After months of speculation regarding SoftBank’s proposed takeover of Deutsche Telekom’s controlling stake in T-Mobile, it seems those rumors can be laid to rest. At least for a short while. A report by Bloomberg states that DT’s CEO, Tim Hoettges told company directors yesterday that a sale of its US carrier is unlikely to happen in the near future due to “regulatory hurdles”.
In recent times we’ve heard plenty of reports that SoftBank’s CEO, Masayoshi Son has met with regulators to try and sound out the possibility of a merger with Sprint. He believes firmly that if the smaller carriers are going to challenge the “big two”, that regulatory bodies need to allow consolidation. Sadly – for him – the Department of Justice wasn’t keen on the idea, and neither was the FCC. This lack of support from those in charge also supposedly lead to a recent plea by Son with the chamber of commerce, trying to garner support from the public.
This doesn’t mean that Deutsche Telekom isn’t looking to sell, however. Bloomberg‘s anonymous sources who have “direct knowledge of the matter” indicated that DT would still like to offload its 67% controlling stake in the company, and that SoftBank is its preferred option. There are other options, one of which is to dispose of the some of the shares after a lockup expires in November. But with that option carrying a financial disadvantage, it’s not likely DT will take that route.
On a much more positive note, Hoettges told the supivisory board that he’s taking a much more long-term view at the U.S. market. Prime focus is keeping hold of the customers who recently joined T-Mobile’s subscriber base, and shifting prepaid account holders on to monthly subscription accounts. He also argued that if a merger with Sprint (or another carrier) isn’t possible, then T-Mobile should at least be given the opportunity to acquire a competitive amount of available spectrum at the upcoming auctions.
All in all, it’s almost 2 silver linings on one cloud. We’ve known for a couple of years that DT doesn’t want to keep hold of T-Mobile US forever. But, the fact that a merger isn’t likely any time soon and the fact that the new Deutsche Telekom CEO wants to help make Tmo more successful is a refreshingly positive piece of news.