Deutsche Telekom Accidentally Speaks Truth About T-Mobile Having A Future Without AT&T [Public Knowledge]

By Harold Feld on October 10, 2011 – 2:13pm

Two weeks ago, Deutsche Telekom (DT) Chief Technology Officer Olivier Baujard accidentally spoke truth about T-Mobile to an audience of German investment analysts. After running through the usual company talking points about the effort to sell T-Mobile to AT&T (e.g., it will happen, DoJ is just playing hardball with negotiations, etc.), Baujard said at a public presentation at a Paris broadband conference that: “any rational company had a Plan B and that Deutsche Telekom had other opportunities for its U.S. operations should the U.S. Department of Justice succeed in terminating the deal.”

If that weren’t bad enough, Baujard then went into even more detail:

“It’s not as if we have no other opportunity than to close T-Mobile USA if the deal doesn’t work. We have other opportunities. (T-Mobile USA ) may not be an economical jewel, but it is a true asset that has many ways to be valued,” Baujard said. (Emphasis added.)

This truth was so terrible and potentially damaging that it prompted an immediate retraction from DT, apparently on the theory that it is better to look like an irrational company with no plan than to admit that T-Mobile is a valuable company with a lot of options about the future. Mind you, because of laws that make it illegal to outright lie to investors, DT could not simply say Mr. Baujard was lying or mistaken. Instead, they stated that Mr. Baujard “is not involved in the decisionmaking process” and generally “unfamiliar” with the details of the future of T-Mobile and that DT still believes AT&T acquiring T-Mo is the “best” outcome. But DT did not (and, indeed, could not) say Mr. Baujard was wrong and that DT does not have other options in mind for T-Mobile.

In other words, DT’s “denial” of Baujard’s statement that the company has other options and the T-Mobile has a strong future even without AT&T acquiring it translates as follows: “Please ignore everything our silly CTO said. He is an engineer and lies poorly. Keep believing that T-Mobile is a sickly gazelle that the mighty AT&T lion must devour as part of a pagan ritual to bring jobs and prosperity back to the world. All part of circle of life. Hakuna mattata. These aren’t the droids you’re looking for.”

Mind you, this is not the first time DT has spoken some inconvenient truth about the real value of T-Mobile and how DT could, with relatively little effort, find another buyer or otherwise exit from the U.S. market. Back in September, when AT&T intimated that maybe it wouldn’t pay DT the promised $6 billion cash-and-spectrum break up fee, DT made it clear that AT&T damn well would because DT had forfeited numerous profitable opportunities by going to the big dance with AT&T instead of all the other boys asking out Ms. T-Mo. As reported by Fierce Wireless Europe:

DT CFO Timotheus Hoettges confirmed that it had discussed the sale of T-Mobile USA with five companies prior to the AT&T deal. One of those companies was reportedly Sprint Netxel.

Click here for the rest of the blog.

2018-03-07T16:16:39-04:00 October 10th, 2011|Categories: Competition|Tags: , , , , |
Translate »