<"The U.S. is used to the best in technology, the best in Internet," he said.
"Why shouldn't they also have access to the best in wireless?">
Deutsche Telekom Chmn Sommer: Focused
On VoiceStream Buy
By JANET WHITMAN
NEW YORK -- Deutsche Telekom AG (DT) Chairman Ron Sommer
hasn't ruled out further acquisitions by the German telecommunications
giant, but said for now the company is focused on its planned purchase of
U.S. company VoiceStream Wireless Corp. (VSTR).
"Our focus right now is on successfully completing the VoiceStream
transaction," said Sommer, who spoke Thursday with reporters from The
Wall Street Journal and Dow Jones Newswires.
He said that Deutsche Telekom will "listen carefully" to the concerns of the
U.S. government regarding the VoiceStream merger.
A number of key lawmakers in Washington, led by Sen. Ernest F. Hollings,
D-S.C., have opposed the acquisition, mainly because Deutsche Telekom
is 58% owned by the German government. That stake will fall to about
45% if the VoiceStream deal goes ahead.
"We will assure Washington that Deutsche Telekom is pro-competitive,
pro-consumer, and a good corporate citizen, as we have proven elsewhere
in the world," said Sommer. "We are convinced that the U.S.
administration views trade as a two-way street."
Deutsche Telekom agreed earlier this week to acquire VoiceStream,
Bellevue, Wash., in a cash-and-stock deal valued at about $45 billion.
Sommer noted that the German government has committed itself to winding
down its stake in Deutsche Telekom as market conditions permit.
He said that other acquisitions would have the effect of further diluting the
government's stake in the company, pointing out that such acquisitions
wouldn't have to be in the U.S.
Sommer reiterated his belief that a global telecommunications provider "has
to be equally rooted in the U.S. and in Europe," but he declined to say
whether that would mean further U.S. acquisitions by the company.
To Invest Substantial Capital In VoiceStream
For now, Deutsche Telekom is "very much focused on VoiceStream," said
Sommer.
Wireless penetration in the U.S. is underdeveloped, which represents a
great opportunity for Deutsche Telekom, as well as a benefit to U.S.
consumers if the VoiceStream merger is approved, he said.
Deutsche Telekom intends to invest substantial capital in VoiceStream so it
can build out its infrastructure, he said.
Sommer noted that VoiceStream has 18.5% subscriber growth, compared
with 14% for Sprint, and single-digit growth for companies such as as
Verizon Communications (VZ) and SBC Communications Inc. (SBC).
VoiceStream's management is "doing the right thing," he said. "We can help
them to do it faster."
Sommer said the U.S. market could benefit from one global standard for
wireless service: global system for mobile, or GSM, the standard used by
VoiceStream.
GSM is the most common wireless standard in Europe, but most major
wireless companies in the U.S. use code division multiple access, or
CDMA, or time division multiple access, or TDMA.
Deutsche Telekom will face competition from companies in the U.S. which
use other technologies, but it's Deutsche Telekom's job to convince
customers to use GSM, he said.
"The U.S. is used to the best in technology, the best in Internet," he said.
"Why shouldn't they also have access to the best in wireless?"
-By Janet Whitman; Dow Jones Newswires; 201-938-5248;
janet.whitman@dowjones.com
Briefing Book for: DT | G.DTL | SBC | VSTR | VZ |
