T-Mobile’s Cell-Tower Sale Is Said to Attract Bidders

T-Mobile USA Inc. received a second round of bids for its cellular towers, attracting offers from companies such as American Tower Corp. (AMT) and Crown Castle International Corp. (CCI), a person with knowledge of the deal said.

The unit of Deutsche Telekom AG (DTE), which owns about 7,000 antenna towers in the U.S., has also received bids from private- equity firms, said the person, who asked not to be named because the discussions aren’t public. Selling the assets could raise about $2 billion, according to Kevin Smithen, an analyst with Macquarie Capital in New York.

Deutsche Telekom set out to sell T-Mobile USA’s towers after a failed takeover of the carrier by AT&T Inc. last year. The deal would help the company raise money for wireless spectrum and network enhancements, while allowing T-Mobile to rent back antenna space on the towers. The new owner could then use the assets to provide service to other carriers as well.

“I expect they will announce a winner in July and probably close the deal by September,” Smithen said.

Deutsche Telekom appointed the New York boutique bank TAP Advisors LLC to search for a tower buyer and raise cash, Bloomberg reported in March.

AT&T Deal

Cara Walker, a T-Mobile spokeswoman, and Philipp Kornstaedt, a Deutsche Telekom spokesman, declined to comment. American Tower and Crown Castle, two of the largest U.S. cellular-tower operators, didn’t respond to requests for comment.

Deutsche Telekom dropped 1 percent to 8.32 euros as of 9:27 a.m. in Frankfurt.

AT&T (T)’s $39 billion bid for T-Mobile collapsed in December because of regulatory opposition. Even as it aims to offload the towers, T-Mobile’s German parent is stepping up investments in the division. Deutsche Telekom plans to boost U.S. network spending by $1.4 billion over two years in a race to upgrade equipment and bring faster connections to smartphones.

T-Mobile, based in Bellevue, Washington, is the only large U.S. carrier that doesn’t offer Apple Inc. (AAPL)’s iPhone. That’s put it at a disadvantage to its three larger rivals, Verizon Wireless, AT&T and Sprint Nextel Corp. (S)

T-Mobile lost 1.65 million contract customers last year, a slump that’s prompting it to make cutbacks. The company said last month that it plans to trim 900 jobs. It’s also eliminating 1,900 jobs by closing seven call centers.

Even so, T-Mobile benefited from a breakup agreement with AT&T following the merger’s collapse. The company received $3 billion in cash; wireless frequencies in cities such as Los Angeles, Dallas, Houston, Washington and San Francisco; and lower fees for calls into AT&T’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 editor responsible for this story: Nick Turner at nturner7@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.