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Deutsche Telekom AG Message Board

  • speaker67 speaker67 Aug 15, 2002 2:08 PM Flag

    Cingular Voicstream Merger

    Makign the rounds in the halls of Cingualr today is a merger to be announced with Voicestream. Structure then divided between East and West with Cingular running the show. Beign heard is that it will happen by Monday. There is no doubt that Cingular has been planning to announce a major reorganization to employees on Friday.....

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    • too bad for you it IS RIGHT!!!!!

    • Take that release cut it in half and then divide it by 4 and then you may be right.

    • The prepay ration is old and inaccurate news. Check the 10-q. VS is now 80% contract 6.421 million contract out of 8.027 milion subscribers.

      http://www.t-mobile-international.com/?id=20&l=en&news_id=768

    • Voicestream is not an attractive merger target for many obvious reasons. One main reason is their subscriber base is heavily prepay in the Northeast and brings little if no value to any deal. All Voicestream has to offer is the GSM footprint which could be valued at $2-$3 Billion and that could be reduced to $1 illion after debt. When a merger occurs the deal will be tightly formed and 100% on Cingular's terms. DT will be out of US markets and Voicestream will be forgotten. DT stock will be viewed very closely and drop a few points immediately upon merger and rise again long term.

    • Good points Troy. The other thing I always wondered about is DT's debt is about �65 billion. All the talk is getting down to about �50 billion. Now, someone might say that would be an over 20% improvement. To me, �50 billion is still A LOT of money and not much different to owing �15 billion more.

      If selling Voicestream was to bring in 30 or 40 billion, I could understand it- but for the 10 billion figure thrown around, it just doesn't seem to worthwhile to DT to do it. And then they would write off the huge loss which would probably drag the stock price down.

    • You are way off base....the reason the Cingular headquarters is in Atlanta is simple. As part of the SBC/BLS agreement although SBC controls 60%, they agreed to locate in Atlanta fpor 2 reason. First was that BLS mobility was hQ'd there and many key mgmt personnel were moving over to Cingular and second they did not want to colocate in Dallas simply for logistical reasons as again many of the key players in Cingular are based on the North coast.

      Dont read any thing into it regardign Voicetsream. The Atlanta HQ for Cingular was picked out over 2 years ago.

    • So what would happen?

      1) All the T-Mobile stuff goes out the window, and is replaced by Cingular?

      2) What sort of role would T-Mobile have in this? It sounds more like a sale then a merger.

      3) How would this affect DT stock price?

      • 2 Replies to csc362
      • I don't know if the rumor is for real or not, but it certainly sounds credible. If it is true and money changes hands in the direction of DT, DT will go up. How much, and for how long is an even bigger question. One thing I feel confident in saying is that Cingular would be quite happy to get VSTR out of the way and pick up their customers. Of course, the customer base would only be as good as the subscription rate/contract they got from Cingular. VSTR has been a big thorn in Cingulars side. VSTR seems to be have better deals. In any case, it's a shame DT can't just see things through as they were planned instead of having to back-pedal at this point. VSTR's just starting to prove its worth.

      • It's all rumors....same ones that have been floating around for months. If DT can hang on to VS until the end of the year, VS should hopefully turn a profit and not be such a drag anymore.

 
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