wireless towerAt least one nationwide wireless carrier, T-Mobile, has sold some of its wireless towers in order to free up money for investment–  and other large carriers reportedly are considering that option.

Does this move make sense for smaller carriers as well?

The NTELOS View
NTELOS clearly believes the answer is yes, announcing this week that it has reached an agreement to sell up to 103 wireless towers to Grain Management, a private equity firm focused on telecom and media.

Advertisement

In a press release, NTELOS Chairman of the Board Michael A. Huber called the deal an “opportunistic sale of non-strategic assets” that would “enhance our financial flexibility to continue our strategic refocus on our Western markets.” Those markets include parts of West Virginia and western Virginia – the same area where the towers are located.

The U.S. Cellular View
Another smaller wireless carrier offered a different take recently. In a question and answer session at the Citi 2015 Internet, Media & Telecommunications Conference in Las Vegas earlier this month, U.S. Cellular executives said they have no plans to sell the company’s wireless towers or to move such assets into a real estate investment trust.

As the company begins to deploy VoLTE to replace current CDMA infrastructure, it may be necessary to move radios to the tops of cell towers, the executives noted, adding that by owning towers, “we have access to wherever we need to be on the tower; … we don’t have to worry if someone is up there before we are.”

The need to negotiate deals with other carriers for the use of other carriers’ towers also figures into U.S. Cellular’s view. By owning its own towers, U.S. Cellular can negotiate better deals, the execs said.

Should Wireless Carriers Sell Towers?
It would seem that the arguments U.S. Cellular makes would apply to other Tier 2 and Tier 3 wireless carriers as well. So is NTELOS making a bad move?

Not necessarily. The reason has to do with the company’s unique circumstances. The company’s Western markets are in a mountainous area that makes deployment difficult – so difficult that Sprint didn’t build its own network there but instead relies on NTELOS to provide service. And that may put NTELOS in a better bargaining position with regard to future use of the cell towers the company is selling.

The upshot is that selling off wireless towers or moving them to a REIT may make sense for small carriers whose circumstances resemble those of NTELOS – but not for those whose circumstances are more similar to those of U.S. Cellular.

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!