Rumor: DT Mulls T-Mobile USA IPO

Deutsche Telekom AG (NYSE: DT) has been talking to banks about an initial public offering for T-Mobile US Inc. , The Wall Street Journal reported late Thursday.

A likely scenario, according to the Journal, has DT offering 20 percent of T-Mobile USA's shares.

The IPO would raise money to push T-Mobile more strongly in the U.S. market, where its 14 percent market share lags behind AT&T Inc. (NYSE: T), Sprint Corp. (NYSE: S), and Verizon Wireless .

Another option would be for T-Mobile to use the cash for an acquisition, but the Journal thinks that's unlikely, as does analyst Michael Nelson of Soleil Securities Group Inc.

"There remains a camp of investors that believes TMU may potentially acquire MetroPCS Inc. (NYSE: PCS) and Leap Wireless International Inc. (Nasdaq: LEAP)," Nelson writes in a note issued shortly after the Journal story appeared.

But those operators operate CDMA networks, while T-Mobile's is a GSM network, making integration a tough prospect. Nelson writes that he doesn't expect any merger deal to come up any time soon.

Across the pond, DT has already agreed to fold T-Mobile (UK) and the Orange (NYSE: FTE) subsidiary, Orange UK , into a joint venture, though that deal could be subject to a lengthy delay if a proposed review by the U.K.'s Office of Fair Trading is given the go-ahead. (See T-Mobile, Orange Join Forces in UK and DT & France Telecom Sign Final Agreement.)

— Craig Matsumoto, West Coast Editor, Light Reading

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