Business Watch: T-Mobile sell-off?


It’s a question the Orange veteran may have asked himself before accepting the job of replacing Jim Hyde.

All-American jock Hyde has returned home for ‘personal reasons’ but he leaves behind a mountain of problems in Moat’s in-tray.

As discussed here last time, T-Mobile UK was partly to blame for last month’s profit warning by parent company Deutsche Telekom.

Hyde’s business spent a shed-load in the first quarter to steal customers off the other four networks as it tried to make up for having lower organic revenue than any of them in each quarter of 2008.

That profit warning was the first major slip up by golden boy Rene Obermann since he stepped up from heading T-Mobile to run Deutsche Telekom in late 2006.

As head of the former German telephone monopoly Obermann has to answer not only to the German government (DT’s biggest shareholder) but also to Blackstone, the aggressive US private equity fund, which is the second biggest investor.

Reports have emerged that the pair, which own 32 per cent and five per cent of DT’s shares respectively, have been pressuring Obermann and his board to make a rapid decision on whether to flog the under-performing T-Mobile UK.

They are doubtless worried that, as number four in the most brutally competitive mobile market in Europe, T-Mobile UK is holding back the performance of the entire group.

The idea of selling was apparently mooted last year too. But because of the global financial crisis Berlin and Blackstone were worried about selling into a tumbling market and getting a fire sale price.

That was partly reflected in the fact that DT, which bought T-Mobile UK when it was the former One2One near the top of dotcom boom, wrote down the value of the division on its books by a whopping €1.8 billion.

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