DT's Obermann: Another sale of T-Mobile USA not in the cards

Deutsche Telekom CEO Rene Obermann said it's unlikely DT will try to sell T-Mobile USA again after AT&T's (NYSE:T) $39 billion acquisition of T-Mobile fell apart. However, he left open the possibility of other kinds of partnerships to grow DT's U.S. business. 

Deutsche Telekom CEO Rene Obermann


"We continue to look for a long-term solution to improve earnings in our U.S. business," Obermann told shareholders at Deutsche Telekom's annual general meeting. "However, a complete sale like the one to AT&T is considered unlikely."

Interestingly, the DT chief also said the company is not excluding "any option for the T-Mobile unit in the U.S., also not a merger." Obermann said the company is exploring ways to increase its return on capital or reduce its capital investment in the market, and is looking at other partnerships and other unnamed "non-organic steps."

The comments fit with those from other high-ranking DT and T-Mobile USA executives from recent weeks. DT CFO Timotheus Höttges said last week that there was "no need for us to enter into any kind of deal at this point in time" between T-Mobile and another company. T-Mobile CEO Philipp Humm said in a more recent interview with the Seattle Times that the focus for the business is to grow organically, though Humm also left the door open to "opportunities to gain additional scale or additional spectrum or strengthen capital structure in the U.S. market."

Höttges said last week that the $1.4 billion DT will spend this year and next year to upgrade T-Mobile's network--and the $4 billion in investments over time--will be all "self-funding" and will come from cash T-Mobile generates in the United States. He said at the end of the network upgrade, T-Mobile will have 2X10 MHz channels for LTE in almost all of its markets, which he said will give the company a strong spectrum position through 2017 or 2018. T-Mobile plans to deploy LTE next year using AWS spectrum and will start refarming its 2G 1900 MHz PCS spectrum for HSPA+ services. 

For more:
- see this Bloomberg article
- see this MarketWatch article
- see this Reuters article

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