The ratings on Deutsche Telekom AG (DT) primarily reflect its solid business position in several markets and the strong uptake of broadband in Germany amid significant challenges in its core domestic fixed-line business. The ratings are also supported by growing operational cash flows from mobile telephony, particularly from U.S. subsidiary T-Mobile USA Inc., which recently agreed to acquire SunCom Wireless Holdings Inc. (B-/Watch Pos/--) for $2.4 billion, strengthening its footprint in the U.S. The ratings are based on Standard&Poor's Ratings Services' expectation that DT's management will endeavor to maintain a disciplined financial policy, particularly during the current peak in its investment in network and spectrum in the U.S. and fiber network in Germany and given high restructuring costs.
