German telecommunications giant Deutsche Telekom AG reaffirmed its intention to keep its U.S. mobile subsidiary T-Mobile USA Inc. and said it plans to participate in upcoming spectrum auctions to strengthen T-Mobile USA’s competitive position.
“There is no reason for a sale,” DT Chief Executive Kai-Uwe Ricke told a German newspaper. “On the contrary, we are about to prepare for the next round. This means that we will take part in the spectrum auctions next year.”
Analysts had speculated that DT would be interested in selling its U.S. subsidiary for as much as $30 billion, which is around $10 billion less than what DT paid to acquire then VoiceStream Wireless Corp. in 2001. However, T-Mobile USA has become a significant source of growth for DT during the past several years despite its position as the smallest nationwide wireless operator in the country.
DT’s management had noted earlier this year that it had set aside $2 billion for T-Mobile USA to use in spectrum auctions to bolster its network capabilities. The company has said it has been unable to launch next-generation wireless services in the United States due to spectrum constraints, though T-Mobile USA recently launched EDGE enhancements to its GPRS network.
T-Mobile USA recently spent $235 million through a bidding partner for 36 licenses in the Federal Communications Commission’s Auction 58. Analysts expect the FCC to auction 90 megahertz of spectrum in the 1.7 GHz and 2.1 GHz spectrum bands next year.
