The German operator is preparing to sell domestic towers to raise funds for investment elsewhere.

Iain Morris, International Editor

July 1, 2016

2 Min Read
DT Preps $5.6B Sale of German Towers – Report

Deutsche Telekom is hoping to raise up to €5 billion ($5.6 billion) from the sale of its German mobile towers in a bid to raise funds it can invest in other parts of its network, according to a report from Reuters.

The German operator has already hired Goldman Sachs & Co. and Morgan Stanley to help it carry out an auction of the assets in the autumn, according to two sources cited by Reuters.

The company intends to distribute information packs to prospective buyers after the summer and to make a decision about retaining a stake in the towers business, or selling the entire unit, based on the feedback it receives.

Other European operators, including the German subsidiary of Spain's Telefónica , have made similar moves to pay off debts, raise funds for investment elsewhere and dedicate additional resources to more critical business needs.

While yet to put any of its European towers on the market, Deutsche Telekom AG (NYSE: DT) raised $2.4 billion back in 2012 from selling the towers business of its T-Mobile US Inc. subsidiary to Crown Castle International Corp. (NYSE: CCI).

According to Reuters, the operator is currently establishing a separate business that will own and operate the German towers in advance of a potential sale.

For all the latest news from the wireless networking and services sector, check out our dedicated mobile content channel here on Light Reading.

The story comes as the German incumbent faces mounting investment needs in Germany and some of its other European markets.

The operator is spending heavily on the rollout of higher-speed fixed and mobile networks to meet growth bandwidth demands and fend off tough competition from rivals, including German cable operators offering faster connections to consumers.

It is also trying to replace outdated PSTN equipment with more sophisticated "all-IP" systems, and has previously estimated this process costs about €60 ($67) per customer.

Earlier this week, Sascha Vorbeck, Deutsche Telekom's head of network development core, said a future rollout of FTTH networks in Germany might help it to phase out some of its legacy platforms more rapidly by allowing it to market higher-speed services to customers. (See DT Eyes FTTH Solution to German Opex Issue.)

However, the cost of equipping every home in Germany with an FTTH service could be as much as €80 billion ($89 billion), according to experts cited by the Deutsche Telekom executive.

Ultimately, Deutsche Telekom hopes to save about €10 ($11) per customer per year from the all-IP transformation and has indicated that investments in SDN and NFV technologies could help it to reduce costs even more.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

Read more about:


About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like