Big 3, private tower firms all likely keen on T-Mobile USA tower sale

T-Mobile USA Inc. indicated that it is interested in selling anywhere from 3,500 to 5,000 of its towers in the United States-a sale that could bring upwards of $1 billion to the No. 4 carrier as it continues its plans to deploy 3G services on recently acquired spectrum.
In a conference call for its annual financial report yesterday, the carrier’s German-based parent company, Deutsche Telekom, indicated that it has numerous cost-cutting plans in place to help it reach its goal of saving $2 billion this year and up to $5 billion in costs by the end of the decade. Along with numerous other assets the company is considering selling, it said its towers in the United States do not fit its current strategy.
“We’ve been saying all along that T-Mobile should consider selling its towers,” said Mark DeRussy, an analyst at Raymond James & Associates. “Considering T-Mobile wrote a pretty big check for the last auction, this could help pay for that.”
T-Mobile was the top bidder in the Federal Communications Commission’s spectrum auction that concluded last summer. The carrier is planning to use the spectrum in its upgrade path to 3G, but it could still be a year or so before the network comes online.
“This is the first time T-Mobile has said their towers aren’t strategically located and that they’re willing to sell them,” DeRussy said. “I think all three of the public guys are going to want a front seat at those negotiations,” he added, referring to the big three tower companies: Crown Castle International Corp., American Tower Corp. and SBA Communications Corp., which together own roughly 50,000 of the 80,000 towers in the United States.
“The more provocative possibility is you’ve got a small private tower company (Global Tower L.L.C.) backed by a very large private-equity firm that has roughly 2,000 towers. If they were able to do this deal, they would have tremendous scale. It could provide a platform for that company to think about going public,” DeRussy said.
“I wouldn’t be surprised if there isn’t already a book circulating out there,” he said, adding that T-Mobile USA has been putting other carriers on its towers recently, which would make it more valuable to a potential buyer.
“The opportunity to purchase a portfolio of this magnitude doesn’t come along every day or every year,” he said. “I think it’s got the potential to have a significant impact on the tower sector in the next six to 12 months. It further shows that carriers are willing to outsource more and more of their infrastructure.”