D.Telekom considers merger or listing of Dutch business -CEO

* CEO: Open to merger of T-Mobile Nederland with Tele2

* Would also consider floating Dutch unit

* Looking to unlock value in German mobile towers operations

BARCELONA, Nov 15 (Reuters) - Deutsche Telekom is open to merging its T-Mobile Nederland division with the local business of Sweden’s Tele2, or floating the Dutch mobile operator on the stock market, CEO Tim Hoettges said on Wednesday.

Telekom would also consider carving out its German mobile towers business to realise value, Hoettges told the Morgan Stanley European Tech, Media & Telecoms Conference in Barcelona.

Hoettges has just called off a tie-up between T-Mobile US , in which Telekom owns 64 percent, and Sprint Corp but the collapse of the deal has not dented his appetite for M&A.

“I’m open to a merger with Tele2,” Hoettges said in answer to a question about T-Mobile Nederland, adding he would also consider an initial public offering of shares in the Dutch unit. “We haven’t decided yet.”

T-Mobile Nederland has gained market share in the Netherlands with a mobile-only strategy and aggressive pricing.

Still, a merger of T-Mobile and Tele2 might make sense as the two lie a distant third and fourth place in the Dutch market behind KPN, the former state telecom, and Ziggo, a joint venture between Vodafone and Liberty Global that dominates the cable market in the Netherlands.

Tele2 CEO Allison Kirkby was not willing to comment on Hoettges’ overture.

“This is Tim’s comment and as a general rule, we don’t comment on M&A speculations,” she told Reuters.

“With regards to our Dutch business, we are focused on our daily operations and delivering a great customer value in a competitive marketplace.”

KPN CEO Eelco Blok, in turn, said the Dutch regulator might give this proposed deal an easier ride than past attempted mergers.

“I think so – if they can create a stronger number three being able to compete on fixed and mobile, then the regulator would seriously look at this situation,” he said in response to a question.


Hoettges, commenting on Deutsche Telekom’s German mobile towers business, which has 28,000 masts, said a carve-out would offer potential to realise what he described as “huge untapped value.”

The German group sold its U.S. towers business to Crown Castle in 2012 for $2.4 billion, part of a wider trend of mobile network operators selling such infrastructure to raise capital and cut debt.

He said towers businesses typically run higher leverage than telecoms - of around five times earnings before interest, tax, depreciation and amortisation (EBITDA) - offering potential to raise capital to invest.

“This is an unregulated business – can we do something to make it grow?” he said.

Deutsche Telekom hired investment banks last year to sell thousands of German mobile phone masts in a potential 5 billion-euro ($5.9 billion) deal that did not come to fruition.

This February it moved the German towers and Dutch mobile businesses into a newly formed Group Development division led by Thorsten Langheim, formerly of private equity group Blackstone, indicating they were no longer considered to be core assets. ($1 = 0.8462 euros) (Additional reporting by Olof Swahnberg in Stockholm. Editing by Jane Merriman)