Deutsche Telekom (DT) CEO Timotheus Hoettges (pictured) predicted the acquisition of Sprint by T-Mobile US will be the first step towards wider collaboration between the parent companies, which will ultimately boost his company’s global presence.

Under the agreement to bring together Deutsche Telekom’s T-Mobile US with SoftBank’s Sprint – the US’ third and fourth largest operators, respectively – finally announced yesterday (29 April) after seven years in the making, DT will gain control of the new entity. The Germany-based operator group will nominate nine of 14 board members, with Hoettges becoming chairman.

Although DT will only hold a 42 per cent stake in the combined operator, part of the deal includes SoftBank ceding voting rights on its stake to DT. As both companies are subject to a four year lock-in, this leaves DT with effective control of 67 per cent of the company for at least that period.

Speaking to investors in the wake of striking the deal, Hoettges said his company had established “friendship and good relations with SoftBank,” noting: “There will be a tighter collaboration [with SoftBank] with regard global presence and global services.”

He added although no specifics could be revealed currently, it would be “something unique that will help us.”

Group benefits
Discussing the impact of the Sprint acquisition on DT, Hoettges said it increased the company’s exposure in one of the world’s most advanced markets, adding it was in line with the company’s strategy of investing in advanced economies.

“90 per cent of our businesses are in AAA markets,” he said. “This is unique. Think about other telcos who have, sometimes stranded, investments or very complex investments in South America, Africa or other areas.”

The executive added the structure of the Sprint deal would not require additional investment from DT and have no negative impact on its European operation.

Regulation issues
The deal is likely to be heavily scrutinised by authorities in the US, which have proved an insurmountable hurdle for such agreements across a number of sectors.

However, Hoettges appeared confident the required green light could be achieved within a year, stating the “window had never been better than it is today”.

“We have now to convince the authorities in the US that this is a great deal for consumers, that this is a great deal for the capability of building 5G, the most modern network in the US.”

Yesterday’s official deal announcement followed the resurrection of talks which last collapsed in November 2017. At the time Hoettges said discussions were terminated after the companies found there was “no possibility for a business combination that would satisfy all those involved.”