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The Wall Street Journal reports Deutsche Telekom considers sale of T-Mobile USA division: Observers have long noted that with the consolidation of six major cellular telephone operators in the U.S. down to just four, T-Mobile would be far behind. Cingular Wireless, Verizon Wireless, and the combined Sprint PCS-Nextel control 90 percent of the market.
T-Mobile USA hasn’t yet made the investment into a 3G network, preferring to bide its time and limited spectrum licenses by pushing for GRPS instead of EDGE and future GPS-based technologies on the data side. The Journal uses sources not noted to estimate $10 billion for T-Mobile USA to upgrade its network. This may or may not include the cost of obtaining scarce spectrum, too.
The sale could raise $30 billion, and any buyer would obtain the second-largest footprint of hotspots in the U.S. with valuable brand partners like Starbucks. It’s unclear whether potential purchasers would have the same commitment to hotspots, however, given the lackluster understanding in the U.S. market by any cellular operator but Sprint PCS (which is using mostly resold locations) and Cingular’s majority shareholder SBC (which has Wayport handling buildout).
Posted by Glennf at July 3, 2005 9:22 AM
Categories: Cellular, Financial, Hot Spot
TrackBack URL for this entry:
not quite sure i get this. i just read at MobilePipeline that T-MobileUSA has a rapidly increasing user base with increasing revenues. Why would they sell out just because they're not number one? Maybe they'd merge with something smaller, but why would T-Mobile sell the division producing the most revenue for them, especially for billions less than they bought it for? Apparently the revenues are increasing, so why would they sell the only division that affords them an actual chance of making good on their investment?
DailyWireless.org shows that Forbes and Bloomberg are quoting officials saying this is nonsense. i can see them merging or acquiring, but flat-out selling? well, if they just feel they had to cut their losses, that's one huge loss.
Posted by: yp at July 5, 2005 3:33 PM
No company is going to make the investment in a company for its hotspots. If they do so, they would then be reducing the market for its 3g services, the ones that they spent many billions on. The only problem I would have of Cingular absorbing T-Mobile (they're the only ones that would/could absorb them, thanks to GSM).
I just hope that if they take them on, the support the sidekick and make its support less sucky, but also up its customer support to T-Mobile levels, which rocks.
Posted by: thecapitalizt ![[TypeKey Profile Page]](http://wifinetnews.com/nav-commenters.gif)
at July 3, 2005 8:38 PM