AT&T and T-Mobile Merger – Terminated
In March of 2011, AT&T announced the purchase of T-Mobile from Deutsche Telekom in a $39 billion transaction. As a result, the combined company would have owned approximately 100,000 total cell sites, some of which would certainly have been terminated. In August of that same year, the US Department of Justice filed a civil antitrust suit attempting to block the merger. In November of that year, the FCC also came out in opposition of the merger by filing a proposal for an administrative hearing. Facing pressure from both the FCC and the Department of Justice, AT&T publicly withdrew its application for the merger. While there is a small chance that the merger could be proposed again or that some type of network sharing agreement between the companies could be reached, it doesn’t appear likely.
How does this impact current lease negotiations with AT&T or T-Mobile?
For property owners, municipal governments and small tower owners who are in the process of negotiating leases with T-Mobile and AT&T for a cell site on their tower, rooftop, or land, we suspect that both companies will be aggressively pursuing new tower and rooftop sites in 2012 and 2013, to make up for the half year lull in any real site development.
How does this impact existing leases with AT&T or T-Mobile?
If you have a lease with either T-Mobile or AT&T, then you are back to where you were prior to the merger announcement. Steel in the Air believes that T-Mobile will need to do something and is likely contemplating other mergers or sales of assets or spectrum or both. Both companies will continue to deploy site upgrades to their existing equipment. AT&T will do so because their network requires it, and T-Mobile because even if they intend to sell, they will still need to add capacity and network speed to retain their existing subscribers. If you are contacted to consent to additional equipment on your cell site or our asked to modify or amend your current lease to allow additional antennas or equipment, please see our page on Evaluating Offers to Expand Lease Area and our page on LTE Modifications on Rooftops.
Should you be considering selling your lease to a buyout company?
If you are considering the sale of your AT&T or T-Mobile lease due to the merger, the risk of termination is obviously significantly less now than it was had the merger gone through. At Steel in the Air, we do believe that a wise landowner will consider the prospect of further industry consolidation. However, in and of itself, the risk of a future unknown merger is not sufficient to justify selling.
"If the lease buyout company’s salespeople try to suggest that the AT&T and T-Mobile merger is a reason to consider selling, you should ignore any such statement."
If you are currently under contract to sell your AT&T or T-Mobile leases, it is likely that the offer you received for your leases could have been undervalued due to the perception of risk related to the merger. If you need help evaluating whether the lease buyout offer is fair, please see Cell Tower Lease Buyouts. You might consult with your attorney to determine whether your letter of intent or contract is binding. Alternatively, you might consider asking the lease buyout company if they can improve your offer.
Here’s what we can help you with:
If you are confused by how the withdrawal of the AT&T and T-Mobile merger will impact your cell site lease(s), please contact us. Steel in the Air has assisted hundreds of clients with past mergers and maintains an unparalleled record in helping its clients make informed decisions. We have excellent data regarding where AT&T and T-Mobile have cell sites, including how many leases were terminated from past mergers. We can help you figure out what your best option is regarding your leases. Contact us to confidentially discuss your options and concerns. Let us be your trusted advisor in navigating how best to secure your cell site lease assets.