Deutsche Telekom is trying to raise money to keep its T-Mobile USA unit competitive following AT&T's failure to acquire the unit.
The German telecom giant is looking to drum up billlions in cash by issuing bonds and possibly selling T-Mobile's cellular towers, says a story in today's Financial Times (registration required).
Deutsche Telekom is in line to pick upin spectrum space and roaming rights . But that still may not be enough to help T-Mobile compete against its three larger U.S. rivals.
T-Mobile lags behind its U.S. competitors, who are busy building up their 4G LTE networks. Deutsche Telekom CEO Rene Obermann said that after the AT&T deal fell through, the company had no fallback plan to launch its own generation of 4G services in the U.S., according to the Financial Times. To jump on the 4G bandwagon, T-Mobile would need money to buy the necessary spectrum from regulators or other carriers.
So far, Deutsche Telekom has reportedly spoken with bankers about issuing bonds to investors or selling its U.S. towers, which could cough up between $1 billion and $2 billion.
Over the long haul, Deutsche Telekom will likely still want to unload its U.S. unit. merger with Sprint might even be an option, though Sprint publicly to the takeover deal with AT&T.has expressed interest in partnering with T-Mobile. Rumors have floated that a
But finding the right buyer at the right price may prove challenging, especially in light of the defeat of AT&T's bid.