adminBerlin. – Deutsche Telekom AG (DTE)’s refusal to agree on bids for T-Mobile US Inc. (TMUS) means it risks going alone to take on AT&T Inc. and Verizon Communications Inc., a strategy likely to weigh on earnings. The German carrier’s stock fell. Sprint Corp. ended talks over buying T-Mobile and joining the third- and fourth-largest US wireless carriers after the companies failed to agree on terms, people familiar with the matter said. T-Mobile is also set to reject an alternative bid from France’s Iliad SA, other people said.
Deutsche Telekom, Europe’s largest phone carrier, has sought to leave the US, where it was unable to establish a competitor capable of matching the clout of larger peers after a decade of effort. The failure to come to terms with Sprint after months of talks puts pressure on Deutsche Telekom Chief Executive Officer Timotheus Hoettges to prove that the US business won’t become a burden on shareholders.
“They are effectively going to have to continue to run it as a standalone entity,” said Andrew Hogley, an analyst at Espirito Santo Investment Bank in London. Deutsche Telekom fell as much as 5,4 percent to 11.23 euros in Frankfurt, the biggest intraday drop since May of last year. The shares were down 2,7 percent as of 1:48 p.m., valuing the Bonn-based carrier at 52,4 billion euros ($70 billion).
Iliad Option?
Deutsche Telekom in 2011 failed to get backing for a $39 billion sale of T-Mobile to AT&T from the U.S. Department of Justice and the Federal Communications Commission. Regulators had also been critical of a deal with Overland Park, Kansas-based Sprint because it would eliminate a nationwide operator. – Bloomberg.
Online Reporter