T-Mobile mulls sale of tower assets

T-Mobile USA Inc.’s (DTEGY) tower assets are likely to get interest from the top three tower companies as T-Mobile’s tower assets are in good locations nationwide and have an operator (T-Mobile) already located on them, said tower expert Jim Fryer, president of Fryer Marketing and Media.
Deutsche Telekom CEO Rene Obermann said in published reports that the global operator could sell non-strategic assets like towers if it needed to raise more capital for T-Mobile. T-Mobile lags behind the other nationwide carriers in spectrum assets and the company needs more spectrum if it wants to build out an LTE network. The operator said it is considering partnerships to help its spectrum portfolio.
T-Mobile is the nation’s fifth-largest tower company with about 7,000 towers in its stable. The company owns strategic assets in California and the Northeast corridor, two regions of the country where it is often difficult to build towers. T-Mobile counts nearly 700 towers in the San Francisco Bay area, close to 2,000 in southern California and close to 700 in the Northeast region of the country.
Fryer noted that managing towers “comes with a lot of headaches” as companies have to deal with local planning and zoning issues, as well as comply with federal regulations covering everything from bird flight paths to lighting – issues that T-Mobile may not consider its core business. American Tower Corp., Crown Castle International Corp. and SBA Communications Inc. could conceivably buy T-Mobile’s assets, depending on how they measure up against their own tower assets. Sprint Nextel Corp. sold 3,300 towers for $670 million to TowerCo L.L.C., in 2008 as a way to free up cash for the operator.
T-Mobile has set up its tower business as a separate business, even actively seeking collocation opportunities with competitors.