Fears grow over T-Mobile’s US disposal

The German government, Deutsche Telekom’s largest shareholder, is increasingly worried that the company’s sale of its US mobile phone unit, T-Mobile USA, to rival AT&T will founder on US antitrust concerns.

In stark contrast to Deutsche Telekom’s comments about the proposed $39 billion deal, government officials said that Berlin was all but resigned to the deal failing – or to Deutsche Telekom trying to reconfigure the transaction. Deutsche Telekom, of which Berlin owns 32 per cent, had not been given an early and full picture of the regulatory risks of selling the US’s number four mobile operator to the number two. The doubts of Angela Merkel’s government fly in the face of Deutsche Telekom’s statement last week that it and AT&T “continue to pursue the sale of T-Mobile USA” despite opposition from federal regulators and many states. However, they mirror grave doubts in the US, where both the Department of Justice and the Federal Communications Commission, the industry’s primary regulator, oppose the deal. A failure could prove a bigger drag on Deutsche Telekom, which could be left with a scarred US operation and the prospect of a fire sale. But it has consistently denied speculation it could try to turn the sale into some kind of joint-venture.