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Deutsche Telekom CEO Predicts Tough Time for T-Mobile in Spectrum Auctions

Thu, 03/13/2014 - 12:05pm
Ben Munson

Deutsche Telekom CEO Timotheus Hoettges anticipates T-Mobile will have trouble competing with the likes of AT&T and Verizon in the FCC’s upcoming spectrum auctions.

Hoettges said Verizon and AT&T generate more cash and handle more traffic than smaller competitors like T-Mobile and therefore have “deep pockets” for spectrum auctions, leaving smaller carriers in the dust.

The FCC has plans to auction off AWS spectrum in 2014 and to launch a long-awaited 600 MHz Broadcast Incentive auction by mid-2015. T-Mobile has been one of the most vocal smaller carriers in insisting the FCC adopt rules that make it easier for carriers other than AT&T and Verizon to get their hands on low-band spectrum. AT&T and Verizon currently control the majority of the U.S. wireless market and hold much more low-band spectrum than their competitors.

Hoettges told the Wall Street Journal that T-Mobile can’t be the “alibi” for an “oligopolistic market in the U.S.” and said that consolidation is the “best option” for getting around that.

But, Hoettges last week told Bloomberg that a standalone strategy is suiting T-Mobile just fine for now.

SoftBank CEO and Sprint Chairman Masayoshi Son confirmed this week his interest in acquiring Deutsche Telekom’s 67-percent stake in T-Mobile. Son has lately been critical of the U.S. wireless industry, accusing U.S. carriers of having slow speeds and high prices. He has vowed that if Sprint, which SoftBank last year acquired, and T-Mobile are allowed to merge, he could launch a huge price war with AT&T and Verizon.

SoftBank last year, with U.S. regulators’ blessings, spent nearly $22 billion to acquire a majority interest in Sprint. But now the FCC and U.S. Justice Department have signaled heavy skepticism about SoftBank’s potential bid for T-Mobile.

Regulators in 2011 squashed AT&T’s $39 billion bid to buy T-Mobile, citing anti-trust concerns.

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