The Wall Street Journal’s report of a possible Crown Castle International purchase of T-Mobile USA’s towers is “entirely plausible,” because of the tower company’s recent activity consolidating carrier portfolios, according to an investing note by Jonathan Atkin, analyst, RBC Capital Markets.
“We think Crown Castle is a logical buyer given its greater focus on the U.S. market and relatively recent experience in integrating a large carrier portfolio (Sprint sites) following its acquisition of Global Signal in 2006,” he wrote.
The total number of towers in the deal is reported to be more than 7,300, although Deutsche Telecom has said it owns more than 8,700 towers in the states. The current bid for the towers is likely to be $2 billion or more, according to published reports.
“We believe that a successful acquisition will strengthen Crown Castle’s leading position in the tower industry,” Zacks Equity Research wrote. “If the company manages to acquire T-mobile’s tower arm, it will … help it achieve better operational efficiency.”
The Wall Street Journal reported on July 31 that American Tower and Global Tower Partners were still being considered, according to its source, but Crown Castle had a leg up after final bids were submitted in July.
American Tower focused on global acquisitions during the first half of 2012, which is where it sees the most opportunity. It purchased 1,920 international towers versus 80 domestic sites.
“More than 95 percent of our new communication sites are located in our international markets where we expect to see continued demand as new technologies are deployed, new spectrum is issued and wireless carriers support the growing demand for wireless data on their networks,” said Tom Bartlett, chief financial officer, American Tower.
SBA Communications might not be bidding on T-Mobile’s towers because it has been pretty busy buying everything else on the market. Its purchase of 3,252 towers from TowerCo for $1.45 billion dominated the most recent quarter, and it bought 2,300 towers and DAS assets from Mobilitie for $1.1 billion in the first quarter.
“SBA has been busy issuing debt to both clean up bridge financing from the Mobilitie acquisition and to prepare for the TowerCo acquisition. The company ended the quarter with $4 billion of net debt and has issued over $1.4 billion of new debt since the end of the quarter. SBA’s guidance includes a $14 million increase in net cash interest expense,” according to Piper Jaffray.