T-Mobile's Cell Towers Are Up For Grabs
August 2, 2012

T-Mobile In Talks To Sell Off Cell Towers

Lee Rannals for redOrbit.com - Your Universe Online

The Wall Street Journal reports that T-Mobile is closing in a new deal that would see the company sell-off 7,000 cell towers.

The report said, citing sources, that the deal could net T-Mobile $2 billion, and cut down on costs related to maintaining the towers.

So far, tower operator Crown Castle International is the lead bidder for the T-Mobile towers, according to the report.

The Journal said T-Mobile's talks with Crown Castle have moved to advanced stages, but the company is still weighing bids from other rival operators, such as American Tower and Global Tower Partners.

T-Mobile is currently the smallest of the large carriers in the U.S., and the only major provider that doesn't sell Apple's iPhone.

The report said that it is still unclear exactly how the deal would be structured, because tower deals tend to be very complicated.

Tower companies typically trade at a multiple cash flow, the Journal said, and Evercore Partners analyst Jonathan Schildraut said the company's towers could generate around $110 million to $120 million a year.

T-Mobile said back in February that it would be upgrading its network to the high-speed technology LTE over the next several years.  Other companies have already begun implanting this new technology, and devices like Apple's iPad already use these services.

T-Mobile tried merging with AT&T late last year, but that deal collapsed due to critics worrying about what implications such a large merger could have on the rest of the mobile industry.  The company was given $1 billion worth of spectrum from AT&T as part of its breakup fee, but analysts say that it isn't enough to meet T-Mobile's needs, according to the report.

The original deal for AT&T to buy out T-Mobile was a $39 billion bid, but regulatory opposition squashed the proposal.

The Journal said it could take months before a deal is reached for T-Mobile's towers, but the sale is expected to happen regardless of whether any of those talks pan out.

The money T-Mobile would receive through selling its towers could help it buy spectrum it has agreed to take from Verizon Wireless, in exchange for T-Mobile's support of Verizon's proposed purchase of spectrum from Spectrum Co.