iOS app Android app More

T-Mobile Network Upgrade Funding Could Come From Sale Of Wireless Towers

Tmobile Network Upgrade

First Posted: 01/10/12 08:54 PM ET Updated: 01/11/12 10:41 AM ET


By Sinead Carew

LAS VEGAS (Reuters) - T-Mobile USA is finalizing a new business plan which may include a sale of its wireless towers to help pay for a network upgrade as it looks to rebuild its business after its failed effort to sell itself to AT&T Inc, top executives of the Deutsche Telekom unit said.

"T-Mobile USA is alive and we are back in fighting spirit," CEO Philip Humm told reporters at the Consumer Electronics Show in Las Vegas, as he promise more details about the company's future strategy later this quarter.

After "nine months in limbo" - when the company and AT&T fought unsuccessfully to secure U.S. approval and seal a $39 billion AT&T acquisition - Humm said the company's brand needed reinvigorating, and its network needed more investment.

Humm also said the company needs to reduce its customer cancellation rates, which rose during the last nine months and will look at adding new wholesale customers to its network to beef up its business.

While the company is in line to get wireless airwaves and had already received $3 billion cash payment as part of a breakup package from AT&T, it may also look to other ways to raise money for what Humm described as a "significant investment" needed in its network.

With that in mind the company's Chief Technology Officer Neville Ray told Reuters that T-Mobile USA is looking into whether it can sell its wireless broadcast towers to raise money. This was an option the company had said it was considering a year ago, before the AT&T deal was announced.

"We're looking at that as an option right now to see if it makes sense," Ray said on the sidelines of a T-Mobile USA press event. "That's still an option. WE believe the market is still as strong as it was."

Meanwhile the executive said that he has been busy since the deal fell apart in late December developing a new strategy for the company's network.

This could involve moving some customers to more sparsely used T-Mobile airwaves so it can combine the so-called AWS spectrum from the break up fee with existing T-Mobile USA AWS spectrum, Ray said.

With the AT&T spectrum, Ray said that T-Mobile USA could have enough airwaves to launch new high-speed services in 20 megahertz spectrum bands in many markets.

AT&T is giving T-Mobile USA spectrum in 128 markets including 12 of the country's top 20 markets, according to the company. However U.S. regulators need to approve that transfer in a process that could take four to six months, Ray said.

"The breakup spectrum gives us an option that wasn't there a year ago," Ray said, adding that it could put the company in "reasonably good shape."

He declined to give specifics about a network upgrade plan, saying that those were still worked out but noted that the company had cited a potential price tag of $1 billion to $2 billion for an upgrade in some markets in early 2011.

One issue that T-Mobile USA has its parent company's clear interest in exiting the U.S. market.

Deutsche Telekom had already earmarked the $39 billion for the failed AT&T deal for paying down debt and dividend payments, leading many analysts to question whether it would want to invest more in upgrading the U.S. units network.

But T-Mobile USA desperately needs to upgrade its network in order to compete with bigger rivals Verizon Wireless, AT&T Inc and Sprint Nextel.

(Reporting By Sinead Carew; Editing by Richard Chang)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Related on HuffPost:

FOLLOW HUFFPOST TECH

Filed by Ramona Emerson  |