Deutsche Telekom chief: We’ll consider partner for T-Mobile if it improves profitability

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Just when we were thinking the rumors of T-Mobile merging – or partnering with a company – were dying down, Deutsche Telekom’s own CEO, Tim Hoettges brings the subject up again. As T-Mobile US’ major stakeholder, DT has a huge say in these matters.

At DT’s annual shareholders meeting, Hoettges admitted that T-Mobile was in far better shape financially than it was two years ago. However, they couldn’t just sit on their laurels. As reported by Reuters, he then went on to say – “But it is our duty to go on improving the return on T-Mobile US,” he added. “If we find a partner who will help us to do so, we will obviously consider it.”

This comment comes just days after it was discovered that T-Mobile US was responsible for almost half of Deutsche Telekom’s growth in the first quarter of this year. Let’s not forget last year’s comment that T-Mo US was one of the most impressive marketing stories Hoettges has ever seen.

He also later told reporters that Deutsche Telekom is no longer under any pressure to sell T-Mobile, which will surely comes as comforting news to any who care about the US’ “Maverick” carrier. And it’s something we’ve heard in the past. Back when rumors of Iliad attempting to buy out T-Mo were circling, it was stated that T-Mobile would only merge or partner with a company already in the States, with spectrum and a pre-existing customer base.

Which brings back in to question: Is T-Mobile inviting Dish to join forces with it? After last year’s comments about spectrum and a U.S. customer base, Dish made no secret about its desire to acquire a ton of spectrum. In fact, it was one of the biggest bidders in the most recent AWS-3 spectrum auction. Is it a coincidence that the company’s name keeps cropping up in rumors about a potential merger? Even John Legere has admitted that a partnership with Dish makes sense.

Given the comments already made by both Deutsche Telekom and T-Mobile’s chiefs, Dish might be the only real, decent company worth partnering with. It has a pile of spectrum – or it will once it’s approved by the FCC – and has a customer base with the States. It also offers services which could work fantastically alongside T-Mo’s big push on entertainment and media.

What do you think? Would it be beneficial for T-Mobile to have a major partner in the States?

Sources: Reuters 1 & 2, Seeking Alpha

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  • KingofPing

    More money and more spectrum in the hands of TMo could only be a good thing.

    Assuming, of course, they keep Legere and continue taking away those pain points.

    • Willie D

      It wouldn’t be more money and more spectrum in the hands of T-Mobile, it would be a steady flow of money to Dish, and all the T-Mobile spectrum in the hands of Dish. Remember this is DT selling TMUS to Dish, not Dish having a direct 50% or 51% merger. That said, it means Dish can get rid of the TMUS crew and bring in their own, including former execs of at&t, or Verizon. This is hypothetical of course, but a new owner means it could spell the undoing or a much more limited, tightened way of thinking “uncarrier” as well.

      • Mary

        Remember now this is partnership, not a buyout or merger

      • KingofPing

        “Remember this is DT selling TMUS to Dish…”

        …remember – this is nothing but conjecture and fantasy at the moment.

  • carol argo

    Bof I am sure when google Fi is an official thing.t-mobile and all in Fi will have very wide grin.

  • tre killjoy

    read this article as if you were a German chancellor arranging a marriage for your only daughter lol.

    • Lance

      Hey check out phonescoop.com. The real article has also been well known there too. Partnership will be excellent for T-Mobile US

    • Cam Bunton

      I would, but I can never quite get the accent right. ;-)

  • Mary

    Dish Network it is. Dish has stated a few days ago that is so ready to enter right into the wireless industry now. Dish will soon partner up with T-Mobile US. Let’s hope so. Comcast will be a no go, definately not Sprint or AT&T. Dish would be a better suit to partner up with. :)

  • Bradley Karas

    Partnering with Dish would be a game changer with all that spectrum to use and the 600 mhz auction on the horizon. Then you add in revenue stream from Google’s project Fi??? Verizon trending down, ATT trending down and TMOUS trending WAY UP!!!

    • Willie D

      Project Fi is just that, a project..not a revenue stream. If it was, both Sprint and T-Mobile would reconsider the plan of how much it charges Google for the privilege of using its networks. Fi is basically an experiment for Google like Ting is an experiment for Tucows

      • Bradley Karas

        Hmmmm…So t mobile is charging nothing for the use of their network?

        • KingofPing

          He didn’t say anything like that. Nice try.

        • Bradley Karas

          So it is a revenue stream? Or do neither of you understand the concept of revenue?

        • KingofPing

          Just. Stop. You’re not an idiot, so don’t act like one.

          You know exactly what he meant.

        • Bradley Karas

          He didn’t know exactly what I meant and clearly you don’t either…nor do you understand basic accounting principles. Stop wasting my time with your ignorance

        • KingofPing

          …/smh

  • AngryBadger

    Sounds good to me.

  • Philip

    I am afraid once they make record profit, they forgot about their humble past. Will it happen?

    • Stefan Naumowicz

      If they make record profit, wouldn’t they be motivated to continue to do what they have been doing to get them there? I’d be more afraid of them not making profit – then there would be motivation for drastic change

      • UMA_Fan

        That’s exactly right. T-Mobile tried no contract only before in its past with even more plus plans. It didn’t take while contract phones and plans were still an option.

  • sushimane

    Sounds very enticing partnership with dish which has a crap load of spectrum under their name. Hopefully if they do go this way tmobile would be a separate company and we get to keep our unlimited data lol

  • gpt2010

    I wish TMO would stand on its own, but I know in reality that won’t last long. I hate to admit it, but Dish is the only company that makes sense. I just hope the Dish CEO Ergen can keeps his hands off most of TMO business strategy. If not, TMO can turn easily turn into wireless companies that they hate. AT&T and Verizon. Great coverage and plans that only benefit the company not the customer base.

  • Fabian Cortez

    I think it has become rather clear that Deutsche Telekom is a bi-polar entity that’s never satisfied.

    • Acdc1a

      They’ve lost interest in the US market. That’s really as simple as it gets.

    • UMA_Fan

      I think people read too much into their statements.

      All they are saying is that they would merge T-Mobile with another company to create a better combined entity. Same thing Legere has always said. It’s very different than the proposed at&t merger which would have eliminated T-Mobile US from the market. I’m sure ANY merger for T-Mobile now would have to be one that bolsters T-Mobile.

  • Fabian Cortez

    Dish’s customer base is not distinct as they offer satellite TV service.

    So one cannot simply take their customer base and add it to T-Mobile’s due to redundancy.

  • Willie D

    The only REAL company TMo can merge with now is USCC, for its customer base, rural coverage, and 700Mhz A-Block Band 12 spectrum

    • UMA_Fan

      how many customers do they have?

      • EndlessIke

        Not a lot anymore…maybe 5 million

        • UMA_Fan

          Would still push Tmobiles customer base past 60 million.

          Still far away from catching ATT and Verizon but now it’s not a question of tmobile more than doubling their customer base

        • RiskyBidThis

          Anyone who succeeds in buying U.S. Cellular wouldn’t do so for their customers, even if they’re a nice bonus.

          They hold multiple kinds of low-band spectrum and a very significant chunk of mid-band as well, while also having a ready-made infrastructure that provides great coverage in rural areas.

          That’s why you buy U.S. Cellular, not a few million customers who could flee the first time someone tries to migrate them to a new company.

    • Tim Engen

      Not going to happen. USCC Is in talks with Sprint currently on something.

      • UMA_Fan

        It would be a waste of Sprints resources to merge with them. However it would prevent Sprints inevitable fall to fourth place for 2015 and it would be an easy migration of their customer base. A lot of Sprints newer handsets also support band 12.

        Then again Sprint is even talking about sitting the 600mhz auction out.

  • Nerd_Baller

    I used to be in the corporate world. I think that once we find out what is happening with dish’s spectrum, we will find out what’s going to happen with a possible merger or partnership with tmobile.

    • RiskyBidThis

      Agreed. Until they know if they’re going to be paying $10B or $13B for AWS-3 it’s hard to hash out an agreement on a merger or acquisition.

  • Stephen J Ketchen

    I’ve said for awhile that T-Mobile and Dish should partner together. It does really make sense. I don’t want Dish to buy T-Mobile however. I think that that could be a disruption to and a drag on T-Mobile’s current momentum, especially if it involved any corporate management shakeup on T-Mobile’s side. If Dish could lease spectrum to T-Mobile at a good rate and T-Mobile could work on some packaging of Dish services like Sling, I think that would be the way to go.

  • Anon

    dish is probably waiting to acquire tmo until after the 600mhz auctions

    • EndlessIke

      Why? It would make much more sense to start that ball rolling before the auction begins both to pool resources and reduce the number of bidders…

      • UMA_Fan

        It’s unlikely even if they announced a merger tomorrow it would recieve regulatory approval before the auctions.

        • Mary

          What do you mean by that statement? You mean unlikely they will start partnering up with each other? If so, yes of course regulatory approval will be in the works, if thats what you mean??

  • Aurizen

    how much did dish spend on the spectrum?

  • Jay J. Blanco

    U.S. Cellular and Dish is perfect. Buy/merge with USC then partner with dish perfect combo

    • UMA_Fan

      And T-Mobile should push the Sling TV as its video offering of the future of mobile as traditional cable and sattelite die off.

  • UMA_Fan

    Would be cool if they used sattelite technology to enhance outdoor cellular coverage and fully blanket the U.S. with signal. Maybe there’s network tech out their that would make the sattelite coverage work like carrier aggregation of two disparate spectrum bands?

    Of course sattelite doesn’t work indoors but then your devices could hand off to wifi calling or low band spectrum. I’m fantasizing of course but it would be amazing if this was possible one day. They would have to make handset radio tech though that doesn’t consume a lot of battery power so if it were ever possible it would be a long ways off.

    • Kidney_Thief

      Ever wonder why satellite telephone service is crazy expensive? It’s because satellites are crazy expensive. Like, several hundred million dollars expensive, and and even after all that cash, the internet link they provide is both high latency and pretty slow. T-Mobile can build thousands of towers for several hundred million dollars.

      Sure, satellites are neat, but an air link from a cell tower than can easily be a dozen times faster than what a satellite can provide, and with a latency of 50ms vs 1500, is even more neat.

    • NorCalOffspring

      Ever heard of something in physics called Relatively?

      • Hector Arteaga

        Relativity?

        • NorCalOffspring

          You haven’t obviously

        • RiskyBidThis

          Everyone has heard of relativity, but maybe if you could stop being a prat for a moment you could explain to the guy why you think satellites don’t make sense for cell service.

  • UMA_Fan

    Since Dish recently hired an executive to expand its wireless initiatives I think they may want to be a T-Mobile US mvno while in exchange T-Mobile gets to build out dish’s spectrum. I don’t think this is the ideal route to take they should throw their weight behind bolstering the T-Mobile brand

    • Clifton K. Morris

      Except… DishNetwork is already in a network trial with Sprint. The network trial is in Texas, and it was announced Dec 17, 2013. It’s doubtful that after a few years of investment into a trial like that, they’ll just abandon it and start over.

      Also, if you’ve read the news, Deutsche Telekom wants *out* of the US. That means the surviving company would probably be a different brand. Probably it would be called “MetroPCS”.

      • RiskyBidThis

        DT wanted out of the U.S., they’ve said themselves they’re under a lot less pressure to sell these days between TMUS’ success and their sales of other assets like EE.

      • UMA_Fan

        It was a network trial with Ntelos wasn’t it?

  • Kousha Vedadi

    They should merger with sprint

    • Justin Smith

      NO

      • UMA_Fan

        Would be good if they folded Sprint and used its assets to bolster T-Mobile.

        • RiskyBidThis

          And saddle them with BRS? No thanks, they can keep that boat anchor.

        • Hector Arteaga

          Whaaa? T-Mobile would do wonders with Sprint spectrum. Tmo has excellent cell density that would work well for B41.

        • RiskyBidThis

          Even T-Mobile’s network spaced as it is for AWS still isn’t dense enough (at least in most places) to make good use of BRS, not to mention how terrible the stuff is at penetrating anything.

          Softbank was foolish to assume that just because they’d made BRS work in Japan it would work in the U.S. The U.S. is more than 24 times as large and less than 1/8th as densely populated. China as so many Sprint apologists are happy to point out is making it work, but that’s a lot easier to do when you have 2 billion people and can spend $182 billion to upgrade your infrastructure.

          In the few places where BRS actually makes sense T-Mobile has other options like LAA LTE to help alleviate the strain.

        • Justin Smith

          Even then it wouldn’t be that great… sure T-Mobile would have almost the customer base of AT&T then but it would also eliminate even more competition in the marketplace! Sprint has a lot of low value customers as well which could drag down T-Mobile’s overall value. As well as Sprint owns a ton of spectrum which would give T-Mobile a complete domination in terms of spectrum holdings by over 2 times almost everyone else…

          As well as the fact that other than the 1900Mhz spectrum the two own no common ground spectrum and would be just a big mess of desperate bands. Among many other reasons it wouldn’t make sense for T-Mo to merge with Sprint.

        • UMA_Fan

          I think with that amount of spectrum T-Mobile could continue to support Unlimited well into the future.

          I’m no engineer but this disparate bands issue is easily resolved with carrier aggregation. ALREADY there exists devices that work on both Tmobiles and Sprints LTE bands. iPhone 6, Nexus 6 etc. Also newer Sprint LTE devices support Tmobiles band 12. As VoLTE gets more common it would be an easier migration than you think.

    • eAbyss

      Buyout maybe. But merge? Ehh…

    • Stone Cold

      Already was shot down unless you are trying to be funny.

  • nycplayboy78

    OMG…JESUS H CHRIST…How much profitability is DT looking for from T-Mobile USA??!! Every year it is the same damn thing….T-Mo add more customers still not enough expand coverage not enough sells a butt ton of high end phones not enough….ARGH!!!!

    • UMA_Fan

      What are you talking about? Did you even read the original article?

      He’s open to a merger to bolster T-Mobile US. Not sell it off. T-Mobile plus third party equals bigger and better T-Mobile.

      There’s nothing wrong with that. This isn’t a sell off to eliminate T-Mobile from the market for cash.

      You seem to have a classic case of att PTSD.

    • Guest2398

      They are indeed adding customers by leaps and bounds but the bottom line is that they still have negative earnings per share.

    • Robert Arutunian

      T Mobile US is still losing money every year and DT has to keep subsidizing with financial support.

    • Mike

      Right now T-Mobile is expanding there network and spending a lot of money to do it and until they build a network that keeps there existing customers they’ll lose money afterwards it’s profits

  • jpswain

    T-mobile has earned my respect and admiration over the last 4 years. I was treated so shabbiley at AT&T. I can see why they were thrown off the Dow 30.
    I hope T-Mobile US understands how loyal their customers have become. Please don’t merge with anyone. Keep getting stronger, eventually you’ll be the one acquiring weaker companies.

    • Companies are thrown off the DWI when they make the index look bad or there’s a higher bidder to join the club.

  • boughtemAll

    Once ppl get aware that they are paying retail prices for phones/tablets from T-Mobile the Tmo rush will collapse and I can’t wait……everything about T-Mobile says they are money hungry SERVICE SUCKS only works in major cities…. try traveling while using the data side of things you’ll get Edge speed the big E no 3g 4g or LTE…..this whole down payment trickery is the new Fraud

    • MMA Prints

      The same concept that was copied by the other carriers? Yes, people will rush to leave T-Mobile to do the same thing elsewhere. Are you new here?

      • boughtemAll

        Sprint still offers 2yr price as well as Verizon and at&t….this whole run credit to still make customers pay full retail price for phones is just outright Bs!!!!!…..why not just have a mvno carrier and buy our own phones through factory unlocked vendors

        • MMA Prints

          Then go pay $20 or $30 more per month on your bill on top of a $200 down payment for your $600 phone. You can pretend that you are getting a great deal and we can continue enjoying the growth and success of T-Mobile.

        • boughtemAll

          U must not get it 2yr prices 200-300 and thats all….not owe 300-400 more to Tmo for the same phone plus better coverage!!!!!…. Yea enjoy getting taken up top for your money….. Some how u find it better to pay retail for phones

        • Mike

          You clearly have no idea how this works. Whether you pay retail or are on a contract, in some way , shape, or form, you are still paying full price for a phone. Ever heard of subsidy? Enjoy being stuck with a phone for 2 years that will be outdated in a year.

        • boughtemAll

          Man I’ve been in the wireless industry since Motorola timeport pagers etc…..2 year pricing is always cheaper then paying retail yea I’ll still be paying for the service but the phone been paid off the day i buy it on 2yr pricing there is a difference in 2yr pricing and eip crap att next crap and vzw edge trickery……just like ppl are keeping s5 m8 and g3 longer cause there’s no need to have to upgrade before the 2yr upgrade

        • Mike

          On a contract, the phone is not paid off until you complete the contract. Ever heard of ETF?

        • boughtemAll

          Yea early termination but that’s just billed to you…..when u finance a phone and stop paying the bill the phone is blocked and u owe the remaining balance on the phone and the phone is bricked…..so like I said pay the 2yr and be done if u leave before the 2yr all carriers have offers to pay etf so your good…..that financing phones is to triple profit that’s why T-Mobile is booming of coursecourse…. revenue is flowing like crazy since all those millions of customers are paying full retail now

        • Mike

          Wrong. Contract is much more profitable especially if people keep their phones longer than 2 years and keep paying the subsidized service rate. Do your homework man. You should know this.

        • Mike

          If you break your contract within the first year AT&T and Verizon can block your phone and you will have to pay the ETF.

        • boughtemAll

          U rather pay on the same phone for 2yrs or pay it off at full retail then upgrade for full retail again….Lol

        • boughtemAll

          Clearly u don’t know how this works…. only tmo forces u to finance a phone other big carriers have the option for u to go full retail or 2yr price….. go check

        • Mike

          I wont do a contract. I like transparency. A contract hides the real cost of the phone and you know it if you have been in the business as long as you say you have. I dont have to wait 2 yrs to get a phone. I have the JUMP program. I can change devices every 6 months. I dont you you telling me that I dont need to upgrade before 2 years. The JUMP program also includes handset protection. So Im glad to see you dont understand the scope of things. I do love the old school thought process. Quite entertaining!

        • thepanttherlady

          It’s bs that a company allowing a customer to make 0% interest payments over 24 months on a phone may want to see if said customer is credit worthy first?

          If that’s the case, I’m sure you’d have no problem lending me $1000. Keep in mind that I don’t want to sign a promissory note because I think that’s just bs!!

        • Stone Cold

          You must not of heard At&t is weaning customers off the 2 yr contract.

    • Stone Cold

      The service has and still is being improved across the board. And not just in major cities go somewhere with that nonsense.

    • joneski

      TROLL!!!!!!!!!! This is so 2012… People worried about EIP geez go cry to your mom

  • Ruphuselderbeer

    I still think that T-mobile should buy US Cellular and smaller carriers in area’s they do not have the greatest coverage or spectrum rights for.

    • Jordan Smellie

      God, buying US Cellular would be amazing. I grew up solidly in US Cellular territory. Inside their coverage areas, their coverage is AMAZING. It’s rock-solid, lock-down perfect, even out in the middle of damn nowhere. Unfortunately, their network is so patchwork across the country that I couldn’t stick with them (plus, CDMA no thank you). Acquiring USC’s coverage areas (and presumably spectrum) would be an incredible move.

    • Or just strike fair reciprocal roaming deals, like it’s done throughout Europe, where mobile plans are between 1/3 and 1/2 the price as in the US.

  • randian

    If Dish isn’t going to buyout or partner why did they bother buying all that cell phone spectrum? I don’t seem them building out their own cell network.

    • Mike

      They can lease it or sell it at a profit

    • Clifton K. Morris

      Today, with American Tower and Crown Castle, it’s possible to build a network that was impossible to be built 5 years ago. It doesn’t require hiring or managing the network like it did in the past…

      All the companies except Verizon outsourced network management to American and Crown.

      I can conceivably see DishNetwork using its spectrum position and building a network very quickly. It needs the phone number of American Tower, Crown Castle, and a good RF and tower planning tool like France-based Forsk ATOLL to start building.

      Spectrum is a very interesting asset. It’s value is what people and companies are willing to bid and pay for it. Unfortunately, DT in Germany, likely due to its monopoly, thinks spectrum carries very little value, so it doesn’t place strong bids.

      The other thing that was reported today, was in RCR Wireless News. It seems when John Legere called Xavier Neil names, Xavier then went and purchased quite a bit of stock in the company from Deutsche Telekom.

      • SteveD

        “All the companies except Verizon outsourced network management to American and Crown. T-Mobile US was the first company to outsource, other companies followed.”

        I’m curious what you mean by this. AFAIK Sprint was the only carrier to outsource Network management and maintenance and they gave that over to Ericsson..

        Every other carrier, T-Mo, VZ, AT&T, US Cell, Metro (when they were still around), all managed and maintained their own networks.
        Unless you’re talking towers only.. In which case you’re only talking about a portion of the network as rooftop sites are still a huge portion of urban buildouts.

        And also..
        “That said however, Allan Tantillo’s discussion at a engineering conference (He was on the panel and discussed DAS coverage strategy on May 3, its on YouTube) illuminated that T-Mobile doesn’t think coverage or capacity at stadiums, hospitals, or hotels is a priority of its customers.”

        That’s a bit misleading as well. T-mobile is investing a great deal of money into acquisition of space and onboarding onto stadium DAS systems, Hotels, Hospitals and Universities.

      • This last paragraph is all good for the share holders, but all bad for the consumers.