Deutsche Telekom Looking at Investing in Start-up Mobile Broadband Operators
22 February 2008- Does Sprint’s Xohm Qualify?
Deutsche Telekom (DT) knows that mobile broadband is a bright future that’s beckoning worldwide and is willing to consider investing in start-up mobile broadband operations.
Company CEO René Obermann told the Financial Times this week the company would consider investing in mobile broadband services outside its existing T-Mobile footprint - and in start-ups.
“Should any opportunity, be it small or large, come along and really fit our strategy [of foreign expansion], we would seriously look at it,” Obermann said. “I would not exclude that we could buy into a market further away from our footprint.”
The statement could open the possibility that DT might be willing to invest in Xohm, the WiMAX network that the financially troubled Sprint is building, or in a financially challenged Clearwire, which is also building a WiMAX network in parts of the States - or even in some combined Xohm-Clearwire operation.
It would remove the barrier that Deutsche Telekom has in increasing market share for its US T-Mobile operation - a fourth place market share and no clear strategy for moving up.
Intel reportedly is willing to invest upwards of $2 billion in a WiMAX network operator in the States.
The other possibility that Obermann talked about is, like other European cellcos, DT might start investing in mobile networks in emerging countries. He said building up mobile broadband services in countries with poor infrastructure is “a real option”.
Spanish-based Telefonica operates in South America. Vodafone has multiple operations globally including a significant but minority share of Verizon Wireless and, more recently, a deal in India.
Obermann told the Financial Times that its recent investment in Slovakia shows the company is willing to invest in building a new operation. DT offers data-only mobile broadband to consumers that cannot get wireline broadband.
“But we won’t just do it because there is public pressure,” Obermann said. “It has to make strategic and financial sense.”
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