Deutsche Telekom eyes direct control over T-Mobile

[@TheRealDanny]

BERLIN, April 1 (Reuters) - Deutsche Telekom DTEGn.DE expects to secure direct ownership of T-Mobile TMUS.O in the medium term, funded by a significant capital return to shareholders by its U.S. business, CEO Tim Hoettges told shareholders on Thursday.

Addressing the telecoms group's annual general meeting, Hoettges said he expected T-Mobile to return up to $60 billion to shareholders between 2023 and 2025.

With its share of the proceeds, Deutsche Telekom would be able to raise its holding in T-Mobile to more than 50% from 43% at a price below current market levels secured with options, he added.

"It's harvest time," said Hoettges.





https://www.nasdaq.com/articles/deut...21-04-01-0?amp


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[DRNewcomb]

I get the feeling someone is looking at us customers as cash cows.

[mm18]

What exactly does this mean for the regular subscribers? Someone correct me here so 60 bill divided by 3 years 2023 to 2025 is 20 bill a year divided by 12 months is 1.6 bill a month divided by 100 mill customers thats about $16 to $17 a month per customer which is doable. Not sure of the average customer bill but lets say is $100 they take 16% to maybe 20% their cut. Sounds about right.
If i am way off just correct.

[Theghostlad82]

What exactly does this mean for the regular subscribers? Someone correct me here so 60 bill divided by 3 years 2023 to 2025 is 20 bill a year divided by 12 months is 1.6 bill a month divided by 100 mill customers thats about $16 to $17 a month per customer which is doable. Not sure of the average customer bill but lets say is $100 they take 16% to maybe 20% their cut. Sounds about right.
If i am way off just correct.

Not sure what it will mean. D.T. has historically taken a hands off approach for the most part with T-Mobile U.S., mainly due to disinterest in the American market. They tried for years to offload the company, and only took interest in it when Legere made the company a player in th market (mainly because D.T. took a hands off approach). Whether or not they will seek more input on how the company is ran, and whether or not that will be a good thing or not, guess we will see.


Also the 102 mil. customer mark is kind of misleading in this instance, though this really isn’t important in the long run. Yes, the T-Mobile network has over 100 million users on it, but this includes wholesale customers as well. T-Mobile says they have 25 million postpaid accounts, that average $133.08 per account per month. They report 66 million total postpaid lines. They do also report 20 million branded prepaid (T-Mobile prepaid and metro) lines, with an average of $38 per line. The remaining 16 million lines are scattered on various Mvnos. The number that matters more in total revenue, not really total number of lines. Number of lines can always be manipulated with promos such as free lines, D.T.’s interest is in revenue, not lines.

[zapjb]

I know I'm reading/misunderstanding this. TM will return 60Bill to TM shareholders from 2023-25. ?Then this will somehow depress the valuation of TM stock so TM can buy 7% of stock for under rated of current prices? I don't get how paying huge dividends will depress the price of TM stock.

[tekfranz]

I know I'm reading/misunderstanding this. TM will return 60Bill to TM shareholders from 2023-25. ?Then this will somehow depress the valuation of TM stock so TM can buy 7% of stock for under rated of current prices? I don't get how paying huge dividends will depress the price of TM stock.

Here is why the stock price might decrease after a dividend:

https://www.investopedia.com/ask/ans...stocksplit.asp

Seems like actually Deutsche Telekom is a shareholder so they will use their dividend to buy more of the company.

“Hoettges said he expected T-Mobile to return up to $60 billion to shareholders between 2023 and 2025.

With its share of the proceeds, Deutsche Telekom would be able to raise its holding in T-Mobile to more than 50% from 43% at a price below current market levels secured with options, he added.”


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[jet1000]

I don't get how paying huge dividends will depress the price of TM stock.

It doesn't appear that they're talking about paying $60 billion in dividends during that time period. I found this release from TMUS and it appears what they really meant is that the total value of their stock would increase $60 billion during the period of 2023-2025 due to market synergies--that's how that amount would be returned to shareholders:

"“We now expect the total net present value of merger synergies to be more than $70 billion -- a 60 percent jump from our original merger plan. We’ve also raised mid- and long-term guidance, setting up the potential to return up to $60 billion to shareholders between 2023 and 2025. "

https://investor.t-mobile.com/news-a...s/default.aspx

The guidance seems to appear to refer to their stock price. Current market cap is $158.64B. So increasing that by $60B by 2025 seems possible.

[i0wnj00]

I get the feeling someone is looking at us customers as cash cows.

That’s why Hoettges was quoted as saying "It's harvest time”, with T-Mobile USA doing so much better ever since attempted merger with AT&T it’s no surprise that he wants DT to benefit from the network expansion and high subscriber count. No doubt he’s pleased with the performance of his business in the USA and probably doesn’t have any regrets in hindsight that the merger had no chance to go through.