Deutsche Telekom has called in banking advisers to study a possible multi-billion dollar bid for Sprint Nextel, the third-largest mobile phone operator in the US.
The company’s decision to call in Deutsche Bank comes hot on the heels of the agreed tie-up of its struggling T-Mobile UK business with Orange to create Britain’s biggest mobile phone firm.
Last month, Mr Obermann reiterated his warning about the poor performance of T-Mobile US, which reported a 1.7pc fall in underlying customer revenue in its second quarter.
The US operation is struggling to compete against larger rivals AT&T and Vodafone’s 50pc-owned joint venture Verizon Wireless, which have more advanced 3G networks. T-Mobile US is also losing customers to small operators offering cheap deals. Sources said Deutsche Telekom (DT) could submit a bid for Sprint, which has a market valuation of $10.6bn , within the next few weeks.
Combined, T-Mobile, the fourth-placed operator, and Sprint, the third biggest player, would closely challenge AT&T’s second-place spot with 78.2m customers.
DT has been investing $1bn a year in improving its US network, but will need to spend far more to integrate Sprint, which runs on a different type of network. However, it could be easier to integrate the networks when they are upgraded to fourth generation status.
DT will probably need to call on a cash injection from shareholders, including the German government, which holds a 32pc stake, in order to fund an acquisition of Sprint.