The next boom in intangible asset sales?

The mobile communications revolution has already touch off one scramble for intangible assets, i.e. patents for smart phone. Now the names of AT&T and T-Mobile may join Nortel and Motorola in the great intangibles boom.
As everyone probably knows by now, AT&T’s takeover of T-Mobile is in trouble. According to Steve Lohr of the New York Time, AT&T may be considering selling up to 40% of T-Mobile’s assets in order to get anti-trust approval for the deal. Some of those assets are tangible, i.e. equipment. But the most valuable are the spectrum rights. Without spectrum, the equipment is useless. And the second most valuable asset is likely to be the customer base.
Lohr notes that there are a number of ways that AT&T could sell off these assets as part of a merger. They could go to a rival mobile company (most likely not Verizon because of anti-trust concerns). Or they could attract the interest of other buyers: companies wishing to breaking to the U.S. market, cable companies, or even investment companies seeking to re-sell the spectrum either later on or in smaller pieces.
Given the size of the deals here, the money involved could easily dwarf the Nortel $4.5 billion patent sale. The 2006 FCC spectrum auction brought in $13.7 billion. The AT&T/T-Mobile deal is worth $39 billion; 40% of that is $15.6 billion. Of course, only a portion of that would be spectrum and it is unclear how much spectrum AT&T would be willing to sell to make the deal acceptable to regulators (as little as possible, one assumes). Nevertheless, the numbers are significant.
And, who knows, such a sale could trigger a new feeding frenzy. So stay tuned.
According to a story in the New York Time’s Dealbook column, “AT&T is knee-deep in talks with Leap Wireless, a second-tier but growing wireless player, to sell it a big piece of T-Mobile’s customer accounts and some of its wireless spectrum, according to people involved in the negotiations.”
We will see if a) they can pull it off, b) it will satisfy the regulators, and c) how much the intangibles are worth.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s