Telekom CEO argues for strong No. 3 player in U.S. wireless market: newspaper

[October 30, 2017]   FRANKFURT (Reuters) - A strong No. 3 player in the U.S. wireless market would enhance competition, the chief of Deutsche Telekom told a German newspaper, as T-Mobile US Inc seeks to merge with Sprint Corp.

Chief executive officer Timotheus Hoettges also urged the new German government to think twice before selling down its large stake in Deutsche Telekom, according to an interview in Welt am Sonntag.

T-Mobile US, majority-owned by Deutsche Telekom, is close to agreeing tentative terms on a deal to merge with Sprint Corp, people familiar with the matter have said, a breakthrough in efforts to merge the third and fourth largest U.S. wireless carriers.

Hoettges, in the interview published on Sunday, declined to comment directly on talks between the companies.

"In the U.S. there is a duopoly between two very big players, and then there are two smaller players well behind," he said. "A third strong player would be good for competition."

Verizon Communications Inc <VZ.N> and AT&T Inc <T.N> are the two largest wireless carriers.

Competition regulators have in the past quashed consolidation efforts by T-Mobile, but Hoettges said chances are now better under U.S. President Donald Trump.

Timotheus Hoettges, Chief Executive Officer of Germany's telecommunications giant Deutsche Telekom AG poses for a picture at the Cyber Defense and Security Operation Center (SOC) of Telekom Security in Bonn October 26, 2017. REUTERS/Wolfgang Rattay

"History has taught us that governments led by Republicans are more hands-off than Democratic administrations," he said.

On the German state's nearly 32 percent stake in Deutsche Telekom, Hoettges acknowledged it would be the new government's decision whether to sell or keep.

But he said those who argued for a sale "should perhaps ask themselves who will buy the stake".

"What interest would the owner have in infrastructure security? Would the owner want to invest in Germany, and if so, where and in particular, how much?"

The FDP and Green parties, which are in talks to form a coalition government with Chancellor Angela Merkel's conservatives, have both advocated a sale or partial sale of the stake.

(Reporting by Tom Sims and Douglas Busvine; editing by John Stonestreet)

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