UK operator Everything Everywhere will seek a bond issue to raise funds for the auction of 4G spectrum due to take place towards the end of 2012, reports The Financial Times. The joint venture between Deutsche Telekom’s T-Mobile and France Telecom’s Orange networks will go to the bond market to raise the funds after raising its first independent finance last year.
In November, the joint venture used bank loans to repay £875 million of £1.25 billion loaned by its parent companies. At the time, it was reported to be considering using its relationship with the banks to help it tap into the bond market to raise as much as £800 million for “future corporate investment.”
Everything Everywhere could potentially roll out 4G LTE services this year due to telecoms regulator Ofcom allowing the use of existing spectrum for LTE. However, it is also due to sell spectrum it holds as part of the conditions of its formation in 2010, a process that could net the company as much as £400 million.
Meanwhile,Reuters reported that Everything Everywhere has not ruled out the possibility of Deutsche Telekom exiting the joint venture, with chief executive Olaf Swantee saying he was unable to comment on recent speculation.
Deutsche Telekom is reportedly considering selling its 50 percent stake in the JV to recover cash after the failure of its proposed US$39 billion sale of T-Mobile USA to AT&T. Possible scenarios could be for France Telecom to buy the stake of a transaction involving a third party such as a private equity consortium or another operator.
The UK’s number-one operator by connections yesterday reported a 2.1 percent fall in pro forma service revenue for 2011 as a result of mobile termination rate cuts. Despite this, the company added 894,000 postpaid customers with T-Mobile having the highest number of postpaid additions since 2006.