AT&T beats Sprint with a higher cash offering (US)
If rumors are to be believed, T-Mobile’s sale discussions were not a sudden decision but that these talks had been going on for about three months, without a single leak to the media.
According to the report, AT&T had been in talks for sometime with T-Mobile’s parent company, Deutsche Telekom and finally won the deal because it was willing to offer a higher cash component for the purchase price. AT&T was also willing to offer a higher than average breakup fee if the sale was cancelled. Possibly, regulatory requirements made it undesirable to complete the deal for them.
According to sources, knowing the deal would face regulatory obstacles, Deutsche Telekom negotiated with AT&T to pay the $3 billion and give it rights for some wireless spectrum if the deal could not be made.
According to Deutsche Telekom Chief Financial Officer, Timotheus Hoettges, the breakup fee was very important to them in the negotiations. In the intensive discussions with lawyers and economists, they concluded that they could be optimistic that the company could get regulatory approval.
As per sources, Sprint Nextel was also unaware that AT&T was talking to Deutsche Telekom until just before the final public announcement was made.
Deutsche Telekom to start US mobile towers sale in Q2 (Germany)
Deutsche Telekom AG’s Chief Financial Officer, Timotheus Hoettges has announced that the company has decided to sell its U.S. cellular towers, aiming at freeing up growth capital. The company will begin the sale in the second quarter.
Deutsche Telekom wants to sell and lease back its 7,000 cellular towers in the U.S. in a transaction that could generate a single digit billion dollar profit. The German telco’s competitors have already conducted similar deals.
According to Deutsche Telekom’s CFO, the transaction makes sense as it can generate money for profitable growth directly in the U.S. rather than injecting money from Germany in the market, which has showed continued weakness since 2008.
Deutsche Telekom is the smallest of the four major nationwide mobile network providers in the U.S. and has to buy new spectrum in the future ahead.
Hoettges excluded a sale of Deutsche Telekom’s U.S. operations.
US Mobile Market consolidation not necessary- Deutsche Telekom CFO
Deutsche Telekom CFO, Timotheus Hoettges told Bloomberg News that he sees no need for further consolidation of the U.S. mobile-phone market.
He mentioned that there are four national players in the U.S. market for 300 million households, whereas in Europe, there are 350 million households with close to 70 operators.
Deutsche Telekom’s current focus in the U.S. is on expanding its 3G network. It is investing $3.5 billion euros in the network in 2009. He said that the mobile data market in the US is booming and they must participate in that now.
On the Issue of 4G networks, there is a possibility that T-mobile could provide funding in exchange for access to ClearWire’s 4G network. Verizon and AT&T are already buliding independent 4G networks.
T-Mobile reshapes management structure
T-Mobile is reshaping its management structure following the recent changes at parent company Deutsche Telekom. An executive committee will be formed to support the new T-Mobile CEO Hamid Akhavan and handle daily operations. In addition to the T-Mobile board members Thomas Winkler (Finance), Lothar Harings (Personnel) and Michael Guenther (Joint Ventures), the committee will include T-Mobile’s managing directors from Germany, the UK, the Netherlands, Austria, the Czech Republic and Poland.Deutsche Telekom corporate developer officer at Deutsche Telekom Christopher Schlaeffer has been named head of product and innovation at T-Mobile International, as well as serving in the same position at Deutsche Telekom. Joachim Horn, formerly technology director at T-Mobile Germany, is promoted to CTO of Europe at T-Mobile International. Other members of the executive committee include T-Mobile UK marketing chief Phil Chapman, who will also take on European branding and marketing for T-Mobile International. Steffen Roehn is also promoted to head of IT management across the group, in addition to heading T-mobile Germany’s IT.
Guenther Ottendorfer, currently responsible for technology at T-Mobile Austria, will take over responsibility for technology at T-Mobile Germany. In the interim, Steffen Roehn will serve in this capacity. In the future, the sales and service area of T-Mobile International, formerly headed by Timotheus Hoettges, will report directly to CEO Hamid Akhavan. Hoettges was recently named to the Deutsche Telekom board. T-Mobile CEO Akhavan, also appointed to the Deutsche Telekom board, will take responsibility on the parent company’s board for product development and innovation activities.
