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T-Mobile UK to Merge or Sell?

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Could T-Mobile UK seriously be forced to sell or merge?

According to hugely surprising news from MarketingWeek this is apparently the case as it claims key shareholders are piling the pressure on owner Deutsche Telekom to make such a move.

BusinessWeek also quotes T-Mobile CFO Timotheus Hoettges during the company's annual meeting as saying "The British market is highly competitive and has comparably low margins. In our view consolidation is a means to take excess capabilities out of the market. Nothing is unthinkable on our side."

Of course a statement really doesn't commit Deutsche Telekom to anything, despite talk of 1.8bn euros of writedowns expected in the UK as part of its Q1 results due this week. That said, with talk of a separate 3 sale/merger also in the air it could well be the UK telco market is about to become the latest victim of globalisation with big fish Vodafone and O2 cementing their stranglehold.

The problem is choice breeds competition, so be warned my dear friends, whether you love or hate any particular network cutting down the numbers would be a bad thing. For now we'll maintain a cynical stance - which ironically in this case means being optimistic.

Needless to say, we're chasing T-Mobile for an official comment...

We've got comment back from Deutsche Telekom and while long it ultimately amounts to 'no comment':

We cannot comment on speculation about our shareholders, such as the German government and Blackstone, please direct your questions to them directly.

We have communicated last week (ad-hoc EBIDTA ajustment announcement) and again yesterday at our annual shareholder meeting regarding T-Mobile UK

TMUK's first quarter results were not satisfactory; the business and economic climate in the United Kingdom are difficult; intense price-competition and regulatory influences have put further strain on the business. We will - with the help of our new management team - focus on realigning the business, further reduce cost, improve our offers in the UK market and provide innovative products for the 3G network.

We have been asked at our annual shareholder's meeting regarding the future of TMUK and the reply of our CFO is outlined in the Reuters piece below (amongst others). We cannot comment beyond his remarks.'

Link:
via MarketingWeek

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