Netflix might have finally found an ally in a very contentious market. Reuters reports that German telecommunications company Deutsche Telekom is in talks with Netflix regarding a potential marketing alliance once the U.S.-based video service begin its international expansion. The news comes via Manager Magazine, a German publication in which it is noted that the two companies are rather far along in negotiations, but they have not reached a deal. In fact, Netflix was still weighing its options with other German telecom companies at the time of publication. More →
In a somewhat surprising development, GigaOM reports that Deutsche Telekom CEO Rene Obermann will resign from his position at the company by the end of next year. GigaOM says that Obermann himself made the call to step down and that the company has already chosen a successor in current CFO Timotheus Höttges. The move comes less than three weeks after Obermann proudly announced that American Deutsche Telekom subsidiary T-Mobile USA would finally be able to sell customers the Apple (AAPL) iPhone in 2013. T-Mobile has recently made some major moves to expand its presence in the United States, including its purchase of prepaid wireless carrier MetroPCS (PCS) and its acquisition of spectrum from rivals AT&T (T) and Verizon (VZ).
T-Mobile and AT&T have filed with the Federal Communications Commission to transfer $1 billion worth of AT&T’s AWS spectrum into T-Mobile USA’s ownership. AT&T previously promised the spectrum to Deutsche Telekom in the event that its bid to acquire T-Mobile USA failed. “This additional spectrum will help meet the growing demand for wireless broadband services,” Tom Sugrue, T-Mobile’s senior vice president for government affairs, told The Wall Street Journal. “We hope the FCC will move swiftly to approve the license assignments.” As The Wall Street Journal points out, T-Mobile desperately needs the spectrum in order to compete with Sprint, AT&T and Verizon Wireless. Each of those aforementioned carriers have already started to, or already have plans to, roll out faster 4G LTE networks this year. T-Mobile has not discussed any firm plans regarding how it will advance beyond its current HSPA+ network. More →
The United States Securities and Exchange Commission on Thursday charged former executives at Deutsche Telekom’s Magyar Telekom unit with bribery and violating the Foreign Corrupt Practices Act. The federal agency said three Magyar Telekom executives paid off Macedonian government officials as much as $6.29 million during 2005 and 2006 for “regulatory benefits” and to muscle one of its competitors out of the Macedonian wireless market, Reuters reported. The SEC also accused the executives of trying to pay off consultants and government officials in Montenegro with as much as $9.47 million to receive a government blessing for a planned Magyar Telekom acquisition. The Magyar Telekom executives named in the SEC filing are former CEO Elek Straub and “strategy executives” Tamas Morvai and Andras Balogh.
Deutsche Telekom recently detailed the breakup terms AT&T agreed to following the deterioration of its planned acquisition of T-Mobile USA. Deutsche Telekom will receive $3 billion in cash and T-Mobile USA will benefit from fresh AWS spectrum as well as a new 7-year 3G roaming deal with AT&T. “As part of the break-up fee, T-Mobile USA will receive a large package of AWS mobile spectrum in 128 Cellular Market Areas (CMAs), including 12 of the top 20 markets (Los Angeles, Dallas, Houston, Atlanta, Washington, Boston, San Francisco, Phoenix, San Diego, Denver, Baltimore and Seattle),” Deutsche Telekom said in a statement. “The UMTS roaming agreement for the U.S. in T-Mobile USA’s favor has a term of over seven years and will allow the company to improve its footprint significantly among the U.S. population and offer its customers better broadband coverage for mobile communications services in the future.” The company also said that T-Mobile USA’s 3G network will grow from blanketing 230 million potential customers to covering 280 million people. Deutsche Telekom’s full press release follows below. More →
AT&T said Monday that it, along with Deutsche Telekom, has asked Judge Ellen Huvelle to delay any further court hearings regarding AT&T’s planned $39 billion acquisition of T-Mobile USA until January 18th, 2012. AT&T said the delay will “allow the two companies time to evaluate all options” and that the U.S. Justice Department also joined in on the filing. AT&T recently withdrew its merger application from the FCC to instead focus on the lawsuit that was brought against the merger by the Department of Justice. “AT&T is committed to working with Deutsche Telekom to find a solution that is in the best interests of our respective customers, shareholders and employees,” AT&T said in a statement. “We are actively considering whether and how to revise our current transaction to achieve the necessary regulatory approvals so that we can deliver the capacity enhancements and improved customer service that can only be derived from combining our two companies’ wireless assets.” The delay makes a lot of sense, since the Department of Justice doesn’t have much of a reason to sue AT&T unless it has a merger application filed with the FCC. ”It’s not a real transaction until they file with the FCC,” Justice Department lead attorney Joseph Wayland said last week. AT&T’s full press release follows after the break. More →
AT&T is reportedly considering a joint venture with T-Mobile USA parent company Deutsche Telekom instead of buying T-Mobile USA outright. Sources speaking to The Wall Street Journal said the plans are far from final, but such a deal could be looked at more closely now that AT&T is facing a number of roadblocks with its planned merger. AT&T recently withdrew its application from the FCC to acquire T-Mobile USA; the carrier will instead focus on a lawsuit brought against the merger by the Department of Justice, which is expected to begin in February. The FCC released a 109-page document that suggested it was not in favor of AT&T purchasing T-Mobile for a number of reasons, including an apparent failure on AT&T’s part to convince the FCC its T-Mobile USA acquisition would create new jobs.
Federal Judge Ellen Segal Huvelle set a hearing for the Department of Justice’s lawsuit against AT&T for September 21st, The New York Times reported on Wednesday. “The parties shall be prepared to discuss the prospects for a settlement” on that date, Huvelle said. The U.S. Department of Justice filed a lawsuit in an attempt to block AT&T’s proposed acquisition of T-Mobile USA on August 31st and said “AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market.” AT&T responded and said it would ask for an expedited hearing and that the DOJ has the “burden of proving alleged anti-competitive affects and [AT&T intends] to vigorously contest this matter in court.” AT&T, Deutsche Telekom and the Department of Justice have been asked to file the initial paperwork for the hearing by September 16th. More →
Sprint announced on Tuesday that it has filed a lawsuit with a federal court in the U.S. District of Columbia in an effort to block AT&T’s planned $39 billion acquisition of T-Mobile USA from Deutsche Telekom. The suit is related to the Department of Justice’s lawsuit, which was filed on August 31st. “Sprint opposes AT&T’s proposed takeover of T-Mobile,” Sprint’s vice president of litigation Suzan Haller said. “With today’s legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal.” Sprint argued that the merger will “harm retail consumers and corporate customers by causing higher prices and less innovation” and said it will “entrench the duopoly of AT&T and Verizon” by allowing those two carriers 90% of U.S. wireless profits and more than three quarters of the market. Sprint also said the merger would “harm Sprint and other independent wireless carriers” and would give AT&T control of backhaul, roaming and wireless spectrum. AT&T responded to the DOJ’s suit last week and said the deal is in the best interest of consumers and the “facts will prevail in court.” Read on for the full press release from Sprint. More →
Apple has yet to announce it’s fifth-generation smartphone, but that apparently won’t stop German carrier Deutsche Telekom from selling it. Bloomberg reported on Monday morning that it has confirmed with Deutsche Telekom that, beginning today, DT subscribers may begin reserving Apple’s next-generation iPhone 5 smartphone. The carrier will hand out coupons to customers who reserve the device, despite the fact that no confirmed details surrounding the next iPhone are available. Not even the name of the device is confirmed at this point. Apple is expected to launch a fifth-generation iPhone and an updated fourth-generation model some time next month. Invitations to a special media event at which Apple will unveil the new phones are expected as early as this week. More →
The U.S. Department of Justice’s decision to file a lawsuit in an attempt to block AT&T’s planned $39 billion acquisition of T-Mobile USA caught Deutsche Telekom CEO Rene Obermann off-guard while he was meeting with a team of managers and his supervisory board, a board member told Bloomberg on Thursday. Deutsche Telekom, AT&T and T-Mobile had all been confident that the deal would be approved in March of next year. Speaking during the IFA trade show in Berlin, head of Deutsche Telekom Germany Niek Jan van Damme echoed AT&T’s commitment to continue to fight for the deal’s approval. “We’re staying in it,” Van Damme said. “Other scenarios were not being discussed. When you are in a deal, you stick to that deal, a clear focus on that deal.” Obermann has said his company will work with AT&T to contest the DOJ’s lawsuit, which Van Damme seemed to shrug off. “When it comes to larger M&A deals in the US, these things happen,” he said. “This isn’t an exception. We have everything under control.” If the federal government does successfully block the deal, AT&T will be required to pay T-Mobile USA $6 billion in cash and assets. More →
T-Mobile USA reported its second quarter results on Thursday and noted that it lost 50,000 subscribers during the quarter. That’s a drop, but it’s not as bad as the 93,000 customers the carrier lost during the year ago quarter or the 99,000 customers who left during the first quarter. T-Mobile also recorded $5.1 billion in revenue for the second quarter, down from the $5.2 billion it reported during the first quarter and the $5.4 billion in revenue it pulled in during the same quarter last year. Blended churn, which includes both prepaid and contract customers, was 3.3%. That’s down from the 3.4% reported last quarter. “The United States remains a difficult market for Deutsche Telekom, but we see improvements compared to the first quarter of 2011,” René Obermann, CEO of Deutsche Telekom said. “T-Mobile USA will continue its strategy with the extended HSPA+ 42 coverage and continued data growth.” Read on for the full press release. More →
On Friday, AT&T announced that it has officially filed a public statement with the Federal Communications Commission in support of its planned $39 billion acquisition of T-Mobile USA from Deutsche Telekom. AT&T argues five main pillars in its statement:
- The transaction will generate jobs and economic growth.
- The transaction will preserve and promote competition and innovation.
- The wireless market will remain vibrantly competitive.
- The network capacity of the combined company will far exceed the sum generated by its pre-merger parts.
- Numerous competitors will have ample spectrum to maintain the vibrantly competitive U.S. wireless market.
In a clear response to claims from Sprint’s CEO Dan Hesse that the acquisition would “stifle innovation,” AT&T also argued “nothing about the combination of AT&T and T-Mobile USA could possibly keep Sprint or any other provider from acting on the same incentives it has today to keep innovating in this unusually dynamic ecosystem.” Hit the jump for AT&T’s full release. More →