Despite continued denials by Deutsche Telekom (DT), fresh rumours have again emerged that its UK subsidiary, T-Mobile UK, is to be sold off. Those close to the discussions, which would appear to be at a preliminary stage with Vodafone, Orange and O2, believe more substantial negotiations--perhaps after short-listing the three interested bidders--will not start until next month.
The renewed interest by DT to understand the level of interest comes after asset prices have rallied amid signs that the global downturn may be bottoming out. Attempts to boost the performance of T-Mobile UK are underway--together with a new MD––and any improvement in its lacklustre track record could also help with raising the bid level.
When the possibility of a sale was first floated some months ago, the price for T-Mobile UK was then put at around £3 billion. Insiders now maintain that a bid nearer £4 billion would be necessary to acquire the company. However, even this improvement would still be a fraction of what the firm paid for its 3G licence.
If the sale was to go ahead, then analysts would expect to see the funds used to strengthen the position of its US subsidiary.
Indications that DT is preparing to shake up its organisation come with the news that it will merge its domestic fixed and mobile units by early 2010, with the two units T-Home and T-Mobile Deutschland combined into one company. The three service companies (Deutsche Telekom Kundenservice, Deutsche Telekom Technischer Service and Deutsche Telekom Netzproduktion) and retail unit Telekom Shop will then become wholly-owned subsidiaries of the newly combined entity.
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