Deutsche Telekom has no Plan B for T-Mobile USA

Deutsche Telekom executives appear to have so completely sure the AT&T purchase of T-Mobile USA would be approved that there is no "plan B." That will probably strike some observers as management irresponsibility. Should the deal collapse, as a growing number of observers believe is a real possibility, T-Mobile USA might face unpleasant options.

Strategically, T-Mobile USA is a segment "no man's land," some would argue. It cannot compete with the industry's true "value" providers, nor with AT&T and Verizon Wireless for the "premium" customer. T-Mobile USA continues to face a difficult challenge in the fourth generation network area, as it needs lots of spectrum it does not own.

T-Mobile USA therefore faces a real need to invest billions of dollars it cannot spare, in a U.S. business with challenging prospects.

Beyond that, there could be repercussions for Deutsche Telekom in a broader sense. The firm had been counting on using the proceeds from the T-Mobile USA sale to fund strategic initiatives elsewhere. Now all that remains "on hold."

Deutsche Telekom Has No Plan B