Commentary

Deutsche Telekom Not Hungry For Sprint

Rene Obermann and Timotheus Hottges of Telekcom AG

We'll still have four major U.S. wireless operators for the forseeable future. Deutsche Telekom Chief Financial Officer Timotheus Hottges told Bloomberg the U.S. mobile market is already consolidated enough, dampening rumors the German phone company was looking to buy Sprint.

Hottges suggested the U.S. cell phone market was less than the fiercely competitive landscape bigger carriers like Verizon Wireless and AT&T have made it out to be. "There are four national players in the U.S. market for 300 million households, while in Europe, where we have 350 million households, there are 50-70 operators," he said.

Of course, Europe is a continent made up of 50 countries with different mobile phone regulations and consumer habits so naturally it's a more fragmented market than the U.S.

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For now, Deutsche Telekom will focus on expanding T-Mobile USA's 3G network here and continue playing the role of "challenger" to its three larger carrier rivals. Bloomberg has previously reported the German carrier is in talks with Clearwire Corp., owned 51 percent by Spring, and with MetroPCS Communications Inc., about getting access to their networks.

In any event, having an aggressive fourth carrier in T-Mobile is better for the market than only three big monolithic operators. If not boasting the most extensive or fastest network, T-Mobile has traditionally been the low-price leader among the major carriers, offering cell customers a more affordable option and putting more pricing pressure on the others.

If T-Mobile can combine its scrappy outlier approach with an upgraded network, it can still be a viable competitor to Verizon and AT&T, especially in the top-10 cities where it's invested. Now if any of those other 50 to 70 European operators would jump into the U.S. market, things might really get interesting.

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