T-Mobile USA parent Deutsche Telekom is reportedly talking to bankers about ways to keep T-Mobile competitive in the U.S. market in light of its failed attempt to sell the company to AT&T (NYSE:T) for $39 billion.
Besides selling its towers, which are expected to raise between $1 billion and $2 billion, the company could raise additional funds by issuing bonds, according to a report in the Financial Times, which cited unnamed sources. The company will get $3 billion in cash, AWS spectrum from AT&T covering 128 markets and a seven-year UMTS roaming agreement with AT&T for a total value of $6 billion.
Deutsche Telekom is expected to provide more details on its strategy as it reports its results in February. According to the FT report, an unidentified source said the company is not in a rush to find a long-term solution for T-Mobile.
DT CEO Rene Obermann told analysts in December that the company has been spending around $3 billion annually on capital expenditures for T-Mobile USA, including network upgrades to HSPA+ technology (T-Mobile's HSPA+42 network, which it says offers customers LTE-like speeds, covers 180 million POPs).
RBC Capital Markets analyst Jonathan Atkin estimated that Deutsche Telekom would likely have to pay as much as $9 billion to acquire spectrum and build out a network to achieve parity with larger rivals AT&T Mobility and Verizon Wireless (NYSE:VZ).
- see this FT article (reg. req.)
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