Deutsche Telekom quashes sell-off speculation, slams regulators

Deutsche Telekom has no plans to sell subsidiaries or shareholdings in other companies, according to Deutsche Telekom CFO Timotheus Höttges.

Höttges

Speaking at the company's annual general meeting, the CFO pointedly denied any discussions that would see Deutsche Telekom (DT) exit its profitable Everything Everywhere UK joint venture with France Telecom. "We don't have a list of units we want to sell," Höttges said.

"We want to be there when demand for mobile data increases," he said, according to Reuters. "We want to participate in upgrading the network [to LTE]."

However, DT's CEO Rene Obermann left the door ajar with regard to T-Mobile USA. "We do not exclude any option for the T-Mobile unit in the U.S., also not a merger," Obermann told shareholders in Germany, according to Bloomberg. "A complete sale is unlikely. You understand that I can't say more in public on T- Mobile USA."

However, this attracted comment from Alexandre Iatrides, an analyst at Oddo & Cie in Paris. "We don't see any value creation by T-Mobile USA if it stays as a stand-alone company," he told Bloomberg. "The alternatives would be a merger or some kind of network-sharing agreement with MetroPCS or Sprint Nextel."

In an attempt to move attention away from possible disposals, Obermann outlined DT's four-point strategy: to become the leading telco in Germany, focus on integrated networks for the gigabit society, innovation through collaboration, secure cloud solutions and on keeping customers delighted.

DT said in a statement issued at the meeting that the company still needed to compensate for the decline in revenue from traditional telephony, which is caused by regulatory interventions and tough competition, by increasing revenue in other fields. According to Obermann, regulation is costing the company "vast amounts of revenue."

"Everyone is calling for high-speed networks in the furthest-flung corners of the country - ideally fibre-optic networks ... At the same time, however, politicians at the European level and the national regulatory authorities are taking away the incentives for investment," Obermann said.

The DT chief added that the United States and Japan already offer widespread LTE services which remain rare in Europe, noting that the UK has yet to even conduct its LTE spectrum auction, and French operators will only begin offering LTE in some cities next year.

Obermann indicated there was a clear link between the lack of European LTE and heavy regulation, and urged Brussels to reduce regulatory intervention. "If not, there will be no new stimuli for broadband rollout adding that regulators were giving cable network operators preferential treatment," he said.

For more:
- see this Reuters article
- see this Bloomberg article
- see this separate Reuters article
- see this DT statement

Related Articles:
Report: Deutsche Telekom mulls sale of UK, Dutch subsidiaries
DT's Obermann: The cloud will save us
Deutsche Telekom's European investment plans will crumble if AT&T deal fails
Deutsche Telekom to cut 40% of German HQ staff

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