Deutsche Telekom Dividend Pressured After AT&T Deal Collapse

Deutsche Telekom AG’s failure to sell its T-Mobile USA unit to AT&T Inc. for $39 billion may put pressure on the German company to reduce shareholder payouts after next year, investors said.

With the collapse of the deal, stakeholders will miss out on the Bonn-based company’s plan to use the proceeds to repurchase 5 billion euros ($6.5 billion) in stock, cut debt, and receive an 8 percent stake in AT&T. Spending on improving T- Mobile’s network and acquiring spectrum may cost as much as $9 billion, said RBC Capital Markets analyst Jonathan Atkin. That may detract from Chief Executive Officer Rene Obermann’s efforts to contain damage from the European debt crisis on consumer and corporate spending and to return the region to growth. Spanish rival Telefonica SA last week became the first former phone monopoly in Europe to cut a dividend forecast, sparking similar cuts at Telekom Austria AG. Obermann wouldn’t commit to dividend levels beyond 2012.