it sold 3,080 towers to TowerCo for $680 million. Sprint used the proceeds to reduce debt. Thanks to the leaseback arrangement, T-Mobile will not be losing any tower space nor will it lose any areas of coverage.

source: Bloomberg via TmoNews

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12 Comments

1. remixfa

Posts: 14605; Member since: Dec 19, 2008

interesting.

posted on Jan 21, 2012, 4:06 AM 1

2. biophone

Posts: 1994; Member since: Jun 15, 2011

Don't know much about this stuff but it doesn't sound good for tmobile.

posted on Jan 21, 2012, 4:14 AM 0

6. greathero1

Posts: 584; Member since: Jun 13, 2008

Interesting indeed but what is more interesting is do you think they are going to put these proceeds into the US subsidiary or take it back to Germany? This would give TMobile $7 billion cash. Since the next spectrum auction is miles away, I think they should consider going after Cricket or Metro PCS the same way AT&T went after them. Buy on of them out, move them over to GSM, and convert that network to LTE.

posted on Jan 21, 2012, 11:07 AM 0

3. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

D-T is definitely not looking to put any more of its $ into T-Mo. A sale-leaseback deal allows T-Mo to move into the LTE space without D-T footing the bill. I wonder what happens after the original lease agreement is up?

posted on Jan 21, 2012, 7:17 AM 0

4. VinCrel

Posts: 39; Member since: Dec 26, 2011

Are they going to use the same money they got to upgrade th towers that they, sold-leaseback? wouldn't it be just unfair for tmo? like what droidxdoug said, what will happen after the contract is up?

posted on Jan 21, 2012, 8:25 AM 0

5. solidsnakeduds013

Posts: 221; Member since: Oct 20, 2010

This doesn't sound too good

posted on Jan 21, 2012, 9:37 AM 1

7. nak1017

Posts: 328; Member since: Jan 08, 2010

T-mo needs an LTE plan and needs to get rolling on it right now, they're already last to the table and, frankly, they could be a real contender with the AWS bands all to themselves.

posted on Jan 21, 2012, 12:50 PM 0

8. Carlitos

Posts: 668; Member since: Oct 23, 2011

If i read right, the money goes to the father company, which is in 'europe. No money for U.S.A. T-mobile. Wow.

posted on Jan 21, 2012, 2:31 PM 0

9. JGuinan007

Posts: 699; Member since: May 19, 2011

So D-T is going to sell off T-mo peice by peice since it can't find a buyer small enough not to be a GSM monopoly

posted on Jan 21, 2012, 2:32 PM 2

11. snowgator

Posts: 3621; Member since: Jan 19, 2011

That is a scary idea, and why I actually thought the sale to AT&T would go through. We can still cross our fingers that an investment company of some kind will purchase T-Mo, or that D.T. Silk have a change of heart once the advantages of the break-up with AT&T start paying some dividends.

posted on Jan 21, 2012, 8:26 PM 0

10. nickjjay

Posts: 79; Member since: Oct 10, 2011

The line about them buying Prince Fielder is a great line. Nice.

posted on Jan 21, 2012, 7:40 PM 1

12. Slammer

Posts: 1515; Member since: Jun 03, 2010

It is important that everyone remember that selling the towers is not a big deal. This is a great move for Tmobile. It will save them millions of dollars on maintenance. They will still own and retain the infrastructure that is attached to the towers. So Tmobile doesn't lose a thing. While Sprint is mentioned as an example, VZW and AT&T have done this in many areas also. Economically, this makes financial sense. John B.