How Will T-Mobile (TMUS) Stock React If Deutsche Telekom (DTEGY) Doesn't Sell It?

NEW YORK (TheStreet) -- T-Mobile U.S. Inc. (TMUS)  parent Deutsche Telekom (DTEGY) is considering whether or not to keep its investment in the cellphone network operator, as it believes the only company currently looking to purchase its stake in T-Mobile will not make an attractive offer, Reuters reports.

Iliad S.A. (ILIAY) , a France-based telecoms operator, has until the middle of October to decide if it will increase its bid of $33 per share for a 56.6% stake in T-Mobile, Reuters added.

Exiting the U.S. business would alter Deutsche Telekom's size and profile as the trend in the industry is to consolidate and bring together fixed and mobile services. T-Mobile accounts for one-third of Deutsche Telekom's sales and a fifth of its core profits, but has been dragging the company's cash flows down, Reuters said.

Deutsche Telekom is weighing a number of factors regarding the sale of its stake in the company, including the possibility of higher bids from satellite TV or cable companies. The company is also considering holding on to T-Mobile until late next year when a major auction of U.S. radio spectrum is completed, Reuters noted.

T-Mobile has begun to post an increase in sales after several years of losses, and some at Deutsche Telekom are arguing that it should hold on to the business during a time of growth, sources told Reuters.

T-Mobile stock is lower by 1.59% to $28.44 in after-hours trading on Friday.

Separately, TheStreet Ratings team rates T-MOBILE US INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate T-MOBILE US INC (TMUS) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."

You can view the full analysis from the report here: TMUS Ratings Report

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