How The Sprint T-Mobile Merger Impacts Landlords

By Nick G. Foster

February 11, 2020

(article updated on April 7, 2020)

Sprint T-Mobile Merger Closes $30 Billion Deal

T-Mobile and Sprint announced the closing of their merger on April 1, 2020. The colorful T-Mobile CEO John Legere will step down and the more buttoned-up Mike Sievert will take the helm as CEO of the combined company. The company will use the name T-Mobile and will have 100 million customers.

Sprint T-Mobile Faced Legal Challenges To Get Here

It was announced in February 2020 by Federal Judge Victor Marrero the United States District Court in Manhattan that Judge Marrero has ruled in favor of T-Mobile’s then valued $26 billion takeover of Sprint.

The challenge against the merger was filed in a suit by attorney generals from 13 states and the District of Columbia. This ruling will combine the third and fourth largest wireless carriers creating a new wireless carrier with more than 100 million users.

After the merger is complete the majority of Sprint customers will have T-Mobile plans. Customers of Sprint’s pre-paid brands (Boost Mobile, Virgin Mobile, and Sprint prepaid), will become Dish Network customers.

T-Mobile agreed to enter into a limited seven year term deal with Dish to lease Dish access to its network. This is supposed to give Dish time to build its own network, however, many skeptics believe Dish will coast on their limited-term deal and then sell of their spectrum holdings in the future for a profit. Skeptics believe Dish never has any intentions of truly building a new wireless network.

Is The Merger A Done Deal?

Not exactly, but it is pretty close to being a done deal. The merger still requires the endorsement of the California Public Utilities Comission.

What Does That Mean For Sprint & T-Mobile Landlords?

We have seen a slow-down in T-Mobile leasing activity while they await the merger decision. Last quarter it was communicated to Airwave Advisors by a number of T-Mobile representatives that they were to hold off on leasing activity such as new cell site development and amendments.

In 2018 it was forecasted that the merger between T-Mobile and Sprint, who operate a total of 110,000 towers, would cause the companies to shut down 35,000 towers and build 10,000 new towers. This would be due to overlapping coverage of towers due to the merger and the filling of holes in the network.

It is anticipated the Crown Castle who receives 20% of their tower revenues from T-Mobile and 13% of their tower revenues from Sprint will be hurt the most with the merger. Crown Castle’s top competitor American Tower Corporation on the other hand has less exposure to the merger with T-Mobile representing 9% of their US based revenue and Sprint representing 8%.

As far as private landlords, we anticipate there will be many site decommissions and rents will stop coming within the next 24 months. If you have both Sprint and T-Mobile on your property there is a very high chance of these tenants will most certainly disappear. We don’t know for sure which one it will be as of yet. For now it is a wait and see approach. Will Dish start up their engine and build out a wireless network, or as skeptics say, sit on the deal and sell when the time is right?

Sprint T-Mobile Merger Cell Tower Overlap

If they say a picture is worth a thousands words then the above network overlap image from Mosaik reads like a book.

How & Why Did The Merger Start?

In 2018 Softbank, Sprint’s majority owner, reached an agreement to buy T-Mobile. Any merger would require the review and approval of the Department of Justice (DOJ) and the Federal Communications Commission (FCC). The DOJ would look at antitrust concerns while the FCC would be concerned with what is best for the US consumer. It was speculated at the time that the Sprint brand would disappear and T-Mobile’s brand and flamboyant CEO John Legere would be in charge post merger. We now know that John Legere is retiring, maybe riding off into the sunset to write more cooking books.

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10 Comments

  1. Richard H Giebitz on May 5, 2020 at 8:51 am

    This is so hard to figure out. I am a private single tower owner. I have both T-Mobile and Sprint there now. As the merger progressed Sprint kept building the newest 2019 Samsung cell system on my tower. I couldn’t figure out why they would keep building the newest equipment out there on my site , as they will be decommissioning one of them. T-Mobile was building and planning their 600 MHZ panel construction at the same time.. Makes little sense to me. I asked the installation contractors what there prospective was, they indicated the Sprint MMBS was going to Dish. Black dot is still on my tail often. If T-Mobile bails one contract from my tower, they will have to pay a big price to remove all the fiber and panels they constructed. It is in my contract site will be restored to original configuration upon closing. This site covers (2) communities of 20,000, plus traffic on US highway 50. What dows your crystal ball say ? Thank You !

    • Nick G. Foster on May 5, 2020 at 9:24 am

      Hi Richard,

      Thanks for reaching out with your question. As far as Blackdot, you can ignore them. In regards to T-Mobile and Sprint and if one of your tenants will disappear, it is very possible. It is forecasted that some Sprint sites will migrate to DISH, but not all. If I were in your position I would just wait and see what happens. I would not grant any rent reductions. I would see where the chips fall, if they fall at all.

      All the best,

      Nick G. Foster

  2. jor on April 10, 2020 at 2:52 pm

    Black dot offering me 150 X the monthly rent for tmobile. What’s the catch there?

    • Nick G. Foster on April 13, 2020 at 8:23 am

      Hi Jor,

      The catch is you would be selling your T-Mobile lease for cheap. If you want a top of the market offer to purchase your lease, give us a call.

      All the best,

      Nick G. Foster

  3. zafar mohammed on April 7, 2020 at 12:37 pm

    Is there maps that show Tower concentrations and grandfathered towers in different areas.

    • Nick G. Foster on April 13, 2020 at 8:22 am

      Hi Zafar,

      There are no maps that I am aware of that show grandfathered towers. The FCC keeps a database of towers registered with them that is available to the public. You may want to check out their website.

      All the best,

      Nick G. Foster

  4. NICK CLAYTON on April 7, 2020 at 11:09 am

    I also heard that some of the Sprint Towers ( were there is also a T Mobil tower ) will be saved and utilized for 5G and or other frequencies that require additional real estate .. ??

    • Nick G. Foster on April 7, 2020 at 11:16 am

      Hi Nick,

      It is possible some of the towers may stay, or they may be transferred over to DISH as part of the merger arrangement. As far as saving towers to utilize 5G, I could only imagine that scenario taking place in an urban environment where the first tower is not sufficient. I can’t imagine that scenario taking place in rural areas.
      All the best,

      Nick G. Foster

  5. Don horton on April 7, 2020 at 9:46 am

    How does this effect an offer I have to build a tower on my prop @ 35051 in Alabama contract was signed approx 1 yr ago for $3100 month no construction has started yet tkx don horton

    • Nick G. Foster on April 7, 2020 at 10:25 am

      Hi Don,

      I think that the other party you signed the contract with may not be legitimate. As a result they may never intend to build. $3,100.00 per month in rent to lease raw land in Alabama is extremely high. Hopefully I am wrong and you will financially benefit as a result of my incorrect opinion.

      All the best,

      Nick G. Foster

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Nick Foster Airwave Advisors

About Nick G. Foster

Since founding Airwave Advisors® in 2014, Mr. Foster has added value to over 400 clients ranging from the State of Nevada, City of Beverly Hills, to Habitat For Humanity. Mr. Foster focuses on cell tower lease renewals, buyouts, new lease negotiation, and cell site lease management. Prior to starting Airwave Advisors® Mr. Foster founded and led the Cell Site Services Group within nationwide commercial real estate services leader Cassidy Turley (now known as Cushman & Wakefield).