T-Mobile seeks Euro expansion

German mobile giant T-Mobile is set to cut its prices and look for European expansions to help it rival Vodafone, according to head of European operations Rene Obermann.

Widening the group's European presence is a "key objective", he told the Financial Times.

T-Mobile currently has no presence in the key markets of France, Spain and Italy, where Vodafone has stakes in SFR (via Cegetel), Airtel and Omnitel respectively.

The only unaffiliated operator in France is Bouygues Telecom, whose owners include the Bouygues family, Bernard Arnault and a selection of French banks.

T-Mobile closed the $25bn acquisition of US mobile operator VoiceStream in May.

T-Mobile's only other international interests are MaxMobil in Austria and One2One in the UK, leaving it with a much smaller international presence than rivals such as Vodafone or Orange.

Given T-Mobile's current cash crisis, it will surprise many to see the company pursuing such an aggressive strategy. However, Obermann told the FTthe acquisitions will be funded by an IPO, expected before next September.

He also told the paper that price-cutting will form an important part of the group's future strategy.

T-Mobile was the first of the big European operators to cut subsidies for entry-level handsets last year, but Obermann suggested the group might step up subsidies for next-generation mobiles.