As merger fever continues to heat up in the telecom industry, there are now reports that Deutsche Telekom is looking to get into the game by acquiring British Telecom.
According to a report by British newspaper The Telegraph, the potential merger between T-Mobile US, which is owned by Deutsche Telekom, and satellite pay-TV operator, Dish Network, could open the door for the German telecom giant to takeover BT.
Industry sources say that the T-Mobile US and Dish Network merger could pave the way for Deutsche Telekom to exit the American market, which would free it up to spend that money to acquire BT to create a cross-border network in the European market.
A senior industry source claimed: “Deutsche Telekom is clearly selling out of the U.S. and clearly they don’t want to give the money back to shareholders, they want to use it in Europe. They want to buy BT.”
Deutsche Telekom is already set to become a major shareholder in BT via a $15 billion takeover of EE, which will take place early next year.
Deutsche Telekom owns two-thirds of T-Mobile US with a current market capitalization valued at nearly $22 billion. BT’s equity is currently valued at $41.46 billion.
This is not the only potential huge European consolidation. Vodafone and Liberty Global are reportedly discussing a merger as well. There has also been speculation that Vodafone will split into two entities, which could perhaps pave the way for a piece of the company to be acquired by AT&T.
AT&T has been rumored to be interested in Vodafone since early 2014 when it issued a statement shelving speculation about a potential bid due to British regulators asking about media speculation regarding the company’s interest in a merger.
This trend could mean the end for state monopolies in Europe as carriers on the continent look to keep up with the U.S. market.
As Neil Campling, a telecom analyst at Aviate Global put it: “Cross-border consolidation is going to happen. You can see a situation in five years when there are three or four really big players across the continent that have markets the size of the U.S.”
