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FRANKFURT (Reuters) - Deutsche Telekom (DTEGn.DE) has put the sale of T-Mobile US (TMUS.O) on hold to deal with an upcoming auction of radio airwaves, giving potential suitors time to wait for a more favorable political environment toward telecoms mergers, two sources said.
The U.S. Federal Communications Commission is due to start an auction for low-frequency airwaves at the end of this month, which industry observers expect could last for months.
"During that period, there will be no M&A activity in the U.S. telecoms sector," said one person familiar with the situation on Tuesday.
Auction participants are not allowed to engage in any partnership or merger talks during the weeks before and after the bidding process. T-Mobile US, which is 65.4-percent owned by Deutsche Telekom, has said it could spend up to $10 billion in the auction.
An auction of AWS-3 airwaves, which ended early last year, raised a record $44.9 billion.
Deutsche Telekom, which declined to comment, has been trying to sell the unit for years, hoping to cash in on a recovery in the business.
Last month T-Mobile US's net profit nearly tripled in the fourth quarter after it added more than 2 million customers.
Last year it overtook Sprint (S.N) to become the third largest provider.
An attempt to sell T-Mobile to Sprint in 2014 was blocked by U.S. regulators and last year talks between T-Mobile US and Dish Network Corp (DISH.O) stalled.
Deutsche Telekom has always said it was under no pressure to sell but that it would consider any offer.
Deutsche Telekom shares pared gains to stand 0.2 percent higher at 1429 GMT (09:29 a.m. EST).
Writing by Harro ten Wolde; Editing by Jonathan Gould and Louise Heavens