Deutsche Telekom Signals Willingness to Sell T-Mobile US

Deutsche Telekom will accept offers for T-Mobile US that value the company at a minimum of US $35.00 per share, according to a report. In a meeting last week, DT senior managers reportedly said that a valuation of the company between US $35.00 and US $40.00 per share could trigger talks. In August, Deutsche Telekom rejected a US $33.00-per-share bid by France’s Iliad, which came after Sprint ended talks with T-Mobile because of regulatory concerns. In the meantime, the company is preparing for U.S. spectrum auctions in November and early next year, although management has yet to specify how the auction will be financed.

T-Mobile US has added millions of customers over the past few years with its low-priced no-contract plans paired with enticing offers to cover the early termination fees of other providers’ customers who switch to its service. The company has had success in the U.S. market, but it imposes risk on its German parent company because of the upcoming spectrum auctions, in which it will have to compete with U.S. giants Verizon and AT&T, and because its network needs to be upgraded to stay competitive. These risks are good reasons for DT to want to divest itself of T-Mobile, and with this US $35.00-per-share valuation, it is signaling its interest in pursuing a sale, perhaps eliciting an improved offer from Iliad or bringing in new proposals from providers such as Dish Network Corp., which has expressed an interest in acquiring T-Mobile.

 The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Many Consumers Unaware Of Throttling.

U.S. Senate Committee Passes Mobile Phone Unlocking Bill

On 10 July the U.S. Senate’s Judiciary Committee unanimously approved bipartisan legislation authored by Chairman Patrick Leahy (D-Vt.) that would once again make it legal for consumers to unlock their mobile phones and transfer them to other wireless carriers.

A 2012 ruling by the Library of Congress stated that unlocking phones violated U.S. copyright laws. The proposed legislation, called The Unlocking Consumer Choice and Wireless Competition Act, would reinstate a 2010 ruling by the Librarian of Congress that said unlocking involved no copyright violation. The modified bill passed by the Senate Judiciary Committee promotes competition and improves consumer choice. It also directs the Library of Congress to consider whether other wireless devices, such as tablets, should be eligible for unlocking. The U.S. House of Representatives passed a similar mobile phone unlocking bill in February, and Leahy has been coordinating with his counterpart in the House to ensure that Congress can pass a bill in 2014.

The Library of Congress’ 2012 ruling was controversial and met with opposition from a wide range of industry observers and participants. In December 2013, Verizon Wireless, AT&T, Sprint, T-Mobile and US Cellular pledged to facilitate unlocking of phones for their customers, after urging by consumer advocacy groups. With consumers and mobile operators on the side of unlocking, the Senate committee’s unanimity in passing the proposed legislation may well presage an unusual degree of concord when the bill comes before the full Senate. Phone unlocking encourages competition among mobile operators and clearly benefits consumers. The U.S. has been out of step with much of the rest of the world with this for a while now; the time has most likely come for that to end.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx