Deutsche Telekom: Complete sale of T-Mobile USA 'unlikely'

Summary:Deutsche Telekom, the German owner of T-Mobile USA, told shareholders that a complete sale of the U.S. mobile network is "unlikely".

Deutsche Telekom says a complete sale of T-Mobile USA is "considered unlikely," the Germany-based company told its shareholders at the company's annual general meeting.

"We must find other ways to increase the (unit's) return on our capital, or reduce our capital investment," chief executive Rene Obermann said, reports Reuters. "We are doing everything in our power to achieve this."

T-Mobile USA, troubled by poor performance and a massive drop in net profit for the first quarter, came close to being bought by AT&T for $39 billion last year.

The merger failed after a series of regulatory resistance made the deal impossible.

Deutsche Telekom wanted to spin the unit into a "self-funding" platform, Obermann told Bloomberg, opening up a possible initial public offering for the mobile network, or another crack at the merger whip.

During the meeting, Obermann urged European authorities to "turn-around" regulatory policy decisions to open up incentives for businesses to invest back into the telecoms infrastructure.

AT&T eventually bowed down to regulatory pressure --- preempted the Federal Communication Commission's final decision --- and sought to book a $4 billion charge in case the deal failed.

The U.S. Justice Dept. antitrust unit was in it "for the long haul" and was willing to take the anti-competitive move to trial.

T-Mobile said in March it would lay off 1,900 jobs from seven call centers. AT&T then pointed the finger at the FCC for not approving the deal, which was claimed would have saved the jobs in the first place.

Only a few months before, the FCC published a slamming report that outright claimed AT&T lied about the proposed benefits of the merger. In particular, the claims that the merger would create jobs for the economy as a by-product were "false".

Image credit: T-Mobile USA via CNET.

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Topics: Mobility

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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