SBA Tower Deal Twists Wireless M&A in 2012
NEW YORK( TheStreet) -- Cell tower operators have quietly reignited a grab for assets with the announcement Tuesday that SBA Communications (SBAC) would 2,300 cell tower sites in the U.S. and Central America from Mobilitie for $1.09 billion.
Wireless airwaves were rattled when a proposed $39 billion merger between AT&T(T) and T-Mobile USA was scuttled by antitrust regulators last year, but Tuesday's announcement coupled with a Dec. 16 deal by Crown Castle (CCI) to buy antenna systems from NextG Networks for $1 billion signal that tower operators are on the move as wireless carriers look at M&A as a way to gear for increasing smartphone data loads.
Tuesday, SBA Communications said it will buy tower assets, in addition to indoor and outdoor distributed antenna system assets in cities like Chicago, New York and Las Vegas from Mobilitie for over $1 billion.
Now industry titans like Crown Castle and American Tower may set their gaze on over $2 billion of tower assets that T-Mobile may look to sell as a way to fund its wireless network, while considering a range of deal options, according to industry analysts.
After AT&T's merger with T-Mobile to pick up wireless spectrum was scuttled in December , the knock-on effects are taking shape in a tower land grab between Crown Castle International (CCI) , American Tower (AMT) and SBA Communications (SBAC) . Watch for ripple effects in the M&A fight to now have a big significance on the next move for T-Mobile USA's parent Deutsche Telekom , as it looks to raise capital for its U.S. operations, which are the fourth largest overall to Verizon(VZ) , AT&T and Sprint(S) .
T-Mobile picked up $3 billion in spectrum assets from AT&T as breakup fee in its proposed merger. Those assets, along with funds that can be raised from a sale of its over 7,000 tower sites could net billions more for T-Mobile USA as it weighs a host of deal options. "I think that we are definitely going to see a more aggressive T-Mobile in 2012. They have to prepare to be a standalone company," says Jonathan Schildkraut of Evercore Partners.
A tower asset sale would help the company re-invest in its network and service, even if the company were eventually to decide on a joint venture with DISH Network (DISH) or sign networking agreements with Sprint(S) or Clearwire(CLWR) . "I wouldn't put any arrangement off the table," adds Schildkraut of T-Mobile's strategic alternatives
Before its proposed $39 billion merger with AT&T in March, T-Mobile was reported to be interested in selling its cell towers for as much as $2 billion. Without AT&T as an acquirer, T-Mobile may revert back to its previous plans, even if SBA Communications drops out as an interested party.