Deutsche Telekom looks for Dutch exit door (again)

Deutsche Telekom is reportedly prepping a sale of its Dutch unit, T-Mobile Netherlands, to a group of private equity investors.

According to financial daily Financieele Dagblad, as reported by Reuters, the deal could be worth between €4 billion ($4.9 billion) and €5 billion ($6.1 billion). Other than that, details are scant.

The identity of the private equity investors has not been revealed, and both T-Mobile Netherlands and Deutsche Telekom are keeping schtum – at least for now – on any possible M&A activity that might be brewing.

It’s no secret that Deutsche Telekom has been angling to offload T-Mobile Netherlands for some time, despite a merger with Tele2’s Dutch operations in 2018. Both T-Mobile and Tele2 mainly sell mobile services and had a combined market share of around 25% when their merger was approved by the European Commission.

T-Mobile Netherlands is the third-largest operator in the country, behind KPN and VodafoneZiggo. Since there are only three network operators in the Netherlands, there is no Dutch exit for Deutsche Telekom by selling up to a rival. Competition concerns would inevitably put the kibosh on that.

Some facts and figures

T-Mobile Netherlands has registered steady, if not spectacular, growth since the Tele2 merger. During the nine months to September 30, 2020, it generated €1.44 billion ($1.77 billion) in revenue, up 3.1% over the same period the previous year (despite lockdown pressures and inevitable squeezes on roaming revenue). As of September 30, 2020, it had 5.76 million mobile subscribers and 647,000 broadband customers, up 4.2% and 10.4% respectively compared with 12 months previously.

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Last July, the operator shelled out €400 million ($487 million) on 70MHz of 5G-friendly spectrum for €400 million. In October the Dutch operator signed an agreement to acquire MVNO and SIM provider Simpel, which has around 1 million customers. It has been using the T Mobile network since 2014. The transaction is expected to be closed in the first half of 2021, provided it gets regulatory approval.

— Ken Wieland, contributing editor, special to Light Reading