Telecommunications company Deutsche Telekom AG (DT), the owner of T-Mobile USA, is considering an initial public offering or spinoff of the T-Mobile business, which would help fund the unit's network build-out, said the Wall Street Journal. The company is expected to come to a conclusion in the next two months.
Deutsche Telekom was reportedly in talks with a number of banks, including Deutsche Bank AG, related to underwriting an IPO for the unit. Citing people familiar with the matter, the newspaper said that Deutsche Telekom also considers a partial spinoff of the business, so that a separate entity will be formed with its own balance sheet and will compensate the investors the loss due to the decline in share prices.
T-Mobile has lost nearly 77 thousand customers in the third quarter, compared to net customer additions of 670 thousand in the third quarter of 2008. The number of contract customers declined by 140 thousand in the quarter.
In its third quarter, T-Mobile USA had reported lower profit as its revenues dropped 2.3% due to lower service revenues. T-Mobile's total revenues declined 2.3% to $5.38 billion from $5.51 billion in the year-ago quarter. Service revenues were $4.73 billion, down from $4.91 billion a year ago, hurt by lower Average Revenue Per User, or ARPU.
Deutsche Telekom, in which the German government has a 30% stake, had reported higher third-quarter profit, helped by revenue growth, mainly in its overseas business, and cost-cutting measures. The company stated that cost-cutting measures and improvements in efficiency helped to post year-on-year increases in profitability in all operating segments between July and September.
DT closed Thursday's regular trading at $12.68, down $0.35 or 2.69%, on a volume of 2.17 million shares.
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