Breaking up is hard to do: Deutsche Telekom demands USD1bn ‘breakup fee’ ahead of planned Sprint merger

13 May 2014

T-Mobile US’ parent company Deutsche Telekom (DT) has demanded a breakup fee in excess of USD1 billion in the event that the Federal Communications Commission (FCC) decides to block the planned merger between Sprint and T-Mobile. According to the Wall Street Journal, which cites unnamed sources, DT also wants assurances that T-Mobile’s brand and some of its management team will remain in place after a deal.

According to TeleGeography’s GlobalComms Database, as a direct result of AT&T’s failure to complete its proposed USD39 billion takeover of T-Mobile in 2011, the DT-owned carrier benefitted from a so-called ‘break-up fee’ of USD3 billion in cash as well as a large package of AWS mobile spectrum in 128 Cellular Market Areas (CMAs), including twelve of the so-called ‘Top 20’ markets.

United States, Deutsche Telekom (DT), SoftBank Group Corp, Sprint Corporation (now part of T-Mobile US), T-Mobile US