The fourth largest mobile phone service company in the U.S. may soon have a for sale sign in the window depending on high level discussions within European cell phone giant Deutsche Telekom turns up.
The possible deal is still just being discussed and no buyers were mentioned but Chief Financial Officer Karl Gerhard Eick met with a number of major investment firms and said a decision would be made by the end of the year.
There are questions about this direction for T-Mobile USA however as, according to the Washington Post, many wonder whether they could come up with a good way to blow the $30 billion from the sale.
An anonymous German fund manager told the Post, “There were several meetings with Eick in which they were testing what our reaction would be.” The source said the meetings happened back in March.
No one seems to be jumping in line though for the world’s 4th largest mobile phone company and some critics say this would be a decidedly bad idea for Deutsche Telekom saying T-Mobile is their best shot at sustained growth.
“Ricke can kiss goodbye to his goal to be the fastest-growing European integrated telecom operator if he sells T-Mobile USA,” one fund manager told Reuters. “There is nothing he could buy that would deliver growth on the same scale.”
As the cell phone industry continues to tighten up, T-Mobile will need to advance its technology to stay competitive. T-Mobile said in the spring their research moves towards development of the 3rd generation cell phone technology.
Watchers say Deutsche needs to do something though. The Reuters article quoted Rich Nespola of Management Network Group Deutsche Telekom needs to “either commit to this or look to divest itself of the asset at the best price.”
John Stith is a staff writer for Murdok covering technology and business.
