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T-Mobile might sell UK division

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by Peter Charalambous

According to the Financial Times, Deutsche Telekom, which owns T-Mobile, is under pressure to leave the UK market after disappointing financial results.

The two main shareholders are the German government and the private equity group, Blackstone, are calling for the UK mobile telephone operations to be sold as they are under performing in an ever increasingly competitive UK market.

As the fourth largest mobile phone operator, T-mobile’s exit would leave a huge gap in the market but there has been no mention of the customers in the event of such a crisis.

T-Mobile’s UK division may merge with a rival such as 3, however even if the UK division were to sell off all the assets, it would still be in a negative position.

The US division is also underperforming, although shareholders are far more willing to remain in that market.

René Obermann, Deutsche Telekom chief executive, said at the end of last month that a new management team would be in position to bring the UK business back into line although no other decisions have been made.

T-mobile’s UK competition is still thriving in the current market as the market leaders O2 and Vodafone reported profit margins in excess of 25 percent which is something T-mobile have not yet achieved in the UK.

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News posted: May 3, 2009

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