Deutsche Telekom slams US regulators

Deutsche Telekom criticized the US authorities alleging they had not given its plans to sell T-Mobile USA to US rival AT&T a proper hearing, a posture that forced the companies to abandon the $39 billion deal. “We never really got to a thorough inspection [of the merger],” René Obermann, Deutsche Telekom chief executive, said, adding that authorities never appeared interested in details of the initial deal and later concessions.

Obermann said the merger followed the logic of other tie-ups in the US market and would have created a company “not a whole lot bigger” than the US market leader, Verizon Wireless. “Given that, I don’t really understand the position of US authorities,” he said. He declined to speculate about the motivation of the US Department of Justice and the Federal Communications Commission. The demise of the deal leaves Deutsche Telekom, which had made no secret of its desire to quit the US market, looking for alternatives. Among its options could be an outright sale, merger or joint venture with a competitor. Obermann said the break-up provisions would give T-Mobile US vital extra spectrum, and roaming capabilities, which would help it along for a while. “But this isn’t the whole solution for the long term,” he conceded. AT&T will pay Deutsche Telekom $3 billion in cash as part of the break up, money Deutsche Telekom would use to pay down group net debt – currently slightly above €40bn.