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T-Mobile parent company demanding concessions for Sprint deal

updated 05:33 pm EDT, Sat May 10, 2014

Deutsche Telekom seeking $1 billion golden parachute, exec safety

Like the toll paid by AT&T following its unsuccessful bid to purchase T-Mobile, majority shareholder Deutsche Telekom is seeking a breakup fee of $1 billion if the proposed merger with Sprint falls apart for whatever reason. Additionally, as part of the merger talks, the German parent company is demanding that some of T-Mobile's management executives not be ousted following a merger.

"In the US, we're getting signals from regulators as well as antitrust authorities that a merger isn't perceived as expedient," Deutsche Telekom Chief Executive Timotheus Hottges said during a first quarter earnings conference call. "Against that background, we have to see how we can best develop the business with the most value for our shareholders."

Sprint has been formulating a position to convince the Federal Communications Commission and the Department of Justice that the merger would not harm the US wireless industry. Regulators have historically denied large-scale acquisitions in the wireless industry -- this deal, if completed, would see the third- and fourth-largest carriers combine. A deal to merge the two companies is expected to be floated during the early summer.

"To really create value in the market, at the highest speed, with a better network, with even more spectrum -- a combination, for instance, with one of the players would make a lot of sense, to create a super-maverick against AT&T," Hottges said.

Sprint and parent company SoftBank want to make the offer while US regulatory boards are concerned with the Comcast purchase of Time Warner Cable. Any deal would require approval by the boards of directors of all four companies involved in the deal -- Sprint parent company SoftBank, T-Mobile parent company Deutsche Telekom, plus the Sprint and T-Mobile boards themselves. The demands by Deutsche Telekom seek to alleviate disruption to the company should the effort fail.

By Electronista Staff
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  1. Inkling

    Dedicated MacNNer

    Joined: 07-25-06

    Good move! Now, as with the AT&T merger, T-Mobile will get money to expand its network if this merger (hopefully) falls through.

  1. driven

    Addicted to MacNN

    Joined: 05-08-01

    If this deal goes through, I'm moving back to at&t. (and since I don't have a contract on t-mobile, that will be very easy)

    That said: I'm not even sure how this merger would work? Sprint is CDMA and T-Mobile is GSM. Not even close to compatible.

  1. RightNow

    Fresh-Faced Recruit

    Joined: 03-11-14

    Driven it would work because both are leaving those techs behind for LTE moving forward. Tons of phones already support both technologies anyway. Sprint's network has vastly improved and getting better. They both have good prices. I think it *might* be a good thing. At least there's a plan for the industry moving forward regardless of this, that sees a unified standard instead of so many techs being used.

    I left AT&T for Sprint. Was a HUGE mistake at first; but, once the network changes hit my area it was the best thing I ever did. I'm paying lots less and have great voice and data at home. ATT never had either at home for me, but work was more important. (Sad reality of living in the boonies sometimes.)

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