T-Mobile USA Not For Sale, Deutsche Telekom Chief Says
A complete sale of T-Mobile USA like the one to AT&T is unlikely, said parent company Deutsche Telekom CEO Rene Obermann. But “we do not exclude any option for the T-Mobile unit in the U.S., also not a merger,” Obermann said. Meanwhile, Obermann called for regulatory relief in Europe.
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There’s no doubt that the telco’s U.S. business continued to be affected by “uncertainty” in 2011, Obermann said. The company continued to look for a long-term solution to improve earnings in its U.S. business, he said. Specifically, the telco is investing in updating and expanding its network and is now developing an LTE network, he said. “We must find other ways to increase the return on our capital or to reduce our capital investment,” he said. “Believe me, we are really working very hard on this
Regulation in Europe and especially in Germany has cost the company “vast amounts of revenue,” Obermann said. “Everyone is calling for high-speed networks in the furthest-flung corners of the country -- ideally fiber-optic networks,” he said. At the same time, “politicians at the European level and the national regulatory authorities are taking away the incentives for investment,” he said. “We need less regulation.” A lack of investment incentives due to “misguided” regulation is the main barrier to further investment, he said, citing European analysts’ reports.
The telco chief urged Brussels to address price declines for network usage resulting from regulatory intervention. “If not, there will be no new stimuli for broadband roll-out,” Obermann said, urging regulators to stop giving cable operators preferential treatment. “The industry would be prepared to shoulder the main burden of broadband roll-out. What we need is a turnaround in regulatory policy,” he said.
As a result of “massive pressure on prices,” Deutsche Telekom plans to focus on cutting costs, Obermann said, hinting potential further restructuring. Meanwhile, it would be “strategically wrong” to build the company’s future on network business alone because it would remain regulated and continue to decline, he said, citing new revenue sources like mobile Internet.