T-Mobile announces plans to sell $1.8 billion in stock to invest in more spectrum

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Late yesterday evening T-Mobile announced a plan to sell common stock. In all, the company hopes to sell up to $1.8 billion worth of stock, or 66.15 million shares. The idea isn’t just to sit on a nice pile of money, instead it hopes to reinvest the money in to “capital investments, enhancing its financial flexibility and opportunistically acquiring additional spectrum.”  It’ll certainly come as good news for those of you concerned with T-Mobile’s coverage in certain areas.

Following the announcement, T-Mobile shares dropped in value by around 3.2% according to AllThingsD, and perhaps show that investors ever so slightly lost a little faith in Tmo after hearing the news. Unsurprising really.

All in all, the mid to long term view here is what’s important. The company’s looking in to as many options as possible to broaden its coverage. It’ll keep looking to acquire spectrum from other, smaller networks like the recent purchase from U.S. Cellular. It’s not been made clear if it these plans include buying spectrum at different bandwidths so that coverage isn’t just made larger, but also better and able to penetrate buildings better. I guess we’ll find out all the ins and outs as time goes on.

Via: T-Mobile

Full Press Release:

BELLEVUE, Wash. – November 11, 2013 – T-Mobile US, Inc. (NYSE: TMUS) (“T-Mobile”) announced today that it is commencing an offering of 66,150,000 shares of its common stock in a registered public offering. T-Mobile expects to use the net proceeds from this offering for general corporate purposes, including capital investments, enhancing its financial flexibility and opportunistically acquiring additional spectrum in private party transactions and/or government auctions. T-Mobile intends to grant the underwriters in this offering the option to purchase up to an additional 6,615,000 shares of its common stock.

Morgan Stanley & Co. LLC, Goldman, Sachs & Co., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the joint book-running managers for the offering.

The offering is being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (“SEC”), which allows for the offering of common stock, preferred stock, debt securities and related guarantees. In addition to the offering of shares of our common stock described in this press release, on an opportunistic basis T-Mobile may seek to raise (immediately or from time to time) additional capital through the offering of debt or equity securities in amounts that may be significant, subject to market conditions.

The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and the related prospectus supplement and other documents the issuer will file with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site athttp://www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus and related prospectus supplement if you request it by contacting: Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, New York 10014, Attention: Prospectus Department, or by calling (866) 718-1649, or by emailing prospectus@morganstanley.com; Goldman, Sachs & Co., Attention: Prospectus Department, 200 West Street, New York, New York 10282, telephone: 1-866-471-2526, or email: prospectus-ny@ny.email.gs.com.; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, telephone: (866) 803-9204; Credit Suisse, Prospectus Department, One Madison Ave., New York, NY 10010, telephone: 1-800-221-1037, or email: newyork.prospectus@credit-suisse.com; or Deutsche Bank Securities Inc., Attention: Prospectus Group, 60 Wall Street, New York, New York 10005-2836, by telephone at +1 (800) 503-4611 or by email at prospectus.cpdg@db.com.

Cautionary Language Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based on T-Mobile management’s current expectations. Such statements include, without limitation, plans, projections and estimates regarding the use of proceeds from the proposed offering. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including, without limitation, prevailing market conditions and other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential risk factors that could affect T-Mobile and its results is included in T-Mobile’s filings with the SEC, which are available at http://www.sec.gov.”

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  • kev2684

    typo second sentence – billion not million.

    I hope this is for the 600mhz spectrum auction.

    • vrm

      I hope not – that is too far out into the future and will also require new phones from ALL their customers as very few phones ( and none sold by carriers) support 600 Mhz radio.

      I hope it is for 700, AWS or PCS.

      • yeah right

        This needs to be done for aws pcs and the 600 MHz spectrum auction. The hspa+ & LTE networks need expanding. T-Mobile should try to get somewhere in the region of 260 – 280 million pops with both networks, and use the 600mhz spectrum for significant rural expansion in q4 2014.

        • vrm

          the 700 mhz band is the preferred one, if enough spectrum can be purchased because it is already used by verizon and at&t for LTE. In addition, AWS is also being used by them in future for LTE.

          t-mobile’s strategy is to go after their customers with lower prices so they can also bring their phones and pay less for postpaid.

          600mhz throws a wrench into that strategy as customers will have to upgrade phones. That sort of thing plays better into at&t and verizon’s phone subsidy strategy. Now you see the why phone subsidies were popular with carriers – their networks evolved so fast that they had to hide the hidden cost of phone upgrades.

        • vrm

          To be clear, this is also the reason why metro PCS customers cannot all be moved to t-mobile at once. T-mobile will have to give them all new phones that will at least cost $200 (cheapest smartphones) and there are more than 8 million customers. That is $1.6 billion VERY conservatively.

        • Bill

          They have this cool thing called JUMP that makes it super easy to upgrade phones. 600MHz will be no problem and most customers would be switched over within 18 months, I’d imagine. Considering that the Metro network conversion will be complete within that time frame I’ll bet TMO can get their subs all over to 600 pretty quickly.

        • maximus1901

          They STILL have to upgrade phones because the only 700 mhz spectrum that TMO can buy is A block.
          A block is Band 12 and TMO’s phones support Band 17.

        • taron19119

          T-Mobile just said they not going to bid in the 600 auction

        • J-Hop2o6

          Source?

        • taron19119

          Its on this site 1 article article about this one

        • Know_it_all

          No, that article refers to the upcoming H block, 1900 auction. They will definitely participate in the 600 auction if and when it happens.

        • J-Hop2o6

          That’s not the 600MHz auction. That’s the PCS/1900 auction. I believe Tmo has plenty of 1900.

        • maximus1901

          No, they didn’t.

        • yeah right

          they said they are not going to pid in the PCS 1900 auction that DISH network wants.

        • maximus1901

          TMO won’t expand past 225 million without low-band spectrum.

        • yeah right

          I say that depends on how the Uncarrier initiative grows revenue & the subscriber base. Even with low band spectrum, Tmobile should be looking to cover 260-280 mil POPs with its LTE on AWS and HSPA+ on PCS. If there goal is to continue to siphon customers off AT&T they have to be competitive in more areas.

      • kev2684

        T-Mobile has enough spectrum to release 4G LTE nationwide on PCS and AWS but they only deploy it on AWS. if the money is to buy spectrum 600 would be the choice for better chance of a nationwide low-freq band. VZW already owns upper 700 and AT&T already has majority of the lower 700. investing on 700 would only mean select 2×5 markets instead of nationwide which is what they need to compete with the big 2..

        • maximus1901

          Tmobile doesn’t NEEEEED anymore than 5×5: for building penetration and for rural areas.

      • maximus1901

        It would still require new phones. TMO iphones support band 17, not band 12 spectrum.

    • Alex Zapata

      Is that auction coming up next year, or in 2015?

      • Bori

        I wanna say its actually happening next year.

        • Alex Zapata

          Awesome! I’ve been waiting and waiting for more news about it, but so far I’ve seen very little.

        • Danny Lewis

          Oddly enough, the only news about the 600Mhz auction I could find was when I actually searched for 600Mhz. You would think tmonews would cover the upcoming 600Mhz auction more. As of right now, they are attempting to come up with a plan to make bidding fair for Sprint and T-Mobile when put up against Verizon and AT&T who could just rape them when it comes to bidding.

        • Ethrem

          Its gonna be a blood bath if the other carriers fail on their proposal to make the rules say that at&t and Verizon can bid on no more than 1/3 of the spectrum as they already own around 80% of the sub-1GHz between the two of them.

        • taron19119

          Tmobile just said they not going ti bid in the 600 auction

        • Ethrem

          Where did they say that? The last thing I saw was that T-Mobile was in league with Sprint, C Spire, US Cellular, and others to keep at&t and Verizon from being able to acquire it all like what happened with the 700MHz C block and Verizon.

        • taron19119

          in a statement given on reuters com they plan on buying spectrum from a private holder

        • maximus1901

          Verizon.

        • taron19119

          what spectrum does verizon has to sell

        • maximus1901

          700 MHz A block.
          Band 12
          No device supports band 12.

        • taron19119

          Verizon is going to use the 700 megahertz band 12 for LTE

        • maximus1901

          700 a block.

        • Ethrem

          Since I can’t respond to your pending one…

          That is a really stupid move. They made the mistake with the 700MHz auction and now they’re doing it again. I don’t see how T-Mobile is ever going to become a top carrier if they keep making stupid decisions such as this one. *sigh*

          Reminds me of the reason I left them way back when – they were the only carrier that hadn’t even announced plans for a 3G network because they didn’t have the spectrum to launch one anywhere.

          Its not like Sprint has the resources. So once again, Verizon and at&t will take it all.

        • http://twitter.com/SParKlngCyaNide SparklingCyanide

          That’s not true, they fully intend on participating in the 600MHz auction.

        • taron19119

          It is tmobile made a statement on reuters com

        • vrm

          They have ruled out participating in the PCS auction, expectedly because they already have PCS spectrum where they deployed current EDGE/GPRS and also acquired some from metroPCS.

          The ‘private’ purchase could be from verizon/at&t (700mhz); or one of the broadcast networks or carrier such as dish. Hard to fathom the definition of private; perhaps as distinct from FCC.

        • Alex Zapata

          I remembered reading that TMO and Verizon had suggested that the whole 600MHz chunk be defined as a single band class to avoid the problems with the 700MHz auction. Very strange considering how Verizon usually handles things.

        • Bori

          Well I take that back they just announced they wont be participating in the spectrum auction early next year. They must have their eyes on something else..

    • maximus1901

      It’s not. That auction is in 2015 and won’t be deployable until 2016. TMO can’t wait that long for low-band spectrum.

  • Paul

    In the words of Lil John, “YAYEAH!”

    THIS is what, I think, most of us want to see, finally. They are planning and making an effort to expand coverage.

  • Tmo1082

    Its nice to see T-Mobile still going at it and not selling out after a little bit of success.

  • Nathan S.

    Nice! I just answered a survey from Tmobile yesterday that came via text message and coverage was my only low rating that I gave. Tmobile is pretty great within city limits (for me at least), once you venture outside of city limits (Rural), it gets rather weak rather quickly. So hopefully it will help to push coverage out a bit more. It would be nice to finally be able to stream a little when going on road trips and such. Right now, that is mostly not possible in my neck of the woods.

    • vrm

      >> It would be nice to finally be able to stream a little when going on road trips

      I do not support such use for wireless services – they are not capable of handling such traffic. You can always store songs in mp3 on your phone/tablet and play them.

      • Alex Zapata

        And how can LTE or HSPA not handle some streaming? What are you smoking?

      • Dakota

        Well it’s not just streaming per se, if you don’t have a data connection you can’t do anything requiring a data connection.. Forget checking email or using gps & if no coverage, you can’t make calls or texts.

        As for streaming Depends on your storage.. 16gb isn’t enough to even have my entire music collection let alone other stuff. It’s why I still have an iPod classic. Plus people don’talways have uunlimited data plans which is why it’s frustrating when companies always say you dont need storageccut its in the cloud. People just have to change the way they use devices. Maybe one day we’ll be living in cities with free Wi-Fi everywhere

      • KingCobra

        Is this a serious response? LTE is more than capable of handling music streaming services. I use iTunes Match because I don’t have the space to store 8000 songs on my phone. I’m paying tmobile for their LTE and HSPA+ services and they handle it just fine.

      • Trevnerdio

        Pandora. It’s a great thing.

      • Nathan S.

        I live in a city about 30 miles east of Downtown Kansas City, MO. I have great coverage at home and all around the metro area, with the exception for Walmart in Blue Springs Mo, complete dead spot even for calls and texts most usually, lol. I stream movies and music all day long. I pay for the unlimited full speed data package and I make good use of it and am mostly pretty pleased with performance. If I head about 20 minutes east or south of my house to the neighboring towns, I am lucky to have G data coverage with a little E sprinkled in. Not a huge deal, I know the limits of the coverage and plan accordingly. I am just saying it would be nice to have a bit more data coverage, if they could pull off at least 3G coverage in between the major cities and towns, that would be great! I would be happy and proud to be a Tmobile subscriber.

        • JB

          I’ve found that it doesn’t matter what Walmart I go to in the KC area, I NEVER get much of a signal in there! Lol

        • Nathan S.

          You know, I think you may be right now that I am thinking about it. Walmart probably trying to prevent smart phone users from being able to do online searches for some of their products while in store. hahaha,

      • fsured

        Streaming music is less intense than streaming youtube videos or netflix. But the important part is actually having signal that could be used for streaming music or better yet, using Google maps on a road trip. The usage is for each person to decide.

        • sushimane88

          yeah when i stream video on youtube on lte it needs to buffer but when i switch to hspa+42 it doesnt need to buffer at all weird

        • fsured

          I have better performance from HSPA+ than LTE where I live. It’s offering the stronger signal reception, the signal is kept with no data drop outs, and it’s more battery friendly. The “Network Communication Error” is not fun and then seeing the signal bars all go off as if the phone has no communication to the tower is upsetting. This was the same situation I found when their first launched HSPA+ a few years back. Big rush to launch “4G” but fine tweaking the towers and network came months after it’s release.

      • maximus1901

        Your current phone is not gonna be able to take advantage of it.

    • ccnet005

      I answered the same text survey too and received a call back.
      I couldn’t talk to the tmo rep since I was a conference, but I’m hoping they

      call back I’ll give them specific locations where coverage drops off.

    • Dakota

      Coverage has always been their Achilles heel. If they had better coverage, they wouldn’t be fighting on price

      • maximus1901

        They don’t have sub 1 GHz spectrum

  • ILikeStarbucks

    Is it $1.8 billion or million? The title conflicts with whats mention in the article.

    • taron19119

      billion

    • ChristianMcC

      I thought the same, but when I read it as million, I was thinking “shoot, I’m going to jump on that; 18/660 on the dollar!!!”

    • gpt2010

      I think it is supposed to be 1.8 billion not million. 1.8 million isn’t going to buy them much today. Although it would look great in my bank account!

  • Red5

    I bet David could do the math here

  • Aurizen

    This is great news! I hope Tmobile really makes use of this greatly, I want better building penetration in the top 50 markets please. Philadelphia included.

  • Abe_The_Babe

    Stock better go back up. Bought 33 shares a couple of weeks ago, and I’m in it for the long haul!

    • guatemala7

      How do you do that.

      • Abe_The_Babe

        I use Scottrade. Pretty good for beginners because it has low fees. Right now is probably a good time to buy since it has gone down a buck or two.

  • LAGURL

    i really hope tmobile improves coverage outside the city outside thats were i have problems as long as im in LA tmobile works great even in buildings i still have att line active for my mom and people always told me att works better in buildings since it use 850 mhz i guess in LA they dnt use it? Because i can tell u that in places like the hospital the doctors hospital ,general hospital, and some malls montebello mall,glendale galleria, etc att gets PRETTY bad deep inside i was shocked tmobile had better service in all those places lol tmobile had 2-3 bars ,att 0-1 yes one lil bar . And sometimes att wouldnt connect the call it would go straight to call failed while tmobile on the first try call would go tru fine, only advantage att has that on trips it works better than tmobile i tried both .But other than that tmobile works ALOT better in the city.

  • Chris

    Are they gonna get rid of edge?! :D

    • maximus1901

      They’re buying block A from Verizon and others

      • Alex Zapata

        Source?

  • Eric

    Better coverage and more capacity! Yes!

  • Glad I Left CA

    Let them use the money to buy US Cellular. They have a lot of spectrum, and 10 million customers to boot! That would put them ahead of Sprint, and give them some more spectrum.

    If I remember correctly, the last auction that T-Mobile bought spectrum at cost them around $10B. That is a lot of cheddar, and Deutch ain’t fitting the bill anymore.

    • maximus1901

      They’re buying block A from Verizon and others.