AT&T could be looking to generate some short-term cash with a possible sale of its more than 10,000 cell sites, according to published reports and analyst predictions.
Last week a number of analysts noted that AT&T could be looking at ways to generate cash flow in a move to keep pace with industry consolidation from T-Mobile USA/MetroPCS, a pending deal between Softbank, Sprint Nextel and Clearwire, as well as noise that Verizon Communications was looking at picking up the 45% stake in Verizon Wireless currently controlled by Vodafone Group.
“What will AT&T’s response be?,” queried Macquarie Equities Research in a research note. “We do not believe that AT&T would sit idle while its top three competitors all participate in major consolidation and improve their competitive positioning in wireless. AT&T has a revenue growth problem, in our opinion, and even buyback-driven [earnings per-share] growth will pale in comparison to [Verizon’s] EPS growth. We believe AT&T will look north and south of the border or out west rather than across the Atlantic or Pacific as recent press reports have suggested.”
One thought was that the company could unload its tower assets, something that has become common for carriers looking to focus their efforts and raise a bit of cash. Sprint Nextel sold off 3,300 towers in mid-2008 for $670 million, while T-Mobile USA last year sold 7,200 towers for $2.4 billion.
The Wall Street Journal reported that AT&T management’s hinted to investors that it could be looking at selling its multi-billion dollar tower package. While AT&T did not specifically site a potential tower sale in the report, the telecom giant did note that there were options on the table.
“We’ve seen others in the industry sell non-core assets, and if we wanted additional flexibility, that could be an option for us, too,” AT&T spokeswoman McCall Butler said in a statement to The Wall Street Journal. “The bottom line is we have attractive assets that could be a potential source of cash.”
AT&T last week was rumored to be looking to invest up to $3.5 billion in soon-to-launch Indian operator Reliance Jio Infocomm, a rumor that surprised many analysts due to the convoluted nature and competitive environment in India’s wireless market.
AT&T is also in the process of acquiring 700 MHz spectrum assets from Verizon Wireless and announced in January plans to acquire spectrum holdings from regional carrier Atlantic Tele-Network.
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