Deutsche Telekom willing to keep stake in T-Mobile-Sprint tie-up
By Nicola Leske and Harro Ten Wolde
BANGALORE/FRANKFURT, May 29, (Reuters) - Germany’s Deutsche Telekom AG is willing to keep a minority stake in a deal to sell T-Mobile US Inc to Japan’s Softbank Corp, but other details such as price and financing remain to be worked out, according to sources familiar with the situation.
Softbank owns a majority of Sprint Corp S.N, the third largest U.S. wireless carrier. Deutsche Telekom owns 67 percent of T-Mobile, which has a market value of $27.6 billion and is the fourth-largest U.S. wireless carrier.
Earlier on Thursday, Kyodo news agency reported that Deutsche Telekom had agreed to a Softbank plan to buy T-Mobile.
But sources familiar with the talks told Reuters that while the two sides are keen to get a deal done, a transaction was complicated, including the issue of getting regulatory approval - it would reduce the number of major U.S. mobile competitors to three from four. The sources said no decision was imminent.
Representatives for Deutsche Telekom and Sprint declined to comment. T-Mobile US was not immediately available for comment.
Softbank Chairman Masayoshi Son has long been eager to buy T-Mobile to merge it with Sprint, so that the new company can better compete with market leaders AT&T Inc T.N and Verizon Communications VZ.N. Son has said that AT&T and Verizon have a virtual oligopoly, leading to slower broadband speeds for consumers. He has said a Sprint-T-Mobile combination would create a player with enough money to make massive network upgrades and shake up the market with new services.
Two weeks ago, Deutsche Telekom Chief Executive Timotheus Hoettges said he was open to any consolidation in the U.S. telecoms market. An exit from the U.S. would allow the German group to invest more in upgrading its network in its home market, as well as beef up its operations across Eastern Europe.
But the U.S. Federal Communications Commission chairman and the U.S. Justice Department chief have repeatedly raised concerns about such a tie-up, including the risk that it could lead to higher prices for consumers. U.S. regulators previously rejected AT&T's $39 billion takeover bid for T-Mobile US in 2011. Continued...