Shares of Deutsche Telekom were up slightly in early morning trading since reports surfaced yesterday that the company is thinking of an initial public offering (IPO) for its T-Mobile USA business. Deutsche Telekom has been under pressure from shareholders for awhile now to take action on T-Mobile.
According to a report yesterday in The Wall Street Journal, citing people familiar with the matter, the German company is in discussions with a number of banks, including Deutsche Bank AG, about underwriting an IPO for the unit.
Other options on the table reportedly include a possible spin-off of the company or merger with another U.S. carrier, the latter of which was less likely due to regulatory and technological complications.
T-Mobile and Deutsche Telekom were unavailable for comment before press time.
T-Mobile has seen its share of struggles recently. Even as the carrier emerges as Google's Android darling, landing exclusivity for a number of the top Google handsets over the past 18 months, T-Mobile's network is still seen as limited in coverage. In its earnings for third quarter of 2009, T-Mobile reported a net loss of 77,000 subscribers and shrinking profits quarter over quarter.
T-Mobile currently serves about 33 million customers and takes a 14 percent market share, leaving it far behind Verizon Wireless, AT&T and Sprint Nextel.
Deutsche Telekom is scheduled to report full-year earnings for 2009 on Feb. 25.