Deutsche Telekom in U.S. Deal?

BONN — Deutsche Telekom offered to buy VoiceStream Wireless Corp. for more than $30 billion, the Financial Times online edition reported Monday, sending VoiceStream shares higher in U.S. after-hours trading.

Deutsche Telekom, Europe’s biggest phone company, offered to acquire all of VoiceStream’s shares or a controlling stake, the paper said without citing sources.

Telekom Chairman Ron Sommer has been under pressure to make a large acquisition, and has raised more than $96 billion through new shares and bond sales to finance a purchase in the U.S., the largest communications market.

Buying Bellevue, Wash.-based VoiceStream would give Deutsche Telekom a nationwide U.S. wireless network using the global system for mobile communications--or GSM--digital standard. GSM is the technology Deutsche Telekom uses in its own European networks, and it’s also dominant in Asia.

“A Deutsche Telekom-VoiceStream combination would be fantastic,” said Kevin Roe, an ABN Amro Inc. analyst who rates VoiceStream a “buy.” “VoiceStream is the premier consolidation candidate for a European operator in the U.S. for three reasons: One, they’re nationwide. Two, they’re spectrum-rich. And three, they’re GSM.”

Acquiring VoiceStream would help Deutsche Telekom get greater discounts on equipment purchases, including handsets for customers and switches and other gear required to build and improve mobile networks, Roe said.

Bonn-based Deutsche Telekom and VoiceStream declined to comment. Deutsche Telekom American depositary receipts rose 82 cents to $58.45. VoiceStream closed off 94 cents to $124.94 in Nasdaq trading, but surged to as high as $141 in trading on electronic networks after the FT online report appeared.

Analysts and investors have said Telekom could buy Sprint Corp. if Sprint’s agreement to be bought by WorldCom Inc. unravels amid regulatory opposition. Telekom, which already owns 10% of Sprint, has also been seen as a suitor for Cable & Wireless. It tried to buy Qwest Communications International Inc. in March, before Qwest completed its purchase of US West Inc., people familiar with the companies said then.

“If Deutsche Telekom has made an offer for VoiceStream, then I don’t think that they would be going after Sprint,” said Peter Friedland, an analyst at WR Hambrecht & Co. in San Francisco who rates VoiceStream a “buy.” That’s because VoiceStream and Sprint’s wireless business, Sprint PCS, are redundant, and Deutsche Telekom would have to shed one.

VoiceStream and Nextel Communications Inc. are the only two nationwide U.S. wireless carriers without ties to large wired phone companies. Because VoiceStream uses GSM and Nextel uses Motorola Inc.’s integrated digital enhanced network, or iDEN, which is compatible with GSM, customers of each company can buy phones that work with a single number worldwide.

VoiceStream has been publicly traded since May 1999, when it was spun out of Western Wireless Corp. In that time, its shares have risen more than sixfold. VoiceStream Chairman John Stanton used the shares to acquire rivals Omnipoint Corp. in February and Aerial Communications Inc. in May.