Deutsche Telekom (DT) has repeatedly said that it has no plans to sell its North American operation, T-Mobile USA. The telecom seems to be changing its tune as reports broke this weekend that top DT executives are openly considering a sale of the company's US carrier. According to analysts' estimates, T-Mobile USA could fetch as much as $30 billion on the open market. Despite rumors, Vodafone said it has no plans to pursue T-Mobile USA, and there is no word yet which companies might be interested in acquiring it.
Insiders claim there are three factors that could prompt DT to sell T-Mobile. The first is T-Mobile USA's lack of 3G. The carrier's US rivals, including Verizon Wireless, Sprint, and Cingular Wireless, either already have 3G networks in place or will in the next few months, putting T-Mobile USA behind in the competitive landscape. The next factor is DT's need to clear out debt and shore up its position in the European wireless market, where the carrier faces growing competition and market saturation. The third factor is the entrance of the US cable TV industry into the wireless industry and the emergence of service bundles. T-Mobile USA has no connection to a landline telecom or an MSO operation, and consequently cannot offer its wireless service in a bundled offering.
For more on the T-Mobile USA rumor:
- read this report from today's Wall Street Journal (sub. req.)