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Comcast Reportedly Pursuing T-Mobile

Comcast has entered the bidding process for T-Mobile US and may now be the strongest contender, according to a press report out of Germany this morning.

In its latest edition, Manager Magazin reports that Deutsche Telekom AG (NYSE: DT) is now talking with Comcast Corp. (Nasdaq: CMCSA, CMCSK) about selling its T-Mobile US Inc. operation to the largest US cable company. The reports follow months of speculation about Comcast's interest in buying T-Mobile, especially after its $45.2 billion deal to acquire Time Warner Cable Inc. (NYSE: TWC) cratered nearly two months ago.

Deutsche Telekom has declined to comment on the reports. Comcast did not respond to questions about the reports before this story went to press.

As has been reported earlier, Deutsche Telekom is also still talking to Dish Network LLC (Nasdaq: DISH) and other possible suitors about T-Mobile. But the on-and-off discussions with Dish have apparently cooled in recent weeks as Deutsche Telekom has sought more attractive buyers. (See Not So Fast on Dish/T-Mobile Deal, Analyst Says .)

As reported by Manager Magazin, Deutsche Telekom executives view Comcast as a more appealing acquirer for T-Mobile because the giant MSO is financially stronger than Dish and other candidates and could buy all shares of T-Mobile. Deutsche Telekom, which has been seeking to shed its US assets in favor of a pan-European focus, reportedly plans to use the proceeds from the sale of its controlling 67% stake in T-Mobile to launch a takeover bid for UK fixed-line incumbent BT Group plc (NYSE: BT; London: BTA). (See Deutsche Telekom Plotting BT Takeover – Report.)

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In many ways, an acquisition of spectrum-rich T-Mobile would make sense for Comcast, which has made no secret of its grand wireless ambitions in the US. It's widely known that MSO executives are now working on plans to launch some type of WiFi-first mobile service that would rely on both WiFi and cellular networks to deliver calls and data to customers.

But Comcast, which dropped its bid for Time Warner Cable in late April because of strong regulatory opposition, could run into the same roadblocks at the Federal Communications Commission (FCC) and Antitrust Division of the U.S. Department of Justice if it tries to buy T-Mobile. Comcast may also not be willing to pay top dollar for T-Mobile, now the third-biggest wireless provider in the US, especially if MSO executives believe that WiFi networks, not cellular networks, will ultimately control most of the nation's mobile traffic.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

Mitch Wagner 6/17/2015 | 3:17:36 PM
Re: My gut says bad idea Comcast seems desperate to buy something. They better watch out or they’ll end up with pants like this
MordyK 6/17/2015 | 2:40:38 PM
Re: T-Mo competition they can also always go in together and blend in Dish's  spectrum assets as well. ALso remember that MSO's could hop on QUalcomm's MuLTEFire bandwagon if it passe regulatory muster and avoid using WiFi for their own services. they've all been testing small cells so it would be an obvious next step. 
msilbey 6/17/2015 | 12:57:52 PM
My gut says bad idea I get that there's a lot of value to the spectrum here, but I have a hard time seeing this as a good move for Comcast. There would be major integration challenges, and Comcast has its fingers in many many other pies. It seems like a better idea to focus on WiFi and then partner for the cellular backup. If that goes smoothly, Comcast could look at a full-on acquisition in the future.

The one caveat to that is, I could see Comcast making a go of this if they let T-Mobile continue to run as its own independent entity. In other words, treat T-Mobile like they've treated thePlatform. 
alanbreznick 6/17/2015 | 12:21:28 PM
Re: T-Mo competition I'll bet Comcast does have big plans for T-Mobile's network. The big question is whether the FCC will aloow Comcast to realize those plans. I'm sorta doubtful about that but we'll see. Don't worry about Dish. Charlie Ergen always has something else up his sleeves.  
Sarah Thomas 6/17/2015 | 11:51:01 AM
T-Mo competition Dish really can't catch a break, huh? I think from T-Mobile's perspective, and definitely from Deutsche Telekom's, Comcast is the better fit. I imagine it has big plans for T-Mobile's wireless network.
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