Would Deutsche Telekom Sell T-Mobile USA?

from the but-why? dept

Ah, those mobile operator merger rumors... how they come and go. As Cingular gobbled up AT&T Wireless and Sprint got engaged to Nextel, plenty were wondering what would happen with T-Mobile in the US. Absolutely nothing, seemed to be the general consensus -- for a variety of reasons. First off, T-Mobile in the US was contributing a ton to Deutsche Telekom's bottom line. However, even more important, it's not clear who would bother buying in. Vodafone would be the most obvious target, especially after losing out in the AT&T Wireless sweepstakes -- but the company still owns a hefty chunk of Verizon Wireless, and got so beaten up over the AT&T Wireless bid that it may have learned its lesson. Still, the rumors keep coming, and the latest is that Deutsche Telekom may be interested in selling the unit, in order to pay off some of its tremendous debt, while also avoiding the expensive process necessary to catch T-Mobile up to other providers with their 3G networks (T-Mobile is still trying to finalize its own, slower, EDGE network, while everyone else is frantically covering the country in 3G), where T-Mobile just doesn't have enough spectrum. Still, if this all sounds familiar, it's because we've heard this story before -- and Deutsche Telekom smashed that rumor by showing how much T-Mobile USA was adding to the bottom line. Things may be slightly different these days (post-mergers, and as the realization of the upgrades and spectrum needed to catch up to others sets in), however, it still seems like it would be a tough property to sell -- but it never pays to underestimate what happens after drooling investment bankers spend months whispering in corporate executive ears how they need to spin off this or that property.


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