Deutsche Telekom to sell its share of T-Mobile and get out of the US market
For a long time T-Mobile has been part of the US market but now Deutsche Telekom wants to get out of the US market
Why? Well, there are a lot of reasons for the company to get out of the market but one thing is for certain – with its 67% share in T-Mobile Deutsche Telekom will determine the destiny of the fourth US carrier.
T-Mobile on the one hand has improved its position considerably over the last year. Only in the second half of 2013 the carrier has managed to attract new two million postpaid subscribers, which is quite an outstanding number for such a small period of time.
However, this alone is not a good enough reason for Deutsche Telekom to stay in the US. The German company is probably going to sell its share in T-Mobile and use the proceeds to improve its German pipeline and a possible expansion in Eastern Europe is may be the next step.
Furthermore, Tim Hoettges worries that the problem that occurred in 2011 may come up again now. Back in 2011 AT&T was willing to offer $39 billion to buy the carrier but the US Justice Department stood in the way of the deal and it effectively forced AT&T to pay 3 billion to T-Mobile and withdraw its bid.
Now Tim Hoettges, the CEO of Deutsche Telekom, may actually have a chance with this deal as Sprint Chairman Masayoshi Son, and CEO Dan Hesse unexpectedly visited the FCC and the Justice Department in order to make sure that there is a lesser chance that there will be any problem with the regulators.
This, of course is driven because by their own estimates Sprint cannot pay a higher than 3 billion break-up fee. Deutsche Telekom’s CEO warns that the risk of regulatory problems is high, so this justifies a huge break-up fee for the lost time. However, if Deutsche Telekom really wants to get away from the US market it will be pushing for the deal with Sprint to happen.