Future T-Mobile USA sale deemed ‘unlikely’; ‘non-organic’ growth on the cards

25 May 2012

Following the collapse of T-Mobile USA’s controversial USD39 billion sale to AT&T earlier this year, parent company Deutsche Telekom (DT) has dismissed the idea of an outright sale as ‘unlikely’. DT CEO Rene Obermann told an investor’s conference in Cologne: ‘Of course, we continue to look for a long-term solution to improve earnings in our US business. However, a complete sale like the one to AT&T is considered unlikely’.

That said, Obermann hinted at DT taking ‘non-organic steps’ to boost its US business, which is generally an industry euphemism for a company buying a smaller rival. Earlier this month DT reportedly entered into discussions regarding a potential merger between T-Mobile USA and Texas-based mobile operator MetroPCS. However, the rumoured deal was greeted with scorn by both industry insiders and analysts, sceptical of the latest in a long line of dubious tie-ups. Any potential merger between the duo would offer something of a logistical nightmare; although they both utilise AWS spectrum, MetroPCS is a CDMA carrier while T-Mobile uses GSM technologies. Speaking to the Wall Street Journal, Sanford Bernstein’s Craig Moffett likened the proposed deal to ‘a baby’s head on a monkey’s body’.

United States, Deutsche Telekom (DT), T-Mobile US