T-Mobile USA considers selling cellular towers to raise funds for ‘capital spending’

By on Jan 21, 2011 at 2:37 AM
General January 21, 2011

Here’s a head scratcher. During a speech today in New York City, Deutsche Telecom CEO, Rene Obermann, told investors that T-Mobile USA would consider “selling nonstrategic assets such as its broadcast cellular towers in order to raise additional funds for capital spending.” We were under the distinct impression that cellular towers were, in fact, capital assets (especially for a wireless provider). It is also a little disconcerting that the towers were referred to as “nonstrategic.”

“We’re definitely not in a rush,” said Olbermann, “the financials [would have to] work out.”

T-Mobile USA’s CEO, Phillip Humm, promised investors $3 billion in revenue growth over the next few years; T-Mobile’s revenues have been, for the most part, flat over the past two years.

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  • http://twitter.com/DavisDarvish Davis Darvish

    I am no CEO of a wireless company but i think you need to keep as many towers as you can, unless you are talking about selling them to another company to operate the towers for you. Tmobile you already have the lowest prices and that isnt helping… YOu need better coverage, better phones, and switch your damn spectrum to 2100 MHz so at least you can be competitive and use phones the rest of the world has

    • http://www.facebook.com/profile.php?id=71500159 John Blair

      They can’t just ‘switch spectrum’. That isn’t how wireless spectrum in the US is run. They would have to buy the spectrum, or swap it, but no company in their right mind would do that. Spectrum is highly valuable, and T-Mobile unfortunately got the short end of the stick when it comes to that.

      Oh, and selling the towers to an operator is exactly what they would do. Sprint did something very similar a while back.

    • Ugmjohn

      Tmobile 3g does use the 2100 and 1700 freq.
      i don’t understand the move or thought process on this one. but ATT and Verizon have so many customers not only cause the were around from the beginning of cellular but cause not only do they have coverage in big city’s but also small country towns and main roads for family people. Tmobile has to worry about the large group of customers in the city and to easily forget about the country folk.

  • rawrrrmonster

    T-mobile, the largest 4g network nowhere in the US

    • http://www.facebook.com/profile.php?id=71500159 John Blair

      Speak for yourself. I’m getting faster speeds on T-mobile’s faux 4G than I ever could on Sprint’s WiMax.

      • Anonymous

        LoL@ that

      • Anonymous

        I’m with you John. Pay no mind to Tim. He hates everything.

      • Anonymous

        I love Android, Sprint, my Evo, Verizon, Lte, and my future ThunderBolt!

        - Sent via my Evo 4G

      • Anonymous

        As i’ve been jokingly calling today’s “4g” as fauxG.

    • Anonymous

      I echo John Blair. Speak for yourself and move out of the sticks of Iowa and into a metro area and you’ll have no problem with T-Mobile. My HSPA+ kills Sprint’s “4G”. I consistently get in the 6-7 Mbps range with HSPA+ and peak at about 9-10 MBps in my freaking living room. Sprint’s 4G gets 2-5 Mbps on a “good” day.

  • Hawk

    Maybe it’s just me, but when your company isn’t doing so hot because of crappy coverage, selling your towers should be the very last thing to consider.
    The new commercials they have out are a very pitiful stab at the phone they still cannot get. Have you seen their “4g” coverage? What’s the use of having 4g when you can’t use it anywhere?
    Geez…. And I thought sprint was going down the toilet…

  • Evilbox

    They said sell towers. Not the antennas on the towers. So basically they’d rent the space for their antennas on the towers then. This should have no affect on their coverage. They own about 44k towers through out the usa but they already lease much more than that to put their antennas on. If you figure it costs about $30k per tower to own and run per year compared to 10k to lease and run per year.their looking at a big saving if they can pull it off right. All the major carriers do this. Why do you think you see cell towers with 3to5 different carriers on it? Its all leasing the space…

  • 1T2dirtnap

    “nonstrategic”… LOL!!!

  • Anonymous

    They’re selling the towers, not selling the antenna arrays and base stations. This just means the towers T-Mobile owns won’t be T-Mobile owned anymore.

    This is going to go right back into the network for more spectrum and coverage..

  • justin

    ehh well… SPRINT DID IT years ago. The thing is that the same companies that may be interested probably have those areas covered already, so it has to be sold at a discount.

  • Big Nerd

    They probably had “g” so great that they couldn’t sustain it effectively anymore — so the sell unessential towers.

    So they focus on a particular market or geography & build a good rep, saving k, which increases the p of their stock and grow at a more sustainable rate.

  • Anonymous

    Andrew: Either you really hate T-Mobile or you are among the slower in our industry? Why do you always speak of the company with such negative spin. This is actually a good thing for the company.

    A tower sale does not mean getting rid of coverage. Towers are just the physical things where cell sites are placed. Who owns the tower is of no real importance.

    There are a lot of private tower owners here in the US but only a handful of really big ones. Some of these owners have a lot of sites in many rural areas as well.

    What this does is allow T-Mobile to lease or rent them wherever they need them all throughout the country. That means less fighting with municipalities when trying to construct their own and less money they have to pay to build and maintain them.

    • Lahbirds

      Gina,
      It can be very important who owns the tower. My situation is, I have two Entities wanting to lease my site when the current lease is up. The one company manages the tower for Verizon. I have the lease with Verizon and believe they are the owner of the steel. The problem is the managing company of the tower acts as if they have the right to dismantle the tower when our site lease is up if I should choose to lease with someone else. How do I know if this is a bluff or if it is true. The cell phone tower people can talk circles around you and make it hard for you to understand what really is going on.

      • Anonymous

        is there no way to determine whose tower it physically is? I would think that by contacting verizon themselves or reviewing the titles or rights to the physical structure you might be able to ascertain the ownership of the tower.

      • Lahbirds

        Thanks for replying Mike. We left a message with someone who works for the Managing company asking who owns the tower. We still believe it is Verizon, but to talk with this individual you would think they personally owned it. When I look our particular tower up it mentions a New Par which is affiliated with Verizon.

  • Anonymous

    Sprint did this a little while back and wishes they had them now, to make their 4G rollout easier with clearwire. Personally it’s dumb to sell away cell towers and stop earning revenues from other operators using them as well.

  • Al

    I work at T-Mobile USA and the amount of pressure they are adding to revenue, mobile broadband, and post paid acts is getting a bit ridiculous.. Especially if they start selling off towers. SMH.

  • http://twitter.com/benfpotts Ben Potts

    T-Mobile is a wireless service provider, not a cell tower operator. This is a focus on business. The future or which is specialization (i.e., specialize in service, let someone else specialize in tower operation). Makes sense from a strategy standpoint.

  • Anonymous

    I know cell operators sell cell towers back and forth to each other, especially after buyouts.

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