Big 4 tower owners likely to join the race to purchase T-Mobile's 5,500 US tower assets  
March 5, 2007 - T-Mobile USA Inc. indicated last Thursday that it is interested in selling up to 5,500 of its United States towers and the four major tower companies are racing to see who will be wearing the yellow jersey following their first round of offers to the number four carrier. T-Mobile Towers

T-Mobile's portfolio of towers, the largest group in California totaling 1,307, could bring upwards of $1.5 billion or more, according to analysts who believe that this cattle car offering could help some of the major tower owners to gain a competitive edge in many markets. The impact upon the tower owner will be substantial, they say, and could reestablish a dominant position for American Tower Corporation if they're successful in their T-Mobile negotiations. 

ATC lost it status as the nation's largest tower owner last October when Crown Castle International Corp. announced that it was purchasing Global Signal Inc. for $5.8 billion, including debt. That deal allowed Crown to surpass ATC by approximately 2,000 wireless sites with a total of 24,000 structures.

T-Mobile, known for excellent management of their towers, will be able to easily provide due diligence information. During the explosive growth of the 90s, oftentimes there was minimal investigation performed in major acquisitions when tower count was king.  Management later discovered that some structures were already over capacity or in some cases, not even built yet.

Is Global Tower Partners a player?
In addition to Crown, ATC and SBA Communications Corp., many industry observers believe that Global Tower Partners LLC, a small private company in Boca Raton, FL with roughly 2,000 towers, could be a serious contender in negotiations with T-Mobile.

T-Mobile Towers by State

AL 68 KS 72 OH 265
AR 5 KY 15 OK 145
AZ 177 LA 32 OR 133
CA 1307 MA 32 PA 183
CO 152 MD 24 RI 15
CT 35 ME 1 SC 2
DC 1 MI 85 TN 7
DE 5 MN 145 TX 763
FL 213 MO 156 VT 124
GA 130 MS 12 VA 35
HI 49 NH 7 WA 282
IA 39 NJ 87 WI 59
ID 39 NM 92 WV 3
IL 266 NV 116 WY 2
IN 51 NY 56 Total:

 5487

Source: Company records 3/5/07

Owned by New York buyout firm Blackstone Group L.P., GTP has considerable funding to provide a competitive offer for T-Mobile. The purchase would then put GTP in an easier position to go public.

Blackstone obtained a 4.5% stake in Deutsche Telekom, T-Mobile's parent company when it made its $2 billion investment last April. However, the buyout giant was required to keep its shares for two years and analysts believe that at the rate Deutsche Telekom stock has been falling, Blackstone could lose more than $400 million by then.

The investment banker is used to making upwards of 25% annual return on its investments and it might look for opportunities to position GTP for a public offering or sell the company to maintain those levels.

News services reported last October that GTP had hired Morgan Stanley to find a buyer or assess the possibility of offering an IPO. GTP's chief executive, Marc Ganzi, informed WirelessEstimator.com at that time, "The stories of our impending sale for $1.5 billion were wildly false and exaggerated. Management and the Blackstone Group have every intention of growing the business."

    T-Mobile Structures In Florida

Type of Structure

Total

Avg. Height (ft.)

Bell Tower 1 120
Guyed Tower 2 147
Tree 3 130
Light Pole 4 142
Flagpole 13 135
Self Support Tower 25 133
Monopole 165 132
TOTAL: 213

(Average) 134

Source: Company records 3/5/07

Last month, Crown had been viewing GTP as a possible buyout company, according to a senior manager familiar with the negotiations. Neither Ganzi nor Crown management would reply to the possibility of an acquisition of the country's fourth largest tower owner.

In a conference call for its annual financial report last week, Deutsche Telekom, indicated that it has numerous cost-cutting plans in place to help it reach its goal of saving $2 billion this year and up to $5 billion in costs by the end of the decade. Along with numerous other assets the company is divesting itself of, it is also considering selling its towers in Germany.
For the fourth quarter, Bonn-based Deutsche Telekom  posted a net loss of $1.2 billion compared to a profit of $1.35 billion a year ago. The carrier shocked the market in late January with its second profit warning in six months
 

 
   
     
Anritsu