What is the coverage of T Mobiles in Hawaii
Decision: Merger of T-Mobile and Sprint in February?
For the management bodies of Deutsche Telekom or its USA subsidiary T-Mobile, but also for Sprint, which is still a competitor, the holidays are unlikely to have been as comfortable as usual.
The story has dragged on for a long time. T-Mobile and Sprint had announced their planned merger several times, and earlier attempts had repeatedly got stuck for anti-trust reasons. In the third attempt it looks better, it is about 26 billion dollars (23.4 billion euros).
In addition, the US supervisory authorities have approved the merger with certain conditions: T-Mobile and Sprint must hand over their licenses for prepaid offers to the television satellite TV provider "Dish", which is the new "number four" in the To establish the market. Dish can then use the T-Mobile network on favorable terms for seven years.
Negotiations until before Christmas
USA: How will the court judge the merger of T-Mobile and Sprint?
Image: Picture Alliance / dpa Until the Friday before Christmas, the top managers from Telekom, T-Mobile, Sprint and Dish and some experts had to answer fairly detailed questions about the merger in court. For two weeks, the managers who argued in favor of the merger had repeatedly emphasized that they did not want to raise prices and that competition would continue. Tim Höttges, CEO of the parent company Deutsche Telekom, John Legere, the iconic CEO of T-Mobile, the bosses of Sprint and the satellite dish provider Dish were called to the stand one after the other.
Fourteen US states sued because they saw the competition in jeopardy: Connecticut, Maryland, Michigan, Virginia, Wisconsin, Hawaii, Massachusetts, Illinois, Oregon, Minnesota, Pennsylvania and Washington DC, led by the New Yorkers, who are regarded as "powerful" Attorney General Letitia "Tish" James and her colleague Xavier Becerra for the State of California.
The story has a political component. The Republican-led Trump administration had approved the merger. The plaintiffs come from the democratic opposition camp. It could be more about giving the unloved Republican president a "lesson" than the question of whether this merger could improve cell phone coverage in the United States.
T-Mobile: A 5G network for the whole of the USA
In the USA, the topic of 5G is very important: There is currently a kind of race going on to see which provider can offer its customers the best 5G network the fastest. T-Mobile US is clearly ahead here at the moment.
The critical questions revolved around the issues of price development or the market opportunities for Dish, which previously only had internet access via satellite in the program, or the question of whether T-Mobile could continue to grow well without Sprint.
There are many analysts and investors in the audience, eagerly listening to each expert or manager. The glass balls are polished to see whether the court approves the merger: the bets are 52 to 70 percent for it.
The actual decision rests with Judge Oscar Marrero of the South District District Court in Manhattan, New York. He deleted lengthy opening statements from the agenda so as not to waste time.
Union officials protested the merger outside the court. They are angry because T-Mobile will not let them work in the company, in the USA there are different rules than with the mother in Germany.
The closing arguments from prosecutors and defense lawyers are scheduled for January 15th. Then the judgment could be made in February as to whether T-Mobile and Sprint may eventually merge or maybe not.
Too much optimism?
Tim Höttges had been optimistic about teltarif.de when he announced quarterly figures, which some had criticized as "premature". In the meantime people have become more cautious. The USA market is very important for Telekom: the group already generates more than half of its sales in the USA. From the USA comes the assessment that Höttges and John Legere would have done well in court. Many observers in Bonn therefore continue to assume that the court will allow the merger of T-Mobile US and Sprint.
If the merger takes place, T-Mobile will have to invest heavily in the USA in order to be able to catch up with competitors Verizon and AT&T. T-Mobile and Sprint have already promised 40 billion dollars (about 36 billion euros) in investments, especially under the topic of "5G", although not everything is really 5G, where 5G is already on it, as we were able to find out on site.
36 billion euros in additional expenditure is not a stick-out problem. In the books there are already 79 billion euros in debt for the first nine months of last year. Höttges had to reduce the previous annual dividend from 70 cents per share to 60 cents.
Again and again rumors haunt the industry that Telekom could sell some newly acquired daughters in order to get money into the till. An analyst suspects that Telekom could only concentrate on Germany and the USA.
In the simulation games, a sale of Deutsche Funkturm GmbH, which owns all of Telekom's transmitter locations, would be conceivable. This would initially bring money into the cash register, but in return the Telekom would then have to rent back its "own" locations from the new owner. A move that business economists may immediately understand, but which leaves the observer with divided feelings.
Telecom Albania has already been sold, Telecom Netherlands is also named as a sales candidate or even more extreme speculation: the complete exit from all European holdings, except in the mother country itself?
Not a great solution
Such speculations are not popular in Bonn. The Handelsblatt, published in Düsseldorf, asked around in corporate circles: "Very unlikely" was the answer. But there are likely to be changes.
But we're not that far at the moment, now the judge in Manhattan will decide. "Adorable", serial cop Lt. Theodoros Kojak from the Manhattan South Police Department said about it.
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