Deutsche Telekom to build up T-Mobile U.S. network

[jones]

Deutsche Telekom to build up T-Mobile U.S. network
Wed Nov 16, 2005 03:01 PM ET

NEW YORK, Nov 16 (Reuters) - Deutsche Telekom AG may buy small U.S. mobile service providers as well as wireless airwaves expected to be sold in government auctions to beef up the network of its U.S. venture, T-Mobile USA, a top executive said on Wednesday.

Deutsche Telekom said recently that it plans to keep T-Mobile USA. There had been speculation it would sell the business, which is a distant No. 4 in the competitive U.S. market and is half the size of its nearest rival.

Deutsche Telekom is committed to investing heavily in T-Mobile USA's network as the unit is far behind its rivals in developing high-speed wireless services, partly due to a lack of enough airwaves or spectrum to build such services.

The company, which has said it expects to bid for spectrum in government auctions that could take place as early as next year, may also look at buying smaller rivals, according to Thomas Winkler, chief financial officer of T-Mobile International, of which T-Mobile USA is a part.

"It's just a question of mathematics to figure out this, but it will be a combination of both," Winkler said at UBS Global Communications Conference in New York, responding to a question about whether acquisitions would make more sense than bidding in competitive spectrum auctions.

While many of the large national U.S. operators have already clubbed together with their own consolidation, smaller operators could be an option.

For example, one small rival, Centennial Communications Corp. a regional wireless company with subscribers in the U.S. Midwest and Southeast, recently hired investment banks to evaluate strategic alternatives.

Other independent U.S. wireless firms include Dobson Communications Corp. and SunCom Wireless Holdings Inc.

Winkler would not comment on how much the company expects to spend to fortify its U.S. operations.

"We don't want to show our cards," he said on the sidelines of the conference.

http://yahoo.reuters.com/financeQuot...6613455_newsml

[ShoresGuy]

Well now we have confirmation to the rumors that have been circling for a while. Undoubtedly, DT waited until after their Q3 results to release this news. It will cost them a bit to get a hold of more spectrum in the US which is pretty much at a premium anyway.

[Andy]

And it will take them a while to do those expansions they are talking about even after they buy/compete for the costly spectrum.

[TNDan21]

RCR News has posted a article about this with some new information. You can read it below.



T-Mobile International looking to bolster U.S. operations through acquisitions, spectrum purchases
By Dan Meyer
Nov 17, 2005

NEW YORK-T-Mobile USA Inc.'s parent company T-Mobile International said it planned to bolster its U.S. operations through the acquisition of smaller U.S. operators and participation in upcoming spectrum auctions.

T-Mobile International recently quashed rumors that it was looking to sell its rapidly growing U.S. subsidiary, and has reportedly set aside several billion dollars to fund expansion plans. Analysts expect T-Mobile USA to be very aggressive in the upcoming auction of so-called 3G spectrum set for next summer in an attempt to strengthen the carrier's modest spectrum position, which today is preventing T-Mobile USA from launching next-generation services.

T-Mobile USA also has been linked with the possible rollup of regional GSM operators that have been struggling to add subscribers in an increasingly competitive environment. Those regional operators include Dobson Communications Corp., SunCom Wireless Inc. and Centennial Communications Corp.

"It's just a question of mathematics to figure out this, but it will be a combination of both," said Thomas Winkler, T-Mobile International's chief financial officer, at the UBS Warburg Global Communications Conference.

The regional acquisitions would help T-Mobile USA expand its footprint geographically, with Dobson possessing a strong network in the Midwest, South and Alaska; SunCom strong in the Southeast and Puerto Rico; and Centennial offering service in the upper Midwest and South.

The spectrum auctions would boost the carrier's spectrum position in larger markets, where it lacks enough capacity to launch UMTS services. T-Mobile USA is the industry's fourth-largest operator, though it has less than half the subscribers of its three larger competitors.

http://www.rcrnews.com/news.cms?newsId=24873