T-Mobile on the block?

T-Mobile on the block?


The rumor mills are agog with the news that Deutsche Telekom is seriously sounding out institutional investors regarding the sell off of T-Mobile USA. Deutsche Telekom is apparently also considering another alternative of investing a huge amount of funds into T-Mobile to revive the business. Both the rumors are going strong and officials from either company have not released any official statement to this effect.

So what’s the asking price for the mobile company? Rumor has it that the price doing the rounds is in the range of $30 billion (yes we do rely on the grapevine a lot). Definitely no small amount, investors believe that a lot less is required by the company to get it going on its own. Fund managers in both countries (USA and Germany) estimate an investment requirement of $10 billion to get the next generation 3G technology running on T-Mobile.

Other mobile majors such as UK’s Vodafone have already given an official statement declining interest in T-Mobile so it is anyone’s guess on who the potential buyer could be. T-Mobile is already a successful mobile operator and has been showing a healthy growth sign in the past few years and a growth of nearly 50% in 2004 in core earnings. It is going to be easy to add T-Mobile to one’s portfolio and become a huge mobile force in the US.