June 12, 2007 / 11:32 AM / in 11 years

D.Telekom CEO says T-Mobile USA is core asset

DUESSELDORF, Germany, June 12 (Reuters) - Deutsche Telekom’s (DTEGn.DE) chief executive said its U.S. mobile phone operations will continue to be central to its overall business, dismissing recurrent speculation that the unit is for sale.

“The U.S. business is a core business of the mobile communications business and therefore of Deutsche Telekom,” Obermann said on Tuesday at an industry conference.

“We have defined the U.S. as a core business for Deutsche Telekom in the future as well,” he added, echoing Chief Financial Officer Karl-Gerhard Eick, who told Reuters in May that Deutsche Telekom was not considering a sale.

Obermann added that he could not see the strategic merit of selling its profitable U.S. mobile phone business.

Speculation that AT&T (T.N) and Telefonica (TEF.MC) were considering a bid for T-Mobile USA as well as market talk that private equity firm The Blackstone Group [BG.UL], Telekom’s second-largest shareholder, wanted the company to sell its U.S. business had boosted Deutsche Telekom’s shares last month.

Blackstone holds 4.7 percent of Deutsche Telekom, which has set ambitious earnings targets for the U.S. subsidiary. The unit is already the group’s most important growth driver and should help reduce Deutsche Telekom’s dependence on Germany.

    Expanding the mobile telephone business of Deutsche Telekom is a key strategy of Obermann, who has not ruled out making acquisitions in the segment and is in talks with France Telecom FTE.PA on buying the French competitor’s Dutch mobile unit.

    Sources familiar with the matter have told Reuters that Telekom will pay around 1.3 billion euros for the asset.

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