Deutsche Telekom still wants to sell T-Mobile

Deutsche Telekom still wants to sell T-Mobile
Despite a growing reputation for being innovative, and its rapidly growing size, T-Mobile still is not quite big enough on its own to go up against the big guys like Verizon and AT&T. So says Deutsche Telekom CEO Tim Hoettges. Now, you might wonder what the CEO of an overseas carrier has to do with T-Mobile. As it turns out, Deutsche Telekom owns 67% of  the nation's fourth largest carrier.

Hoettges was hoping that Sprint would be able to get a bid past U.S. regulators like the FCC and the FTC. Sprint owner SoftBank had been working on getting the financing for a deal. However, SoftBank CEO Masayoshi Son was concerned that SoftBank would have to give up too much in break-up fees if the deal couldn't close. In 2011, when AT&T decided to withdraw its bid for T-Mobile also because of regulators, T-Mobile received $3 billion in cash and a ton of spectrum as a break-up fee from AT&T.

The Deutsche Telekom executive says that U.S. regulators are looking at the wrong thing. Instead of worrying that a Sprint-T-Mobile combination would drop the number of major carriers from four to three, he says that they should be concerned with Verizon and AT&T's duopoly. Hoettges is also concerned that the top two U.S. mobile operators have widened the gap with Sprint and T-Mobile by purchasing more spectrum in the FCC's recent mid-band auction.

Hoettges says that T-Mobile's current strategy cannot be sustained long term because of the $4 billion to $5 billion in investments each year that it needs to make in order to keep up. He also says that T-Mobile CEO John Legere has done a great job although "his management style will never be adaptable to Germany."


Bottom line, while the Deutsche Telekom chief is impressed with T-Mobile's turnaround, he also hopes that the environment changes and that U.S. regulators would welcome consolidation in the industry with T-Mobile getting bought out by a monied partner.

source: re/code via SlashGear

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6 Comments

1. mloudt

Posts: 20; Member since: Nov 14, 2014

It wouldn't be a new year without us hearing about how DT wants to sell T-mo. DT is funny because they have a pending agreement to sell joint venture EE in UK. Hopefully, they sell that quick and hold on to T-mo until the right investor comes along. Sprint and Dish aren't the right buyer who cares what DT CEO wants FCC doesn't want that thus Sprint-T-mobile won't happen anytime soon.

2. EspressoBrownie

Posts: 15; Member since: May 08, 2014

T-Mo has come a long way from what it used to be. Sure it will take time for it to be profitable being that only within the last year or so with all these changes. These changes were welcomed with open arms. Legere basically adapted to current times and instilled new ways to breathe life back to the mobile industry. Even if another buyer comes into play, patience is still the key for long term profits. Hoettges is ignorant for saying not being adaptable. There is no such thing as being impossible.

7. Jason78

Posts: 281; Member since: Apr 10, 2013

Hoettges didn't say T-Mobile isn't adaptable. He said that Legere's personality would not work in Germany. German CEO's are very conservative, Legere is not. You are overlooking the reason Deutsche Telekom wants to sell T-Mobile. Deutsche Telekom needs to spend $4-5 billion every year (out of their own pocket not T-Mobile's) to improve T-Mobile's network if they want T-Mobile to be a true competitor to AT&T and Verizon. Deutsche Telekom doesn't want to spend that money in the USA, they want to spend it in Eastern Europe and other parts of the world. Parts of the world where mobile communication is still rapidly growing and there aren't already two huge competitors that dominate the market.

4. iOSLMFAO

Posts: 290; Member since: Dec 15, 2014

T-MobiLOL. Even the owners know they're trash and want them gone LOL

5. npaladin2000

Posts: 165; Member since: Nov 06, 2011

There's no options left for a buyer, what, does DT think AT&T's going to try again? Do they think they can con Verizon into taking a shot at it? The FCC and the DoJ have said for better or worse that the Big 4 are staying the Big 4. I'm sure they're welcome to buy up smaller players, but there will be no M&A of the top 4 in the industry.

6. Jason78

Posts: 281; Member since: Apr 10, 2013

There are plenty of wealthy individuals and corporations around the world that could purchase T-Mobile. T-Mobile would be pocket change for Carlos Slim.

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