T-Mobile Said to Hire TAP Advisors to Help Sell U.S. Towers

T-Mobile USA (166783Q) hired TAP Advisors LLC to help sell wireless towers and raise cash for parent Deutsche Telekom AG (DTE), said people familiar with the matter.

Deutsche Telekom (DTE) appointed the New York boutique bank to renew the search for a buyer after an aborted effort last year, said the people, who declined to be identified because the matter is private. The disposal may raise as much as $3 billion, according to an estimate by Kevin Smithen, an analyst at Macquarie Capital USA Inc.

Deutsche Telekom halted its plan to sell assets last year after agreeing to AT&T Inc. (T)’s $39 billion bid for T-Mobile. As the deal collapsed in December because of regulatory hurdles, Deutsche Telekom Chief Financial Officer Timotheus Hoettges said the company would revisit the tower sale to help fund possible spectrum purchases and network expansion.

“They lost a lot of time last year and that creates urgency to find a solution for those assets soon,” said Jan Goehmann, an analyst at NordLB in Hanover, Germany, who recommends investors buy Deutsche Telekom shares. “This is the logical next step.”

Deutsche Telekom shares declined as much as 2.1 percent to 8.94 euros and traded 1.8 percent lower as of 4:47 p.m. in Frankfurt. The stock is still up 1.2 percent this year, valuing Deutsche Telekom at 38.7 billion euros ($51 billion).

Self-Funding Strategy

U.S. tower operators American Tower Corp. (AMT), Crown Castle International Corp. (CCI) and SBA Communications Corp. (SBAC) are potential buyers, Smithen said. Philipp Kornstaedt, a Deutsche Telekom spokesman in Bonn, declined to discuss who may be a buyer or adviser in a potential sale.

T-Mobile has considered the sale as part of its self- funding strategy, said Michelle Taylerson, a T-Mobile spokeswoman, declining to discuss details of the plan.

Fiona McKone, vice president of finance at Crown Castle, and Lynne Hopkins, a spokeswoman for SBA Communications, declined to comment. An American Tower representative didn’t return calls seeking comment.

U.S. wireless companies, including Sprint Nextel Corp. (S) in 2008, have sold tower assets to specialized companies that then charge operators for using the infrastructure. Such tower companies may be able to run them more efficiently by letting various phone companies use them.

Job Cuts

Bellevue, Washington-based T-Mobile, the only large U.S. carrier without the Apple Inc. (AAPL) iPhone, is lagging behind bigger rivals and lost 1.65 million contract customers last year. The fourth-largest U.S. wireless carrier owns 7,000 antenna towers in the U.S., Taylerson said.

Deutsche Telekom said last month it plans to boost U.S. network spending by $1.4 billion over two years to win back customers who want faster connections on their smartphones.

To make room in the budget, T-Mobile said last week it was looking to cut an unspecified amount of costs by closing seven call centers and eliminating 1,900 jobs. The operator is also benefiting from a breakup package from AT&T following the transaction’s collapse, including $3 billion in cash, wireless frequencies in cities including Los Angeles, Dallas, Houston, Washington and San Francisco, as well as lower fees for calls into the rival’s network.

To contact the reporters on this story: Scott Moritz in New York at smoritz6@bloomberg.net; Serena Saitto in New York at ssaitto@bloomberg.net; Cornelius Rahn in Frankfurt at crahn2@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net; Peter Elstrom at pelstrom@bloomberg.net; Jennifer Sondag at jsondag@bloomberg.net

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