News
Upcoming spectrum auction, political climate mean German operator will not sell U.S. arm for some time, sources say.
Deutsche Telekom has shelved plans to sell its T-Mobile US business pending the completion of the country’s upcoming spectrum auction, it emerged on Tuesday.
The German incumbent has been exploring its options with regard to its U.S. mobile arm for some time, but has decided to hold off on any moves for the time being, Reuters reported.
Citing two unnamed sources, the newswire said the decision comes in part due to the planned incentive auction, that is due to get underway at the end of this month, and also because any potential buyers are likely to wait for a more favourable political environment when it comes to mergers in the telecoms space.
The incentive auction, through which the FCC will reallocate nationwide 600-MHz frequencies currently held by TV broadcasters for mobile broadband use, is a complex process. It will be divided up into two parts, the first being a reverse auction, that will see the broadcasters sell their spectrum back to the FCC, followed by a forward auction in which telcos will bid for the airwaves.
It is scheduled to begin on 29 March and, according to one of Reuters’ sources, could last for months.
There will be no M&A activity during that period, the source said.
Indeed, auction participants are barred from taking part in any partnership or merger talks in the run-up to and during the weeks after the auction.
T-Mobile US is one of a number of big names to have registered to take part in the auction, others including AT&T, Verizon and Comcast.
Arch-rival Sprint is missing from the list, as is Internet giant Google, which many industry watchers speculated would join in the bidding.
Deutsche Telekom owns around two-thirds of T-Mobile US.
