It has been announced that Deutsche Telekom, a German telecommunications company, is looking to sell its Dutch subsidiary T-Mobile Netherlands for approximately €5-6 billion. The company is aiming to sell the Dutch mobile phone operator to private equity investors.
In 2015, Deutsche Telekom was unsuccessful in trying to sell T-Mobile Netherlands in an attempt to reduce its debt and raise funds to help acquire spectrum for T-Mobile US. Six years ago, the company considered leaving the Dutch market and had seen interest from Liberty Global. Nonetheless, the potential sale did not go through and Liberty Global later merged the Ziggo cable unit with Vodafone Netherlands.
Since then, the Dutch unit has grown. Instead of seeking another buyer, Deutsche Telekom decided to expand its operations in the country. In 2017, the company published a €190 million merger with Tele2’s local branch. At the time, Deutsche Telekom said it wanted to build a stronger third player and strengthen their competition with market leaders KPN and VodafoneZiggo. However, rumors of the carrier selling the unit have never gone away, and the private equity firm EQT was said to be a potential buyer back in November of 2019. On the contrary, EQT has initiated talks with T-Mobile Netherland’s competitor KPN over a potential takeover.
For potential buyers in 2021, the options remain unclear, although it is proposed that competitors KPN and VodafoneZiggo should be excluded, as selling to one of the two larger competitors would be impossible due to competition concerns. Such a transaction would create a Dutch duopoly and would most likely be denied by regulatory institutions. Recent indications, however, suggest that European regulators are gradually coming around to the idea of greater consolidation in the telecommunications market, making the suggestion not be as improbable as it would have been before the coronavirus pandemic.
