BYLINE: By BERTRAND BENOIT, ROBERT BUDDEN and TOM WARNER DATELINE: FRANKFURT, LONDON and KIEV BODY: A partial disposal of VoiceStream, Deutsche Telekom's US mobile arm, is unlikely to be among measures announced when the German group unveils its debt reduction strategy at its third-quarter conference next week. People close to the German operator said it was now persuaded it could reach its 2003 de-leveraging target without sacrificing its stake in VoiceStream, a transaction that analysts and investors had until recently considered unavoidable. Yet DT plans to continue merger talks with VoiceStream's rivals Cingular and AT&T Wireless, although its management will now assess a deal on its own merits and not as a debt-reduction instrument. "Even if a deal were to be announced next week, which is highly unlikely, it could not close before the end of next year and would therefore be irrelevant from a debt-reduction point of view," one insider said. Helmut Sihler, DT's interim chief executive, will also use next week's conference to introduce his successor, ending a four-month interregnum since Ron Sommer was ousted from the top job in July. "We have completed the evaluation of the external and internal candidates," Mr Sihler wrote in a letter to employees yesterday. "The supervisory board will consider our proposals on the morning of November 14." Nearly 20 external candidates have been considered as possible successors to Mr Sommer. Most have declined interest. Kai-Uwe Ricke, head of DT's mobile activities, is currently thought to be the leading contender. Without a partial disposal of VoiceStream, DT will need to slash operating and capital expenditure drastically while divesting smaller assets, in order to meet its target of cutting net debt from Euros 64.2bn to Euros 50bn (Dollars 50m) by the end of next year. * Russia's leading mobile operator Mobile TeleSystems, owned 40 per cent by Deutsche Telekom, announced plans yesterday to take over Ukrainian Mobile Communications, the leading operator in Ukraine, Tom Warner reports from Kiev. If regulators approve the deal, MTS will pay Dollars 194.2m to acquire a 57.7 per cent stake in UMC in the biggest corporate takeover in Ukraine's history.
Well, it's standard gossip from the standard places, but; Just ran into a T-mobile rep from across the hall in the mall I work at. Said that they had a rollout meeting last week in Philadelphia and it was said "THERE WILL NOT BE A MERGER!" But then again, we all know who should be talked to in these, and we know store reps are definitely not the people who really know things about situations like this. P
I told you guys that DT could manage without a merger or loosing Voicestream. Noone believed me though. Actually maybe we should believe that store rep. Up until recently, all of the store reps were saying that their was going to be a merger with Cingular. Something had to happen for him to give us a different story this time, don't you think.
They said there will not be a merger because when the merger happens there will be a lot of t-mobile reps without jobs. So essentially they are telling you this so sales teams don't quit.
Er, EUR 50bn != USD 50m. EUR 50bn ~= USD 50bn. I feel somewhat vindicated - that a deal would not take place (due to regulatory bullpucky in two countries, and you have never seen regulatory bullpucky until you've seen German regulatory bullpucky) in the timeframe required to decrease the debt. Thus, as was stated, any merger would have to have other benefits, which I assume includes service-related and technological benefits.
