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Deutsche Telekom ready to spin off T-Mobile?

updated 07:30 pm EST, Thu February 4, 2010

Move considered due to poor stock performance

Deutsche Telekom AG is allegedly considering an initial public offering of its T-Mobile USA division, according to a Wall Street Journal report. People familiar with the matter claim the move is intended to appease shareholders who have voiced frustration over the company's lackluster stock performance.

The telecom company is said to be in talks with several banks, including Deutsche Bank AG, that could underwrite an IPO or a spinoff. A similar plan, which included the European T-Mobile branches, had been considered several years ago, although the idea was never brought to fruition.

The IPO scheme would bring additional funding that could potentially serve to bolster T-Mobile's 3G deployment. The company has been criticized for limited 3G coverage in many areas. Although previous reports suggest Deutsche Telekom has been hunting for a merger in the US market, many of the clear choices use CDMA technology instead of T-Mobile's GSM system.

Deutshe Telekom has not finalized its plans for T-Mobile USA, although the company is allegedly aiming to have a complete plan sometime in the next several months. A spinoff is believed to be the most likely conclusion.



By Electronista Staff
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