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T-Mobile USA ‘in fund-raising moves’
09 January 2012
Deutsche Telekom is considering raising capital for US mobile unit by selling towers and issuing bonds
T-Mobile USA’s parent Deutsche Telekom may look to raise money on the unit following its failure to sell it to AT&T by issuing bonds and selling its base station towers. The German parent firm has already held preliminary discussions with the bankers over the matter, according to the Financial Times.
T-Mobile USA, which is the fourth largest US operator behind Verizon Wireless, AT&T and Sprint, lacks the updated mobile services technology that is require to meet the demands for higher data, Deutsche Telekom said. The operator could lose market to rivals as it does not own the spectrum to carry LTE services.
AT&T has promised $3 billion as part of the deal termination, along with spectrum and roaming rights worth $1 billion. This however maybe insufficient to boost competitiveness and the company may require more money to purchase additional spectrum, according to the FT.
Deutsche Telekom is looking at plans to offload its US towers which are expected to fetch around $1 billion to $2 billion. Sources told the FT that the company does not seem to be in a hurry to reach an enduring solution for T-Mobile USA. Analysts meanwhile believe that the US unit will probably be sold or combined with a rival, the FT reported.
The attempts to raise capital would also be an indicator to Deutsche Telekom’s shareholders that the US unit would be independent of the German parent firm. GTB
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