T-Mobile USA’s plans to bolster its network and position in the domestic market received a financial boost late last week from its parent company Deutsche Telekom, which said it plans to spend $4.7 billion in 2013 and $3 billion per year in 2014 and 2015 on capital expenditures for its U.S. operations. The investment will focus on the build out of T-Mobile USA’s previously announced network migration plans that include the deployment of LTE services.
The investment news accompanied an announcement that T-Mobile USA would begin offering Apple products in 2013, likely in line with its LTE rollout plans.
DT noted that $4 billion of its 2013 investments would be focused on the LTE network plans, echoing previous comments from T-Mobile USA regarding the cost of its network initiative, and that total investments would be a significant improvement compared with the $2.7 billion average spent on T-Mobile USA capex over the past three years.
DT noted that T-Mobile USA’s recent spectrum accumulations from a deal with Verizon Wireless and a breakup fee from AT&T’s attempted acquisition of T-Mobile USA, as well as a recent sale of its tower assets to Crown Castle places T-Mobile USA in an “extremely good position to benefit from growth.” T-Mobile USA is also looking to bolster its spectrum position through a pending acquisition of MetroPCS.
“Following on from the preceding steps such as the spectrum swap with Verizon [Wireless], the towers deal with Crown Castle and the transaction with MetroPCS that we have announced, we have now added the final piece to the jigsaw to boost the competitiveness of T-Mobile USA sustainably,” explained René Obermann, CEO of DT.
Analysts noted the news provided a denser foundation for the domestic telecom sector, especially in terms of the tower industry.
“While the company had already announced plans to spend $4 [billion] on its [U.S.] network modernization plan, we view this longer-term spend as especially positive in terms of further visibility for the tower sector’s pipeline,” noted Wells Fargo Securities senior analyst Jennifer Fritzsche.
However, a downside could come from the pending T-Mobile USA/MetroPCS deal as MetroPCS recently said it plans to decommission approximately 10,000 cell sites as part of the transaction. As for network vendors, T-Mobile USA announced earlier this year plans to work with Ericsson and Nokia Siemens Networks on its network initiatives.
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