T-Mobile USA has hired TAP Advisors to help sell its wireless towers in a bid to raise money for parent Deutsche Telekom, according to a Bloomberg report.
The report, citing unnamed sources familiar with the matter, said Deutsche Telekom had hired the boutique investment bank to help dispose of the tower assets after a plan to do so last year fell apart. There has been speculation that T-Mobile would try to sell its 7,000 U.S. towers ever since AT&T (NYSE:T) and Deutsche Telekom aborted their plans late last year for AT&T to buy T-Mobile for $39 billion. DT CFO Timotheus Hoettges had even raised the possibility of a tower sale as a way to fund spectrum purchases.
In a statement, T-Mobile confirmed that a tower sale was a possibility, but did not indicate anything besides that. "T-Mobile USA continues to evaluate a tower sale as part of its self-funding strategy, but [we] have no specific plans to detail at this time," the company said. DT spokesman Philipp Kornstaedt told Bloomberg that running towers is not T-Mobile's core business and could be handled more cheaply by a dedicated manager, but he declined to comment on a potential sale.
Analysts have estimated that a tower sale to one of the major tower companies, such as American Tower, Crown Castle and SBA Communications, could net around $3 billion.
T-Mobile isn't the first major carrier to consider selling its towers. Sprint Nextel (NYSE:S) in 2008 sold 3,080 towers to TowerCo for an estimated $670 million in cash. And in 2009 AT&T sold 235 communication towers to Global Tower Partners for an undisclosed amount.
More recently, Sprint last year amended its tower contracts with Crown Castle and Mobilitie to more quickly roll out its Network Vision network upgrade. The amended tower contracts affect more than 10,000 cell sites across the country.
Selling towers isn't the only action on T-Mobile's plate. T-Mobile said last month it will launch LTE service in its AWS spectrum sometime in 2013 as it seeks to regain its competitive edge in the wake of its failed transaction with AT&T. Deutsche Telekom will invest $1.4 billion in T-Mobile's network this year and in 2013 to pay for the upgrades, with investments totaling $4 billion over time.
Separately, AT&T also will give T-Mobile a seven-year UMTS roaming agreement that will allow T-Mobile to expand its coverage to 280 million POPs from 230 million today.
- see this Bloomberg article
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