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UPDATE 2-T-Mobile considers buying spectrum from private party

Tuesday, 12 Nov 2013 | 5:35 PM ET

NEW YORK, Nov 12 (Reuters) - T-Mobile US Inc is considering buying spectrum from an unidentified private party and would use some of the proceeds of a planned $2 billion share offering to finance such a deal, the company said in a regulatory filing on Tuesday.

On Monday, after the market close, the company announced an offering of up to roughly 72 million shares and said it could buy wireless airwaves using proceeds from the sale. The share sale could represent the fourth biggest secondary offering so far this year, according to Reuters data.

T-Mobile, the No. 4 U.S. mobile operator, said in the filing that it would not participate in a spectrum auction the U.S. government plans to hold in January, leaving investors in suspense over what spectrum it is looking to buy.

BTIG analsyt Walter Piecyk said T-Mobile could potentially be looking into buying spectrum from privately held Aloha Partners, which has spectrum in 12 of the top 50 U.S. markets but does not operate a wireless network.

It could also look to buy spectrum Verizon Wireless does not use, Piecyk said.

He estimated that a deal with Aloha could cost T-Mobile $650 million while a Verizon deal could be as high as $3 billion.

Verizon declined to comment for the story and a representative for Aloha was not immediately available for comment. Dish Network Chairman Charlie Ergen declined to comment on whether or not his company was considering selling spectrum to T-Mobile.

T-Mobile shares closed down 3 percent at $26.09 on the New York Stock Exchange on investor worries that the share offering would dilute the value of T-Mobile shares.

Deutsche Telekom, which owns 74 percent of T-Mobile, said its stake would be reduced to 67 percent due to the offering.

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