With its planned acquisition of T-Mobile USA now dead,
AT&T Mobility look set to end the year having to plan how to
proceed. Details of the deal’s demise indicate that the companies have
entered into a network-sharing arrangement, details of which are not yet
known.
What is known is that AT&T will be handing over $3 billion in cash; 1.7/2.1 GHz spectrum licenses covering 128 markets, including 12 of the nation’s top 20 markets; and a nationwide UMTS roaming agreement that will allow T-Mobile USA to expand coverage from its current 230 million potential customers covered to 280 million pops covered. That bounty will at least give Deutsche Telekom and T-Mobile USA a jump on their plans.
Those plans could be a fallback to what Deutsche Telekom had announced just prior to AT&T’s acquisition attempt when the company held a news conference touting the ways in which it was going to re-energize its U.S. operations. Deutsche Telekom said at that time that it wanted to increase annual revenues by $3 billion over the next three years while at the same time reducing operating costs by $1 billion per year by 2013. In addition, the carrier was looking to jump-start its customer growth across all market segments in hopes of becoming a solid No. 3 in the market.
Rumors have already begun to swirl about where T-Mobile USA will turn next. Some have indicated that the carrier could run back into the arms of Sprint Nextel, which it flirted with prior to agreeing to AT&T’s acquisition attempt. However, with the government already having shot down a large merger, it’s not known whether such a relationship would be as all-encompassing.
One option would be a network-sharing arrangement in which T-Mobile USA could take advantage of Sprint Nextel’s Network Vision initiative to host either spectrum or a LTE network on Sprint Nextel’s renovated tower infrastructure. This could serve Sprint Nextel well as its current plans to host and tap into the spectrum holdings of LightSquared appear to be bogged down in interference issues.
T-Mobile USA could also plug into Sprint Nextel’s subsidiary Clearwire’s plans to launch TDD-LTE services that would involve a resale model for that network’s 2.5 GHz-backed network plans. T-Mobile USA could tap into its newly fortified AWS spectrum for broader coverage, with the Clearwire network providing density in larger markets.
T-Mobile USA also has the option of turning to Dish Networks, which in recent weeks has said it would be open to a partnership with T-Mobile USA in regards to using the approximately 40 megahertz of spectrum it controls across the 700 MHz band as well as those acquired when it purchased TerreStar Networks.
Another cash option for T-Mobile USA could be the sale of its nearly 7,000 cell sites that were reportedly up for bid prior to the deal with AT&T. Analysts have forecast that such a deal could derive several billion dollars for the carrier with an ample selection of tower companies looking to pick up those assets.
For AT&T, most anticipate that the carrier will now be on the hunt for new spectrum or network assets on a scale slightly smaller than its attempt to acquire the nation’s No. 4 carrier. Rival Verizon Wireless has spent the previous weeks snatching up valuable spectrum assets from a cadre of cable companies that in the end had no interest in competing in the mobile space. Those deals fortified Verizon Wireless’ plans for its LTE rollout, which by year end is expected to cover 200 million potential customers.
“While it can spend through this near term, longer term we believe it will need to add more spectrum to its portfolio,” said Wells Fargo Securities in a research note. AT&T “has been a vocal advocate of the need for more spectrum for the industry overall. We believe it is unlikely that (AT&T) will guide to a decline in wireless capex spend in 2012 given these issues.”
There is still plenty of fallow spectrum in the market that AT&T could go after, including some 40 megahertz currently controlled by Dish Network, as well as network sharing or mobile virtual network operator opportunities similar to what was laid out for T-Mobile USA. However, many expect AT&T will take a more lonely route in the aftermath of the T-Mobile USA deal collapse that could see it challenged operationally in 2012.
“We continue to believe that AT&T is at a strategic and operational crossroads with spectrum needs and high annual iPhone subsidies on one hand, and slowing sub and ARPU growth on the other,” said Macquarie Securities in a research note.
What is known is that AT&T will be handing over $3 billion in cash; 1.7/2.1 GHz spectrum licenses covering 128 markets, including 12 of the nation’s top 20 markets; and a nationwide UMTS roaming agreement that will allow T-Mobile USA to expand coverage from its current 230 million potential customers covered to 280 million pops covered. That bounty will at least give Deutsche Telekom and T-Mobile USA a jump on their plans.
Those plans could be a fallback to what Deutsche Telekom had announced just prior to AT&T’s acquisition attempt when the company held a news conference touting the ways in which it was going to re-energize its U.S. operations. Deutsche Telekom said at that time that it wanted to increase annual revenues by $3 billion over the next three years while at the same time reducing operating costs by $1 billion per year by 2013. In addition, the carrier was looking to jump-start its customer growth across all market segments in hopes of becoming a solid No. 3 in the market.
Rumors have already begun to swirl about where T-Mobile USA will turn next. Some have indicated that the carrier could run back into the arms of Sprint Nextel, which it flirted with prior to agreeing to AT&T’s acquisition attempt. However, with the government already having shot down a large merger, it’s not known whether such a relationship would be as all-encompassing.
One option would be a network-sharing arrangement in which T-Mobile USA could take advantage of Sprint Nextel’s Network Vision initiative to host either spectrum or a LTE network on Sprint Nextel’s renovated tower infrastructure. This could serve Sprint Nextel well as its current plans to host and tap into the spectrum holdings of LightSquared appear to be bogged down in interference issues.
T-Mobile USA could also plug into Sprint Nextel’s subsidiary Clearwire’s plans to launch TDD-LTE services that would involve a resale model for that network’s 2.5 GHz-backed network plans. T-Mobile USA could tap into its newly fortified AWS spectrum for broader coverage, with the Clearwire network providing density in larger markets.
T-Mobile USA also has the option of turning to Dish Networks, which in recent weeks has said it would be open to a partnership with T-Mobile USA in regards to using the approximately 40 megahertz of spectrum it controls across the 700 MHz band as well as those acquired when it purchased TerreStar Networks.
Another cash option for T-Mobile USA could be the sale of its nearly 7,000 cell sites that were reportedly up for bid prior to the deal with AT&T. Analysts have forecast that such a deal could derive several billion dollars for the carrier with an ample selection of tower companies looking to pick up those assets.
For AT&T, most anticipate that the carrier will now be on the hunt for new spectrum or network assets on a scale slightly smaller than its attempt to acquire the nation’s No. 4 carrier. Rival Verizon Wireless has spent the previous weeks snatching up valuable spectrum assets from a cadre of cable companies that in the end had no interest in competing in the mobile space. Those deals fortified Verizon Wireless’ plans for its LTE rollout, which by year end is expected to cover 200 million potential customers.
“While it can spend through this near term, longer term we believe it will need to add more spectrum to its portfolio,” said Wells Fargo Securities in a research note. AT&T “has been a vocal advocate of the need for more spectrum for the industry overall. We believe it is unlikely that (AT&T) will guide to a decline in wireless capex spend in 2012 given these issues.”
There is still plenty of fallow spectrum in the market that AT&T could go after, including some 40 megahertz currently controlled by Dish Network, as well as network sharing or mobile virtual network operator opportunities similar to what was laid out for T-Mobile USA. However, many expect AT&T will take a more lonely route in the aftermath of the T-Mobile USA deal collapse that could see it challenged operationally in 2012.
“We continue to believe that AT&T is at a strategic and operational crossroads with spectrum needs and high annual iPhone subsidies on one hand, and slowing sub and ARPU growth on the other,” said Macquarie Securities in a research note.
Comments
Post a Comment