Deutsche Telekom CEO Says Merger, Not Sale Is Still An Option For US Branch

Deutsche Telekom CEO Rene Obermann spoke this morning during his company’s investors call and said that a T-Mobile merger is still an option, though an outright sale is more than likely off the table.

“We do not exclude any option for the T-Mobile unit in the U.S., also not a merger,” Obermann told shareholders today at an annual meeting in Cologne, Germany. “A complete sale is unlikely. You understand that I can’t say more in public on T-Mobile USA.”

The comments are Deutsche Telekom’s clearest yet on their plans to hold on to their USA branch, though they did not discount the idea of a merging the company with a partner. Obermann said that T-Mobile is still “look[ing] for a long-term solution to improve earnings in our U.S. business.”

Analysts agree that Deutsche Telekom may need to combine T-Mobile USA with a partner to boost the company.

“We don’t see any value creation by T-Mobile USA if it stays as a stand-alone company,” said Alexandre Iatrides, an analyst at Oddo & Cie. in Paris. “The alternatives would be a merger or some kind of network-sharing agreement with MetroPCS or Sprint Nextel.”

The uncertainty about T-Mobile’s future has affected Deutsche Telekom’s business as Obermann says that: “We must find other ways to increase the return on our capital, or to reduce our capital investment….believe me, we are really working very hard on this, but we are not going to make a snapshot.”

The company continues to explore options involving selling off the company’s tower portfolio having hired TAP Advisors LLC to advise them on any process with hopes of raising a few billion dollars with such  sale.

Bloomberg

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  • Fage

    Play on words?  Didn’t they call the AT&T takeover a “merger” the whole time?

    • MagentaMadness

      It was an acquisition.

      • ogopogo

         I think that what @Fage was saying is that even though it was definitely an “acquisition”, they kept touting it as a “merger”.

        • cellularcrazy09

          They did the same thing with AT&T/Cingular merger even though Cingular “Aquired” AT&T…

  • Rfgenerator

    I can pretty much guarantee DT’s plan is if they can’t find someway to unload T-Mobile USA before the elections, is to do everything in their power to get Romney into the White House thus triggering a major change in the Justice Department & FCC and then to make another run at selling off to ATT.  With a more “business friendly” administration the selling off of T-Mobile USA will be right back on the table and would probably go through faster than you could say “stick together”.

    • http://www.unscripted360.com/ Deacon

      i’ve always said it’s an inevitable end as far as DT is concerned … they want nothing to do with US business anymore for whatever reason .. the ATT deal was the best thing for the company and its customers but well .. nothing worth speaking on anymore. it is what it is.

      now we’ll have to see how it all shakes out unfortunately.  hopefully TMO rebounds and sticks around.

  • Guest

    I am so over T-Mobile, I go to a store where I have know this rep for 5 years…She is magnificent and they is still a Rep for T-Mobile, and I have seen several suck manager come out of that store. I know to me at least she has made it clear the environment within-in T-Mobile is very “stuffy” and ppl are no as pumped to be there, because their future is so uncertain. The only resin i am still with T-Mobile is because of her, she always keeps it real with me and makes me fell comfortable about being with a company in between decision. My service has always been good, but when you see public things about selling and merging it makes you want to flee. 

    • Spooln3

      I lol’d at your post. Someone has a crush. O and some people are content where they are, perhaps she chooses not to progress her career? Hmmm.

      • http://www.facebook.com/people/Bill-Wheeler/100003185900982 Bill Wheeler

         Sounds like the un-named rep is Carly.   lol

  • Godhand4505

    Sell to Google.

    • Get_at_Me

      what if tmo and google partnered up in some way? not an outright buyout of tmo but a partnership….tmo and google are like minded companies in some ways…..hmmmm

    • UMA_Fan

      Well this article just threw out that possibility.

  • TMoFan

    He is being misleading for a reason. That whole thing last year was a good old fashioned corporate sellout/buyout branded as a “merger”. Now that their true intentions are known they will look at every opportunity to sellout. Not sure who they would sellout to though, since this country has an obsession with CDMA and everyone seems to be using different frequencies for LTE.

    If a network sharing agreement with Sprint helps both companies against the Twin Bells then I’m for it. But I hope DT doesn’t do anything drastic while T-Mobile is revamping itself. I really believe that we’ll see huge improvement having a mirror-at&t network.

    • xmiro

      they only agreed to a sell to AT&T because they got offered so much above what T-Mobile was worth – plus a board seat and 8% stake in AT&T corporation

  • Guest

    They should’ve expected Germans would be loathe to relinquish power.

  • TYLERDERK

    This information is not new, we know this .

    Possibilities are Metro ,Dish or Sprint mergers any of which would help grow the company.

    • xmiro

      only if Dish is serious about doing wireless. Dish is to satellite TV what T-Mobile is to wireless phones. Wouldn’t be a bad combo actually

  • xSAVAGEx

    Google would be interesting but I would probably regret seeing it happen.

  • MarcusDW

    How exactly is a network sharing agreement with CDMA Sprint beneficial?

    • TMOTECH

      LTE is LTE. When it becomes a reality for us network sharing will be very viable. 

      • MarcusDW

        As far as I have known LTE isn’t LTE.  I know for a fact that AT&T LTE doesn’t roam on Verizon’s LTE.

        I’m gonna reply again with a link because I hate the wait when you post a link.

        • TMOTECH

          I think that is due to different frequency bands not necessarily technology. If the handsets have the same bands, and I am sure sprint will be using AWS, they should be compatible.Metro uses AWS for their LTE as well.

        • MarcusDW

          Sprint has 2100Mhz for LTE??

        • TMOTECH

          I think so. I could be wrong. Wouldn’t be the first time. 

        • ChadBroChillz

          Nah, Sprint is using 1900mhz aka PCS. They do not currently own any AWS. 

        • J-Hop2o6

           Sprint will use 1900, 850, and 2500 for LTE. But yes, LTE network sharing agreement with Sprint will work. The phones have to add support and be programed to use Tmo’s & Sprints LTE bands.

        • MarcusDW

          Aight, so how would that benefit TMO?  Or should I say DT?

        • J-Hop2o6

          A better LTE network for both against the Big 2. Not sure what else. Maybe it’ll be more attractive to customers (Better nationwide LTE network + cheaper plans + more phones)?

  • http://cosmicbreeze.tumblr.com/ DtheArtist

    I’m so tired of the back & forth with them, it makes me regret getting a contract extension (Which due to the circumstances, I had to). Unless it’s a real “merger” & T-Mobile USA is the superior carrier with most of the control, I don’t want it. I don’t want them to do away with what I already like about T-Mobile

    • xmiro

      the DOJ wants 4 national carriers

      MetroPCS and Cricket aren’t exactly the epitome of healthy companies seeing as how they can’t retain customers and have to deal with losses. Both have ample spectrum that T-Mobile can use. Sprint is on the verge of being undone by that huge subsidy for the iPhone they signed on to, but it will have LTE on 850 and 1900Mhz which is great for Tmobile so there a network sharing agreement could actually work.

      In the UK, Tmobile and another carrier merged their network, created a holding company, and run their own brands. No reason why it can’t happen here

      • http://pulse.yahoo.com/_AWWIKW6MNPUHOC4OVSHWUDWAHM Fabio

        This is the U.S, they will not allow what happened in the U.K with everything everywhere.

        • http://www.facebook.com/profile.php?id=547940103 Whitney Danielle Pyant

           What happend in the UK

  • http://applepedia.net/ Mark Anders

    Great article, like always! I am very much impressed with your work..

  • JMccovery

    The words “T-Mobile”, “merger” and “Sprint Nextel” all used in one paragraph send shivers down my spine.

    A Sprint/T-Mobile merger would only benefit both companies if Sprint was willing to sunset CDMA, which I don’t think they’d be ready to do yet…

    • http://pulse.yahoo.com/_HTL3TKBNEICYZKCU7SZQN6IRWQ v

      this is the best post in this thread, IMO. The only one that makes sense. DT management should keep their mouths shut and not create so much uncertainty around tmobile’s business model.

  • Johntho21

    Wait, didn’t another T-Mobile official just last week stated that T-Mobile USA will not be merged with any company and that T-Mobile USA is not a problem child for the parent company…. So a week later a whole new statement is released that contradicts the statement from last week. T-Mobile will be merged… At some point… I’m starting to think…. Do the CEO’s and CFO’s of these different branches communicate with one another? Because it seems like a HUGE lack of communication on their parts…… To the parent company, Mr.Telekom, think about it, yes your US branch is loosing money, the only branch of yours that is. But what popular device is being sold on ALL of your branches around the world except the US? Hmm seems like abit of a correlation to me. Stop being stupid and ignoring the problem/company you need to be friends with… We’re all adults here.

    • UMA_Fan

      Sometimes public statements like that are there so if they are working on a deal, they can get better terms on it since they don’t ‘need’ to merge.

  • BahamasGeek242

    I love T-moible well I like the prices more than anything else.  I don’t mind a merger if the prices will stay the same and all current customers plans are grandfathered in

  • Stallion2242

  • http://profile.yahoo.com/H4UXDNEBB5RA62MRNXXEZS6UIE Alexander

    Come on GOOGLE… This is what you need…. a wireless PROVIDER… you have the hardware company…here is the carrier….G-Mobile!…. If Apple can do it… I know Google can do it BETTER!

    • http://twitter.com/312O Mr Nice Guy

      Apple owns a wireless provider? That’s news to me.

  • http://www.facebook.com/profile.php?id=547940103 Whitney Danielle Pyant

    Why Metro PCS or Sprint? This is probably stupid why not Verizon

    • Moises1204m

      yes that is really stupid, whats the difference betwin at&t and Verizon? stupid comment to make.

      • http://twitter.com/412Epic 4-12

        hahaha

  • BigMixxx

    I think he is saying that overall, mergers are the best option…
     

    I don’t think a network sharing agreement is bad.  Actually benefits
    both t mobile and any other would be carrier. 

    a 2013 LTE network would
    mean t mobile would operate the fastest overall experience as a carrier and be positioned well for Real 4g i.e. LTE-A….

  • UMA_Fan

    Hopefully what he means is that T-Mobile would be the ‘acquirers’  in any potential deal so we wouldn’t see the loss of the T-Mobile brand.

    ANY deal with T-Mobile and any other wireless company is going to be a clusterf*ck since nearly everyone else is CDMA.

  • TMOTECH

    Okay so what I am reading here is that AT&T and Verizon are having their handsets locked out so they will not work on the other carriers bands. And as i suspected I was wrong about sprint. Looks like they will be using the 800 MHZ spectrum that the Nextel network is currently on for LTE plus some of their 1900 MHZ as well. But we don’t have any LTE handsets yet so if there were a network sharing agreement made we would just have to have our handsets be compatible with the other bands as well as AWS. NBD. 

    • MarcusDW

      It’s all Jesus TECH.  At least we know the deal now.

  • Dave Macias

    Vodafone? check , Telenor? check, TeliaSonera? chekc, NTT Docomo? check, SoftBank? check, au by KDDI? check, at&t? absent, Verizon? not here today, MetroPCS? absent, Sprint?absent

    • xmiro

      Vodafone owns a big chunk of Verizon, so that’s off the table

      • http://pharaohtechblog.blogspot.com/ Conan Kudo (ニール・ゴンパ)

        The Vodafone Group is the only mobile network operator in Europe that actually managed to improve for the 2011 fiscal year. Everyone else fell further into debt. Don’t expect that to improve for 2012. I don’t expect it to improve until 2015 at the earliest.

  • MagentaMadness

    Once TMO has LTE up and running, and has lowered its OPEX, it’ll be sold. We’re in the middle of drastic cutbacks to reduce OPEX. Buy reducing OPEX you make your company worth more, the writing is on the wall.

  • J-Hop2o6

    I have a feeling it’ll be a MetroPCS buyout for spectrum and customers, and a LTE network sharing agreement with Sprint (TMO 1700 + Sprint 1900, 850, 2500 LTE band phones).

    • ChadBroChillz

      I would not trust Metro customers. they are all basically prepaid, and making them switch to HSPA+ would be a pain in the ass for tmobile. Also I doubt we will see a quad band LTE phone for a long time. Not enough space in the phone for all the antennas, etc needed.  If tmobile wanted to network share with sprint, they would have to switch to using LTE on 1900mhz. Probably better to just sign a wholesale LTE deal with clearwire.

      • xmiro

        there are multiband chips available

        • ChadBroChillz

          The problem is not the chips. Its the antennas and RF electronics that go with it. With LTE, MIMO is the standard, which mean currently needing two antennas for the same frequency, and it must be spaced accordingly.

        • J-Hop2o6

           LTE phones right now already have two antennas for Cell. Forget what phone it was, but wasn’t huge. So having multi-LTE bands + older Cell tech+bands won’t be an issue with upcoming efficient baseband chips. Qualcomm’s newest Baseband chip currently w/ LTE is already very efficient.

          And to reply to the MetroPCS customer comment, I’m sure they’ll stay with Tmo’s great prepaid plans, plus its a better network than MetroPCS. And all Tmo has to do is exchange the MetroPCS customers with phones that are equal value to their phones that works on Tmo’s network, at Tmo’s expense of course.

          And Tmo does not have to switch to 1900. The phone just has to support Tmo’s (1700) and Sprints (1900, 850, 2500) LTE bands. Not hard with the more efficient baseband chips these days.

        • ChadBroChillz

          You are not listening to what I am saying. Each LTE band will need two different antennas plus the RF electronics on top of old cell bands. It has nothing to do with efficient chips. Chips like the MDM9600 already support all the LTE bands needed, its the antennas and RF electronics that are the problem. Only positive would be ability to share antennas, so they wouldnt need another 1900mhz band if they already had 1900mhz LTE.

          Nothing forcing them to stay was my only point. Sure tmobile could offer them phones and try to get them to switch, but does not mean all of them would stay. If I was tmobile, I would not pay for customers. Tmobile does have some good prepaid plans though, and they are better than metros current pricing. 

        • J-Hop2o6

          I’m not calling you a liar, but link me to the evidence of “Each LTE band will need two different antennas.” So far I only seen two antennas in the FCC reports using LTE+3G+2G bands. Damn I wish I could remember which phone it was.

        • ChadBroChillz
        • http://pharaohtechblog.blogspot.com/ Conan Kudo (ニール・ゴンパ)

          Quad-band LTE devices already exist: 
          http://goo.gl/57Egi

          If U.S. Cellular can do it, why can’t anyone else?

        • ChadBroChillz

          Yea, I just saw that device last night after making my post. I was wrong, it seems like it is possible currently, but the phone will be a brick and be lower spec’d. That phone is .16in thicker and .10in wider than the One S, while only having a hummingbird processor, 512MB of RAM, and 1.4GB of internal memory . Very Dated for a device coming out just a month ago.

          And man, It is just one giant antenna:
          http://i44.tinypic.com/296p5b5.png
          And it only supports 700/850/1700/1900. I wonder how much bigger it would get if you add GSM/WCDMA to it.

        • http://pharaohtechblog.blogspot.com/ Conan Kudo (ニール・ゴンパ)

          It wouldn’t get much bigger. In fact, it could be thin! Check out the FCC filings for the HTC Rezound and the Motorola DROID RAZR. Both devices have CDMA2000, WCDMA, GSM, and LTE support.

          Don’t forget that we now have integrated UMTS modems that support GSM, WCDMA, and LTE on a single chip and antenna structures that are similarly combined now.

        • http://pharaohtechblog.blogspot.com/ Conan Kudo (ニール・ゴンパ)

          It wouldn’t get much bigger. In fact, it could be thin! Check out the FCC filings for the HTC Rezound and the Motorola DROID RAZR. Both devices have CDMA2000, WCDMA, GSM, and LTE support.

          Don’t forget that we now have integrated UMTS modems that support GSM, WCDMA, and LTE on a single chip and antenna structures that are similarly combined now.

        • J-Hop2o6

           Damn that’s radio overload! Lol. But I knew it was possible. I don’t know why Chad thought they couldn’t have 2G/3G/LTE in one phone with most of the supported bands. And thats crazy it uses 6 antennas (4 cell, 2 non-cell). How much can u fit on one antenna? In the picture Chad posted below shows Antenna 2 supports 4 LTE (Rx & Tx).

        • J-Hop2o6

           I already know what MIMO is. But I see u admitted u were wrong below. That picture u posted below shows Antenna 2 supporting 4 LTE bands (Rx & Tx).

    • MagentaMadness

      Not so much a total buyout, but rather some spectrum swapping. TMO has spectrum that Metro can use and vice versa. Spectrum is arranged in blocks, easiest way to explain it is, so for instance say if there are 4 blocks, TMO owns block 1 and 3, Metro owns blocks 2 and 4…it works but its more efficient if they were in order, so they’ll swap 2 and 3, then TMO will have 1 and 2, and Metro will have 3 and 4.

      • J-Hop2o6

        I know about blocks inside of Bands/Spectrum.

  • SirAuron14

    so do they want another AT&T thing to happen? or does Tmobile want to buy another smaller company to make tmobile bigger? I still want tmobile to exist and become better.

  • https://www.facebook.com/pages/TruTechies/241886182579005 TruTechies

    Just buy MetroPCS.

    It would be a benefit in more ways than one :P

  • Youngt82

    Yeah i will also have to say just buy Metro-PCS :)

  • BigMixxx

    It looks like oberman just finished saying ‘boobies’ in this picture…

  • BigMixxx

    It looks like oberman just finished saying ‘boobies’ in this picture…

    • cellularcrazy09

      He wasn’t talking about carly…

    • http://twitter.com/412Epic 4-12

      haha u wild

  • wsj

    The big three is not going to happen.  So unless its a tiny US company to merge with a US merger is not going to happen.  Vodaphone neither.  Maybe America Movil.

  • wsj

    The big three is not going to happen.  So unless its a tiny US company to merge with a US merger is not going to happen.  Vodaphone neither.  Maybe America Movil.

  • http://pulse.yahoo.com/_AWWIKW6MNPUHOC4OVSHWUDWAHM Fabio

    How about DT just let’s T-Mobile out of their hands! It seems like all DT wants is to sell out or merge with some other companies like MetroPCS (WHICH IS INCOMPATIBLE CDMA!). T-Mobile USA has about 33 Million customers and it is VERY profitable, just not to DT apparently.

    If T-Mobile USA were to be on it’s own it would survive without DT.

    • Mr_Vault

       Good point. Seems if I remember correctly that DT is in deep debt and Tmo is very profitable. I’d think DT needs to fix their own problems and let Tmo continue making the $$$…

    • Crybabies

      I agree.  If you want to learn how to run a company into the ground than DT is the place you want to look.  They are the biggest jokes.  

  • LinuxFrenzy

    I’m looking at YOU Google.

    • JBLmobileG1

      How about Facebook?

  • JBLmobileG1

    What ever happened to the Tmobile and DISH Network merger? Maybe that is still a possibility.

    • Eyeris15

      I give T-mobile Two years before the whole company goes under. I worked for T-mobile for 11 years. And have moved on to one of top two carriers in Wireless. I bleed majenta for those 11 years. What I got ead false promices and a company that was operating from across the water and failed its employees. Its only a matter of time you know it and they know it. Good luck.

  • GinaDee

    “Reduce capital investment….”

    That means reduce spending on their network…  Now more then ever T-Mobile needs to be increasing CAPEX to be able to better compete with their larger rivals.  

    I understand Rene’s position.  As a CEO of a huge telecom company he has shareholders to please. Unfortunately with a very very conservative bunch of shareholders in Germany who are looking for quick ROI their US customers don’t’ reap any real benefits.  

    With 1/3 of the customers of AT&T…  T-Mobile should be spending at least a 1/3 in CAPEX as AT&T does… at the very  minimum to keep up technology and get ahead of the curve but they don’t.  Even with the $3 billion CASH infusion T-Mobile still spends the bare minimum.  

    At the very minimum we need to hear T-Mobile’s plans to overlay their existing GPRS network but sadly even with LTE I suspect a large area of their geographic coverage area will remain GPRS only for years to come.

  • JBLmobileG1

    Just a crazy thought and idea. I read on CNN a few minutes ago that Facebook maybe creating a phone and has hired engineers who worked on the iphone. Now while they may not have spectrum that Tmobile may need they do have plenty of money to help invest in Tmobile’s network. Could Facebook be a company Tmobile could merge with? It isn’t any crazier of an idea than Google merging with Tmobile. Supposedly this Facebook phone would use an Android based O/S. I could see it happening… what does everyone else think?

  • Stbrown1683

    i agree i work for t-mobile and i have been looking eslewhere for employment

  • http://twitter.com/412Epic 4-12

    I hope and pray MetroPCS & T-Mobile Join forces!

    @412Epic:twitter