Deutsche Telekom acquires US mobile networks

$2.5bn to former partner Cingular

By Tim Richardson • Get more from this author

Posted in Mobile, 25th May 2004 16:08 GMT

Deutsche Telekom plans to splash out $2.5bn (£1.4bn) to acquire mobile phone networks in California and Nevada. The networks in question were jointly own by T-Mobile USA and the US mobile communications company, Cingular Wireless, following a deal back in 2001.

Now, that joint venture is to be dissolved and T-Mobile USA is to acquire the GSM networks from Cingular. As well becoming the sole owner of these GSM networks, T-Mobile USA will also regain full ownership of a mobile network in New York. Over the past two years T-Mobile USA has added 1.7m new punters in California and Nevada - and it reckons that there is plenty of scope for further growth.

Chairman of the Board of Management of T-Mobile parent Deutsche Telekom , Kai-Uwe Ricke, said: "We are confident that this investment will accelerate the long-term profitable growth of our US mobile operations by strengthening our market position in the important and attractive markets of California and Nevada."

As a result of the proposed deal, Deutsche Telekom reckons that it will have more than 16m punters in the US by the end of the year. It's also upped long-term estimates for customer growth guessing that numbers in the US will increase to between 30 and 35 million, from current market estimates of around 25 million over the next ten years.

T-Mobile USA's plan to acquire the network - which still needs regulatory approval - comes as Cingular nears its $40bn (£22bn) acquisition of AT&T Wireless in the USA. ®