T-Mobile USA IPO or spin-off being considered

Deutsche Telekom is reportedly considering an IPO or spin-off of the T-Mobile USA business, according to Reuters. T-Mobile is a distant fourth in the U.S. mobile carrier sector. The Wall Street Journal states Duetsche Telekom has recently been in contact with several banks, including Deutsche Bank, regarding underwriting an IPO for T-Mobile USA.

Although T-Mobile USA has aggressively priced service plans, the carrier still lost 77,000 customers in the third quarter of 2009. Reported to have more than 33 million customers in the United States, T-Mobile still trails AT&T, Verizon, and Sprint Nextel. Analysts' valuation of T-Mobile USA varies greatly, ranging from $14 billion for the entire unit to approximately $6.9 billion for 20 percent of the company.

In the event of a complete spin-off, T-Mobile USA could possibly cut prices further to maintain a competitive edge in the wireless market. Odds are AT&T and Verizon, each holding about one third of the U.S. market, will not acquire the struggling company, as regulators most likely would not approve a deal.

It is anticipated Deutsche Telekom, T-Mobile USA's parent company, will make a decision by the end of the year.

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