No Clear Path for Deutsche Telekom

Reports have been flying around all morning about DT’s plans for its US arm T-Mobile USA (formerly Voicestream). DT has been investigating merging the unit with either AT&T Wireless or Cingular. But at the same time the company is indicating that it may not want to sell off one of its fastest growing units. The reality is that even though T-Mobile USA is a fast growing company, it will have a very difficult time getting out of sixth place in the US market. DT should merge the unit with the partner offering the best terms. While this would be a blow to their global branding, assuming that the new enity would take the name of the US partner, they would still have a piece of a major player in the US market. At 50% penetration, growth is already slowing down and carriers are battling churn more than ever before. Consolidation is inevitable.

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