Deutsche Telekom Considered a T-Mobile Merger With Comcast in 2015 Meeting

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(Bloomberg) -- T-Mobile US Inc. in 2015 weighed a hypothetical merger with Comcast Corp. as one of several ways to position the wireless company for continued success, according to internal documents presented as evidence by states seeking to block T-Mobile’s real-life merger with Sprint Corp.

Combining T-Mobile with Comcast, the largest U.S. cable provider, was seen by T-Mobile’s controlling owner, Deutsche Telekom AG, as unlikely to encounter significant regulatory barriers while resulting in cost and network synergies, according to a December 2015 presentation for a company workshop in Germany, a copy of which was filed Monday in Manhattan federal court.

Attorneys general from a dozen states and the District of Columbia claim in a lawsuit that T-Mobile’s planned $26.5 billion merger with Sprint will reduce competition and raise prices by removing Sprint as the nation’s scrappy low-cost carrier. The states, led by New York and California, entered the 2015 presentation into evidence to highlight T-Mobile’s internal merger discussions in recent years, court records show.

A two-week trial of the states’ lawsuit concluded last week, with delayed closing arguments set for next month. U.S. District Judge Victor Marrero will decide the high-stakes case without a jury. The merger has already been blessed by the Justice Department’s antitrust division.

The document, marked “confidential,” was handed over to the states in discovery. The findings in the presentation were based on interviews with regulatory and industry experts, it says.

The presentation notes that T-Mobile “delivered strong performance over last 2 years and drives DT’s growth.” The Comcast deal was listed as one of several hypothetical developments that could help T-Mobile establish a “winning position” going forward.

The event in Germany was planned in part by Thorsten Langheim, the head of Deutsche Telekom’s U.S. business, the filing says.

According to the document, the possible Comcast deal could happen after a then-hypothetical merger with Sprint or instead of a Sprint deal. The document said a Sprint merger would face steep regulatory hurdles and suggested the company strengthen lobbying “with the ‘right’ people on Washington.”

The document also predicted that U.S. regulators would balk at a T-Mobile-Sprint combination even if Sprint filed for bankruptcy.

Sprint, T-Mobile and Comcast all declined to comment on the document.

©2019 Bloomberg L.P.

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