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Telekom Chief Rules Out Acquisitions in US

December 28, 2004

Deutsche Telekom has no intention of making acquisitions or stepping up investments for its mobile phone business in the United States, in spite of the planned merger of rivals Sprint and Nextel, the head of German telecommunications giant said on Tuesday. The US market, with 280 million people and a penetration rate of only 60 percent, was large enough for the current number of players, Deutsche Telekom chief Kai-Uwe Ricke told the Financial Times and Financial Times Deutschland in an interview. "It does not matter whether you have four, five or six players, as long as our positioning is right, and as long as we have the critical mass" of at least 15 million subscribers, Ricke argued. Deutsche Telekom's mobile phone arm, T-Mobile, has been growing rapidly in the US, adding 3.2 million customers during the first nine months and it intends to have "just over 17 million" subscribers by the end of the year, Ricke said. Indeed, the firm was targeting 30-35 million US customers by 2010. The US mobile phone market is in the process of consolidating. Cingular and ATT Wireless merged at the beginning of the year and more recently Sprint and Nextel tied the knot. T-Mobile USA has an 11.8-percent share of the market, Cingular/ATT hold a share of 34.5 percent, Verizon 30.6 percent and Sprint and Nextel 23.1 percent, FT Deutschland calculated.

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