T-Mobile parent company Deutsche Telekom apparently put all of its eggs in AT&T’s basket. Now that AT&T’s $39 billion T-Mobile purchase has been squashed, thanks to pushback from the US government, DT is scrambling once again to find additional funds for its US carrier.
“There’s no Plan B,” T-Mobile spokesman Andreas Fuchs said, according to the New York Times. “We’re back at the starting point.”
Deutsche Telekom will receive $4 billion in spectrum and assets from AT&T as compensation for the deal’s failure to close. The company will also form a “mutually beneficial roaming agreement” with AT&T. But DT still needs a longer term solution to keep its T-Mobile business afloat, which has been losing subscribers and profits over the last few years. (Notably, T-Mobile remains the only U.S. carrier without the iPhone.)
“With the spectrum we’re getting, we have a better chance of expanding the network in many markets,” Deutsche Telekom CEO René Obermann said during a conference call today. “That is not a final solution. In the long-term, we need more spectrum and network capacity. We are working on that.”
It’s unclear what lies in T-Mobile’s future. The company has invested heavily in HSPA+ technology for its “4G” network (the technology is faster than typical 3G, but technically not 4G like LTE) and it has landed a handful of interesting Android smartphones. But T-Mobile’s phone variety remains limited, and without the iPhone it won’t be able to effectively compete against AT&T, Sprint, and Verizon.