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Deutsche Telekom CEO hopes for a T-Mobile merger in the future

Deutsche Telekom CEO Tim Hoettges explains that T-Mobile's current Un-carrier initiative won't be enough to compete with Verizon and AT&T.
By
January 19, 2015
tim hoettges

Over the past few years, T-Mobile has been gaining some headway in the United States with the company’s Un-carrier initiative. Unfortunately, that might not get them to where they want to be, according to some higher-ups in the carrier world. In an interview with Re/code, Tim Hoettges, Deutsche Telekom CEO, explains that in order to compete with the likes of Verizon and AT&T, T-Mobile still needs “greater scale” in the US.

Sprint has been in talks with Deutsche Telekom about buying T-Mobile for the past few years. Thanks to US regulatory authorities, the deal ended up falling through because it would decrease the number of major US carriers from four to three. While this may have seemed like a positive situation at the time, Hoettges explains his thoughts on the matter:

I was intrigued by the idea of having a combination with Sprint and being the ‘super-maverick’ in the market. I hope that the political environment will change at one point in time.

While growing in marketshare and surpassing Sprint is an important feat to accomplish for the company, Hoettges says that the biggest hurdle is Verizon and AT&T’s concentration of wealth and spectrum that T-Mobile should be worried about. The CEO admits that while T-Mobile’s current Un-carrier initiative has been working so far, it won’t generate enough revenue to compete with the top two carriers. He says that T-Mobile will need to invest “between $4 billion and $5 billion each year just to keep up.”