T-Mobile USA Could Be Spun Off or Sold, Reports Say

 
 
By Nicholas Kolakowski  |  Posted 2010-02-05 Email Print this article Print
 
 
 
 
 
 
 

T-Mobile USA could be spun off or sold as an IPO from parent company Deutsche Telekom, according to reports. T-Mobile currently ranks fourth in the United States, behind Verizon, AT&T and Sprint. Although T-Mobile recently upgraded its 3G network and introduced a selection of high-profile smartphones, service issues involving Google's Nexus One and the Sidekick mobile device have left any number of customers vocally unsatisfied.

T-Mobile USA may be sold or spun off from its parent company, Deutsche Telekom, according to reports.

A Feb. 4 report in The Wall Street Journal, citing unnamed sources, said Deutsche Telekom was feeling out potential underwriters preparatory to divesting itself of the struggling unit, which ranks behind Verizon, AT&T and Sprint in the United States. One logical scenario for an IPO (initial public offering), according to the Journal, would involve selling 20 percent of T-Mobile to another company.

Some analysts are disagreeing with that assessment, however, with USB analysts quoted in a Feb. 5 Reuters article saying, "Historically this has been seen as a way to crystallize value, especially when the share price is low, but we would view an IPO as unlikely."

T-Mobile USA's most recent high-profile smartphone is the T-Mobile MyTouch 3G Fender Limited Edition, from HTC, which went on the market Jan. 20 at a price of $179.99 with a two-year service contract. The carrier teamed up with DoubleTwist, a startup that offers a free software application for managing and syncing media between a smartphone and a PC or Mac.

In January, T-Mobile also completed the upgrade of its 3G network to HSPA 7.2. According to a Jan. 5 statement, the next step will be to move to HSPA+, a 3.5G technology.

But T-Mobile has also been dealing with some problems of late. On Jan. 5, Google launched its Nexus One smartphone with the option to select T-Mobile as a service provider, but sales for the device have been relatively anemic in comparison to sales of the Apple iPhone or Motorola Droid. In addition, some customers have been complaining that T-Mobile offers poor 3G coverage.

"Google and T-Mobile are investigating this issue and hope to have more information for you soon," read a notice on T-Mobile's help forums. "We understand your concern and appreciate your patience."

In October 2009, T-Mobile and Microsoft played a widespread game of damage control after a server outage at Microsoft subsidiary Danger wiped out personal data for roughly 800,000 users of T-Mobile's Sidekick smartphone. Although much of that data was restored, and T-Mobile offered a $100 "customer appreciation card" to customers with "significant and permanent loss of personal content," many Sidekick owners expressed displeasure on online forums for weeks afterwards.

Whether such issues will come into play in an eventual spinoff or IPO remains to be seen.


 
 
 
 
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
 
 
 
 
 
 
 

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