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Deutsche Telekom CEO Tim Hoettges said that for all of T-Mobile’s short-term gains in the United States, the company still needs greater scale in the U.S. to battle AT&T and Verizon.
“I was intrigued by the idea of having a combination with Sprint and being the ‘super-maverick’ in the market,” Hoettges told Re/code in an interview on the sidelines of the DLD conference in Munich, Germany. “I hope that the political environment will change at one point in time.”
Sprint and Deutsche Telekom held talks last year over a combination, but the deal fell apart after it became clear that U.S. regulators would block any deal that reduced the number of players in the market from four to three.
Hoettges, though, argued that it is the concentration of wealth and spectrum by the two largest players that remains an obstacle to true competition. Hoettges said this is underscored by the huge bids–likely from AT&T and Verizon–made in the current spectrum auction.
“I’m worried about what has happened with this midband auction,” he said, adding that it is likely to further the gap between AT&T and Verizon from the far smaller T-Mobile and Sprint.
Despite the challenges, T-Mobile has done an impressive job of reasserting itself after years of subscriber losses, he said.
“We have done what we had to do,”Hoettges explained. “We had built an infrastructure and this infrastructure had to get utilized and we did that with very aggressive promotions.”
Hoettges praised the work of T-Mobile CEO John Legere, but acknowledged that his outspoken style probably wouldn’t fly in Germany.
“His management style will never be adaptable to Germany,”Hoettges said, although he added that Legere’s competitive nature and desire to win are very much in line with the company’s culture. “I like people being disruptive… I like people who are brave. He is very much fitting to our DNA, how we want to be, even if he is very American in his approach.”
Longer term, Hoettges admitted that T-Mobile’s current approach is not sustainable, especially given the need to invest between $4 billion and $5 billion each year just to keep up.
“The question is always the economics in the long term … and earning appropriate money,” Hoettges said. “You have to earn your money back at one point in time.”
This article originally appeared on Recode.net.
