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T-Mobile’s parent company won’t sell it until after a major spectrum auction

T-Mobile’s parent company won’t sell it until after a major spectrum auction

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And maybe the election

By Ananya Bhattacharya

Entry image Deutsche Telekom Timotheus Höttges

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David Ramos/Getty Images

Deutsche Telekom has its hands tied once again. T-Mobile's majority owner has been wanting to sell it off for years, but it now plans to wait until after an upcoming auction for radio airwaves to resume looking for a buyer, according to Reuters.

The German telecom company is halting its search pending a spectrum auction by the Federal Communications Commission set to begin later this month, Reuters reports. For a period of weeks during and after bidding, participants in the auction are barred from engaging in any partnership or merger talks.

Deutsche Telekom can only sell T-Mobile after the spectrum auction

Deutsche Telekom owns 65.4 percent of T-Mobile, which overtook Sprint last year to become the country's third-largest carrier. In the upcoming auction, Reuters reported, it plans to spend up to $10 billion on spectrum — which would make T-Mobile more valuable to buyers.

In the last quarter of 2015, T-Mobile's profits doubled over the previous quarter's earnings, and it added over 2 million net subscribers. The company's success has come in part thanks to promotions like Binge On and Music Freedom, which allow customers to stream Netflix, Spotify, and other services without it counting against their data plans. But the moves have also raised concerns that the company has violated the principles of net neutrality.

The Obama administration has been been wary of a T-Mobile sale for years. In 2011, it blocked a deal a deal between AT&T and T-Mobile, arguing that the merger would reduce competition and raise prices. Three years later, the Justice Department refused to give its blessing to a proposed merger with Sprint. Last year, a possible deal with Dish Network Corp also hit a roadblock over concerns that it would make the wireless sector less competitive.

Even though T-Mobile is becoming more valuable, selling it off is not going to be easy. Deutsche Telekom's best bet may be a more permissive presidential administration — and if the Republicans win in November, it might very well get one.

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