Deutsche Telekom U.S. action not imminent-sources
Deutsche Telekom has not taken a decision on any option that could change its position in the U.S. market and is not planning to do so in the immediate future, two sources familiar with the company said.
There was no pressure from shareholders to find a solution soon, the people said on Tuesday.
For at least one year the development of the U.S. mobile business will be looked at unhurriedly, one of the people said, adding it was still open as to how things would go from there.
There is no deadline, the other person said, referring to media reports stating that Deutsche Telekom's key shareholders had set an ultimatum for management to make a move in the United States.
The Financial Times on Tuesday reported that the shareholders have set the German operator a mid-2010 deadline to turn around its U.S. mobile phone business or make strategic changes.
The newspaper cited people familiar with the thinking of the German government, which holds 32 percent of Deutsche Telekom, and private equity group Blackstone, which holds close to 5 percent, as saying they were prepared to force through strategic changes if T-Mobile USA's fortunes did not improve.
Deutsche Telekom's U.S. business T-Mobile USA accounts for about 26 percent of group revenue and has been the cash cow for the group for some years.
T-Mobile USA, which has a distant fourth place U.S. ranking, is being hurt by aggressive discounts from Sprint Nextel Corp and from smaller rivals such as Leap or MetroPCS.
While T-Mobile USA still generates cash, growth has slowed and revenue and operating profit have declined in the past six months.
This is certainly a topic for them (Deutsche Telekom) but they are not forced to change course, one of the sources said.
The business is not in need of a turnaround, the other person said.
On Monday, Sprint shares jumped 14 percent on speculation that the No. 3 U.S. mobile service might be bought by Deutsche Telekom even as many analysts said such a deal would be very difficult to pull off.
Deutsche Telekom is currently not able to financially bear an acquisition like that, one of the people said.
Speculation about buyers for Sprint have circulated since it announced a large goodwill write-off in February 2008 and shares fell to a five-year low.
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