AH-T-Mobile-TMO-Logo-2.5

Deutsche Telekom Believes T-Mobile Doesn’t Need Their Help Funding The Spectrum Auction

November 6, 2014 - Written By Justin Diaz

With all the success that T-Mobile has seen over the past year or so, you would think that their parent company Deutsche Telekom would be more than happy at this point to invest some of their own capital for the U.S. currently fourth largest wireless carrier to use in the upcoming spectrum auction. That isn’t the case though. DT states that they won’t be putting any of their own money towards T-Mobile’s spectrum buying efforts, stating the reason as them believing T-Mobile is more than capable of funding the purchases of the spectrum on its own. Whether or not DT wanted to invest any money towards the auction due to happen soon on T-Mobile’s behalf, it seems that they truly believe that T-Mobile will be able to handle the funding.

DT’s CEO Tim Hoettges stated in the third quarter earnings call recently that they “will continue to follow their strategy of de-risking, self-funding,” following up that they believe T-Mobile will continue to be a source of great satisfaction. With this DT believes T-Mobile can take on the cost of the spectrum on the auction, being able to fund their own purchases by issuing new shares or bonds. Whatever they spend at this upcoming auction will likely play into the estimated amount that they’ve been projected to spend on spectrum over over a cycle of the next few years, a number that Fitch analysts think could be in the range of about $7 billion.

T-Mobile is not the only major carrier that will be bidding when the auction begins, as they will be joined by the number one and number two carriers in the U.S, Verizon Wireless and AT&T, along with a number of other smaller, regional carriers. Sprint on the other hand has stated they will not be planning on participating in this year’s AWS3 spectrum auction, likely focusing their funding and efforts elsewhere for the time being. Even though T-Mobile isn’t getting any help from Deutsche Telekom, needed or not, the money they put forth towards this auction will result in some much needed spectrum to be used for upgrading crucial parts of their network.