Deutsche Telekom seeks US partner

Natalie Apostolou
23 Nov 2009

Deutsche Telekom is seeking a financial partner that will help support billions of euros worth of investment in high-speed data networks for its US operations.

According to German newspaper Handelsblatt, possible US suitors include MetroPCS, Clearwire and AT&T as well as parties from the financial sector and VC funds.

Speculation suggests that the German giant is still in the initial stages of the search but appears wedded to this type of expansion strategy.

T-Mobile is ranked fourth in the US and has been struggling to stay competitive against bigger rivals Verizon and AT&T. Back at Deutsche Telekom HQ, the carrier is forging ahead with plans to merge landline and mobile divisions T-Home and T-Mobile into a single entity.

The carrier expects the spin-off to generate an initial boost to earnings of €600 million ($890.9 million).

“Now is the right time to merge our mobile and fixed-network business. Two healthy, competitive business areas will become even stronger by joining forces,” said chairman René Obermann.

The move, which has been mooted for months, will seek formal shareholder approval on Thursday.

The carrier said that the merger was the group's response to the challenges facing the industry. The company aid it was also continuing to focus on efficient planning and the simplification of systems and wholesale products.

Obermann said that the merger held enormous potential for subscriber growth. “[J]ust one in five of our 29 million customer households currently has a fixed-network and a mobile contract with Deutsche Telekom. If we were to persuade just one percent of the remaining customers to sign up for a second contract, our revenue could increase by up to €100 million per year.”

In light of the employee backlash from France Telecom’s recent restructure attempt, Deutsche said the reorganization had been drawn up in agreement with staff representatives.

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