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Deutsche Telekom may drop T-Mobile UK after failed AT&T deal

updated 05:40 pm EST, Wed February 15, 2012

T-Mobile UK may be price of ATT merger dying

T-Mobile's parent company Deutsche Telekom may be looking to offload T-Mobile UK after AT&T dropped its bid for T-Mobile USA, insiders asserted Wednesday. Tips to Bloomberg had it in the early phases of considering a British "exit" now that AT&T's $39 billion proposal had been deemed anti-competitive. The choices could include anything from letting Orange UK take over the other half of the Everything Everywhere partnership to an outside company.

The investigations wouldn't lead to anything until at least later in 2012, the sources understood, as it wanted to improve the often struggling T-Mobile UK before handing it to someone else. Orange's parent, France Telecom, might itself have "financing challenges" in taking on T-Mobile's network.

Neither T-Mobile nor Orange would discuss the apparent leak.

Although cast as a combination of stalled growth in saturated markets and a lack of profit from tightening roaming costs in Europe, T-Mobile has mostly had trouble competing against more successful carriers in the US and Europe that have continued to grow quickly and stay profitable. Most of AT&T's edge over T-Mobile has been a series of strategic mergers that made it bigger as well as its having the iPhone. O2 and other carriers in the UK got the iPhone sooner, and T-Mobile's smaller size in the US usually makes it harder for the provider to get the best possible exclusives for Android hardware.

If T-Mobile UK were to merge, it would hurt one of the more vibrant cellphone markets in the world. 3 UK, O2, Orange, and Vodafone would still leave a relatively competitive market, but would more closely parallel the US market where four national carriers dominate.




by MacNN Staff

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