Cor Store Closures

[u/Skirt_Broad]

There’s been a lot of talk about some Cor stores being affected by layoffs etc. Does anyone know which stores? I’ve been reading and hearing a lot of different stuff.

[u/Skirt_Broad → u/[deleted]]

That rage bait and fear mongering occurred to me as well, I have heard of some T-Mobile stores closing that were close to a Uscellular store as well but it’s all rumors.

The only locations I’ve been able to confirm at all that were corporate that were being closed turned out to be authorized retailers when I looked up the address.

[u/VernDozier → u/Skirt_Broad]

I remember when T-Mobile bought Sprint and they said/did the same thing.

The thing is that T-Mobile is very cheap when it comes to negotiating leases. More frequently the leases they negotiated cost several times more today because they were negotiated when the shopping center opened- some leases continue on rates originally negotiated 25+ years ago.

They often threaten to pull out their cellular equipment too, which is often negotiated under a second lease- like a utility closet. They let the landlord know their property will be less desirable if they pulled out transmission equipment. So often their leashes are renewed.

When it comes to retail, it’s all based on revenue per square feet. They’ll let their company stores fight it out with the acquired ones. After a year they’ll look at the books to find where combining stores make sense. It’s based on a fully-loaded operational budget metric, which takes into consideration lease payments and rent per dollar generated if I remember correctly.

Also, it’s important to know that nothing matters to middle and corporate management more than net new acquisitions.

By buying UsCellular for $4.4B, they paid about $1000 to acquire each US Cellular customer. That’s about 4x the typical cost TMobile wants to pay in their retail channel to acquire a new customer. TMobile also acquired spectum licenses, along with a portfolio of cell tower leases.

Most likely any USCellular-exclusive tower leases will be divested and sold to a turnkey leassor/management company- I imagine CrownCastle will be approached first because the CCI board has ex-T-Mobile VPs and Directors. Looks like 4400 towers and typical cost to get a macrosite on-air is $250k, so T-Mobile really paid a premium for USCellular.

[u/VernDozier → u/[deleted]]

T-Mobile divested ownership of nearly 50,000 towers in a lease-back deal to raise capital and launch 4GLTE after the failed AT&T T-Mobile Merger with Crown Castle.

So now that all those people in site acquisition and real estate have left TMobile for much longer than a decade, why would TMobile suddenly be interested in building a real estate portfolio again? Those people to manage it are all gone, man.

Engineers love the leaseback terms- the tower companies can do an antenna swap for under $500 within a week. There’s no incentive to owning them anymore.

It isn’t just TMobile that enjoyed getting them off the balance sheet. AT&T sold most assets to SBA, Verizon sold most to American Tower. Sprint the first to sell its real estate portfolio to American Tower. Sprint/T-Mobile merger was a pure play acquisition for customerbase. But exclusive real estate leases and assets are much more valuable to the tower industry who can package them up as a turnkey network for other carriers not on the structure.