Tuesday, January 25, 2011

T-Mobile pushing to sell all their cell towers

Is the Tinton Falls tower really about improving voice coverage or is it part of T-Mobile's now publicly disclosed plans to sell their cell towers to generate revenue?? Read on...

UPDATE:T-Mobile Mulls Selling Tower Assets Valued At $2 Billion Source

By Roger Cheng


NEW YORK -(Dow Jones)- T-Mobile USA is exploring the sale of its network of cellular towers, which could fetch around $2 billion and possibly more, according to a person familiar with the situation.

T-Mobile USA, a unit of German telecommunications giant Deutsche Telekom AG ( DTEGY, DTE.XE), is taking a "measured approach" to the process, and hasn't fully committed to selling its roughly 7,000 towers, according to a spokesman.

"It's not a foregone conclusion," he said.

Earlier reports placed a $2 billion value on the assets, and called for the sales process to begin early in the second quarter.

The details shed more light on Deutsche Telekom Chief Executive Rene Obermann's comments from T-Mobile USA's investor day on Thursday. He said the company would consider selling these assets to raise funds for projects or the acquisition of wireless spectrum.

Obermann said on Thursday that T-Mobile USA has more towers than its U.S. rivals, as many of the other carriers have shed their own assets to focus on their core businesses. At the time, he said there was no rush to pursue a deal.

American Tower Corp. (AMT) and Crown Castle International Corp. (CCI) are seen by analysts as the most likely acquirers, although interest may also come from private investors.

"There's little doubt that these assets would see interest in the market," said Jonathan Atkin, an analyst at RBC Capital.

Spokesmen for American Tower and Crown Castle weren't immediately available for comment.

The other public tower company, SBA Communications Corp. (SBAC), is likely too small to make such a deal, analysts said.

Still, the public tower companies may not necessarily jump on the assets, said Jonathan Schildkraut, an analyst at Evercore Partners. He noted that Crown Castle has implied it doesn't need to expand further, while American Tower has more recently looked toward overseas expansion.

With a historical sales price of roughly $500,000 per tower, T-Mobile's assets could be worth as much as $3.5 billion, he said, adding that the price could change depending on demand.

T-Mobile USA tried to sell the assets previously, according to Atkin, and got bids at roughly the same price. He expects a higher bid this time around because it runs more towers than before.

T-Mobile USA started thinking about the tower sale option again this summer, Atkin said.

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