Deutsche Telekom on Tuesday accused the U.S. authorities of failing to give its plans to sell T-Mobile USA to U.S. rival AT&T a proper hearing, a posture that forced the companies to abandon the $39-billion deal on Monday.
“We never really got to a thorough inspection [of the merger]” René Obermann, Deutsche Telekom chief executive officer, said Tuesday morning, adding that authorities never appeared interested in details of the initial deal and later concessions.
Mr. Obermann and AT&T counterpart Randall Stephenson on Monday had to concede defeat in their pursuit of a deal which attracted overwhelming opposition from U.S. regulators since it was announced in spring.
The companies had argued that the merger of T-Mobile, the nation’s number four player, with AT&T, the number two, would have established a powerful mobile phone network which would have helped overcome capacity shortages.
Mr. Obermann on Tuesday morning said the merger followed the logic of other tie-ups in the U.S. market and would have created a company “not a whole lot bigger” than the US market leader, Verizon Wireless.
“Given that, I don’t really understand the position of US authorities,” he said. He declined to speculate about the motivation of the U.S. Department of Justice and the Federal Communications Commission.
The demise of the deal leaves Deutsche Telekom, which had made no secret of its desire to quit the U.S. market, looking for alternatives. Among its options could be an outright sale, merger or joint venture with a competitor.
Mr. Obermann said the break-up provisions would give T-Mobile US vital extra spectrum, and roaming capabilities, which would help it along for a while. “But this isn’t the whole solution for the long term,” he conceded.
He refused to be drawn on what Deutsche Telekom was now planning to do with T-Mobile US and how quickly. Mr. Obermann said Deutsche Telekom would continue to invest in its US business, which was profitable.
AT&T would also pay Deutsche Telekom $3-billion in cash as part of the breakup, money Deutsche Telekom would use to pay down group net debt - currently slightly above €40-billion. He said experts valued the entire break-up package at $6-billion.
However, he conceded that proceeds from the sale would have helped Deutsche Telekom pay down debt much quicker. “But we can also continue without it. [$6-billion]is not nothing,” he said. “This is more than just a consolation prize,” he said.
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