T-Mobile Tower Deal Leases 7,200 Locations For $2.4 Billion

T-Mobile USA has agreed to sell the rights to operate 7,200 of its wireless towers to Crown Castle International Corp in a deal worth $2.4 billion. In the deal announced this morning, Crown Castle also gains the option to pay another $2.4 billion to buy the towers from T-Mobile USA outright at the end of a 28 year term for each tower for another $2.4 billion.

The towers will support enough space to accommodate at least one more wireless provider on each tower without requiring significant incremental capital according to Crown Castle.

As part of the terms of the agreement, T-Mobile committed to maintaining its equipment on the towers for at least 10 years with annual rent increases tied to the consumer price index. Furthermore, T-Mobile’s rent includes the rights to complete its current network modernization on these sites.

T-Mobile says they will use the money from the deal to accelerate its efforts to launch LTE and continue their network modernization project, otherwise known as their refarming. The company will also use some of the acquired cash to pay down some Deutsche Telekom corporate debt.

“We are pleased to reach this mutually beneficial agreement with Crown Castle and take another step closer to realizing the bold vision outlined in our Challenger strategy to solidify our competitiveness in the industry by investing in areas where we anticipate the strongest return for our customers,” said John Legere, Chief Executive Officer of T-Mobile USA.  “T-Mobile USA is working aggressively to make our 4G network stronger, faster and more dependable for consumers, and this transaction will support our ongoing $4 billion network modernization initiative that is the cornerstone of this effort as we work tirelessly to continue to deliver our amazing 4G services nationwide.”

To hopefully avoid any confusion, this deal should have absolutely zero impact on your service, in fact, if you never knew this deal took place, you wouldn’t notice anything service-wise that cause you to stop and pause.

Full Press Release:

CROWN CASTLE AND T-MOBILE USA ANNOUNCE $2.4 BILLION TOWER TRANSACTION

  • Reinforces Crown Castle’s position as largest provider of wireless infrastructure in the US  
  • Urban-centric portfolio with 83% of the towers in top 100 US markets and 72% in top 50 US markets  
  • Strengthens T-Mobile’s position within the US market by helping to support funding of previously announced growth initiatives 
  • T-Mobile to continue focus on network modernization, LTE launch in 2013 and other previously announced initiatives

Crown Castle International Corp. (NYSE: CCI) and T-Mobile USA, Inc. (“T-Mobile”), a subsidiary of Deutsche Telekom, AG (“DT”), announced today that they have entered into definitive agreements pursuant to which Crown Castle will acquire rights to approximately 7,200 T-Mobile towers for $2.4 billion in cash at closing (subject to certain adjustments).  Under the definitive agreements, Crown Castle will have the exclusive right to lease and operate the T-Mobile towers for a weighted average term of approximately 28 years.  In addition, Crown Castle will have the option to purchase such towers at the end of the respective lease terms for aggregate option payments of approximately $2.4 billion, which payments, if exercised would be primarily between 2025 and 2048.  The transaction is expected to close in fourth quarter 2012.

“We are pleased to reach this mutually beneficial agreement with Crown Castle and take another step closer to realizing the bold vision outlined in our Challenger strategy to solidify our competitiveness in the industry by investing in areas where we anticipate the strongest return for our customers,” said John Legere, Chief Executive Officer of T-Mobile USA.  “T-Mobile USA is working aggressively to make our 4G network stronger, faster and more dependable for consumers, and this transaction will support our ongoing $4 billion network modernization initiative that is the cornerstone of this effort as we work tirelessly to continue to deliver our amazing 4G services nationwide.”

“We are very pleased with our agreement with T-Mobile, which strengthens our position as the largest provider of shared wireless infrastructure in the US, which we believe is the largest, fastest growing and most profitable wireless market in the world,” stated Ben Moreland, Crown Castle’s President and Chief Executive Officer.  “Consistent with our focus on the top 100 US markets, the T-Mobile towers are similarly well-located, with 83% of the towers in the top 100 markets and 72% located in the top 50 markets.  The T-Mobile assets are expected to provide significant growth driven by the continued demand for wireless data services, particularly in the most densely populated areas in the US.  While this transaction increases our tower count by approximately 33%, the transaction consideration represents only approximately 9% of our enterprise value.  Further, we expect the impact from the contemplated transaction and related expected debt financing to be accretive to our 2013 adjusted funds from operations per share and approximately 5% accretive to our long-term adjusted funds from operations per share.”

Crown Castle expects to fund the transaction with cash on hand and debt financing.  DT will use the proceeds from the transaction to retire corporate debt and strengthen its financial position to provide for funding of growth investments, including T-Mobile’s Challenger strategy.

Following the contemplated transaction, Crown Castle will continue to be the largest wireless infrastructure operator in the US with approximately 30,000 towers and extensive small cell operations in over 50 markets.  T-Mobile’s nationwide network remains unchanged today, consisting of approximately 51,000 cell sites, the vast majority of which are leased from third parties, as is common in the industry across the US.

Crown Castle estimates the T-Mobile towers will produce approximately $125 million to $130 million in adjusted funds from operations (“AFFO”) before financing costs in 2013, and have sufficient capacity to accommodate at least one additional tenant per tower without significant incremental capital.  T-Mobile has committed to maintain its communications facilities on the towers from Crown Castle for a minimum of 10 years with annual rent escalation provisions tied to the consumer price index.  Further, T-Mobile’s rent includes the rights, subject to certain limitations, to complete its current network modernization on these sites.

It is expected that the net effect of this transaction, as reported under US GAAP, will not have a material impact to adjusted OIBDA or annual operating income in 2012 for T-Mobile USA.  DT reports results under IFRS.  The transaction is expected to result in a material gain impacting Net Income and EBITDA under IFRS for 2012.

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  • tomarone

    7200 is a lot of towers! is this good or bad?

    • TMOLOYAL

      It is good. T-Mobile still gets to use the towers as they have been being since day one and they get a large cash infusion.

      • eanfoso

        But wouldn’t the renting of towers be more expensive over time???

        • TMOLOYAL

          Maybe in the way distant future, but right now T-Mobile is in need of cash to really roll out LTE and keep up with the industry. I think as part of this deal T-Mobile is not having to shell out a lot of extra rent to be on these towers and they get to remove the OPEX of maintaining these towers from the budget. At the end of the day owning and maintaining towers is not T-Mobile’s core business. If they can sell the lease rights of the towers and grow the side of the business that pays the bills then this is win, win.

        • bleeew

          So basically its like they borrowed money, but wont have to pay more in the long run, where as they would go to the bank and borrow 2.4 billion and pay more interest plus the 2.4. so this is a way of getting the 2.4 they need now for lte right? Hopefully new subs come in.

        • UMA_Fan

          I would imagine the hope is whenever T-Mobile gets to the point in the long run where renting out the towers is more expensive than owning them, they would have grown as a business to the point where it wouldn’t matter.

  • http://www.jaxidian.org/update teh Jax

    Short-term, this is obviously good. They lose nothing and gain lots of money. But what does this mean longer-term (10+ years) for T-Mobile?

    • Deceptivesmiles

      Right now this is good, as far as the 10+ yrs, let’s cross that bridge when we get there. Smart move by TMO, starting to act like a big fish instead of a guppy

      • BigMixxx

        Totally agree.

        Having just a couple of lease agreements in the workhouse, Leasing towers back in, with some low interests rates on the leases, on some equipment at work with our partners, in terms of 5 and 15 years, KEEPS capital and reduce massive expenses…it is worth every drop.

        They are doing the three R’s…Reading, Righting and arithmetic. (See what I did there…3 r’s….lol)

        • Tbyrne

          2 r’s and 1 a, but close enough Big M.

    • BigMixxx

      This increases the net present value of the company. cook the books to make them look good. They probably will hold on to these funds, then, more than likely, ask banks for money, because the bottom dollar looks REALLY good.

      7,200 towers for 2.4 billion is a great deal, given the present economic conditions, and given sprint in 2008, sold nearly all of there towers for less than a billion.

      There HAS TO BE VALUE in T mobile if crown gave them 2.4 billion.

      • http://www.jaxidian.org/update teh Jax

        Keep in mind that T-Mobile is now renting the towers back from Crown for at least 10 years, so a chunk of that money (I’m sure nobody knows how muhch) will be flowing back in as well.

      • Alcorn-Alum

        There you go spewing nonsense. Increase thier Net Present Value? Do you even know what that means are did you just read that word from business section of a newspaper? Cook books? You know what that means? Are you accusing TMO of fraud. Damn dude you say some of the dumbest things on this blog. 90% is ignorant garbage.
        If you knew anything about business you would realize by and large this is a simple financing transaction. Why would they go to the banks now that a) they have more cash on balance b ) less assets to borrow against? You really don’t know much about business and it shows. When you do talk about phones strictly you do sound more reasonable. But as soon as you try to add some business sense you lose the script. I’m embarrassed for you.

        • Mirad77

          We are not in Harvard business school here but there is sense in what BigMixx said rather in poor words. Tmo can present say $1.4b to a bank in prospect to finance a project of $5b, this answer question part a. For part b, 30 million contract customers is an asset mind you plus the fact that we only get to see buseness’s FI ( as in FICO) where as the CO is for internal use(cooking book) but doesn’t imply any wrong doing. Given also that Tmo FI is part of DT.You and I are not part of Tmo so anything we say here is based on speculations and wishes. Have a nice wkend bro’.

        • Alcorn-Alum

          I’m not even going to try explaining simple concepts to you – and it’s not cause your not a Harvard student. You’re just way off, even more than Biggy. Not sure what I can say to even help you. Perhaps you would benefit from taking a business 101 class at your local college.

        • Mirad77

          Bro’ I don’t personally come to this blog to study rather to get informed of latest news as regards Tmo. I think you know too much business for your on good and fail to understand certain things. My drive home point was that with all the business savvy that you or any other person on this blog have is ( unless you are the CFO or CEO of Tmo) we are all speculating and wishing on how we see fit of what went down as non of us was there when it happened. They just sent out the spoken terms of their deal and you cannot use that to dictate what the specifics of the deal is. Calling others names and insulting them doesn’t drive you point, it rather paint your picture.
          PS Hope you know the difference between spoken and written English and their uses before insulting me.

        • Alcorn-Alum

          My point is, it really is a simple transaction. No inside information required. The company made a rent or own decision like we all do at some point in our lives. Biggy is accusing TMO of committing fraud by using terms that denote that: cooking books. “Cooking books” is a serious accusation and it extremely misinforming some people that will accept what they read on the Internet. You pretty much agreed with Biggy’s assessment. He is very misinformed in this specific matter. It’s not a bad thing to not understand finance, accounting or business strategy. It’s not a crime. But to pretend to understand something and misinform is horrible. Biggy has some good understanding on phones and the technical things involved with phone, but when he goes off on trying to tell TMO what to do he’s way off or in this case misinforming.

          I personally come here to learn about a few things. What service changes TMO is making. What devices might TMO be getting. In general, what direction is the company taking. I learned about this blog particularly bc of my apprehension with the TMO and AT&T merger. So I pay particular attention those topics. I really don’t post comments, but I on occasion will respond to comments that are way off. Biggy accusing the company of fraud is just wrong, bc the transaction is pretty straight forward and simple from a business perspective. It is not cooking the book, but a simple financing decision – rent or own, nothing more.

          Don’t be offended for not understanding this, it’s not a big deal. Perpetrating misinformation though is another thing and I will comment when it’s pretty clear.

        • BigMixxx

          Let me see…I’ll defend my point…..

          Garbage, eh? Let me defend my position. IF this were a simple financing transactions, you would ACTUALLY let TMO U.S.A. go public and drive income from that. OR you would leverage the assets of TMO U.S.A. as DT did themselves some time back…

          This is about increasing margins, getting some captial to sit on, helping DT and at the SAME time investing in infrastructure the smart way. Look at sprints position. They HAVE spent every dime they had, books look bad, profits are down twice from where they were last year….Imagine if they hadda pulled the buy trigger on MetroPCS. Sprint would have folded under.

          THE RIGHT THING TO DO IS:
          Increase Net Present Value. You can find that definition anywhere. upgrades are expensive, those type of investments are both demanding on the financial arm of the company AND people. This type of expenditure brings the overall investment value of the company down AGAIN look at Sprint. (How do you gain customers and still lose money)

          MOST large companies try there best NOT to use cash reserves to fund projects, especially major infrastructure investments; they actually bring NO value into the company, you just look good.

          Based on that thought alone, let’s just say ALL of this cash was going back to TMO U.S.A. Why would I, as a CFO, say, let’s spend DOUBLE and a half, (’round 6.6 billion 4 billion estimated and an addtional 2.4 I just got) all on infrastructure and investments, when I can go borrow what I REALLY need from a bank, at low interest rates, especially these days, and pay it back over time. I could borrow ALL, some, open a serious credit line, of the planned investment and pay it back in very little payments, and keep refinancing that debt as the interest rates fall or rise…Dangerous game, but TMO couold keep cash reserves high, decrease quarterly margins by 1 or 2 percentage points, but remain solvent and in a good financial position. PLUS TMO keeps gaining money on the cash I have in the bank! Compound interest is a mother.

          Yes, it’s a form of cooking the books, especially when you get free money for it.

          Now defend your position: Simple financing transaction of only selling towers in certain areas and getting 2.4 billion for those towers? which means you could have sold them all for significant profit… Sprint sold 25% more towers and got 3 times less, to a larger company. There is value in those tower positions that gained them optimal cash. Those funds will go between a funding model that prime for TMOusa and debt payments DT.

          You never know. They may even buy metroPCS.

        • Alcorn-Alum

          I know what NPV means. Clearly you don’t. You don’t derive income from going public – that’s a stupid misunderstanding on your part. You clearly don’t understand basic business principals. Most large companies don’t fund investments from cash? WTF, who miseducated you? They do this all the time, and if they dont have enough they raise funds by borrowing, going public, or in this case selling assets. Nothing is free dummy. They did not do a sales-leaseback for free. At the end of thier agreed upon term Crown will own the towers if they exercise the purchase option. That is hardly free! Very few things in life if any are free.
          Everything you wrote in defense is hogwash and a complete indictment of your business un-savvyness. Then you describe something simple, a financing transaction, as “cooking books.” They did not just commit fraud by selling towers. Maybe in your mind, but not in the real world. Why do you even bring up Sprint? They are irrelevant to the simple things we are discussing, that you seem to lack even the most simple understanding.
          Dude, you make some sense when discussing phones. But when you discuss business, I’m sorry bro, but you are way off.

        • BigMixxx

          @jon

          Dude, really, look at this. I only say this to prove a point…
          (then I’m jumping on an airplane to celebrate my Grandmothers homegoing…:-( — So if you are in the Memphis Area, I can chart it out… )

          You have to first look at sprint and compare what sprint is doing and what t mobile is about to do. Sprint’s model is driving them in the ground. Sprint can’t
          borrow anything from anyone. They are taking at there infrastructure revitalization projects alone, they’ve showed that the cash reserves are growing by
          cutting costs and selling towers. And are taking a beating for it.
          AGAIN, HOW DO YOU GAIN CUSTOMERS and NOT MAKE MONEY. It is as simple as
          Sprints captial investments (WiMax, iPhone, LTE) and operational costs
          (an nasty amalgamation of networks) are quite a bit higher than they’ve
          been and they could not borrow to build.

          Operating costs for T mobile is approaching is at it’s highest, and they are losing customers. Sell the towers, it makes sense. Reduces operating expenses, that’s a very good move. TMO is getting a premium for SOME of the towers… AGAIN sprint sold 25% more and got 25% of what seems to be the full value..

          I MAINTAIN my thought. Not saying T mobile is trouble, increasing the companies value by putting money on the books, then reporting a X dollars in the bank is a VERY good thing, Especially when you need funding, and your parent company is in a bad position, PLUS there is no one to partner with…This is something sprint was looking to do, but they did not have enough cash to show their value…

          Borrowing for your infrastructure needs, reduces capital significant expenditures, thereby making the books look better…

          Now having SEEN this with my own eyes, keeping a company solvent while the hardest portion of the recession hit, the model works. You have to remember, but you already know, infrastructure costs are a tremendous hit to any company, especially, when you have not seen real growth since 2009. Spending as a whole has been stalled by a failed purchase by AT&T so the best thing to do is leverage infrastructure, bank money and borrow to build. What’s not available, again, no one to partner with and share services, you can’t do any IPO that makes logical sense, there are no shares to issue or DT is in a position to issue to fund anything, you cannot cut costs at the risks of losing customers, OR worse case a leveraged buyout. (Blackstone has part of DT, TPG, Appolo or KKR, probably don’t want any part of it)

          To keep the doors open and projects going, show your value to the bank and asks banks to help by investing their money.

          Having LOOKED at many companies offer additional shares of the
          company to fund projects, partial IPO’s of the company to fund projects, especially large capital expenditures…YES it does happen, especially when you are cash strapped as T mobile is, including the parent company.

  • mikkej2k

    In total T-Mobile has 37,000 sites in its network. 7,200 are the ones they own. Also , other carriers have similar lease deals so there is no reason to panic.

    • http://tmonews.com David

      Much agreed.

      • http://pharaohtechblog.blogspot.com/ Conan Kudo (ニール・ゴンパ)

        Don’t forget that this transaction will cause T-Mobile to have a massive drop in OPEX next year. T-Mobile won’t have to pay for maintaining them anymore, only to upgrade them and lease them.

        • TMOTECH

          And I think that since we are leasing these towers to Crown we don’t have to pay them rent to be on the tower. So Win Win Win!!!

        • bleeew

          So, T-mobile doesnt get anything since the rent is in the lease?
          It doesn’t make sense.
          Its like if i own apartment complexes and lease them to someone, and they maintain it, I would have to pay rent to live in it, or make some sort of deal to be live in the apartment.

        • TMOTECH

          We are getting 2.4 Billion dollars. I would say that is something.

        • BigMixxx

          PLUS NPV is 2.4 billion richer. Makes T mobile more investment grade and keeps T mobile solvent.

          There is a dude that is doing some good nots and crosses in the company. (that’s Jethro from the beverly hillbillies for math)

    • TMOTECH

      Actually, we have 52,000 cell sites in our network. 37,000 are 3G and getting the modernization treatment and LTE in round one.

      • Gunner Joe

        I’ve heard you mention phase one or round one of modernization before, are there plans for a phase two? Do you have an idea of what that might entail?

        • TMOTECH

          There is always a phase 2 in every big project. Phase 2,3,4 will be to continue to modernize every site in the network once all of the planned markets are complete. And then hopefully start to build new sites again. This is my educated speculation based on what I know about our legacy equipment needing to be replaced eventually and T-Mobile needing to be able to compete in every market.

        • http://pharaohtechblog.blogspot.com/ Conan Kudo (ニール・ゴンパ)

          I really wish T-Mobile would upgrade my market. It sucks being on the only carrier in the area without 3G/4G services.

        • Alex B

          Are rural areas part of any of these phases? If history is any guide, new wireless technologies always come to metropolitan areas, then some highways, and then they stop. Lather, rinse, repeat – and suddenly you have a network where metro areas are using a technology that’s about 6 iterations newer than what exists just miles outside those same metro areas. (EDGE, GPRS)

          I’m certainly not expecting Tmobile to drop LTE in the boonies anytime soon, but it should would be be nice to get off of EDGE completely and replace it with at least some form of HSPA…

      • bleeew

        How many do they actually own? And the others are temporary until they renew a license?

  • gnd

    More money? Good, now they can payoff Apple to get the I Phone! I don’t care if you like or dislike the phone, T-Mobile MUST carry this. It looks stupid if every other carrier in the country carries it except for them! http://www.bgr.com/2012/09/28/iphone-5-release-date-2012-us-international/

    • Chis

      It’s like you didn’t read the article. They are using the money to help launch their LTE network and complete its refarming. And then this will lead to a network that can fully support the iPhone.

      It’s pretty stupid to carry a phone that your network can’t support. Especially if you have to pay billions for it.

      • philyew

        Not to mention that, just as was the case with the cash settlement from the AT&T breakup, some of the money is being siphoned off to reduce Deutsche Telekom’s debt in Europe.

        Agree 100% that their priority has to be the network, but I also hope that the re-farming phase is the game-changer that gets a much better price demand from Apple for the AT&T version of the iPhone 5, compared with previous requests where they would have been looking to have an iPhone customized with 3G/HSPA+ on the AWS band.

        I don’t personally need the iPhone, but I am more convinced than ever that they need it to stop the bleeding. Last weekend’s “All Hands” response in TM stores to counter the iPhone 5 launch seems to have been a joke, with the busiest TM store in my area hosting just one customer when I walked by during peak shopping hours.

    • Ford_Thundercougarfalconbird

      The iPhone on T-Mobile will never happen.

      Accept it and move on with your life.

      • TMOLOYAL

        Well said.

      • philyew

        What do you mean? The iPhone sold by TM or the unlocked iPhone supported by TM? The latter is going on right now.

        • Ford_Thundercougarfalconbird

          The iPhone sold by TMo. It will never happen.

        • Tony

          Actually it might happen. Verizon wireless’ deal with SpectumCo to purchase the remaining AWS bands and transfer some of the spectrum to T-Mobile has been approved. Although Verizon’s LTE network is rolled out on 700MHz spectrum, their national footprint of 1700/2100 AWS spectrum after the deal might make the next version of iphone compatible with this spectrum should Verizon request it of Apple. If that should happen, then just maybe Apple would bring the device to T-Mobile since it would already be compatible with the T-Mobile network. This way Apple wouldn’t have to make an iphone specifically for T-Mobile. I don’t know how Verizon plans on using all of that AWS spectrum but there is hope that somehow the deal could help T-MO get the iphone. Also, by the time the next iphone is released T-MO’s network will be 100% refarmed which would make the iphone compatible anyway but I’m not sure Apple would want their device running on HSPA+ only in 2013. I’m not interested in iphone but would love to see it come to T-MO for the health of the company.

          http://www.fiercewireless.com/story/fcc-approves-verizons-39b-aws-purchase-t-mobile-spectrum-swap/2012-08-23

        • bleeew

          Nope, Anyways Verizon would throttle those bands for unlimited users, and they might lock that band since that is the band without the “unlock” policy. And it will be on T-Mobile is they agree with Apple or vice versa. Not everything will be refarmed, its just most of its network. And why would Apple care if it still runs HSPA+? If T-Mobile does pay then Apple will be happy. Applr doesn’t care that Sprint has 2G speeds on a 3G network, or that they barely have LTE. And they don’t care Cricket has half of it’s network to support it.

      • watch me

        End of 2013 iPhone on T-Mobile …. My dm said

        • Ford_Thundercougarfalconbird

          Liar.

    • GwapoAko

      If you want iPhone just buy it from Apple Store, Ebay or Craigslist. A lot of iPhone users are already with Tmobile.

    • TMREPKC

      T-Mobile is smart not getting the iPhone because it would only help with the short term of keeping customers or adding some customers. Sprint did a deal with iPhone that was around 15 billion dollars. Crazy money. If we added the iPhone, the prices on the rate plans would of course go up to pay off the debt. As a T-Mobile sales rep I would love to get it because that means more money in my pocket but over all not a good for T-Mobile as a whole. People can get an iPhone and transfer it over to T-Mobile and T-Mobile would not have to pay a dime to Apple. By not adding apple to our line up we are able to get more phones like Note 2 and new Windows phones. Since T-Mobile right now is really lacking on good well known phones would it be worth adding one amazing phone to the line up or adding a lot great quality phones? I don’t know this is just my opinion on this subject.

      • watch

        The deal was for 20 million.

        With value plans not subsidizing handsets and reframing the I phone wouldn’t be as costly

        • TMREPKC

          the deal was around 15 billion for 30 million iPhones

  • Nick

    Anyone know of a website that plots all of Tmobile’s towers on a map?

    • Get_at_Me

      there’s an android app called tmobile towers….that might help u out

    • Secret Shopper #42

      RootMetrics makes a great app called ‘coverage map’. It’s very well done and uses a combo of crowd sourcing and their own testing to reflect actual speeds and coverage versus theoretical. It also lets you compare coverage across major carriers.

  • mreveryphone

    Nice play tmo, nice play

  • bruce_leer0y

    good stuff

  • Jarhead

    It’s about time we hear about the network

  • Aurizen

    good job tmobile, i was hoping some of that money would go to getting the iphone on but oh well. maybe after the LTE is out.

  • DJ Lawless Oneâ„¢

    Why are people so worried about getting the iPhone on T-mobile? If you’re looking for one on an unlimited plan you can get it on Verizon with unlimited minutes, text, and pix, with 5 GB of data to share on 2 lines for $160….. the same price as Tmo’s unlimited plan. Just switch!

    • bleeew

      Yes, but people are dumb.
      Today I heard people comparing Sprint, AT&T, Verizon, but they forgot about T-Mo’s existence.
      1. People want coverage
      2. People do want the iPhone. Today, my friend was going to get a GS3 on T-Mobile, but went to Verizon instead, because it had the iPhone 5, and left Sprint because of how slow it was. And if someone gets the iPhone, then the only thing to care about is LTE, and his dad pays for his 8GB share plan, since his dad has an AT&T iPhone and his mom has a Sprint iPhone.
      3.People are dumb about not knowing how much they save by buying unlocked phones. And some just don’t know about T-Mobile value, and dont think they will save money.
      4. Everyone is brainwashing with these LTE commercials. And not that many people go over 2GB’s a month.

  • mattcat03

    ” The company will also use some of the acquired cash to pay down some Deutsche Telekom corporate debt”. This looks like one step forward and two steps backward. All the proceeds should go to the LTE deployment as well as improve coverage and their ability to penetrate through enclosed locations. Paying the parent company debt is not a good for Tmo Usa since it needs all the resources to compete and implement planned objectives.

    In addtion a 10year lease to use the towers does not seem like a positive outlook for Tmobile. After 10 years where are they planning to go?

    • http://pharaohtechblog.blogspot.com/ Conan Kudo (ニール・ゴンパ)

      What in the world are you talking about? Of course Deutsche Telekom needs to have some of the debt paid off. Otherwise, how will it be able to prove that all of its units are working to bring the Group to profitability and to encourage further investment in T-Mobile USA?

      • mattcat03

        This is disposal of asset not a revenue center profit. The difference is huge. The parent company already takes a portion of the bottom line. This should just be reclassification of Tmo Usa assets so that they have cash for future growth.

      • mattcat03

        Now if Tmo Usa needed to pay off their Intercompany Liability with the Parent company, thats different.

    • http://rpad.tv/ RPadTV

      This is a very reasonable analysis and I’m surprised more people aren’t thinking in these terms. Cashing out an company’s asset to clearly benefit the parent company and vaguely benefit the asset-holding company isn’t something T-Mobile USA fans should be jumping for joy about.

      • Alcorn-Alum

        Its off base and unreasonable. What analysis? There is nothing wrong with TmoUSA using a portion of the proceeds to repay parent company debt. DT shareholders own DT and all it’s subs, so there is nothing wrong with doing this. It’s not taking one step forward to take to step backs, even if you think that sounds catchy. It’s wrong. There is nothing wrong with TmoUSA using the proceeds to repay parent company debt. DT owns TmoUSA it can do whatever it wants. Anyway, the proceeds will be used for a few things like funding growth and repaying patent debt. Sounds like sound business policy, even if us TmoUSA customers prefer 100% to fund domestic growth. That’s unrealistic and unreasonable.

        It’s laughable though for mattcat03 to go off on an irrelevant accounting discussion. It does not change his less than sophisticated assessment of the use of proceeds. It’s a good move and not a step backwards.

        • http://rpad.tv/ RPadTV

          Who said anything about it being “wrong”? That’s not the point. The TMo USA customers celebrating this move are wrong in being so joyous about it. Just look at some of the comments in this thread. Some people think all this money is going to the LTE build out. It’s not.

      • UMA_Fan

        Actually way back before the at&t merger Philip Humm announced this move… the plan was to sell/lease back the towers to raise capital for spectrum purchases and all that stuff…

        For all we know, the cash raised from this transaction will pay for Spectrum from Verizon.

  • wsj

    stupid, stupid, stupid

  • http://twitter.com/LarsKelley Lars Kelley

    This is all about lower costs. As all these towers can at least support one more carrier. So instead of T-Mobile paying 100% of the costs of the towers, now the future rent is subsidized by the possibly of other carriers renting the tower as well.

  • jon

    Only the insane can take a story about towers and twist into another “get the iPhone” blabber. You iPhone freaks do us all a favor; go get the new iPhone on another carrier, open up the apple maps app, and get lost for good!

    • note_lover

      LOL!!!!

    • bleeew

      Umm actually Apple maps is not that bad. Either way you will end up on a carrier with more service.

  • JBLmobileG1

    This all sounds fine now and a great way to make a quick buck and have your cake and eat it too, but what about in the long run and in the long term? Doesn’t Tmobile see themselves as a company even if it’s in the distant future? Personally I think this will cost Tmobile. I only hope they have a plan in place for the long term.

  • DL

    Im jumping on board now. Unlimited everything for $49 a month at dlaunlimited.com

  • http://profiles.google.com/truckeemike mike s

    DT needs to quit dipping into T Mo’s income. I call B.S.

    • unknown

      DT owns T-Mobile. They can do whatever they want.

      • DeLonta Ransom

        “DT INTERST IS IN THE AMERICAN MONEY NOT THE AMERICAN MARKET AND PEOPLE”

        DT is a company with no morals so dont expect them to do anything but to love money. Thanks T-Mobile USA CEO for exposing the company for the biggest fail with AT&T while customers jump ship by the boat load! DT shot theirself in the foot trying to be greedy and sale when they needed to work on infrastrucutre and better phones to whole time. The debt paying back is total BS! How can you try to sale a profitable company then lease that companies towers to pay back debt owed by another portion of the company! Yes you can do what you want with your company, but what they have been doing isn’t working and won’t until they invest heavily behind taking AT&T and Verizon customers. Until then we’re all still playing LTE catch up for the next two or three years. Some may not agree, but truth is T-Mobile USA needs to bought by someone who will actually care about the company and the consumer as whole in the market. Maybe the Metro merger rumors would benefit us the customer more then them the business. Just a thought though, Im not an expert I just hate to see companies do this with American money after they tried to get rid of us!

        • philyew

          DT paid out $55 billion to establish T-Mobile USA ten years ago, and they have been chasing a return on that investment ever since.

          Since the AT&T valuation was only $39 billion and no-one else came close, despite the company growing from 7 million to 33 million subscribers, it’s hardly surprising that DT have extracted a sizable share from both the AT&T break up fee and now the towers deal.

  • http://www.facebook.com/unfazedrebel Jé Be (Here but Gone)

    Yeah talk about shade