It has been revealed in the press that a sale or merger of T-Mobile could be on the cards. Reports published in the Financial Times suggest that Deutsche Telekom, owner of T-Mobile UK, is facing immense pressure from its shareholders to take some drastic strategic action about the unit. The shareholders, including the German government, are demanding quick action in this respect.

In terms of market presence, T-Mobile UK is the one of the smallest mobile broadband operators in the country after 3. In this highly competitive market, this is a major disadvantage, and the company has been reporting low profits recently, which is becoming a major cause of concern for its parent company.

Deutsche Telekom was forced to release a profit warning recently, and many shareholders believe that T-Mobile is one of the factors putting pressure on the company’s profitability.

The Financial Times report also suggests that Deutsche Telekom had considered exiting the UK market last year, but that it had chosen to put off such a drastic decision until there was more clarity in the market.

It is now being said that the two options available to the company are to either sell the unit or merge it with another player. Orange or 3 mobile are likely to be involved if such a move does materialize eventually.

René Obermann, Deutsche Telekom chief executive, had declared just about a month ago that he would be putting in place a new management to bring the UK business back on track. However, with things getting worse since then, the next move by the company is anybody’s guess.

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