Deutsche Telekom proposes compensation plan if Sprint's plan to merge with T-Mobile falls through. Seeks breakup fee of $1billion, WSJ reports.
Deutsche Telekom AG is securing grounds once again as Sprint attempts to merge with the German telecom's T-Mobile in the U.S. The telecommunication giant is seeking a compensation of $1billion if the merger falls through. The information surfaced online after people familiar with the matter reported to the Wall Street Journal, Friday.
AT&T failed in its attempt to acquire Deutsche Telekom's controlling shares in T-Mobile, almost three years ago. Due to the breakup, terms of the deal favored Deutsche Telekom, AT&T paid around $4billion as compensation, which also included $1 billion worth of wireless spectrum, TMO News reports. The German telecommunications company, which currently owns 67 percent of T-Mobile shares, is expecting a reasonable compensation comparatively.
Sprint and T-Mobile merger has long been making the headlines but has faced stiff opposition from the regulators. The government officials fear that the merger will affect the carrier competition in the U.S. wireless market, which is mainly driven by the four carriers including Verizon and AT&T as top contenders. But Softbank CEO Masayoshi Son continues to push the merger for the better of the wireless industry.
It remains unclear in whose favor the deal is expected to turn, but it is being watched closely by other companies.
In a separate report by Bloomberg, Dish Network has also been eyeing T-Mobile along with DirecTV if the Sprint deal does not go through. Dish Chairman Charlie Ergen is,however, planning smart by jumping into the bid war and increasing the demand. "We don't have the kind of money to go outbid Sprint for T-Mobile or outbid AT&T for DirecTV. So we have to be well positioned so no matter what happens it's all good for us, and I think we're there," Ergen said.
