According to a New York Post report, Deutsche Telekom CEO Timotheus Hoettges is not as interested in a merger between T-Mobile US (NYSE:TMUS) and Dish Network (NASDAQ: DISH) and would prefer a deal with Sprint (NYSE: S).
The report, citing an unnamed source, said that Hoettges told investors at an RBC Capital Markets road show in Toronto last week that a deal with Sprint would create a large amount of value for shareholders and the industry. Hoettges said that a deal with Dish makes sense but at some point in the future.
Last week reports emerged that Dish and T-Mobile were in discussions on a merger but that terms of the deal had not yet been finalized. Dish and T-Mobile have declined to comment on the reports.
Hoettges said DT would keep all of its options open regarding T-Mobile. The German telco does not control T-Mobile's board but still has a 66 percent ownership stake in the carrier. The report added that T-Mobile might try to team up with Sprint in next year's auction of 600 MHz broadcast TV spectrum. T-Mobile has continually pushed the FCC to allow for joint bidding arrangements between national carriers.
Citing two unnamed sources, the report said Hoettges' Sprint strategy was tied to the belief that Comcast (NASDAQ: CMCSA) might buy or partner with a larger T-Mobile. The report added that Hoettges said a Dish deal would likely close off a deal with Comcast because of regulatory concerns. "If you buy Dish, you kill the prospect of selling to Comcast," a source said, paraphrasing Hoettges.
A DT spokesman declined to comment on the report, which noted that a Deutsche spokesman said the quotes and paraphrases in the report were false but declined to say how they were false.
Last summer DT and Sprint parent SoftBank abandoned plans to try to merge the two carriers amid signals of opposition from U.S. regulators. Then, in the fall of 2014, French telecom and Internet company Iliad made an ill-fated bid for a majority stake in T-Mobile.
Hoettges said in May that DT will consider any partnership for T-Mobile US that can improve profitability at the carrier, and indicated that the company is not in a rush to make a deal. "But it is our duty to go on improving the return on T-Mobile US," Hoettges said at the company's annual shareholders meeting, according to Reuters. "If we find a partner who will help us to do so, we will obviously consider it."
Hoettges told reporters on the sidelines of the investor meeting in May that DT is under no pressure to sell T-Mobile, reiterating what he has said in the past. "Customers are literally flocking to us," he said.
A deal between Sprint and T-Mobile likely would not be attempted until the next presidential administration takes office in 2017.
- see this NY Post article
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