Deutsche Telekom Says T-Mobile Requires US Merger To Sustain

(RTTNews) - German telecom giant Deutsche Telekom AG. (DTEGY.PK), the parent company of T-Mobile US Inc. (TMUS), has indicated that the US wireless service provider requires a merger with an US company in order to compete with telecom giants Verizon and AT&T, although its "Un-carrier" initiative has been a hit.

Deutsch Telekom Chief Executive Timotheus Hoettges, in an interview to Re/code, said it would be very difficult for T-Mobile to sustain itself over a long-term with its Un-carrier plans and will need to spend billions of dollar every year.

Although, T-Mobile continues to report strong customer additions, the company has been reporting losses for the past few quarters. Parent company Deutsche Telekom believes T-Mobile's long-term future depends on its merger with another company.

Last year, wireless carrier Sprint Corp. (S) abandoned its attempt to acquire T-Mobile due to tough regulatory hurdles after pursuing the deal for nearly eight months. The US regulators did not approve the deal citing that the merger between third- and fourth-largest wireless carriers in the country could curb competition and increase prices.

"I was intrigued by the idea of having a combination with Sprint and being the 'super-maverick' in the market," Hoettges told Re/code in the interview on the sidelines of the DLD conference in Munich, Germany. "I hope that the political environment will change at one point in time."

"We have done what we had to do. We had built an infrastructure and this infrastructure had to get utilized and we did that with very aggressive promotions," Hoettges said.

TMUS is currently trading at $29.70, up $0.56 or 1.92%, on the NYSE.