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.

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It is also trying to replace outdated PSTN equipment with more sophisticated "all-IP" systems, and has previously estimated this process costs about €60 ($67) per customer.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

danielcawrey 7/1/2016 | 1:11:48 PM
Cash It's obvious from this report that DT needs money to fund expansion badly. I think we saw Sprint do a similar thing in order to raise cash for its operations. Owning these types of assets are clearly not as important as cash for wireless providers. 
mendyk 7/1/2016 | 4:47:31 PM
Re: Cash DT won't be the first company to sell a reliable cash cow for some immediate steaks. Buh-dump.
KBode 7/5/2016 | 2:28:38 PM
Re: Cash I'm not sure if there are any US carriers that haven't done this yet? 
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